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Appeal No. 2016 of 1969. Appeal by Special Leave from the judgment and order dated April 27, 1967 of the Madras High Court in Tax Case No. 75 of 1963. section C. Manchanda, B. D. Sharma and R. N. Sachthey, for the appellant. M. C. Chagla, Janendra Lal and B. R. Agarwala, for the respondent. The Judgment of the Court was delivered by Hegde, J. This appeal by special leave arises from a decision of the Madras High Court in a reference under section 66 (1) of the Indian Income Tax, 1922 (to be hereinafter referred to as the Act). As demanded by the assessee the Tribunal submitted the statement of the case to the High Court seeking its opinion on the question "whether on the facts and in the circumstances of the case, the loss of Rs. 1,93.750/ was an allowable deduction under section 10 of the Income tax Act?" 461 Material facts are these The assessee respondent was a member of a Hindu undivided family which carried on money lending business in India and abroad. In the course of such money lending business, properties were taken over in settlement of debts as and when occasion arose. The family was disrupted on March 28, 1939. The assessee received some shares in some companies, properties and gardens and certain other items in Malaya. Even after the partition the assesses continued the money lending business in Malaya. During the war, in general with others, the assessee suffered damages to these properties on account of Japanese bombing. This loss occurred on account of bombing in December, 1941, a date falling within the accounting period ending on April 12, 1942, relevant for the assessment year 1942 43. This loss was claimed as a business loss. The Income Tax Officer rejected that claim. The Appellate Assistant Commissioner affirmed the order of the Income Tax Officer . The assessee did not succeed before the Tribunal as well. The Tribunal rejected the claim of the assessee on the sole ground that bombing, which caused the loss, was not incidental to the business of the assessee. The Tribunal held that the loss in question was a loss of stock in trade. That finding of the Tribunal has not been challenged. Hence we have to proceed on the basis that the loss caused to the assessee was a loss of stock in trade. It was contended on behalf of the department that the loss in question cannot be given deduction to, as a business loss, in computing the net income of the assessee under section 10(1). According to the department that was not a loss incidental to the business carried on by the assessee. We are unable to appreciate the contention of the department. It is established that the assessee was carrying on business in Malaya when the war was going on. Malaya was within the war zone and, therefore, there was every possibility of that area being bombed. If the assessee had earned any profits out of his business during the war, the department undoubtedly would have considered those profits as assessable income. It is strange that when loss had occurred in such a situation the department should contend that the loss in question was not a business loss. In our opinion, taking into consideration the facts and circumstances of the case, the loss occurred must be held to be a loss incidental to the business carried in by the assessee in Malaya during the war. We are fortified in our conclusion by the decision of the Bombay High Court in Pohoomal Bros. vs Commissioner of Income Tax, Bombay City(1). The facts of that case are some (1) 462 what similar to the facts before us. The assessee therein, which had its head office in Bombay and branches in various parts of the world, claimed deduction of the losses resulting from the destruction of its stock in trade in three foreign branches, at Manila, Saigon and Kuala Lumpur, by enemy invasion, in computing its profits and gains for the purpose of income tax. The department resisted that claim but the High Court held that the losses in question were trading losses. This decision of the High Court was cited with approval by this Court in Commissioner of Income Tax, U.P. vs Nainital Bank Ltd. (1), In this connection we may also refer to two English decisions. The first case is Green vs J. Gliksten(2). The facts of that case were as follows : A fire occurred on the company 's premises in August, 1921, and destroyed timber the written down value of which in the company 's books was pound 160,824; the company 's valuation of its stock based on cost or market value whichever was the lower, had been accepted for purposes of taxation. The timber had 'been insured for many years and the company had been allowed to deduct the insurance premises in computing its assessable profits. In due course the company received from the insurers a sum of pound 477,838 representing the replacement value of the destroyed timber, but only a small part of this timber was in fact replaced because the current demand was for timber of a different character. The company accordingly credited in its profit and loss account as a trading receipt only pound 160,824 of the insurance payment; the balance did not appear in the profit and loss account but was entered as a reserve in the balance sheet. The Special Commissioners held that no part of the sum of pound 477,838 recovered from the insurers was a trading receipt. But the House of Lords held that the whole sum recovered was trading receipt to be taken into account in computing the profits assessable to Income Tax under case 1 of Schedule D and to Corporation Profits Tax. This court in Nainital Bank 's case (supra) quoting that decision with approval observed. "If receipt from an insurance company towards loss of stock was a trading receipt, conversely to the extent of the loss not so recouped it should be trading loss. " Next we shall refer to the decision of the Court of Appeal in London Investment and Mortgage Co., Ltd. vs Inland Revenue Commissioners.(3) The facts of that case were as follows : The assessee were paying compulsory war damage contributions during the war in respect of the properties in which they were dealing. They received payments under the War Damage Act, 1943, in respect of the properties damaged by enemy action. (1) (2) 14 Tax Cases 364. (3) [1957] 1 All England Reports 377. 463 They disposed of some of the properties but retained others as part of their stock in trade and either were having them rebuilt or would have them rebuilt. Under the War Damage Act, 1943, contributions made and indemnities given under Part I were to be treated for all purposes as outgoings of a capital nature and expenditure on making good war damage was not deductible in computing profits for income tax purposes. On the question whether the value payments should be included in the receipts of the taxpayers ' trade for the purpose of their assessments to income under Case 1 of Schedule D and to profit tax, the Court of Appeal held that the value payments should properly be treated as part of the taxpayers ' trading receipts, since they were money into which their stock in trade had been converted. This decision is an authority for the proposition that the compensation received in lieu of loss, of stock in trade as a result of enemy action is a trading receipt conversely a loss of stock in trade occasioned by enemy action must be considered, as a trading loss. For the reasons mentioned above we agree with the conclu sions reached by the High Court and see no merit in this appeal. It is accordingly dismissed with costs. K.B.N. Appeal dismissed.

The assessee, who was carrying on business in Malaya which was within the war zone, suffered damages to property during the war on account of bombing. The loss in question was loss of stock in trade. On the question whether the loss could be given deduction to as a business loss in computing the net income of assessee under section 10 (1) of the Income tax Act, 1922. HELD : On the facts and circumstance of the case the loss occurred must be taken to be a loss incidental to the business carried on by the assessee during the war. If the assessee had earned any profits cut of his business during the war the department undoubtedly have to consider those profits as assessable income. When loss had occurred in such situation the department cannot contend that the loss in question must not be a business loss. A loss of stock in trade occasioned by enemy action must be considered as a trade loss. [461 F] Bombay High Court in Pohoomal Bros. vs Commissioner of Income tax, Bombay City, , Commissioner of Income tax, U.P. vs Nainital Bank Ltd., , Green vs J. Glikstan, 14 Tax Cases 364 and London Investment and Mortgage Co. Ltd, vs Inland Revenue Commissioners [1957] 1 All England Reports. 377, referred to.

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iminal Appeal No. 52 of 1970. Appeal from the Judgment and Order dated the 10th October, 1969, of the Allahabad High Court (Lucknow Bench) Lucknow, in Criminal Appeal No. 48 of 1968). K. B. Rohatgi, for the appellants. O. P. Rana, for the respondent. The Judgment of the Court was delivered by KHANNA, J. This is an appeal by special leave by Ram Prasad (65), his son Udit Narain (22) and their servant Sri Pal (22) against the judgment of the Lucknow Bench of the Allahabad High Court affirming on appeal the judgment of the Additional Sessions Judge Lucknow whereby the three appellants and three others, namely 651 Sarju Putti and Jaganath had been convicted under section 148 and section 302 read with section 149 Indian Penal Code and had been sentenced to undergo rigorous imprisonment for a period of 18 months on the first count and imprisonment for life on the second count. The occurrence giving rise to the present case took place on March 31, 1967 at 2.30 p.m. in front of and inside the tarwaha of the house of Jaskaran, father of Jagannath accused, in village. Gadarian Purwa at a distance of two miles from police station. Mandiaon. The person murdered during the course of the occurrence was Parmeshwar Din (35). The prosecution case is that Parmeshwar Din de eased and Sita Ram (PW 4) purchased two plots of land situated in the area of village Gadarian Purwa from Paggu and others for Rs. 3,000 as per sale deed dated December 23, 1966. The possession of these plots had been taken by the vendees about one or two months earlier when they paid Rs. 500 as earnest money. The vendees sowed wheat in those plots. Sarju and Putti accused, who are both brothers, laid claim to, those plots. As Ram Prasad accused was an influential person, Sarju and Putti sought his assistance in obtaining the possession of the plots. Ram Prasad is also stated to have been assured by Sarju and Putti that in case they were successful in getting those two plots ', they would give him half of the land. On March 31, 1967, it is stated, Parmeshwar Din was getting the wheat crop standing in the two plots mentioned above harvested. The plots are at a distance of about 150 paces from the house of Jaskaran, father of Jagannath accused. Umrao (PW 1) as well as Sita Ram (PW 4) were also present in the fields along with Parmeshwar Din. The actual work of harvesting was being done by seven labourers, four of whom were women. The male labourers were Shankar, Baddal and Bubba. At about 2.30 p.m., it is alleged, Udit Narain accused came to Parmeshwar Din and told him that some persons were waiting for him in the abadi of Gadarian Purwa to have some talks with the deceased regarding the two Plots in dispute. Parmeshwar Din deceased then went with Udit Narain. Shortly thereafter, Umrao and Sita Ram PWs heard the cries of Parmeshwar Din. On looking towards the house of Jaskaran, they found that the six accused had surrounded Parmeshwar Din and were giving bank a blows to him in front of that house. The six accused then dragged Parmeshwar Din deceased inside the tarwaha which had a thatched roof. The tarwaha had one shutterless opening. Umrao and Sita Ram then ran towards the tarwaha and stood close to the opening of the tarwaha. The labourers engaged in harvesting also followed Umrao and Sita Ram to that place. Chandrika (PW 2) and Mohan (PW 3) were passing that way at that time. Both of them on hearing alarm also came there and saw the accused giving banka blows to Parmeshwar Din. Umrao and others shouted to the accused not to kill Parmeshwar Din, but they too were threatened by the accused. The accused thereafter ran away. Umrao and 652 Others then went inside the tarwaha and. found Parmeshwar Din lying dead in a pool of blood. A number of persons then collected 'there. Umrao got report Ka 1 written by his son Hari Prasad. Umrao thereafter went to police, station Mandiaon and lodged there report Ka 1 at 5.30 p.m. Station Officer Tiwari (PW 11) was not present at the police station at the time he report was lodged. On being informed about the lodging of the report, the Station Officer went to the place of occurrence and arrived there at 6.30 p.m. The Station Officer on arrival recorded the statements of Umrao, Sita Ram and Mohan PWs and prepared inquest report relating to the dead body of the deceased. The body was thereafter sent to the mortuary where post mortem examination was performed by Dr. Jaitle on April 1, 1967. Out of the appellants, Udit Narain and Sri Pal were arrested ,on April 7, 1967, while Ram Prasad surrendered in court on April 14, 1967. The six accused in their statements denied the prosecution allegations about their having participated in the assault on Parmeshwar Din deceased. Sarju and Putti also denied the prosecution allegation that Parmeshwar Din and Sita Ram had purchased the land in question and had brought the same under cultivation. The case of Ram Prasad and Udit Narain was that they had been falsely involved in this case 'because of the enmity of Sita Ram PW with whom, according to these accused, Ram Prasad had an altercation on an earlier occasion. The trial court accepted the prosecution case and convicted and ,sentenced the six accused as mentioned above. The judgement of the trial Court was, as already stated, affirmed on appeal by the High Court. In appeal before us, Mr. Anthony on behalf of the appellants has assailed the conviction of the accused appellants on the ground that the evidence adduced by the prosecution in this case is not reliable and suffers from infirmities. As against that, Mr. Rana on behalf of the State has canvassed for the correctness of the view taken by the High Court. It cannot be disputed that Parmeshwar Din deceased was the victim of a murderous assault. Dr. Jaitle, who performed post mortem examination on the dead body of Parmeshwar Din, found as many as 23 injuries on the body, out of which 18 were incised wounds, One of the incised wounds had resulted in cutting the occipital bone and another had resulted in cutting the frontal bone. The incised injuries, in the opinion of the doctor, had been caused by some heavy sharp edged weapon. The death of the deceased was due to shock and haemorrhage resulting from the head and neck injuries. The injuries were sufficient in the ordinary course of nature to cause death. 653 According to the prosecution case, the injuries found on the body, of the deceased had been caused by the six accused, including the three appellants. The prosecution, in order to substantiate that allegation, examined Umrao (PW 1), Chandrika (PW 2), Mohan. (PW 3) and Sita Ram (PW 4) as eye witnesses of the occurrence These witnesses supported the prosecution case as given above. The trial court, on consideration of the material on record, accepted the evidence of the four eye witnesses. On appeal the learned Judges of the High Court again examined that evidence and found the same to, be convincing. Nothing cogent has been brought to our notice as may justify interference with the concurrent findings of the trial court. and the High Court arrived at as a result of the appraisement of the evidence of the four eye witnesses. It has been pointed out that the statement of Chandrika was, recorded during the investigation of the case 25 days after the occurrence, and as such, not much reliance can be placed upon the testimony of this witness. In this respect we find that the evidence of Chandrika shows that on the morning of the day following the,occurrence, he went to Muzaffarpur in district Barabanki where his father in law was lying ill. The witness stayed in Muzaffarpur for about six days and thereafter returned to his village. In the meanwhile, Sub Inspector Tiwari had gone back to the police station. The SubInspector subsequently called the witness and recorded his statement on April 25, 1967. Chandrika 's name as an eye witness of the occurrence had been mentioned in the first information report which was lodged within about three hours of the occurrence. In the circumstances, the delay in recording the police statement of Chandrika by the investigating officer would not justify rejection of Chandrika 's testimony. In any case, we find that apart from the statement of Chandrika, the prosecution case is also supported by the evidence of ' other three eye witnesses. So far as these witnesses are concerned, their statements were recorded by the investigating officer soon after he arrived at the place of occurrence. Argument has also been advanced on behalf of the appellants that there, is no mention in the first information report that injuries were caused to Parmeshwar Din deceased by the accused before the deceased was dragged inside the tarwaha, while, according to the evidence of the eye witnesses in court, the injuries to the deceased ' were caused by the accused both before he was dragged as well as inside the tarwaha. Reference to the first information report shows that it is recited therein that the deceased was dragged and given banka blows by the accused. The omission to make an express mention in the first information report that banka blows were given to the deceased before he was dragged inside the tarwaha would not in the circumstances, in our opinion, make much material difference. Assuming that banka blows were caused to the deceased inside the tarwaha, this fact would not exculpate any of the accused. The accused at the time of the occurrence were armed with bankas. They dragged the deceased inside the, tarwaha and gave banka blows to 654 him. It is plain that the injuries were caused to the deceased prosecution of the common object of all the accused to cause death of the deceased. The appellants, in the circumstances, car derive any benefit from the inability of the prosecution witnesses .state as to which particular injury was caused which of the accused. It has also been argued that the evidence of the eye witnesses is of partisan character and, therefore, It is not safe to base the conviction ,of the accused upon that evidence. We find it difficult to accede to this contention beause the trial court and the High Court while appraising the evidence of these witnesses, considered all the features ,of the case and came to the conclusion that the evidence of the witnesses was trustworthy and reliable. We find no cogent ground to take a different view. Considerable stress has been laid by Mr. Anthony upon the fact ,that, besides the four eye witnesses who have been examined in this case, the occurrence, according to the first information, report, had also been witnessed by Baddal, Shankar and Hubba. These persons were, however, not examined as witnesses at the trial. It is also pointed out that in addition to these persons, the occurrence was also ,witnessed by Sham Lal and Hubba (this Hubba is different from Hubba whose name was mentioned in the first information report), who also arrived at the scene of occurrence. Sham Lal and Hubba too. were not examined as witnesses. The non examination of these witnesses, in our opinion, would not introduce an infirmity fatal to the prosecution case: It is no doubt true that the prosecution is bound to produce witnesses who are essential to the unfolding of the nar rative. on which the prosecution is based. Apart from that, it cannot be laid down as a rule that if a large number of persons are present at the time of the occurrence, the prosecution is bound to call and ;examine each and every one of those persons. The answer to the ,question as to what is the effect of the non examination of a particular witness would depend upon the facts and circumstances of each case. In case enough number of witnesses have been examined with tregard to the actual occurrence and their evidence is reliable and .sufficient to base the conviction of the accused thereon, the prosecution may well decide to refrain from examining the other witnesses. Like wise, if any of the witnesses is won over by the accused party and as such is not likely to state the truth, the prosecution would have a valid ground for not examining him in court. The prosecution would not, however be justified in not examining a witness on the ground that his evidence even though not untrue would go in favour of the accused. It is as much the duty of prosecutor as of the court to ensure that full and material facts are brought on the record so that there may be no miscarriage of justice. The discharge of such a duty cannot be affected by the consideration that some of the facts if brought on the record would be favourable to the accused. In case the court finds that the prosecution has not examined witnesses 655 for reasons not tenable or not proper, the court would be justified in drawing an inference adverse to the prosecution. So far as the present case is concerned, we find that the prosecution has examined four eye witnesses of the ence and their evidence has been found by the trial court and the High Court to be reliable, convincing and sufficient to warrant the conviction of the accused. It has not been shown to us that the evidence of the persons who were not examined as witnesses was essential for the unfolding of the narrative on which the prosecution was based. The present is not a case wherein the witnesses not examined could have given evidence on a point regarding which the witnesses actually examined were not in a position to depose. We are, therefore, of the view that the failure of the prosecution to examine the persons mentioned above as witnesses would not justify interference with the judgments of the High Court and the trial court. The appeal fails and is dismissed, S.B.W. Appeal dismissed.

The appellants were convicted u/s 148 and 302 read with Sec. 149 of the I.P.C. The conviction was challenged in the Supreme Court, inter alia, on the ground that besides the eye witnesses, the F.I.R. mentioned the names of three more persons who had seen the incident but they were not examined by the prosecution. In rejecting the contention and dismissing the appeal. HELD : Non examination of some of the eye witnesses mentioned in the F.I.R. does not introduce any fatal infirmity to the prosecution case. It is no doubt true that the prosecution is bound to produce witnesses who are essential to the unfolding of the narrative on which the prosecution is based. Apart from that, it cannot be laid down as a rule that if a large number of persons are present at the time of the occurrence,. the prosecution is bound to call and examine each and every one of those persons. The answer to the question as to what is the effect of the non examination of a particular witness would depend upon the facts and circumstances of each case. In case enough number of witnesses have been examined with regard to the actual occurrence and their evidence is reliable and sufficient to base the conviction of the accused thereon, the prosecution may well decide to refrain from examining the other witnesses. Likewise, if any of the witnesses is won over by the accused party and as such is not likely to state the truth, the prosecution would have a valid ground for not examining him in court. The prosecution would not, however, be justified in not examining a witness on the ground that his evidence even though not untrue would go in favour of the accused. It is as much the duty of the prosecutor as of the court to ensure that full and material facts are brought on the record so that there may be no miscarriage of justice. The discharge of such a duty cannot be affected by the consideration that some of the facts if brought on the record would be favourable to the accused. In case the court finds that the prosecution has not examined witnesses for reasons not tenable or not proper, the court would be justified in drawing an inference adverse to he prosecution. [654F]

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Appeal No. 2433 of 1968. Appeal by special leave from the Award dated August 9, 1968 of the Labour Court Gauhati in Case No. 6 of 1968 published in the Assam Gazette dated the 4th September 1968. B. Sen, G. Mukhuty and D. N. Gupta, for the Appellant. D. L. Sen Gupta and section K. Nandy, for the respondents. The Judgment of the, Court was delivered by VAIDIALINGAM, J. In this appeal, by special leave, the question that arises for consideration is whether the appellant has contravened section 9 D of the (hereinafter referred to as the Act), when at the request of the majority of the workmen the holiday for Diwali was changed from 11th November, 1966 to the ,next day. According to the usual practice, at the commencement of the year 1966, the appellant had published a list of holidays for that year. According to this list, the holiday for Kali Puja was stated to be on Friday, the 11th November, 1966. On November 5, 1966, the appellant notified that the factory will remain closed for Kali Puja on Friday, the 11th November, '1966. This notification was only on the basis of the list of holidays referred to earlier. The workmen in this company were represented by two unions (1) Amco Employees Association (hereinafter referred to as the Association) and (2) Amco Sramik Sangha (hereinafter referred to as the Sangh ). There is no controversy that the Sangha represented the majority of the workmen of this company. On November 10, 1966, the General Secretary of the Sangha wrote a letter to the factory Manager of the appellant requesting him to close the factory on Saturday, the 12th November, 1966, on account of Kali Puja instead of the 11th instant as already notified by the com 118 pany on November 5, 1966. A further request was made in this letter that the factory may be kept working on Friday, the 11th November, in accordance with the timings mentioned therein. The General Secretary further stated in this letter that if the request of change in the holiday is not accepted, a large number of workmen will not be attending on Saturday, the 12th November, which will result in heavy loss of production. On receipt of this letter, the appellant put up a notice the same 'day that in response to the request of the Sangha, the factory will remain closed for Kali Puja on Saturday, the 12th November, instead of Friday, the 11th, as previously notified. This notice further stated that the factory will remain open on Friday, the 11th November during the hours mentioned therein. Quite naturally, this notice cancelled the previous notice dated November 5, 1966. After the company 's notice regarding the change of holiday for Diwali was put up on the notice board, the Association, on the same day (November 10, 1966), addressed a letter to the management that the change of holiday for Diwali was not justified and that the date originally declared as a holiday, namely, the 11th November, should be allowed to stand. The company obviously did not accede to this request of the Association with the result that most of the workmen attached to the association did not attend to work on November 11, 1966. The wages for that day were not paid by the appellant to those workmen on the ground that they were absent from duty. Nearly a year later on December 30, 1967, the respondents in this appeal, 83 in number, filed an application before the Labour Court, Gauhati, under section 33 A of the Act. The grievance of these workmen appears to be that there was an industrial dispute pending at the relevant time and that without complying with the provisions of section 33, and without conforming to the provisions of section 9 A, the employer had altered the condition of service by changing the date of the holiday for Diwali. According to them, one day holiday for Kali Puja was being allowed for a number of years and that it has become a condition of service. The notice issued on November 5, 19766, declaring November 11, 1966, as a holiday for Diwali was in conformity with the right of the workmen under the conditions of their service. The Standing Orders of the company did not give any power to the appellant to change the holiday for Diwali and, therefore, section 3 3 (2) (a) of the Act does not give power to the appellant to alter the, said date. Any change of date can only be effected in accordance with section 9 A. As that has not been done, the action of the employer in declaring 12th November, 1966, as a holiday and refusing to pay wages for 11th November, 1966, were both illegal. Accordingly they proved for directing the appellant to pay them 'Wages for November 11, 1966, which has been denied to them, as their absence on that day was perfectly legal. The management contested the application on the ground that there has been no change effected in the conditions of service of the workmen by altering the holiday of Diwali from November 11, to the next day. As the holiday is for Diwali and as the majority of the workmen specifically desired the holiday on the 12th November the 119 change was made to suit the convenience of the workmen. Even if the fixation of a holiday is a condition of service, the change has been made for the benefit of the workmen. The management further pleaded that under the Standing Orders they were entitled to fix the holidays and also to effect any changes therein and, therefore, section 33 (2) (a) of the Act gives power to them to effect such a change, although an industrial dispute was then pending. The management also cited certain previous instances when the holiday for Holiday or for Diwali once fixed had been altered at the request of the workmen. The Labour Court has accepted the plea of the management that the Sangha represented the majority of the workmen of the appellant. It has further found that the appellant altered the date from 11th to 12th at the specific request of the Sangha. But the Labour Court held that, as the holiday has been originally fixed for the 11th November by the notice dated November 5, 1966, on the basis of the list of holidays announced by the company, the alteration of the holiday from 11th to 12th November, though at the request of the majority of the workmen, amounted to a change in the condition (if service and as such, the procedure under section 9 A should have been followed. As the said procedure had not been followed by the appellant, the Labour Court held that there has been a violation of section 33 read with section 9 A of the Act. In this view, it granted the reliefs asked for by the 33 workmen. Mr. B. Sen, on behalf of the appellant company supported the stand taken by it before the Labour Court. He urged that there is no question of any cancellation of a holiday that the workmen were entitled to, in which case it may be stated that the condition of service is effected. On the other hand, the workmen did have a holiday for Diwali on the 12th November. The counsel also referred us to the evidence on record to show that on previous occasions such changes had been effected in the holidays when a request was made by the workmen concerned. Mr. Sen Gupta, learned counsel for the respondents, has adopted the reasons given by the Labour Court for holding that a change in the condition of service has been effected by the appellant. In particular, Mr. Sen Gupta pointed out +hat if the employer wanted to effect a change in the date of the holiday, it should have been done by the appellant entering into a settlement with the work men, as contemplated by clause (a) of the proviso to section 9 A. The sum and substance of the arguments of Mr. Sen Gupta was that the appellant, having fixed the holiday for Diwali as per its previous circular". had no power to change the same oven though a majority of the workmen had desired the appellant to do so. Section 9 A no doubt provides that the conditions of service of any workmen in respect of any matter specified in the Fourth Schedule cannot be changed without following the procedure indicated therein. If the alteration of the date of a holiday amount to a change in the Condition of service. it is needless to state that the appellant is bound to follow the Procedure laid down in section 9 A. Item 5 of the Fourth Schedule deals with "leave with wages and holiday". There 120 fore, prima facie, if a holiday has been fixed, the management may not have power to totally cancel the same or deprive the workmen of such a holiday without conforming to provisions of section 9 A. In the notice published at the beginning of the year 1966 regarding the holidays for the said year, the appellant has no doubt stated that Friday, the 11th November, will be a holiday for Kali Puja. But there is a statement in this notice to the effect that this list is subject to modification, if thought necessary". Under paragraph 6 of the company 's certified Sanding Orders, it is provided that "Notice specifying (a) the days observed by the Factory as holidays and (b) pay days, shall be posted as required by the Factory Act and the payment of wages Act respectively". There is no controversy that the list of holidays published at the beginning of the year 1966 as well as the circular dated November 5, 1966 are in conformity with this provision. Similarly the notice dated November 10, 1966, by the management regarding the 12th November being a holiday for Diwali, acceding to the request of the workmen, must also be considered to satisfy the provisions of this clause in the Standing Orders. In our opinion, the alteration of the date regarding the holiday for Diwali, from 1 1 the to the next day, cannot be considered to be an alteration in the conditions of service. The workmen may be entitled to have a holiday for Diwali. But on what particular day Diwali Calls or it is being observed and a holiday is to be declared, is a matter to be decided by the management in consultation with the workmen. If a large body I of the workmen require a change in the date of the holiday on the ground that the festival is not being observed on the day originally fixed and the management changes the date,, it cannot be stated that there is an alteration in the conditions of service. The workmen are not being deprived of a holiday at all for Diwali. In fact they have got it on the 12th November, 1966. In The Workmen of M/S. Sur Iron & Steel Co. Pvt. Ltd. vs M/S. Sur Iron & Steel Co. Pvt. Ltd., and another(1), the workmen contended that the change in the weekly off day, from Sunday to Saturday, without complying with the provisions of section 9 A, was illegal. This Court rejected that contention on two grounds that (1) there was no specific entry in the Fourth Schedule covering a condition of service relating to a weekly off day and (2) even assuming that the grant of a weekly off day falls under item 4 of the Fourth Schedule, the State Government had issued a notification on April 10, 1962 under section 9,B laying down that no notice under section 9 A was required to be served in respect of the matters covered by items 4, 6 and 11 of the said Schedule for a period of three months. Therefore, it will be seen that this decision did not express any opinion on the question whether the alteration of the weekly off day from Sunday to Saturday, amounts to a change in the conditions of service coming within section 9 A. In fact the indications in the judgment are that such an alteration will not attract section 9 A. The decision in M/s Tata Iron and Steel Co. Ltd. vs The Workmen and others(2) does not advance the case of the respondents. From (1) (2) 121 the facts of that case it is seen that Sunday had been a holiday in the factory concerned for a long number of years. The company, for the reasons stated in the judgment, cancelled this holiday and in turn gave a holiday in the mid week without following the procedure under section 9 A. It was held in the particular circumstances of that case that the alteration amounts to a change in the conditions of service. It must be noted that the workmen have been having for a long number of years Sunday as a holiday and that may have become a condition or their service. A holiday on a Sunday can only be on that day and no other day of the week can be Sunday. On this basis the decision has been rendered holding that canceling, the holiday enjoyed on Sunday amounts, in the circumstances, to a change in the conditions of service. The position in the case before. us is entirely different. The fact is that the workmen have not been deprived of a holiday for Diwali. Even assuming that the workmen have got a right to get a holiday for Diwali and that it has become a condition of service, in this case the workmen did have a holiday for Diwali. The holiday for the said festival is to be given on the date when the majority of the workmen claim that they are celebrating Diwali. It has been emphasised in M/s. Tata Iron and Steel Co. Ltd. vs The workmen and others(1) that the real object and purpose of section 9 A is to afford an opportunity to the workmen to consider the effect of a proposed change and. if necessary, to represent their view on the proposal. Even assuming that the alteration of the date of the holiday for Diwali will amount to a condition of service, there is no question, in this case, of a contravention of section 9 A, when the majority of the workmen themselves requested the employer to make the ' alteration. The employer was within its rights under section 3 3 (2) (a). The evidence on the side of the respondents shows that the workmen actually celebrated Diwali ,on the 12th November, which was declared to be a holiday. For the reasons stated above, we are of the opinion that the application filed by the workmen before the Labour Court under section 33 A was misconceived. In the result, the order of the Labour Court is set aside and this appeal is allowed. There will be no order as to ,costs. S.C. Appeal allowed.

The appellant, according to the usual practice of the company, at the beginning of 1966, had published a list of holidays for that year. According to this list, the holiday for Kalipuja was stated to be on Friday the 11th November 1966. The workmen in this company were represented by two Unions The Amco Employees Association ' and Amco Shramic Sangha ' of which the Sangha represented the majority of the workmen of this company. On November 8, 1966, the appellant notified that the factory will remain closed for Kalipuja on 11th November 1966. On 10th November 1966, the General Secretary of the Sangha wrote a letter to the Factory Manager of the Company requesting him to close the factory on Saturday the 12th November, 1966 on account of Kalipuja instead of 11th November, 1966. A further request was made that the factory may be kept working on Friday in accordance with the timings of the company and stated in his letter that if the request for change in the holiday is not acceptable a large number of workmen will not be attending on Saturday and there will be heavy loss of production. On receipt of this letter, the appellant put up a notice the same day that in response to the request of the Sangha the factory will remain closed on Saturday the 12th November instead of Friday the 11th. After the company 's notice regarding the change of holiday for Kalipuia, the other Union, the Association on the same day addressed a letter to the Management that the change of holiday for Kalipuja was not justified and that the original date should be allowed to stand. The company did not accede to this request and as a result most of the workmen belonging to the Association did not attend work on November 11, 1966. The wages for the day were not paid by the appellant to those workmen who were absent on that day. After about a year, the respondent& filed an application before the Labour Court under section 33 A of the Act. The grievance of these workmen was that there was an industrial dispute pending at the relevant time and that without complying with the provisions of section 33 and section 9 A, the employer had altered the condition of the service by changing the date of the holiday for Kalipuja. According to the respondents, one day holiday for Kalipuja was allowed to them for a number of years and that it had become a condition of service. The standing orders of the company did not give any power to the appellant to change the, holiday for Kalipuja, and therefore section 33 (2) (a) of the Act was violated. According to them, any change of date can only be affected in accordance with section 9 A. Therefore the employer in declaring 12th November as a holiday and refusing to pay wages for 11 November 1966 acted illegally. The management on the other hand, Contested the application on the ground that there had been no change in the conditions of service of the workmen. The change was made to suit the convenience of the workmen themselves and it was done for their benefit. The Labour Court accepted the plea of the management but held that as the holiday has been originally fixed for 11th but later changed to 12th amounted to a change in the condition of service and therefore, the procedure under section 9 A had not been followed. As the said procedure had not been followed by the appellant, the Labour Court held that there had been it violation of section 33 read with section 9 A of the Act and he granted the reliefs accordingly. Allowing the appeal, 117 HELD : (i) The alteration of the date regarding the holiday for Kalipuja from 11th to 12th November 1966 cannot be considered to be an alteration in the conditions of service. The workmen may be entailed to have a holiday for ' Kalipuja. But on what particular date Kalipuja falls or it is being observed and a holiday is to be declared, is a matter to be decided by the management in consultation with the workmen. If a large body of the workmen require a change in the date of the holiday on the ground that the festival was not being observed on the day originally fixed. and the management changed the date, it cannot be stated that there was an alteration in the conditions of service. The workmen were no, being deprived of a holiday at all for Kalipuja. In fact, they had got it on the 12th November 1966. [120D] The Workmen of M/s. Sur Iron & Steel Company Private Ltd. vs M/s. Sur Iron & Steel Co. Private Ltd. , referred to. (ii)Even assuming that alteration of the date of the holiday for Kalipuja will amount to a condition of service there is no question in the present case of a contravention. of section 9 when the majority of the workmen themselves requested the employer to make the alteration. The employer was within its rights under section 33(2). Further. the evidence on the side of the respondents showed that the workmen actually celebrated Kalipuja on the 12th November which was declared to be a holiday. Therefore, the application filed by the workmen before the Labour Court under section 33 A was misconceived. [121E] M/s. Tata Iron & Steel Co. Ltd. vs Workmen and Ors. , discussed and distinguished.

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minal Appeal No. 172 of 1969. Appeal by certificate under Article 134(1)(c) of the Con stitution of India from the judgment and order dated June 20, 1969 of the Delhi High Court at New Delhi in Criminal Revision No. 385 of 1968. 924 Hardev Singh, for the appellant. Jindra Lal and B. P. Maheshwari, for the respondent. The Judgment of the Court was delivered by Shelat, J. In March 1967, the appellant was an employee in a sweetmeat shop, known as Bengal Sweet Shop being shop No. 6, Sector 11, in Ramakrishna Puram, New Delhi. The shop was owned by one Budh Ram and one A. K. Bhattacharya. On March 15, 1967, wit. F. Dean, a Food Inspector in the employment of the Municipal Corporation of Delhi, went to the said shop and purchased 'patisa ' which were sold to him by the appellant. These were sold to him from a lot exposed for sale. The Food Inspector then divided the patisa into three portions and packed each of them into sealed bottles, one of which was handed over by him to the appellant. On an analysis of the sample by the Public Analyst appointed under the , XXXVII of 1954 it was found that the patisa were prepared with unpermitted coal tar dye, and therefore, were adulterated food stuff. A complaint to that effect was filed before the Magistrate, 1st Class, Delhi, who, after recording evidence, found the appellant and the said Budh Ram guilty under section 7(1) read with section 16(1) of the Act, and sentenced each of the two accused to simple imprisonment for a period of six months and a fine of Rs. 1,000, in default imprisonment for a further period of three months. On an appeal by the appellant and his co accused, the said Budh Ram, the Additional Sessions Judge allowed Budh Ram 's appeal and set aside the order of conviction passed against him on the ground that though he and the said Bhattacharya were partners in the firm which carried on the said shop, there was nothing to show that Budh Ram was in charge of the said shop or its business or was in any way responsible for the sale of articles sold in the shop. He found that Budh Ram was, on the contrary, an employee of a club in New Delhi and was therefore at best a sleeping partner. So far as the appellant was concerned, the Additional Sessions Judge held that he was an employee of the firm, concerned with the sales, that the prosecution had led sufficient evidence to establish its case against him, and therefore, his conviction could not be interfered with. Regarding the sentence awarded to him, the Additional Sessions Judge remarked that (a) the case was not covered by section 2(i) (j) of the Act, but was one which amounted to violation of rules 23 to 30 of the Rules framed under the Act, (b) that there was nothing in the evidence to show that the use of the unpermitted coal tar dye in the manufacture of the patisa in question rendered them injurious to health, and (c) that there was no allegation of the appel 925 lant having committed a similar offence before. On these 'grounds he partially allowed the appeal by reducing the sentence of imprisonment to the period of imprisonment already undergone by the appellant before. he was granted bail. The order awarding the said fine was not interfered with. Against that order, the Municipal Corporation filed a revision petition in the High Court urging that in view of the mandatory provisions of section 16 of the Act providing for the compulsory miniMum sentence, the Additional sEssions Judge ought not to have interfered with and reduced the sentence imposed by the Trial Magistrate. The High Court accepted that contention and setting aside the order of sentence, as modified by the Additional Sessions Judge, restored the order of sentence passed by the Trial Magis trate. The High Court, however, granted a certificate under article 1 34 (c) of the Constitution. The appellant filed this appeal on the strength of that certificate. Counsel for the appellant did not challenge before us either the order of conviction or the order of sentence passed against him by the High Court, which, as aforesaid, confirmed the conviction and restored the order. of sentence passed by the Trial Magistrate. The only point raised by him was that the appellant should be given the benefit of section 4 of the under which the sentence of imprisonment awarded to the appellant could be dispensed with and an admonition should instead be given to him. In a recent decision in Isher Das vs Punjab(1) to which two of us were parties, it was held on a consideration of section 18 of the that its operation is not excluded in cases of persons found guilty of offences under the . The former Act was brought on the statute book in 1958, but no specific exception as regards the , though an earlier Act, is to be found therein, just as an exception in respect of the Prevention of Corruption Act, 1947 has been expressly made. The provisions of the , therefore, apply to persons found guilty under the . That decision, however, expressed a note of caution that adulteration of food being a menace to public health and the Act having been enacted with the object of eradicating that antisocial evil and for ensuring purity of articles of food sold to the members of the public courts should not lightly resort to the provisions of section 4 of the which applies to offenders who are 21 years of age or above. (1) ; 926 The question, therefore, is whether we ought to, apply, in the circumstances of the case and the nature of the evil to, prevent which section 16 of the Prevention of Food Adulteration was enacted, section 4 of the and release the appellant from the sentence of simple imprisonment awarded to him with an admonition and a warning only. Under section 2 (i) (j), the patisa, in the preparation of which a nonpermissible colouring matter has been used, is an adulterated article. Such an article is adulterated food as defined by cl. (v) of section 2, as that clause defines 'food ' to include any article used in the preparation of human food or any flavouring matter. Sec. 7 provides that no person shall himself or by any person on his behalf manufacture for sale, or store, or sell "any adulterated food" or any article of food in contravention of any other provision of the Act or of any rule made thereunder. 16 provides for a minimum sentence of imprisonment for not less than six months inter alia for the offence of selling adulterated food. The proviso confering discretion to the courts in the matter of sentence does not apply to sales of food which is adulterated under section 2(i) (j). The policy of section 16, therefore, is clearly to impose a sentence not less than that provided therein inter alia for sale of food articles adulterated as defined _by section 2 (i) (j). Under rule 23 of the Prevention of Food Adulteration Rules, 1955, addition of a colouring matter to any article of food except as specifically permitted under the rules is prohibited. Rule 28 makes only the coal tar dyes specified therein permissible in the preparation or manufacture of articles of food set out in rule 29. There is no dispute that the coal tar dye used in the patisa sold by the appellant was not one of the coal tar dyes permissible under rule 28. That is also clear from the report of the Public Analyst, the correctness of which was not under any challenge before us. Though there was no express evidence on the record that the use of the particular coal tar dye in the making of the patisa sold at this shop was injurious to health, it must be presumed to be so from the fact that it is not one of the permitted coal tar dyes enumerated in r. 28. It is, therefore, clear that the sale of such an article of food was an anti social activity, deleterious to the health of those who would consume them as article of food, the eradication of which is the principal aim of the Act and in particular of section 16 thereof. The evil would appear to be more pernicious when. it is realised that patisa are more often than not purchased and consumed by children and by persons from the unaffluent sections of the society, who cannot afford to buy costlier sweets prepared by more sophisticated processes. The colouring matter was obviously used to attract customers, without any regard to the 927 injury it would cause to those who consumed them. The appellant 's activity being thus distinctly anti social, we do not think that it would be either expedient or in consonance with the object with which the was passed to apply section 4 of the . There being no other point raised for our consideration, the appeal fails and is dismissed.

In Isherdas vs Punjab this Court held on a consideration of section 18 of the Probation of offenders Act that its operation is not excluded in cases of persons found guilty of offences under the . That decision. however, expressed a note of caution that adulteration of food being a menace to public health and the Act having been enacted with the object of eradicating that antisocial evil and for ensuring purity of articles of food sold to the members of the public, Courts should not lightly resort to the provisions of s.4 of the Probation of Offenders Act. Isherdas vs Punjab ; The appellant, an employee of a sweetmeat shop found guilty under s.7(1) read with section 16(1) of the and sentenced to simple imprisonment for a period of six months and of rupees onethousand. It was found that the patisa sold by him were prepared withunpermitted coal tar dye and therefore, were adulterated food stuffas defined by section 2(1) (j). On the question whether in the circumstancesof the case and the nature of the evil to prevent which section 16 of the , was enacted, section 4, of the Probation of Offenders Act could be applied. , HELD : The sale of an article of food prepared with unpermitted coal tar dye is an anti social activity, deleterious to the health of those who would consume them as article of food, the eradiction of which is the principal aim of the Act and in particular of s.16 thereof. The evil would appear to be more pernicious when it is realised that patisa are more often than not purchased and consumed by children and by persons from the non affluent sections of the society. The colouring matter was obviously used to attract customers, without any regard to the injury it would cause to those who consumed them. The appellant 's activity being thus distinctly anti. social, it would be neither expedient nor in consonance with the object with which the Prevention of Food Act.

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Appeals Nos. 1194, 11 96, 1197 & 1250 of 1967. 400 Appeals by certificate from the judgment and order dated November 22, 23 and 24, 1966 of the Bombay High Court in Special Civil Applications Nos. 1476 and 1424 of 1966. G. L. Sanghi, C. K. Ratnaparkhi and A. G. Ratnaparkhi, for the appellant (in C.A. No. 1194/67). B. N. Lokur, C. K. Ratnaparkhi, A. G. Ratnaparkhi and B. M. Srivastava, for the appellant (in C.A. No. 1196/67). M. C. Bhandare, B. D. Sharma, for the appellants (in C.As. 1197 and 1250/67 and Respondent No. 2 (in C.As. 1194 and 1196/67). Sharad Manohar and B. P. Maheshwari, for respondent No. 1 (in C. As. 1194 and 1197 of 1967). M. N. Phadke, Sharad Manohar and B. P. Maheshwari, for respondent No. 1 (in C.As. 1196 & 1250/67). B. N. Lokur, G. L. Sanghi, C. K. Ratnaparkhi, A. G. Ratna parkhi and B. M. Srivastava, for respondent No. 2 (in C.As. 1197 & 1250/67). The Judgment of the Court was delivered by MATHEW, J. The respondents in these appeals filed writ peti tions in the Bombay High Court challenging the validity of the Borough Municipalities (Validation of Certain Taxes on Buildings and Lands) Act, 1965 (Maharashtra Act No. 111 of 1966), hereinafter called the "Validating Act", on the ground that the provisions of the Act violated their fundamental rights under article 14 of the Constitution and for restraining the appellants from levying house tax on the mills, factories and buildings connected therewith of the respondents or collecting the same from them. A Division Bench of the High Court held that sections 3(b), 4(1), 4(2) and 5 of the Validating Act were invalid as they contravened article 14 and granted the prayer for restraining the appellant Municipality from levying and collecting the tax. These appeals, by certificate, are directed against the judgment of the Division Bench. Till the year 1947, the appellant Municipality used to levy house tax on the mills, factories and buildings connected therewith of the respondents in these appeals on the basis of their annual letting value and the annual letting value for this purpose was ascertained in the normal way, that is, by ascertaining the amount at which the buildings might reasonably be expected to let from year to year. In 1947, the appellant Municipality made fresh rules for levy of house tax and rule 2 (c) of the new rules ran as follows 401 "2(c) In the case of mills and factories and buildings connected therewith, house tax on buildings shall be levied at the usual rate on the annual rental value fixed at Rs. 40/ for every 100 square feet or portions thereof for each sterey, floor or cellar. "Explanation : The expression "building connected therewith" means and includes warehouses, godowns, millshops, etc. which are within the compound of mill premises but does not include residential buildings, such as bungalows, out houses. "Note : Buildings which are not taxed under Rule 2(c) shall be taxed under the ordinary rules. " Under this rule, the annual rental value of all the buildings of mills and factories other than residential buildings was fixed at a uniform rate of Rs. 40/ for every square foot of floor area irrespective of the actual rental value of the premises. One of the respondents, namely, Lokamanya Mills. Barsi, Limited, claimed refund of amounts paid by them on the basis that Rule 2(c) was ultra vires the Boroughs Act and they filed 4 suits for the same. Against the decrees dismissing the suits, appeals were preferred to this Court and they were finally disposed of by this Court in Lokamanya Mills, Barsi Ltd. vs Barsi Borough Municipality(1). This Court, after referring to the provisions of section 78 and the explanation to section 75 of the Boroughs Act, held that the Municipality could levy a rate on lands and buildings on the basis of their capital or annual letting value and that in framing rule 2(c), the Municipality had adopted a mode of valuation different from the one sanctioned by the Boroughs Act. The Court also observed : "The vice of the rule lies in an assumed uniformity of return per square foot which structures of different classes which are in their nature not similar, may reasonably fetch if let out to tenants and in the virtual deprivation to the rate payer of his statutory right to object to the valuation." Accordingly, the Court allowed the appeals and decreed the suits. The main objects of the Validatting Act were to enable the municipalities governed by the Boroughs Act to levy house tax on mill 's factories and buildings connected therewith on the basis of rule 2(c) and to validate the levy and collection of the tax with retrospective effect. Section 3 of ,the, Validating Act (1) ; 402 brings about certain amendments in the Boroughs Act. In section 3 of the Boroughs Act, a clause is inserted which lays down that " rate on buildings or lands" includes any tax imposed on buildings or lands. Another amendment introduced in the Boroughs Act is with reference to Explanation to section 75. Prior to the amendment, the explanation to section 75 was as follows : "In the case of lands the basis of valuation may be either capital or annual letting value. " This explanation was substituted by the Validating Act by an explanation which reads "Explanation : For the purposes of a rate on buildings or lands, the basis of valuation may be (i) the annual letting value. (ii) the annual value; (iii) the floor area, in the case of mills, factories buildings and lands connected therewith; (iv) the capital value in the case of vacant lands". Both these amendments were given retrospective effect from the commencement of the Boroughs Act. Sections 4 and 5 of the Validating Act are designed to validate with retrospective effect, the levy and collection of tax notwithstanding the decision of this Court. Sub section (1) and (2) of section 4 provide "4(1) Any house tax and any water tax levied or purported to be levied and collected in respect of any mills, factories and buildings and lands connected therewith or in respect of any vacant lands, under the Boroughs Act and rules made thereunder, at any time before the commencement of this Act shall be deemed to have been levied and collected by or under the Boroughs Act as amended by this Act; and accordingly notwithstanding anything in any judgment, decree or order of any Court any such house tax or water tax levied and collected shall, for all purposes be deemed to be, and always to have been, validity levied and collected, and shall not be called in question merely on the ground that the tax was not levied on the basis of the annual letting value, or was levied on the basis of a uniform rate on the floor area, or that it was levied on the basis 403 of capital value or a percentage on such value, or on the ground that any proceeding laid down in the Boroughs Act or in the rules was not followed." "4(2) anything done or any action taken, by or on behalf of any Borough Municipality or any officer of such Municipality, acting or purporting to act under the provisions of the Boroughs Act or any rules made thereunder for or in connection with the levy or collection of the said taxes, shall be deemed for all purposes to have been validly done or taken; and no suit or other legal proceedings whatsoever shall be entertained or continued in any Court on any or all of the grounds mentioned in sub section (1). " Section 5 provides, among other things, for recovery of tax by the municipal authority concerned and the period within which it should be recovered, etc. The two points which arise for consideration in these appeals are, whether rule, 2(c) was available to the appellant Municipality for imposing house tax on mills, factories and buildings connected therewith of the respondents and whether the rule can be deemed to have been in operation in order that the levy and collection of house tax might be validated with retrospective effect It may be recalled that rule, 2 (c) was struck down by this Court in Lokamanya Mills, Barsi Ltd. vs Barsi Borough Muni cipality (1) on the, basis that the Boroughs Act authorized levy of house tax only on the basis of annual letting value or capital value of the land or building as the case may be, and that rule 2(c) as it purported to levy house tax on the basis of the floor area was ultra vires the Act. When the rule was struck down by this Court, the effect was, that the rule could never be deemed to have been passed. Apart from rule 2(c), there was no charging provision similar to rule 2(c) either in the Boroughs Act, or in the Validating Act for levying house tax on mills, factories and buildings connected therewith. After rule 2(c) was struck down, the Municipality did not frame any rule under the provision of section 75 of the Boroughs Act for imposing house tax on mills factories or buildings connected therewith. The Validating Act has not also revived or resurrected rule 2(c). Therefore, the position was ,that there was no charging provision for imposition of house tax on the mills, factories or buildings connected therewith. It is only if there was a charging provision for imposing house tax on the mills, factories or buildings connected therewith that any house tax could be imposed upon the mills, factories or buildings connected therewith of the respondents. All that the explanation to section 75 substituted by the Validating Act did was (1) ; 404 to enact that, for imposing house tax, floor area will be the basis of valuation in the case of mills, factories or buildings connected therewith. The consequence is that (there could be no levy of house tax on the mills, factories or buildings connected therewith of the respondents nor could any demand be made on the respondents on the basis of any levy. The High Court was, therefore, right in restraining the appellant Municipality from levying house tax on the mills, factories or buildings connected therewith of the respondents and in quashing the demand notice issued. Section 4 did not resurrect rule 2(c) with retrospective effect in order that it might be said that there was, in the eye of law, a provision for charging house tax on mills, factories or buildings connected therewith so that the tax levied and collected might be validated. Even if section 4 had resurrected rule 2(c) and said that it shall be deemed to have been passed under the Validating Act with retrospective effect, that might not have cured invalidity on account of its being violative of article 14 of the Constitution as it imposed a flat rate on the floor area without making any classification of the area on the basis of income, productivity. or age of building, etc. But we do not think it necessary to pass upon this hypothetical question as section 4 did not revive or resurrect rule 2(c), much less, give it retrospective operation. In this view, we have no occasion to reach ?the constitutional question as regards the validity of the impugned sections of the Validating Act and we express no opinion upon it. We think that it was not necessary for the High Court to have struck down the provisions of sections 3(2), 4(1), 4(2) and 5 of the Validating Act. When rule 2(c) was held to be inoperative by virtue of the decision of this Court, all the reliefs claimed by the respondents in the writ petitions could have been given to them without striking down these provisions. It is a wise tradition with Courts not to decide a constitutional question if the case can be disposed of on other grounds. We dismiss the appeals but, in the circumstances, make no order as to costs. S.B.W. Appeals dismissed.

The Supreme Court, in Lokmanya Mills, Barsi Led. vs Barsi Borough Municipality ; struck down Rule 2(c) as being violative of article 14 of the Constitution of India, for the vice of assumed uniformity of return per sq. from structures of different classes which are in their nature not similar. The Maharashtra Legislature passed Borough Municipalities (validation of certain taxes on buildings and lands) Act 1965, to validate the levy and collection of the tax with retrospective effect and to enable the municipalities to levy house tax on mills factories and buildings on the basis of Rule 2(c). Explanation to Sec. 75 of the Act was substituted by the new explanation, by the Validating Act. Ss. 4 and 5 are designed to validate the levy and collection of tax with retrospective effect. On challenge through a Writ Petition, the Division Bench of the Bombay High Court struck down Sections 3(b), 4(1), 4(2) and 5 of the Validating Act for their contravention of article 14. The appeal filed by the State and the Barsi Municipal Council before this Court among other things, raised a question as to whether the Validating Act has resurrected the provisions of Rule 2(c) and levy and collection were validated as required by law. Dismissing the appeal, HELD : When the rule was struck down by this Court, the effect was that the Rule could never be deemed to have been passed. Apart from Rule 2(c), there was no charging provision 'similar to Rule 2(c) either in the Boroughs Act or in the Validating Act for levying house tax on mills, factories and buildings connected therewith. After Rule 2(c) was struck down, the Municipality did not frame any rule under the provisions of Section 75 of the Boroughs Act for imposing tax on mills, factories or buildings connected therewith. Section 4 of the Validating Act does not revive or resurrect Rule 2(c). Since the charging section is not revived, there was no authority under law to collect tax on the said categories of properties. Since in the eye of law there was no charging provision, there could be no validation of any levy or collection. [403G] Held further, that the above holding was enough to grant all reliefs claimed by the respondent in the Writ Petition and there was no need to express an opinion on the validity of the impugned sections of the Validating Act. [404F]

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Appeal No. 43 of 1954. Appeal under Article 132(1) of the Constitution of India from the Judgment and Order dated the 22nd November 1952 of the Judicial Commissioner 's Court, Ajmer, in Misc. Petition No. 226 of 1952. N. C. Chatterji (I. N. Shroff, with him) for the appellant. Porus A. Mehta and P. G. Gokhale for the respondents. December 3. The judgment of Mehr Chand Mahajan C.J., Mukherjea, Vivian Bose, Bhagwati and Venkatarama Ayyar JJ. was delivered by Bose J. The judgment of Das and Jagannadhadas JJ. was delivered by Jagannadhadas J. BOSE J. The appellant is the Istimrardar of Kharwa. According to him, be has held a cattle fair on his estate every year for some twenty years. On 8 1 1951 the Chief Commissioner of Ajmer framed certain rules for the regulation of cattle and other fairs in the State of Ajmer. He purported to do this under sections 40 and 41 of the Ajmer Laws Regulation of 1877 (Reg. III of 1877). One of the rules required that persons desiring to hold fairs should obtain a permit from the District Magistrate. Accordingly the appellant applied for a permit. This was refused on the ground that no more permits were to be issued to private individuals. The appellant thereupon applied under article 226 of the Constitution to the Judicial 1067 Commissioner 's Court at Ajmer for the issue of a writ directing the authorities concerned to permit the appellant to hold his fair as usual. He contended that his fundamental rights under the Constitution were infringed and also that the rules promulgated by the Chief Commissioner were ultra vires the Regulation under which he purported to act. The learned Judicial Commissioner refused to issue the writ but granted leave to appeal under article 132(1) of the Constitution in the following terms: "I am of opinion that the question whether the regulation and the bye laws framed thereunder amount to a reasonable restriction on the appellant 's fundamental right to hold a cattle fair in his own land involves a substantial question of law as to the interpretation of the Constitution". The leave is confined to the vires of the Regulation and the bye laws but we allowed the appellant to attack the, validity of the District Magistrate 's action as well. It is admitted that the land on which the fair is normally held belongs to the appellant. That being so, he has a fundamental right under article 19(1)(f) which can only be restricted in the manner permitted by sub clause (5). The holding of an annual fair is an occupation or business within the meaning of article 19 (1) (g), therefore, the appellant also has a fundamental right to engage in that occupation on his land provided it does not infringe any law imposing "reasonable restrictions on that right in the interests of the general public", or any law "relating to (i) the professional or technical qualifications necessary for practising. . . or carrying on" the occupation or business in question. (Article 19(6) as amended in 1951). The only law relevant here is sections 40 and 41 of Regulation III of 1877. Under section 40, the Chief Commissioner is empowered, among other things, to make rules about 137 1068 "(a) the maintenance of watch and ward, and the establishment of a proper system of conservancy and sanitation at fairs and other large public assemblies; (b) the imposition of taxes for the purposes mentioned in clause (a) of this section on persons holding or joining any of the assemblies therein referred to; (b) the registration of cattle". Section 41 provides for penalties in the following terms: "The Chief Commissioner may, in making any rule under this Regulation, attach to the breach of it, in addition to any other consequences that would entire from such breach, a punishment, on conviction before a Magistrate, not exceeding rigorous or simple imprisonment for a month or a fine of two hundred rupees, or both". These sections were not impugned in the argument before us nor were they attacked in the petition made to the Judicial Commissioner, so we will pass on to the rules made by the Chief Commissioner. The first three sub rules of Rule I deal with permits. They prohibit the holding of a fair except under a permit issued by the District Magistrate, and the District Magistrate is enjoined to "satisfy himself, before issuing any permit, that the applicant is in a position to establish a proper system of conservancy, sanitation and watch and ward at the fair". The fourth sub rule empowers the District Magistrate to "revoke any such permit without assigning any reasons or giving any previous notice". When the appellant applied for a permit on 9 7 1952) the District Magistrate replied: "It has been decided that as a matter of policy permits to hold fairs will be issued only to local bodies and not to private individuals. It is, therefore, regretted that you cannot be permitted to hold the fair and you are therefore requested to please abandon the idea". In our opinion, the rules travel beyond the Regu 1069 lation in at least two respects. The Regulation empowers the Chief Commissioner to make rules for the establishment of a system of conservancy and sanitation. He can only do this by bringing a system into existence and incorporating it in his rules so that all concerned can know what the system is and make arrangements to comply with it. What he has done is to leave it to the District Magistrate to see that persons desiring to hold a fair are in a position "to establish a proper system of conservancy, etc. " But who, according to this, is to determine what a proper system is: obviously the District Magistrate. Therefore, in effect, the rules empower the District Magistrate to make his own system and see that it is observed. But the Regulation confers this power on the Chief Commissioner and not on the District Magistrate, therefore the action of the Chief Commissioner in delegating this authority to the District Magistrate is ultra vires. Further, under the fourth sub rule of Rule I the District Magistrate is empowered to revoke a permit granted "without assigning any reasons or giving any previous notice". This absolute and arbitrary power uncontrolled by any discretion is also ultra vires. The Regulation assumes the right of persons to hold fairs, and all it requires is that those who do so should have due regard for the requirements of conservancy and sanitation; and in order that they may know just what these requirements are, the Chief Commissioner (not some lesser authority) is given the power to draw up a set of rules stating what is necessary. If they are in a position to observe these rules, they are, so far as the Regulation is concerned, entitled to hold their fair, for there is no other law restricting that right. Therefore, the Chief Commissioner cannot by Rule invest the District Magistrate with the right arbitrarily to prohibit that which the law and the Constitution, not only allow, but guarantee. As these sub rules of Rule I are ultra vires, the District Magistrate 's order, which in effect prohibits the holding of the fair, is also bad for, without the aid of these rules or of some other law validly 1070 empowering him to impose the ban, he has no power in himself to do it. The matter is covered by the decision of this Court in Tahir Hussain vs District Board, Muzafarnagar(1). The appeal is allowed and the order of the Judicial Commissioner is set aside. We declare that the rules are void to the extent indicated above and we quash the order of the District Magistrate dated 18 9 1952. But we make no order about costs because the point on which we have proceeded was not taken in proper time in this Court. JAGANNADHADAS J. The order of the District Magistrate dated the 18th September, 1952, declining to grant a permit to hold the cattle fair on the ground that it has been decided to issue permits only to local bodies and not to private individuals is bad for two reasons. The rules under which he is to grant or refuse permits in this behalf only authorise him to satisfy himself that the applicant is in a position to establish a proper system of conservancy, sanitation and watch and ward at the fair and also to impose such terms and conditions as he may deem fit. But they do not authorise him to reject an application on the ground on which he has done. The rules themselves under which the permit has been asked for and with reference to which the District Magistrate declined to grant the permit are not within the ambit of the rule making power. These rules purport to have been framed in exercise of the powers conferred by sections 40 and 41 of the Ajmer Laws Regulation, 1877. Section 40 authorises the framing of the rules "for the maintenance of watch and ward and the establishment of a proper system of conservancy and sanitation at fairs and other large public assemblies". But the actual rules as framed are to the effect (1) that no such fair can be held except under a permit of the District Magistrate, (2) that before issuing a permit the District Magistrate is to satisfy himself that the applicant is in a position (1) A.I.R. 1954 S C. 630, 1071 tion and watch and ward at the fair, (3) that when issuing a permit the District Magistrate can impose such terms and conditions as he may deem fit. The net effect of these rules is merely to establish a system of ad hoc control by the District Magistrate through the issue of a permit and by the vesting of other powers in him under the rules. These cannot be said to be rules which in themselves constitute a system of conservancy, sanitation and watch and ward. Thus the result that is brought about is not within the intend ment of the section which authorises the making of the rules. A system of ad hoc control of responsible officers may, possibly be one method of regulating the sanitary and other arrangements at such large gatherings. But if it is intended to constitute a system of ad hoc control with reasonable safeguards, the power to make rules in that behalf must be granted to the rule making authority by the legislative organ in appropriate language. The impugned order of the District Magistrate being bad on both the above grounds, this is enough to dispose of the appeal and it is not necessary to express any opinion as to whether the impugned order infringes also the appellant 's fundamental rights under article 19. The appeal must accordingly be allowed. Appeal allowed.

Under section 40 of the Ajmer Laws Regulation of 1877 (Reg. III of 1877) the Chief Commissioner is empowered, among other things, to make rules about. . . . the establishment of a proper system of conservancy and sanitation at fairs. . . . . The first three sub rules of Rule 1, framed by the Chief Commissioner prohibit the holding of a fair except under a permit issued by the District Magistrate and the District Magistrate is enjoined "to satisfy himself, before issuing any permit that the applicant is in a position to establish a proper system of conservancy, sanitation and watch and ward at the fair". The fourth sub rule empowers the District Magistrate "to revoke any such permit without assigning any reasons or giving any previous notice". The appellant 's application for a permit to hold a fair was refused by the District Magistrate on the ground that no more permits were to be issued to private individuals. Held, that under the Regulation it is the Chief Commissioner and not the District Magistrate who has power to frame rules, that the Chief Commissioner had no authority to delegate that power and that the Rules made by the latter are therefore ultra vires; Held further, that the Rule is also ultra vires for the reason that in authorising the District Magistrate to revoke a permit granted " without giving any reason or previous notice" it invests him with a power to prohibit the exercise by the citizen of the constitutionally protected right to bold fairs. The District Magistrate 's order, which in effect prohibits the holding of the fair, is therefore bad, for, without the aid of these rules or some other law validly empowering him to impose the ban, he has no power in himself to do it. 1066 Per JAGANNADHADAS J. (DAS J. concurring): The impugned order of the District Magistrate is bad: (i)because the rules do not authorise him to reject an application on the ground on which lie has done; (ii)because the not effect of the rules is to establish a system of ad hoc control by the District Magistrate through the issue of a permit and by the vesting of other powers in him under the rules. This result is not within the intendment of the section which authorises the making of the rules. Tahir Hussain vs District Board, Muzafarnagar (A.I.R. referred to.

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Appeals Nos. 50 of 1968 and 1201 of 1970. From the judgment and Order dated the 20th January 1966, and ' 26th November 1968 of the Madras High Court in Writ Appeals Nos. 1124 of 1963 and 153 of 1966. K.S. Ramamurthy and section Gopalakrishnan, for the appellant (in both the appeals). S.V. Gupte and A.S. Nambiar, for respondent Nos. 1 3 (in both ., the appeals). section Govindaswaminathan, A.V. Rangam, N.S. Sivam and A. Subshashini, for respondent No. 5 (in both the appeals). B.R. Agrawala, for intervener (in C.A. 50/68). The Judgment of A.N. Ray, C.J., H.R. Khanna and A. Alagiri swami, JJ. was delivered by Alagiriswami, J. The dissenting Opinion of ' K.K. Mathew and P.N. Bhagwati JJ. was delivered by Bhagwati, J. ALAGIRISWAMI, J. The appellants are the tenants of a property bearing door Nos. 16 and 17 on the Poonamallee High Road in the city of Madras. They became tenants of this building in May 1929, when the property was with one of the predecessors in title of the present landlords, who are the respondents in these appeals. Though, the appellants became tenants in 1929 a registered lease deed came into existence only in 1935 under which the lease was to run upto 1 5 1969. The lessee was entitled to renewal on the same terms, and conditions for another period of fifteen years. The monthly rent agreed upon was Rs. 225/ and a sum of Rs. 225/ was payable as an annual contribution towards repairs and Rs. 220/ towards public charges and taxes. In 1949 the parties mutually agreed that the tenants were to pay a 25 per cent increase in rent and also certain other amounts, The present landlords purchased the property in 1962 and soon after filed an application under Section 4 of the Madras (now Tamil Nadu) Buildings (Lease and Rent Control) Act, 1960 for fixation of fair rent. Thereupon the tenants filed writ Petition No. 1124 of 1963 seeking, to restrain the landlords from proceeding with that petition. The learned Single Judge who heard the petition felt that in view of a long, series of decisions of Madras High Court under the various Rent Control Acts in force in Madras that they applied also to contractual 632 tenancies in the matter of payment of rent as well as eviction, the matter should be considered by a Full Bench in view of the decisions of this Court in Rent Control cases from certain other States. The Full Bench after an elaborate consideration came to the conclusion that the Act controls both contractual as well as statutory tenancies, that it is a complete Code, and enables both landlords and tenants to seek the benefit of fixation of fair rent, whether a contractual tenancy prevails or it has been determined. Thereafter the matter again came up before the same learned Single Judge who, applying the provisions of the Act to the facts of the case held that the Act did not apply to the premises in question. On appeal by the landlords a Division Bench of the High Court held that the premises were not exempted from the provisions of the Act and the Rent Controller has therefore jurisdiction to entertain and dispose of on merits the application for fixation of fair rent filed by the landlords. These two appeals ;are against the judgments of the Full Bench (reported in and the Division Bench respectively. Before we go further into a discussion of the questions that arise :it is necessary to look into certain relevant provisions of the Act. Clause (6) of section 2 of the Act defines landlord thus : "Landlord" includes the person who is receiving or is entitled to receive the rent of a building, whether on his own account .or on behalf of another or on behalf of himself and others or as an agent, trustee, executor, administrator, receiver or ' .,guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant;" Clause 8, in so far as it is relevant, defines tenant as follows "tenant" means any person by whom or on whose account rent is payable for a building and includes the surviving spouse, or any son, or daughter, or the legal representative of a deceased tenant who had been living with the tenant in the building as a member of the tenant 's family up to the death of the tenant and a person continuing in possession after the termination of the tenancy in his favour. Section 4 provides for an application for fixation of a fair rent by the tenant as well as the landlord. The fair rent for any residential building is to be six per cent gross return per annum on the total cost of the building if it is residential and nine percent if it is nonresidential. The total cost has to be calculated by taking the cost of const ruction at prescribed rates less depreciation at prescribed rates as well as the market value of the site on which the building stands. It is to include allowances for such considerations as locality, features of architectural interest, accessibility to market, dispensary or hospital, nearness to the railway station or educational institution and such ,other amenities as may be prescribed. 633 Section 5 provides that when the fair rent of a building has been fixed no further increase shall be permissible except in cases where some addition, improvement or alteration has been carried out at the landlord 's expense and at the tenant 's request. Similarly,. if there is a decrease or diminution in the accommodation or amenities provided,, the tenant may claim a reduction in the fair rent. Section 6 provides for payment of additional sums in cases where the taxes and cesses payable to local authorities are increased. Section 7 prohibits the landlord from claiming or receiving or stipulating for the payment of any premium or anything in excess of ' fair rent. It also provides that where a fair rent has not been fixed the landlord shall not claim anything in excess of the agreed rent. Section 10 deals with the eviction of tenants and lays down the conditions under which an eviction could be asked for. One of those conditions mentioned in sub section (3) is when the Landlord requires. a residential building for his own occupation or a non residential building for the purpose of his business. Clause (d) of sub section (3) provides that where the tenancy is for a specified period agreed upon between the landlord and the tenant, the landlord shall not be entitled to apply under that sub section before the expiry of such period. Sections 12 and 14 provide for recovery of possession by landlord for repairs or for reconstruction. Section 17 provides that the landlord is not to interfere with the amenities enjoyed by the tenant. Section 30 exempts from the provisions of the Act (1) any building the construction of which was completed after the commencement of the Act, and (2) any residential building in respect of which the monthly rent payable exceeds two hundred and, fifty rupees. We shall refer to other details as and when they become relevant. The above short analysis of the Act would show that the Act provides for every contingency that is likely to arise in the relationship ,of landlord and tenant. On behalf of the appellants reliance is placed upon two decisions of this Court, Bhaiya Punjalal Bhagwanddin vs Dave Bhagwat prasad Prabhuprasad ; and Manujendra vs Purendu Prasad ; They are cases dealing with eviction. In those two cases it was held, broadly speaking, that the provisions of the Acts there under consideration were in addition to and not in derogation of the provisions of the Transfer of Property Act. There are certain general observations in those two decisions upon which reliance was placed to contend that they apply to cases of fixation of rent also. The argument was that as it was held in those cases that the Acts did not provide the landlord with additional rights which he did not possess under his contract of tenancy, similarly where there was a subsisting 634 contract of tenancy it is not open . to the landlord to take advantage of the provisions of the Act to apply for fixation of a fair rent at a figure higher than the contract rent. We are not called upon in this case to consider whether those two cases were correctly decided. But we must point out that the general observations therein should be confined to the facts of those cases. Any general observation ,cannot apply in interpreting the provisions of an Act unless this Court has applied its mind to and analysed the provisions of that particular Act. We may also point out that in both those cases the contract of 'tenancy was not subsisting. In a sense, therefore, the observations therein were not really necessary for deciding those cases. We may also point out that in Rai Brii Raj Krishna vs S.K. Shaw Bros. ; dealing with the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 and interpreting section 11 of that Act this Court observed as follows : '. 'Section 11 begins with the words 'Notwithstanding anything contained in any agreement or law to the,contrary ', and hence any attempt to import the provisions relating to the law of transfer of property for the interpretation of the section would seem to be out of place. Section II is a self contained section, and it is wholly unnecessary to go outside the Act for determining whether a tenant is liable to be evicted or not, and under what conditions he can be evicted. It clearly provides that a tenant is not liable to be evicted except on certain conditions, and one of the conditions laid down for the eviction of a month to month tenant is non payment of rent." 'Similarly in Shri Hem Chand vs Shrimati Sham Devi (ILR 1955 Punj 36) which dealt with the Delhi and Ajmer Merwara Rent Control Act, section 13(i) of which provided that no decree or order for the recovery of possession of any premises shall be passed by any court in favour of the landlord against a tenant, notwithstanding anything to the contrary contained in any other law or any contract, it was h. Id that the Act provided the procedure for obtaining the relief of ejectment and that being so the provisions of section 106 of the Transfer or Property Act had no relevance. Both these cases were referred to in the decision in Bhaiya Punjalal Bhagwanddin vs Dave Bhagwatprasad Prabhuprasad. Therefore, the following observations in Manujendra ,vs Purendu Prosad that "Rent Acts are not ordinarily intended to interfere with contractual leases and are Acts for the protection of tenants and are consequently restrictive and not enabling, conferring no new rights of action but restricting the existing rights either under the contract or under the general law." should not be held to apply to all Rent Acts irrespective of the scheme of those Acts and their provisions. The decision of the Madras High 'Court in R. Krishnamurthy vs Parthasarathy (AIR 1949 Mad. 780 1 949 where it was held that section 7 of the Madras Buildings (Lease and Rent Control) Act of 1946 had its own scheme 635 of procedure and therefore there was no question of an attempt to reconcile that Act with the Transfer of Property Act and that an application for eviction could be made to the Rent Controller even before the contractual tenancy was terminated by a notice to quit, should not have been summarily dismissed on the grounds that it was contrary to the decisions of this Court in Abbasbhai 's Case ; and Mangilal 's Case ; and therefore was not a correct law, without examining the provisions of that Act. Be that as it may, we are now concerned with the question of fixation of a fair rent. The legislation regarding control of rents started during the Second World War. In Madras first two orders under the Defence of India Rules were issued as the Madras House Rent Control Orders, 1941 and the Madras Godown Rent Control Order, 1942. In1945 these orders were reissued with slight changes, as the Madras House Rent Control Order, 1945 and the Madras Non Residential Buildings Rent Control Order, 1945. These were replaced by the Madras Buildings (Lease and Rent Control) Act, 1946. Under that Act for the first time both the tenant as well as the landlord were given the right to apply for fixation of a fair rent. This Act was later replaced by the Madras Buildings (Lease and Rent Control) Act, 1949, which again had a similar provision. But the important thing to note about the fixation of a fair rent under both these Acts is that the fair rent was related to the rents prevailing in April 1940 and only a fixed percentage of increase from 8 11/3 to 50 per cent depending upon the rent payable was allowed. The 1960 Act which replaced the 1949 Act adopted a completely new scheme of its own. It provided for the fixation of a fair rent on the basis of the cost of construction and the cost of land and after allowing for depreciation provided for a return of 6 per cent in the case of residential buildings and 9 per cent in the case of non residential buildings. It also provided for increase in rent for such factors as locality, nearness to railway station, market, hospital, school etc. Another significant fact is that all new buildings constructed after 1960 were exempt from the scope of the Act. Still another departure was that the Act applies, in the case of residential buildings, only if the monthly rent does not exceed Rs. 250. The Act also provides for fixation of fair rent under the new provisions even though fair rent for the building might have been fixed under the earlier repealed enactments. All these show that the Madras Legislature had applied its mind to the problem of housing and control of rents and provided a scheme of its own. It did not proceed on the basis that the legislation regarding rent control was only for the benefit of the tenants. It wanted it to be fair both to the landlord as well as the tenant. Apparently it realised that the pegging of the rents at the 1940 rates had discouraged building construction activity which ultimately is likely to affect every body and therefore in order to encourage new constructions exempted them altogether from the provisions of the Act. It did not proceed on the basis that all tenants belonged to the weaker section of the community and needed protection and that all landlords 636 belonged to the better off classes. It confined the protection of the Act to the weaker section paying rents below Rs. 250. It is. clear, therefore, that the Madras Legislature deliberately proceeded on the basis that fair rent was to be fixed which was to be fair both to the landlords as well as to the tenants and that only the poorer classes of tenants needed protection. The facile assumption on the basis of which an argument was advanced before this Court that all Rent Acts are intended for the protection of tenants and, therefore, this Act also should be held to be intended only for the protection of tenants breaks down when the provisions of the Act are examined in detail. The provision that both the tenant as well as the landlord can apply for fixation of a fair rent would become meaningless if fixation of fair rent can only be downwards from the contracted rent and the contract rent was not to be increased. Of course, it has happened over the last few years that rents have increased enormously and that is why it is argued on behalf of the tenants that the contract rents should not be changed. If we could contemplate a situation where rents and prices are coming down this argument will break down. It is a realisation of the fact that prices and rents have enormously increased and there fore if the rents are pegged at 1940 rates there would be no new construction and the community as a whole would suffer that led the Madras Legislature to exempt new buildings from the scope of the Act, it realised apparently how dangerous was the feeling that only "fools build houses for wise men to live in". At the time the 1960 Act was passed the Madras Legislature had before it the precedent of the Madras Cultivating Tenants (Payment of Fair Rent) Act, 1956. That Act provides for fixation of fair rent. It also provides that the contract rent, if lower, will be payable during the contract period. Even if the contract rent is higher only the fair rent will be payable. After the contract period is over only the fair rent is payable. The Madras Legislature having this Act in mind still made only the fair rent payable and not the contract rent if it happens to be lower. It is clear, therefore, that the fair rent under the present Act is payable during the contract period as well as after the expiry of the contract period. It was argued that the basis of the decisions in Rai Brij Raj Krishan 's Case and Shri Hem Chand 's Case was the non obstante clause in those two Acts. But it is well settled that the intention that a legislation should, take effect notwithstanding any earlier legislation on the subject can be both explicit and implicit and that is the Position in the present case. We do not also feel called upon to refer to the decisions in Glossop vs Ashley , a Newell vs Crayford Cottage Society , and Kerr vs Bryde , nor to the various statements regarding the law in Megarry 's work on the Rent Acts relied upon by Sri K. section Ramamurthy on behalf of the appellants. They are based on the relevant provisions of the Act,in force in England particularly section 3(1) of the Increase of Rent & Mortgage Interest (Restrictions) Act, 1920 which reads. 637 "Nothing in this Act shall be taken to authorise any increase of rent except in respect of a period during which but for this Act the landlord would be entitled to obtain possession. " The provisions of the Act under considerations show that the are to take effect notwithstanding any contract even during the subsistence of the contract. We have already referred to the definition of the terms 'landlord ' and 'tenant ' which applies both to subsisting tenancies as well as tenancies which might have come to an end. We may also refer to the provision in section 7(2) which lays down that where the fair rent of a building has not been fixed the landlord shall not claim anything in addition to the agreed rent, thus showing that the fair rent can be fixed even where there is an agreed rent. That is why we have earlier pointed out that the various English decisions which provide for fixation of rent only where the contractual tenancy has come to an end do not apply here. We may also refer to sub section (3) of section 16 which deals with cases where a landlord requires a residential or non residential building for his own use. Clause (d) of that sub section provides that where the tenancy is for a term the landlord cannot get possession before the expiry of the term, thus showing that in other cases of eviction covered by section 10 eviction is permissible even during the continuance of the contractual tenancy if the conditions laid down in section 10 are satisfied. The Madras High Court reviewed all the decisions of this Court ' except the latest one in Manujendra vs Purendu Prosad. We have already pointed out that the criticism made in that decision regarding Krishnamurthy 's Case was not justified. We are in agreement with the view of the Full Bench of the Madras High Court that the various decisions of this Court were based upon particular provisions of the Acts. which were under consideration, mainly the Bombay Act which is vitally different from the Madras Act. A close analysis of the Madras Act shows that it has a scheme of its own and it is intended to provide a complete code in respect of both contractual tenancies as well as what are popularly called statutory tenancies. As noticed earlier the definition of the term 'landlord ' as well as the term 'tenant ' shows that the Act applies to contractual tenancies as well as cases of "statutory tenants" and their. landlords. On some supposed general principles governing all Rent Acts it cannot be argued that such fixation can only be for the benefit of the tenants when the Act clearly lays down that both landlords and tenants can apply for fixation of fair rent. A close reading of the Act shows that the fair rent is fixed for the building and it is payable by whoever is the tenant whether a contractual tenant. or statutory tenant. What is fixed is not the fair rent payable by the tenant or to the landlord who applies for fixation of fair rent act fair rent for the building, something like an incident of the fair regarding the building. We have then to deal with Civil Appeal No. 1201 of 1970.The learned Single Judge considering that as the total amount annually in respect of these premises was Rs. 5032/ , which lakhs the rent payable to exceed Rs. 400/ a month, the building was outside 15 M602Sup. CI 74 638 the scope of the Act and therefore the petition for fixation of fair rent does not lie. (This provision was removed by an Amending Act of 1964). The learned Judges of the Division Bench on the other hand held that the agreement of the year 1949 between the landlord and the tenant by which the rent was increased was one in variation of a written contract and therefore evidence of it is barred under section 92 of the Evidence Act. Clearly any variation of rent reserved by a registered lease deed must be made by another registered instrument. We are not able to accept the argument of Sri K. section Ramamurthy on behalf of the tenants that the agreement of 1949 was one by the landlord to give up his right to apply for fixation of fair rent in consideration of the additional rent agreed to be paid by the tenant and is, therefore, not covered by section 92 of the Evidence Act. The correspondence between the parties makes it clear beyond doubt that the agreement was to pay increased rent. If this agreement is left out of account the rent payable is below Rs. 400/ a month, and, therefore, the decision of the Division Bench is correct. Before concluding we must refer to one other argument on behalf of the appellants. Under section 30 of the Act, as originally enacted, any residential building the rent of which exceeded Rs. 250 / per month and any non residential building whose rent exceeded Rs. 400/ a month were outside the scope of the Act. In 1964 the Act was amended so as to provide that all non residential buildings would be within the scope of the Act. This amendment was attacked on the ground that it contravened the provisions of article 19(1) of the Constitution. In view of our finding earlier that this case should be decided on the basis of the monthly rent being below Rs. 400/ this argument does not fall to be considered. In the result the appeals are dismissed. The appellants will pay the respondents ' costs. BHAGWATI J. We have had the advantage of reading the judgment prepared by our brother Alagiriswami, J., and though we, agree with him in regard to the decision in Civil Appeal No. 1201 of 1970, we find it difficult to assent to the view taken by him in Civil Appeal No. 50 of 1968. The facts giving rise to the two appeals have been stated clearly and succinctly in the judgment given by our learned brother and we think it would be a futile exercise to reiterate them. We may straight away proceed to examine the question which arises for consideration in. Civil Appeal No. 50 of 1968. The question is whether a landlord can during the subsistence of the contractual tenancy, apply for fixation of fair rent under section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the Tamil Nadu Act 18 of 1960). The determination of this question depends on the true interpretation of certain provisions of the Tamil Nadu Act 18 of 1960 and we may, therefore, refer to those provisions and see what is their proper meaning and effect. The long title and the preamble of the Tamil Nadu Act 18 of 1960 show that it is enacted "to amend and consolidate the law relating to the regulation of the letting of residential and non residential buildings and the control of rents of such buildings and the preven 639 tion of unreasonable eviction of tenants therefrom in the State of Tamil .Nadu". See, 2, cl. (6) gives an inclusive definition of 'landlord ' and according to this definition, 'landlord ' includes "the person who is receiving or is entitled to receive rent of a building, whether on his own account or on behalf of another or on behalf of himself and others or as an agent, trustee, executor, administrator, receiver or guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant". Thus the owner of a building which becomes vacant would be 'landlord ' within the meaning of that expression as defined in section 2, cl. (6) and so also would be the landlord during the subsistence of the contractual tenancy as also after the termination of the contractual tenancy where the tenant continues to remain in possession of the building. 'Tenant ' is defined in section 2, cl. (8) to mean "any person by whom or on whose account rent is payable for a building and includes the surviving spouse, or any son, or daughter, or the legal representative of a deceased tenant who had been living with to tenant in the building as a member of the tenant 's family up to the death of the tenant and a person continuing in possession after the termination of the tenancy in his favour". This definition is wide enough to include not only a contractual tenant but also a tenant remaining in possession of the building affect the termi nation of the contractual tenancy. Section 3 enacts detailed provisions regulating the letting of residential and non residential buildings. The broad scheme of this section is that when a building becomes vacant, the landlord is required to give notice of the vacancy to the authorised officer and if the building is required "for the purposes of the State or Central Government or of any local authority or of any public institution under the control of any such Government or for the occupation of any officer of such Government", the authorised officer may give necessary intimation in that behalf to the landlord and on receipt of such intimation, the landlord would be bound to deliver possession of the building to the authorised officer or to the allottee named by the authorised officer, as the case may be, and the Government would be deemed to be the tenant of the landlord on such terms as may be agreed upon between the landlord and the Government, or in default of agreement, determined by the Controller. The rent payable by the Government to the landlord would be the "fair rent, if any, fixed for the. building under the provisions of this Act and if no fair rent has been so fixed, such reasonable rent as the authorised officer may determine", but "the reasonable rent fixed by the authorised officer shall be subject to such fair rent as may be fixed by the Controller". Section 4 provides for fixation of fair rent of a building on the application of the tenant or the landlord. Sub section (1) of the section is material and it says that "The Controller shall, on, application by the tenant or the landlord of a building and .after holding such inquiry as the Controller thinks fit, fix the fair rent for such building in accordance with the principles set out in subsection (2) or in sub section (3) as the case may be, and such other principles as may be prescribed". Sub section (2) lays down the principles for fixation of fair rent of residential building and sub section (3), for fixation of fair rent of non residential building. The fiar rent is to be such as would provide 6 % gross_return per annum on 640 the total cost of the building, if it is residential and 9 gross return per annum on the total cost of the building, if it is non residential. The total cost of the building is to be computed by taking the cost of construction as calculated according to the prescribed rates less depreciation also at the prescribed rates and adding to it the market value of that portion of the site on which the building is constructed and making allowances for such considerations as locality in which the building is situated, features of architectural interest, accessibility to market, dispensary or hospital, nearness to the railway station or educational institution and such other amenities as may be prescribed. It may be pointed out that under the Madras Buildings (Lease and Rent Control) Act, 1946 and the Madras Buildings (Lease and Rent Control) Act, 1949, which preceded the Tamil Nadu Act 18 of 1960, the scheme of fixation of fair rent was different, in that the fair rent was related "to the prevailing rate of rent in the locality for the same or similar accommodation in similar circumstances during the twelve months period to 1st April, 1940" and only a fixed percentage of increase varying from 8 1/3 % to 50 % was allowed on such rate of rent, depending upon whether it exceeded or did not exceed a certain limit ' But the Legislature while enacting the Tamil Nadu Act 18 of 1960 made a departure from that scheme presumably because it felt that in view of the staggering and disproportionately heavy fall in, the purchasing power of the rupee over the last 30 years, it was most, unrealistic to peg the fair rent to the level of rents prevailing during the period of 12 months prior to 1st April, 1940 and allow only an ad hoc percentage of increase, and therefore, in section 4, sub sections (2) and (3), it adopted a different basis for fixation of fair rent which would not unduly depreciate the yield permissible to the landlord and at the same time, be not extortionate or exploitative of the tenant. Now once the fair rent of a building is fixed under section 4, sub section (1), no further increase in such fair rent is 'permissible except in cases where some addition, improvement or alteration has been carried out at the expense of the landlord and if the building is then in the occupation of a tenant, at his request and similarly, if there is a decrease or diminution in the accommodation or amenities, the tenant may claim reduction in such fair rent. Vide section 5. Section 6 provides that where the amount of the taxes and cesses payable in respect of a building to a local authority for any half year commencing on 1st April, 1950 or on any later date exceeds the amount of taxes and cesses payable for the half year commencing on 30th September, 1946 or for the first complete half year after the date on which the building was first let out, whichever is later, the landlord shall be entitled to claim such excess from the tenant in addition to the rent payable for the building. The consequences of fixation of fair rent are set out in section 7, sub s (1) and (3). Sub section (1) says that where the Controller has fixed the fair rent of a building "(a) the landlord shall not claim, receive or stipulate for the payment of (i) any premium or other like sum in addition to such fair rent, or (ii) save as provided in section 5 or section 6, anything. in, excess of such fair rent 641 (b). any premium or other like. sum or any rent paid in addition to, or in excess of, such fair rent whether before or after the date of the commencement of this Act, in consideration of the grant, continuance or re newal of the tenancy of the building after the date of such commencement, shall be refunded by the landlord to the person by whom it was paid or at the option of such person, shall be otherwise adjusted by the landlord; Provided that where before the fixation of the fair rent, has been paid in excess thereof, the refund or adjustment shall be limited to the amount paid in excess for the period commencing on the date of application by the tenant or landlord under sub section (1) of section 4 and ending with the date of such fixation. " Sub sec. (3) declares that any stipulation in contravention of sub section (1) shall be null and void. These are the only provisions of the Tamil Nadu Act 18 of 1960 which have a direct bearing on the determination of the question before us, but reference was also made to certain other provisions of that Act dealing with eviction of tenants for the purpose of drawing support by way of an a logical reasoning from the decisions of this Court interpreting those provisions and we must, therefore, briefly advert to them. Section 10 confers protection on the tenant against eviction "in execution of a decree or otherwise" by providing that he shall not be evicted except in accordance with the provisions of that section or sections 14 to 16. Sub sections (2) and (3) of section 10 set out the grounds on which the tenant my be evicted by the landlord. One of the grounds that set out in cl. (a) of sub section (3) is that the landlord requires the building, if residential, for his ,own occupation or for the occupation of his son, and if non residential, for a business which he or his son is carrying on, but in respect of this ground, there is a limitation imposed by cl. (d) of sub section (3) that when the tenancy is for a specified period agreed upon between the landlord and the tenant, the landlord shall not be entitled to apply for possession under sub section (3) before the expiry of such period. Sections 12 to 14 provide for recovery of possession of the building by the landlord for repairs or reconstruction. These provisions are not material and we need not refer to them in detail. Then we go straight to section 30 which exempts certain buildings from the operation of the Act. Every new building the construction of which is completed after the commencement of the Act is exempted under cl. The reason obviously is that the legislature wanted to encourage construction of new buildings so that more and more buildings would become available for residential as well as non residential purposes and that would help relieve shortage of accommodation. (ii) exempts any residential building or part thereof occupied by any tenant, if the monthly rent paid by him exceeds Rs. 250/Here the object of the Legislature clearly was that the the protection of the beneficent provisions of the Act should be available only to ,small tenants paying rent not exceeding Rs. 250/ per mouth, as they 642 belong to the weaker sections of the community and really need protection against exploitation by rapacious landlords. Those who can afford to pay higher rent would ordinarily be well to do people and they would not be so much in need of protection and can, with,out much difficulty, look after themselves. It is in the light of these provisions of the Tamil Nadu Act 18 of 1960, that we have to consider whether a landlord can, during the subsistence of the contractual tenancy, apply for fixation of fair rent under. section 4, sub section Two basic considerations must guide our approach to this question. The first is that the agreed rent which is the result of contract between the parties must continue to bind them so long as the contract subsists, unless there is anything in the statute which expressly or by necessary implication overrides the contract, It is true that with the decline of the doctrine of laissez faire and the assumption by the State of a more dynamic and activists role, the principle of sanctity of contract which is one of the pillars of a free market economy, has in a number of cases been eroded by legislation. But if we examine such legislation it will be apparent that this has happened invariably in aid of the weaker party to the contract. Where there is unequal bargaining power between the parties, freedom of contract is bound to produce injustice and social legislation therefore steps in and overrides the. contract, with a view to protacting the weaker party from the baneful Consequences of the contract. It is to contract the injustice resulting from inequality in bargaining power and to bring about social or distributive justice that social legislation interferes with sanctity of contract. It seeks to restore the balance in the scales which are otherwise weighted in favour of the stronger party which has larger bargaining power. Ordinarily we do. not find, and indeed it would be a strange and rather incomprehensible phenomenon, that legislation intervenes to disturb the sanctity of contract for the benefit of a stronger party who does not need the protective hand of the legislature. This consideration we must constantly keep. before us while construing the relevant provisions of the Tamil Nadu Act 18 of 1960. Secondly the Tamil Nadu Act 18 of 1960, as its long title and preamble show, has been enacted inter alia with the object of controlling rents of residential and non residential buildings and preventing unreasonable eviction of tenants. Now, there can be no doubt that in so far as it is calculated to prevent unreasonable eviction of tenants, the Tamil Nadu Act 18 of 1960 is a protective measure intended to safeguard tenants against indiscriminate eviction by landlords. Equally, by controlling the rents by keeping them within fair and reasonable limits, the Tamil Nadu Act 18 of 1960 seeks to protect tenants against greedy and rapacious landlords who taking advantage of the great scarcity of housing accommodation which prevails in almost all urban areas, may extract excessive and unconscionable rent from tenants. The Tamil Nadu Act 18 of 1960 is in its essential character as also in its object and purpose similar to what may conveniently be described as rent control legislation, in other States, such as Maharashtra, Gujarat, West Bengal and Madhya Pradesh. 643 Now it is well settled by decisions of this Court that rent control Acts are "not ordinarily intended to interfere with contractual leases and are Acts for the protection of tenants and are consequently restrictive and not enabling or conferring any rights of action but restricting the existing rights either under the contract or under the general law. " That is what this Court said in Manuiendra Dutt vs Purendu Prosad Roy Chowdhury & Ors.(1), while dealing with the Calcutta Thika Tenancy Act, 1949. The same view was taken by this Court in Bhaiya Punjalal Bhagwanddin vs 'Dave Bhagwat Prasad Prabhuprasad(2) in relation to Bombay Rents, Hotel and Lodging House Rates. Control Act, 1947 which prevails in Maharashtra and Gujarat and which has long title and preamble in almost the same terms as the Tamil Nadu Act 18 of 1960. This Court said in that case: "the Act,", that is the Bombay Rent Act "intended therefore to restrict the rights which the landlords possessed either for charging excessive rents or for evicting tenants". The Madhya Pradesh Accommodation Control Act, 1955 was also construed in the same way by this Court in Mangilal vs Sugarchand Bathi.(3) This general purpose and intendment of rent control legislation and its positive thrust and emphasis on the protection of the tenant cannot be lost sight of when we are construing a similar legislation like the Tamil Nadu Act 18 of 1960. We may now turn to examine the relevant provisions of the Tamil Nadu Act 18 of 1960 against the background of these general considerations. Section 4, sub section (1) contemplates that an application for fixation of fair rent of a building may be made by the tenant or the landlord. The definition of "tenant", as we have pointed out above, includes contractual tenant as well as tenant remaining in possession of the building after determination of the contractual tenancy, that is, statutory tenant, and both contractual tenant and statutory tenant can, therefore, apply for fixation of fair rent under section 4, sub section (1). The Government, who is deemed to be the tenant of the landlord under section 3, sub section (5), can also similarly avail of the provision for fixation of fair rent in section 4, sub section The question is as to who are the persons comprehended within the expression 'landlord ' who can apply for fixation of fair rent under section 4, sub section The landlord, where the Government is deemed. to be the tenant under. section 3, sub section (5), would certainly be entitled to make such application and, having regard to the wide definition of the expression 'landlord ', which includes not only contractual landlord but also statutory landlord, if one may use that expression to describe the counterpart of statutory tenant, it was common ground between the parties that the statutory landlord can also avail of this provision, but the dispute was whether the contractual landlord is within the ambit of this provision. Can he apply for fixation of fair rent under section 4, sub section (1)p ? Now prima facie according to 'the definition as also according to its plain natural connotation, the expression 'landlord ' includes contractual landlord and it might, therefore, appear at first blush, on a purely literal construction, that the contractual landlord can make an application for fixation of fair rent under section 4, sub section But is well settled that a definition clause (1) ; (2) ; (3) ; 644 is not to be taken as substituting one set of words for another or as strictly defining what the meaning of a term must be under all circumstances, but as merely declaring what may be comprehended within the term, when the circumstances require that it should be so comprehended. It would, therefore, always be a matter of interpretation whether or not a particular meaning given in the definition clause ,applies to the word as used in the statutory propriety. That would depend on the subject and the context. Moreover, it is equally well established that the meaning of words used in a statute. is to be found, not so much in strict etymological propriety of language, nor even in popular use, as in the subject or occasion on which they are used and the object which is intended to be achieved. The context, the ,collocation and the object of the words may show that they are not intended to be used in the sense which they ordinarily bear, but are meant to be used in a narrow and limited sense. Lord Herschell pointed out in Cox vs Hakes (1) "It cannot, I think, be denied that, for the purpose of construing any enactment, it is right to look, not only at the provision immediately under construction, but at any others found in connection with it which may throw light upon it, and afford an indication that general words employed in it were not intended to be applied without some limitation." However wide in the abstract, general words must be understood as used with reference to the subject matter in the mind of the legislature and limited to it. Thus, in Whethered vs Calcutta(2) a statute which, reciting the inconveniences arising from church wardens and overseers making clandestine rates, enacted that those officers should permit "every inhabitant" of the parish to inspect the rates under a penalty for refusal, was held not to apply to a refusal to one of the church wardens, who was also an inhabitant. As the object of the statute was to protect those in habitants who had previously no access to the rates (which the church wardens had, the meaning of the term 'inhabitants ' was limited to them. The same approach in interpretation must be adopted by us in the present case. We must not allow ourselves to be unduly obsessed by the meaning of 'landlord ' given in the definition or by its ordinary etymological meaning but we must examine the scheme of the relevant provisions of the statute, the contextual setting in which section 4, sub section (1) occurs and the object which the legislation is intended to achieve, in order to determine what is the sense in which the word 'landlord ' is used in section 4. sub section (1) whether it is intended to include contractual landlord. It is necessary for this purpose to consider what are the consequences of fixation of fair rent, for that furnishes the key to the solution of the problem before us. The fair rent, when fixed, becomes an attribute or incidence of the building and there can be no change in it except in the circumstances set out in section 5. When the fair rent is fixed, three possibilities may arise. The fair rent may be the same as the agreed rent in which case no difficulty arises. Or the fair rent may be less than the agreed rent. Where that happens, section 7, sub section (i), ,el. (a) operates and it provides that the landlord shall not be entitled to claim, receive or stipulate for payment of anything in excess of the (2) 645 fair rent. The landlord, can, in such a case, claim, receive or recover only the fair rent and nothing more, despite the contract of tenancy which provides for payment of higher rent. To that extent sanctity of contract is interfered with by the legislation in order to protect the tenant against exploitation by the landlord so that the landlord may not take undue advantage of shortage of housing accommodation and extract excessive rent from a needy and helpless tenant. The stipulation in the contract of tenancy for payment of higher rent would in such a case be clearly in contravention of sub section (1) of section 7 and would be null and void under section 7, sub section But what happens if the fair rent fixed is higher than the agreed rent? Can the landlord claim to recover such fair rent from the tenant, overriding the contract of tenancy which provides for payment of lesser rent? We do not think so. There is nothing in section 7 or in any other provision of the Tamil Nadu Act 18 of 1960 which can by any process of construction be read as authorising the landlord to override the contract of tenancy and claim fair rent higher than the agreed rent from the tenant. If the legislative intent were that, even though the contract of tenancy is subsisting, the landlord should be entitled to recover fair rent higher than the agreed rent, we should have expected the Legislature to say so in so many terms, as it has done in section 7, sub section (1), cl. (a) when it wanted the landlord not to be able to recover the agreed rent where it is in excess of the fair rent. It may no noted that whenever the Legislature intended to confer on the landlord a right to recover any amount which he would not otherwise have under the contract or the general law, the Legislature has done so in clear and specific language as in section 6 of the Act. But here we do not find any such provision, either express or necessarily implied. We may also profitably com pare the language of the provision in section 3, sub section There it is provided that "the reasonable rent fixed by the authorised officer shall be subject to such fair rent as may be fixed by the Controller". The words "subject to" clearly take in both kinds of cases, where the fair rent fixed is higher as well as lower than the reasonable rent. in section 7, sub section (1), cl. (a), however the Legislature has departed from this phraseology and instead of saying that the agreed rent shall be subject to the fair rent or the rent payable by the tenant shall be the fair rent, the Legislature has merely laid an embargo on the landlord prohibiting him from recovering anything in excess of the fair rent. This provi sion is clearly, without doubt, restrictive in character. it is not an enabling provision empowering the landlord to recover the fair rent where it is higher than the agreed rent. But quite apart from these considerations, there is inherent evidence in section 7 itself which strongly reinforces our interpretation and that is to be found in sub section That sub section says that any stipulation in. contravention of sub section shall be null and void. If, therefore, there is a stipulation in the contract of tenancy for payment of rent higher than the fair rent, it would be invalid. , Such a stipulation would not be enforceable by the landlord against the tenant. Only the fair rent would be payable by the tenant. If, however, there is a stipulation for payment of rent which is less than the fair rent, it would not be in contravention of sub sec. (1) and hence would not be invalidated by sub section (3) but would remain 646 enforceable and binding on the parties and if that be so, the landlord would not be entitled to claim the fair rent in breach of such stipulation. Section 7, sub section (3) clearly indicates that the stipulation in the contract of tenancy as regards rent is overridden only where the fair rent is less than the agreed rent and not where it is higher than the agreed rent. This is the only rational construction which, in our opinion, can be placed on the relevant provisions of the Act relating to control of rent. It is not only compelled by grammar and language, but also accords with the broad general considerations we have already discussed. It is difficult to believe that the Legislature should have chosen to interfere with contractual rights and obligations in favour of the landlord who is ordinarily, in view of the acute shortage of housing accommodation, in a stronger and more dominating position than the tenant qua bargaining power. The Legislature while enacting a social legislation could not have intended to confer on the landlord a new right of action a right to override the contract of tenancy and to impose a greater burden on the tenant than that permitted under the contract of tenancy. It would be a startling proposition to assume that the Tamil Nadu Legislature was so solicitous of the welfare of the landlord, who is admittedly, as a class, stronger party and much more favorably situated in respect of bargaining power than the tenant, that it enacted a provision in the Act for relieving the landlord against the consequences of an unwise contract entered into by him with open. To take such a view would be to pervert the legitimate end of a social legislation and proselytise its true object and purpose. These considerations impel us to the conclusion that the Legislature could not have. intended that the landlord should have the right to apply for fixation of fair rent during the subsistence of the contractual tenancy. If it was not the intention of the Legislature to benefit the landlord by giving him a right to override the contract of tenancy and claim fair rent higher than the agreed rent from the tenant during the subsistence of the contractual tenancy, it must follow a fortiorari that it could not have been intended by the Legislature that the landlord should have the right to apply for fixation of fair rent whilst the contract of tenancy is subsisting. Having regard to the basic character of the statute as a rent control legislation and the scheme of its provisions and reading section 4, sub section (1) in its contextual setting and in the light of the other provisions of the statute, the conclusion is inescapable that the word 'landlord ' in section 4, sub section (1) is used in a limited sense and it does not include contractual landlord. The landlord is not given the right to apply for fixation of fair rent during the subsistence of the contractual tenancy. It is only when the contract of tenancy is lawfully determined that he becomes entitled to, apply for fixation of fair rent, for it is only then that he can recover fair rent higher than the agreed rent from the statutory tenant, there being no contract of tenancy to bind him down to the agreed rent. We were referred to certain decisions of this Court relating to the interpretation of the provisions of various Rent Control Acts dealing with the eviction ' of tenants. Some of these decisions have 647 already been noticed by us earlier while discussing the general object and intendment of Rent Control Acts. They have no direct bearing on the determination of the question before us, but they do lend some support to the view we are taking as to the interpretation of the word 'landlord ' in section 4, sub section These decisions which are given in reference to Rent Control Acts of Maharashtra, Gujarat, West Bengal and Madhya Pradesh, clearly establish that the Rent Control Acts do not give a right to the landlord to evict a contractual tenant without first determining the contractual tenancy. So long as the contractual tenancy subsists, the tenant does not need protection because he cannot be evicted in breach of the 'Contract of tenancy. It is only after the contract of tenancy is determined and the landlord becomes entitled to the possession of the premises, that the tenant requires protection and it is there that the Rent Control Acts step in and prevent the landlord from enforcing his right to possession except under certain conditions. The Rent Control Acts do not confer on the landlord a new right of eviction, but merely restrict his existing right to recover possession under the contract or the general law. The landlord cannot, therefore, sue for recovery of possession on any of the grounds recognised as valid by the Rent Control Acts unless he has first determined the contractual tenancy of the tenant. This view. which has been taken by the decisions of this Court in regard to the Rent Control Acts of Maharashtra, Gujarat,, West Bengal and Madhya Pradesh, applies equally in regard to the Tamil Nadu Act 18 of 1960. It is true that the High Court of Madras took a different view in R. Krishnamurti vs Perthasarthi (1) in regard to the Madras Buildings (Lease and Rent Control) Act ' '1945 which was in material respects in almost identical terms as the, Tamil Nadu Act 18 of 1960 and held that section 7 of that Act, corresponding to section 10 of the present Act, had its own scheme of procedure and there was no question of any attempt .to reconcile that Act with the Transfer of Property Act and an application for eviction could, therefore, be made under that Act without terminating the contractual tenancy of the tenant. But in Manujendra Dutt. vs Purendu Prosad Roy Choudhury & ors.(2) this decision of the Madras High Court was expressly overruled and held not to be correct law by this Court. The argument on behalf of the respondents was that the observation of this Court disapproving the view taken by the Madras High Court was a casual observation made without examining the scheme of the Madras Act and no validity could attach to it. We fail to see how such an argument can possibly be advanced with any degree of plausibility. It is clear from the dis cussion of the Madras decision which we find in the judgment of Court that the attention of this Court was specifically directed to the reasoning of the Madras decision which proceeded on the basis that section 7 of the Madras Act had its own self contained scheme which excluded the Transfer of Property Act and it was because this Court found the reasoning to be incorrect, that it held that the Madras decision was not good law. It would not be fair to presume that this Court cavalierly overruled the Madras decision without applying its mind and caring to examine the scheme of the Madras Act. (1) A.I.R. 1949 Mad. (2) ; 648 Such a charge cannot be made merely because this Court did not elaborately discuss the merits of the Madras decision but disposed it of in a few words. The brevity of the discussion does not signify casualness or lack of proper consideration. We must, in the circumstances, hold that the observation of this Court that the Madras decision cannot be regarded as good law was a deliberate and considered pro nouncement and the view taken by this Court in regard to the Rent Control Acts of Maharashtra, Gujarat, West Bengal and Madhya Pradesh must equally prevail in regard to the Tamil Nadu Act 18 of 1960. We may point out that in any event we do not find any cogent reason to question the validity of the observation made by this Court disapproving of the Madras decision. We are wholly in agreement with that observation as we do not see any material difference between the language and the scheme of section 10 of the Tamil Nadu Act 18 of 1960 and the language and scheme of the corresponding provisions of the other Rent Control Acts which came to be construed by this Court. The only distinctive feature which could be pointed out on behalf of the respondents was the provision in section 10, sub s ' (3), cl. But that provision does not make any material difference because all that it provides is that though, in a case where the tenancy is for a specified period and it is determined by forfeiture before the expiration of the term, the landlord would have been, but for cl. (d), entitled to recover possession of the building under cls. (a), (b) or (c), he shall be precluded from doing so until the expiration of the period for which the tenancy was created. If there is any other ground available to him for claiming possession, for example, a ground specified in section 10, sub section (2), he can seek to recover possession on that ground and cl. (d) would not afford the tenant any protection. But cl. (d) would stand in the way of the landlord, if possession is sought on any of the grounds set out in cls, (a), (b) and (c). The object of cl. (d) clearly is that even though the tenancy has come to an end by forfeiture and the landlord has become entitled to the possession of the building under the general law. , the tenant shall be protected from eviction on any of the grounds set out in cls. (a), (b) and (c) so long as the period for which the tenancy was created in his favour has not a expired, This construction receives considerable support from the tact that the Legislature has used the words "before the expiry of such period" and not the words "before the determination of the tenancy" to indicate the length of time for which protection is given to the tenant under cl. We do not therefore think that it would be right to infer from cl. (d) that, save in cases falling within that provision, the landlord would be entitled to apply for possession under sub section (2) or sub cl. (3) of section 10 without determining the tenancy of the tenant. There can be no doubt, having regard to the judicial pronouncements of this Court, that the word 'landlord ' in section 10 of the Tamil Nadu Act 18 of 1960 :is used in a limited sense to refer only to a landlord who has terminated the tenancy of the tenant and does not include a contractual landlord. if the ' word 'landlord ' in section 10 is found subjected to a limitation excluding a contractual landlord, it forms a strong argument for subjecting the word 'landlord ' in s.4.,sub s.(1) also to the like limitation. 649 It may also be noted that, whatever be the correct interpretation of the word 'landlord ' in section IO, it is clear from the decisions of this Court in regard to the other Rent Control Acts. that it is not at all unusual,, having regard to the object and purpose of Rent Control legislation, to read the word 'landlord ' in a limited. sense so as 'to exclude contractual landlord and we are therefore not doing anything startling or extraordinary but merely following the path eked out by the decisions of this Court when we place a limited meaning on the word 'landlord 'in section 4, sub section (1) which would exclude contractual landlord. That is in fact in conformity with the object and purpose of the Tamil Nadu Act 18 of 1960, which, to quote the words used by this Court in P.J. Irani vs State of Madras (1) in reference to the earlier Tamil Nadu Act 25 of 1949 which was in material respects in identical terms as the present Act, is intended to protect "the rights of tenants in occupation of buildings from being charged unreasonable rates of rent" and not to benefit landlords by conferring on them a new right against tenants which they did not possess before. Since we are of the view that it is not competent to the landlord to apply for fixation of fair rent under section 4, sub section (1) during the subsistence of the contractual tenancy, we set aside the decision of the High Court of Tamil Nadu which has taken the view that the Controller has jurisdiction to entertain the application of the respondents and allow Civil Appeal No. 50 of 1968. There will be no order as,. to costs all throughout. ORDER In accordance with the opinion of the majority, the appeal is dismissed. The appellant will pay the respondents costs.

On the tenants ' appeal, the Full Bench of the Madras High Court held that the Act controls both contractual and statutory tenancies and it enables both landlords and tenants to seek the benefit of fixation of fair rent. Thereafter, the matter came up before a Single Judge of the High Court who applying the provisions of the ' Act to the facts of the case, held that the Act did not apply to the premises in question. The Division Bench reversed this decision, In the appeal by special leave the tenants mainly contended that a landlord has no right to apply for the fixation of a fair rent at a figure higher than the contractual rent, where there was a subsisting contract of tenancy. Dismissing the appeal, HELD : (per majority and Bhagwati, JJ. Contra) The present Act which replaces the 1949 Act adopts a completely new scheme of its own and provides for every contingency, i.e. in 'the relationship of landlord and tenant. The provisions of the Act show that the Madras Legislature deliberately proceeded on, the basis that fair rent was to be fixed which was to be fair both to the landlords as 'well as to the tenants, and that only the poorer class of tenants needed protection. 'the assumption that the Act like ill rent acts, is intended only for the to on of tenants is not warranted by the provisions of the Act. It is clear therefore, that the fair rent under the present Act is payable during the contract period as well as after the expiry of the contract period. [636C F] The analysis. of the Act shows that it has a scheme of its own and it is intended to provide a complete code in respect of. both contractual tanancees. the definitions of the term "landlord" and "tenant" show that the Act applies to contractual tenancies,as well as to. cases of statutory tenants and their landlords. On some supposed general principles governing all Rent Acts it cannot be argued that such fixation can only be for the benefit of the tenants when the Act clearly lays down that both landlords and tenants can apply for fixation of fair. A close reading of the Act shows that the fair rent is fixed for the building and it is payable by whoever is the tenant whether a contractual tenant or statutory tenant. What is fixed is not the fair rent payable by the tenant or to, the landlord who applies for fixation of fair rent but fair rent for the building somethings like an incident of the tenure, regarding; the building. [637F] 630 The general observations to the contrary in Bhaiya Punjalal Bhagwanddin vs Dave Bhagwat Prabhuprasad ; and Manujendra vs Purendu Prasad ; , held obiter. Sri Brij Raj Krishna vs section K. Shaw and Bros. [1951] S.C.R. 145, Hem Chand V. Sham Devi, I.L.R. [1955] Punj, 36, R. Krishnamurthy vs Parthasarathy A.I.R. 1949 Mad. 780, distinguished. Abbashails case ; and Mangilal vs Sugarchand Rathi ; , referred to. Per Mathew and Bhagwati, JJ : Two basic considerations must guide our approach to the question whether a landlord can, during the subsistence of the contractual tenancy, apply for fixation of fair rent under section 4(1) of the Act. The first is that the rent which is the result of contract between the parties must continue to bind them so long as the contract subsists, unless there is anything in the statute which expressly or by necessary implication over rides the contract. It is to counter act the in justice resulting from in equality in bargaining power and to bring about social or distributive justice that social legislation interferes with sanity of contract. Ordinarily, we do not find and in deed it would be a strange and rather incomprehensible phenomenon,that legislation intervenes to disturb the sanctity of contract for the benefit of a stronger party who does not need the protective bind of the legislature. Secondly the Act has been enacted inter alia, with the object of controlling rents of residential and non residential buildings and preventing unreasonable a diction of tenants. Tamil Nadu Act 18 of 1960 is in its essential character as also in its object and purpose similar to what may conveniently be described rent control legislation, in other States, such as Maharashtra, Gujarat, West Bengal and Madhya Pradesh. The general purpose and intendment of rent control legislation and its positive thrust and emphasis on the protection of the tenant cannot be lost sight of when we are construing a similar legislation like the Tamil Nadu Act 18 of 1960 [642C] Bhaiya Punjalal Bhagwanddin vs Dave Bhagwat prasad Prabhuprasad ; , Mangi Lal vs sugarchand Rathi [1964] 5 S.C.R. and Manujendra vs Pwendu prasad ; referred to. Having regard to the basic character of the statute as a rent control legislation and the scheme of its provisions and reading sec. 4(1) in its contextual setting and in the light of the other provisions of the statute, the conclusion is inescapable that the ward "landlord" in sec. 4(1) is used in a limited sense and it does not include contractual landlord. The landlord does not have the right to apply for fixation of fair rent during the subsistence of the contractual tenancy. It is only when the contract of tenancy is lawfully determined that he becomes entitled to apply for fixation of fair rent, for it is only then that he can recover fair rent higher than the agreed rent from the statutory tenant, there being no contract of tenancy to bind him down to the agreed rent. [646G] (2) Per majority : General observations in earlier decisions of this Court should be confined to the facts of those case. Any general observation cannot apply in interpreting the provisions of an Act unless this Court has applied its mind to and analysed the provisions of that particular Act. Therefore, the observations in ; , that rent acts are not ordinarily intended to interfere with contractual leases and are Acts for the protection of tenants and are consequently restrictive and not enabling conferring no now right but restricting the existing rights either under the contract or under the general law, should not be held to apply to all rent Acts irrespective of the scheme of those acts and their provisions. The present Act did not proceed on the basis that the legislation regarding rent control was only for the benefit of the tenants. It wanted the legislation to be fair both to the landlord and the tenant. [834B] (per Mathew and Bhagwati,JJ). The meaning of the term landlord ' must not be confined to that given in the definition or to its ordinary etymological meaning but must be understood in the context of the setting in which it occurs, and the scheme and object of the Act. The Provisions of the Act, particularly of sec. 7, are clearly restrictive in character and not enabling provisions empowering the landlord to recover the fairrent where it is higher than the agreed rent. This is the only rational 631 construction which can be placed on the relevant provisions of the Act relating to control of rent and such a construction is not only compelled by grammar and language but also accords with the broad general considerations in interpreting the rent control legislation.[646B] Cog vs Hakes(1890) A.C. 15, and Whethered vs Calcutta(842)5 Scctt. N.R. 409,referred to. (3)Any variation of rent reserved by registered lease deed must be made by another registered instrument. The agreement between the landlord and the tenant by which the rent was increased being in variation of a written contract,evidence of that was barred under section 92 of the Evidence Act.

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Appeal No. 1605 of 1972. Appeal by Special leave from the Award dated November 24, 1971 of the Labour Court, Delhi in L.C.I.C. No. 31 of 1971. M. K. Ramamurthi and J. Ramamurthi, for the appellant. V. M. Tarkunde, O. C. Mathur, D. N. Mishra, and Sudhir K. Khanna, for the respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. Industrial law in India has many twilight patches, illustrated by the present appeal which projects the problem of an employee whose services have been terminated similiciter by the Management, a pump manufacturing enterprise, issuing a notice ending the ,employment and offering one month 's pay as authorized by the relevant Standing orders. The thorny legal issue is whether the ipse dixit of the employer that he has lost confidence in the employee is sufficient justification jettison the latter without levelling and proving the objec tionable conduct which has undermined his confidence so that the tribunal may be satisfied about the bona fides of the 'firing ' as contrasted with the colourable exercise of power hiding a not so innocuous purpose. The backdrop The facts and circumstances become decisive of the fate of the, ,case even where the law is simplistic or fair in its face. Here, what are the events and environments of employment leading to the worker being given the boot ? Is the order an innocent and, therefore, legal quit notice sanctioned by the Standing Orders which does not stigmatize the worker but merely bids him good bye ? Oris it a sinister intent to punish as a guileless order based on 'loss of confidence ', an alibi which, on a certain reading of this Court 's rulings, is also a protective armour against judicial probe and setting aside ? 491 Michael, a permanent employee of proved efficiency and six years standing, was appreciatively given two 'merit ' increments. But a letter of September 2, 1970 told him off service, giving him one month 's 'notice pay ' discharging him without damning, as distinguished from dismissing him for misconduct. The rival versions illumine the factual confrontation, the resolution of which is no easy legal essay. The worker, Michael, through his Union, protested against the 'sack ' order as victimisation of a Trade Union activist but the Management was heedless, conciliation was fruitless and the dispute between the Union and the Management was eventually referred by the Delhi Administration to the Labour Court for adjudication. The reference ran thus "Whether the termination of services of Shri L. Michael is illegal and/or unjustified and, if so, to what relief is he entitled and what directions are necessary in this respect ?" Both sides stated their cases in their pleadings and the true nature of the conflict emerges from them. The story set out by the employee in his statement before the Labour Court was that although he was efficient, appreciated and awarded merit increments, the Management was antagonized by his active part in the formation of an Employees ' Union, especially because oral warnings by the Regional Manager against his Unionist proclivity was ignored. Michael became the treasurer of the Union. This Union chapter claimed its price, for the Management quietly terminated his services by a simple letter which reads: "We are sorry to advise that your services are no longer required by the Company. As such, this letter may be treated as a notice for the termination of your services with immediate effect. As for the terms of your employment letter, on termination of services you will be paid one month 's salary extra. You may please call on the undersigned and have your accounts settled. " This act, claims the worker, was 'in flagrant violation of elementary principles of natural justice without assigning any reason and without giving him an opportunity to defend himself. This, in his statement he challenged the termination as 'wrongful, mala fide, illegal, and an act of victimisation '. The counter case of the management get up in its statement, as is apparent from the discharge order, is that no dismissal is involved, no enquiry necessary and no illegality invalidates. The management claimed that the alleged annoyance with the, workman for union activity was a concoction in self defence, as the Management had not even knowledge of the formation of the Union. This fatter limb of the plea is a little too naive. The warning by the Regional Manager was denied and the reference to trade union activities by the worker was more 'to create a ground for the workman 's claim and has been leveled as a matter of habit and routine. The basic plea of the management was that the action being a simple 492 termination without a sting, the process and consequence of a disciplinary action were not attracted. The Management, however, took the Court into confidence to explain why the employee was discharged. He was employed as a Receipt and Dispatch Clerk in the office upto 10 3 1970. As an insider with a to office correspondence the employee misused his position by passing on 'very important and secret information about the affairs of the company to certain outsiders. He was consequentially shifted to the post of clerk handling posting of bins and collection of payments but the workman, although denied direct access to correspondence in the Receipt and Dispatch section, made attempt 'to elicit information from the section with a view to pass it on to outsiders '. The upshot of these activities of which the management was alerted was a loss of confidence in the employee. This unreliability was visited with non injurious termination of service by a bona fide order. Therefore, the action was claimed to be legal and immune to judicial interference. Two socially vital factors must inform the understanding and application of Industrial jurisprudence. The first is the constitutional mandate of Part IV obligating the State to make 'provision for securing just and humane conditions of work '. Security of employment is the first requisite of a worker 's life. The second equally axiomatic consideration is that a worker who willfully or anti socially holds up the wheels of production or undermines the success of the business is a high risk and deserves, in industrial interest, to be removed without tears. Legislation and judicial interpretation have woven the legal fabric. We have to see whether on the facts of the present case what the relevant law is, whether it has been applied by the Labour Court rightly and whether the appellant has merit on his side, judged by the social conscience and judicial construction of the law in this branch of discharge simpliciter versus disguised ' dismissal. A few salient facts need emphasis before the principles of law are applied. The workman in his statement stressed the case of malaus antinus due to his union activities, although he did vaguely refer to the termination of service as wrongful and malafide. From this it cannot be argued, as the Management sought to make out, that his denial of leaking out office secrets was an after thought pleaded only in the rejoinder and therefore liable to be discredited. How could the worker have a hunch about the management 's undisclosed ground for dismissal ? When the latter stated the reason which prompted this action for the first time before the Labour Court, the workman in his reply refuted this case. It is noteworthy that there is no speck of record or any hint of written material in support of the story that the management had credible information of the appellant betraying sensitive secrets of business. The letters sent by the Union and the worker requesting for reinstatement were being ignored. The management could well have disclosed their suspicion in reply and told the Union and the workman that they resorted to an innocuous discharge to avoid punitive trauma. The management could have divulged in writing to 493 the Conciliation Officer their legitimate fears about the worker 's integrity and their considerate action of simple termination. This too they failed to do. In their written statement in Court the Management asserted for the first time that the employee was an intractable smuggler of inside information. The statement winds up with the legalistic plea : 'the management had, in the meanwhile, lost confi dence in the workman '. This culminating collapse of trust is alleged to be the primary cause for the discharge from employment. At the time of the evidence, M.W.1, a former Regional Manager, swore that the workman joined as a pump operator in 1963, was promoted as clerk in 1967, that the suspicion of disloyal communication arose 'for the first time in 1968 ' and yet 'thereafter he was given two increments extra in addition to normal increments. He was a hard working man and has a very good memory but the suspicion was there '. These are the facts and the evidence in the case and it has been fairly conceded before the Labour Court by the Management 's representative that were the action regarded as punitive it was bad, there having been no enquiry whatever with liberty to the employee to meet the charge. But the single slender strand on which the discharge was suspended was 'loss of confidence of the management in the employee. The Labour Court argued: "According to the management, as there was no proof with it for this suspicion it could not proceed against him departmentally and, in the circumstances, it was considered desirable to terminate his services by passing an order of discharge without any stigma attached to it." While on all hands it was agreed that the employee was efficient, the court took the view that the motivation for the termination was the suspicion Which lurked in the mind of the Regional Manager that information regarding tenders was being passed on by the workman '. We, have to find out whether the holding in the award that, on the materials above placed, the action could be called colourable or saved as bona fide, could be castigated as achieving an illegitimate end or supported as a premature but straight forward and harmless farewell. In short, was loss of confidence a legal label affixed by the management to eject the workman, there being no other legal method of accompli shing their wish to remove him for misconduct ? Two questions, therefore, fall for decision. Can a person, reasonably instructed in the law and scrutinising with critical faculties the facts on record, conic to the conclusion that the snapping of the tic of master and servant in the present case was innocuous andbona fide or oblique circumvention of the processual protection the law provides before a workman is dismissed for mis conduct ? We can discern harmony and consistency in case lawfrom Chartered Bank(1) and Murugan(2) through Sudder Office(3) and (1) ; (2) (3) [1970] II L. L. J. 620. 423SCI/75 494 Air India Corporation(1). The social justice ice perspective and particular facts are important, though. The plethora if precedents need not, be covered in extenso as the law laid down is the same except that judicial response to each case situation leads to emphasis on different facets of the principle. Even so some milestone decisions, if we may say so, may be considered. In Murugan Mills Case (supra) Wanchoo J (as he then was), speaking for the Court made the following observations : "The right of the employer to terminate the services of his workman under a standing order like cl.17(a) in the present case, which amounts to a claim 'to hire and fire ' an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication, came up for consideration before the Labour Appellate Tribunal in Buckingham & Carnatic Co. Ltd vs Workers of the Company The matter then came up before this Court also in Chartered Bank vs Chartered Bank Employees Union ; and the Management of U. B. Dutt & Co. vs Workmen of U. B. Dutt & Co. (1962 Supp. 2 SCR 822) wherein the view taken by the Labour Appellate Tribunal was approved and it was held that even in a case like the present the requirement of bona fides was essential and if the termination of service was a colourable exercise of the power or as a result of victimisation or unfair labour practice the industrial tribunal would have the jurisdiction to intervene and set aside such termination. The form of the order in such a case is not conclusive and the tribunal can go behind the order to find the reasons which led to the order and then consider for itself whether the termination was a colourable exercise of unfair labour practice. If it came to the conclusion that the termination was a colourable exercise of the power or was a result of victimisation or unfair labour practice, it would have the jurisdiction to intervene and set aside such termination. " In that case the form of the order had no foul trace, but before the Tribunal dereliction of duty and go slow tactics were disclosed as the inarticulate reasons. This Court ruled : "This clearly amounted to punishment for misconduct and therefore to pass an order under cl.17(a) of the Standing Orders in such circumstances was clearly a colourable exercise of the power to terminate the services of a workman under the provisions of the Standing Orders." Shri M. K. Ramamurthy, counsel for the appellants, contended for the proposition that even where a management had the power to terminate the services of its employee without reasons but with notice pay only, the colourable exercise of that power invalidated it, and the (1)[1972] 3 section C. R. 606. 495 Court could probe, beneath the surface to check upon the bonafides behind the exercise of the power. If the reasons including the termination were victimisation, unfair labour practice or misconduct, it was foul play to avoid a fair enquiry and fall back upon the power to terminate simpliciter There are myriad situations where an employer may in good faith, have to reduce his staff, even though he may have only a good word for his employees. Simple termination is a weapon usable on such occasions and not when the master is willing to strike but afraid to wound. We have been referred to the Bihar State Road Transport Corporation case(1). The power of the Court to go behind the language of the order is reaffirmed there. In Suddek Office (supra) the Court apparently laid stress on the Management 's right to terminate the services simpliciter under the terms of contract, where there was no lack of bona fides, unfair labour practice or victimisation. It is significant that this Court used language and laid down law very much like in the earlier cases and did refer to the precedents on the point. For instance, Vaidialingam J., 'there observed : " It is needless to point out that it has been held by this Court in The Chartered Bank, Bombay vs The Chartered Bank Employees ' Union that if the termination of service is a colourable exercise of the power vested in the management or as a result of victimisation or unfair labour practice, the Industrial Tribunal would have jurisdiction to intervene and set aside such termination. In order to find out whether the order of termination is one of termination simpliciter under the provisions of contract or of standing orders, the Tribunal has ample jurisdiction to go into all the circumstances which led to the termination simpliciter. " The manner of dressing up an order does not matter. The Court will lift the veil to view the reality or substance of the order. The Court, in that case, examined the circumstances in detail to see whether a dismissal for misconduct was being masked as a simple send off with a month 's pay, and held ultimately : "We are satisfied that the management has passed the order of termination simpliciter and the order does not amount to one of dismissal as and by way of punishment. " of course, loss of confidence in the workman was alleged by the management and the Court found that it was not a camouflage. It may be noticed that in that case the workman was being entrusted with stores worth several lakhs of rupees, some goods were lost from the stores and the Union was informed by the management that it had lost confidence in the workman. In the written statement before the Labour Court the management alleged that the workman was the head godown clerk who was the custodian of the company 's property, the post being one of trust and confidence. It is noteworthy that in the High Court the workman did not even file a counter affidavit and the counsel for the Union and the workman agreed that the order of termination was not a camouflage to cover up what really was an order (1) 496 of dismissal. He merely urged that the termination of the services was really by way of dismissal. In this conspectus of circumstances, this Court found that the Head Clerk in charge of the engineering godown and responsible for the maintenance of considerable stores, held a sensitive position. This Court observed : "The entire basis of the Labour Court 's award for holding that the order is one of dismissal is its view that the management has invoked cl. 9 to camouflage its action. When that approach has been given up on behalf of the workman before the High Court the reasoning of the Labour Court falls to the ground and the High Court has acted within the jurisdiction under article 226 when it set aside the order of the Labour Court especially when there has been no finding of victimisation, unfair labour practices or mala fides recorded, against the management. To conclude we are satisfied that the High Court was justified in setting aside the order of the Labour Court. " We have gone into this decision at length to disabuse the impression that a new defence mechanism to protect termination of service simpliciter, viz., loss of confidence, had been propounded in this ruling. We do not agree, that any such innovation has been made. The Air, India Corporation Case (supra) may seem to support the 'no confidence ' doctrine but a closer study contradicts any such view. of course, Shri Tarkunde, counsel for the management, placed great reliance on this ruling. Needless to say, this Court recognised the power of the Tribunal to go behind the form of the order, look at the substance and set aside what may masquerade as termination simpliciter, if in reality it cloaked a dismissal for misconduct 'as a colourable exercise of power by the management. The Court repeated that an Industrial employer cannot 'hire and fire ' his workmen on the basis of an unfettered right under the contract of employment. On the facts of the Air India Case (supra) the Court concluded that it was 'not possible to hold this order to be based on any conceivable misconduct '. Special reference was made to the grave suspicion regarding the complainant 's private conduct with air hostesses. Where no misconduct spurs the action and a delicate unsuitability for the job vis a vis the young women in employment in the same firm is strongly suspected, resort to termination simpliciter cannot be criticized as a malafide machination. In that background, the action was held to be bonafide and the overall unsuitability led to a loss of confidence in the employee. Not that the loss of. confidence was exalted as a ground but the special circumstances of the case exonerated bad faith in discharge simpliciter. Before concluding the discussion, we may refer to the case of Delhi Transport Undertaking vs Goel(1) adverted to by the Labour Court. Indeed that decision turned on Regulations framed under the Delhi Road Transport Authority Act, 1950 and not on pure Industrial Law or construction of the Standing Orders. Moreover, the Court, in that (1) [1970] II LLJ 20. 497 case, appears to have discussed rulings under article 311 also. However, on the facts of that case, the Court was satisfied that order of termination was not a disguise or cloak for dismissing the employee and the ground given that he was a cantankerous person undesirable to be retained was good. We do not read the Delhi Transport case (supra) to depart from Murugan Mills Case (supra). Indeed, the latter did not, and maybe could not, over rule the former. The above study of the. chain of rulings brings out the futility of the contention that subsequent to Murugan Mill 's Case (supra) colourable exercise of power has lost validity and loss of confidence has gained ground. The law is. simply this : The Tribunal has the power land, indeed, the duty to X ray the order and discover its true nature, if ,,he object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated. But if the management, to cover up the inability to establish by an enquiry, illegitimately but ingeniously passes an innocent looking order of termination simpliciter, such action is bad and is liable to be set aside. Loss of confidence is no new Armour for the management; otherwise security of tenure, ensured by the new industrial Jurisprudence and authenticated by a catena of cases of this Court, can be subverted by this neo formula. Loss of confidence in the Law will be the conse quence of the Loss of Confidence doctrine. In the light of what we have indicated, it is clear that loss of confidence is often a subjective feeling or individual reaction to an objective set facts and motivations. The Court is concerned with the latter and not with the former, although circumstances may exist which justify a genuine exercise of the power of simple termination. In a reasonable case of a confidential or responsible post being misused or a sensitive or strategic position being abused, it may be a high risk to keep the employee, once suspicion has started and a disciplinary en quiry cannot be forced on the master. There, a termination simpliciter may be bow fide, not colourable, and loss of confidence may be evidentiary of good faith of the employer. In the present case, the catalogue of circumstances set out in the earlier part of the judgment strikes a contrary note. The worker was not told when he wrote; the Union was not disclosed when they demanded; the Labour Court was treated to verbal statements like; very reliable sources ' and other credulous phrases without a modicum of evidence to prove bonafides. Some testimony of unseemly attempts by the workman to get at secrets outside his orbit, some indication of the source of suspicion, some proof of the sensitive or strategic role of the employee, should and would have been forthcoming had the case been bona fide. How contradictory, that even when a strong suspicion of leaking out sensitive secrets was being entertained about the employee he was being given special merit increments over and above the normal increments ' A case of res ipsa loauitur. Circums tances militate against the 'I say so ' of M.W.1 that the management had suffered an ineffable loss of confidence. To hit below the belt by trading legal pharses is not Industrial Law. We are constrained to express ourselves unmistakably lest industrial unrest induced by 498 wrongful terminations based on convenient loss of confidence should be generated. Before we conclude we would like to add that an employer who believes or suspects that his employee, particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of the employment permit, terminate his employment and discharge him without any stigma attaching to the discharge. But such belief or suspicion of the employer should not be a mere whim or fancy. It should be bona fide and reasonable. It must rest on some tangible basis and the power has to be exercised by the employer objectively, in good faith, which means honestly with due care and ' prudence. If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour practice, the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicially. In the instant case this has not been done. There is only the ipse dixit of the employer that he was suspecting since 1968 that the appellant was divulging secrets relating to his business. The employer has not dis closed the grounds oil which this suspicion arose in 1968. Further after 1968, the appellant was given two extra increments, in addition to his normal increments, as stated already, in appreciation of his hard work. This circumstance completely demolishes even the whimsical and tenuous stand taken by the employer. It was manifest therefore that the impugned action was not bona fide. It was urged by Mr. Tarkunde, learned counsel for the employer that the question whether or not the employer had lost confidence in the employee, was essentially one of fact aad this Court should not disturb the finding of fact recorded by the trial court on this point. It is true that this Court, in appeal, as a rule of practice, is loath to interfere with a finding of fact recorded by the trial Court. But if such a finding is based on no evidence, or is the result of a misreading of the material evidence, or is so unreasonable or grossly unjust that no reasonable person would judicially arrive at that conclusion, it is the duty of this Court to interfere and set matters fight. The case before us is one such instance , where we are called upon to do so. The Labour Court has misled itself on the law land we set aside its order. The workmans will be reinstated with back wages. However the management will be free, if it has sufficient material and if so advised, to proceed against the workman for misconducts or on other ,grounds valid in law. The appeal is, accordingly, allowed with costs. P.B.R. Appeal allowed.

The services of the appellant, who was an employee of the respondents, were terminated by the latter by giving him a month 's notice as per the standing orders without assigning any reasons for the termination. The consequential industrial dispute was referred to the Labour Court. The management alleged that the dismissed employee misused his position by passing on important and secret information about the affairs of the company to certain outsiders, that even after he was transferred to another section he made attempts to elicit information from the section with a view to pass it on to outsiders, and that, therefore, the management lost confidence in the employee and terminated his services by a bona fide order. The Labour Court confirmed the order of termination. In appeal to this Court, it was contended that, even where a management had the Power to terminate the services of its employees without reasons but with notice pay the colourable exercise of that power invalidated the order and the Court court probe, beheath the surface to check upon the bona fides behind the exercise of the power, Allowing the appeal to this Court. HELD: 1(a) Ile Labour Court has misled itself on the law and its order should be set aside. The word will be reinstated with back wages. [498 G] (b) The manner of dressing up an order does not matter. The Court will lift the veil to view the reality or substance of the order. [495 F] (2) (a) 'The Tribunal has the power and. indeed, the duty to X ray the order and discover its true nature, if the object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated. But if the management, to cover up the inability to establish by an inquiry, illegitimately but ingeniously passes an innocent looking order of termination simpliciter, such action is bad and is liable to be set aside. Loss of confidence is no new Armour for the management; otherwise security of tenure, ensured by the new industrial jurisprudence and authenticated by a catena of cases of this Court can be subverted by this neo formula Loss of confidence in the law will be the consequence of the Loss of Confidence doctrine. [497 C D] (b) An employer who believe or suspects that _his employee, particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of the employment permit, terminate his employment and discharge him without any stigma attaching to the discharge. But such belief or suspicion of the employer should not be a mere whim or fancy. it should be bona fide and reasonable. It must rest on some tangible basis and the Power has to be exercised by the employer objectively, in good faith, which means honestly and with due care and prudence. If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour practice. the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicially. [498 B C] In the instant case this has not been done. There is only the ipse dixit of the employer that he was suspecting since 1968 that the appellant was divulging secrets relating to his business. The employer has not disclosed the grounds on which this suspicion arose in 1968. Further after 1968, the appellant was given 490 two extra increments in addition to his normal increments in appreciation of his hard work. This circumstance completely demolishes even the whimsical and tenuous stand taken by the employer. It was manifest that the impugned action was not bona fide. [498 D] The Chartered Bank vs The Chartered Bank Employees ' Union ; ; Murgan Mills Ltd. vs Industrial Tribunal, Madras ; and Workmen of Sudder Office, Cinnamare vs Management, [MO] II L.L.J. 620. followed. Air India Corporation Bombay v, V. A. Rebellow & Anr. ; distinguished. Delhi Transport Undertaking vs Goel [1970] II LIJ, 20, referred to. (3) It is true that this Court, in appeal, as a rule of practice, is loath to interfere with a finding of fact recorded by the trial court. But if such a finding is based on no evidence or is the result of a misreading of the material evidence or is so unreasonable or grossly unjust that no reasonable Person would judicially arrive at that conclusion. it is the duty of this Court to interfere and set matters right. [498 E F]

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minal Appeal No. 808 of 1973. From the judgment and order dated the 30th March, 1973 of the Punjab & Haryana High Court in Election Petition No. 14 of 1972. R. K. Garg, section C. Agarwala, V. J. Francis add R. C. K. Kaushik, for the appellant. T. section Krishnamurthi Iyer, K. C. Agarwala, M. M. L. Srivastavta and E. C. Agrwala, for respondent No. 1. A. T. M. Sampath, for respondent No. 2. The Judgment of the Court was delivered by BEG, J. Pritam Singh, the appellant before us under Section 116A of the Representation of the People Act, 1951 (hereinafter referred to as 'the Act '), was elected at an election held on 11 3 1972 for the Haryana State Legislative Assembly, the result of which was declared 47OSCI/75 586 on 12 3 1972. The Respondent Balbir Singh questioned this election by, means of an election petition alleging that the, election was void as the appellant had committed corrupt practices hit by section 123, sub. s.4, 5 and 6 of the Act. The petition was allowed by a learned Judge of the, High Court of Punjab & Haryana, solely on the ground that the corrupt practice, provided for as follows, in Section 123(5) of the Act, was committed by the appellant: " 123(5). The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the consent of a candidate or his election agent, or the use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under section 25 or a place fixed under sub section (1) of section 29 for the poll : Provided that the hiring of a vehicle or vessel by an elector or by several electors at their joint costs for the purposes of conveying him or them to and from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause if the vehicle or vessel sp hired is a vehicle or vessel not propelled by mechanical power Provided further that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost, for the purpose of going to or coming from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause". The appellant assails the judgment of the High Court on the following main grounds with which we will deal seriatim : 1. That, the High Court erred in relying upon legally unproved entries in what is called a Pukar book or register showing both the hiring out and then payments for the use of certain trucks on 11 31972, the date of election, for purposes of election. That, the Register itself is inadmissible in evidence under any provision of the Evidence Act. That, the entries in the Pukar Register are suspicious indicating that the Register itself, or, atleast, the entries involved were not contemporaneous but fabricated after the election was over. That, the High Court erred in relying upon the evidence of challans by the police on 11 3 1972 of drivers of trucks said to have been used by the appellant when the best evidence in the possession of the police relating to these challans was not forthcoming so that the challans appeared to have been maneuvered for the purpose of supporting a false case. That, the High Court erred in relying upon merely uncorroborated oral testimony of Motor truck drivers in accepting the respondent 's case which was not really corroborated as the alleged corroborative evidence was not evidence at all in the eye of law, 587 6. That, the High Court overlooked the well established principle that the charge of a corrupt practice in the course of an election must be treated as quasi criminal in character which has to be proved beyond reasonable doubt. We will deal with these objections, in the reverse order, starting with the last mentioned ground of attack on the High Court 's judgment. The judgment rests largely on appreciation of oral evidence. It could not, therefore, be easily disturbed us as has been repeatedly pointed out by this Court even in first appeals on facts in election cases. If the High Court overlooks serious infirmities in the evidence adduced to support the case accepted by it or misreads evidence or ignores the principle that a charge of corrupt practice, in the course of an election, is a grave one which, if established, casts a serious reflection and imposes a disability upon the candidate held guilty of it, so that the Court must be satisfied beyond reasonable doubt about its veracity, this Court will not hesitate to interfere. Learned. Counsel for the appellant has relied upon the decision of this Court in Rahim Khan vs Khurshid Ahmed & Ors.,(1) where Krishna Iyer, J., speaking for this Court, said (at p. 666) : "An election once held is not to be treated in a lighthearted manner and defeated candidates or disgruntled electors should not get away with it by Ming election petitions on unsubstantial grounds and irresponsible evidence, thereby introducing a serious element of uncertainty in the verdict already rendered by the electorate. An election is a politically sacred public act, not of one person or _of one official, but of the collective will of the whole constituency. Courts naturally must respect this public expression secretly written and show extreme reluctance to act aside or declare, void an election which has already been held unless clear and cogent testimony compelling the Court to uphold the corrupt practice alleged against the returned candidate is adduced. Indeed, election petitions where corrupt practices are imputed must be regarded as proceedings of a quasi criminal nature wherein strict proof is necessary. The burden is therefore heavy on him who assails an election which has been concluded". In Rahim Khan 's case (supra) our learned brother Krishna lyre also warned us in the word of Sydney Harris (at p. 666) "Once we assuage our conscience by calling something a necessary evil ', it begins to look more and more necessary and less and less evil". He then proceeded to observe (at p. 666) "For this very reason the Court has to be stern so as induce in the candidates, the parties and workers that temper and truthfulness so appropriate to the process. (1) 1974 2 SCC p. 660 @ P. 666. 588 After pointing out the difficulty of laying down any past iron or rigid rules for testing the veracity of witnesses, this Court said (at p. 672) there "We regard it as extremely unsafe, in the present climate of kilkenny cat election competitions and partisan witnesses wear ingrobes of veracity, to upturn a hard won electoral victory merely becauselip service to a corrupt practice has been rendered by somesanctimonious witnesses. The Court must look for seriousassurance, undying circumstances, or unimpeachabledocuments to uphold grave charges of corrupt practice whichmight not merely cancel the election result, but extinguish many a man 's public life". In that case, this Court found the charge of a corrupt practice to be established upon oral and documentary evidence given to support it. In the case before us, we find that the High Court accepted the evidence of Uggar Sain, P.W. 24, because, inter alia, it was supported by a "Pukar Register_" kept by the Union of truck drivers of trucks hired in the order said to be determined by their places in the Register. It relied on this evidence despite certain serious objections to the entries in the Register showing payments for the trucks said to have been used by the appellant. The High Court, however, held that the testimony of Uggar Sain found sufficient corroboration not only from the entries in Pukar Register but also from the testimony of Khandu Ram, P.W. 25, Harish Lal, P.W. 26, Jai Gopal, P.W. 27, Chokha Namad, P.W. 28, Gurbachan Singh, P.W. 37 and Rajinder Singh, P.W 38, each of whom had deposed that he was paid a sum of Rs. 150/ on 10 3 1972 for performing election duty for the appellant for carrying voters on 11 3 1972. The learned Judge observed about these drivers : "None of them is shown to be interested in the petitioner or against the returned candidate nor was the deposition of any one of them shaken in cross examination and I do ,act see any good reason for discarding their sworn word. As would be seen later, they actually plied their trucks for the returned candidate on the 11th of March, 1972. a fact which clinches the matter against him". The denial of the returned candidate were rejected by the learned Judge on the ground that threw were made by a highly interested party. After having been taken through the judgment we are not satisfied that the learned Judge did anything more than to rather mechanically accept the oral and documentary evidence given to support the charge. We certainly do not find there any consideration or discussion of a number of infirmities which have been placed before us both in the oral and documentary evidence adduced to support the, charge. We think that this is so because the learned Judge seems to have held the view that a mere consideration of probabilities, without applying a strict standard of proof beyond reasonable doubt to a charge of corrupt practice was enough here. 589 After going through the evidence relating to the use of each truck, and repeating, rather mechanically, that this evidence on behalf of the petitioner was acceptable in each instance given, the learned Judge concluded "As a result of the discussion of the evidence under this issue, I hold that the returned candidate hired and used trucks Nos. HRR 5155, HRR 5161, HRR 5077, HRR 5013, and HRR 597, for the free conveyance of electors to various polling stations and thus committed the corrupt practice defined in clause (5) of section 123 of the Act". We find no indication anywhere in the judgment that the stricter standard of proof, which is applicable to such charges, was kept in view by the learned Judge. The fifth ground of objection set out above seems to proceed on the erroneous assumption that oral testimony cannot be accepted when a corrupt practice is set up to assail an election unless it is corroborated by other kinds of evidence in material particulars. We are not aware of any such general inflexible rule of law or practice which could justify a wholesale condemnation or rejection of a species of evidence which is legally admissible and can be acted upon under the provisions of Evidence Act in every type of case if it is, after proper scrutiny found to be reliable or worthy of acceptance. There is no presumption, either in this country or anywhere else, that a witness, deposing on oath in the witless box, is untruthful unless he is shown to be, indubitably, speaking the truth. On the other hand, the ordinary presumption is that a witness deposing solemnly on oath before a judicial.tribunal is a witness of truth unless the contrary is shown. It is not required by our law of evidence that a witness must be proved to be a perjurer before his evidence is discarded. It may be enough if his evidence appears to be quite improbable or to spring from such tainted or biased or dubious a source as to be unsafe to be acted upon without corroboration from evidence other than that of the witness himself. The evidence of every witness in an election case cannot be dubbed as intrinsically suspect or defective. It cannot be ,equated with that of an accomplice in a criminal case whose testimony has, according to a rule of practice, though not of law, to be corroborated in material particulars before it is relied upon. This Court pointed out in Rahim Khan 's case (supra) that there are no golden rules for appraising human testimony. In assessing its worth Judges can err honestly just as witness can make honestly mistaken statements under oath. The extraction of what should constitute the credible foundation of judicially sound judgment is an art which nothing except sound common sense and prudence combined with experience can teach. A sound judgment must disclose a fair attempt to "separate the grain from the chaff" as it has often been said. Section 3 of the Evidence Act lays down: "A fact is said to be proved when after considering the matters before it, the Court either believes it to exist or con 590 siders its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Hence it has sometimes been argued that the same standard of proof applies to all types of cases. Such a contention seems plausible. But, what has to be borne in mind is that, in judging the evidence of a grave charge, prudence dictates that the belief in its correctness should form the basis of a judicial verdict of guilt only if that belief reaches a conviction beyond reasonable doubt. If prudence is the real test, it prescribes differing standards of proof in differing circumstances. Its requirements preclude any Procrustean a bed of uniformly rigid rules for each type of case. The circumstances under which reasonable doubt may or may not exist in a case cannot possibly be exhaustively cataloged. All that one can say is that in deciding whether the stricter standard of proof is satisfied in a case of alleged corrupt practice, resting upon oral evidence only, the Courts should be particularly astute and not omit to examine fairly the effect of every existing substantial ground which could introduce a reasonable doubt in a case. In doing so, the Court has also to beware of bare suspicion, based on popular prejudices or belief sought to be introduced merely to bias the Court against a witness or a partly of a particular type. In the case before us, we find that the learned Counsel for the appellant has repeatedly referred to the fact that the respondent, whose election petition succeeded before the learned Judge, was a defeated former Minister of the ruling Congress party. Learned Counsel wanted us to infer that, because, the respondent had been welcomed and garlanded by the President of the Motor Truck Drivers ' Union of Ganaur,. the evidence of motor drivers was easily available to him. In other words, we were asked to assume that the motor drivers would be prepared to commit perjury, at the instance of the President of the Motor Truck Drivers ' Union, only to please a former defeated Minister. We do not think that it is reasonable to carry such a suspicion to the extent of attributing to every witness appearing in support of the respondent 's case a tendency or desire to commit perjury. The law does not discriminate against or frown upon a former Minister, belonging to any party, whether in or out of power, so that it must view every witness produced by him with suspicion simply because he had been a Minister. On the other hand, we think that it would not be unreasonable to believe that a person who has occupied the responsible position of a Minister will be less inclined to suborn witnesses or conspire to produce perjured evidence just because he is defeated in an election which is not the only test of a person 's worth or respectability in society. We think that a person who has held a responsible office will be acting imprudently if he spoils his public image by deliberately producing perjured evidence. We are not prepared to uphold the 5th contention of the appellant that, either as a general rule. in election cases, or on the facts of this particular case, the evidence of the motordrivers must be necessarily rejected simply because it is oral testimony of drivers of trucks who had formed a Union which had once invited 591 and garlanded the respondent. We, however, think that the evidence had to be more carefully scrutinized than the High Court was disposed to do it. As was Pointed out in Rahim Khan 's case (supra), evidence considered unsafe to be acted upon by a judicial Tribunal need not be necessarily false. Turning to the 4th ground of objection, relating the prosecutions of truck drivers by the Police for alleged offenses said to have taken place on 11.3.1972, we find that the High Court accepted the allegation that the ' drivers were challenge on 11.3. 1972 without commenting on some conflicting evidence as to the date on which the motor drivers were challenge. In reply, it has been contended that witnesses who could have given more, evidence on this question were not only given up by the petitioner respondent but also by the appellant as the date of challans was accepted or not questioned on behalf of the appellant. Our attention is invited to Miscellaneous application No. 216 E/72 dated 19 10.1972 where learned Counsel for the appellant not merely stated that he did not want to examine either the Mohrir Constable of Police Station Ganaur or a Clerk of the office of the Superintendent of Police, Rohtak, but prayed that "the above two witnesses may kindly be informed telegraphically not to appear on 23.10.72". It is, therefore, argued, not without force, that the date of the challans was not seriously disputed by the appellant before the High Court so that this question should not be allowed to be argued before us. It was also contended on behalf of the respondent that there had been some tampering with the record in the Magistrate 's Court which explained the contrary evidence given by Subash Chander, P.W.11, the Ahalmad of a Magistrate 's Court, showing that the challan was dated 17 3 1972. It was orally prayed that we should summon and examine, at this stage, the original record from the Court of the Magistrate, concerned. However, as no argument appears to have been addressed on this question in the High Court we think that this as a matter which the High Court can and should itself examine after summoning the record from the Magistrate 's Court as we propose to send the case back to it for reconsideration after taking some further evidence. It has been argued on behalf of the respondent that there is enough evidence of the motor truck drivers and of the voters carried as well as documentary evidence, including a log book of a driver, to show that the truck used on behalf of the respondent were carrying voters to the election booth, and were, therefore, challaned on 11 3 1972 because carrying of passengers in truck was not permitted. It was admitted that no entry was made in the general diary of Ganaur Police Station, according to the rules, but this, it was contended for the respondent, is not conclusive as relevant entries relating to some 'petty offences are often missing. These are, however, some of the matters which the High Court can and should consider. It appears to us that a number of Points, on the worth of various tems of evidence, which have been raised for the 1st time to question 592 the authenticity. of the evidence relating to the prosecution of drivers of trucks, said to have been carrying voters for the appellant were not advanced before the High Court. We think that we ought to have the benefit of scrutiny of the whole evidence on this question by the High Court and its findings thereon. We are not prepared to proceed on the assumption that the respondent could easily get evidence fabricated as he had been a minister. We may now deal with the first three grounds of objection, all relating to what is called the Pukar Register. It is true that Uggar Sain, P.W. 24, who was called to prove the Pukar Register, did not actually depose in %*hose handwriting the entries in it were made, or what could or could not be property entered here. The trend of cross examination, however, shows that it proceeded on the assumption that Uggar Sain, P.W. 24, was actually making entries in it. But, neither this fact was proved in the examination in chief nor was the course of business, according to which entries could be made in the Register, including entries of alleged payments by the respondent, proved. A number of question raised before us,( throwing some suspicion on the authenticity of the entries in this Pukar Register and the dates on which they could be or were made seem to us to be entirely new. They were not suggested to P.W. 24, Uggar Sain, who might have had some explanations for these suspicious features. Nor do all these defects seem to have been mentioned in the course of arguments before the High Court. For example, the truck numbers of trucks said to have been sent to the appellant do not appear against the name of the appellant but seem inserted afterwards above the place where they would be expected to be found. The exact meaning or effect of such a feature could only have been brought out by cross examination of Uggar Sain, P.W. 24 on behalf of the appellant. As regards the admissibility of the Pukar Register and evidence of prosecution of the truck drivers, we are unable to accept the submission that these are inadmissible under the Evidence Act. Even though the course of business under which the Pukar Register was kept was not proved, we think that documents, such as the Pukar Register and those relating to the prosecutions of the drivers, who were said to be carrying voters on 11. 3. 1972, could be proved under section 11 of the Evidence Act. We think that, in view of the importance of the evidence Uggar Sain, P.W. 24 both his examination in chief and his cross examination are must unsatisfactory. We may here observe that the election Tribunal is not powerless in such cases in the performance of its duty to ascertain the truth. There is not only Section 165 of the Evidence Act which enables the Court to put any question it likes to a witness,. but there are also the provisions of order XVI, Rule 14, Civil Procedure Code which Jay down : "Subject to the provisions of this Code as to attendance and appearance and to any law for the time being in force, 593 where the Court at any time thinks it necessary to examine any person other than a party to the suit and not called as a witness by a party to the suit, the Court may, of its own motion, cause such person to be summoned as a witness to give evidence, or to produce any document in his possession, on a day to be appointed, and may examine him as a witness or require him to produce such document". We think that the ascertainment of a number of essential facts relating to the charge was neither regular nor sufficiently detailed in the case now before us. We find that the High Court proceeded on the assumption that facts which ought to have been technically proved had been sufficiently proved. It too readily accepted the evidence, both oral and documentary, without examining all the defects of it which have been sought to be placed before us. We are left with an unavoidable impression that important aspects of the case were neither satisfactorily brought out clearly by the evidence in the case nor examined by the High Court despite the voluminous evidence led by the parties and the lengthy judgment delivered by the Tribunal. We also find that the Court adopted a standard of proof which is not strict enough in appraising the worth of evidence produced to support a charge of corrupt practice. As it is not the practice of this Court to reassess evidence or to perform the duties of the Trial Court, even in election first appeals, unless no other course is left open to it, we think that this is a fit case in which we should send back the case for reconsideration by the High Court after recalling such witnesses as may be considered necessary by it, and, in particular, Uggar Sain, P.W. 24, so that at least the Pukar Register, assumed to have been duly proved, may be proved in accordance with law. We think that the objections to the proof of this document, and of entries in it do not go beyond objections to the mode of proof. The entries in it could be accepted as sufficiently reliable only after a much more rigorous examination of their maker than the parties or the Court subjected him to. We think that we should not give a finding upon the reliability of these entries before the allegedly suspicious features have been specifically put to P.W. 24, Uggar Sain, who was assumed to have made the entries without even asking him whether he did make them. In the result, we set aside the judgment and order of the High Court and we remand the case to it for disposal in accordance with law after abduction of such further evidence as may be necessary in the interests of justice. In view of our order remanding the case to the High Court it is unnecessary to consider the three Civil Miscel 594 laneous Petitions for urging addition grounds, for condonation of delay in filing the application for urging additional grounds, and for permission to file a certified copy of the summary register for 21 3 1972 and 22 3 1972 of the Court 'of Judicial Magistrate 1st Class, Sonepat. These applications are, therefore, dismissed. Partics may, however, make appropriate applications in the High Court. The costs of this litigation in the High Court as well as in this Court will abide the result. The appellant will continue to function as an elected member subject to the result of the Election Petition. P. B. R. Appeal allowed.

The respondent, in his election petition before the High Court, allegedd a number of corrupt practices hit by section 123(4), (5) and (6) of the Representation of the People Act, 1951 against the appellant, who was the duly elected candidate to the State Assembly. The High Court allowed the petition and set aside the election. On appeal to this Court it was contended that the High Court overlooked the well established principle that the charge of corrupt practice must be treated as quasi criminal in character which has to be proved beyond reasonable doubt. Allowing the appeal and remitting the case to the High Court, HELD : (1)(a) The judgment of the High Court rests largely on appreciation of oral evidence. It could not, therefore, be easily disturbed by this Court even in first appeal on facts in election cases. [587B] (b) But if the High Court overlooks serious infirmities in the evidence adduced to support the case accepted by it or misreads evidence or ignores the principle that a charge of corrupt. practice, in the course of an election, is a grave one which, if established, casts a serious reflection and imposes a disability upon the candidate held guilty of it, so that. the Court must be satisfied beyond reasonable doubt about its veracity, this Court will not hesitate to interfere. [587C] In the instant case, the High Court did nothing more than to rather mechanically accept the oral and documentary evidence given to support the charge of corrupt practice. There was no consideration or discussion of a number of infirmities both in the oral and documentary evidence to support the charge. Ibis is so because the High Court has held the view that a mere consideration of probabilities, without applying a strict standard of proof beyond reasonable doubt to a charge of corrupt practice was enough. There is no indication , anywhere in the judgment that the stricter standard of proof, which is applicable to such charges, was kept in view by the High Court. [588G H] Rahim Khan vs Khurshid Ahmed & Ors. ; @ 666. followed. 2(a) It is difficult to accept the contention of the appellant that oral.testimony could not be accepted in an allegation of corrupt practice unless it is corroborated by other kinds of evidence in material particulars. There is no such general inflexible rule of law or practice which could justify a wholesale condemnation or rejection of a species of evidence which is legally admissible and can be acted upon under the provisions of the Evidence Act in every type of case if it is, after proper scrutiny, found to be reliable or worthy of acceptance. There is no presumption that a witness deposing on oath in the witness box, is untruthful unless he is shown to be speaking the truth. The ordinary presumption is that a witness deposing solemnly on oath before a judicial tribunal is a witness of truth unless the contrary is shown. The evidence in an election petition cannot be equated with that of an accomplice in a criminal case whose testimony has, according to a rule of practice, though not of law, to be corroborated in material particulars before it is relied upon. [589D E & F] 585 (b) It is not required by our law of evidence that a witness must be proved to be a perjurer before his evidence is discarded. It may be enough if his evidence appears to be quite improbable or to spring from such tainted or biased or dubious a source as to be unsafe to be acted upon without corroboration from evidence other than that of the witness himself [589F] (c) There are no golden rules for appraising human testimony. The extraction of what should constitute the credible foundation of judicially sound judgment is an art which nothing except sound common sense and prudence combined with experience can tear h. [589G] (d) In judging the evidence of a grave charge, prudence dictates that belief in its correctness should form the basis of a judicial verdict of guilt only if that belief reaches a conviction beyond reasonable doubt. [590B] (e) In deciding whether the stricter standard of proof is satisfied in a case of alleged corrupt practice, resting upon oral evidence only, the Courts should be particularly astute and not omit to examine fairly the effect of every existing substantial ground which could introduce a reasonable doubt in a case. [590c] In the instant case the appellants contention that the motor drivers would be prepared to commit perjury at the instance of the respondent who was the defeated Minister and that because the respondent had been welcomed and garlanded by the President of the Motor Truck Drivers ' Union, the evidence of motor drivers was easily available to him cannot be accepted either as a general rule in election cases, or. on the facts of this particular case. It is not reasonable to carry a suspicion to the extent of attributing to every witness appearing in support of the respondent,,, case a tendency or desire to commit perjury. The law does not discriminate against or frown upon a former Minister or view every witness produced by him with suspicion because he had been a Minister. On the other hand, it is reasonable to believe that a person who has occupied the responsible position of a Minister would be less inclined to suborn witnesses or conspire to produce perjured evidence. [590E G] Rahim Khan vs Khurshid Ahmed & Ors. ; (a) 666, followed. (f) Where the examination in chief and cross examination of a witness are most unsatisfactory the Trbunal is not powerless in the performance of its duty to ascertain the truth. There is not only section 165 of the Evidence Act which enables the Court to put any question it likes to a witness. but there are also provisions of O.XVI, r. 14 CPC. The High Court adopted a standard of proof which is not strict enough in appraising the worth of evidence produced to support a charge of corrupt practice. [592G H]

3243.txt

minal Appeal No. 226 of 1970. Appeal by special leave from the judgment and order dated the 14th April, 1970, of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal appeal No. 260 of 1968. A. N. Mulla and O. N. Mohindroo, for the appellant. O. P. Rana, for the respondent. The Judgment of the Court was delivered by KHANNA, J. Barati (26) was tried in the court of Sessions Judge Sitapur for an offence under section 302 Indian Penal Code for causing the death of Lekhai (45). Prabhu (24) and Ram Lal (24) were also tried along with Barati for offence under section 302 read with section 109 Indian Penal Code for having abetted the commission of the offence of murder. Learned Sessions Judge acquitted all the three accused. On appeal filed by the State the Allahabad High Court convicted Barati under section 302 Indian Penal Code and sentenced him to undergo imprisonment for life. The appeal against Prabbu and Ram Lal was dismissed. Barati then came up in appeal to this Court by special leave. The prosecution case is that the relations between Lekhai deceased and his younger brother Pancham (PW 3) on the one side and Barati accused on the other were strained. All three of them belong to village Nasirapur in district Sitapur. Dispute had been going on between them regarding the construction of a wall. About a couple of months before the present occurrence, Baratia effected an opening in the western wall of his house which gave rise to an apprehension that he intended to encroach upon the land belonging to Lekhai and Pancham. Pancham made complaint dated May, 27, 1967 to the Judicial Panchayat in that connection. The said complaint was still pending when the present occurrence took place. About three days prior to the present occurrence Barati and Prabhu accused after arming themselves with lathis went to the door of Lekhai and Threatened to assault him. Mainku PW intervened and persuaded Barati and Prabhu to go away. On the evening of July 30, 1967, it is stated, Lekhai deceased after taking his meals was lying on a cot in an open space near his baithak. Lekhai 's son Nagai (PW 1) and brother Pancham (PW 3) slept nearby on another cot. A lighted lantern was hanging nearby. At about 10.30 p.m. the three accused came there. On hearing some sound, Lekhai opened his eyes. Lekhai saw the three accused standing near the cot. Ram Lal accused is the brother in law of Barati accused. At the instigation of Ram Lal and Prabhu, it is stated, Barati accused, who was holding a bottle, poured acid over Lekhai. Lekhai cried aloud and shouted that he was being killed. On hearing the cries of Lekhai, his son Nagai and brother Pancham got up from their cot and saw the three accused standing there. Barati accused was holding a bottle in his hand. Nagai and Pancham too raised alarm whereupon 572 Bhallu (PW 2) and Jeorakhan (PW 4), whose houses are nearby, also arrived there with lighted torches and lathis in their hands. On seeing them, the three accused ran into the house of Barati and closed the door from inside. Nagai and others chased the accused and knocked at the door of the house but the accused did not open the door. Nagai, Pancham, Bhallu and Jeorakhan were told by Lekhai that Barati accused had poured acid over him. Badri Pradhan (PW 6) also came there and on his enquiry he too was told by Lekhai that Barati accused had poured acid over him. Nagai, Pancham, Bhallu, Jeorakhan and Badri Pradhan PWs saw acid present all over the body of Lekhai deceased. His clothes too were stained with acid. At the suggestion of Badri, Lekhai was then taken in a bullock cart by Nagai and Pancham PWs to police station Sandhana at a distance of two miles from the place of occurrence. Report Ka 1 was lodged at the police station at 2.30 a.m. by Lekhai. In that report Lekhai stated that Barati accused had poured acid over his body. The names of Nagai, Pancham, Bhallu and Jeorakhan were also mentioned in the first information report and it was stated that they had seen the accused present near his cot when Lekhai had raised alarm. The motive for the assault, as given earlier, was also given. After recording the first information report, Sub Inspector Asrarul Haq (PW 18) recorded statement Ka 22 of Lekhai. In that statement Lekhai reiterated what he had stated in the first information report. The Sub Inspector thereafter recorded the statements of Nagai and Bhallu PWs. Lekhai was then sent to Misrikh dispensary at a distance of about 12 miles from the place of occurrence. The party arrived at the dispensary at about 3 p.m. on July 31, 1967. Soon thereafter Dr. Bisht (PW 5) recorded statement Ka II at 3 p.m. of Lekhai deceased. Lekhai was at that time in a fit condition to make statement. In that statement also Lekhai stated that Barati accused had poured acid over his body and as such had caused him injuries. The injuries of Lekhai were examined by Dr. Bisht at 3 .15 p.m. As the condition of Lekhai was serious, Dr. Bisht referred the case of Lekhai to District Hospital Sitapur. Lekhai was then taken to the District Hospital Sitapur. The party arrived in the hospital at about 4 45 p.m. the same day but about an hour thereafter at 5 .45 p.m. Lekhai succumbed to the injuries. Post mortem examination on the body of Lekhai was performed by Dr. N. Verma on the following day, i.e. August 1, 1967, at 4 pm. Barati accused absconded after the occurrence. Proceedings under sections, 87 and 88 of the Code of Criminal Procedure were initiated against him. Barati surrendered in court on August 17, 1967. He was thereafter put under arrest. At the trial the plea of Barati accused, with whom we are concerned was denial simpliciter. No evidence was produced in defence. The trial court did not place reliance upon the evidence of Nagai, Pancham, Bhallu and Jeorakhan PWs. The reason which weighed 573 with the trial court was that the witnesses were related to the deceased. The evidence with regard to the dying declarations of the deceased was not accepted by the trial court. The deceased, in the opinion of the trial court, became unconscious and as such was not in a position to lodge first information report Ka 1 or to make statement Ka 22. The trial court also rejected dying declaration Ka II recorded by Dr. Bisht as it found the language of the same to be chaste and the same, in the opinion of the trial court, was not expected of a rustic living in a village. In the result the accused were acquitted. On appeal the learned Judges of the High Court accepted the evidence of Nagai, Pancham, Bhallu and Jeorakhan PWs as well as the evidence about the dying declarations made by the deceased. The High Court also took note of the fact that Barati accused had a motive to assault the deceased and that when witnesses knocked at his door, he instead of professing his innocence, did not open the door. Reference was also made to the fact that Barati accused had absconded after the occurrence. In the result the appeal against Barati accused was accepted, and he was convicted and sentenced as above. So far as Ram Lal and Prabhu accused were concerned, the High Court gave them the benefit of doubt and as such acquitted them. In appeal before us Mr. Mulla on behalf of the appellant has urged that the High Court should not have reversed the judgment of acquittal of the trial court in respect of the appellant. According to the learned counsel, the evidence relied upon by the High Court is not satisfactory and as such the conviction of the appellant cannot be based upon it. In reply Mr. Rana has canvassed for the correctness of the view of the High Court. It cannot be disputed that acid was poured on Lekhai deceased on the night of July 30, 1967 as a result of which he died. Dr. Bisht, who examined Lekhai deceased on July 31, 1967 at 3 .15 p.m., found the following injuries on his person : "Burnt area of black colour on the left side of the face, on both sides of the neck, on the front part of the whole chest, on the right arm, right fore arm, and back part of right palm on the front and back part of both shoulders. " Dr. Bisht also found black marks caused by running down of fluid on the front and outer part of abdomen and on the vertebral column. Burnt areas of black colour were found by the doctor on the front and inner part of right thigh, inner and upper Part of right leg and inner part of the left thigh in the middle. The injuries, in the opinion of the doctor, were previous and were caused by acid in liquid form. The injuries were about 12 to 24 hours old. Lekhai died at 5 .45 p.m. on July 31, 1907. Dr N. Verma who performed the post mortem examination on the body of Lekhai on August 1, 1967 at 4 p.m. found the following injuries on the body 574 "1.Corrosive burns area. There were marks of acid,on the left side of the face, in front and both sides of the neck, in front of the chest and in front, up and back side of the shoulders ; upper side and in front of the right arm and in front and in several places of the other arm. In front and outer side of right thigh and in front inside of left shoulder, in front and down part of the right leg and both sides of the back. The marks on account of pouring of acid existed on the left side of the face, and also existed on both sides of the chest, abdomen, and shoulders, the inner part of the skin and flesh of front of the chest, neck, side and several places became discolored by the action of acid. Injuries were on account of corrosion burns which were upto III, IV, V degree. " On internal inspection the brain and thin skin cover were found to be congested. The same was the condition of the longs, larynx, trachea and bones. The heart was full of blood, while the stomach was empty. Death, in the opinion of the doctor, was due to shock as a result of the pouring of acid. The injuries were sufficient to cause death in the ordinary course of nature. The case of the prosecution is that it was Barati accused who poured acid over Lekhai deceased as a result of which Lekhai died. In support of this allegation, the prosecution has relied, in the first instance, upon the four dying declarations of Lekhai deceased. The first dying declaration of the deceased was the one made by him to Nagai, Pancham, Bhallu and Jeorakhan immediately after the occurrence. It is in the evidence of these witnesses that they were told immediately after the occurrence that it was Barati accused who, had poured acid over him. There appears to be no cogent reason to disbelieve the above evidence of the witnesses. The trial court, in our opinion, was wholly in error in rejecting the evidence of these witnesses on the ground that they were related to the deceased. Close relatives of the deceased would normally be most reluctant to spare the real assailant and falsely mention the name of another person as the one responsible for causing injuries to the deceased. Lekhai deceased also told Badri Pradhan (PW 6) who arrived at the place of occurrence on hearing alarm that Barati accused had poured acid over him. No cogent ground has been shown as to Why the above evidence of Badri Pradhan be not accepted. All that was suggested on behalf of the accused was that Badri was inimical to Prabhu accused. If that was so, no reason has been shown as to why Badri should attribute the major part in the assault on the deceased to Barati accused and not to Prabhu. It is also plain that Lekhai deceased must have seen as to who was the person who poured acid over his body. The moment the acid first came in contact with his body, the immediate reaction of Lekhai, as of any other person, would be to see as to who was responsible for all that. Even if the assailant took only a few seconds to pour acid over the body of Lekhai, the latter would not have failed to fix the identity of the assailant during that short time. It is significant that Barati was no stranger to Lekhai. They were neighbours and were well known to each other. it is, in our opinion, most difficult 575 to believe that Lekhai would spare his real assailant and falsely mention the name of Barati as one who had poured acid over his body. Apart from the oral dying declarations made by the deceased to Nagai, Pancham, Bhallu, Jeorakhan and Badri Pradhan PWs, we have the evidence of Sub Inspector Asrarul Haq that the deceased lodged report Ka 1 at the police station at 2.30 a.m. when the deceased was brought there in a cart. The deceased stated in that report that Barati accused had poured acid over him and thus caused him injuries. Sub Inspector, Asrarul Haq thereafter recorded statement Ka 22 of Lekhai, deceased. In that statement also the deceased reiterated that it was Barati accused who had poured acid over him and thus caused him injuries. We see no particular reason to disbelieve the evidence adduced by the prosecution regarding the dying declaration of Lekhai deceased contained in report Ka 1 and statement Ka 22. The trial court reacted the above evidence because it was of the view that Lekhai deceased, as mentioned by him in dying declaration Ka 1 made to Dr. Bisht, had become unconscious after the occurrence. There was, however, nothing in that statement to indicate that Lekhai remained unconscious for a long time and as such was not in a position to lodge the first information report at the police station or make statement Ka 22 to Sub Inspector Asrarul Haq. The view taken by the trial court in rejecting the above evidence, in our opinion, was clearly erroneous '. Another dying declaration upon which prosecution has placed reliance was Ka 11 recorded by Dr. Bisht in Misrikh dispensary According to Dr. Bisht, Lekhai was in possession of his senses when he made statement Ka 11. Dr. Bisht is a wholly disinterested and respectable witness and there appears no reason as to why his statement regarding the dying declaration Ka 11 be not accepted. Dying declaration Ka 11 is a brief document consisting of about 9 or 10 lines. The statement incorporated in dying declaration Ka 11 is very simple and relates to the pouring of acid by Barati accused on Lekhai deceased. The fact that the language used in it is rather chaste would not go to show that the said statement could not have been made by Lekhai deceased. The statement of Lekhai in exhibit Ka 11 that Barati accused had poured the liquid from a bottle on him clearly establishes the guilt of Barati accused. Reference was made on behalf of the accused to the fact that statement Ka 11 was sent by Dr. Bisht to Additional District Magistrate not immediately after recording that statement but on the third day. According to Dr. Bisht, the delay took place because of rush of work. No adverse inference, in our opinion, can be drawn from the fact that the dying declaration was sent by Dr. Bisht on the third day after recording the same. The dying declaration bears the thumb impression of Lekhai deceased. Lekhai was sent from Misrikh dispensary soon after the dying declaration was recorded and his injuries were examined. There could be no possibility of any such dying declaration being prepared subsequently. 576 Mr. Mulla has pointed out that the language used in dying declaration Kall is chaste while that used in report Ka 1 as well as in statement Ka 22 has some words which are spoken by villagers. This fact, in our opinion, is not of much significance because there is nothing abnormal or unusual in the same person using colloquial language while talking to one person and using refined language while talking to another person. Apart from the dying declaration& of the deceased, we have the evidence of Nagai, Pancham, Bhallu and Jeorakhan PWs that they saw Barati accused with a bottle in his hand near the cot of the deceased when those witnesses got up on hearing alarm. The High Court accepted the evidence of these witnesses and we see no particular reason to take a different view. As mentioned earlier, the reason given by the trial court in rejecting the evidence of these witnesses was wholly erroneous. It is well settled that the High Court in an appeal under section 417 of the Code of Criminal Procedure has full power to review at large the evidence on which the order of acquittal was founded and to reach the conclusion that upon the evidence the order of acquittal should be ' reversed. No limitation should be placed upon that power unless it be found expressly stated in the Code, but in exercising the power conferred by the Code and before reaching its conclusion upon fact the High Court should give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any real and reasonable doubt and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a judge who had the advantage of seeing the witnesses. Keeping the above principles in view as well as the fact that the approach of the trial court was clearly unreasonable, the High Court, in our opinion, was fully justified in setting aside the acquittal of Barati accused. There is, in our opinion, no force in the appeal which fails and is dismissed. P.B.R. Appeal dismissed.

The appellant and his companions were charged with an offence under section 302 I.P.C. for causing the death of the deceased by pouring acid on him when he was sleeping on his cot on the night of the occurrence. After recording the first information report the police sub inspector recorded the statement of the deceased and at the dispensary the doctor recorded the statement of the deceased, in both of which he stated that the appellant poured acid over his body and caused injuries to him. The deceased succumbed to his injuries. Disbelieving the prosecution evidence the trial court acquitted him. The High Court on the other hand accepted the evidence of all the prosecution witnesses and convicted and sentenced the appellant to life imprisonment but acquitted the remaining two accused. In appeal to this Court it was contended that the High Court should not have reversed the judgment of the trial court and the evidence relied upon by the High Court was not satisfactory. Dismissing the appeal. HELD : that the approach of the trial court was clearly unreasonable and the High Court was fully justified in setting.aside the acquittal of the. appellant. It is well settled that in an appeal under section 417 of the Code of Criminal Procedure the Court has full power to review at large the evidence on which the order of acquittal was founded and to reach the conclusion that upon the evidence the order of acquittal should be reversed. No limitation should be placed upon that power unless it be found expressly stated in the Code, but in exercising the power conflict by the Code before reaching its conclusion upon facts the High Court should give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any real and reasonable doubt and (4) the slowness of an appellate court in disturbing the finding of fact arrived at by a judge who had the advantage of seeing the witnesses. [576 D F] In the instant case there was no doubt that the deceased died as a result of acid bums. There was no cogent reason to disbelieve the evidence of the prosecution witnesses. The trial court was wrong in rejecting evidence of these witnesses on the ground that they were related to the deceased.! Close relatives of the deceased would normally be most reluctant to spare the real assailant and falsely mention the name of another person as the one responsible for causing injuries to the deceased. The deceased would not spare his real assailant ' and falsely mention the name of the appellant as one who poured acid over his body. There was no reason to discard the dying declaration made by the appellant to the police sub inspector, The trial Court was wrong in rejecting the dying declaration to the police (F.I.R.) on the ground that the deceased had stated to the doctor that he had become unconscious after the occurrence. There was nothing in the statement recorded by the doctor to indicate that the deceased remained unconscious for. a long time and as such was not in position to lodge the F.I.R. The fact that the language used in the dying declaration made to the doctor was rather chaste would not go to show that the said statement could not have been made by the deceased. As to the language used in the dying declaration there is nothing abnormal or unusual in the same person using colloquial language while talking to one person and using refined language while talking to another person. [574 E F ; 575D; 576A] 571

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Civil Appeals Nos. 1461 to 1468 of 1 974. From the Judgment and order dated the 14th April, 1974 of the Disciplinary Committee of the Bar Council of India, New Delhi. in C. Appeals Nos. 15 to 19, 21, 22 and 25 of 1973 respectively. H V. section Desai, Vimal Dave and Kailash Mehta, for the appellant (in all the appeals). 309 M. V. Dabolkar, for the respondent (In C. A. No. 1461/74). Z. F. Bootwala and Urmila Sirur, for the respondent (In C. A. Nos. 1462 64/74) . V. N. Ganpule and V. H. Dixit, for the respondent (In C. A. No. 1465/74). K. G. Mandalia, for the respondent (In C. A. No. 1466/74). E. Udayarathallam and A. K. Doshi, for the respondent (In C.A. No. 1467/ 74). D. K. Raisinghani, for the respondent (In C.A. No. 1468/74). K. K. Sinha and section K. Sinha, for the Bihar State Bar Council. D. V. Patil and K. Hingorani, for the Bar Council of India. The Judgment of A. N. RAY, C.J., H. R. KHANNA, K. K. MATHEW, A. C. GUPTA AND section M. FAZAL ALl, was delivered by A. N. RAY, C.J., M. BEG and V. R. KRISHNA IYER, JJ. gave separate opinions. RAY, C.J. These appeals were placed before this Bench for consideration of the question whether the Bar Council of a State is "a person aggrieved" to maintain an appeal under section 38 of the hereinafter called the Act. The Bar Council of Maharashtra on 8 August, 1964 considered a complaint received from the High Court against the respondents and resolved that the complaint received from the High Court against the respondents be referred to the disciplinary committee. Another resolution was passed by the Bar Council of Maharashtra on the same day whereby Messrs Hotchand Advani, R. W. Adik and section C. Chagla were elected as members of the disciplinary committee to enquire into the complaints. The aforesaid disciplinary committee met on 19 March, 1965 and heard the advocates for the Bar Council of the State of Maharashtra. After considering the papers placed before the committee, it directed the Registrar to issue notices under section 35(2) of the Act to the "parties concerned including the Advocate General". The committee also expressed the opinion that "there is a prima facie case of professional misconduct". The Bar Council of Maharashtra on 18 May, 1965 issued notices under section 35 of the Act to the respondents. The notice was described as a suo motu inquiry against the respondents. The notice proceeded with the recital that it came to the notice of the Bar Council of Maharashtra that the respondents stood at the entrance of the Court House at the Presidency Magistrate 's Court, Esplanade, Fort Bombay and solicited work and generally behaved at that place in an undignified manner and the said acts amounted to professional and/or other misconduct and the Bar Council constituted disciplinary committee and the inquiry was entrusted to the committee consisting of Messrs H. G. Advani, R. W. Adik and section C. Chagla. 310 The said disciplinary committee heard evidence upto 31 August, 1968. On 14 June, 1969, the Bar Council of Maharashtra passed a resolution requesting the aforesaid disciplinary committee to proceed with the inquiry which was pending before them prior to 31 March, 1969. The disciplinary committee of the Bar Council of Maharashtra on 27 June, 1973 found the respondents guilty of conduct which seriously lowered the reputation of the Bar in the eyes of the public. The disciplinary committee directed that the respondents would stand suspended from practising as advocates for a period of three years. The suspension orders were to be operative from 1 August 1973. The respondents preferred appeals before the Bar Council of India. In these appeals, the respondents impleaded the Bar Council of Maharashtra as respondents. The disciplinary committee of the Bar Council of India on 14 April, 1974 allowed the appeals and set aside the orders of the disciplinary committee of the Bar Council of Maharashtra. While setting aside the orders of the disciplinary committee of the Bar Council of Maharashtra, the disciplinary committee of the Bar Council of India stated as follows: "The Bar Council of Maharashtra has not appeared even though they started the proceedings suo motu and we do not pass any orders as to costs and we direct each party will bear their costs. However, we have gone through the evidence ourselves and also the same has been placed in detail by the appellants. All that we can say is that we expected the Bar Council of Maharashtra to be represented in the ap peal because proceedings were started suo motu" These statements of the disciplinary committee of the Bar Council of India indicate that the Bar Council of Maharashtra should have appeared before the disciplinary committee of the Bar Council of India. The scheme of the in short is as follows: There are State Bar Councils. There is Bar Council of India Every Bar Council is a body corporate. The functions of a State Bar Council are inter alia to entertain and determine cases of misconduct against advocates on its roll and to safeguard the rights, privileges and interests of advocates on its roll. The functions of the Bar Council of India are inter alia to lay down standards of professional conduct and etiquette, to lay down the procedure to be followed by its disciplinary committee and the disciplinary committee of State Bar Councils, to safeguard the rights, privileges and interests of advocates and to exercise general supervision and control over State Bar Councils Disciplinary committees are constituted by each Bar Council. A Bar Council is required to constitute one or more disciplinary committees each of which shall consist of three persons of whom two shall 311 be persons elected by the Council from amongst its members and the other shall be A person co opted by the Council from amongst advocates who possesss the qualifications specified in the proviso to section 3(2) of the Act and are not members of the Council, and the senior most advocate amongst the members of a disciplinary committee shall be its Chairman. When the Executive Committees of a State Bar Council and of the Bar Council of India and an Enrolment Committee of a State Bar Council and the legal education committee of the Bar Council of India are to consist of members erected by the Council from amongst its members, it is noticeable that the disciplinary committees of Bar Council of State as well as of Bar Council of India shall consist of three persons of whom two shall be elected by the Council from amongst its members and the other shall be a person co opted by the Council from advocates who are not otherwise members of the Council. Chapter V of the Act relates to the Conduct of Advocates. Chap ter V contains sections 35 to 44. Section 35 states that where on receipt of a complaint or otherwise a State Bar Council has reason to believe that any advocate on its roll has been guilty of professional other misconduct, it shall refer the case for disposal to its disciplinary committee. The State Bar Council may, either of its own motion or on application made to it by any person interested, withdraw a proceeding pending before its disciplinary committee and direct that inquiry to be made by another disciplinary committee of the State Bar Council. The disciplinary committee of a State Bar Council shall fix a date for the hearing of the case and shall cause a notice to be given. to the advocate concerned and to the Advocate General of the State. The disciplinary committee of the State Bar Council may make any of the following orders namely, (a) dismiss the complaint, or where the proceedings were initiated at the instance of the State Bar Council, direct that the proceedings be filed, (b) reprimand the advocate, (c) suspend the advocate for such period as it may deem fit, (d) remove the name of the advocate from the state roll of advocates. Section 36 speaks of disciplinary powers of the Bar Council of India and provides that where on receipt of a complaint or otherwise the Bar Council of India has reason to believe that any advocate whose name is not entered on any State roll has been guilty of professional or other misconduct, it shall refer the case for disposal to its disciplinary committee. The disciplinary committee of the Bar Council of India may either of its own motion or on a report by any State Bar Council or on an application made to it by any person interested, withdraw for inquiry before itself any proceeding for disciplinary action against any advocate pending before the disciplinary committee of any State Bar Council and dispose of the same. Section 37 speaks of appeal to the Bar Council of India. This section states that any person aggrieved by an order of the disciplinary 312 committee of a State Bar Council or the Advocate General of the state may, within sixty days of the date of communication of the order, prefer an appeal to the Bar Council of India. Section 38 provides for appeal to the Supreme Court. Section 38 states that any person aggrieved by an order made by the disciplinary committee of the Bar Council of India under section 36 or section 37 or the Attorney General of India or the Advocate General of the State, as the case may be, may prefer an appeal to the Supreme Court. Section 49 of the Act provides that the Bar Council of India may make rules for discharging its functions under the Act and in particular such rules may prescribe inter alia the standards of professional conduct and etiquette to be observed by advocates. The Bar Council of India in exercise of the rule making power under section 49(c) of the Act on 10 and l l July, 1954, approved the rules of standards of professional conduct and etiquette. The standards of professional conduct and etiquette are described in five sections. The first section deals with duty of advocates to the Court. The second section speaks of duty of advocates to the clients. The third section consists of rules regarding duty of advocates to opponent. The fourth section prescribes duties of advocates to colleagues. The fifth section lays down restrictions on advocates on other employments. The present appeals touch on Rule 36 of the Rules of the Bar Council of India. Rule 36 is in fourth section under the heading "duty to colleagues Rule 36 speaks that "an advocate shall not solicit work or advertise either directly or indirectly, whether by circular, advertisements, touts, personal communications, interviews not warranted by personal relations furnishing newspaper comments or procuring his photograph to be published in connection with cases in which he has been engaged or concerned. The question for consideration is the meaning of the words any person aggrieved by an order made by the disciplinary committee of the Bar Council of India" occurring in section 38 of the Act. It is noticeable that in section 37, the Advocate General of the State and in section 38, the Attorney General or the Advocate General of the State, as the case may be, have been given specific rights of appeal. These rights were introduced into the Act by amendments made in the year 1974 by Amending Act 60 of 1973. In Adi Pherozshah Gandhi vs H. M. Seervai, Advocate General of Maharashtra, Bombay(1), the question which fell for consideration was whether the appeal filed by the Advocate General of Maharashtra before the Bar Council of India was competent. The majority view was that the Advocate General of the State was not competent to file an appeal to the Bar Council of India. In the Maharashtra case (supra), the disciplinary committee of the State Bar Council was satisfied that that there was no reason to hold Adi Pherozshah Gandhi guilty of professional misconduct or other misconduct. The Advocate General (1) 313 of Maharashtra filed an appeal before the Bar Council of India. The appellant objected to the locus standi of Advocate General before the Bar Council of India. That objection was overruled and the appeal filed by the Advocate General was accepted by the disciplinary committee of the Bar Council of India. The disciplinary committee of the Bar Council of India held the advocate, Adi Pherozshah Gandhi guilty of misconduct and suspended him from practice for one year. The advocate preferred an appeal under section 38 of the Act to this Court. In view or majority decision, the appeal filed by Adi Pherozshah Gandhi was accepted by this Court on the ground that the Advocate General of Maharashtra was incompetent to file an appeal. It is in this background that amendments have been introduced into sections 37 and 38 of the Act conferring right of appeal on the Advocate General of State and the Attorney General of India under sections 37 and 38 respectively. The respondents contended on the ruling of this Court in Adi Pherozshah Gandhi s case (supra) that the Bar Council of the State is not a person aggrieved to maintain an appeal against a decision of its disciplinary committee for these reasons. First, the Bar Council of a State is not an aggrieved person because Bar Council has not suffered ally legal grievance, and the decision of the Bar Council of India has not deprived the Bar Council of a State of anything. Second, the allegation that order of the disciplinary committee of the Bar Council of India is wrongfully made does not by itself give any grievance to the Bar Council of a State. The person must be aggrieved by the order and not by the consequences which ensue. Third, it is not the duty of the State Bar Council to attempt to set right any alleged error of the disciplinary committee of the Bar Council of India. The reason is that no such duty has been imposed or cast by law on the Bar Council of a State. Fourth, a person can be said to be aggrieved by an order which is to his detriment, pecuniary or otherwise or causes him some prejudice in some form or other. Fifth, the Bar Council of a State is subordinate to Bar Council of India and is, therefore, not competent to appeal against any orders of the superior body. Finally, an appeal could have been filed by the Advocate General or the Attorney General of India who have the right to appeal but they have chosen not to do so. The scheme and the provisions of the Act indicates that the constitution of State Bar Councils and Bar Council of India is for one of the principal purposes to see that the standards of professional conduct and etiquette laid down by the Bar Council of India are observed and preserved. The Bar Councils therefore entertain cases of misconduct against advocates. The Bar Councils are to safeguard the rights, privilege and interests of advocates. The Bar Council is a body corporate. The disciplinary committees are constituted by the Bar Council. The Bar Council is not the same body as its disciplinary committee. One of the principal functions of the Bar Council in regard to standards of professional conduct and etiquette of advocates is to receive complaints against advocates and if the Bar Council has reason to believe that any advocate has been guilty of professional or other misconduct it shall refer the case for disposal to its disciplinary committee. The Bar Coun 314 cil of a State may also of its own motion if it has reason to believe that any advocate has been guilty of professional or other misconduct it shall refer the case for disposal to its disciplinary committee. It is apparent that a State Bar Council not only receives a complaint but is required to apply its mind to find out whether there is any reason to believe that any advocate has ben guilty of professional or other misconduct. The Bar Council of a State acts on that reasoned belief. The Bar Council has a very important part to play first, in the reception complaints, second, in forming reasonable belief of guilt of professional or other misconduct and finally in making reference of the case to its disciplinary committee. The initiation of the proceedings before the disciplinary committee is by the Bar Council of a State. A most Significant feature is that no litigant and no member of the public can straightaway commence disciplinary proceedings against an advocate. lt is the Bar Council of a State which initiates the disciplinary proceedings. In finding out the meaning of the words "person aggrieved by an order made by the disciplinary committee of the Bar Council of India", two features are to be kept in the fore front. First, there is no lis in proceedings before the disciplinary committee. When the disciplinary committee exercises the power to reprimand the advocate, or suspend the advocate from practice or remove the name of the advocate, the committee does not decide a suit between the parties. The Bar Council in placing a matter before the disciplinary committee does not act as prosecutor in a criminal case. A complainant who prefers a complaint against an advocate is not like a plaintiff in a civil suit. The complaint is examined by the Bar Council in order to find out whether there is any reason to believe that any advocate has been guilty of misconduct. 'The Bar Council may act on its own initiative on information which has come to its notice in the course of its duties. Second, there is no party to the disciplinary proceedings. It is because the Bar Council, the Attorney General, the Advocate General, as the case may be, all act in protecting the interests of advocates, the interests of the public. In so acting there is no conflict between the advocate and another person. The reason is that it is professional conduct, professional etiquette, professional ethics, professional morality, which are to be upheld, transgression of which results in reprimanding the advocate of suspending him from practice or removing his name from the roll. With regard to the conduct of the advocates, the State Bar Council plays an important part, vis a vis the disciplinary committee constituted by the State Bar Council. First, under section 35(1A) of the Act the State Bar Council may either of its own motion or on an application made to it by any person interested, withdraw a proceeding pending before its disciplinary committee and direct the inquiry to be made by ant other disciplinary committee of the State Bar Council. This indicates the watch that the State Bar Council has to keep. Its task does not cease on placing a matter before the disciplinary committee. This provision shows on one hand the abiding interest of the State Bar Council in the matter and on the other the duty of guarding the professional ethics with which it is entrusted. Second, under section 36(2) of the Act, a 'State Bar Council may make a report to the Bar Council of India to 315 withdraw before the disciplinary committee of the Bar Council of India any proceeding for disciplinary action against any advocate pending before the disciplinary committee of a State Bar Council. These provisions indicate that after the State Bar Council has placed the matter before its disciplinary committee, the Bar Council continues its check on the proceedings. These courses of action are procedural. These steps do not give the State Bar Council any power to deal with the decisions of the disciplinary committee. The reason why the State Bar Council is empowered under the Act to withdraw proceedings from one disciplinary committee and give it to another or to have the disciplinary proceedings withdrawn from the State for determination by the disciplinary committee of the Bal Council of India is that the State Bar Council is all the time interested in the task of preserving the profession against impurities in the standards of conduct. The Bar Council is the collective representative of the lawyers, the public, in regard lo the observance of professional ethics by persons belonging to the noble profession. The words `person aggrieved" are found in several statutes. The meaning of the words "person aggrieved" will have to be ascertained with reference to the purpose and the provisions of the statute. Some times, it is said that the words "person aggrieved" correspond to the requirement of locus standi which arises in relation to judicial remedies. Where a right of appeal to Courts against an administrative or judicial decision is created by statute, the right is invariably confined to a person aggrieved or a person who claims to be aggrieved. The meaning of the words "a person aggrieved" may vary according to the con text of the statute. One of the meanings is that a person will be held to be aggrieved by a decision if that decision is materially adverse to him. Normally, one is required to establish that one has been 'denied or deprieved of something to which one is legally entitled in order to make one "a person aggrieved". Again a person is aggrieved if a legal burden is imposed on him. The meaning of the words a "person aggrieved" is sometimes given a restricted meaning in certain statutes which provide remedies for the protection of private legal rights. The restricted meaning requires denial or deprivation of legal rights. A more liberal approach is required in the background of statutes which do not deal with property rights but deal with professional conduct and morality. The role of the Bar Council under the is comparable to the role of a guardian in professional ethics. The words "persons aggrieved" in sections 37 and 38 of the Act are of wide import add should not be subjected to a restricted interpretation of possession or denial of legal rights or burdens or financial interests. The test is whether the words "person aggrieved" include "a person who has a genuine grievance because an order has been made which prejudicially affects his interests". It has therefore, to be found out whether the Bar Council has a grievance in respect of an order or decision affecting the professional conduct and etiquette. The pre eminent question is: what are the interests of the Bal. Council? The interests of the Bar Council are the maintenance of standards of professional conduct and etiquette. The Bar Council has 316 no personal or pecuniary interest. the Bar Council has the statutory A duty and interest to see that the rules laid down by the Bar Council of India in relation to professional conduct and etiquette are upheld and not violated. The Bar Council acts as the sentinel of professional code of conduct and is vitally interested in the rights and privileges of the advocates as well as the purity and dignity of the profession. The interest of the Bar Council is to uphold standards of professional conduct and etiquette in the profession, which is founded upon integrity and mutual trust. The Bar Council acts as the custodian of the high traditions of the noble profession. The grievance of the Bar Council is to be looked at purely from the point of view of standards of professional conduct and etiquette. If any decision of the disciplinary committee of the Bar Council of India is according to the State Bar Council such as will lower the standards and imperil the high traditions and values in the profession, the State Bar Council is an aggrieved person to safeguard the interests of the public, the interests of the profession and the interests of the Bar The Bar Council is "a person aggrieved" for these reasons First, the words "person aggrieved" in the Act are of wide import in the context of the purpose and provisions of the statute. In disciplinary proceedings before the disciplinary committee there is no lis and there are no parties. therefore, the word "person" will embrace the Bar Council which represents the Bar of the State. Second, the Bar Council is "a person aggrieved" because it represents the collective conscience of the standards of professional conduct and etiquette. The Bar Council acts as the protector of the purity and dignity of the profession. Third, the function of the Bar Council in entertaining complaints against advocates is whn the Bar Council has reasonable belief that there is a prima facie case of misconduct that a disciplinary committee is entrusted with such inquiry. Once an inquiry starts, the Bar Council has no control over its decision. The Bar Council may entrust it to another disciplinary committee or the Bar Council may make a report to the Bar Council of India. This indicates that the Bar Council is all the time interested in the proceedings for the vindication of discipline, dignity and decorum of the profession. Fourth, a decision of a disciplinary committee can only be corrected by appeals as provided under the Act. When the Bar Council initiates proceedings by referring cases of misconduct to disciplinary committee, the Bar Council in the performance of its functions under the Act is interested in the task of seeing that the advocates maintain the proper standards an(l etiquette of the profession. Fifth, the Bar Council is vitally concerned with the decision in the context of the functions of the Bar Council. The Bar Council will have a grievance if the decision prejudices the maintenance of standards of professional conduct and ethics. For these reasons we hold that the Bar Council is an aggrieved person to maintain an appeal under the Act. The appeals will now be heard on merits by a Division Bench. 317 BEG, J. I not only concur with the conclusion reached by My Lord the Chief Justice and the reasons given to support it. but I think that we can and should hold that there was actually a "lis" between tho Bar Council and the allegedly delinquent Advocates who were hauled up before its Disciplinary Committee, on complaints sent by the Executive Committee of the State Bar Council, for what were said to be acts of professional misconduct, The learned Chief Justice has very clearly and succinctly set out the reasons why a State Bar Council is a "person aggrieved" entitled to appeal against orders in disciplinary proceedings against members of the Bar of the State. It represents the Bar of the State. It is the "keeper of the conscience" and the guardian of the interests of members of the Bar. It acts "as the protector of the purity and dignity of the (` profession." Its function in relation to disciplinary proceedings, is to entertain complaints against Advocates, and, when there is a prima facie case of misconduct, to initiate proceedings by sending the complaint to its Disciplinary Committee. It has an interest in seeing that correct decisions are given upon matters involving allegations of misconduct against members of the Bar of the State. My learned brother Krishna Iyer has indicated the wide range and the social significance and dimensions of this interest. A State Bar Council is composed primarily of members elected from amongst Advocates of a State. Its statutory functions are given in Section 6 of the (hereinafter referred to as 'the Act '). Amongst these, we are especially concerned here with clauses (c) and (d) of Section 6(t) of the Act, which read as follows: (c) to entertain and determine cases of misconduct against advocates on its roll; (d) to safeguard the rights, privileges and interests; of advocate on its roll;" Under Section 9 of the Act, the State Bar Council constitutes its Disciplinary Committee consisting of "three persons of whom two shall be persons elected by the. Council from amongst its members and the other shall be a person elected by the Council from amongst Advocates who possess the qualifications specified. ". Under Section 10 it elects an Executive Committee of five members and an Enrolment Committee of three members. Thus, the State Bar Council operates through its Committees. Each Committee has distinct and separable functions. Each could, therefore, be said to have a "persona" and an identity of its own which is distinguishable from that of the Bar Council as a whole. Each Committee, no doubt, acts for the Bar Council, but its members are likely to be different although this is not necessarily so. In any case, when the State Bar Council has sent a case to its Disciplinary Committee, under Section 35 of the Act, that Committee proceeds as an independent and impartial authority which tries a complaint and either dismisses lt or directs proceedings to be filed, or, upon finding an advocate guilty, punishes him by either reprimanding him, suspending him from practice for a specified period, or orders removal of his name 7 L 839 Sup CI/75 318 from its roll of advocates. Indeed, Section 42(1) of the Act gives the Disciplinary Committee the powers of a Civil Court under the Civil Procedure Code; and, Section 42(2) enacts that its proceedings shall be "deemed" to be judicial proceedings for the purposes mentioned there. At the trial of a complaint, opportunities to be heard must be given to the Advocate General and to the Advocate who is tried by it. This has to be done because there are disputes and conflicting interests and points of view on which the Disciplinary Committee has to give its decisions. Tho Advocate General can appear either personally or through an Advocate representing him. He presumably represents public interest as well as the interests of the legal profession of which he is the formal head in the State. It is true that there is no provision in Section 35 of the Act for impleading the State Bar Council which, on its executive side, initiates the proceedings by sending the case to its Disciplinary Committee. But, if the Bar Council has a separable interest, as a guardian of the rights and privileges of the members of the Bar specifically mentioned by Section 6(1)(d) of the Act, there is no reason why I right to represent this interest before its on Disciplinary Committee well as before the Bar Council of India, on an appeal under Section 37 of the Act, or, on the further appeal to this Court under Section 38 of the Act, should be denied to it. Neither Section 37 nor Section 38 of the Act mention the State Bar Council as a separate entity. Nevertheless if, as we are holding, it can have the locus standi and rights of "person aggrieved", affected by the results of such proceedings, I see no reason why we should not say that in tho position of a party to a "lis" or a dispute between itself and the allegedly delinquent Advocate towards the decision of which the proceedings are directed. The term "lis" is not confined to litigation by means of a suit in a Court of law. In Butler vs Mountgarret it was held that a "suit is not necessary to constitute lis". It was pointed out there that "a family . controversy capable of being litigated is a lis mota '. In B. Johnson & Co. (Builders) vs Minister of Health(2), Lord Greene, M.R. said: `"Lis implies the conception of an issue joined between two parties, The decision of a lis. is the decision of that issue". If the State Bar Council, acting through its through it Executive Committee, has found a prima facie case to be send and tried by its Disciplinary Committee, it performs the functions of a prosecuting agency. lt does so i the discharge of its duty to safeguard '`the rights, privileges and interests ' of advocates as a whole on its roll which are affected by the misconduct of an advocate. There arc, therefore, triable issues between it and the; (, individual Advocate accused of misconduct. lt seems to mc that we could and should, therefore, hold that the State Bar Council, in its executive capacity, act as the prosecutor through its Executive Committee There is no incongruity in its Disciplinary Committee, representing is judicial want" functioning as an impartial Judge whose decisions ar. binding upon the State Bar Council. If are were holding that Bar Council, dissatisfied with a decision of its Disciplinary Committee, can appeal against it, we her to, I think, as its logical corollary, also hold that it is (1) 7 H. L. Ca. 641. (2) ; At 399. 319 a party to a "lis". Our` opinion that it is a 'person aggrieved", within the meaning of that expression as used in Sections 37 and 38 of the Act, necessarily implies that. The point of view stated above rests upon the distinction between the two different capacities of the State Bar Council; an executive capacity, in which it acts as the prosecutor through its Executive Committee, and a quasi judicial function, which it performs through s Disciplinary Committee. If we can make this distinction, as I think we can, there is no merger between the prosecutor and the Judge here. If one may illustrate from another sphere, when the State itself gets through it executive agencies to prosecute and then though its judicial wing to decide a case there is no breach of a rule of natural justice. The prosecutor and the Judge could not be said to have the some personality or approach just because both of them represents different aspects or functions of the same State. For the reasons given above, I do not see any objection to a participation of State Bar Council in its executive capacity, in a disciplinary proceeding against an Advocate on its roll, either at the initial or the appellate stages. Before it can become a person aggrieved" by an order against which it could appeal, there must have been a "lis" or a dispute to be decided which gives rise to the order complained of. To such a "lis" the State Bar Council, in its executive capacity must be deemed to be a party. Apparently, its interests are presumed to be sufficiently represented by the Advocate General. Hence, it was not considered necessary to provide for its separate representation by a notice to be given by its Disciplinary Committee; is provided for in the case of the Advocate General But, their seems to me to be no legal obstacle in the way of its separate representation, if. it so desires, even before its own Disciplinary Committee. It certainly has notice of every complaint whenever it send it to its Disciplinary Committee. Its right to appeal in any event, as a "person aggrieved", seems squarely covered by the provisions of Sections 37 and 38 of the Act. It may be mentioned here that the respondents themselves treated the Bar Council as a party interested in a "list", so that it could become a "person" aggrieved" by the setting aside of the orders against respondents, when they impleaded the State Bar Council as a respondent in their appeals to the Bar Council India. Its statutory right to appeal to this Court under Section 38 is not affected by the mere fact that it did not put in appearance before the Bar Council of India. KRISHNA IYER, J. My concurrence the opinion which has been handed down by the learned Chief Justice is ordinarily dissuasive of a separated long note, save when a fresh perspective is to be presented or new frontiers are to be drawn by doing so. Partially, my supplementary has this apology. The tow day long arguments in this case have been devoted to a construction of two simple words in common use forming the 320 expression 'person aggrieved '. Precedential erudition and traditional approaches not withstanding, the key to tho meaning of the expression in question lies in plain English plus the social fell of the Status and the public commitment of the legal profession, the regulation on which has been achieved by the (for short, the Act) wherein the above words occur. Legal scholarship, to be fruitful, must focus on the life style of the law without getting lost in mere logomachy. The short question is as to whether the State Bar Council is a person aggrieved ' within the meaning of section 38 so that it has locus standi to appeal to this Court against a decision of the Disciplinary Tribunal of the Bar Council of India which, it claims, is embarrassingly erroneous and, if left unchallenged, may frustrate the high obligation of maintaining standards of probity and purity and canons of correct professional conduct among the members of the Bar on its rolls. I skip the facts as they have been 5 out in the judgment of the armed Chief Justice, except to state. that a number of advocates, who are ranged as respondents, had been found guilty by the Disciplinary Tribunal of the State Bar Council of unseemly soliciting but,. On appeal. the disciplinary body of the National Bar Council, exonerated them on certain view of 'professional conduct ' which disturbed the State Bar Council and even the All India Bar Council, with the result that the former came upto this Court in appeal and. the latter activity supported this stand. The hackneyed phrase, 'person aggrieved is not merely of frequent occurrence m statutes and in the writ jurisdiction but has come up for judicial consideration in Anglo American and India courts in a variety of situations and legislative settings. Notwithstanding the slippery semantics of such legalese, the Indian legislative draftsmen have continued to use them, out of linguistic allegiance to the British art, and Indian Judges have frequently sought interpretative light from English authorities of ancient vintage. These 'borrowed ' drafting and interpretative exercises arc sometimes inept when time and country change and the context and text of the statute vary. I stress this aspect since much of the time of the Courts in India is consumed by massive, and sometimes mechanical, reliance on exotic constructions and default in evolving legislative simplicity and avoiding interpretative complexity. At a time when our Courts are on trial for delayed disposals and mystifying processes, this desideratum becomes all the more urgent. Otherwise, why should decoding a single expression 'person aggrieved ' take two days of learned length ? Even. in England, so well known a Parliamentary draftsman as Francis Bennion has recently pleaded in the Manchester Guardian against incomprensible law forgetting 'that it is fundamentally important in a free society that the law should be readily ascertainable and reasonably clear, and that otherwise it is oppressive and deprives 321 the citizen of one of his basic rights '. It is also needlessly expensive and wasteful. Reed Dickerson, the famous American Draftsman. said: 'lt cost the Government and the public many millions of dollars annually '. The Renton Committee, in England, has reported on drafting reform but it is unfortunate that India is unaware of this problem and in a post Independence statute like the legislators should still get entangled in these drafting mystiques and judges forced lo play a linguistic game when the country has an illiterate laity as consumers of law and the rule of law is basic to our constitutional order. Back to the issue. Is the State Bar Council a 'person aggrieved '? No narrow. pedantic, technical or centenarian construction can be blindly applied. On the other hand, a spacious construction, functionally informed by the social conscience and the salutary purpose of the enactment must illumine the judicial effort. So viewed, the ample. import and breath of meaning of the words 'person aggrieved ' will . embrace the State Bar Council,for reasons which 1 shall presently set out. Each statute has a personality and a message. Judicial interpretation is not bloodless and sterile exercise in spinning subtle webs sometimes cobwebs, out of words and phrases otherwise simples. but to unfold the scheme of the Legislation insightfully, sense its social setting and read the plain intendment. This living approach can do justice to law, We arc here concerned with a legislative outfit for a national Bar, organising and prescribing its statutory autonomy, elective structure, public functions, internal regulation and ultimate appeal to the Supreme Court where canons of good conduct have been allegedly breached by delinquent lawyers. This conspectus will show what a vibrant and responsible role the Bar Council has to play at the State and national levels and any interpretation which will detract from this supervisory status of the Bar Council will be incongruous with the founding creed of the institution. The paramount concern of the Bar Councils is the lawyer, the public and professional responsibility. Anything that hurts the health of this system is a social trauma, a legal grievance, a special injury, for them. After all, 'lawyer power ' lasts not through peak incomes of a few and security of statutory monopoly, but by the high comport and ethics of the many, screening and weeding deviants and delinquents. Let us get a glimpse of the great expectations about The legal profession in society. Long ago, De Toqueville trenchantly remarked that the profession of law. "is the only aristrocratic element which can be amalgamated without violence with natural elements of democracy. I cannot believe that a Republic could subsist if the influence of lawyers in public business did not increase in proportion to the power of the people. " He rightly stressed that 'lawyers belong to the people by birth an. interest, to the aristocracy by habit and taste '. Thus the profession is 322 the connecting link between the community and the Administration given an enlightened, goal oriented group outgrowing its elitist mores indeed today lawyers are recruited also from the lower brackets. India has huge number of law men who can be a force. What Prof. Brabanti observed about the Pakistan Bar has some, only some though, relevance to India, and I quote: "The sheer size of the legal community, strongly organised into bar associations and closely allied with equally strong courts has not only been a major source for the diffusion and regeneration of norms generally, but by weight of numbers has enabled the courts to remain strong and has prevented the rise of administrative lawlessness. There is s curious anomaly here. The legal community, while often antagonistic to government and constraining executive action, is nevertheless closely identified normatively and culturally with the bureaucratic elite. This identification curiously coupled with health antagonism actually enhances the strength of the legal community. It derives popular support from its ostensible opposition to Government and at the same time elicits bureaucratic support in the community at large. It has a net work of relationships in rural areas and the cities. In short, the legal community is a force to be, reckoned with. It has challenged the executive during and after martial law, it has defined efforts to restrict court jurisdiction, it has compelled justiciability of fundamental rights, it has forced abrogation of several restrictive enactments. Is this law as an impendiment to political development ? Is this misallocation of scarce resources in the system? Is this unproductive use of non productive man power ? On the contrary, it seems to us that this is the Very genius of political development." Michael Hager, after quoting Prof. Brabanti, comments (in his article in the American Bar Association Journal, January 1972, Vol. 58, on .The Role of Lawyers in Developing Countries ') "The legal profession has a unique opportunity to effect change from within the political elite, to exert pressure from without and to win over the general public to development policies. And as Mihaly and Nelson observed with respect to legal education, 'law graduates usually fan out not only into legal practice but also into responsible positions in business, government and politics '. " The Bar is not a private guild, like that of 'barbers butchers and candlestick makers ' but, by bold contrast, a public institution committed to public justice and pro bono publico service. The grant of monoply licence to practice law is based on three assumptions There is a socially useful function for The lawyer to perform. (2) The lawyer is a professional person who will perform that function, and (3) His performance as a professional person is regulated by himself and more normally, by the profession as a whole. The central function 323 That the legal profession must perform is nothing less than the administration of justice ( 'The Practice of Law is, a Public Utility ' `The Lawyer, The Public and Professional Responsibility ' by F. Raymond Marks et al Chicago American Bar Foundation, 1972, p.288 289). A glance at The functions of the Bar Council, and it will be apparent that a rainbow of public utility duties, including legal aid to the pour, is cast on these bodies in the national hope that the members of this monopoly will serve society and keep to canons of ethics befitting an honourable order. If pathological cases of member misbehaviour occur, the reputation and credibility of the Bar suffer a mayhem and who, out the Bar Council, is more concerned with and sensitive to this potential disrepute The few black sheep bring about? The official heads of the Bar i.e., the Attorney General and the Advocates General too are distressed if a lawyer 'stoops to conquer ' by resort to soliciting, touting and other corrupt practices. I may now refer to A. P. Gandhi vs H. M. Seervai (1) where diver gent opinions were delivered but all concurred in treating the Bar Council as an 'aggrieved person '. The earlier decision in Bhataraju (2) strikes a note in consonance with this view. No hesitancy inhibits me from hazarding the opinion that the social canvas must be spread wide when making out the profile of a statute like the for the good reason that the Bar has a share in being the sentinel on the qui vive when the legal dykes of Right and justice are breached by authoritarianism or citizen wrong doing. Nor do I conceal my halfhorror at any professional tribunal glossing over 'snatching briefs ' and 'dragging clients ' provided they are proved as less than gross misconduct. If the salt lose their savour, wherewith shall they be salted ? However, I hasten to make it plain, to avoid prejudice to the parties. that I totally desist from pronouncing on the merits of tho evidence in this case. One more point. A case of professional misconduct is not a lis in the British sense nor a case and controversy in the American meaning. It is a public investigation about misconduct by one belonging to public profession where every member of the Bar with a reputation to lose has a stake and every one concerned with the justice administration is interested. Traditionally used to the adversary system, we search for individual persons aggrieved. But a new class of litigation public interest litigation where a section or whole of the community is involved (such as consumers ' organisations or NAACP National Association for Advancement of Coloured People in America), emerges. In a developing country like ours, this pattern of public oriented litigation better fulfils the rule of law if it is to run close to the rule of life. The Bar Council clearly comes within this category of organisations When a lawyer is involved. I derive support for this philosophy of approach from academic and judicial opinion in England and America. A question arose whether a railroad company BAR (Bangor and Aroostook Railroad) could bring an action against the stockholders for having drained BAR (1) [197] I S C. R. 863. (2) [1955] 1 section C. R. 1055,1064. 324 improperly. Although an academic critic took the view that the District Court was incorrect in its view that BAR was the 'sole beneficiary ', he went on to state that the public 's interest in the financial health of BAR provided a separate interest in bringing the action. The learned author wrote: "It would seem to be incontestable that the public has a very n real interest in rail roads. Railroads have been found vital to a healthy national economy; any such factor must. a priori, be deemed a potent component of the public welfare. As such, it is evident that a financially healthy railroad is of concern not only to its stockholders, but to the public as well Finding that the management of a railroad has obligations running to the public as well as fiduciary duties owing to the corporation 's stockholders, the Court concluded that, of these two responsibilities, tho public interest is paramount. "It must be remembered," the Court cautioned, "that railways are public corporations organized for public purposes. They all primarily owe duties to the public of a higher nature even than that of earning large dividends for their shareholders." (Review by James 1;. Simon of Bangor & Aroostook R. R vs Bangor Punta operations, Inc (Bangor & Aroostook), ; Cir. 1973), cert. granted, 94 S.Ct. 863 (1974) Columbia Law Review Vol. 74 No. 3, April 197 p. 528 at pp. 531 532). Similarly, the American Supreme Court relaxed from the restrictive attitude towards 'standing ' in public action in Baker vs Carr ; (1962), vide Maryland Law Review, Vol. XXXIII 1973 p.506: "In Baker, voters challenged the failure of the Tennessee legislature to reapportion itself since 1901; the plaintiffs lived l. in countries which had become under represented under the old law. The Supreme Court held that these voters had the requisite standing to challenge the inaction of the legislature The Court expanded the notion cf direct injury to include mere 'debasement ' of a vote, rather than the total deprivation which had previously been required." American jurisprudence has recognised, for instance, the expanding importance of consumer protection in the economic system and permitted consumer organisations to initiate or intervene in actions, although by the narrow rule of 'locus standi ', such a course could not have been justified (see p. 807 New York University Law Review. 46. 1971). In fact, citizen organisations have recently been Campaigning for using legal actions for protection of community interest, broadening the scope of 'standing ' in legal proceedings (see p.403 Boston University Law Review, Vol. 51, 1971). 325 In the well known case of Attorney,General of the Gambia vs Pierr sarr N. 'Jie(l), Lord Denning observed about the Attorney General 's standing thus: ". The words 'person aggrieved ' are of wide import and should not be subjected to a restrictive interpretation. They do not include, of course, a mere busy body who is interfering. in things which do not concern him; but they do include a person who has a genuine grievance because an order has been made which prejudicially affects his interests. Has the Attorney General a sufficient interest for this purpose ? Their Lordships think that he has. The Attorney General in a colony represents the Crown as the guardian of the public interest. It is his duty to bring before the judge any mis conduct of a barrister or solicitor which is of sufficient gravity to warrant disciplinary action. " Ray, J (as he then was) crystallised this ratio in A.P. Gandhi (supra) thus: "The Judicial Committee construed the words 'person aggrieved ' to include the Attorney General of Gambia as representing the public interest." (p.927) "The profession touches the public on the one hand and the courts on the other. On no other basis could the presence of J., the Advocate General be explained." (p.928) Although not strictly confined to 'standing ' with reference to suits jurists have thrown some light on this subject. Professor S.A de Smith has observed: "All developed legal systems have had to face the problem of adjusting conflicts between two aspects of the public interest the desirability of encouraging individual citizens to participate actively in the enforcement of the law, and the undesirability of encouraging the professional litigant and the meddlesome interloper to invoke the jurisdiction of the courts in matters that do not concern him." (Quoted ill 'Standing Justifiability ' by V. section Deshpande Journal of the Indian Law Institute April June 1971 Vol. 13, No. 2, p. 174) Professor H.W.R. Wade has observed: "In other words, certiorari is not confined by a narrow conception of locus standi. It contains an element of the actio (1) 326 popularis. This is because it looks beyond the personal rights A of tho applicant; it is designed to keep the machinery of justice in proper working order by presenting inferior tribunals and public authorities from abusing their powers." (Standing and Justiciability bid, p. 175) The possible apprehension that widening legal standing With a public connotation may unloose a flood of litigation which may overwhelm the judges is misplaced because public resort to court to suppress public mischief is a tribute to the justice system. In this very case, to grant an exclusionary windfall on the respondents is to cripple the Bar Council in its search for justice and insistence on standards. I have been long on a short point, but brevity, where there is some thing to speak, is not the soul of wit but a sign of something different.

The State Bar Councils created by the have been entrusted with the functions inter alia of entertaining and determining cases of misconduct against advocates on their rolls and to safeguard their rights, privileges and interests. The Bar Council of India which is a national body created by the Act is entrusted with the work of laying down standards of professional conduct and etiquette and overseeing the functioning of the State Bar Councils. Under section 35 of the Act, if a State Bar Council, either on receipt of a complaint or otherwise has reason to believe that any advocate on its roll has been guilty of professional or other misconduct, it shall refer the case to its Disciplinary Committee which, after due inquiry may impose certain penalties. An appeal from the decision of the State Bar Council lies to the Bar Council of India. Any "person aggrieved" by an order of the Disciplinary Committee of the Bar Council of India may, under section 38, appeal to the Supreme Court. In exercise of the Powers conferred by the Act the Bar Council of India framed rules relating to professional conduct and etiquette, r. 36 of which says that advocates shall not solicit work or advertise themselves. The State Bar Council, in the present case, issued notices to the respondents suo motu alleging that they stood at the entrance of the court house at the Presidency Magistrate 's Court, Fort Bombay and solicited work etc., and that the said act amounted to professional and/or other misconduct. 'the Disciplinary Committee of the State Bar Council found the respondents guilty of conduct which absolutely lowered the reputation of the Bar in the eyes of the public and suspended them from practising as advocates. The respondents ' appeal to the Bar Council of India having been allowed, the State Bar Council has come up in appeal to this Court under section 38. Before the Bar Council of India the State Bar Council had not appeared. F On the question whether the State Bar Council is a "person aggrieved," Allowing the appeals, Held: ^ [By the full Court], The State Bar Council is an "aggrieved person" to maintain an appeal under the Act. per Ray, C.J., Khanna, Mathew, Gupta and Murtaza Fazal Ali, JJ): (1) The Bar Council is a "person aggrieved" because (i) the words "person aggrieved" in the Act are of wide import in the context of the purpose and provisions of the statute and should not be subjected to a restricted interpretation of possession or denial of legal rights or burdens or financial interests. In disciplinary proceedings before the Disciplinary Committee there is no lis and there are no parties. The word 'person ' will embrace the Bar Council which represents the Bar of the State; (ii) the Bar Council represents the collective conscience of the standards of professional conduct and etiquette. The Bar Council acts as the protector of the purity and dignity of the profession; (iii) the function of the Bar Council in entertaining complaints against advocates indicates that the Bar Council is interested in the proceedings for the vindication of discipline. dignity and decorum of the profession; (iv) when the Bar Council ini 307 tiates proceedings by referring eases of misconduct to the Disciplinary Committee, the Bar Council, in the performance of its function under the Act, is interested in the task of seeing that the advocates maintain proper standards and etiquette of the profession and (v) the Bar Council is vitally concerned with the decision, in the context of its functions. The Bar Council will have a grievance if the decision prejudices the maintenance of standards of professional conduct and ethics. [315G: 316D G] (2) (a) The Bar Council acts as the sentinel of professional code of conduct and is vitally interested in the rights and privileges of the advocates as well as the purity and dignity of the profession. [316A B] (b) The grievance of the Bar Council is to be looked at purely from the point of view of standards of professional conduct and etiquette. If any decision of the Disciplinary Committee of the Bar Council of India is according to the State Bar Council such as will lower the standards and imperil the high traditions and values in the profession the State Bar Council is an "aggrieved person" to safeguard the interests of the public, the interests of the profession and the interests of the Bar. [316B C] (3) The most significant feature in the matter of initiation of proceedings before the Disciplinary Committee is that no litigant and no member of the public can straightaway commence disciplinary proceedings against an advocate It is the Bar Council of a State which initiates the disciplinary proceedings. There is no lis in proceedings before the Disciplinary Committee The Bar Council, in placing a matteu. before the Disciplinary Committee, does not act as a prosecutor in a criminal case. A complainant who prefers a complaint against an advocate is not like a plaintiff in a civil suit. The Bar Council may act on its own initiative on information which has come to its notice in the course of its duties. There is no party to the disciplinary proceedings because the Bar Council, the Attorney General, the Advocate General act in protecting the interests of advocates and the interests of ' the public. In so acting there is no conflict between the advocate and any other person because it is professional conduct, professional etiquette, professional ethics, professional morality, which are to be upheld. transgression of which results in reprimanding the advocate or suspending him from practice or removing his name from the roll. [314B F] Adi Pherozshah Gandhi vs H. M. Seervai, Advocate General of Maharashtra. Bombay [1971] I S.C.R. 863, referred to Beg J. (concurring): (1) There is no objection to a participation of a State Bar Council in its executive capacity in a disciplinary proceeding against an advocate on its roll either at the initial or at the appellate stages. Before it can become a "person aggrieved" by an order against which it could appeal, there must have been a lis or a dispute to be decided which gives rise to the order complained of. To such a "lis" the State Bar Council, in its executive capacity, must be deemed to be a party. There seems to be no legal obstacles in the way of its separate representation even before its own Disciplinary Committee. Its right to appeal as a "person aggrieved" is squarely covered by the provisions of sections 37 and 38 of the Act. In the present case the respondents themselves treated the Bar Council as a party interested in the lis when they impleaded the State Bar Council as a respondent in their appeals to the Bar Council of India. Its statutory right to appeal under section 38 is not affected by the mere fact that it did not put in appearance before the Bar Council of India. [319D G] (2) The State Bar Council operates through its committees. Each committee has distinct and separable functions. Each could be said to have a "persona" and an identity of its own, which is distinguishable from that of the Bar Council as a whole [317G] 3 (a) If the Bar Council has a separable interest as a guardian of the rights and privileges of the members of the Bar, specifically mentioned by section 6(1)(d) of the Act. there is no reason why a right to represent this interest before its 308 own Disciplinary Committee as well as before the Bar Council of India, on an A appeal under section 37 of the Act, or., on further appeal to this Court under section 38 of the Act should be denied to it. [318C D] 4(a) When the State Bar Council can have locus standi and rights of a "person aggrieved" affected by the results of such proceedings there is no reason why it should not be in the position of a party lo a lis or dispute ' between itself and the allegedly delinquent advocate. [318D E] (b) The term 'lis ' is not confined to litigation by means of a suit in a court of law. [318E] Butler vs Mountgarret 7 H.L. Ca. 641 and B. Johnson & Co. (Builders) vs Minister of Health 399, referred to. The State Bar Council in its executive capacity acts as the prosecutor through its Executive Committee. There is no incongruity in its Disciplinary Committee representing its judicial wing, functioning as an impartial judge whose decisions are binding upon the State Bar Council. It is a "person aggrieved" within the meaning of that expression used in sections 37 and 38 of the Act. [318G H] Krishna Iyer, J. (concurring): (1) The Bar is not a private guild, like that of 'barbers, butchers and candlestick makers ' but, a public institution committed to public justice and pro bono publico service. The grant of a monopoly licence to practice law is based on three assumptions; (i) there is a socially useful function for the lawyer to perform; (ii ) the lawyer is a professional person who will perform that function; and (iii) his performance as a professional person is regulated by himself and more formally, by the profession as a whole. The central function that the legal profession must perform is nothing less than the administration of justice. [322G H] (2) In a developing country the pattern of public oriented litigation better fulfils the rule of law if it is to rule close to the rule of life. The Bar Council clearly comes within this category of organisations when a lawyer is involved. (3) A case of professional misconduct is not a lis in the British sense nor a case and controversy in the American meaning. It is a public investigation about misconduct by one belonging to a public profession where every member of the Bar with a reputation to lose has a stake and everyone concerned with the justice administration is interested. 'the Bar has a share in being the sentinel on the qui vive when the legal dykes of right and justice are breached by authoritarianism or citizen wrongdoing. [323F Gl (4) The possible apprehension that widening legal standing with a public connotation may unloose a flood of litigation which may overwhelm the judges is misplaced because public resort to court to suppress public mischief is a tribute to the justice system. In this case to grant an exclusionary windfall on the respondents is to cripple the Bar Council in its search for justice and insistence on standards. [326B] G A. P. Gandhi vs H. M. Seeravai, [1971] 1 S.C.R. refered to.

3278.txt

Appeal No. 260 of 1953 and connected appeal (C.A. No. 12 of 1954). Appeals from the Judgment and Decree dated the 11th day of May 1951 of the High Court of Judicature at Patna in Miscellaneous Appeal No. 253 of 1950 and in appeal from Original Order No. 252 of 1950 arising out of the order dated the 11th day of May 1951 of the Court of Subordinate Judge, Dhanbad in Suit No. 34 of 1949 and in Title Suit No. 27 of 1949 respectively. Mahabir Prasad, Advocate General for the State of Bihar (section P. Varma and M. Sinha, with him), for the appellant (In Civil Appeal No. 260 of 1953). Mahabir Prasad, Advocate General for the State of Bihar (M. M. Sinha for R. C. Prasad, with him), for the appellant (In Civil Appeal No. 12 of 1954). 7 50 C. K. Daphtary, Solicitor General for India (Porus A. Mehta and P. G. Gokhale, with him), for the respondent (In both the Appeals). March 24. The Judgment of the Court was delivered by BOSE J. This appeal and Civil Appeal No. 12 of 1954, which will also be governed by this judgment, raise the same points though there are some differences in the facts. We will deal with Civil Appeal No. 260 of 1953 first. The suit there related to an arbitration matter. The appellant before us, whom it will be convenient to call the contractor, entered into a contract with the Dominion of India through an Additional Chief Engineer of the C.P.W.D. on 1 11 1945 for the supply of bricks to the C.P.W.D., a department of the Dominion Government. Disputes arose about a number of matters. Clause 14 of the agreement provided that all disputes arising out of or relating to the contract should be referred to the Superintending Engineer of the Circle for the time being. Accordingly, there was a reference on 21 1 1949 and an award followed on 8 5 1949. It was filed in the Court of the Subordinate Judge, Dhanbad, and the contractor prayed that it be accepted and that a decree be passed in terms of it. The Dominion of India filed objections under section 30 of the and prayed that the award be set aside and alternatively that it be modified or corrected. The contractor 's application was registered as a suit under section 20(2) of the Act and a decree was passed in terms of the award on 18 3 1950. By that time the Constitution had come into force and the Union of India replaced the Dominion of India as a defendant. The Union of India filed an appeal to the High Court. The appeal was allowed in part. The contractor thereupon appealed to this Court. The dispute that was referred to the arbitrator consisted of 17 heads of claim but only three of them are contested here, namely items 5, 8 and 17. 51 In the 5th head of claim the contractor claimed Rs. 75,900 as the price of 88 lacs of katcha bricks that were destroyed by rain. These bricks were not the subject matter of the contract but the contractor put his claim in this way. The contract was for the supply of 2 1/2 crores of pucca bricks which bad to be delivered according to the following schedule 30 lacs by 25 1 46 50 lacs by 25 2 46 55 lacs by 25 3 46 55 lacs by 25 4 46 60 lacs by 25 5 46. Delivery was to be at the kiln site. In order to keep to this schedule the contractor bad to think ahead and work to a particular time table. First, he had to prepare katcha or unbaked bricks and place them in his kilns for baking. While this lot was baking be had to prepare and stock another lot of katcha bricks ready to take the place of the baked bricks as soon as they were removed. It was the duty of the C.P.W.D. to remove these bricks as soon as they were ready for delivery,that is to say, as soon as they were fully baked. At a certain stage of the contract the C.P.W.D. failed to remove the baked bricks which were ready for delivery and removal. This caused a jam in the kilns and prevented the contractor from placing a fresh stock of unburnt bricks in the kilns, and in the meanwhile his stock pile of katcha bricks ready for baking kept on mounting up. Had everything been done to time the 2 1/2 crores of bricks would have been delivered before the rains set in. But owing to the default of the C.P.W.D. in not removing the burnt bricks which were ready for removal, delay occurred in the time table and the rains set in with the result that88 lacs of katcha bricks were destroyed by the rains. As this loss was occasioned by the default of the C.P.W.D. the contractor claimed that be should be paid their price. The reply of the Union Government was two fold. First, it contended that the katcha bricks formed no part of the contract and even if it was at fault in not 52 taking delivery of the burnt bricks in time all that it could be held liable for would be for breach of that contract; and said that the loss that was occasioned by the damage caused to the katcha bricks which formed no part of the contract was too remote. Secondly, that compensation for this loss could not in any event be claimed because this kind of situation was envisaged by the parties when the contract was made and they expressly stipulated that the Dominion Government would not be responsible. The Union Government relied on additional clause 6 of the agreement which is in these terms: "The department will not entertain any claim for idle labour or for damage to unburnt bricks due to any cause whatsoever". The arbitrator held that this clause was not meant "to absolve the department from carrying out their part of the contract" and so he awarded the contractor Rs. 64,075 under this head. We are clear that the arbitrator went wrong in law. Government departments have their difficulties no less than contractors. There is trouble with labour, there is the likelihood of machinery breaking down in out of the way places and so forth; there was also the danger of thunder storms and heavy showers of rain in the month of May: it will be remembered that the last date of delivery was 25 5 46 if, with that in view, Government expressly stipulated, and the contractor expressly agreed, that Government was not to be liable for any loss occasioned by a consequence as remote as this, then that is an express term of the contract and the contractor must be tied down to it. If he chose to contract in absolute terms that was his affair. But having contracted he cannot go back on his agreement simply because it does not suit him to abide by it. This is not to say that Government is absolved from all liability, but all it can be held responsible for is for damages occasioned by the breach of its contract to remove the pucca bricks which it had undertaken to remove. But what would such a breach entail? 53 The contractor had a duty under section 73 of the Contract Act to minimise the loss, accordingly he would have had the right to remove the bricks himself and stack them elsewhere and claim compensation for the loss so occasioned; and indeed two of his heads of claim (not in dispute here) relate to that. He has been awarded Rs. 11,744 11 0 under claim No. 4 for the extra load in connection with the stacking of I crore 7 lacs of bricks due to the accumulation at the kiln site owing to the department 's failure to work to its part of the time table, and in addition, he has been given Rs. 15,500 under claim 13 for the cost of levelling and dressing land to enable him to stack these extra bricks. Alternatively, he could have sold the bricks in the market and claimed the difference in price, but ordinarily he could not have claimed compensation for damage done to the katcha bricks unless he could have shown that that kind of damage, ordinarily too remote, was expressly contemplated by the parties when the contract was made: section 73 of the Contract Act. Here it is clear that this was in their express contemplation and they chose to provide against such a contingency by making clause 6 an express clause in their contract. There can therefore be no doubt that the arbitrator was wrong in his law. His construction of the terms of the contract was at fault. The question now arises whether his decision on this point is final despite it being wrong in law. In India this question is governed by section 16(1) (c) of the of 1940 which empowers a Court to remit an award for reconsideration "where an objection to the legality of the award is apparent upon the face of it". This covers cases in which an error of law appears on the face of the award. But in determining what such an error is, a distinction must be drawn between cases in which a question of law is specifically referred and those in which a decision on a question of law is incidentally material (however necessary) in order to decide the question actually referred. If a question of law is specifically referred and it is evident that the 54 parties desire to have a decision from the arbitrator about that rather than one from the Courts, then the Courts will not interfere, though even there, there is authority for the view that the Courts will interfere if it is apparent that the arbitrator has acted illegally in reaching his decision, that is to say, if he has decided on inadmissible evidence or on principles of construction that the law does not countenance or something of that nature. See the speech of Viscount Cave in Kelantan Government vs Duff Development Co.(1) at page 409. But that is not a matter which arises in this case. The law about this is, in our opinion, the same in England as here and the principles that govern this class of case have been reviewed at length and set out with clarity by the House of Lords in F. B. Absalom Ltd. vs Great Western (London) Garden Village Society(1) and in Kelantan Government vs Duff Development Co.(1). In Durga Prasad vs Sewkishendas (3) the Privy Council applied the law expounded in Absalom 's case(2) to India: see also Champsey Bhara & Co. vs Jivraj Balloo Spinning and Weaving Co.(4) and Saleh Mahomed Umer Dossal vs Nathoomal kessamal (5). The wider language used by Lord Macnaghten in Ghulam Jilani vs Muhammad Hassan(1) bad reference to the revisional powers of the High Court under the Civil Procedure Code and must be confined to the facts of that case where the question of law involved there, namely limitation, was specifically referred. An arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. He is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law, and if he does not, he can be set right by the Courts provided his error appears on the face of the award The single exception to this is when the parties choose specifically to refer a question of law as a separate and distinct matter. (1) (2) (3) , 79. (4) 50 I.A. 324, 330 & 331. (5) 54 I.A. 427, 430. (6) 29 I.A. 51, 60. 55 Reference was made to a decision of this Court in A. M. Mair & Co. vs Gordhandass Sagarmull(1) where Fazl Ali, J. quoted a passage from Viscount Simon 's speech in Heyman vs Darwins Ltd.") where the learned Lord Chancellor (Viscount Simon) in turn, quoted from Lord Dunedin in another case. It was argued on the basis of this that if you have to have recourse to the contract to establish your case, then the dispute must fall within the arbitration clause. That is undeniable but it is not enough that the dispute should fall within the clause. It is also necessary that the parties should define what the dispute is and agree to refer the dispute so set out and defined to arbitration, or, if they do not, that the Court should compel them to do so: (see Lord Macmillan in Heyman 's case(1) just cited at pages 369 and 370). If, therefore, no specific question of law is referred, either by agreement or by compulsion, the decision of the arbitrator on that is not final however much it may be within his jurisdiction, and indeed essential, for him to decide the question incidentally. Lord Russell of Killowen and Lord Wright were both in the earlier case, F. R. Absalom Ltd. vs Great Western (London) Garden Village Society(1), as well as in Heyman 's case(2) and they would have pointed to any distinction had there been a likelihood of conflict; but in fact there is none and we do not read Fazl Ali J. 's judgment as a decision to the contrary. We have next to see whether the arbitrator was specifically asked to construe clause 6 of the contract or any part of the contract, or whether any question of law was specifically referred. We stress the word "specifically" because parties who make a reference to arbitration have the right to insist that the tribunal of their choice shall decide their dispute according to law, so before the right can be denied to them in any particular matter, the Court must be very sure that both sides wanted the decision of the arbitrator on a point of law rather than that of the Courts and that they wanted his decision oil that point to be final. (1) ; at 798. (2) at 368. (3) 56 The clause in the contract that requires disputes about the contract to be referred to arbitration is clause 14 and is in the following terms: "Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specification and instructions here in before mentioned and as to quality of materials or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, specification, instructions, orders or these conditions, or otherwise concerning the supplies whether arising during the progress of delivery or after the completion of abandonment thereof shall be referred to the arbitration of the Superintending Engineer of the Circle for the time being in the manner provided by law relating to arbitration for the time being in force who after such investigation as he may think proper shall deliver his award which shall be final, conclusive and binding on all parties to the contract". The dispute sprang out of a series of claims made in a number of letters written by the contractor to the Additional Chief Engineer, C.P.W.D. and culminated in a petition, exhibit B(1), in which the contractor summarised his claims. The document is not dated. On receipt of this, someone on behalf of the C.P.W.D. invoked the jurisdiction of the arbitrator. That letter has not been filed. The arbitrator then wrote to the contractor and asked him to submit a statement of claim. That letter has not been filed either but reference is made to it in exhibit C(1), the statement claim which the contractor filed in response to that letter. As the material documents setting out the terms of reference are not here, we were asked by both sides to infer what the terms were from this statement of claim and the recitals in the award. The learned counsel for the contractor relied on the following: In the statement of claim "Item 5. Loss of katcha bricks. . Rs. 75,900. The chief reason of the destruction of these bricks was the failure of the department to lift the 57 monthly quota of bricks The argument of the department that they are not liable to compensate us on this account because of clause 6 of the agreement is not correct. Clause 6 refers to only such cases over which the department has no control. But if the department would have lifted the bricks (this was entirely under their control) then no such loss would have occurred. Also be it noted that clause 6 refers only to 'damage ' and not to 'destruction. . Damage means only partial loss. . .it cannot mean total destruction. : The award states "The statement of claims submitted by the contractor contains seventeen items in respect of which the contractor claimed a total payment of Rs. 4,76,138 12 0 plus interest i.e., approximate total amount claimed: Rs. 5,03,803 12 0 as detailed below". Then follow the seventeen items of which item 5 is "Payment for katcha bricks destroyed by rain: Rs. 75,900". The body of the award deals with this as follows: " Claim No. 5. Payment for 88. lacs of katcha bricks destroyed by rain. The contractor argued etc The Executive Engineer stated . . The C.P.W.D. moreover were safeguarded by clause 6 of the contract. . The contractor maintained that clause 6 of the contract could not be invoked when the department was at fault as in this case. Clause 6 was meant to cover contingencies which were not of the department 's own making. I hold that the removal of the bricks in such a manner or to prevent accumulation in excess of 60 lacs was an implied contractual obligation on the part of the C.P.W.D. . I further hold that the C.P.W.D. cannot take shelter behind clause 6 of the contract. This clause is not, in my opinion, meant 8 58 to absolve the department from carrying out their part of the contract. It is impossible not to admit this without offending the rudiments of common sense reasoning". We are of opinion that this is not the kind of specific reference on a point of law that the law of arbitration requires. In the first place, what was shown to us is no reference at all. It is only an incidental matter introduced by the Dominion Government to repel the claim made by the contractor in general terms under claim No. 5. In the next place, this was the submission of the contractor alone. A reference requires the assent of both sides. If one side is not prepared to submit a given matter to arbitration when there is an agreement between them that it should be referred, then recourse must be had to the Court under section 20 of the Act and the recalcitrant party can then be compelled to submit the matter under sub section (4). In the absence of either, agreement by both sides about the terms of reference, or an order of the Court under section 20(4) compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction. Therefore, when a question of law is the point at issue, unless both sides specifically agree to refer it and agree to be bound by the arbitrator 's decision, the jurisdiction of the Courts to set an arbitration right when the error is apparent on the face of the award is not ousted. The mere fact that both parties submit incidental arguments about a point of law in the course of the proceedings is not enough. The language of Lord Wright in F. R. Absalom Ltd. vs Great Western (London ) Garden Village Society(1), a case similar to this so far as this point is concerned, is apposite here "There is here no submission of any specific question of law as such and as a specific question of law; no doubt incidentally, and indeed necessarily, the arbitrator will have to decide some questions on the construction of the building contract, but the two matters submitted are both composite questions of law and fact; there is no express submission of the (1) , 616.59 true effect of the contract on the basis of undisputed facts, as in the Kelantan case(1) or as a separate and distinct matter on facts to be separately assumed or found, as in In re King and Duveen(2). . The arbitrator was not being asked simply and specifically to decide, upon some agreed or assumed basis of fact, the true interpretation of either clause 26 or clause 30 of the conditions or of both together; he was being required to make an award on the two matters submitted on whatever questions of fact and law might emerge". Clause 32 of the contract in the House of Lords case was the equivalent of clause 14 in ours. It ran "Provided always that in case any dispute or difference shall arise . . . as to the construction of the contract or as to any matter or thing arising thereunder. . such dispute shall be and is hereby referred to the arbitration and final decision of etc. " The arbitrator relied on that to invest him with juris diction to determine,, as a matter of law, the construction of clauses 26 30 of that contract. The House of Lords held that in the absence of a specific reference about the construction of the contract the jurisdiction of the Courts was not taken away. Lord Russell of Killowen put it this way at page 610 "No specific question of construction or of law was submitted. The parties had, however, been ordered to deliver pleadings, and by their statement of claim the contractor had claimed that the arbitrator should under his powers revise the last certificate issued etc. It is at this point that the question of the construction of condition 30 arose as a question of law, not specifically submitted, but material in the decision of the matters which bad been submitted. This question of law the arbitrator has decided; but if upon the face of the award he has decided it wrongly his decision is, in my opinion, open to review by the Court". That is exactly the position here. Simply because the matter was referred to incidentally in the pleadings (1) (2) , 36.60 and arguments in support of, or against, the general issue about liability for damages, that is not enough to clothe the arbitrator with exclusive jurisdiction on a point of law. The next question is whether the error is apparent on the face of the award. That; in our opinion, is clear from the passages we have quoted from the award. We hold that clause 6 expressly relieves the Union Government of all liability under this head of claim and that the arbitrator was wrong in awarding any sum on that account. The next head in dispute is item No. 8 in the statement of claim: "Cost of additional wages paid to the coolies on account of non supply of ration and cloth Rs. 51,495". Here again no specific question of law was referred, so all we have to see is whether there is an error of law apparent on the face of the award. The contractor put his case as follows in the statement of claim: "At the time when this work was allotted to us there was rationing system in the locality. As per conditions of contract we were bound not to employ local labour and we had to import coolies from far off places. We had in our employ about 1800 coolies and it was an impossibility to arrange their ration from open market. This difficulty was brought to the notice of the authorities concerned, and they promised us to supply ration. It was only after this promise that we signed the agreement. . From a perusal of these letters it is clear that the department promised us to supply ration. . . These circumstantial evidences are sufficient enough to show that there was a mutual understanding between the parties that ration will be supplied. In the eyes of law even circumstantial evidence is sufficient to prove that such a promise was made. Any breach of that promise makes the department legally liable to compensate for that loss. . Apart from the legal responsibility it was also a moral responsibility for the department to supply ration". 61 This claim, therefore, was not grounded on any clause of the contract, nor was it said to be implied in the contract. What was relied on was a collateral promise evidenced, not by the contract, but by two letters written by "the department" and a promise by "the authorities concerned"; and later this promise is turned into a "mutual understanding" and to a "moral responsibility" in addition to a legal one. The arbitrator dealt with this as follows. He began by saying "The contractor stated that when he submitted his tender on 25 9 45 he did so in the bona fide belief that the department would make the necessary arrangements, etc. " Then he sets out the following dates. On 1 11 45 the contractor was told that his tender had been accepted. On 9 11 45 the contractor "warned" the Executive Engineer about his "immediate requirements in respect of rations". The contract was finally accepted and signed on 22 11 45. Now it is admitted that the contract contains no clause about rations and it is also evident that the question was not raised when the tender was accepted on behalf of the Dominion Government. The question was raised in a letter to the Executive Engineer, and the contractor signed the contract without waiting for a reply. It is well settled that governments can only be bound by contracts that are entered into in a particular way and which are signed by the proper authority. A reference to the agreement, exhibit A(1), will show that it was accepted on behalf of the Dominion Government by the Additional Chief Engineer and not by an Executive Engineer. A letter written to the Executive Engineer would therefore have no effect and even if it be assumed that the letter was forwarded to the Additional Chief Engineer for consideration, what does it amount to? A tender embodying certain terms is submitted and is accepted on 1 11 45. Both sides are agreed on all matters contained in it and their conduct shows that both sides indicated that the contract should be reduced to writing. Be 62 fore the agreement is signed, one party wants to include a further condition in the contract. We will assume that the request was made to the other contracting party. But without waiting for the assent of the other side, both sides accept and sign the contract as it existed before the fresh suggestion was made. It is an error in law to deduce from this that there was acceptance of the fresh proposal. On the contrary, the legal conclusion is that the new suggestion was dropped and that the contractor was content to accept the contract as it was without ' this condition. In any case, a person cannot be bound by a one sided offer which is never accepted, particularly when the parties intend that the contract should be reduced to writing. That is the whole point of insisting on a document. It excludes speculation as to what was and what was not agreed to however much the matter might have been raised by one of the parties during the stage of negotiation. The arbitrator continues that the contractor stated that "it was a well known and established fact that Sindri was a rationed area; that the C.P.W.D. were giving rations at controlled rates to their employees and contractors through arrangements with the local Civil Supply Authorities; that nobody working under the C.P.W.D. was allowed to make independent arrangements or approach the Civil Supply Authorities direct" and the contractor contended that the very fact that he tendered such low rates showed that he expected to supply his labourers with rations at controlled rates. The arbitrator then sets out some more of the contractor 's contentions and from them concludes that "there was an implied contractual obligation for the C.P.W.D. to make available controlled rations to the contractor and that this obligation was not fulfilled with due diligence and care". He accordingly awarded Rs. 40,000 as compensation under this head. The error is apparent. Facts must be based either on evidence or on admissions; they cannot be found to 63 exist from a mere contention by one side especially when they are expressly denied by the other. The inference from the facts stated above is that the contractor entered into the agreement with his eyes open and whatever his one sided hopes may have been he was content to enter into the agreement as it stood without binding the other side to the new conditions and without even waiting to ascertain the reaction of the other side to his further proposals. It has to be remembered that rationing was not a matter that was under the direction and control of the Dominion Government. It was a local matter handled by the then Provincial authorities and under their direction and contract. The C.P.W.D., as a department of the Dominion Government, was not concerned with rationing except that its employees had to submit to rationing like everybody else in the Sindri area. This confusion between the Dominion Government and the Provincial Government occurs in the arbitrator 's opening sentence under this head where he sets out the contractor 's contention that "commodities such as rations and cloth which were absolutely essential for the maintenance of his labourers and which were under Government control". As the arbitrator bases solely on the contractor 's contentions it is evident that he failed to appreciate the fact that the Dominion Government and the Provincial rationing authorities were separate entities distinct from one another. The position accordingly reduces itself to this: two persons, neither of which is a part of the Provincial Government or has any control over rationing, chose to enter into an agreement for work in a rationed area. They insisted that their contract should be reduced to writing, and that indeed was essential, this being a contract with the Dominion Government which was incapable of contracting in any other way; they agreed upon and concluded all their terms; then, at the last minute, one side raised a point about rationing but without waiting for a reply and without having the term entered in the contract, he signed the contract as it stood before the point was raised even during the negotiation. It is 64 an error in law to hold that any contractual obligation can be inferred or implied from these circumstances. Then there is still another error. If this implied agreement about rations and cloth does not spring out of the written contract but is to be inferred collaterally as a distinct and subsidiary contract, and we gather that that is the finding, especially as reference was made to section 9 of the Contract Act, then that is not a contract to which the arbitration clause can apply. Wide though it is, clause 14 is confined to any matter relating to the written con tract and if ration and cloth are not covered by the written contract, they are not matters that relate to it. If parties choose to add a fresh contract in addition to or in substitution for the old, then the arbitration clause cannot cover the new contract. See Lord Macmillan in Heyman vs Darwins Ltd.(1). The last item in dispute in this appeal is claim No. 17 about interest. The statement of claims sets out "Item 17 Interest on the amount of money involved in this claim at the rate of Rs. 6 percent. 27,665. This work was finished in May 1946 and it was proper for the department to have decided all our claims at least by 31st December 1947. . . . But this was not done. Due to this a heavy amount remained blocked up and we were compelled to take money from our bankers on interest. We therefore pray for interest for 16 months from 1 1 48 to 31 4 49". The arbitrator held "The contractor 's contention that his claims should have been settled by January 1948 is, in my opinion, reasonable. I therefore award interest at 6% for 16 months on the total amount of the awards given i.e., Rs. 17,363". Then the arbitrator sets out the amounts awarded under each head of claim. A perusal of them shows that each bead relates to a claim for an unliquidated sum. The Interest Act, 1839 applies, as interest is (1) at 371.65 not otherwise payable by law in this kind of case (see Bengal Nagpur Ry.Co. vs Ruttanji Ramji(1)), but even if it be assumed that an arbitrator is a "court" within the meaning of that Act, (a fact that by no means appears to be the case), the following among other conditions must be fulfilled before interest can be awarded under the Act: (1) there must be a debt or a sum certain; (2) it must be payable at a certain time or other wise; (3) these debts or sums must be payable by virtue of some written contract at a certain time; (4) There must have been a demand in writing stating that interest will be demanded from the date of the demand. Not one of these elements is present, so the arbitrator erred in law in thinking that he had the power to allow interest simply because he thought the demand was reasonable. It was suggested that at least interest from the date of "suit" could be awarded on the analogy of section 34 of the Civil Procedure Code, 1908. But section 34 does not apply because an arbitrator is not a "court" within the meaning of the Code nor does the Code apply to arbitrators, and, but for section 34, even a Court would not have the power to give interest after the suit. This was, therefore, also rightly struck out from the award. We pause to note that there was only a delay of five days at the outside in the over all picture. The last date for removal of the last instalment of bricks was 25 5 46 and the contractor says under this head that the whole contract was completed by the end of May, 1946. It is difficult to see how 88 lacs of bricks could have been damaged by rain in the last five days of May, and if the damage occurred before it would have occurred anyway, for on the contractor 's case he had to have a large stack of unbaked bricks on hand ready to enter the kilns in order to keep pace with his time table. However, that was a (1) 65 I.A. 66. 9 66 matter within the jurisdiction of the arbitrator and is not a matter in which the Courts can interfere. That concludes Civil Appeal No. 260 of 1953 and we now turn to the other appeal, Civil Appeal No. 12 of 1954. Only two items are in dispute here. Heads 4 and 17 of the claim. The over all pattern of the claim is the same as in the other case. There was a contractor and he entered into an agreement containing the same terms and conditions, except about the details of supply. It was signed on the same day as the other and by the same authority on behalf of the Dominion Government., and the matter went before the same arbitrator and the award in this case was given on 1 5 1949, one week before the other award. Here also, no specific question of law was referred and we need not cover the same ground. Our decision is the same here as there. The fourth head of claim is about cloth and rations. The claim here. , and the Dominion Government 's reply, is the same as in the other case, but the award in this case is not based on an implied contractual obligation but on "a moral and implied obligation". The error here is even greater than before. The sum claimed was Rs. 51,495 and the amount awarded was Rs. 30,000. The seventeenth head of claim was about interest. The contractor claimed Rs. 27,665 and the arbitrator awarded Rs. 9,954. There is the same error of law apparent on the face of the award. The High Court was right in dismissing the claims made under the heads in dispute here. The two appeals fail and each is dismissed with costs in this Court. Appeals dismissed.

The appellant, a contractor, entered into a contract with the Dominion of India for the supply of bricks. A clause in the contract required all disputes arising out of or relating to the contract to be refered to arbitration. Disputes arose and the matter was duly referred. The arbitrator gave an award in the contractor 's favour. The Union Government, which by then had displaced the Dominion of India, contested the award on a number of grounds. Held:(1) that it is not enough for the contract to provide for arbitration; more is necessary. An arbitrator only gets jurisdiction when either, both the parties specifically agree to refer specified matters or, failing that, the court compels them to do so under the arbitration clause if the dispute is covered by it; (2) the legality of an award cannot be challenged on facts, but it can be challenged on questions of law provided the illegality is apparent on the face of the award: section 16(1)(c) of the ; (3) the only exception is when both parties specifically refer a question of law for the decision of the arbitrator. In that event they are bound by his decision on that particular question as well as by his decision on the facts. But a distinction must be drawn between cases in which a question of law is specifically referred and those in which a decision is incidentally material (however necessary) in order to decide the question actually referred. The law about this is the same in India as in England. and , followed. at 79, 50 I.A. 324 at 330 49 331, 54 I.A. 427 at 430, 29 I.A. 51 at 60, at 368 referred to and ; at 798, explained; Quaere: Whether the courts will interfere when a question of law is specifically referred if the arbitrator acts illegally in deciding it, such as deciding on inadmissible evidence or on principles of construction which the law does not countenance. at 409, referred to; (4) a wrong construction of the contract is an error of law and can be challenged provided the error appears on the face of the award; (5) so is the awarding of interest when the contract does not provide for interest and the requirements of the Interest Act are not fulfilled:65 I.A. 66, referred to. Quaere: whether the Interest Act applies to arbitrations; (6) when a specific type of loss is directly contemplated by the parties to a contract and they expressly stipulate that no damages will be payable in respect of it they must be bound down to their agreement and any claim for damages in respect of such loss must be dismissed; (7) when the agreement on which the suit is based is not to be found in a contract which has been reduced to writing but has to be implied under section 9 of the Contract Act then the matter is not covered by an arbitration clause of the kind referred to above because the dispute in such a case arises out of and relates to the implied agreement and not to the written contract: at 371, referred to.

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Civil Appeal No. 561 of 1975. Appeal by special leave from the judgment and order dated 6 2 1975 of the Karnataka High Court in Writ Petition No. 48 of 1975. G L. N. Sinha, Solicitor General of India and M. Veerappa, for the appellants. V. M. Tarkunde,, section section Javali, A. K. Srivastava and B. P. Singh, for respondent Nos. 1 9, 16, 17, 19 21 & 26 30. H H. B. Datar and R. B. Datar, for respondent Nos. 18 & 25. 59 The judgment of the Court. was delivered by BHAGWATI, J. There is a town called Gangawati in The State of Karnataka. It had a Town Municipal Council constituted under the Karnataka Municipalities Act, 1964. The term of office of the Municipal Councillors elected at the last General Elections expired by efflux of time in 1962, but instead of holding a General Election to constitute a new Town Municipal Council, the State Government appointed an Administrator to exercise the powers and perform and discharge the functions and duties of the Town Municipal Council and also constituted an Advisory Council to advise and assist the Administrator. The appointment of the Administrator and the constitution of the Advisory Council were challenged by one of the residents of Gangawati in the High Court of Karnataka by Writ Petition No. 2405 of 1972. The writ petition was, however, settled as the State Government gave an undertaking that it would take the necessary steps for holding a General Election within a reasonable time. This happened on 6th February, 1974. The State Government thereafter, in accordance with the undertaking given by it, appointed the Returning Officer on 25th February, 1974 and it looked as if the General Elections was at last going to be held. But this hope was belied. Before the Re turning officer could issue a notice fixing the calendar of events forth election, the State Government rescinded the Notification which had been issued by it earlier under s.13 of the Act determining inter alia the territorial divisions into which the Municipality shall be divided. The result was that no further steps could be taken by the Returning Officer in the matter of holding the election. Angered and frustrated by this second attempt on the part of the State Government to bulk the holding of the election, the same individual, who had filed the earlier writ petition, preferred another writ petition, namely, Writ Petition No. 2715 of 1974. for a mandamus to the State Government to hold the election. The High Court made an order on this writ petition on 7th August, 1974 directing the State Government to hold the election within four months. This time was later extended to 8th March, 1975. Pursuant to the direction of the High Court, the State Government issued a Notification dated 3rd December, 1974 under section 13 of the Act determining the territorial divisions into which the Gangawati Municipality shall be divided for the purpose of holding the election and allotting number of seats to each territorial division. The Gangawati Municipality was divided into six territorial divisions and each territorial division was defined and demarcated by reference to census block numbers, wards and also boundaries. The Returning officer there after on 7th December, 1974 issued a notice fixing the calendar of events for holding the election. The Tehsildar, who was the designated officer under section 14, sub section (2), in the meanwhile, prepared the list of voters for each division from the Mysore Legislative Assembly Electoral Roll (hereinafter referred to as the Electoral Roll) by including in the list parts of the Electoral Roll referable to the census block numbers comprised within the division. The list of voters for each division so prepared was authenticated by the designated officer and kept open for inspection in the office of the Municipal Council. A 60 large number of nominations were filed on or before the last date fixed for it in the calendar of events and after scrutiny and withdrawal, a list of the contesting candidates was published by the Returning officer on 21st December, 1974. The only step which remained to be taken to complete the process of election was the poll which was fixed on 10th January 1975. However, on 21st December, 1974, when the question of finalisation of polling stations was taken up by the Returning officer, the Secretary of the Congress Party raised an objection that the division wise lists of voters prepared and authenticated by the designated officer were defective "inasmuch as voters who reside in one division are being made to vote in a different division" and that these lists of voters should, therefore, be rectified before fixing up the polling stations. The Returning officer considered his objection and by an order made on the same date rejected it. This order is very material and we will, therefore. reproduce it in full. It reads inter alia as follows: "It is seen from the list maintained that the population in the parts of voters list tallies with the proposal made to Government for the delimitation of the constituencies. Further it is seen that the various parts included in the division wise voters list conform to the census block numbers which are mentioned in the notification published in regard to the declaration of delimitation of territorial divisions. It also fits into the ward wise description of constituencies as declared by Government. However, it is too late in the day to prefer objections about voters list. The voters list was open for inspection all along. Many interested parties have obtained copies of the same. Nominations have been filed by respective parties on the basis of the same voters list and the scrutiny has been completed and valid nominations have been declared and today at 3.00 p.m. Last date for withdrawal is also over and the list of polling stations is finalised. At this juncture, it is regretted to declare that parties cannot be allowed to go back to the period prior to scrutiny of the nomination papers, especially so when there was not one word of objection or protest over the voters list at the appropriate time. As per section 23(3) of the Representation of the People Act, 1950 no amendment or deletion of any entry in the electoral roll should be made or given effect after the last date for making nominations in that constituency or division. Any change in the parts of the Division of Voters will amount to an amendment of electoral roll of that division. " It appears that three of the contesting candidates and a member of the Legislative Assembly belonging to the Congress Party were dissatisfied with this order and they, therefore, made an application to the Deputy Commissioner pointing out what they thought were defects in the division wise lists of voters. The Deputy Commissioner instructed the 61 Returning officer to make physical verification of these defects and the Returning officer accordingly went to the respective places where the mistakes were alleged to have occurred and after verification, made a report dated 27th December, 1974. In this report, the Returning officer stated that: "It was found during my random inspection of the various houses on the borders of the different divisions that some voters residing adjacent to one division have been included in another ad joining division and the voters list in respect of each division has been formed accordingly." The Returning officer observed that as a result of this physical verification it was found that 'the number of; voters ill the respective division would undergo considerable change" and gave figures showing that the change in the number of voters in each division would be in the neighborhood of twenty five per cent. Basing itself on this report, the State Government, by an order dated 30th December, 1974, canceled the calendar of events published by the Returning officer and directed him to issue fresh calendar of event. "after getting the voters lists completed strictly as per the division notified. " Though this order did not refer to the provision of law under which it was purported to be made, the State Government claimed that the source of its power to make this order lay in rule 75 of the Mysore Municipalities (Election of Councillors) Rules, 1965 (hereinafter referred to as the Rules) made under s.38 of the Act. The petitioners. who are residents of Gangawati, finding that the State Government had again tried to fish out some excuse for putting off the general election, preferred the present writ petition questioning the validity of this order made by the State Government. The High Court, by a judgment and order dated 6th February, 1975 held that the State Government had no power under rule 75 to cancel the calendar of events validly fixed by the Returning officer and set at naught the election process which had already commenced and in this view, quashed and set aside the order of the State Government and directed the Returning officer to hold the elections "from the Stage at which it was interrupted by the impugned Government order after fixing convenient dates for the remaining events so that the election may be completed before 8th ' March, 1975. " The State Government challenges the correctness or this view in the present appeal brought with special leave obtained from this Court. The hearing or this appeal concluded on 2nd May 1975 which was the last working day for the Court before the commencement of the summer vacation. Since the appeal involves the question as to the holding of the election and delay in the pronouncement of the order might defeat the object of filing the appeal, we pronounced our order immediately after the conclusion of the hearing, dismissing the appeal with costs and directing the Returning officer to complete the election before 10 June, 1975. We now proceed to give our reasons. The question which arises for determination in the appeal is as to whether the State Government had power under rule 75 to make the impugned order cancelling the calendar of events and thereby in effect setting at naught the entire election process which had proceeded upto the stage of poll. Rule 75, which is the last amongst the Rules, in the following terms: 62 "Notwithstanding anything contained in these rules, the State Government and subject to the general or special orders of the Government, the Commissioner shall have the power of superintendence, direction and control of the con duct of elections under these rules, and may make such orders as it or he deems fit for ensuring that the elections are held in accordance with the provisions of the Act. " lt is not necessary for the purpose of the present appeal to embark on a discussion on the wider question as to what are the different circumstances in which the power conferred under rule 75 can be exercised by the State Government and what kind of order can be made by the State Government in exercise of such power. It would indeed be inexpedient and unwise to draw the precise lines within which the power under rule 75 should be exercisable, for there may be infinite valid circumstances which may call for exercise of such power What we need consider here is only the limited question whether on the facts and circumstances of the present case, the State Government had power under rule 75 should be exercisable, for there may be infinite calendar of events fixed by the Returning officer. If such power could not be found in rule 75, it was common ground that there was no other provision in the Act or the Rules which would justify the making of the impugned order and it would plainly be invalid. Now, the only justification pleaded by the State Government in support of the exercise of the power under rule 75 was that the division wise lists of voters prepared and authenticated by the designated officer were defective and if the election were held on the basis of such defective lists of voters, it would not be in accordance with the provisions 1. ` of the Act and hence the impugned order had to be made by the State Government for ensuring that the election was held in accordance with the provisions of the Act as contemplated under rule 75. This justification, plausible though it may seem, is, in, our opinion, without merit. To test its validity it is necessary to understand the nature of the defect from which according to the finding of the Returning officer, the divisional lists of voters suffered and see whether that defect brings the case within the scope and ambit of rule 75. We may first refer to a few relevant sections of the Act. Sec. 13 provides that for the purposes of election of councillors at a general election, the State Government shall, after previous publication, by notification, determine (a) the number of territorial divisions into which the municipality shall be divided, (b) the extent of each territorial division, (c) the number of seats allotted to each territorial division which shall be not less than three and not more than five, and (d) the number of seats, if any, reserved for the Scheduled Castes and for women in each territorial division. It was in obedience to the requirement of this section that the State Government issued the notification dated 23rd December, 1974 determining inter alia the divisions in which the Gangawati Municipality shall be divided for the purpose of holding the election. The extent of each division was defined and demarcated in the Notification with great precision by reference to the 63 census block numbers which had been given to the different areas at the time of the census. These areas were clearly and definitely identifiable by their census block numbers, particularly as the extent of each census block number was well defined and it was known with definiteness and certitude as to which houses were comprised in it. There was, therefore, plainly and manifestly no doubt or uncertainty about the extent of each of the division into which the Gangawati Municipality was divided by the Notification. Section 14 is the next important section which deals with the subject of list of voters. It has four sub sections of which the first three are material. They are as follows: "(1) The electoral roll of the Mysore Legislative Assembly for the time being in force for such part of the constituency of the Assembly as is included in a division of a municipality shall, for the purpose of this Act, be deemed to be the list of voters for such division. (2) The officer designated by the Deputy Commissioner in this behalf in respect of a municipality shall maintain a list of voters for each division of such municipality (3) Every person whose name is in the list of voters referred to in sub section (1) shall unless disqualified under any law for the time being in force, be qualified to vote, at the election of a member for the division to which such list pertains. " What shall be the qualification of a person to stand as a candidate at an election is laid down in section 15, sub section That sub section provides that every person whose name is in the list of voters for any of the divisions of the municipality shall, unless disqualified under this Act or any other law for the time being in force, be qualified to be elected to the election for that division or any other division of the municipality and every person whose name is not in such list shall not be qualified to be elected, at the election for any division of the municipality. Then follows sub section (2) which is of some importance. We quote it: "Subject to any disqualification incurred by a person the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or is not qualified to vote or is qualified or is not qualified to be elected as the case may be, at an election." Section 38 confers power on the State Government to make rules to provide for or regulate all or any of the matters set out in the section for the purpose of holding election of councillors under the Act. It was in pursuance of this section that the Rules were made by the State Government. It will be seen on a plain reading of sub s (1) of section 14 that the electoral roll for the territorial area comprised in a division is to be deemed to be the list of voters for such division. The designated officer is merely to perform the operation of scissors and paste cut 64 out those portions of the electoral roll which relate to the territorial area included in the division and paste them together so as to form the list of voters for the division. There is no separate qualification laid down in the Act for being placed in the list of votes for a division laid down in the Act for being placed in the list of votes for a division as was the case in Chief Commissioner, Ajmer vs Radhey Shyam Dani. In that case, section 30, sub section (2) of Ajmer Merware Municipalities Regulation, 1925 laid down tow conditions which must be fulfilled in order to entitle a person to be enrolled as an electoral of the Ajmer Municipalities Regulation, 1925 laid down two conditions which must be fulfilled in order to entitle a person to be enrolled as an electoral of the Ajmer Municipalities, namely, (1) that he should be entitled under the Representation of the People Act, 1950 to be registered in the electoral roll for a Parliamentary Constitution, if the constituency had been co extensive with the Municipality, and (2) that his name should be registered in the electoral roll for a Parliamentary Constituency comprised in the Municipality. It was for this that the name of a person should be registered in the electoral roll of a Parliamentary Constituency. That did not entitle him straightaway to be included in the electoral roll of the Municipality. It was further required to be seen whether he was entitled to be registered in the electoral roll of the Parliamentary Constituency. That enquiry was necessary to be made before the electoral roll of the Municipality could be prepared. But, here no other qualification is required : the mere fact of a person being in the Electoral Roll for the territorial area comprised in a division is sufficient to include him in the list of voters for such division. Vide sub section (1) of section 14. What is required by this sub section is that the list of voters of a division should correspond ipsissima verba with the Electoral Roll for the territorial area included in the division. If there is any mistake in the Electoral Roll, in that some voters residing in one area or house number are shown as residing in another, it cannot be corrected by the Returning Officer while preparing the list of voters for each division. The Returning Officer has to take the Electoral Roll for the territorial area of the division as it is, with whatever mistakes there may be in it and that would be the list of voters for the division. The only way in which the mistakes, if any, either in the names of the voters or in their addresses, including house numbers in which they reside, can be corrected is by applying for rectification of the Electoral Roll under section 22 of the Representation of the People Act, 1950. So long as such rectification is not made, the entries in the Electoral Roll would stand and they would necessarily be reflected in the list of voters for the division. But they would not constitute mistakes, so far as the preparation of the list of voters for the division is concerned. It is only if the list of voters for the division does not correspond with the Electoral Roll for the territorial area comprised in the division, in the sense that voters shown in the Electoral Roll as residing in the territorial area of the division are omitted to be included in the list of voters, or voters shown in the Electoral Roll as residing in the territorial area of another division are included in the list of voters, that it can be said that the list of voters is defective and not in accordance with the provisions of the Act. 65 Now in the present case, it is clear from the order of the Returning officer dated 21st December, 1974 that the list of voters for each division corresponded fully and completely with the Electoral Roll for the territorial area comprise in such division. The finding of the Returning officer was that the various parts of the Electoral Roll included in the list of voters for each division conformed to the Census Block numbers of the respective division mentioned in the Notification dated 3rd December, 1974. Each division was defined and demarcated by reference to Census Block numbers and the parts of the Electoral Roll were also made out on the basis of Census Book numbers. There could, therefore, be no doubt or confusion as to which parts of the Electoral Roll related to the territorial area comprised in a particular division. The correspond parts of the Electoral Roll could be easily ascertained and identified by reference to Census Block numbers for preparing the list of voters for each division. that was admittedly done in the present case and there was no complaint about it. No defect was also alleged or found in this respect. The only defect if at all it can be cared a defect which the Returning officer noticed on physical verification was that the voters shown ill the Electoral Roll as residing in the territorial area or one division were in fact residing in another. But, as already pointed out above that cannot be regarded as a defect in the division wise list of voters and it would not stamp them with the vice of not being in conformity with the requirements of the Act. The State Government was, there fore, in any view of the matter, not entitled to make the impugned order under rule 75 on the ground that the divisional lists of voters were defective and the election held on the basis of such lists of voters would not be in accordance with the provisions of the Act. What the State Government did by making the impugner order was to interfere with the election process which was going on in accordance with law and that was clearly not permissible on any interpretation of rule 75. That takes us to the alternative argument advanced by the learned Solicitor General on behalf of the State Government. He contended that in any event even if the impugned order was bad and the election process was liable to be continued from the stage at which it was interrupted, the poll could be taken only on the basis of the revised Electoral Roll which had come into being, in the meanwhile, in February 1975 and, therefore it was necessary for the designated officer to correct the divisional lists of voters so as to bring them in accord with the revised Electoral Roll. This contention is also without force. lt is true that there is no provision in the Act similar to section 23 sub section (3) of the Representation of the People Act, 1950 providing that no amendment, transposition or deletion of any entry in the list of voters for a division shall be made and no direction for the inclusion of any name in such list of voters shall be given after the last date for making nomination for an election in the division. But the scheme of the Act and particularly sections 14 and 15 make it clear that it is one list of voters for each division that is contemplated to be in force during the entire process of election. The list of voters is to be prepared for the election and 'election ' means the entire process consisting of several stages and embracing several steps by which an elected member is re 66 turned, whether or not it is found necessary to take a poll. Vide: N. P. Ponnuswami vs Returning officer, Namakkal Constituency & ors.(1) The list of voters must, therefore, a fortiori remain the same throughout the process of election. There cannot be one list of voters for determining the eligibility to stand as a candidate and another for determining the eligibility to vote, at the sane election. That would not only be irrational, but would also introduce confusion and uncertainty in the election process. Candidates would not know at the time when they file their nominations as to what is the strength and composition of the electorate in the division m which they are contesting the election. They would also be handicapped in canvassing for votes. It would indeed be a strange and anomalous position if there were two or more different lists of voters at different stages of the same election Sub section (1) of s.14 does not contemplate a this of voters which keeps on changing from times to time during the election t process. It deems the Electoral Roll for the territorial area of the division, in force at the relevant time to be the List of voters for the division "for the purpose of the Act", that is for the purpose of election which is the whole process culminating in a candidate being declared elected and not merely polling. The same list of voters is, therefore, to prevail for all stages in the election. This we find emphasised also in sub section (3) of s.14 which enacts that every person whose name is in the list of voters referred lo in sub section (1) shall be qualified to vote at the election of a member for the division to which such list pertains. Sub section (2) of s.15 also points in the same direction. It says that "the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or is not qualified to vote or is qualified or is not qualified to be elected as the case f may be, at an election. " The reference here, as matter of plain grammar, is indisputably to the same list of voters which is to be conclusive evidence for both purposes. lt is, therefore, clear, on a proper interpretation of the provision of the Act that the Legislature did not intend that the list of voters should change from time to time during the process of election and the relevant Ellctoral Roll for the purpose of preparation of the list of voters must consequently be taken to be the Electoral Roll in force at the date when the election process commenced, that is, the date when the calendar of events was published. The same view was taken by a revision Bench of the Mysore High Court in Shivappa Chanamollappa Jogendra vs Basavannappa Gadlappa Banker. (") We are in agreement with that view. The poll in the present case must, therefore, be taken on the basis of the list of voters for each division prepared with reference to the Electoral Roll in force on 7th December, 1974, that being the date on which the calendar of events was published by the Returning officer. One other question was also raised before us, namely, whether the designated officer can be required to rectify the list of voters for a division, if it can be shown that the list of voters does not correspond exactly with the Electoral Roll for the territorial area of the division, as for example, some voters in a particular house in a Census Block number falling in the division, though shown in the Electoral Roll as 67 such, are, through inadvertence, omitted to be included in the list of voters for the division. It is not necessary for the purpose of the present appeal to decide this question, but we may point out that tall the election process has commenced by the issue of notice fixing the calendar of events, there is no reason why the designated officer should not be entitled to rectify such defect in the list of voters and bring the list of voters in conformity with the Electoral Roll. But once the calendar of events is published and the election process has begun, it is extremely doubtful whether any changes can be made in the list of voters for the purpose of setting right any such defect. We, however, do not wish to express any final opinion on this point. These were the reasons which weighed with us in making the order dated 2nd May, 1975 dismissing the appeal with costs and directing the Returning officer to complete the election before 10th June 1975 on the basis of the Electoral Roll in force on 7th December 1914.

Section 13 of the Karnataka Municipalities Act, 1964, provides that for the purpose of election of councillors of a town municipality at a general election the State Government shall, after previous publication by notification, determine, (a) the number of territorial divisions into which the municipality shall be divided. (b) the extent of each territorial division; (c) the number of seats allotted to each territorial division. and (d) the number of seats reserved for the Scheduled Castes and women. Section 14 provides that the electoral roll of the State Legislative Assembly for the territorial area comprised in the division, shall be deemed to be the list of voters of such division Rule 75 of the Mysore Municipalities (Election of Councillors) Rules, 196 empowers the State Government to make such orders as it deems fit for ensuring that the elections are held in accordance with the provisions of the Act. For holding a general election with respect to a town municipal council, the State Government issued the notification under section 13. Thereafter the Returning officer issued a notice fixing the calendar of events for holding the election. The list of voters for each division was prepared exactly according to the Electoral Roll, and kept open for inspection In the office of the municipal council. A list of the contesting candidates was also published and the poll date was also fixed as January 10, 1975. At that state it was found that some voters residing in the border of one division had been included in the voters ' list of an adjoining division and the State Government, in purported exercise of the power under r. 75, cancelled the calendar of events published by the Returning officer and directed a fresh preparation of the voters ' list as per the divisions notified. In a writ petition filed by the respondents, who were residents of the town, the High Court held that the State Government had no power to cancel the calendar of events and quashed the direction of the State Government. Dismissing the appeal to this Court, ^ HELD: (1) What is required by section 14(1) is that the list of voters of a division should correspond ipsissima verba with the Electoral Roll for the territorial area included in the division. of there is any mistake in the Electoral Roll in the some voters residing in one area or house number are shown as residing in another, it cannot be corrected by the Returning officer while preparing the list of voters for that division. The only way in which such mistake can be corrected is by applying for rectification of the Electoral Roll under section 22 of the Representation of the People Act, 1950, but of such rectification is not made the entries in the Electoral Roll would stand and they would necessarily be reflected in the list of voters for the division. But that would not constitute a mistake so far as the preparation of the list of voters for the division is concerned. It is only if the list of voters for the division does not correspond" with the concerned Electoral Roll in the sense that the voters shown in the Electoral Roll as residing in the territorial are omitted to be included in the list of voters of that division or voters shown In the Electoral Roll as residing in the territorial area of one division are included in the list of voters of another. that it can be said that the List is defective and not in accordance with the provisions of the Act [64D H] 58 (2) The scheme of the Act and particularly sections 14 and 15 show that it is only one list of voters that is contemplated to be in force during the entire process of election, and there is no question of correcting the list of voters according to the revised Electoral Roll which had come into being in February, 1975. [65G H] The list of voters is to be prepared for the election tnd 'election ' means the entire process consisting of the several stages and embracing the several steps by which an elected member is returned. [65H] Section 14(1) does not contemplate a list of voters which keeps on changing from time to time during the election process. It deems the Electoral Roll for the territorial area of the division in force at the relevant time to be the list of voters for the division for the purposes of the Act that is, for the purposes of the 'election '. Section 14(3) enacts that every person whose name is in the list of voters referred to in sub section (1) shall be qualified to vote at the election of a member for the division to which such list pertains. Section 15 (2) also says that the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or not qualified to vote or to be elected. The sub sections refer to the same list of voters and it is, therefore, clear that the legislature did not intend that the list of voters should change from time to time during the process of election and the relevant Electoral Roll for the purpose of preparation of the list of voters must consequently be taken to be the Electoral Roll in force at the date when the election process commenced, that is when the calendar of events was published. [66A F] Chief Commissioner, Ajmer vs Radhey Shyam Dani, ; , explained . N. P. Ponnuswami vs Returning officer, Namakkal Constituency & Ors, ; , followed Shivappa Chanamallappa jogendra vs Basavannappa Gadlappa Bankar, [1965] Mysore L.J. 289. approved. Obiter: Till the election process has commenced by the issue of a notice fixing the calendar of events. there is no reason why the designed officer should not be entitled to rectify the list of voters for a division if it can be shown that the list of voters does not correspond exactly with the Electoral Roll for the territorial area and bring the list of voters in conformity with the Electoral Roll, but once the calendar of events is published and the election process has begun it is extremely doubtful whether any changes can be made in the list of voters for the purpose of setting right any such defect. [67 C]

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etition No. 254 of 1974. Petition under Article 32 of the Constitution of India. section K. Gambhir, for the petitioner. P. K. Chatterjee and G. section Chatterjee, for the respondent. , The particulars of the ground of detention refer to a single incident described thus: "That on 24 5 72 at about 10 35 hrs. you along with your associates broke BEX Wagon No. WR 75961 loaded with food grains at Mathurapur Goods sidings and decamped with 10/12 bags of wheat and rice. Your action caused disruption of supply and services". After the rule issued in this habeas coprus petition was served on the respondent, the State of West Bengal, the District Magistrate filed a counter affidavit in answer to the petition. Paragraph 5 of the aforesaid affidavit says that the order of detention was passed after the District Magistrate was satisfied that it was necessary to detain the petitioner with a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community; that the District Magistrate was satisfied that if the petitioner was not detained he was likely to act in a manner described above; and that : "The nature of act, the manner in which the same was committed, the effect and result of said activity upon the community and the question of supply of food grains were taken by me into consideration before making the order of detention". Learned counsel appearing on behalf of the petitioner argues that the petitioner was ordered to be detained on the basis of a single, isolated incident and that no reasonable person could possibly come to the conclusion that it was necessary to detain the petitioner in order to prevent him from acting prejudicially to the maintenance of supplies and services essential to the community. This submission, in our opi nion, is well founded and must be accepted. in Debu Mahato vs State of West Bengal(1), the Distt. Magistrate had passed an order directing that the petitioner therein be detained with a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community. Only one ground of detention was set out, namely, that the petitioner and his associates were found removing three bales of empty jute bags after breaking open a. railway wagon and that when challenged by the Railway Protection Force they fled away leaving the booty behind. A Bench consisting of three learned Judges held that though it could not be laid down as &a invariable rule that in no case can a single, solitary act form the basis for reaching the satisfaction that the detenu might repeat such acts in future, in the circumstances of the particular case one solitary isolated act of wagon breaking committed by the petitioner could not possibly persuade any reasonable person to reach the satis faction that unless the petitioner was detained he would in all probability indulge in further acts of wagon breaking. This conclusion was not reached by the Court on the basis that what was stolen was empty jute bags. The conclusion is based on the circumstance that (1) 451 what was alleged against the petitioner was his involvement in a solitary, isolated act of wagon breaking and secondly, nothing was said by the District Magistrate in his counter affidavit suggesting that wagon breaking had become so rampant that in the context of the peculiar situation, the District Magistrate arrived at the requisite satisfaction in spite of the fact that the act on which the satisfaction was founded was just one single, solitary act of wagon breaking. No two cases can have precisely indentical facts but we are unable to see any material distinction in the facts of the case before us and the facts in Debu Mahato 's case. A single act has been attributed to the petitioner and it consists of a theft of 10 or 12 bags of wheat and rice after breaking open a wagon. The act was not accompanied by violence or by show of force and the District Magistrate has not stated in his affidavit that by reason of the peculiarity or enormity of the situation, he formed the requisite satisfaction as regards the necessity to detain the petitioner, even though the satisfaction was founded on an isolated incident. Mr. Chattarjee who appears on behalf of the State of West Bengal, argues that the judgment of this Court in Debu Mahato 's case was predominantly influenced by the consideration that the District Magistrate in his counter affidavit had stated that the petitioner was "one of the notorious wagon breakers" and was engaged in systematic breaking of railway wagons. We are unable to agree. Two ground s were urged in Debu Mahato 's case for invalidating the detention order. The first 'ground was that the District Magistrate could not have possibly reached the satisfaction on the basis of a single incident that unless the petitioner was detained, he would indulge in further acts of wagon breaking. While considering this argument, no reference at all was made by the Court to the fact that in the counter affidavit, the District Magistrate had referred to circumstances which were not disclosed to the detenu. Having held that the order was liable to be set aside on the ground that the satisfaction of the District Magistrate was truly no satisfaction at all, the Court proceeded to consider the second ground of attack , namely, that the order of detention was based on facts not disclosed to the petitioner. That is why the judgment on the second ground of attack begins by saying : "There was also another angle from which the validity of the order of detention was challenged on behalf of the petitioner". It is manifest from the judgment that the order of detention was held to be bad on two separate and distinct grounds and the reasons which weighed with the Court on the second aspect of the matter did not influence its decision on the first ground of attack. Counsel for the State then urged that the sufficiency of grounds of detention is not a justiciable issue and all that the Courts can consider is whether the grounds of detention are germane to the purpose for which the detention has been ordered. Learned counsel argues that if wagon breaking for the purpose of committing theft of foodstuffs bears nexus with the maintenance of supplies and services essential to the community, the detention must be upheld at all events and the Courts have no jurisdiction to enter into the question whether any 255SuP.Cl/75 452 other conclusion was possible on the basis of facts placed before the detaining authority. It is true that Courts cannot sit in appeal over the propriety of detention orders. But the argument of the State overlooks the distinction between the Court 's jurisdiction in regard to the sufficiency of grounds necessitating the detention and its jurisdiction to examine whether a reasonable person could at all reach the conclusion that unless the person w is detained he would in all probability indulge in a similar course of conduct. We are not concerned to consider whether the District Magistrate was justified in passing the order of detention on the strength of the material available to him. So long as the grounds of detention are germane to the purpose of detention, Courts do not weigh the evidentiary value of the data placed before the detaining authority in order to determine the sufficiency of that data as justifying the order of detention. The point of the matter is that considering the nature of the act attributed to the petitioner and its context, and not merely the fact that the ground of detention refers to a single incident, the satisfaction reached by the District Magistrate that the petitioner, unless detained, was likely to commit similar acts in the future is such as no reasonable person could possibly reach. The conclusion that the past conduct of the detenu raises an apprehension regarding his future behaviour must at least be rational. Accordingly, we set aside the order of detention, make the rule in this petition absolute and direct that the petitioner shall be released forthwith. P.H.P. Petition allowed.

The petitioner was detained under the Maintenance of Internal Security Act on the ground that on a particular day he along with his associates broke open a railway wagon loaded with foodgrains. The petitioner in Writ Petition filed in this Court under article 32 contended that he was detained on the basis of a single isolated incident and that no reasonable person could possibly come to the conclusion that it is necessary to detain the petitioner in order to prevent him from acting prejudicially to the Maintenance of Supplies and Services essential to the community. It was contended by the respondent that the sufficiency of grounds of detention is not a justiciable issue and all that the courts can consider is whether the grounds of detention are germane to the grounds on which the detention has been ordered. If wagon breaking for the purpose of committing theft of foodstuffs bears nexus with the maintenance of supplies and services essential to the community, the detention must be upheld at all events and the courts have no jurisdiction to enter into the question whether any other conclusion was possible on the basis of facts placed before the detaining authority. Setting aside the detention, HELD : Following the decision of this Court in Debu Mahato vs State of West Bengal, , it is true that the courts cannot sit in appeal over the propriety of a detention order. But there is a distinction between the Court 's jurisdiction in regard to the sufficiency of grounds necessitating the detention and its jurisdiction to examine whether a reasonable person could at all reach the conclusion that unless a person was detained he would in all probability indulge in a similar course of conduct. So long as the grounds of detention are germane to the purpose of detention courts do not weigh the evidentiary value of the data placed before the detaining authority. In the present case, no reasonable person can come to the conclusion on the basis of a solitary act of wagon breaking that it is necessary to detain the petitioner. Considering the nature of the act attributed to the petitioner and its context and not merely the fact that the ground of detention refers to a single incident the satisfaction reached by the District Magistrate that the petitioner, unless detained, was likely to commit similar acts in the future, is such as no reasonable person could possibly reach. The conclusion that the past conduct of the detenu raises apprehension regarding his future behaviour must at least be rational. [452A BD]

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Appeal No. 582 of 1969. Appeal from the Judgment and Decree dated the 19th March, 1968 of the Bombay High Court at Nagpur in First Appeal No. 72 of 1959. M. N. Phadke, R. A. Gupta and K. B. Rohatgi for the Appellant. B. N. Lokur, Arun Kumar Sanghi and A. G. Ratnaparkhi for the The Judgment of the Court was delivered by CHANDRACHUD, J. This is a plaintiff 's appeal on a certificate granted by the High Court of Bombay, Nagpur Bench, under Article 133(1)(a) of the Constitution On March 24, 1953 defendant 1 executed on behalf of himself and 'his minor son defendant 2, a deed of mortgage in favour of the plaintiff. Defendant 3 is also a son of defendant 1 but he was born, after the mortgage deed, on September 30, 1955. On January 11, 1956 a registered deed of partition was executed amongst the defendants under which the mortgaged property was allotted to the share of defendants 2 and 3. 884 On September 1, 1956 the mortgagee filed Civil Suit No. 3A of 1956 to enforce the mortgage. On September 20, 1958 the trial court passed a preliminary decree for sale of defendant 1 's interest in the mortgaged property. It held that part of the consideration for the mortgage was not supported by legal necessity and the, balance of the debt incurred on the mortgage was tainted with immorality. Though, therefore, defendant 1 had executed the mortgage as a manager of the joint Hindu family consisting of himself and defendant 2, the debt was held not binding on the one half share of defendant 2 in the mortgaged property. On the issue relating to the genuineness of the partition effected by defendant 1 between himself and his suits, the trial court recorded a finding that it wag a sham and colourable transaction and its object was to delay or 1 defeat the creditors. Being aggrieved by. the decree directing the sale of half the mortgaged property only, the plaintiff filed First Appeal No. 40 of 1959 in the High Court of Bombay. Though the suit was dismissed as against defendants 2 and 3, they also filed an appeal in the High Court to challenge the finding of the trial court that the deed of partition was a sham and colourable transaction. That was First Appeal No. 72 of 1959. During the pendency of these two appeals, the preliminary decree was made final by the trial court on October 23, 1958. On March 2, 1960 the plaintiff purchased, with the permission of tile court, a joint half share in the mortgaged property in full satisfaction of his decree. On September 21, 1960 the auction sale was confirmed and on November 25, 1960 the plaintiff was put in joint possession of the property. On March 15, 1966 the appeals filed by the plaintiff and by defendants 2 and 3 came up for hearing before a. Division Bench consisting of Abhyankar and Deshmukh JJ. The hearing of the appeals was adjourned from time to time and while the appeals were part heard, defendants 2 and 3 applied on August 2, 1966 for amendment of their Memorandum of Appeal in First Appeal No, 72 of 1959. By the proposed amendment they sought leave of the High Court to challenge the preliminary decree passed by the trial court. The plaintiff opposed that amendment and applied that she did not desire to prosecute First Appeal No. 40 of 1959 filed by her. The High Court did not pass any orders either on the application for amendment made by defendants 2 and 3 or on the application of the plaintiff asking that her appeal be dismissed for non prosecution. On August 24, 1966 the High Court adjourned the hearing of the appeals for three months to enable defendants to pay the amount due under the preliminary decree. On November 24, 1966 defendants 2 and 3 deposited Rs. 12,500 and applied for an extension of two months for paying the balance. The extension was granted by the High Court and on fabruary 25, 1967 defendants 2 and 3 deposited a further sum of Rs. 25,000 towards the satisfaction of the preliminary decree. On February 14, 1968 another Division Bench of the High Court (Tambe and Badkas, JJ.) allowed the application of defendants 2 and 3 for amendment of their Memorandum of Appeal in First 885 Appeal No. 72 of 1959. On an application made by their counsel, the High Court granted to those defendants time till February 23, 1968 to pay the deficit court fees, which they did. The High Court then took up the two First Appeals. for hearing in March, 1968. As the plaintiff had applied that she did not desire to proceed with First Appeal No. 40 of 1959 filed by her, the High Court dismissed that appeal for non prosecution. As a consequence of this order the High Court observed that the findings recorded by the trial court in favour of the defendants and adverse to the plaintiff would stand confirmed. In First Appeal No. 72 of 1959 filed by defendants 2 and 3 it was urged by the plaintiff that as the appeal was originally filed to challenge the finding of the trial court on the question of genuineness of the partition. defendants 2 and 3 were not entitled to include now grounds in the Memorandum of Appeal and that the Memorandum should not have been permitted to be amended. The High Court hold that in view of the Provisions of Order 41, Rule 2, Civil Procedure Code. it was oven to defendants 2 and 3. with leave of the court, to urge additional grounds in their appeal without amending the Memo randum of appeal and therefore the objection raised by the plaintiff as against the amendment was futile. The High Court further held that the appeal filed by defendants 2 and 3 was competent even though the suit, was wholly dismissed as against them. According to the High Court, defendants 2 and 3 were aggrieved by the adverse finding on the question of partition and further they were denied under the preliminary decree the right to pay the decretal amount and to redeem the mortgage. It was there fore open to them to file an appeal against that decree. On the merits of the appeal the High Court set aside the finding of the trial court and held that the partition was "real and genuine" and that it was not effected in order to defeat :lie creditors. Defendants 2 and 3 bad therefore become owners of the, equity of redemption and they could not be deprived of the right to redeem the mortgage. In the result, the High Court set aside the preliminary decree as also the final decree and with it the auction sale in favour of the plaintiff. The High Court passed a fresh preliminary decree under Order 34, Rule 4, Civil Procedure Code declaring that the plaintiff was entitled to recover Rs. 34, 386 and odd and directing the defendants to pay the entire decretal amount within six months of the date of decree. The plaintiff questions the correctness of that decree in this appeal. It is necessary first to understand the nature of the appeal filed by ,defendants 2 and 3 in the High Court and the relief they sought therein. That appeal was in terms filed only against the finding recorded by the trial court that the partition between defendant 1 and his sons was a sham and colourable transaction intended to defeat or delay the creditors. The Memorandum of Appeal as filed originally contained 886 seven grounds, each of which was directed against the finding given by the trial court on the question of partition. The Memorandum contained a note that as the subject matter in dispute was not capable of being estimated in terms of a money value, a fixed court fee of Rs. 20 was paid thereon. Only one prayer was originally made in the Memorandum of Appeal that the partition deed be declared as genuine. Counsel for defendants 2 and 3, furnished to the registry of the High Court a written explanation as required by Rule 171 of the High Court Rules that as defendants 2 and 3 were only challenging the finding recorded by the trial court on the question of partition and as they were merely seeking a declaration that the partition was genuine, the fixed court fee of Rs. 20 was properly paid. It is thus clear that the appeal filed by defendants 2 and 3 in the High Court was directed originally not against any part of the preliminary decree but against mere finding recorded by the trial court that the partition was not genuine. The main controversy before us centers round the question whether that appeal was maintainable on this question the position seems to us well established. There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring suit of a civil nature and unless the suit is barred by statute one may, at one 's peril,_bring a suit of one 's choice. It is no answer to a suit howsoever frivolous the claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute. Under section 96(1) of the Code of Civil Procedure, save where otherwise expressly provided by the Code or by any other law for the time being in force, an appeal lies from every decree passed by any court exercising original jurisdiction, to the court authorised to hear appeals from the decisions of such court. Section 100 provides for a second appeal to the High Court from an appellate decree passed by a court subordinate to the High Court. Section 104(1) provides for appeals against orders of the kind therein mentioned and ordains that save as otherwise expressly provided by the Code or by any law for the time being in force an appeal shall lie "from no other orders". Clause (i) of this section provides for an appeal against "any orders made under Rules from which an appeal is expressly allowed by rules". 'Order 43, Rule 1 of the Code, which by reason of clause (i) of section 104(1) forms a part of that section, provides for appeals against orders passed under various rules referred to in clauses (a) to (w) thereof, Finally, section 105(1) of the Code lays down that save as otherwise expressly provided, no appeal shall lie from any order made by a court in exercise of its original or appellate jurisdiction. These provisions show that under the Code of Civil Procedure, an appeal lies only as against a decree or as against an order passed under, rules from which an appeal is expressly allowed by Order 43, Rule 1. 887 No appeal can lie against a mere finding for the simple reason that the Code does not provide for any such appeal. It must follow that First Appeal No. 72 of 1959 filed by defendants 2 and 3 was not maintainable as it was directed against a mere finding recorded by the trial court. The High Court mixed up two distinct issues : one, whether it was competent to defendants 2 and 3, if they were aggrieved by the preliminary decree of file an appeal against that decree; and two, whether the appeal such as was filed by them was maintainable. If it be correct that defendants 2 and 3 could be said to have been aggrieved by the preliminary decree, it was certainly competent for them to challenge that decree in appeal. But they did not file an appeal against the preliminary decree and therefore the question whether they were aggrieved by that decree and could file an appeal therefrom was irrelevant. While deciding whether the appeal filed by defendants 2 and 3 was maintainable ' , the High Court digressed into the question of the competence of defendants 2 and 3 to file an appeal against the preliminary decree and taking the view that it was open to them to challenge that decree even though the suit was wholly dismissed against them, the High Court held that the appeal, which in fact Was directed against a find ing given by the trial court, was maintainable. It the High Court had appreciated that the two questions were distinct and separate, it would not have fallen into the error of deciding the latter question by considering the former. Adverting to the question which the High Court did consider, namely, whether defendants 2 and 3 could be said to be aggrieved by the preliminary decree, there is nothing in the terms of that decree which precluded those defendants from depositing the decretal amount to be able to redeem the mortgage. The trial court had passed the usual preliminary decree for sale in Form No. 5A, under Order 34, Rule 4, Civil Procedure Code. If the amount found due to the appellant under the decree was paid into the court within the stipulated or extended period, the appellant would have been obliged to deliver to the mortgagors all the documents in her possession or power relating to the mortgaged property and to deliver up to the defendants quiet and peaceable possession of the property free from the mortgage. The amount declared to be due to the appellant by the preliminary decree was not paid by the defendants, from which it would appear that they were not interested in paying the amount. It is significant that defendants 2 and 3 were served with the notice of final decree proceedings and they appeared therein. The Code is merciful to mortgagors and perhaps 'rightly, because the mortgagee ought to have no grievance if the loan advanced by him is repaid with permissible interest, costs and expenses. Under Order 21, Rule 89, it was open to defendants 2 and 3 as late as after the appellant purchased the property in the auction sale, to pay the amount due to her. These defendants had interest in the mortgaged property by virtue of a title acquired before the sale, that is, under the registered partition dated January 11, 1956. Under Order 21, Rule 89, where immovable property is sold in execution of a decree, any person owing the property or holding an interest there 888 in by virtue of a title acquired before the sale, can apply to have the sale set aside on his depositing in Court, for payment to the purchaser a sum equal to five per cent of the purchase money and for payment to the decree holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered. Nothing of the kind was done and even the last significant opportunity was not availed of by the defendants. Counsel for the appellant seems right that the defendants were content that only half the mortgaged property was directed to be sold and that it was only because of the later appreciation in prices of real property that defendants 2 and 3 awoke to the exigency of challenging the preliminary decree. That was much too late. So late indeed, that not having any plausible reason to assign for the inordinate delay caused in applying for an amendment of the appeal, they preferred not to file an application for condonation of delay at all. The appeal was filed on January 4, 1959 while, the application for amendment was made on August 2, 1966. Event though no explanation was offered for the long delay of over 7 1/2 years, the High Court allowed the amendment with a laconic order "Application for amendment allowed". Thus, the appeal filed by defendants 2 and 3 being directed against a mere finding given by the trial court was not maintainable; defendants 2 and 3 were not denied by the preliminary decree the right to pay the decretal amount; and the two defendants could even have applied under Order 21, Rule 89, for setting aside the sale in favour of the appellant but they failed to do so as, presumably, they were not interested in paying the amount. The High Court was therefore wholly in error in allowing the amendment of the Memorandum of Appeal, particularly when defendants 2 and 3 had neither explained the long delay nor sought its condonation. The preliminary decree had remained unchallenged since Sep tember 1958 and by lapse of time a valuable right had accrued in favour of the decree holder. The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding. But the exercise of such far reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the court. The appeal in terms was originally directed against the finding given by the trial court that the partition was sham and colourable. "Being aggrieved by the finding given in the Judgment and the Decree. . . it is humbly prayed that findings given by the learned Judge in Para 34 of his Judgment may kindly be set aside, and instead the partition deed dated 11 1 56 may kindly be declared as genuine" So ran the Memorandum of Appeal. Defendants 2 and 3 reiterated through their counsel by Ming a note to explain the payment of fixed court fees of Rs. 20 that they were "seeking the relief of declaration only" and therefore the court fee paid was proper and sufficient. Long years thereafter, the High Court allowed the Memorandum to be amended not a reason was cited to, explain the delay and not a reason was given to condone it. And it was not appreciated that in granting time to defendants 2 and 3 to 889 make up the deficit of the court fees 71 years after the appeal was filed, an amendment was being allowed which had its impact not only on the preliminary decree but on the final decree which was passed in the meanwhile, the auction sale which was held in pursuance of the final decree and the sale certificate which was granted to _the appellant who, with the leave of the court and in full satisfaction of her decree, had purchased a joint 1/3 share in the mortgaged property. With the striking down of the preliminary decree, these proceedings had to fall but the error really lay in allowing the amendment so as to permit, without good cause shown, a belated challenge to the preliminary decree. One other aspect of the question relating to the maintainability of the appeal yet remains to be examined. Counsel for the respondents. argues that the finding of the trial court on the issue of partition would have operated as res judicata against them and they were therefore entitled to appeal therefrom. In Harchandra Das vs Bholanath Day on which the learned counsel for the respondents relies in support of this submission, a suit for preemption was dismissed by the trial court on the ground of limitation. In an appeal filed by the plaintiff, the District Court reversed that finding but confirmed the decree dismissing the suit on the ground that the sale effected by defendants 4 and 5 in favour of defendants 1, 2 and 3 was not validly registered and there being no "sale", there can be no right of preemption. Defendants 1 to 3 preferred an appeal to the High Court against the finding recorded by the District Court that the sale effected in their favour by defendants 4 and 5 was not valid as it was not lawfully registered. On a preliminary objection raised by the plaintiffs to the maintainability of the appeal, the High Court of Calcutta, held that though under the Code of Civil Procedure there can be no appeal as against a mere finding, "it may be taken to be the view of courts in India generally, that a party to the suit adver sely affected by a finding contained in a judgment, on which a decree, is based, may appeal; and the test applied in some of the, cases for the purpose of determining whether a party has been aggrieved or not was whether the finding would be res judicata in other proceedings". The High Court, however, upheld the preliminary objection on the ground that the issue regarding validity of the sale which was decided against defendants 1 to 3 would not operate as res judicata in any subsequent proceeding and therefore the appeal which was solely directed against the finding on that issue was not maintainable. The position here is similar to that in the Calcutta case. The trial court decreed the mortgagee"s suit only as against defendant 1, the father, and directed the sale of his one half interest in the mortgaged property on the ground that part of the consideration for the mortgage was not supported by legal necessity, the remaining part of the consideration was tainted with immorality and therefore the mortgage was not binding on the interest of the sons, defendants 2 and 3. Whether the partition between the father and sons was sham or real had no (1) I.L.R. 890 impact on the judgment of the trial court and made no material difference to the decree passed by it. The finding recorded by the trial court that the partition was a colourable transaction was unnecessary for the decision of the suit because even if the court were to find that the partition was genuine, the mortgage would only have bound the interest, of the father as the debt was not of a character which, under the .Hindu law, would bind the interest of the sons. There is no substance .in the submission made on behalf of the sons that if the partition was held to be genuine, the property would have been wholly freed from .the mortgage encumbrance. The validity or the binding nature of an .alienation cannot depend on a partition effected after the alienation; or else, a sale or a mortgage effected by the Karta of a joint Hindu family ,can easily be avoided by effecting a partition amongst the members of .the joint family. As the matter relating to the partition was not directly and substantially in issue 'in the suit, the finding that the partition was sham cannot operate as res judicata. Therefore, the appeal filed by defendants 2 and 3 against that finding was not maintainable, even on ,,the assumption that the High Court of Calcutta is right in its vie", that though under the Code there could be no appeal against a finding, ,yet "On grounds of justice" an appeal may lie against a finding provided that it would operate as res judicata so as to preclude a party aggrieved by the finding from agitating the question covered by the .finding in any other proceeding. It is not necessary here to determine ,whether the view of the Calcutta High Court is correct. For these reasons we allow the appeal with costs, set aside the judgment of the High Court and restore that of the trial court. section C. Appeal allowed.

In 1953, defendant 1 executed on behalf of himself and his minor son, defendant 2, a deed of mortgage in favour of the plaintiff. Deft. 3 is also a son of deft. I who was born after the mortgage deed. In 1956, a regd. deed of partition was executed amongst the defendants under which the mortgaged property was allotted to the share of defts 2 & 3. Thereafter, the mortgagee filed a civil. suit to enforce the mortgage and the trial court passed a preliminary decree for sale of deft. 1 's interest in the mortgaged property. It held that part of the consideration for the mortgage was not supported by legal necessity and the balance of the debt incurred was tainted with immorality. Therefore, the debt was held not binding on the one half share of deft. 2 in the mortgaged property. As regards the partition, the trial court held that it was a colourable transaction effected to delay or defeat the creditors. Being aggrieved, pltf. filed an appeal (40/59) in the High Court. Deft. 1 & 2 against whom the suit was dismissed, also filed an appeal (72/59) against the finding of the trial court that the partition was a colourable transaction. During the pendency of these 2 appeals, the preliminary decree was made final by the trial court and in 1960, the plaintiff purchased with the permission of the court, a joint half share of the mortgaged property in full satisfaction of his decree. Thereafter, the auction sale was confirmed and the plaintiff was put in joint possession of the property. Thereafter, the appeals filed by the) plaintiff and defendants 2 and 3 came up for hearing and while the appeals were part hard, defts 2 & 3 applied on August 2, 1966 (nearly 7 1/2 years after filing the appeals), applied for amendment of their Memorandum of appeal in first appeal No. 72/59 and sought permission of the High Court to challenge the preliminary decree passed by the trial Court. The plaintiff opposed that amendment and applied that she did not desire to prosecute first appeal No. 40/59 filed by her. The High Court did not pass any orders either on the application for amendment or the plaintiff 's appeal, but adjourned the hearing of the appeals for 3 months to enable defendants to pay the amount due under the preliminary decree. Accordingly the defendants deposited the money towards the satisfaction of the preliminary decree. After about 2 years, another division bench of the High Court, allowed the amendments of the defendants Memo of Appeal in Appeal No. 72/59 and allowed time to the defendants to pay the deficit Court fee, which they paid. The High Court, then took the 2 appeals for hearing and dismissed appeal No. 40/59 for non prosecution and confirmed the findings of the trial court in favour of the defendants. As regards appeal No. 72/59, the High Court held that in view of Order 41, Rule 2 C.P.C., it was open to the defendants. with the leave of the court, to urge additional grounds without amending the Memo of Appeal and therefore, the objection raised. by the plaintiff that amendment should not be allowed, cannot be upheld. The High Court further held that the defendants ' appeal was competent and they had the right to redeem the mortgage. On the merits, the High Court held that the partition was real and genuine. In the result, the High Court set aside the preliminary decree as also the final decree and with it the auction 883 sale in favour of the plaintiff. The High Court passed a fresh preliminary decree under order 34, Rule 4 C.P.C., directing that that the plaintiff was to recover Rs. 34,386/ and 'odd and directed the defendants to pay the entire decretal amount within 6 months of the date of decree. The plaintiff questions the correctness of the decree before this Court. The appeal filed by defendants 2 & 3 Was against the finding recorded by the trial court that the partition between deft. 1 and his sons was a colourable transaction. Therefore, it was clear that the appeal filed by defts. 2 & 3 was directed originally not against any part of the preliminary decree but against a mere finding recorded by the trial court that the partition was not genuine. Before this Court, the main question was whether that appeal was maintainable and secondly, whether it was proper for the High Court to allow the amendment of the Memo of appeal after 7 1/2 years without good cause shown and Without any application for condonation of delay. Allowing the appeal, HELD : (i) There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of at civil nature, but the right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. The various provisions in the C.P.C. show that under the Code, an appeal lies only as against a decree or as against an order passed under rates from which an appeal is expressly allowed by Order 43, Rule 1. No appeal can lie against a mere finding for the simple reason that the Codes does not provide for any such appeal. Therefore, the first appeal filed by. defendants 2 and 3 in the High Court was not maintainable as it was directed against a mere finding recorded by the trial court. [886 D H] (ii) The High Court should not have allowed the amendment of the Menlo of Appeal particularly when defendants 2 & 3 had neither explained the long delay nor sought its condonation. Defendants 2 & 3 were not denied by the preliminary decree the right to pay the decretal amount and the two defendants could even have applied under order 21, Rule 89 for setting aside the sale in favour of the appellant; but they failed to do so. The preliminary decree had remained unchallenged since September, 1958 and by lapse of time a valuable right had accrued in favour of the decree holder. Therefore, to allow the amendment after such a long time without a good cause was not a proper exercise of judicial discretion in the circumstances of the case. [888 D E]

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Appeals Nos. 1883 to 1886 of 1969. From the judgment & Order dated the 12th July, 1968 of the Mysore High Court in W.P. Nos. 949, 955, 956 and 958 of 1968. K. Srinivasan and Vineet Kumar, for the appellants. H. B. Datar (In C.A. No. 1883/69) and M. Veerappa, for the respondents. The Judgment of the Court was delivered by MATHEW, J. The appellant was an excise contractor. He secured the privilege of vending arrack in retail in certain taluks in the State of Karnataka for a period of 18 months beginning from 28 12 1967 and ending on 30 6 1969. He purchased arrack from the Government at a price of 17 paise per litre and the Government collected besides the sale price of arrack, excise duty, health cess and education cess. The Government also collected sales tax on the sale price of arrack, on excise duty, on health cess and on education cess for the period from 28 12 1967 to 31 1 1968 and made similar demands for the month of February, 1968 also. The appellant and other excise contractors filed writ petitions in the High Court of Karnataka challenging the validity of the levy and collection of excise duty, education cess, health cess and sales tax. The High Court accepted some of the contentions of the appellant, granted him reliefs on that basis but rejected the other prayers. The appellant has filed these appeals on the basis of certificates granted by the High Court against the order. The contentions raised by counsel for the appellant before this Court were : that no excise duty can be levied on a licensee in respect of the quantity of arrack purchased by him from Government depots, that the power to fix the rate of excise duty conferred under section 22 of the Mysore Excise Act of 1965 on the Government was bad for the 609 reason that it was an abdication by the state legislature of its essential legislative function and that no sales tax could be levied on the price for sale of arrack since section 19 of the Mysore Sales Tax Act, 1957 under which the tax was levied was beyond the legislative competence of the state legislature. Section 22 of the Mysore Excise Act, 1965 (hereinafter referred to as 'the Act ') provides for levy of excise duty at such rate or rates as the government may prescribe on excisable articles manufactured or produced in the State under any licence or permit granted under the Act. Section 23 of the Act deals with the method of levying excise duties. The first contention of the appelant was that sections 16, 22 and 23 of the Act read with Mysore Excise (Distillery and Warehouse) Rules, 1967 and with Mysore Excise (Excise Duties) Rules, 1968, enables levy of excise duty only when arrack is issued from a distillery or warehouse or other place of storage established or licensed under the Act and since the government depot from which he purchased arrack does not come under the above category, no excise duty can be levied. The High Court found that though sections 22 and 23 of the Act and Rule 2 of the Mysore Excise (Excise Duties) Rules, 1968, do not expressly state that excise duty levied at the stage of issue of liquor from the government depot should be collected from the issuer or from the person to whom it is issued, it is obvious that excise duty cannot be collected from the State Government which issues liquor from its depots and that the only person from whom it can be collected is the licensee, to whom the State Government issues liquor from its depots. The material portion of section 16 of the Act provides that the Excise Commissioner may, with the previous sanction of the State Government, establish or license a warehouse wherein intoxicants may be deposited and kept without payment of duty and that without the sanction of the State Government no intoxicant shall be removed from any distillery, brewery, warehouse or other place of storage established or licensed under the Act unless the duty, if any imposed under the Act has been paid or a bond has been executed for the payment thereof. It is clear from the return filed before the High Court that the Government purchase arrack from the distillers and keeps it in the warehouse established or licensed under section 16 and that any removal of arrack after the purchase of the same will attract the liability to pay excise duty shall be levied on the excisable article issued from a ware Excise Commissioner who is competent to establish or license a warehouse wherein intoxicants may be deposited and kept under clause (e) of section 16 and therefore it is not a warehouse established or licensed by the State Government. We see no force in this contention. Section 23 provides that excise duty shall be levied on the excisable article issued from a ware 610 house also. We see no reason to think that a warehouse established or licensed under section 16(e) is not warehouse within the meaning of that expression in section 23. The second contention raised by the appellant was that section 22 of the Act provides for delegation of the power to fix the rates of excise duty to the Government by making rules and since no guidance has been furnished to the government by the Act for fixing the rate there was abdication of essential legislative function by the legislature and there fore the section is bad. The High Court after referring to the preamble of the Act said that it was the policy of the Act both to raise revenue and to discourage consumption of liquor by making the price of liquor sufficiently high, and that that 'would serve as a guidance to fix the rates of excise duty, that the rates fixed will be such as would keep the balance between these somewhat conflicting objects so as to serve the purpose of each. The Court further said that if the rate of excise duty is too low, not only will the revenue from excise duties suffer but also there will be increase in the consumption of liquor; but if the rate of excise duty on liquor is too high, it is Rely to encourage the production and consumption of illicit liquor and consequently the control and regulation of liquor as well as the revenue from excise duty may be adversely. The Court therefore held that the need to arrive at such rates of excise duty as will serve the twin objects of the policy underlying the Act operates as guidance for determination of the rates of excise duty. We are not certain whether the preamble of the Act gives any guidance for fixing the rate of excise duty. But that does not mean that the legislature here has no control over the delegate. The legislative control over delegated legislation may take many forms. In Corporation of Calcutta & Anr. vs Liberty Cinema(1), the validity of section 548(2) of the Calcutta Municipal Act, 1951, which empowered the Corporation to levy fees "at such rates as may from time to time be fixed by the Corporation" was challenged on the ground of excessive delegation as it provided no guidance for the fixation of the amount. The majority upheld the provision relying on the decision in Banarsi Das vs State of Madhya Pradesh (2 ) holding that the fixation of rates of tax not being an essential legislative function, could be validly delegated to a non legislative body. but observed that when it was left to such a body, the legislature must provide guidance for such fixation. The Court found the guidance in the monetary needs of the Corporation for carrying out the functions entrusted to it under the Act. In Municipal Board, Hapur vs Raghuvendra Kripal(2) the validity 1916, was involved. Ile Act had to fix the rate of tax and after having of the U.P. Municipalities Act, empowered the municipalities enumerated the kinds of taxes to be levied, prescribed an elaborate (1) [1965] 2,S.C.R.477. (2) ; (3) ; 611 procedure for such a levy and also provided for the sanction of the Government., Section 135 (3) of the Act raised a conclusive prerumption that the procedure prescribed had been gone through on a certain notification being issued by the Government in that regard. This provision, it was contended, was ultra vires because there was an abdication of essential legislative functions by the legislature with respect to the imposition of tax inasmuch as the State Government was given the power to condone the breaches of the Act and to set at naught the Act itself. This, it was contended, was an indirect exempting or dispensing power. Hidayatullah, J. speaking for the majority, said that regard being had to the democratic set up of the municipalities which need the proceeds of these taxes for their own administration, it is proper to leave to these municipalities the power to impose and collert these, taxes. He further said that apart from the fact that the Board was representative body of the local population on whom the tax was levied, there were other safeguards by way of checks and controls by Government which could veto the action of the Board in case it did not carry out the mandate of the legislature. In Devi Dass Gopal Krishnan vs State of Punjab(1) the question was whether section 5 of the East Punjab General Sales Tax Act, 1948, which empowered the State Government to fix sales, tax at such raters as it thought fit was bad. The Court struck down the section on the ground that the legislature did not lay down any policy or guidance to the executive in the matter of fixation of rates. Subba Rao, C.J., speaking for the Court, pointed out that the needs of the State and the purposes of the Act would not provide sufficient guidance for the fixation of rates of tax. He pointed out the danger inherent in theprocess of delegation : "An overburdened Legislature or one controlled by a powerful executive may unduly overstep the limits of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of awther agency either in whole or in part is beyond the permissible limits of delegation." In Municipal Corporation of Delhi vs Birla Cotton Spining and, Weaving Mills(1), the main question was about the constitutionality of delegation of taxing powers to municipal corporations. The Delhi Municipal Corporation Act (66 of 1957) by section 113(2) had empowered the Corporation to levy certain optional taxes. Under section 150, power was given to the Corporation to define the maximum rate of tax to be levied, the classes of persons and the description of articler, and property to be taxed, the systems of assessment to be adopted (1) [1967]3, S.C.R. 557. (2) ; . 612 and the exemptions, if any, to be granted. The majority of the court held the delegation to be valid. Wanchoo, C.J. observed that there were sufficient guidance, checks and safeguards in the Act which prevented excessive delegation. The learned Chief Justice observed that statements in certain cases to the effect that the power to fix ,rates of taxes is not an essential legislative function were too broad and that "the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation". According to the learned Chief Justice, the fact that delegation was made to an clected body responsible to the people including those who paid taxes provided a great check on the elected councillors imposing unreason.able rates of tax. He then said : "The guidance may take the, form of providing maximum rates of tax up to which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local area and then fixing the rates after such consultation. It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watchdog on the actions of the local body in this matter on behalf of the legislature. There may be other ways in which guidance may be provided." In Sita Ram Bisharnbhar Dayal vs State of U.P.(1) section 3 D(1) of the U.P. Sales Tax Act, 1948, bad provided for levying taxes at such rates as may be prescribed by the State Government not exceeding the maximum prescribed therein. Hegde, J., in speaking for the Court, observed : "However much one might deplore the 'New Despotism ' of the executive, the 'very complexity of the modern society and the demand it makes on its Government have set in motion forces which have made it absolutely necessary for the Legislatures to entrust more and more powers to The executive. Text book doctrines evolved in the 19th century have become out of date. " In this case, we think that section 71 of the Act which provides for the rule making power imposes the necessary check upon the wide power given to the government to fix the rate. Sub section (4) of that section provides : "Every rule made under this section shall be laid as soon as may be after it is made, before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions and if before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule (it ?) shall thereafter have effect only in such modified form or be of no effect, as the case may (1) ; 613 be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule." The appellant submitted that section 71(4) does not provide a guarantee for legislative control over delegated legislation. The argument was that the rules would come into force as soon as they are framed and that the power of the legislature to annul the rules subsequently cannot be regarded as sufficient control over delegated legislation. That laying of rules before the legislature is control over delegated legislation is implied in the speech of Lord Thankerton in the House of Lords in Minister of Health vs The King(1) where he said : "In this case, as in similar cases that have come before the courts, Parliament has delegated its legislative function to a Minister of the Crown, but in this case Parliament has retained no specific control over the exercise of the function by the Minister, such as a condition that the order should be 'aid before Parliament and might be annulled by a resolution of either House within a limited period. " In Institute of Patent Agents vs Joseph Lockwood (2) Lord Watson said : "The Legislature retained so far a check that it required that the regulations which they framed should be laid upon the table of both Houses; and of course these regulations could have been annulled by an unfavourable resolution upon a motion made in either House." In Bernard Schewartz 's "An Introduction to American Administrative Law" it is stated : "In Britain, Parliamentary control over delegated legislation is exercised through the various forms of 'laying ' prescribed in enabling Acts. Through them, the legislature is enabled at least in theory to exercise a continuing supervision over administrative rules and regulations. " As Dean Landis pointed out, the English techniques for laying the rules before the Houses have several virtues. "For one thing, they bring the legislative into close and constant contact with the administrative. The legislature may also retain its control over its delegate by exercising its power of repeal. This was the basis on which the Privy Council in Cobb & Co. vs Kropp(4) upheld the validity of delegation of the power to fix rates to the Commissioner of Transport in that case. The question there was whether the Queensland Legislature, had legislative authority under the impugned Acts to invest the Commissioner for Transport with power to impose and levy (1) (2) (3) see Landis, "The Administrative Process", 77 (1938). (4) C.). 614 licence and permit fees. It was not disputed before their Lordships that .fees imposed are to be regarded as constituting taxation. Accordingly, it was contended that the legislature had abdicated its exclusive power of levying taxation. The Privy Council held that Queensland Legislature was entitled to use any agent or machinery that it considered appropriate for carrying out the object and the purposes of the Acts and to use the Commissioner for Transport as its instrument to fix and recover the licence and permit fees, provided it preserved its own capacity intact and retained perfect control over him; that as it could at any time repeal the legislation and withdraw such authority and discretion as it had vested in him, it had not assigned, transferred or abrogated its sovereign power to levy taxes, nor had it renounced or abdicated its responsibilities in favour of a newly created legislative authority and that, accordingly, the two Acts were valid. Lord Morris of Borth y Gest said : "What they (the legislature) created by the, passing of the Transport Acts could not reasonably be described as a new legislative power or separate legislative body armed with general legislative authority (see R. vs Burah, Nor did the queensland Legislature 'create and endow with its own capacity a new legislative power not created by the Act to which it owes its own existence (see in re the Initiative and Referendum Act (1919) A.C. 945 at 945). " The point to be emphasized and this is rather crucial is the statement of their Lordships that the legislature preserved its capacity intact and retained perfect control over the Commissioner for T port inasmuch as it could at any time repeal the legislation and with draw the authority and discretion it had vested in him, and, therefore the legislature did not abdicate its functions. We, therefore, think that the power to fix the rate of excise duty conferred on the government by section 22 of the Act is valid. The dilution of parliamentary watch dogging of delegated legislation may be deplored but,, in the compulsions and complexities of modern life cannot be helped. The last contention raised by the appellant was that section 19 of the Karnataka Sales Tax Act, 1957 is invalid as it purports to levy sales tax upon the sale of arrack made by the Government to licensees. The appellant submitted that the definition of 'dealer in section 2 of the Act excludes the Government of Mysore and that by virtue of the provisions in section 5(3) of that Act, no tax could be levied on the sale of arrack by government to the appellant. We see no merit in this contention. Section 19 of the Act reads: "19. State Government entitled to collect tax as registered dealers. Notwithstanding anything contained in this Act the Government of Mysore shall, in respect of any sale of goods effected by them, be entitled to collect by way of tax any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under this Act. " 615 This section makes it clear that notwithstanding anything contained in that Act, the Government shall in respect of any sale of goods effected by it be entitled to collect by way of = any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under the Act. The section is clear that the Government could collect the tax on the sale made, by it as if it were a registered dealer, not withstanding anything contained in section 2 or section 5. The section itself creates a right in the State to recover and an obligation on the purchaser from the State to pay the amount. Any imposition of liability or obligation in respect of sale or purchase of goods will be covered by Entry 54 of List If of the Seventh Schedule of the Constitution. We do not think that section 19 is ultra vires the powers of the, legislature. We therefore dismiss the appeals but make no order as to costs. V.M.K. Appeals dismissed.

The appellant. an excise contractor secured the privilege of vending arrack in retail in certain taluks in the State of Karnataka for a period of 18 months beginning from 28 12 1967 and ending on 30 6 69. He purchased attack from the Government at a price of 17 paise per litre and the Government collected besides the sale price of arrack. excise duty. health cess and education cess. 'rho Government also collected sales tax on the sale price of attacks on excise duty. on health cess and on education cess for the period from 28 12 1967 to 31 1 1968 and made similar demands for the month of February. 1968 also. The appellant and other excise contractors filed writ petitions in the High Court at Karnataka challenging the validity of the levy and collection of excise duty, education cess. health cess and sales tax. The High Court accepted some of the contentions of the appellant, granted him reliefs on that basis but rejected the other prayers. The appellant has filed these appeals on the basis of certificates granted by the High Court against the order. It was contended for the appellant (i) that no excise duty can be levied on a licensee in respect of the quantity of arrack purchased by him from Government depots, (ii) that the. power to fix the rate of excise duty conferred under section 22 of the Mysore Excise Act of 1965 on the Government was bad for the reason that it was an abdication by the state legislature of its essential legislative function and (iii) that no sales tax could be levied on the price for sale of arrack since section 19 of the Mysore Sales Tax Act, 1957 under which the tax was levied was beyond the legislative competence of the state legislature. Rejecting the contentions and dismissing the appeals, HELD : (i) It is clear from the return filed before the High Court that the Government purchases arrack from the distillers and keeps it in the warehouses established or licensed under section 16 and that any removal of arrack after the purchase of the same will attract the liability to pay excise duty. Section 23 provides that excise duty shall be levied on the excisable article issued from a warehouse also. It cannot be said that a warehouse established or licensed under section 16(e) is not warehouse within the meaning of that expression in section 23. [609G 610A] (ii) The High Court held that the preamble of the Act would serve as a guidance to fix the rates of excise duty. It cannot be said with certainty that the preamble of the Act gives any guidance for fixing the rate of excise duty. But that does not mean that the legislature here has no control over the delegate. In this case, a. 71 of the Act which provides for the rule making power imposes the necessary check upon) the wide power given to the Government to fix the rate. The laying of rules before the legislature provides control over delegated legislation. Again the legislature may also retain its control over its delegate by exercising its power of repeal the power to fix the rate of excise duty conferred on the Government by section 22 is valid. [ 6140E F; 614 E F] 608 Corporation of Calcutta & Anr. vs Liberty Cinema, [1965] 2. S.C R 477, Batwrsi Das vs State of Madhya Pradesh, ; , Municipal Board, Hapur vs Raghuvendra Kripal , Devi Dass Gopal Krishan vs State of Punjab, [1967] 3 S.C.R 557, Municipal Corporation of Delhi vs Birla Cotton Spinding and Weaving Mills, [1968] 3 S.C.R. 251, Sita Ram Bisliambhar Dayal vs State of U.P. ; , Minister of Health vs The King, , Institute of Patent Agents vs Joseph Lockwood, [1894] A.C. 347 and Cobb & Co. vs Kropp, , referred to. (iii) Section 19 of the Karnataka Sales Tax Act. makes it clear that notwithstanding anything contained in this Act of 1957, the Government shall in respect of any sale of goods effected by it be entitled to collect by way of tax any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under the Act. The section is clear that the Government could collect the tax on the sale made by it as if it were a registered dealer, notwithstanding anything contained in section 2 or & 5. The section itself creates a right in the State to recover and an obligation on the purchaser from the State to pay the amount. Any imposition of liability or obligation in respect of sale or purchase of goods will be covered by Entry 54 of List II of the Seventh Schedule of the Constitution. Section 19 is therefore, not ultra vires the powers of the legislature. [615A C]

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n Nos. 1679, 1662 and 1681 of 1973. (Under Article 32 of the Constitution for issue of a writ in the nature of Habeas Corpus.) R. K. Jain, amicus curiae for the Petitioner. M. M. Kshatriya and G. section Chatterjee for the Respondent. The Judgment of the Court was delivered by SARKARIA J. This judgment will dispose of all the three petitions above mentioned under Article 32 of the Constitution of India. It will be convenient to first take up Writ Petition No. 1679 of 1973. The petitioner Shaik Hanif, aged 40 years, was arrested on February 23, 1973 in pursuance of a detention order, dated February 19, 1973, passed by the District Magistrate, West Dinajpur in West Bengal under sub section (1) read with sub section (2) of s.3 of the (for short, 'the Act '). On February 19, 1973, the District Magistrate reported about his detention to the State Govern ment which approved it on March 1, 1973. The detenu made a representation which was rejected by the State Government on April 5, 1973 and forwarded to the Advisory Board for consideration. The Board reported to the State Government on April 24. 1973 that there was sufficient cause for the detention. Thereupon the Government confirmed the order of detention under s.12(1) of the Act and directed that the detention of the petitioner would continue "till the expiration of 12 months from the date of his detention or until the expiry of Defence of India Act of 1971 whichever is later. " The grounds of detention as conveyed to the detenu under P. 8(1), read as under : 260 "You are being detained in pursuance of a detention order on the ground that you have been acting in a manner prejudicial to the maintenance of supplies and services essential to the community, as evidenced by the particulars given below : On 3 7 72 at dead of night you along with your associates kept concealed 20 bundles, of Telegraph copper wire weighing 2 qutls. 60 kgs. in your court yard under earth with a view to dispose of the same in opportune moment. The said Telegraph copper wire were recovered on 3 7 72 on the basis of the confession of your associates. The police seized those copper wire and arrested your associate but you evaded arrest. This activity of yours seriously affected one of the essential services to the community by disrupting Telegraph facilities to the public and thus you acted in a manner prejudicial to the maintenance of supplies and services essential to the community. You are hereby informed that you may make a representation to the State Government against the detention order your case shall be placed before the Advisory Board within thirty days from the ' date of your detention under the order. You are also informed that under Section 11 (Act 26 of 1971) the Advisory Board, shall if you desire to be heard, hear you in person. Sd/ K. L. Gupta 19 2 73. District Magistrate, West Dinajpur, Balurghat". In answer to the Rule Nisi issued by this Court, Shri Sukuniar Sen, Deputy Secretary, Home (Special) Department, Government of West Bengal filed the counter affidavit, explaining that the district Magistrate who passed the order of detention "is at present not available for affirming the affidavit as he has been transferred from the said District". In para 4 of the affidavit, it is stated : "It appears from the records that after receiving reliable information relating to the illegal anti social and prejudicial activities of the above named detenu petitioner relating to the maintenance of supplies and services essential to the community, the said District Magistrate of West Dinajpur passed order of detention against him under the provisions of the said Act." In para 7, it is averred "I further state that it appears from the record that the petitioner is a veteran copper wire stealer. It was found on 3 7 72 that the petitioner and his associates kept concealed about 20 bundles of telegraph cable wire underground in the court yard of his house with a view to dispose the same at opportune moment. The said removal of copper wire from 261 the telegraph lines resulted in disruption of telegraph service and he was detained under the said Act". In paragraph 9 of the affidavit it is inter alia stated that the "statements made in paragraphs 3, 4, 5, 6 and 7 are based on information derived from the records kept in the office of the State Government in its Home Department (Special Section), which I verily believe to be true." Mr. R. K. Jain, who assisted the Court as amicus curiae advanced these contentions in support of the petition : (1) After the issue of Rule Nisi by this Court, it was incumbent upon the Respondent State to satisfy the Court about the legality of the detention by producing the affidavit of the District Magistrate who had. passed the detention order. The counter affidavit of the Deputy Secretary who did not personally deal with the case at any stage, is no substitute for the affidavit of the District Magistrate on the basis of whose subjective, satisfaction, the detention has been effected. The omission to file the counter affidavit of the District Magistrate coupled with the other circumstances of the case, shows that the detention order was passed in an utterly casual way, without application of mind and it was therefore, illegal; (2) From the counter affidavit of the Deputy Secretary, it appears that there were "reliable information" and material (other than the solitary ground of detention communicated to the detenu) before the detaining authority on the basis of which it was satisfied that the petitioner was a "veteran copper wire stealer" and had been indulging in "illegal anti social activities prejudicial to the maintenance of supplies and services essential to the community". Since the, nondisclosure of that information or material lo the detenu is not sought to be justified under clause (6) of Article 22, on the ground of its being facts which the detaining authority considers to be against the public interest to disclose, it was incumbent upon the authority to communicate the detenu that information and material in full. Since this was not done, the detenu was unable to make an :effective representation. The detention order was thus violative of the mandate of clause (5) of Article 22, and liable to be struck down on that score; (3) The Act is violative of Articles 19 and 21 of the Constitution because its : (a) Section 3 makes no provision for an objective determination of the truth of the allegations that form the basis of action under that section; (b) Section 8 does not provide for consideration of the representation of the detenu by an impartial body in accordance with the principles of natural justice; (c) Section It enables the Advisory Board to base its report on the material received by the Board from the Officer passing the order of detention without the said report being disclosed to the detenu and without affording him an opportunity to controvert the contents of the said report; 262 (d) Sections 11 and 12 empower the Advisory Board and the State Government, as the. case may be,. to take, into consideration materials and information without giving the detenu an opportunity to make his submissions with regard to those materials or to adduce evidence to disprove the allegations levelled against him. (4) (a) The continuance of Emergency in as much as it suspends Fundamental Rights, indefinitely under an executive fiat is unconstitutional. What the Parliament cannot destroy in exercise of its amendatory powers under Article 368, a fortiori, the President cannot bury by embalming and encasing the same in a Proclamation of Emergency. Fundamental Rights guaranteed under Article 19 are essential features of the, Constitution and their indefinite suspension under the cloak of Emergency, amounts to their destruction; (b) In forming in opinion as to the necessity of proclaiming Emergency under Article 352 of the Constitution, the President has to act on certain objective facts open to judicial scrutiny. The war having ended more than two years ago, there is no justification for continuing the Proclamation of Emergency. We will take up contentions (1) and (2) together. As was pointed out by this Court in Natarajan Singh vs State of Madhya Pradesh,(1) where in a habeas corpus petition a Rule Nisi is issued, it is incumbent upon the State to satisfy the Court that the detention of the petitioner was legal and in conformity not only with the mandatory provisions of the Act, but is also in accord with the requirements implicit in clause (5) of Article 22 of the Constitution. Since the Court is precluded from testing the subjective satisfaction of the detaining authority by objective standards, it is all the more desirable that in response to the Rule Nisi the counter affidavit on behalf of the State should be sworn to by the District Magistrate or the authority on whose subjective satisfaction the detention order under s.3 was passed. If for sufficient reason shown to the satisfaction of the Court, the affidavit of the person who passed the order of detention under s.3 cannot be furnished, the counter affidavit should be sworn by some responsible officer who personally dealt with or processed the case in the Government Secretariat or submitted it to the Minister or other Officer duly authorised under the rules of business framed by the Governor under Article 166 of the Constitution to pass orders on behalf of the Government in such matters. In the instant case, the counter affidavit of Shri Sukumar Sen Deputy Secretary, Home, suffers from two infirmities. Firstly, the deponent does not swear that he had at any relevant time personally dealt with the case of the detenu. He has verified the correctness of the averments in his affidavit on the basis of facts gathered from tile official records. Secondly, the explanation given for not furnishing the affidavit of the District Magistrate who had passed the detention order, is that the Magistrate has been transferred from that District. The explanation is far from being satisfactory. (1) A. I. R. 263 In Ranjit Dam vs State of West Bengal,(1) the reason given for not ' making the counter affidavit by the Magistrate himself, who had passed the detention order, was that he had since then been appointed as Secretary of the State Electricity Board. It was held that the reason, given was not satisfactory. "Shri Sukumar Sen is incharge of a specially created cell in the Government Secretariat of West Bengal, which maintains the records of all persons detained under the Act. It is true that a similar reason given for not furnishing the affidavit of the Magistrate who passed the impugned order, was accepted by this Court in J. N. Roy vs State of West Bengal,(2) and instead, the counter affidavit of the Secretariat official specially entrusted with detention cases was deemed sufficient. But that was so because nothing turnedon it. Nevertheless, the failure to furnish the counter affidavit of theMagistrate who passed the order of detention, is an impropriety. In most cases, it may not be of much consequence but in a few cases, for instance, where mala fides or extraneous considerations are attributed: to the Magistrate or the detaining authority, it may, taken in conjunction with other circumstances, assume the shape of a serious infirmity, leading the Court to declare the detention illegal. In the present case, too, the mere omission to file the affidavit of the District Magistrate does not vitiate the detention orders. But it is a circumstance, among others, in the light of which contention (2) is to be appreciated. The Act restricts citizens ' personal liberty which is a fundamental ' right under the Constitution. It has therefore to be construed strictly, as far as possible, in favour of the citizen and in a manner that does not restrict that right to an extent greater than is necessary to effectuate that object. The provisions of the Act have, therefore, to be applied with watchful care and circumspection. It is the duty of the. court tosee that the efficacy of the limited yet crucial, safeguards provided in the law of preventive detention is not lost in mechanical routine, dull casualness and chill indifference on the part of the authorities entrusted with their application. Let us therefore see, whether there has been sucha careful and strict compliance with the legal procedure in the instant case. In the counter affidavit, the Deputy Secretary has inter alia, stated that the petitioner is a "veteran copper wire stealer" and there were "reliable informations" before the District Magistrate about his antisocial activities prejudicial to the maintenance of supplies and services essential to the community. "Veteran copper wire stealer" implies a long course of repetitive thievery of copper wire. No one is born a knave: it takes time for one to become so. It is manifest that but forthose "reliable informations" showing that the detenu was repeatedly and habitually stealing copper wire, the District Magistrate, night not have passed the detention order in question. Those "reliable information" were withheld. No privilege under clause (6) of Article 22 has been claimed in respect of them. Even the main ground viz. that the petitioner is a "veteran copper wire stealer" was not, as such,, (1) A. 1. R. (2) A.I.R. 1972 S.C. 2143. 264 communicated to the detenu. The ground intimated was that "you have been acting in a manner prejudicial to the Maintenance of Supplies and Services essential to the community". Only one solitary instance of the recovery of stolen copper wire from the petitioner 's house on 3 7 1972 was conveyed to the detenu. Learned Counsel for the State has been fair enough to collect and place before us what the Deputy Secretary in his counter affidavit called "reliable information" on the basis of which the District Magistrate ordered the detention. In this, under the caption "Criminal Biography", is mentioned inter alia, how the petitioner with his associates organised a gang to steal telegraph copper wire systematically. From what has been said above, it is clear as day light that all material particulars of the ground of detention which were necessary ,to enable the detenu to make an effective representation, were not communicated to him. The impugned order of detention is thus ,violative of Article 22(5) of the Constitution, and is liable to be quashed on that score alone. In view of the above finding, it is not necessary to decide the. .remaining contentions canvassed by Mr. Jain. Now we take up Writ Petition No. 1662 of 1973. In this case also, Shri Sukumar Sen, Deputy Secretary in his counter affidavit .averred that the detenu was a "veteran copper wire stealer" and that the District Magistrate, Burdwan, had passed the order of the petitioner 's detention on receipt of reliable information about the illegal, anti .social and prejudicial activities of the petitioner. Here also, all the 'material information ' showing or even alleging how the petitioner was a "veteran copper wire stealer" was not communicated to him. Only two instances of theft of electric copper wire which took place on November 6, 1971 and November 25, 1971 were intimated to him. Learned Counsel for the State has placed for our perusal a copy of History Sheet of the detenu on receiving which, the District Magistrate had passed the impugned order of detention. Among other facts, it is mentioned therein that on November 3, 1973, also, the petitioner alongwith his two associates had committed theft of, electric copper wire measuring 125 ft. from the electric poles near Hatgarui and a case under section 379, Penal Code was registered in Police Station Asansol on the same date, relating to this theft. It is further stated that "from his boyhood the petitioner started mixing up with anti social elements, wagon breakers and in course of time, he along with his associates, indulged in thefts of iron materials, copper wire and other forms of crime". All this matter including that concerning the theft dated November 3, 1973, was admittedly not communicated to the detenu. Its non to the detenu is not being justified as privileged under Article 22(6). Thus in this case also, all the material or adequate particulars relatable to the ground intimated, were not conveyed to the detenu. It is not possible to predicate how far the mind of the ,detaining authority was influenced in passing the order of detention by the uncommunicative material. By this omission, the petitioner 's 265. constitutional right of making an effective representation was seriously. jeopardised. In the result the detention of the petitioner (Gudma Majhi) must be held to be illegal. In Writ Petition No. 1681 of 1973, the ground of detention as communicated to the petitioner, Kamal Saha, ran as under : "That on 10 12 1972 at about 19 30 hrs. you and your associates being armed with daggers put all the passengers to fear of death of a IInd Class Compartment of 162 Dn. train at New Barrackpore R.S. and committed robbery in respect of one bundle of woollen Shawl containing 90 pieces valued at Rs. 9500/ from Golam Kadar Kashmiri of 96 Ripon Street Calcutta 16, you were subsequently arrested. 44 pieces of shawl valued a Rs. 4500/ were recovered later on. Your action caused panic, confusion and disturbed public order then and there, you have thus acted in a. manner prejudicial to the maintenance of public order". In Para 7 of counter affidavit, Shri Sukumar Sen, Deputy Secretary, stated "that it appears from the records that the petitioner is a veteran Railway Criminal and was indulging in committing robbery in running sub urban trains. It appears that on 10 12 1972 at about 19 30 hours the petitioner and his associates armed with daggers, committed robbery in a III class Railway Compartment. " The history sheet communicated by the Superintendent of Police to,, the detaining authority states that "he formed and organised a gang and started committing robbery in Sealdah Bongaon Railway Section. , This gang is so desperate that nor body of the locality resists them,. even if they commit robbery and other offences even in their very presence. They always move with deadly weapons such as pype guns, daggers, bombs etc. by which they intimidate the local people." Thereafter, instances of two robberies committed by him along with his associates, on January 30, 197Z and August 1, 1972, are, mentioned. The particulars of any past crime committed by him, which were necessary for showing how he was a veteran railway criminal, were not communicated to the detenu. In respect of the uncommunicative material, nor privilege under article 22(6) was claimed '. 266 In the absence of those material particulars, the detenu could not ,exercise his constitutional right of making an effective representation. In other words, the grounds communicated to the petitioner suffered .from vagueness. For the reasons aforesaid, all the three petitions are allowed and the petitioner in each of them is directed to be set at liberty forthwith. Nothing in this judgment, however shall preclude, the State Government /District Magistrate, if so advised, from passing fresh orders of the detention of the petitioners or any of them, after full and meticulous 'compliance with the procedure prescribed by law. S.C. Petitions allowed.

Since the matters are similar, the facts of W.P. No. 1679 of 1973 are as follows: The petitioner was arrested section 3, sub section (1) and (2) of the . The grounds of detention were that the petitioner, on 3 7 72, alongwith his associates kept concealed 20 bundles of Telegraph copper wire in his court yard under ground with a view to dispose the same at an opportune moment. The said telegraph wire were recovered on 3 7 72 on the basis of the confession made by his associates. The petitioner was, therefore, arrested because he was acting in a manner prejudicial to the maintenance of supplies and services essential to the community. The detention order was challenged on various grounds : (i) That the counter affidavit on behalf of the State of West Bengal was sworn by the Deputy Secretary and not by the District Magistrate, on the basis of whose subjective satisfaction the detention order was made and therefore, it was illegal. (ii)From the counter affidavit, it was clear that there were "reliable informations" and material other than the solitary ground of detention communicated to the detenu and so, the detenu was unable to make an. effective representation. Therefore, the detention order was violative of clause (5) of article "I of the Constitution of India etc. Allowing the petitions, HELD : (1) When a Rule Nisi is issued in a habeas corpus petition, it is incumbent upon the State to satisfy the court that the detention of the petitioner was legal and in conformity not only with the mandatory provisions of .he Act, but is also in accord with the requirements of Cl. (5) of article 22 of the Constitution. [262 EJ Niranjan Singh vs State of Madhya Pradesh A.I.R. 1972 S.C. 2215, referred to. (2)Since the Court is precluded from testing the subjective satisfaction of the detaining authority by objective standards, it is all the more desirable that in response to the Rule Nisi, the counter affidavit on behalf of the State should be sworn to by the District Magistrate or the authority on whose subjective satisfaction the detention order was made. If for sufficient reason shown to the satisfaction of the Court that the affidavit of the person who passed the detention order could not be furnished, the counter affidavit should be sworn by some responsible officer who personally dealt with the case in the Govt. Secretariat etc. [262 E F] In the present case, the deponent did not swear that he had at any relevant time personally dealt with the case of the detenu and secondly, the explanation given for not furnishing the affidavit of the District Magistrate due to his transfer from that District, was far from satisfactory. Ranjit Dam vs State of West Bengal A.I.R. 1972 S.C. 1753 and J. N. Roy vs State of West Bengal A.I.R. 1972 S.C. 2143 referred to. 259 (3)The failure to furnish the counter affidavit of the Magistrate who passedthe order of detention is an impropriety. However, in most cases, it mayDot be of much consequence; but in a few cases, for instance. where mala fides or extraneous considerations are attributed to the detaining authority, it may, taken in conjunction with other circumstances, assume the shape of a serious infirmity. [263 C] (4)In the counter affidavit, it was mentioned that the detenu was a "veteran copper wire stealer" and there were "reliable information" before the District Magistrate. Those reliable information were withheld. The words . veteran copper wire stealer" also implied a long course of repetitive, thievery of copper wire, it is manifest that but for those "reliable information" showing that the detenu was repeatedly and habitually stealing copper wire, the District Magistrate might not have passed the detention order in question. Further, from the 'Criminal Biography, supplied by the State, it was clear that all material particulars of the ground of detention necessary to enable the detenu to make an effective representation were not communicated to the detenu. Hence, the impugned order of detention is violative of article 22(5) of the Constitution and therefore, liable to be quashed. Similarly, the other two petitions were also allowed on the ground that material particulars were not communicated to the detenues and therefore, the detentions were illegal. [263 G 264 C]

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Appeal No. 1357 of 1970. From, the Judgment & Order dated the 10th February, 1969 of the Calcutta High Court in l. T.Ref. No. 164 of 1963. 630 D. Pal, T. A. Ramanchandran and D. N. Gupta, for the appellant B. Sen and section P. Nayar, for the respondent. The Judgment of the Court was delivered by KHANNA, J. This appeal on certificate is directed against the Judgment of the Calcutta High Court whereby that court answered the following question referred to it under section 66(1) of the Indian Income tax Act, 1922 against the assessee appellant and in favour of the revenue "Whether, on the facts and in the circumstances 'of the case, the sum of Rs. 7,14,398/ was liable to be included in the total income of the assessee under the Indian Income tax Act, 1922 ?" The matter relates to the assessment year 1953 54, the corresponding accounting period for which ended on June 30, 1952. The assessee is. a limited company with its head office at Calcutta. One ,of its activities was the purchase and sale of jute in the State of Orissa and for this purpose the assessee was a registered dealer under the Orissa Sales Tax Act, 1947. During. the accounting year the assessee sold jute to M/s. McLeed & Co. Ltd. for being used in two jute miffs situated in Andhra Pradesh under the management of the purchaser company. The assessee used to charge from the purchaser sales tax on the purchase of goods at the rate of one anna per rupee of the value of the goods. The sales tax was charged under a separate head in the bill. The words used in the bill in this respect were "Sales tax buyers ' account. . at the rate of /1/ per rupee to be paid to Orissa Government". The total amount shown as "Liabilities for expenses" in the balance sheet as on June 30, 1952 included a sum of Rs 16,54 455 on account of sales tax. The said sum was, however, not paid to the State Government as the sale by the assessee to the purchaser company were stated to be inter State sale. The assessee contended before the income tax officer that the sales tax realised from the purchaser did not form part of the sale price of the jute and as such did not constitute receipt in jute business. The contention was rejected by the income tax officer who held that the sales tax formed a part of, the consideration for the sales and, therefore, the accumulation on that account represented the assessee 's income. The income tax officer accordingly added the aforesaid sum of Rs. 16,54,455 to the assessee 's total income. On appeal by the assessee the Appellate Assistant Commissioner found that the actual amount received as sales tax during the relevant period amounted to only Rs. 7,41,962, out of which Rs. 27,564 had been paid to the Orissa Government. He, therefore, held that the amount which was to be added to the assessee 's total income was Rs. 7,14,398. The contention of the assessee that the sales tax realised was not part of the taxable receipt of the assessee was rejected. The assessee preferred second appeal before the Tribunal and submitted that the purchaser paid the sales tax and the price of goods to the assessee on the understanding that if ultimately no sales tax 631 was exigible on those sales, the amount collected as sales tax would be refunded to the purchaser. The amount collected as sales tax, according to the assessee company, could not belong to it but belonged to the purchaser and as such could not be treated as income of the assessee. The Tribunal held that where a dealer collects sales tax under the provisions of section 9B of the Orissa Sales Tax Act, the amount of the tax does not form part of the sale price and the dealer doe:; not acquire any beneficial interest in that amount. According to the Tribunal, if at the time of the collection the amount was collected as sales tax the subsequent failure of the assessee to deposit the amount in the Orissa Treasury could not transform the character of that amount. The Tribunal consequently came to the conclusion that the Appellate Assistant Commissioner had erred. in treating Rs. 7,14,398 as part of the total income of the assessee. On the application of the Commissioner of Income tax the Tribunal referred the question reproduced above to the High Court. The High Court held that if tax, which is validly exigible, is realised by a trader from his customer, and, is then utilised in his business, the tax so realised. cannot but form part of the sales price. According to the High Court, the tax would be included in the trading receipt of the dealer and would become part of his income as the money realised from the purchaser on account of tax was employed by the dealer for the purpose of making profit and was not separated from price simpliciter. The High Court in this context referred to the fact that the assessee did not earmark the amount realised as sales tax and did not put it in a different account or deposit it with the Government. It was further found that the assessee had treated the amount of sales tax as his own money. Reference was made in the High Court to subsection (3) of section 9B of the Orissa Sales Tax Act which reads as under : "(3) The amount realised by any person as tax, on sale of any goods, shall, notwithstanding anything contained in any other provision of this Act, be deposited by him in a Government treasury within such period as may be pres cribed, if the amount so realised exceeds the amount payable as tax in respect of that sale or if no tax is payable in respect thereof. " The High Court in the above context observed ; "There is no finding that the trader did not use that money for his trading purpose, and because of the fact that money was not deposited in terms of section 9B(3). In such circumstances simply because the trader had a duty to refund, we cannot say it would not constitute trading receipt. If a trader received money as trading receipt and employs that money as his own fund and is then called upon to refund the money even then it is trading receipt of the trader but when he pays back that money the amount refunded may be considered for deduction at the time when it is refunded." 632 In appeal before us, Dr. Pal on behalf of the assessee appellant has contended that the amount received as sales tax retained its character ,as such and could not be considered to be a part of trading receipt. As against the above, Mr. Sen on behalf of the revenue submits that the amount in question constituted trading receipt. According to Mr. Sen, the matter is concluded by a decision of this Court in the case of Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal.(1) The submission of Mr. Sen, in our opinion is well founded. In the case of Chowringhee Sales Bureau P. Ltd. the appellant company was a dealer in furniture and also acted as an auctioneer. In respect of sales effected by the appellant as auctioneer, it realised during the year in question in addition to the commission, Rs. 32,986 as sales tax. This amount was credited separately in its account books under the head "sales tax collection account". The appellant did not pay the amount of sales tax to the actual owner of the goods nor did it deposit the amount realised by it as sales tax in the State exchequer because it took the position that statutory provision creating that liability upon it was not valid. The appellant also did not refund the amount to persons from whom it had been collected. In the cash memos issued by the appellant to the purchasers in the auction sales the appellant was shown as the seller. This Court held that the sum of Rs. 32,986 realised as sales tax by the appellant company in its character as an auctioneer formed part of the trading or business receipts. The fact that the appellant credited the amount received as sales tax under the head "sales tax collection account" did not make any material difference. According to this Court, it is the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive. If a receipt is a trading receipt the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as trading receipt. The Court further observed that the appellant company would be entitled to claim deduction of the amount as and when it paid it to the State Government. The above decision, in our opinion, fully applies to this case and in view of it, there is no escape from the conclusion that the amount of Rs. 7,14,398 should be treated as trading receipt. Dr. Pal has tried to distinguish the decision of this Court in the case of Chowringhee Sales Bureau P. Ltd. on the ground that there was no provision in the Bengal Finance (Sales Tax) Act, 1941 under which the sales tax was realised by the appellant in that case corresponding to sub section (3) of section 9B of the Orissa Sales Tax Act, 1947. This circumstance, in our opinion, hardly constitutes a suffi cient ground for not applying the dictum laid down in the case of Chowringhee Sales Bureau P. Ltd. to the present case. The provisions of sub section (3) of section 9B of the Orissa Sales Tax Act have already been reproduced above. It is not necessary for the purpose of the present case to express an opinion on the point as to whether in view of the decisions of this Court in the cases of R. Abdul Qyader & Co. vs Sales Tax Officer, Second Circle, Hyderabad, (2) (1) (2) [1964] 15 S.T.C. 403. 633 Ashoka Marketing Ltd. vs State of Bihar Anr.(1) and State of U.P. & Anr. vs Annapurna Biscuit Manufacturing Co. (2) the State legislature was competent to enact that provision and whether the same was constitutionally valid. Assuming that the said provision is valid, that fact would not prevent the applicability of the dictum laid down in Chowringhee Sales Bureau P. Ltd. The aforesaid decision did take into account the possibility of the appellant in that case being com pelled to deposit the amount of sales tax in the State exchequer. It was accordingly observed that the appellant company would be entitled to claim deduction of the amount as and when it paid the amount to the State Government. Likewise, we would like to make it clear in the present case that if any when the appellant pays the sum of Rs. 7,14,398 or any part. thereof either to the State Government or to the purchaser, the appellant would be entitled to claim deduction of the sum so paid. Dr. Pal points out that the appellant may have to refund the amount realised by it as sales tax to the purchaser. So far as this aspect is concerned, we have already mentioned above that if and when the appellant refunds any part of the amount of sales tax to the, purchaser, the appellant would be entitled to claim deduction on that account. Lastly, reference has been made by Dr. Pal to the case of Morley (H. M. Inspector of Taxes) vs Messrs. Tattersall,(3) and it is submitted that once an amount was received as sales tax by the appellant it could never be treated as trading receipt. We find it difficult to, accede to the above submission because the case of Chowringhee Sales Bureau P. Ltd. is a direct authority, for; the proposition that an amount even though realised as sales tax can in a case like the present be, treated as trading receipt. It would be pertinent in this context to refer to the finding ' of the High Court that the assessee appellant in the present case did not separately earmark the amount realised as sales tax, or put it in a different account. The assessee also did not deposit the amount with the Government as and when realised nor did ' the assessee refund it to the purchaser from whom the amount had been realised. The High Court has further found that the assessee company mixed up the amount of sales tax with its own funds and treated the same as its own money. Nothing cogent has been brought to our notice to justify interference with the above findings. the case of Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors. (4) the Constitution Bench of this Court held that the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954 was not bad on the ground of legislative incompetence. In that context this Court observed that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entire consideration and the distinction between the two amounts tax and price loses all significance. This Court in that case relied upon the following observation of Lawrence J. in Paprika Ltd. & Anr. vs Board of Trade.(5) (1) [1970] 26 S.T.C. 254. (2) [1973] 32 S.T.C. 1. (3) (4) [1961] 12 STC 476 (5) 634 "Whenever a sale attracts purchase tax, that tax presumably affects the price which the seller who is liable to pay the tax demands but it does not cease to be the price which the buyer has to pay even if the price is expressed as X plus purchase tax. " Reliance was also placed upon the following observation of Goddard, L. J. in Love vs Norman Wright (Builders) Ltd.(1) "Where an article is taxed, whether by purchase tax, customs duty, or excise duty, the tax becomes part of the price which ordinarily the buyer will have to pay. The price of an ounce of tobacco is what it is because of the rate of tax, but on a sale there is only one consideration though made up of cost plus profit plus tax. So, if a seller offers goods for sale, it is for him to quote a price which includes the tax if be desires to pass it on to the buyer. If the buyer agrees to the price, it is not for him to consider 'how it is made up or whether the seller has included tax or not. " After referring to these observations section K. Das J. speaking for the Constitution Bench of this Court observed "We think that these observations are apposite even in the context of the provisions of the Acts we are considering now, and there is nothing in those provisions which would indicate that when the dealer collects any amount by way of tax, that cannot be part of the sale price. So far as the purchaser is concerned, he pays for the goods what the seller demands viz., X price even though it may includes tax. That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turnover. " We are, therefore, of the view that the submission which has been made by Dr. Pal that the sales tax should not be treated to be a part of the price realised by the assessee from the purchaser is not well founded. The case of Tattersall can be of no help to the appellant because the amount with which the court was concerned in that case was ,never received by the assessee as income or trading receipt. In any case, as already observed, the question with which we are concerned ' stands concluded by the case of Chowringhee Sales Bureau P. Ltd. As a result of the above, we dismiss the appeal with cost. P.B.R. Appeal dismissed.

The assessee collected sales tax from the purchaser but did not pay the collections to the State Government alleging that the sale was interstate sale. The Income Tax Officer treated the sales tax as income of the assessee. The assessee claimed that the sales tax realised from the purchaser did not form part of the sale price of the goods and as such did not constitute taxable receipt. The Income tax Officer held that the sales tax formed part of the consideration for the sales and, therefore, the accumulation on that account represented the assessee 's income. The Appellate Assistant Commissioner also rejected the contention of the assessee that the sales tax realised was not part of the taxable receipt of the assessee. The Appellate Tribunal held that where a dealer collected sales tax under the provisions of the Orissa Sales tax Act the amount of tax did not form part of the sale price and the dealer did not acquire any beneficial interest in that amount and that the failure of the assessee to deposit the amount with the Government could not transform the character of that amount. The High Court held that if a validly eligible tax was realised by a trader which had been utilised in his business the tax so realised could not form part of the sale price and that the tax would be included in the trading receipt of the dealer and would become part of his income as the money realised from the purchaser on account of tax was employed by the dealer ' for the purpose of making profit and was not separated from price simpliciter. On appeal to this Court it was contended that the amount received as sales tax retained its character as such and could not be considered to be a part of trading receipt. Dismissing the appeal,, HELD : It is 'the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive. If a receipt is a trading receipt the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as trading receipt. If and when the appellant paid the sum or any part thereof either to the State Government or to the purchaser it would be entitled to claim deduction of the sum so paid. In the instant case there is no escape from the conclusion that the amount should be treated as a trade receipt. [632B F; 633C] Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal followed. The purchaser pays what the seller demands, that is, the price, even though it may include tax. That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turn over. [634F] Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors. (1961) 12 S.T.C. 476 followed, Morley (H. M. Inspector of Taxes) vs Messrs. Tattersall REFERRED TO, Paprika Ltd. & Anr. vs Board of Trade and Love vs Narman Wright (Builders) Ltd. [1944] 1 All E.R. 618, held inapplicable.

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ivil Appeals Nos. 1266 & 1267 of 1969. From the Judgment and order dated the 29th July, 1968 of the Patna High Court in Civil Writ Jurisdiction Case No. 61 of 1967 H. K. Puri and K. K. Mohan, for the appellant 264 D. Goburdhan, for respondent Nos. 1 and 2 (In both the appear) Respondent No. 21 (In C.A. No. 1266/69) and for respondent No. 60 (in C.A. No. 1267/69). A. K. Nag, for respondent Nos. 3 19 (In C.A. No. 1266/69) and for respondent Nos, 4, S, 7 9, 11 32, 35 42, 44 52, 54 58 (In C.A. No. 1267/69). The Judgment of the Court was delivered by ALAGIRISWAMI, J. By two notifications dated 22 6 65 and 28 8 65 the Government of Bihar sent to the Labour Court, Chota Nagpur Division, Ranchi, applications in respect of 73 workers of the appellant for decision under section 33C(2) of the Industrial disputes Act for retrenchment compensation. The employer contended that it was a case of closure for reasons beyond its control and that therefore the workmen were entitled to compensation under the proviso to subsection (1) of section 25FFF of the Act and not to retrenchment compensation workers contended, however, that they were entitled to retrenchment compensation under s.25F. The Labour Court held that it was a case of retrenchment. Two writ petitions filed by the employer before the High Court of Patna failed and these appeals have been filed in pursuance of a certificate of fitness granted by the High Court. The argument on behalf of the appellant is that where there is a dispute before the Labour Court considering an application under section 33C(2) as to whether the workmen had been retrenched or the factory had been closed for reasons beyond the control of the employer, it was not a matter which the Labour Court was competent to decide and that it was a matter which only an Industrial Tribunal considering a reference under section 10 is competent to decide. In particular Item 10 of the Third Schedule to the Act is relied upon to show that the matter relating to retrenchment and closure is one which only an Industrial Tribunal is competent to decide. Reliance is placed upon a decision of this Court in U.P. Elect. Co. vs R. K. Shukla(1) where it was held that the power of the Labour Court is to complete the compensation claimed to be payable to the workmen on the footing that there has been retrenchment of the workmen, that where retrenchment is conceded and the only matter in dispute is that by virtue of section 25FFF no liability to pay compensation has arisen the Labour Court will be competent to decide the question, that in such a case the question is one of computation and not of determination, of the conditions precedent to the accrual of liability, and that where the dispute is whether workmen have been retrenched and computation of the amount is subsidiary or incidental, the Labour Curt will have no authority to trespass upon the powers of the Tribunal with which it is statutorily invested. In the U.P. Electric Company case (supra) the facts were somewhat different. The Court in that case noticed at page 513 of the report that "The company had expressly raised a contention that they had not retrenched the workmen and that the workmen had 265 voluntarily abandoned the Company 's service by seeking employment with the Board even before the company closed its undertaking". This Court emphasised at page 5l7 of the report that If the liability arises from an award, settlement or under the provisions of Ch. V A or by virtue of a statute or a scheme made thereunder, mere denial by the employer may not be sufficient to negative the claim under section 33C(2) before the Labour Court". We, therefore, do not see how the decision in the U.P. Electric Company 's case (supra) can come to the aid of the appellant in this case. The said case is clearly distinguishable on the peculiar facts as noticed above. In Central Bank of India Ltd vs P. section Rajagopalan(1) this Court considered the scope of section 33C(2) elaborately and it would be necessary to quote at some length from that decision. In that case it was urged by the employer that section 33C(2) can be invoked by a workman who is entitled to receive from the employer the benefit there specified, but the right of the workman to receive the benefit has to be admitted and could not be a matter of dispute between the parties and that the only point which the labour Court can determine is one in relation to computation of the benefit ill terms of money. This Court observed: "We are not impressed by this argument. In our opinion on a fair and reasonable construction of sub section (2) it is clear that if a workman 's right to receive the benefit is disputed, that may have to be determined by the Labour Court. Before proceeding to compute the benefit in terms of money the Labour Court inevitably has to deal with the question as to whether the workman has a right to receive that benefit. If the said right is not disputed, nothing more needs to be done and the labour Court can proceed to compute the value of the benefit in terms of money; but if the said right is disputed the Labour Court must deal with that question and decide whether workman has the right to receive the benefit as alleged by him and it is only if the Labour Court answers this point in favour of the workman that the next question of making necessary computation can arise. It seems to us that the opening clause of sub section (2) docs not admit of the construction for which the appellant contends unless we add some words in that clause. The clause "Where any workman is entitled to receive from the employer any benefit" does not mean "where such workman is admittedly, or admitted to be. entitled to receive such benefit. " The appellant 's constructional would necessarily introduce the addition of the words "admittedly, or admitted to be" in that clause, and that clearly is not permissible. Besides, if seems to us that is the appellant 's construction is accepted it would necessarily mean that 266 it would be at the option of the employer to allow the workman to avail himself of the remedy provided by sub section (2), because he has merely to raise an objection on the ground that the right claimed by the workman is not admitted to oust the jurisdiction of the Labour Court to entertain the workman 's application. The claim under section 33C(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be preceded by an enquiry into the existence of the right and such an enquiry must be held to be incidental to the main determination which has been assigned to the Labour Court by sub s.(2). As Maxwell in Interpretation of Statutes, p. 350, has observed 'where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution; we must accordingly hold that section 33C(2) takes within its purview case of workmen who claimed that the benefit to which they are entitled should be computed in terms of money, even though the right to the benefit on which their claim is based is disputed by their employers. Incidentally, it may be relevant to add that it would be somewhat odd that under sub s (3), the Labour Court should have been authorised to delegate the work of computing the money value of the benefit to the Commissioner if the determination of the said question was the only task assigned to the Labour Court under sub section On the other hand, sub s.(3) becomes intelligible if it is held that what can be assigned to the Commissioner includes only a part of the assignment of the Labour of Court under sub section Further on this Court observed: "It is thus clear that claims made under s.33C(1), by itself can be only claims referable to the settlement, award, or the relevant provisions of Chapter VA. These words of limitations are not to be found in s.33C(2) and to that extent, the scope of section 33C(2) is undoubtedly wider than that of section 33C(1). It is unnecessary in the present appeals either to state exhaustively or even to indicate broadly what other categories of claims can fall under section 33C(2). There is no doubt that the three categories of claims mentioned in section 33C (1) fall under section 33C(2) and in that sense, section 33C(2) can itself be deemed to be a kind of execution proceeding, but it is possible that claims not based on settlements, awards or made under the provisions of Chapter VA, may also be competent under section 33C(2) and that may illustrate its wider scope." This Court then went on to discuss some of the claims which would not fall under s.33C(2), which is not very relevant for the purposes of this case. The present case stand on an even stronger footing. Even the employer does not dispute that the workmen are entitled to compensation. It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim. The claim also falls under Chapter VA. 267 In the decision in South Arcot, Elect. Co. vs N. K. Khan(1) where a right had been claimed by the various workmen in their applications under section 33C(2), it was held that it was a right which accured to them under s.25FF of the Act and was an existing right at the time when these applications were made, that the Labour Court clearly had jurisdiction to decide whether such a right did or did not exist when dealing with the application under that provision, and that the mere denial of that by the company could not take away its jurisdiction. We hold that in this case it was competent to the Labour Court to decide whether the case before it was a case of retrenchment compensation or the proviso to sub section (1) of section 25FFF was attracted on closure of the establishment. The question even according to the employer falls under section 25FFF and therefore in deciding that question the Labour Court has necessarily to decide whether the proviso has been satisfied. We do not consider that the reference to item No. 10 of the Third Schedule to the Act can decide the matter one way or the other. The item reads as follows: "10. Retrenchment of workmen and closure of establishment It does not say that all questions arising out of retrenchment of workmen and closure of establishments have to be decided by Industrial Tribunal. Logically if the contentions is to be accepted, even if the question of retrenchment is not disputed the Labour Court will not be competent to decide the question of compensation payable in a case of retrenchment because it raises a question of jurisdiction. This entry should therefore be held to refer to cases where the right to retrench workers or to close an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal. In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenched workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on the basis that the so called closure was to closure at all. In the present case the workmen do not ask for reinstatement. They accept the termination of their services and ask for compensation. The only dispute is about the compensation whether it is to be paid under s.25F or 25FFF. Item 10 of Third Schedule will not cover such a case. We therefore uphold the decision of the High Court and dismiss these appeals with costs. V.M.K. Appeals dismissed.

The Government of Bihar sent to the Labour Court, Chota Nagpur Division, Ranchi, application in respect of 73 workers of the appellant for decision under sec. 33C(2) of the for retrenchment compensation. The contention of the appellant was that it was a case of closer for reasons beyond its control and that, therefore, the workmen were entitled to compensation under the proviso to sub section (1) of sec. 25FFF of the Act and not to retrenchment compensation. The workers contended that they were entitled to retrenchment compensation under sec. 25F. The Labour Court held that it was a case of retrenchment. The writ petitions filed by the employer in the High Court has failed and these appeals have been preferred to this Court on the basis of the certificate of fitness granted by the High Court. Dismissing the appeals, ^ HELD : (i) It was competent to the Labour Court to decade whether the case before it was a case of retrenchment compensation or the proviso to sub sec. (1) of section 25FFF was attracted on closure of the establishment. Even the employer does not dispute that the workmen are entitled to compensation. It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim. The claim also falls under Chapter VA of the Act. [266H; 267B C] Central Bank of India Ltd. vs P. section Rajagopalan ; relied on. U.P. Electric Company vs R. K. Shukla [1970] 1 S.C.R. 507 and South Arcot Elect. Co. vs N. K. Khan [1969] 2 S.C.R. 902, referred to. (ii) Item No. 10 of the Third Schedule to the Act does not say that all questions arising out of retrenchment of workmen and closure of establishment have to be decided by Industrial Tribunal. This entry refers to cases where the right to retrench workers or to lose an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal. In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenchment workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on basis that the so called closure was no closure at all. In the present case the workmen do not ask for reinstatement. They accept the termination of the services and ask for compensation. The only dispute is about the compensation whether it is to be paid under section 25F or 25FFF. Item 10 of Third schedule will not cover such a case. [267D G]

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Civil Appeal Nos. 1988 1989 of 1970. From the Judgment and order dated the 29th day of October, 1968 of the Kerala High Court in W.P. No. 156 of 1967. V. A. Seiyed Muhamad and K. M. K. Nair, for the appellant (In C.A.No. 1988/70. K. M. K. Nair, for the appellant (In C.A. No. 1989/70) G. B. Pai, A. G. Meneses, for the respondent. The Judgment of the Court was delivered by KHANNA, J. This judgment would dispose of civil appeals No. 1989 and 1989 of 1970, Filed on certificate against the judgment of the Kerala High Court, whereby that court held that it was beyond the competence of the State Legislature to enact law contained in sub section (3) of section 22 of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963) (hereinafter referred to as the Act) in so far as it related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the. We may now set out the facts giving rise to one of the appeals. Both the learned counsel are agreed that the decision in that would also govern the other appeal. Under section 5 of the Act, tax is payable by a dealer on his tax able turnover. "Taxable turnover` ' is defined in section 2(xxv) of the Act as the turnover on which a dealer is liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed by the rules under the Act. It does not, however, include the turnover of purchase or sale in the course of inter State trade or commerce or in the course of export or import of goods. The Kerala General Sales Tax Rules have been framed be the State Government in exercise of the powers conferred by section 57 of the Act. According to clause (i) of rule 9 of the sail rules. in determining the taxable turnover the following amount shall be deducted from the total turnover of the dealer: "the excise duty, if any paid by the dealer to the Government of Kerala or the Central Government in respect of the goods sold by him". It may be stated that clause (i) was omitted subsequently but we are concerned with the period when that clause was an integral part of the rule. The respondent is an incorporated company engaged in the manufacture and sale of soaps, toilets and other goods. The respondent 's accounts disclosed that it had collected from the persons to whom it sold goods a sum of Rs. 30,591.71 as sales tax in excess of the tax which the respondent was liable to pay under the Act. The respondent, it would appear, paid Rs. 6,62,958 as excise duty and deducted the same from its total turnover for the purpose of determining the taxable turnover. When, however, the respondent company sold the 154 goods it collected sales tax from the purchasers on the invoice price without deducting there from the excise duty paid in respect of the said goods. This resulted in the respondent company realising Rs. 30,591.71 in excess of the sales tax payable in respect of the goods sold by it: The sales tax officer held that the respondent was liable to pay the aforesaid amount of Rs. 30,591.71 to the Government under section 22(3) of the Act. The respondent then filed writ petition in the Kerala High Court to challenge its liability to pay the aforesaid amount on the ground that the provisions of section 22 in so far as they imposed a liability on a dealer to pay over to the Government any amount collected by him as sales tax, even though that amount was not payable as tax, was unconstitutional. The learned single Judge dismissed the petition filed by the respondent. On appeal, however, the Division Bench held, as already mentioned earlier, that the impugned provision was beyond the legislative competence of the State Legislature. Sub section (3) of section 22 of the Act reads as under: "(3) If any dealer or person collects tax on transactions not liable to tax under this Act or in excess of the tax leviable to under this Act, such dealer or person shall, unless it is established to the satisfaction of the assessing authority that the tax so collected has been refunded to the person who had originally paid tax, pay over to the Government, in addition to the tax payable the amount so collected within such time and in such manner as may be prescribed. " The learned Judges of the High Court in holding the above provision. in so far as it related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act to he beyond the legislative competence of the State Legislature, referred to entry 54 of the State List in the Seventh Schedule to the Constitution upon which reliance had been placed on behalf of the State. It was held that the State Legislature was incompetent to enact the impugned provisions contained in sub section (3) of section 22 of the Act under the above entry. In appeal before us Dr. Seiyed Muhammad on behalf of the appellants has assailed the judgment of the Division Bench of the High Court. As against that, Mr. Pai on behalf of the respondent has canvassed for the correctness of the said judgment. After hearing the learned counsel, we are of the opinion that there is no merit in these two appeals. A State Legislature is competent to make a law under entry 54 of List II in Seventh Schedule to the Constitution in respect of "taxes on the sale or purchase of goods other than newspapers subject to the provisions of entry 92A of List I". Entry 92A of List I relates to taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce, and we are not concerned with this entry. 155 Entry 54 enpowers State Legislatures to make law, except i certain cases with which we are not concerned, in respect of taxes on the sale or purchase of goods. As long as the law relates to taxes on the sale or purchase of goods, it would be within the competence of the State Legislature to enact such a law. It would not, however, b permissible for the State Legislature to enact a law under entry 54 for recovery by the State of an amount which could not be recovered as sales tax or purchase tax in accordance with the law on the subject and which was wrongly realised by a dealer as sales tax or purchase tax. Such a law plainly would not be a law relating to tax on the sale or purchase of goods but would be one in respect of an amount wrongly realised by a dealer as sales tax or purchase tax. It looks perhaps odd that a dealer should recover in the course of business transactions certain sums of money as sales tax or purchase tax payable to the State and that he should subsequently decline to pay it to the State on the ground that the same amount is not exigible as sales tax or purchase tax. Whatever might be the propriety of such a course, the question with which we are concerned is whether the State Legislature is competent to enact a law under entry 54 for recovery by the State of an amount, which though not exigibie under the State law as sales tax or purchase tax was wrongly realised as such by a dealer. The answer to such a question has to be in the negative. The matter indeed is not res integra and is concluded by two decisions of this Court. A Constitution Bench of this Court examined in the case of R. Abdul Quader & Co. vs Sales Tax officer, Hyderabad(1) the validity of section l l (2) of the Hyderabad Sales Tax Act, 1950 which reads as under: "(2) Notwithstanding anything to the contrary contained in any order of an officer or tribunal or judgment, decree or order of a Court, every person who has collected or collects on or before 1st May, 1950, any amount by way of tax otherwise than in accordance with the provisions of this Act shall pay over to the Government within such time and in such manner as may be prescribed the amount so collected lay him, and in default of such payment the said amount shall be recovered from him as if it were arrears of land revenue. " The appellant in that case collected sales tax from the purchasers of betel leaves in connection with the sales made by it. The appellant however, did not pay the amount collected to the government. The Government directed the appellant to pay the amount to the Government. The appellant thereupon filed a writ petition in the High Court questioning the validity of section 11(2). The main contention of the appellant before the High Court was that section 11(2) which authorised the Government to recover a tax collected without the authority of law was beyond the competence of the State Legislature because a tax collected without the authority of law would not be a tax levied under the law and it would therefore not be open to the State to collect (1) ; 156 under the authority of a law enacted under entry 54 of List II of the Seventh Schedule to the Constitution any such amount. The High Court upheld the validity of section 11(2). On appeal to this Court it was observed by the Constitution Bench as under: "The first question therefore that falls for consideration is whether it was open to the State legislature under its powers under entry 54 of List II to make a provision to the effect that money collected by way of tax, even though it is not due as a tax under the Act, shall be made over to Government. Now it is clear that the sums so collected by way of tax arc not in fact tax exigible under the Act. So it cannot be said that the State legislature was directly legislating for the imposition of sales or purchase tax under entry 54 of List II when it made such a provision, for on the face of the provision. the amount, though collected by way of tax, was not exigible as tax under the law." An attempt was made on behalf of the State in that case to sustain the validity of section 11(2) of the Hyderabad Act on the ground that the Legislature had enacted that law as part of the incidental and ancillary power to make provision for the levy and collection of sales or purchase tax. This contention was repelled and it was observed that the ambit of ancillary or incidental power did not go to the extent of permitting the legislature to provide that though the amount collected may be wrongly by way of tax is not exigible under the law. as made under the relevant taxing entry, it shall still be paid over to Government, as if it were a tax. The question again arose in this Court before a Bench consisting of six Judges in the case of Ashoka Marketing Ltd. vs State of Bihar & Anr.(1). In that case in determining the appellant 's turnover for assessment to sales tax for the year 1956 57, the Superintendent of Sales Tax included an amount representing Railway freight in the appellant 's sales of cement. The appellate authority set aside the orders directing the inclusion of the Railway freight in the turnover. After the introduction of section 20 A of the Bihar Sales Tax Act the Assistant Commissioner issued a notice under section 20 A(3) of the Act requiring the appellant to show cause why an amount representing sales tax on the Railway freight which became refundable under the orders of assessment be not forfeited. The appellant 's contention that section 20 A was ultra vires the State Legislature was rejected by the Assistant Commissioner as well as by the High Court in a writ petition under article 226 of the Constitution. On appeal filed by the assessee this Court held that sub sections (3), (4) and (5) of section 20 A were ultra vires the State legislature. As a corollary thereto, sub sections (6) and (7) of that section were also held to be invalid. Subsection (3) of section 20 A of the Bihar Sales Tax Act read as under: "(3)(a) Notwithstanding anything to the contrary contained in any law or contract or any judgment, decree or order of (1) 157 any Tribunal, Court or authority, if the prescribed authority has reason to believe that any dealer has or had, at any time, whether before or after the commencement of this Act, collected any such amount, in a case in which or to an extent to which the said dealer was or is not liable to pay such amount, it shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a time and place to be specified therein neither to attend in person or through authorised representative to show cause why he should not deposit into the Government treasury the amount so collected by him. (b) On the day specified in the notice under clause (a) or as soon thereafter as may be, the prescribed authority may. after giving the dealer or his authorised representative a reason able opportunity of being heard and examining such accounts and other evidence as may be produced by or on behalf of the dealer and making such further enquiry as it may deem necessary, order that the dealer shall deposit forthwith into the Government treasury, the amount found to have been so collected by the dealer and not refunded prior to the receipt of the, notice aforesaid to the person from whom it had been collected. " In holding sub section (3) and other impugned provisions of section 20 A to be beyond the legislative competence of the State Legislature, this Court in the case of Ashoka Marketing Ltd. (supra) relied upon the decision of this Court in Abdul Qadar 's case (supra). Dr. Muhammad has, however, tried to distinguish the above two cases on the ground that the present case relates to an amount realised in excess of the tax leviable under the Act and not to an amount which was not payable at all as tax under the Act. This fact, in our opinion, would not prevent the applicability of the principle laid down in the cases of Abdul Qadar and Ashoka Marketing Ltd. (supra). Any amount realised by a dealer in excess of the tax leviable under the Act stands, for the purpose of determining the legislative competence under entry 54, on the same footing as an amount not due as tax under the Act. Dr. Muhammad 's argument involves inventing a category of a "deemed tax" which is not there in the Act. The provisions of the Act contain a definition of "tax". This necessarily means that every thing outside it collected by the dealer would be an exaction not authorised by the Act. "Tax", according to section 2(xxiv) of the Act, means the tax payable under the Act. The amount which was realised by the respondent in excess of what was due as tax cannot 158 be held to be "tax", because such excess amount was not tax payable under the Act. If the State Legislature cannot make a law under entry 54 of List II of the Seventh Schedule to the Constitution directing the payment to the State of any amount collected as tax on transactions not liable to tax under the Act, it would likewise be incompetent to make a law directing payment to the State of an amount realised be a dealer in excess of the tax payable under the Act. The amount realised in excess of the tax leviable under the Act would not stand for this purpose on a footing different from that of the amount realised as tax, even though the same could not be recovered as tax under the Act. We would, therefore, dismiss the two appeals with costs. One hearing fee. V.P.S. Appeals dismissed.

According to r. 9(1) of the Kerala General Sales tax Rules framed under. the Kerala General Sales tax Act, 1963, in determining the taxable turnover of a dealer the excise duty, if any, paid by the dealer to the Government of Kerala or to the Central Government in respect of the goods sold by him shall be deducted. Section ,22(3) of the Act provides that if any dealer or person collects tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act such dealer or person shall pay to the Government. in addition to the tax payable, the amount so collected unless it was refunded to the person from whom it was collected. The respondent deducted the sum paid by it as excise duty from its total turnover for the purpose of determining the taxable turnover. The respondent, however, when it sold the goods. had collected, sales tax from the purchasers on the invoice prices without deducting therefrom the excise duty paid in respect of the said goods. This resulted in the respondent realising a sum in excess of the sales tax payable in respect of the goods sold by it. The Sales tax officer held that the respondent was liable to pay that amount to the Government under section 22(3). The writ petition filed by the respondent was allowed by the High Court on the ground that section 22(3) was not covered by Entry 54 of the State List in the VII Schedule to the Constitution, and hence, beyond the competence of the Slate Legislature. Dismissing the appeal to this Court. ^ HELD: (1) Entry 54 empowers the State Legislatures to make laws, except in certain cases, in respect of taxes on the sale or purchase of goods. As long as the law relates to taxes on the sale or purchase of goods, it would be within their legislative competence. But, it would not be permissible for. the State legislature to enact a law under Entry 54 for recovery by the State of an amount which could not be recovered as sales tax or purchase tax in accordance with the law on the subject and which was wrongly realised by a dealer as sales tax or purchase tax. Such a l. would not be a law relating to tax of the sale or purchase of goods but would be one in respect of an amount wrongly realised by a dealer as sales tax or purchase tax. [1 55A C] (2) The ambit of ancillary or incidental power would not go to the extent of permitting the Legislature to provide that. though the amount collected, may be wrongly, be way of tax,, was not tax, it shall still be paid over to the Government as if it were a tax. [156D E] (3) The fact that the amount realised is in excess of the tax leviable and not as amount which was not at all payable as tax, would not make any difference. Any amount realised by a dealer in excess of the tax leviable, stands, for the purpose of determining the legislative competence under Entry 54, on the same footing as an amount not due as tax under the Act. Tax, according to section 2(xxiv) of the Act, means tax payable under the Act. This necessarily means that everything outside it, collected by the dealer. would be an exaction not authorised by the Act. The amount which was realised by the respondent in excess of what was due as tax cannot be held to be tax, because, such excess amount was not tax payable under the Act. If the State Legislature cannot make a law under Entry 54 directing payment to the State of any amount collected as tax on transactions not liable to lax under the Act, it would likewise be incompetent to make a law directing payment to the State of an amount realised by a dealer in excess of the tax payable under the Act. [157G 158C] 153 R. Abdul Quader & co. vs Sales Tax Officer , Hyderabad and Ashoka Marketing Ltd. vs State of Bihar & Anr. followed.

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Civil Appeals Nos. 76 to 80 of 1971 From the Judgment and orders dated the 17th October, 1968 of the Madhya Pradesh High Court in Misc. Petitions No. 277, 279 to 282 of 1966. G. C. Sharma, P. L. Juneja and section P. Nayar, for the appellant. S, Chowdhury, Leila Seth and U. K. Khaitan, for respondent. The Judgment of the Court was delivered by FAZAL ALI, J. These appeals are by Income tax officer, 'A ' Ward, Indore, against the judgment of the Madhya Pradesh High Court and involve a question of law regarding the interpretation of section 220 sub sections (2) and (3) of the Income tax Act, 1961. In order to understand the scope and ambit of the question involved, it may be necessary to mention a few facts leading to these appeals. The respondent firm carries on the business of manufacturing cloth. In 1947 the then Maharaja of Gwalior granted to the firm exemption from tax for a period of twelve years from the date when the firm started its factories. Under the Part States (Taxation Concessions) Order, 1950 the Commissioner of Income tax of the region concerned approved of the exemption only to the weaving division of the respondent for ten years, but deferred decision regarding the staple fibre division until the ' factory started functioning in 1954. The Commissioner was approached again for granting exemption but he refused to do so. The respondent thereafter moved the Hi h Court of Madhya Pradesh for cancelling the order of the 857 Commissioner refusing exemption. The writ petition before the High Court succeeded and the respondent 's right to exemption was upheld by the High Court. Thereafter the Revenue filed an appeal to this Court which was allowed and by its order dated April 28, 1964 reported in this Court reversed the decision of the High Court and maintained the order of the Commissioner refusing exemption. As a result of the cancellation of; the exemption, a huge amount of income tax became due from the respondent, and the provisional assessments made for the years 1959 60 to 1965 65 reached the aggregate amount of over Rs. 6.60 crores which was payable by the firm was actually demanded from the respondent. In fact the effect of the order of this Court was that the amount exempted became payable at once and was according demanded from the respondent but the respondent instead of paying the amount tried to negotiate with the Revenue for certain concessions. In this connection a series of correspondence followed between the respondent and the Income tax `Department including a letter which was written by the assessee on December 26, 1964 by which the assessee paid a sum of Rs. 3 crores and wanted the balance of Rs. 3.60 crores to be paid in instalments. The assessee further undertook to pay interest on the arrears at the rate ' of 5% per annum, even though under sub s (2) of section 220 of the Income tax Act, 1961 hereinafter referred to as 'the Act he was required` to pay interest at the rate of 4% only. In view of these favourable terms offered by the assessee, the Income tax officer acceded to its request by his letter `dated January 16, 1965. The assessee had agreed to pay the arrears in the following manner: Rs. 1,00,00,000 by March 15, 1966. Rs. 1,20,00,000 by March 15, 1967. Rs. 1,34,76,000 by March 15, 1968. Soon after the request of the assessee was granted by the Income tax officer, sub section (2) of section 220 of the Act was amended by the Finance Act, 1965 by which the rate of interest was increased from 4 to 6% per annum. In view of this amendment, the Income tax Officer by his letter dated January 10,1966 informed the assessee that on the unpaid balance of tax arrears the respondent would be liable to pay interest at the rate of 6% per annum with effect from April 1, 1965 instead of 5% as agreed to by the Income tax officer in his previous letter. The Income tax officer pointed out that this course was necessitated in view of the amendment made by the Finance Act, 1965. Consequently a notice of demand under section 156 of the Act was served on the respondent which resulted in his filing writ petitions before the High Court with the result mentioned above. The main point urged in the petitions before the High Court by the respondent was that the Income tax officer having acceded to the request of the assessee a settlement between the parties was arrived at to pay the balance of arrears at the rate of interest at 5% per annum and it was not open to the Income tax officer to vary that 858 rate to the prejudice of the assessee even in spite of a change in the rate of interest by the Finance Act 1965, because a vested right could not be taken away by a statute which in terms did not apply retrospectively. This plea appears to have found favour with the High Court, though not on the ground expressly taken by the respondent. The High Court found that in view of the notice of demand the liability of the assessee to pay the arrears arose only after the expiry of 35 days and this period had expired before the Finance Act, 1965 amending section 220(2) of the Act and therefore the Revenue had no jurisdiction to demand payment of the arrears at the rate of 6% interest. Thus it would appear that the High Court actually decided the case on a point which was not raised by the respondent in his petition but after making out a new case made out at the time of arguments and without giving any opportunity to the Revenue to rebut the same. The High Court has written a detailed judgment regarding the time as to when the liability of the assesse to where a notice of demand under section 156 of the Act is issued would arise. It is, however, not necessary for us to consider the reasons given by the High court in detail because in the view that we take we find that the basis on which the High Court has decided this case is wholly irrelevant and is not at all germane to the issue that was involved. It was not a case of a notice of demand under section 156 of the Act simpliciter, but the admitted position was that in view of the decision "f the Supreme court the respondent was in arrears of tax and had to pay heavy amounts of over Rs. 6.6 crores. The respondent voluntarily paid the amount of Rs. 3 crores and requested the Income tax officer to allow it to pay the balance in instalments and Persuaded the Income tax officer to accept the request even by agreeing to pay a higher rate of interest of 5% than the rate prescribed under section 22()(2) of the Act. The liability to pay the arrears was never disputed and the only dispute between the parties was as to rate of interest that was payable. Section 22n, sub sections ( '2) and (3) run thus: "(2) If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub section (1), the assessee shall be liable to pay simple interest at four per cent per annum from the day commencing after the end of the period mentioned in sub section (1). Provided that, where as a result of an order under section 154. Or section 155, or section 250, or section 254, or section 260 or section 262, or section 264. the amount on which inter st was payable under this section had been reduced. the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded. (3) Without prejudice to the provisions contained in sub section (2), on an application made by the assessee before 859 the expiry of the due date under sub section (1), the Income tax officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case. " The fact that the arrears were demanded from the assessee is not disputed as would appear from the statement made by the respondent in paragraph 2 of the writ petition filed before the High Court where it was averred thus: "Subsequently when assessments for the assessment years 1959 60 to 1964 65 were provisionally made, a huge amount aggregating to over Rupees six and a half crores became payable and was demanded from the petitioner. " In these circumstances, therefore, the conditions precedent to the application of subs. (2) of section 220 of the Act were undoubtedly fulfilled, in this case. It would be seen that before the assessee entered into correspondence with the Revenue, the rate of interest prescribed under sub section (2) of section 220 was only four per cent and yet the assessee offered to pay a higher rate namely 5% per annum is he was allowed to pay the arrears in instalments. This request of the assessee was accepted by the Income tax officer on January 16, 1965 when there was no amendment in the provisions contained in section 220(2) of the Act and the order passed by the Income tax officer must be construed as one made under sub section (3) of section 220 of the Act. It was suggested before the High Court that the order of the Income tax officer amounted to an irrevocable agreement which could not be varied merely because the rate of interest contained in sub section (2) of section 220 of the Act was enhanced. Mr. section C. Choudhry learned counsel for the respondent, however, has fairly conceded that there was no question of an agreement or settlement because section 220(3) does not empower the Income tax officer to enter into agreement or settlement in order to bind the Revenue. We find ourselves in complete agreement with this view. Section 220(3) merely empowers the Income tax officer to extend the time for payment or allow payment by instalments on such conditions as he may impose. In the instant case the Income tax officer merely exercised his powers under sub section (3) of section 220 by imposing the condition that the assessee shall be allowed to pay the arrears by instalments if he paid interest at the rate of 5% per annum offered by him. What is important however, is that sub section (3) is not independent of sub section (2) but is inter connected with it. The words 'without prejudice to the provisions contained in sub section (2) ' clearly show that any order passed by the Income Tax officer under sub section (3) must neither be inconsistent with nor prejudicial to the provisions contained in sub section In other words, the Position is that although sub section (3) is an independent provision the power under this sub section has to be exercised subject to the terms and conditions mentioned in sub section (2) so far as they apply to the facts mentioned in sub section Thus if sub section (2) of section 220 provided that the rate of interest chargeable would be 860 four per cent per annum any order passed under sub section (3) could not vary that rate, and if it did, then the order to that extent would stand superseded. The argument o the assessee. is that sub sections (2) and (3) of section 220 were independent provisions which operated in fields of their own. We are, however, unable to accept this somewhat broad proposition of law. Sub sections (2) and (3) form part of the same section, namely section 220, and are therefore closely allied to each other. It is no doubt true that the two sub sections deal with separate issues but the non obstante clause of sub section (3) clearly restricts the order passed under sub section (3) to the conditions mentioned in sub section (2) of section 220 of the Act. Further more, it is the Finance Act which fixes the rate of interest payable under sub section (2) of section 220 and it is common knowledge that every year the Finance Act makes important amendments in the rates payable under the various provisions of the Income tax Act. In these circumstances, therefore, it is not within the competence of the Income tax officer to vary the rate of interest fixed by the Finance Act under sub section (2) of section 220 from time to time. We are fortified in this view by a decision of this Court in Esthuri Aswathaiah vs Commissioner of Income tax, Mysore(1) where this Court observed thus "The Income tax officer has no power to vary the rate on which the income of the previous year is to be assessed. The rate of tax is fixed by the Finance Act every year. By section 3, the tax is levied at that rate for an assessment year in respect of the income of the previous year. Once the length of the previous year is fixed and the income of the previous year is determined, that income must be charged at the rate specified in the Finance Act and at no other rate. " As we have already pointed out sub section (3) of section 220 of the Act does not empower the officer to enter into and indefeasible settlement with the assessee or to clothe the Income tax officer with any such power so as to vary the statutory inhibition contained in sub section Any order which is passed under sub section (3) would be subject to the rate of interest mentioned in sub section (2) and as soon as the rate mentioned in sub section (2) is varied or enhanced by the Legislature it would have to be read into sub section (2) from the date of the amendment and any order passed under sub section (3) would be subject to the rate so fixed. In fact if this is not the position, then the order passed under sub section (3) being prejudicial to sub section (2) becomes illegal and invalid and the Income tax officer exceeds the limits of his jurisdiction in passing such an order. In the instant case the Finance Act of 1965 became effective form April 1, 1965 and the Income tax officer in his letter dated (1) ,416. 861 January 10,, 1966, to the assessee had merely given effect to the legal provisions of the Finance Act by insisting that in view of the variation in the rate of interest under sub s (2) of section 220 the assessee would have to pay interest at the rate of 6% per annum only from April 1, 1965. There was absolutely no question of the Finance Act operating retrospectively, near there was any question of the Finance Act taking away a vested right which had accrued to the assessee because we have already held that the order of the Income tax officer under sub section (3) of section 220 does not amount to any final settlement or agreement. There is yet another view of the matter. In the present case the assessee himself wanted extension of time for being allowed to pay the arrears by instalments. The assessee could be permitted to seek this indulgence under sub section (3) of section 220 only within the four corners of the law and not outside the same. The moment the Finance Act, 1965, came into operation and the rate of interest in sub section (2) of section 220 was increased from 4% to 6% per annum any order passed by the Income tax officer would automatically operate in accordance with the Finance Act with effect from April 1 1965. This is what has happened in the present case. Thus it is manifest that the Income tax Officer could not have passed any order against the statutory provisions of sub section (2) of section 220 either with or without the consent of the assessee. Even the order of the Income tax officer dated January 16, 1965, accepting the offer of the assessee to pay interest at the rate of 5% per annum was legally invalid, because if the rate of interest fixed by the statute was 4% the parties could not be allowed to contract out of the statute. The only relief, therefore, which the assessee could get is that it was liable to pay interest at the rate of 4% and not 5% per annum for the period January to march 1965. But from April 1, 1965 it was bound to pay interest at the rate of 6% per annum as found by the income tax officer. Reliance was placed by Mr. G. C. Sharma appearing for me Revenue on a decision of the Orissa High Court in Biswanath Ghosh vs Income tax Officer, Ward and Another(1) where a Division Bench of that Court observed as follows: "As we find, the Income tax officer has charged interest at 6 per cent until the provision was amended to enhance the rate of interest at 9 per cent. In fact in the counter affidavit given by the Income tax officer in O.J.C. No. 195 of 1972 that position has been clarified. Mr. Pasayat for the petitioner claims that the rate of interest must he only at 6 per cent in view of the fact that default in this case had occurred prior to the amendment. It is only here that he relies upon the decision of the Madhya Pradesh High Court in Gwalior Rayon Silk Manufacturing (Weaving) Co. vs Income tax Officer (1) , 374. 862 That was a case in respect of penalty under section 220(2) of the Act and the court took the view that the rate of interest as provided on the date when default occurred would apply to the facts of the case. We do not agree with the view expressed in the said decision. It is true that central Act 27 of 1967 has no retrospective effect, but in respect of continuing default after the amendment, in our view, the rate of interest as provided thereunder would apply." The Orissa High court expressly dissented from the view taken by the Madhya Pradesh High Court in the present judgment under appeal and we find ourselves in complete agreement with the view taken by the orissa High court. We have already pointed out, the Madhya Pradesh High Court did not at all go into the question which really arose in this case with respect to the payment of interest at the rate of 6 per cent in accordance with the Finance Act, 1965 . For these reasons, therefore, the appeals are allowed and the order of the High Court is set aside with slight modification, namely In that the assessee shall pay interest on the entire amount of arrears the rate of 4 per cent per annum only during the period January to March 1965. So far as rest of the period is concerned, the order of the Income tax officer directing the assessee to pay interest at the rate of 6 per cent per annum is restored. In view of the peculiar circumstances of the case, however, we leave the parties to bear their own costs throughout. P.B.R. Appeals allowed.

Sub section (2) of 9. 220 of the Income tax Act. 1961 makes an assessee liable to pay simple interest at 4% p.a. if the amount specified in any notice of demand under section 156 was not paid within the period limited under sub section Sub section (3) states that without prejudice to the provisions contained in sub section (2) on an application made by the assessee before the expiry of the due date under sub section (1) the Income tax officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case. Out of a large sum of money which became payable by the respondent as income tax, half the amount was paid and in respect of the remaining half which was allowed to be paid in three instalments, the respondent had under taken to pay interest at the rate of 5% p.a. even though section 220(2) of the Income tax Act, 1961 prescribed 4% as the rate of interest payable on such arrears. The Income tax Officer accepted the term. By the Finance Act, 1965 the rate of interest payable under this section was raised from 4% to 6% p.a. On receipt of a notice from the Income tax officer, that on the unpaid balance of the tax arrears the company was liable to pay interest at 6% p.a., the respondent moved the high Court contending that it was not open to the Income tax officer to vary the rate from 5% to 6% even in spite of the change made by the Finance Act, 1965, in that a vested right could not be taken away by a statute which did not apply retrospectively. The High Court allowed the writ petition. On appeal to this Court it was contended by the respondent that sub sections (2) and (3) of section 220 were independent provisions which operated in fields of their own. Allowing the appeal to this Court, ^ HELD: (1) Sub sections (2) and (3) form part of the same section namely, section 220 and are therefore closely allied to each other. It is true that the two sub sections deal with separate issues but the non obstante clause of sub section (3) clearly restricts the order passed under sub section (3) to the conditions mentioned in sub section (2) of section 220 of the Act. [860 B] (2) It is the Finance Act which fixes the rate of interest payable under sub section (2) of section 220. It is not within the competence of the Income tax officer to vary the rate of interest fixed by the Finance Act under subs. (2) of section 220 from time to time. [860C D] Esthuri Aswathaiah vs Commissioner of Income fax Mysore and 416, followed. (3) Sub section (3) of section 220 does not empower the Income tax officer to enter into any indefeasible settlement with the assessee or to clothe the Income tax officer with any such ,power so as to vary the statutory inhibition contained 856 in sub section Any order which is passed under sub section (3) would be subject to the rate of interest mentioned in sub section (2) and as soon as the rate mentioned in sub section (2) is varied or enhanced by the legislature it would have to be read into sub section (2) from the date of the amendment and any order passed under sub section (3 ) would be subject to the rate so fixed. If this is not the position then the order passed under sub section (3) being prejudicial to sub section (2) becomes illegal and invalid and the Income tax officer exceeds the limits of his jurisdiction in passing such an order. [860F H] In the instant case there was no question of the Finance Act operating retrospectively nor was there any question of the Finance Act taking away a vested right which had accrued to the assessee because the order of the Income tax officer under sub section (3) of section 220 does not amount to any final settlement or agreement. The notice had merely given effect to the legal provisions of the Finance Act. [861 B] (4) In is manifest that the Income tax officer could not have passed any order against the statutory provisions of sub section ( 2) of section 220 either with or without the consent of ' the assessee. Even the order of the Income tax officer accepting the Offer. Of the assesse to pay interest at the rate of 5% p.a. was legally invalid because if the rate of interest fixed by the statute was 4% the parties could not be allowed to contract out of the statute. The only relief which the assessee could get was to pay interest at 4% p.a. prior to the Finance Act, 1965 and at 6% after 1st April, 1965. [861D E] Biswanath Ghosh vs Income tax officer, Ward, B. and Another , 374, approved.

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Civil Appeal No. 63 of 1971. Appeal by Special Leave from the Judgment and order dated the 19th February 1970 of the Andhra Pradesh High Court in R.C. No. 50 of 1966. section T. Desai and K. Rajendre Choudhary, for the Appellant G. C. Sharma and section P. Nayar, for the Respondent. The Judgment of the Court was delivered by GUPTA, J. This appeal by special leave is directed against an order of the High Court of Andhra Pradesh at Hyderabad answering in the negative and in favour of the revenue the following question referred to it under sec. 66(1) of the Indian Income Tax Act, 192 (hereinafter referred to as the Act). "Whether the Assessee is entitled to registration under Section 26A of the Income Tax Act, 1922 for the assessment year 1961 62. " The assessee is a firm. The instrument of partnership was executed on January S, 1959 but the application for registration under sec. 26A remained undisposed of until the assessment for the year 1961 62 was taken up. The instrument shows that three persons, Mandyala Narayana, Mandyala Venkatramaiah, Mandyala Srinivasulu and a minor, Mandyala Jaganmohan who was admitted to the benefits of the partnership, held the following shares: Narayana 31 per cent, Venkatramaiah 23 per cent, Srinivasulu 23 per cent, and minor Jaganmohan 23 per cent: Clause 2 of the instrument which sets out the 133 shares of the partners add that the profits of the above partnership A business shall be divided and enjoyed according to the shares specified above. " There is no clause in the instrument specifying the proportion in which the three adult partners were to share the losses, if any. Having set out all the terms of agreement, the instrument closes with clause 9 which states: "We (the partners) are bound to act according to the above mentioned stipulations and also according to the provisions of the Indian Partnership Act. " The High Court was of the view that unless the instrument of partnership specified the shares of the partners not only in the profits hut also in the losses, the firm would not be entitled to registration under sec. 26A, and negatived the contention raised on behalf of the assessee that clause 9 of the instrument indicated how losses were to be apportioned between the partners. The correctness of this decision is challenged by the appellant firm. It is not that a firm to be able to trade must be registered under sec. 26A. A firm, registered or unregistered, is an assessee under the Act and can do business as such. However, registration under sec. 26A "confers on the partners a benefit", as would appear from the provisions of sec. 23 (5) of the Act, "to which they would not have been entitled but for section 26A, and such a right being a creature of the statute, can be claimed only in accordance with the statute which confers it, and a person who seeks relief under section 26A must bring himself strictly within its terms before he can claim the benefit of it": Rao Bahadur Ravulu Subba Rao and others vs Commissioner of Income tax, Madras.(1) The question in this case is whether in the absence of a specific statement in the instrument as to the proportion in which the partners were to share the losses, the requirement of sec. 26A can be said to have been satisfied. Sec 26A reads: "26A. (1) Application may be made to the Income tax officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax. (2) The application shall be made by such person or persons, and at such times and shall contain such particulars shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income tax officer in such manner as may be prescribed. " The required particulars are specified in rules 2 and 3 of the Rules framed under the Act and the form of application including the Schedule annexed to rule 3. Paragraph 3 of the Form requires the partners to ` 'certify that the profits (or loss if any) " of the relevant period were or will (1) 134 be, as the case is, '`divided or credited, as shown in Section 8 of the Schedule". In Section 8 of the Schedule are to be recorded the "particulars of the apportionment of the income, profits or gains (or loss) of the business, profession or vocation in the previous year between the partners who in that previous year were entitled to share in such income, profits or gains (or loss)". Note (2) appended to this Schedule states that if any partner is entitled to share in profits but is not liable to bear a similar proportion of any losses, this fact should be indicated. It is clear therefore that the application for registration which has to be made in the prescribed form must include particulars of the apportionment of the loss, if any. It does not appear to have been considered in this case whether the application for registration made by the firm conforms to the prescribed rules; the dispute is confined to the question whether sec. 26A requires the instrument of partnership to specify the individual shares of the partners in the profits as well as the losses of the business. Section 23(5) of the Act provides different procedures in the assessment of a registered firm and a firm that is unregistered. Without going into details, in the case of a registered firm the share of each partner in the firm 's profits is added to his other income and he is assessed on his total income which includes his share of the profits and the tax payable by him is determined accordingly. There is a proviso which lays down that "if such share of any partner is a loss it shall be set off against his other income or carried forward and set off in accordance with the provisions of section 24". Thus, the loss, if any, affects the assessment proceeding and therefore the Income tax officer has to know what are the respective shares of the partners in the losses before allowing the firm to be registered. It is not disputed that the Income tax officer must be in a position to ascertain how losses are to be apportioned; the question is whether it is a condition for registration under sec. 26A that the instrument of partnership must specify the respective shares of the partners in the losses. According to the appellant sec. 26A has no such requirement. The appellant contends that sec. 26A does not require specification of the shares in losses in the instrument of partnership and it is sufficient if the proportion in which the losses are to be shared is otherwise ascertainable, and that, assuming the section did so require, clause 9 of the instrument satisfies that requirement. The contention that clause 9 specifies the respective shares of the partners in the losses is obviously untenable. This clause says that the partners are "bound to act according to the provisions of the Indian Partnership Act"; that they are in any case, and it is not clear which provision of the Partnership Act indicated the proportion in which the partners were to bear the losses in this case. Counsel for the appellant refers to sec. 13(b) of the Partnership Act in this connection. 12(b) reads: "Subject to contract between the partners (a) x x x x (b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm :" 135 We shall refer to sec. 13(b) in more detail when we consider the other contention of the appellant, but assuming that this provision has any relevance to the facts of this case, which it has not, bringing in by implication sec. 13(b) from a general statement that the partners are to act in accordance with the Partnership Act does not amount to specification of the partners ' shares in the losses, and the instrument of partnership, it must therefore be held, fails to comply with sec. 26A of the Act, were this a requirement of that section. The other contention of the appellant is that it is not essential for registration under sec. 26A of the Act that the shares of the partners in the losses must be specified in the partnership deed. In support of this contention reliance is placed mainly on two decisions, one of the Mysore High Court: R. Sannappa and Sons vs Commissioner of Income tax, Mysore (1) and the other of the Allahabad High Court: Hiralal Jagannath Prasad vs Commissioner of Income tax, U.P. (2) on behalf of the revenue it is claimed on the authority of a decision of the Gujarat High Court, Thacker & Co. vs Commissioner of Income tax, Gujarat (3), that the shares in the profits and losses have both to be specifically stated in the instrument of. partnership in order to comply with the conditions laid down in sec. 26A to obtain registration. The view taken by the Gujarat High Court appears to have been followed by the Kerala High Court in the following cases among others: C. T. Palu & Sons vs Commissioner of Income tax, Kerala (4) and Commissioner of Income tax, Kerala vs Ithappiri & George (5), There is thus a conflict of opinion in the High Courts on the point. It will not be necessary, however, for the purpose of this appeal to consider at any length the conflicting views of the different High Courts and decide which view is correct according to us because on the facts of the case the appeal is bound to fail on any view. It is not, and it cannot be, disputed that the Income tax officer before allowing the application for registration must be in a position to ascertain the shares of the partners in the losses even if sec. 26A did not require the shares in the losses to be specified in the instrument of partnership. Counsel for the appellant argues that clause 9 of the instrument refers to sec. 13(b) of the Partnership Act by implication and, accordingly, in the absence of any contrary indication, it must be held that the partners are liable to share the losses equally. The argument is not based on a correct appreciation of the scope of sec. 13(b) and the facts of the case. 13(b), it seems plain to us, makes the partners liable to contribute equally to the losses only when they are entitled to share equally in the profits. In this case the shares of the partners are not equal. In the absence of any indication to the contrary, where the partners have agreed to share the profits in certain proportions, the presumption is that the losses are also to be shared in like proportions. Jessel M. R. states the principle in In re Albion Life Assurance Society (G) as follows: (1) (2) (3)[1966] (4) (5) (6) 16 Ch. 83 (87). 10 L1276SCI/75 136 "It is said, as a general proposition of law, that in ordinary mercantile partnerships where there is a community of profits in a definite proportion, the fair inference is that losses are to be shared in the same proportion. " In the case before us the partners having unequal shares in the profits, there can be no presumption that the losses are to be equally shared between them Sec. 13(b) of the reproduces the provisions of the repealed sec. 253(2) of the . In K. Pitchiah Chettiar vs G.Subramaniam Chettiar(1), Ramesam J. explained the scope of sec. 253 (2) of the : "Section 253(2) of the lays down that all partners are entitled to share equally in the profits of the partnership business, and must contribute equally towards the losses sustained by the partnership. As I read the section, it lays down two presumptions with which the Court should start. The two presumption are clubbed in one sub section. The first is, if no specific contract is proved, the shares of the partners must be presumed to be equal. In the present case the plaintiff alleged unequal shares which were not denied by the defendants. So the parties being agreed on their pleadings as to the shares possessed by them in the profits, there is no scope for the application of this first presumption. The second presumption is that where the partners are to participate in the profits in certain shares they should also participate in the losses in similar shares. Now the section says that both should be in equal shares but implies that if unequal shares are admitted by the partners as to profits that applies equally to losses. In the absence of a special agreement, that this should be the presumption with which one should start is merely a matter of common sense and in India one has only to rely on section 114 of the Evidence Act for such a principle. " The law stated here in the context of sec. 253(2) of the Contract Act, 1872 applies equally to sec. 13(b) of the Partnership Act, 1932: the two provisions are in identical terms. On the facts of the present case, and having regard to the scope of sec. 13(b), the section has plainly no application. (1) I. L. R. (28). 137 The other rule that where the shares in the profits are unequal, the A losses must be shared in the same proportions as the profits if there is no agreement as to how the losses are to be apportioned, does not also apply to this case. In this case even if the adult partners bear the losses in proportion to their respective shares in the profits, the amount of loss in the minor 's share would still remain undistributed. Will the partners between them bear this loss equally, or to the extent of their own individual shares ? To this the instrument of partnership does not even suggest an answer. There is therefore no means of ascertaining in this case how the losses are to be apportioned. For the reasons stated above, the appeal fails and is dismissed with costs. P.H.P.Appeal dismissed.

The appellant assessee is a firm, having three Partners and one minor admitted to the benefits of the partnership. One of the partners has 31% share and the remaining two partners and the minor have 23% share each in the profit of the firm but the partnership deed is silent about their shares in the losses. Clauses 9 of the partnership deed provides that the partners are bound to act according to the provisions of the Indian Partnership Act. The firm applied for registration under section 26A of the Income Tax Act, 1922 which was refused by the Income Tax officer. The High Court in a reference under section 66(1) held that unless the instrument r of partnership specified the shares of the partners not only in the profits but also in the losses, the firm would not be entitled to registration under section 26A. The High Court negatived the contention of the assessee that clause 9 of the instrument indicated how losses were to be apportioned between the partners. On appeal by special leave it was contended by the appellant: (1) section 26A does not require that the instrument of partnership must specify the respective shares of the partners in the losses and it is sufficient if the proportion in which the losses are to be shared is otherwise ascertainable. (2) Assuming that section 26A does require mentioning the proportion of losses in the instrument of partnership, clause 9 of the instrument read with s 13(b) of the Partnership Act satisfies that requirement. Dismissing the appeal, ^ HELD: (1) A firm whether registered or unregistered is an assessee under the Act and can do business as such. However, registration under section 6A confers on the partners a benefit to which they would not have been entitled but for section 26A and such a right being a creature of a statute can be claimed only in accordance with the statute which confers it and the person who seeks relief under section 26A must bring himself strictly within its terms before he can claim the benefit of it. [133D E] Rao Bahadur Revulu Subba Rao and others vs Commissioner of Income Tax, Madras, , relied on. (2) In the case of a registered firm the share of each partner in the profit or loss is added to or set off against, as the case may be, to the other income of the partner. Thus, the loss, if any, affects the assessment proceedings and. therefore, Income Tax officer has to know what are the respective shares of the partners in the loss before allowing the firm to be registered. [134 C D] (3) There is a conflict of opinion amongst the High Courts whether it is essential for registration under section 26A that the shares of the partners must be specified in the partnership deed. It is not necessary to decide for the purpose of this appeal which of the conflicting views is correct because in the present case the appeal is bound to fail on any view. It is not disputed and cannot be disputed that the Income Tax Officer before allowing the application for 132 registration must be in a position to ascertain the shares of the partners in the losses. even if section 26A did not require this to be specified in the instrument of partnership. [135E F] (4) The contention that clause 9 brings in by implication section 13 (b) of the Partnership Act and thus specifies the shares of the partners in the losses is untenable. section 13(b) makes the partners liable to contribute equally to the losses only when they are entitled to share equally in the profits. ID this case the shares of the partners are not equal. The case of K. Pitchiah Chettiar. vs G. Subramaniam Chettiar I.L.R. and In re Albion Life Assurance Society, 16 Ch. 83, 87, applied. [135 G H] The law stated in these cases in the context of section 253(2) of the contract Act applies equally to section 13(b) of the Partnership Act which is in identical terms. In the absence of any indication to the Contrary, where the partners have agreed to share the profits in certain proportions, the presumption is that the losses are also to be shared in like proportions. The other rule that where the shares in the profits are unequal the losses must be shared in the same proportions as profits in the absence of an agreement as to how the losses are to be apportioned, also does not apply to this case since there is a minor admitted to the benefits of the partnership. Even if the adult partner bear the losses in proportion to their respective shares in the profits, the amount of loss in the minor 's share would still remain undistributed. Whether the partners between themselves will bear this loss equally or to the extent of their own individual shares, is not even suggested in the instrument of Partnership. TD There is, therefore, no means of ascertaining in this ease how the losses are to be apportioned. [136 H, 137A C]

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Civil Appeal No. 1827 of 1969. Appeal by Special Leave from the Judgment and order dated the 28th November, 1968 of the Orissa High Court in O.J.C. No. 152 of 1964. F.S. Nariman, A. G. Meneses, Sharad Manohar and J. B. Dada chanji, for the Appellant. S.T. Desai and M. N. Shroff ' and R. N. Sachthey for Respondents 1 and 5. Santosh Chatterjee and G. section Chatterjee for Respondent No. 4. The Judgment of the Court was delivered by ALAGIRISWAMI, J. The question of bonus for 16,000 workmen for the years 1958 59 and 1959 60 is still being fought out on preliminary points and this is the second time the matter has come to this Court. The earlier decision is reported in ; Gammon vs Industrial Tribunal, Bhubaneshwar, Orissa & Ors.(1). In August 1957 the Hindustan Steel Ltd., the 4th respondent in the appeal, hereinafter called the company, and the appellant, a partnership of a West German company and an Indian company, hereinafter called the contractor, entered into a contract for execution of the foundation and civil engineering work of the Hot and Cold Rolling Mills at Rourkela including the purification and other civil engineering work of the Hot and with the water supply to the Rolling Mills. The contract was a cost contract with a target sum plus fixed overheads and fee, that is, the company was to pay to the contractor all costs of construction and in addition pay fixed overhead or the head office general expenses of the (1) ; 670 contractor plus a fixed fee. The target sum for the work was Rs 66,294,000. The overheads were D.M. 2,800,000/ plus Rs 2,120,000/ and the fee of Rs. 6,200,000/ . The work was to be carried out as detailed in the drawings, bills of quantities, specifications and other written orders issued or to be issued by the company. All payments in respect of wages and salaries and connected payments made two persons engaged upon the work as may be approved by the company, comprising wages of all operatives as well as all other payments connected with wages were to be paid by the company. Any increase beyond the initial rates specified in Enclosure III to the contract was to be subject to the approval of the company and such approval was to be taken in respect of categories and not individuals. Emoluments of site supervisory staff as well as all other payments connected therewith were also to be paid by the company. Payments made to statutory schemes in connection with sickness or accident or provident fund or pension or other like schemes to the above categories, payments of overtime and additional remuneration for Sunday, holiday or night work etc., and payments for leave and traveling cost were all to be made by the company. It was also provided that the count of any other expenditure was to be admitted only on satisfactory proof being given by the contractor that such expenditure was necessary in connection with the preparation and execution of the work. The company was to open an imprest account of Rs. 30,00,000/ and the contractor was to draw on the account to cover his day to day requirements for the work. The imprest was to be increased or decreased from time to time depending on the amount required by the contractor to do the work. The contractor was to submit fortnightly cash account covering the expenditure incurred from the imprest account and the company was to recoup the amounts covered by such account within seven working days. Once in three months the contractor was to be paid a part of the fixed amount of overheads pro rata to the target cost of work done during the preceding three months. Once in six months he was to be paid three fourths of the fee proportionate to the target cost of the work done in the preceding. half year. Enclosure Ill also set out the rate of wages for unskilled labourers, khalasi, mason, fitter or carpenter. If the contractor completed the work prior to the 30th September, 1960 he was to be paid, exclusive of such sums as may be due to, or from, him a bonus equivalent to Rs. 2,00,000/ for every complete month by which the actual completion of the work precedes the 30th September, 1960. The terms of the contract have been set out at some length as they have a relevance to the question of bonus payable to the workers because the question now agitated before this Court is that the Industrial Tribunal should be asked to decide who is to Pay the bonus, if bonus is payable to the workmen, the contractor or the company. It would be noticed from the provisions of the contract set out above that all payments to labour were to be made by the company. The contract contemplates payment of traveling allowance, payment in respect of sickness, accident, provident fund, pension, overtime, additional remuneration for Sunday, holiday or right work etc. It has even mentioned the rate of wages and is thus fairly comprehensive. There is, of course, no mention about bonus. Now if the contractor 671 has to pay a higher rate of wages than that found in Enclosure III because of the conditions in the labour market naturally the contractor cannot be expected to pay it from out of his funds or the payments he was to receive in pursuance of the contract. This being a contract in which the company is to pay for labour as well as for materials any increase in the cost of those items cannot be borne by the contractor, who was to be paid only a fixed sum towards its remuneration. As the question of bonus is not mentioned in the contract the question arises as to who is to pay the bonus in case bonus is found payable to the workmen. We express no opinion on that point. But it appears to us that the company is adopting an ostrich like policy in trying to avoid being made a party to the reference before the Industrial Tribunal. if it should ultimately be held that bonus is payable and the company is liable to pay it, it should do its best even from this stage to fight the question of liability to pay bonus as well as the quantum. What is called a tripartite agreement seems to have been entered into between the workmen and the appellant in the presence of the Labour Commissioner on 12th June, 1960. That was natural as the appellant it was that employed labour. But that by itself does not decide the question who is to pay the bonus. Under that agreement the appellant agreed to the payment of bonus in principle subject to the condition that they get the bonus from the company. The quantum of bonus and exact date from which the bonus was payable was not, however, indicated. It was also stated that when bonus was received by the management it shall notify the fact to the workers and that the union may raise this as a point of dispute when it would deem it appropriate On 15th June, 1960 the labour union appears to have written a letter to the Labour Commissioner of orissa raising a dispute for adjudication regarding bonus The union mentioned that they had also written a number of letters to the appellant as well as the company but either of them had decied the issue. They, therefore, served a notice of strike. The Labour Commissioner wrote to the Government on 17 10 60 about the dispute and mentioned that the appellant had agreed to pay bonus if the company paid it. He also mentioned the fact that the appellant in reply to the letters from the workmen had stated that they had not come to any final decision in the matter. On the ground that unless something was done there will be a strike causing complete dislocation of work of the company he suggested that the following issue may be considered for reference to the Industrial Tribunal: "Whether the workers of Hochtief Gammon are entitled to any bonus ? If so, what should be the quantum ?" He proceeded to say that if this question was finally decided it would also serve as a guiding principle for other contractors as similar demands for payment of bonus from workers were being received. It would be noticed that though the appellant 's stand was that they would pay the bonus if it were given by the company the Labour Commissioner did not suggest that the question as to the party liable to pay the bonus, whether it was the appellant or the company, be referred for 672 adjudication. His anxiety was that the work of the company should not A be dislocated. He did not apply his mind to the question of the party liable to pay the bonus. Naturally the Government also did not. The Government therefore referred the following issue for adjudication: "Whether the workers of M/s. Hochtief Gammon. Civil Engineers and Contractors, Rourkela are entitled to any bonus and if so, what should be the quantum?" On this a notice seems to have been served on the company and curiously enough the company said that the appellant did not complete the work as set out in the Memorandum of Agreement and hence no bonus was due to the contractors and that therefore they were not a necessary party. This bonus, as the terms of the contract set out earlier would show. has nothing to do with the bonus payable to the workmen. The appellant in their written statement pointed out that under the terms of the contract the company had to bear all expenditure with reference to labour, all payments in respect of wages, salaries and other connected payments made to persons engaged in the works, that it was also responsible to make payments to statutory schemes in respect of all workmen and that they themselves were only paid a stated fee for professional services rendered to them and therefore no demand can be raised by the workmen who are engaged by the contractor against the contractor and such a demand is unsustainable in law. They then gave reasons why the workmen were not entitled to any bonus from them. It is not necessary to set out those reasons at length. We have already referred to the stand of the company. As would be apparent from the decision of this Court on the earlier occasion, which we shall set out later, the Tribunal could not have decided this question in view of the terms of reference made to it. Thereafter the appellant filed. an application under section 18(3) (b) of the Industrial Disputes Act praying that for a proper adjudication of the issue referred to the Tribunal it was necessary to bring on record the company as a party to the proceedings. They pointed out that any amount payable to the labourers engaged by the contractors for what soever reason was a contract expenditure within the meaning of the term contract and payable by the company as it was entirely responsible for payment of all remuneration to the workmen and all expenditure incurred by reason of any demand put forward by the workmen in connection with the works, was debitable to the contract and payable by the company. This application was rejected. Thus the stand of the appellant as to the party liable to pay the bonus was never in doubt. The appellant thereupon filed a petition before the High Court of orissa praying that the order of the Tribunal should be set aside. that petition also having been dismissed an appeal was filed before this Court by special leave. The relevant portion of the judgment of this Court is found at page 605, 1964(7) S.C.R.: "The next contention raised by Mr. Chatterjee is that M/s. Hindustan Steel Ltd. is a necessary party because it is the said concern which is the employer of the respondents and not the appellant. In other words, this contention is that 673 though in form the appellant engaged the workmen whom the respondent union represents, the appellant was acting as the agent of its principal and for adjudicating upon the industrial dispute referred to the Tribunal by the State of orissa, it is necessary that the principal, viz., M/s. Hindustan Steel Ltd. Ought to be added as a party. In dealing with this argument, it is necessary to bear in mind the fact that the appellant does not dispute the respondent Union 's case that the workmen were employed by the appellant. It would have been open to the State Government to ask the Tribunal to consider who was the employer of these workmen and in that case, the terms of reference might have been suitably framed. Where the appropriate Government desires that the question as to who the employer is should be determined, it generally makes a reference in wide enough terms and includes as parties to the reference different persons who are alleged to be the employers. Such a course has not been adopted in the present proceedings, and so, it would not possible to hold that the question as to who is the employer as between the appellant and M/s. Hindustan Steel Ltd. is a question incidental to the industrial dispute which has been referred under section 10(1)(d). This dispute is a substantial dispute between the appellant and M/s Hindustan Steel Ltd. and cannot be regarded as incidental in any sense, and so, we think that even this ground is not sufficient to justify the contention that M/s. Hindustan Steel Ltd. is a necessary party which can be added and summoned under the implied powers of the Tribunal under section 18(3)(b). " lt would be noticed that before this Court what was admitted was that the appellant had employed the workmen but the question as to who was the employer in relation to those workman was the main question at issue. That was why this Court pointed out that it would have been open to the State Government to ask the Tribunal to consider who was the employer of these workmen and in that case the terms of reference might have been suitably framed. As that had not been done this Court pointed out that it would not be possible to hold that the question as to who was the employer as between the appellant and the company was a question incidental to the industrial dispute which had been referred under section 10(1)(d), as it was a substantial dispute between the appellant and the company. Apparently taking the cue from the observations of this Court the appellant filed a writ petition out of which this appeal arises. But before doing so the appellant had filed an application before the State Government asking them to modify the earlier reference to the Industrial Tribunal by adding the company as a party to the reference and an additional clause as under: "If bonus is payable, who is the employer and who is responsible for payment of the bonus to the workmen?" They pointed out in that application that the company was entirely responsiblele for payment of wages and connected payments and all 674 other remuneration of any kind to the workmen, that for enabling the appellant to make payments to the labourers engaged for such work on behalf of the company an imprest of Rs. 3,000,000/ was given to them out of which the payments were made, that the appellant got only a fee, that if any bonus becomes payable it was the person who pays wages that has to pay the bonus. Thereafter they also asked for a personal hearing. To this the reply of the Government was as follows: "With reference to their petition dated 20 5 64 on the above subject, the undersigned is directed to say that after due. Consideration of the matter the Government do not find any materials on the basis of the petition to include Hindustan Steel Ltd., Rourkela as a party in the above case. " It would be noticed that in the petition the appellant wanted not only that the company should be made a party but also that another issue must be referred to the Tribunal for adjudication. They had given reasons as to why the company should be included as a party. They had in their petition included the paragraph which we have extracted above from this Court 's judgment. It is apparent from their reply that the Government had not applied their mind to the facts placed before them. There was at least an arguable case on the point as to who was liable to pay the bonus and in that case the company would have been a necessary and appropriate party. Even if the Government thought that the company was not a necessary party the question as to who was liable to pay the bonus was a very relevant question and that made the company a necessary or at least a proper party. The attitude of the appellant had throughout been that their contract was a cost contract, that the company had to pay labour and while they have employed the workmen the employer was really the company. That contention may or may not be upheld by the Tribunal. Ultimately if the Tribunal should hold that the appellant is the party responsible for payment of bonus the question as between the company on the one hand and appellant on the other may have to be decided by arbitration as provided in the contract between them or otherwise. It appears to us, therefore, that not only was this an appropriate question to be referred to the Industrial Tribunal for adjudication but even the company should be interested in getting itself impleaded as a party so as to put forward any contention which it may decide to put forward as regards the question whether bonus was payable and if so the quantum thereof, as also the question as to who would be liable to pay the bonus instead of adopting, as we have said earlier, an ostrich like policy. The power of the Courts in relation to the orders of the appropriate Government in the matter of referring industrial disputes for adjudication is no longer in doubt. In State of Bombay vs K.P. Krishnan & Ors. (1) it was held: "It is common ground that a writ of mandamus would lie against the Government if the order passed by it under s.10 (1) is for instance contrary to the provisions of s.10(1) (a) to (d) in the matter of selecting the appropriate authority; (1) 675 it is also common ground that in refusing to make a reference under section 12(S) if Government does not record and communicate to the parties concerned its reasons therefore a writ of mandamus would lie. Similarly it is not disputed that if a party can show that the refusal to refer a dispute has not bona fide or is based on a consideration of wholly irrelevant facts and circuit of mandamus would lie. The order passed by the Government under section 12(5) may be an administrative order and the reasons recorded by it may not be justiciable in the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny; in that sense it would be correct to say that the court hearing a petition for mandamus is not sitting in appeal over the decision of the Government; nevertheless if the court is satisfied that the reasons given by the Government for refusing to make a reference are extraneous and not germane then the court can Issue, and would be justified in issuing, a writ of mandamus even in respect of such an administrative order. " In Bombay Union of Journalists vs The State of Bombay(1) it was observed: "The breach of section 25F is no doubt a serious matter and normally the appropriate Government would refer a dispute of this kind for industrial adjudication; but the provision contained in section 10(1) read with section 12(5) clearly shows that even where a breach of section 25F is alleged, the appropriate Government may have to consider the expediency of making a reference and if after considering all the relevant facts the appropriate Government comes to the conclusion that it would he inexpedient to make the reference, it would be competent to it to refuse to make such a reference. If the appropriate Government refuses to make a reference for irrelevant considerations, or on extraneous grounds, or acts malafide, that, of course, would be another matter: in such a case a party would be entitled to move the High Court for a writ of mandamus. " The above are not the only powers of the Courts in relation to the orders of the Government or an officer of the Government who has been conferred any power under any statute, which apparently confer on them absolute discretionary powers, in this country as well as in England. In England in earlier days the Courts usually refused to interfere where the Government or the concerned officer passed what was called a non speaking order, that is, an order which on the face of it did not specify the reasons for the order. Where a speaking order was passed the Courts proceeded to consider whether the reasons given for the order or decision were relevant reasons or considerations. Where there was a non speaking order they used to say that it was like the face of the Sphinx in the sense that it was inscrutable and therefore hold that they could not consider the question of the validity of the order. Even in England the Courts have travelled very far since those days. (1) ; , 34. 676 They on longer find the face of The Sphinx inscrutable. Needless to say that Courts in India, which function under a written Constitution which confers fundamental rights on citizens, have exercised far greater; powers than those exercised by Courts in England, where there is no written Constitution and there are no fundamental rights. Therefor the decisions of Courts in England as regards powers of the Courts 'surveillance ', as Lord Pearce calls it, or the control which the Judiciary have over the Executive, as Lord Upjohn put it, indicate at least the minimum limit to which Courts in this country would be prepared to go in considering the validity of orders of the; Government or its officers. In that sense the decision of the House of Lords in Padfield vs Minister of Agriculture, Fisheries and Food(1) is a landmark in the history of the exercise by Courts of their power of surveillance. That decision is well worth a close study but we will resist the temptation to quote more than is absolutely necessary. That was a case where under the provisions of the Agricultural Marketing Act, 1958 the Minister had the power to appoint a committee to go into certain questions under. section 19 of that Act but when requested to appoint a committee he refused. In refusing to appoint the committee he had given elaborate reasons for his refusal. It was admitted that the question of referring the complaints to a committee was a matter within the, Minister 's discretion. It was also argued that he was not bound to give any reasons for refusing to refer a complaint to a committee and that if he gives no reason his refusal cannot be questioned and his giving reasons could not put him in a worse position. It was held by the House of Lords that an order directing the Minister to consider the complaint according to law should be made. It was also held that Parliament conferred a discretion on the Minister so that it could be used to promote the policy and objects of the Act which were to be determined by the construction of the Act and that was a matter of law for the court. It was further held that though there might be reasons which would justify the Minister in refusing to refer a complaint, his discretion was not unlimited and, if it appeared that the effect of his refusal to appoint a committee of investigation was to frustrate the policy of the Act, the court was entitled to interfere. The extracts given below of certain portions of the speeches of the learned Lords can be appreciated in that background. Lord Reid: "The respondent contends that his only duty is to consider a complaint fairly and that he is given an unfettered discretion with regard to every complaint either to refer it or not to refer it to the committee as he may think fit. The appellant contents that it is his duty to refer every genuine and substantial complaint, or alternatively that his discretion is not unfettered and that in this case he failed to exercise his discretion according to law because his refusal was caused or influenced by his having misdirected himself in law or by his having taken into account extraneous or irrelevant considerations. (1) ; 677 In my view, the appellants ' first contention goes too far. There are a number of reasons which would justify the Minister in refusing to refer a complaint. For example, he might consider it more suitable for arbitration, or he might consider that in an earlier case the committee of investigation had already rejected a substantially similar complaint, or he might think the complaint to be frivolous or vexatious. So he must have at least some measure of discretion. But is it unfettered? lt is implicit in the argument for the Minister that there are only two possible interpretations of this provision . either he must refer every complaint or he has an unfettered discretion to refuse to refer in any case. I do not think that is right. It was argued that the Minister is not bound to give any reasons for refusing to refer a complaint to the committee, that if he gives no reasons his decision cannot be questioned, and that it would be very unfortunate if giving reasons were to put him in a worse position. But I do not agree that a. decision cannot be questioned if no reasons are given." Lord Hadson: The reasons disclosed are not in my opinion good reasons for refusing to refer the complaint to the committee, that if he gives no reason his decision cannot be questioned, and that it would be very unfortunate if giving reasons were to put him in a worse position. But I do not agree that a decision cannot be questioned if no reason are given. Lord Hodson: "The reason disclosed are not, in my opinion, good reason for refusing to refer the complaint seeing that they leave out of account altogether the merits of the complaint itself. The complaint is, as the Lord Chief Justice pointed out, made by person affected by the scheme and is not one for the consumer committee as opposed to the committee of investigation and it was eligible for reference to the latter. It has never been suggested that the complaint was not a genuine one. It is no objection to the exercise of the discretion to refer that wide issues will be raised and the interests of other regions and the regional price structure as a whole would be affected. It is likely that the removal of a grievance will, in any event, have a wide effect and the Minister cannot lawfully say in advance that he will not refer the matter to the committee to ascertain the facts because, as he says in effect, although not in so many words, "l would not regard it as right to give effect to the report if it were favour able to the appellants." Lord Pearce: "I do not regard a Minister 's failure or refusal to give any reasons as a sufficient exclusion of the court 's survellance. It was for the Minister to use his discretion to promote Parliament 's intention. If the court had doubt as to whether the appellants ' complaint was frivolous or repetitive, or not genuine, or not substantial, or unsuitable for investigation or more apt for arbitration, it would not interfere. But nothing which has been said in this case leads one 678 to doubt that it is a complaint of some substance which shoukl A properly be investigated by the independent committee with a view to pronouncing on the weight of the complaint and the public interest involved. The fact that the complaint raises wide issues and affects other regions was not a good ground for denying it an investigation by the committee. lt is a matter which makes it very suitable for the committee of investigation, with its duty to report on the public interest, and its capacity to hear representatives of all the regions." Lord Upjohn: "The Minister in exercising his powers and duties, conferred upon him by statute? can only be controlled by a prerogative writ which will only issue if he acts unlawfully. Unlawful behaviour by the Minister may be stated with sufficient accuracy for the purposes of the present appeal (and here I adopt the clarification of Lord Parker C.J., ill the Divisional Court): (a) by an outright refusal to consider. the relevant matter, or (b) by misdirecting himself in point of law, or (c) by taking into account some wholly irrelevant or extraneous consideration, or (d) by wholly omitting to take into account a relevant consideration. There is ample authority for these propositions which were not challenged in argument. In practice they merge into one another and ultimately it becomes a question whether for one reason or another the Minister has acted unlawfully in the sense of misdirecting himself in law, that is, not merely in respect of some point of law but by failing to observe the other headings I have mentioned. The Minister 's main duty is not to consider its suitability for investigation; he is putting the cart before the horse. He might reach that conclusion after weighing all the facts but not until he has done so. This introduces the idea, much pressed upon your Lordships in argument, that he had an "unfettered" discretion in this matter; it was argued, means that, provided the Minister considered the complaint bona fide, that was an end of the matter. Here let it be said at once, he and his advisers have obviously given a bona fide and painstaking consideration to the com plaints addressed to him; the question is whether the consideration given was sufficient in law. My Lords, I believe that the introduction of the adjective "unfettered" and its reliance thereon as an answer to the appellants ' claim is one of the fundamental matters confounding the Minister 's attitude, bona fide though it be. even if the section did contain that adjective I doubt if it would make any difference in law to his powers. But the use of that adjective, even in an Act of Parliament, can do nothing to unfetter the control which the judiciary have over the executive, 679 namely that in exercising their powers the latter must act law fully and that is a matter to be determined by looking at the Act and its scope and object in conferring a discretion upon the Minister rather than by the use of adjectives." ' . a decision of the Minister stands on quite a different basis; he is a public officer charged by Parliament with the discharge of a public discretion affecting Her Majesty 's subjects; if he does not give any reason for his decision it may be, if circumstances warrant it, that a court may be at liberty to come to the conclusion that he had no good reason for reaching that conclusion and order a prerogative writ to issue accordingly. " That was a case where the Minister had given elaborate reasons and it was, therefore, possible for their Lordships of the House of Lords to consider the reasons given by the Minister in elaborate detail and show how he had misdirected himself. They also pointed out that by merely keeping silent the Minister cannot avoid the Court considering the whole question. The principles deducible from the decisions of this Court and the above decision of the House of Lords which, though not binding on us, appeals to us on principle may be set out as follows: The Executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter nor should They take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful. The courts have power to see that the Executive acts lawfully. It is no answer to the exercise of that power to say that the Executive acted bona fide nor that they have bestowed painstaking consideration. They cannot avoid scrutiny by courts by failing to give reasons. It they give reasons and they are not good reasons, the court can direct them to reconsider the matter in the light of relevant matters, though the propriety, adequacy or satisfactory character of those reasons may not be open to judicial scrutiny. Even if the Executive considers it inexpedient to exercise their powers they should state their reasons and there must be material to show that they have considered all the relevant facts. Judged by these tests the order of the State Government is unsustainable. Here the Government did not say that it considered it inexpedient to refer the question for adjudication or that the considerations put forward by the appellant before it were irrelevant. Neither the Labour Commissioner nor the Government seem to have noticed that this contract is not one of the usual kind wherein a contractor undertakes to do a certain work for a certain sum. In that case the question of profit and loss or as between the contractor and the party for whom he is executing the work any question as to who was to pay labour would not arise whether it is with regard to wages or bonus. The contractor will have to bear the full cost o material as well as the full liability for paying the workmen on any head whatsoever. In this contract the company had to pay for the material as well as labour. The appellant 680 got paid only for its professional services. There was in any case in A the contract no provision that the appellant was to incur any item of expenditure or make any payment in relation to the workman. In such a contract it would be unusual if it was to be considered that the appellant were expected to pay the bonus for the workman. This however need not be taken as our final view on this point. But it is a relevant Matter for consideration by the Government in deciding whether to refer the matter to the Tribunal or not. Furthermore, when the question of bonus in this case arose what is known as the Full Bench formula was holding the field in the matter of payment of bonus. If the bonus were to be paid by the appellant it could hardly be brought within that formula. As the company had certainly not begun production at that stage it would be difficult to calculate the bonus with reference to the business of the company either. The mistake that the Labour Commissioner committed was in not realising that the dispute concerned not Cr merely two parties but three because from the beginning the appellant had made it clear that they would pay the bonus if the necessary amount was paid to them by the company. We have set out the facts of this case at considerable length and considered the whole question. We think that the Government 's order in this case really amounts to an outright refusal to consider relevant matters and the Government also misdirected itself in point of law in wholly omitting to take into account the relevant considerations which as held by the House of Lords is unlawful behavior. It has failed to realise that in effect the contractor employed labour for the company wh() was the real paymaster. lt held failed to take into account the fact that the workmen wanted the bonus from either the company or the appellant. Naturally the workmen were not interested who paid them as long as they were paid. lt would bear repetition to say again that the. Original mistake arose out of the assumption by the Labour Commissioner that this was a case of an ordinary contract which would apply to other contractors also. He had apparently not seen the contract between the company and the appellant and that mistake was adopted by the State Government and they stuck to it inspite of the application made to them by the appellant after the disposal of the earlier appeal by this Court, giving all relevant facts. It does not appear from the communication of the Government to the appellant that they had applied their mind to any of the considerations set out in the appellant 's application. In the circumstances this appeal must be allowed and the Government of orissa must be directed to reconsider this matter and take a decision in the matter of reference in the light of the relevant facts. There will be no order as to costs. P.H.P. Appeal allowed.

In 1957, the Hindustan Steel Limited (Company) and the appellant (contractor) entered into a contract for execution of the foundation and civil engineering work of the hot and cold rolling mills at Rourkela. The Company was to pay to the Contractor all costs of construction and in addition pay fixed overhead charges for the head office and general office of the contractor plus a fixed fee. All payments in respect of wages and salaries and connected pay matter made to persons engaged upon the work as might be approved by the Company comprising wages of all operatives as well as all other payments connected with wages were to be paid by the Company. Emoluments of Site Supervisory staff as well as all other payments connected therewith were also to be paid by the Company. The payments made to statutory schemes, in connection with sickness, or accident, or Provident Fund, or Pension or other like schemes to the above categories, payments of overtime and additional remuneration for ' Sunday, holiday or night work etc., and payments for leave and traveling cost were all to be made by the Company. In 1960, the Labour Union of workmen employed by the Contractor raised a dispute for adjudication about the bonus payable to the workmen for doing the aforesaid job. 'The stand of ' the contractor was that they would pay the bonus if it were given by the Company. The Government referred the question whether the workers of the contractor were entitled to any bonus and if so what should be the quantum. The question whether the Company or the Contractor was liable to pay the bonus was not referred. A notice was served on the company and the Company contended that since the contractor did not complete the work according to the agreement, no bonus was due to the contractor and that the Company was not a necessary party to the reference. The contractor in the written statement contended that under the terms of the Contract the Company had to bear all costs with reference to labour, all payments in respect of wages, salaries and other connected payments made to persons engaged in the works and that the contractors were paid a stated fee for professional services rendered by them and that therefore, the demand against the contractor was not sustainable in law. the contractor made an application to the Tribunal that for the proper adjudication of the issues referred to the Tribunal it was necessary to bring on record the Company as a party to the proceedings. The said application was rejected by the Tribunal. The contractor thereupon filed a Writ Petition in the High Court of orissa against the said order of the Tribunal. The High court dismissed the said writ Petition. The contractor filed an appeal by Special Leave to this Court. This Court in that appeal held: "That it would have been open to the State Government to ask the Tribunal to consider as to who was the employer of the workmen and in that case the terms of reference might have been suitably framed. In the present case such a course has not been adopted. The dispute between the Company and the contractor would be a substantial dispute and cannot be regarded as incidental to the industrial dispute which was referred The Company was therefore a necessary party. " 668 The Contractor, thereafter, filed an application before the Slate Government asking, them to modify the earlier reference by adding whether the bonus was payable by the Company or the contractor and by adding the Company as a party to the reference. It was pointed out in that application that it was the Company which would be liable to pay the bonus if at all it was payable. The contractor also asked for a personal hearing. The Government disposed of that application by observing "Government do not find any materials on the basis of the petition to include Hindustan Steel Limited, Rourkela, as a party in the above case. ' The Government did not apply its mind to the other prayer, namely, adding one more issue to the reference. The Contractor filed a writ Petition against the said order of the State Government. The High Court dismissed the Writ Petition Against the judgment of the High Court the appellants appealed to Court. Allowing the appeal, ^ HELD: 1. It is apparent from the Government 's reply that the Government did not apply its mind to the facts placed before them. There was at least an arguable case on the point as to who was liable to pay the bonus and in that close the Company would have been a necessary and appropriate party. Even if the Government thought that the company was not a necessary party. the question as to who was liable to pay the bonus was a very relevant question and that made the Company a necessary or at least a proper party. The attitude of the contractor throughout had been that their contract was a cost contract; that the Company had to pay labour and the Company was the real employer. That contention may or. may not be upheld by the Tribunal. This was however, an appropriate question to be referred to the Tribunal [674 C F] 2. The power of the courts in relation to the orders or ' the appropriate Government in the matter of referring industrial disputes for adjudication is no longer in doubt. [674 G] State of Bombay vs K P Krishan & Ors. [1961] (1) [S.C.R. 227] and Bombay Union of Journalists vs The State of Bombay [1964(6) S.C.R. 22@ 24]. followed. The powers of the Court mentioned in the above two cases in relation to the orders of the Government under any statute are not the only powers of the courts. In England, in earlier days, the courts usually refused to interfere where the Government or the concerned officer passed what was called a nonspeaking order. Where a speaking order was passed the Courts proceeded to consider the reasons given to see whether the reasons given were relevant reasons or considerations. Where there was a non speaking order they used to saw it was like the face of the sphnix in the sense that it was inscrutable and. therefore, held that they could not consider the question of the validity of the order. Even in England, the courts have traveled very fast since those say. They no longer find the face of the sphinx incurable. Needless to say that the courts in India which function under a written constitution which confers fundamental rights on citizens exercise, far greater powers than those exercised by the courts in England where there is no written constitution and there are no fundamental rights. The decision of ' House of Lords in Padfield vs Minister of Agriculture. Fisheries and Food ; , followed. [675 F H, 676 A] 3. The Executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter. nor should they take into account wholly irrelevant or extraneous considerations 'they should not misdirect themselves on a point of law. only such a decision will be lawful. The Courts have power to see that the Executive acts lawfully. It is no answer to the exercise of that power to say that the Executive acted 669 bone fide nor that they have bestowed painstaking consideration . They cannot avoid scrutiny by courts by failing to give reason. If they give reasons and they are not good reasons, the court can direct them to reconsider the matter in the light of relevant matters though the propriety, adequacy or satisfactory character of these reasons may not be open to judicial scrutiny. Even if. the Executive considers it inexpedient to exercise their powers they should state their reasons and there must be material to show that they have considered all the relevant facts. [679 D F] 4. Judged by this test the order of the State Government is unsustainable. The Government does not seem to have Noticed that the contract in question us not one of the and wherein a contractor undertakes to do a certain work for a certain sum. In thus contract, the Company had to pay for the material as well as for labour. the Contractor to a paid only for his professional services. There was in any case no provision in the contract that the contractor was to incur any item of expenditure or make any payment in relation to the workmen. The Government did not realise that the dispute concerned of merely two parties but three. The Government order in the present case really amounts to an outright refusal to consider relevant matters and the Government also misdirected itself in point of law in wholly omitting to take into account the relevant considerations which as held by the House of Lords us unlawful behaviour. The Government does not appear to have applied their mind to any of the considerations set out in the contractor 's application.[679 F H, 680 D&F] Allowing the appeal the Court directed the Government of Orissa to reconsider the matter and take a decision in the matter of reference in the light of the relevant facts. [680 G]

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N: Criminal Appeal No. 277 of 1974. Appeal by Special Leave from the Judgment and order dated the 22nd February, 1974 of the Allahabad High Court Lucknow Bench in Criminal Appeal No. 498 of 1973 and Capital Sentence No. 13 of 1973. A. N. Mulla and N. section Das Behal for the appellant. O. P. Rana for the respondent. The Judgment of the Court was delivered by BHAGWATI, J. This appeal, by special leave, is limited only to the question of sentence. The appellant has been sentenced to death for an offence under section 302 of the Penal Code. The question is: Should the extreme penalty of death be commuted to one of life imprisonment? To answer the question it is necessary to state a few facts. The appellant and a few others were tried in the Court of the Sessions Judge, Unnao for offences under section 148 and section 302 read with section 149 of the Indian Penal Code. The learned Sessions Judge, on an appreciation of the evidence, found that the appellant, Sheo Dayal, Mihi Lal, Dularey and Mewa Lal had formed an unlawful assembly and in pursuance of its common object, the appellant had intentionally caused the death of one Ram Kumar by by inflicting on him a severe injury with a bank severing his head from the body and then carried away the head in an angaucha in a most brutal and inhuman fashion. On this finding, the learned Sessions Judge convicted the appellant, Sheo Dayal, Mihi Lal, Dularey and Mewa Lal of offences under section 148 and section 302 read with section 149 and sentenced each of them to rigorous imprisonment for one fear for the former offence and to death for the latter. The appellant, Sheo Dayal, Mihi Lal, Dularey and Mewa Lal preferred an appeal to the High Court against the order of conviction and sentence recorded against them and their case was also referred to the High Court for confirmation of the death sentence. The High Court agreed with the findings reached by the learned Sessions Judge and confirmed the conviction of Sheo Dayal, Mini Lal, Dularey and Mewa Lal under section 148 and section 302 read with section 149, but reduced their sentence to one of life imprisonment for the offence under section 302 read with section 149 and so far as the appellant was concerned, the conviction was converted to one under section 302 and the sentence of death was maintained. The appellant thereupon preferred an application for special leave and on that application, special leave was granted by this Court limited only to the question of sentence. Now, there can be no doubt that the crime committed by the appellant was a most reprehensible and heinous crime which dis 276 closed brutality and callousness to human life and no extenuating circumstances could be pointed out on behalf of the appellant which would assuage the conscience of the Court and persuade it not to inflict the extreme penalty of death on the appellant. The only circumstance on which reliance could be placed on behalf of the appellant for mitigating the rigour of the punishment to be inflicted on him was his tender age at the time of the commission of the offence. The record of the case shows that the appellant was about sixteen years of age at the time when he committed this brutal crime. The question is : whether this could be regarded as a valid circumstance for invoking the clemency of penal justice? The legislative history in regard to the subject of capital punishment shows that there has been significant change in thinking and approach since India became free. Prior to the amendment of section 367(5) of the Code of Criminal Procedure by Act 26 of 1955, the normal rule was to impose sentence of death on a person convicted for murder and, if a lesser sentence was to be imposed, the Court was required to record reasons in writing. But by Act 26 of 1955 this provision in section 367(5) was omitted, with the result that the Court became free to award either death sentence or life imprisonment and no longer was death sentence the rule and life imprisonment the exception. Then again a further progress was made in the same direction by section 354(3) of the Criminal Procedure Code, 1973. That section provides that when the conviction is for an offence punishable with death or, in the alternative, with imprisonment for life or imprisonment for a term of years, the judgment shall state the reasons for the sentence awarded, and, in the case of sentence or death, the special reasons for such sentence. It will be seen that the unmistakable shift in the legislative emphasis is that for murder, life imprisonment should be the rule and capital punishment the exception to be resorted to only for special reasons. It is only where, in view of the peculiar facts and circumstances, there are special reasons that death sentence may be awarded : otherwise life sentence should be the ordinary rule. This legislative provision in the new Code of Criminal Procedure clearly shows, as pointed out by Krishna Iyer, J., in E. Anamma vs State of Andhra Pradesh(1), "that the disturbed conscience of the State on the vexed question of legal threat to life by way of death sentence has sought to express itself legislatively, the stream of tendency being towards cautious, partial abolition and a retreat from total retention. " The seminal trends in current sociological thinking and penal strategy, tampered as they are by humanistic attitude and deep concern for the worth of the human person frown upon death penalty and regard it as cruel and savage punishment to be inflicted only in exceptional cases. It is against this background of legislative thinking which reflects the social mood and realities and the direction of the penal and processual laws that we have to consider whether the tender age of an accused is a factor contraindicative of death penalty. 277 The Law Commission, in the 35th Report made by it on capital punishment fully considered whether the Indian Penal Code should specify the minimum age of the offender who can be sentenced to death, and after examining the position under the Children 's Acts of various States it expressed the following opinion : "We feel that, having regard to the need for uniformity, to the views expressed on the subject, and to the consideration that a person under 18 can be regarded as intellectually immature, there is a fairly strong case for adopting the age of 18 as the minimum for death sentence. we are aware that cases will occasionally arise where a person under 18 is found guilty of a reprehensible killing, or, conversely, a person above 18 is found to be immature and not deserving of the highest punishment. A line has, however, to be drawn somewhere and we think that 18 can be adopted without undue risk. We, therefore recommend that a person who is under the age of 18 years at the time of the commission of the offence should not be sentenced to death. A provision to that effect can be conveniently inserted in the Indian Penal Code as section 558. " The Law Commission in its 42nd Report on the Indian Penal Code agreed with this recommendation of the previous Law Commission vide paragraph 3.34 of the 42nd Report of the Law Commission. The Central Government appears to have accepted this recommendation and a provision to that effect is to be found in the Indian Penal Code (Amendment) Bill, 1972. This being the current sociological and juristic thinking on the subject, it would be legitimate for the Court to refuse to impose death sentence on an accused convicted of murder if it finds that at the time of commission of the offence he was under 18 years of age. Krishna Iyer, J., also pointed out in E. Anamma vs State of Andhra Pradesh (supra) that "where the murderer is too young the elemency of penal justice helps him", and a murderer who is below 18 years age at the time of the commission of the offence would certainly be "too young". The appellant in the present case was, as pointed out above, just around 16 years of age at the time when he committed the offence and, therefore, in the light of the above discussion he would be entitled to the elemency of penal justice and it would not be appropriate to impose the extreme penalty of death on him. We accordingly commute the sentence of death imposed on the appellant and convert it to one of life imprisonment. P.B.R. Appeal allowed and sentence reduced.

The legislative history in regard to the subject of capital punishment shows that there has been a significant change in thinking and approach Since India became free. Prior to the amendment of section 367(5) of the Code of Criminal Procedure by Act 26 of 1955, the normal rule was to impose sentence of death on a person convicted for murder and if a lesser sentence was to be imposed, the Court was required to record reasons in writing. But by Act 26 of 1955, this provision in section 367(5) was omitted with the result that the Court became free to award either death sentence or life imprisonment, and no longer was death sentence the rule and life imprisonment the exception. Then again a further progress was made in the same direction by section 354(3) of the Criminal Procedure Code, 1973. That section provides that when the conviction is for an offence punishable with death or in the alternative with imprisonment for life or 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. The unmistakable shift in the legislative emphasis is that for murder, life imprisonment should be the rule and capital punishment the exception to be resorted to only for special reasons. It is only where, in view of the peculiar facts and circumstances, there are special reasons that the death sentence may be awarded: otherwise life sentence offence would certinly be "too young." [277G; E, F] The seminal trends in current sociological thinking and penal strategy tempered as they are by humanistic attitude and deep concern for the worth of the human person, frown upon death penalty and regard it as cruel and savage punishment to be inflicted only in exceptional cases. [276G] In the instant case the appellant was charged with an offence of murder by severing the head of the deceased from the body and then carrying it away in a most brutal and inhuman manner. The trial court convicted and sentenced him to death. Both the conviction and sentence were upheld by the High Court. On the question of sentence, Allowing the appeal to this Court, ^ HELD: The appellant was just around 16 years of age at the time when he committed the offence and, therefore, he would be entitled to the clemency of penal justice. It would not be appropriate to impose the extreme penalty of death. Taking into account the current sociological and juristic thinking as could be seen from the recommendation of the Law Commission which appears to have been incorporated in the Indian Penal Code (Amendment) Bill 1972, it would be legitimate for the Court to refuse to impose death sentence on an accused convicted of murder, if it finds that at the time of the commission of the offence the appellant was under 18 years of age. A murderer who is below 18 years of age at the time of commission of the offence would certainly be "too young." [277G; E, F] E. Anamma vs State of Andhra Pradesh, A.I.R. 1974 S.C. 799, followed.

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N: Petitions for Special leave to appeal (Crl) Nos. 918 919 of 1975. From the Judgment and Order dated the 30th May, 1975 of the High Court at New Delhi in Criminal Appeal No. 140 of 1971. Frank Anthony and K. C. Dua, for the petitioner (In S.L.P. 918/75) C. L. Sahu, for the petitioner (In S.L.P. 919/75) B. P. Maheshwari and Suresh Sethi, for respondent (In both the petitions) The Judgment of the Court was delivered by BHAGWATI, J. There are two special leave petitions which are being disposed of by us by judgment after hearing both sides. There 261 is only one question of law which arises for determination and since it lies in a very narrow compass and is concluded against the petitioner by the language of the new statutory enactment in section 29(2) of the , we thought that it would be a futile exercise to grant special leave and then hear the appeals and hence we decided to hear these two special leave petitions after issuing notice to the respondents so that the question of law arising for consideration can be finally determined by a pronouncement of this Court. The petitioner in Special Leave Petition No. 918 of 1975, hereinafter referred to as Mangu Ram, was at all material times a partner in the firm of M/s Ram Pershad Gondamal, which is the petitioner in Special Leave Petition No. 919 of 1975. The firm of M/s Ram Pershad Gondamal owned a shop in Kharibaoli, Delhi where it sold inter alia Phool Gulab. On 8th August, 1969, the Food Inspector of the Municipal Corporation of Delhi purchased two samples of Phool Gulab from the shop of the firm of M/s Ram Pershad Gondamal for analysis after complying with the procedure prescribed by law and each sample was divided into three parts, out of which one part was sent to the Public Analyst for analysis, the other was retained by the Food Inspector and the third was handed over to Mangu Ram who sold the samples on behalf of the firm of M/s Ram Pershad Gondamal. The first sample was marked O. P. K. 169 and the second was marked O. P. K. 170. It was found from the report of the analysis made by the By the Public Analyst that both samples O. P. K. 169 and O. P. K. 170 were adulterated and hence the Municipal Corporation Delhi filed two complaints, one in respect of each sample, against Mangu Ram and the firm of M/s Ram Pershad Gondamal in the Court of the Judicial Magistrate, 1st Class Delhi for an offence under section 7 read with section 15 of the . These two complaints were consolidated and tried together by the learned Judicial Magistrate. During the course of the trial, on an application made by Mangu Ram and the firm of M/s Ram Pershad Gondamal, one part of each of the two samples lying with them was sent by the learned Judicial Magistrate to the Director, Central Food Laboratory for analysis as required by section 13, sub section (2) of the Act. The Director Central Food Laboratory, analysed the two samples sent to him, and issued a certificate in respect of each of them showing the result of the analysis. The certificate in respect of sample O. P. K. 169 showed the presence of Tartrazine Indigo Carmine which was then a non permitted Coal Tar dye, but subsequently permitted by reason of amendment of rule 29 of the Prevention of Food Adulteration Rules 1955, while the certificate in respect of sample O. P. K. 170 revealed the presence of Rhodamine B, which was at all times a non permitted coal tar dye. The learned Judicial Magistrate, in view of those certificates of the Director, Central Food Laboratory, came to the conclusion that both the samples sold by Mangu Ram on behalf of the firm of M/s Ram Pershad Gondamal were adulterated, but since Phool Gulab of these two samples was purchased by the firm of M/s Ram Pershad Gondamal from M/s Venkateshwara & Co, which was a large manufacturing concern and hence presumably a licensed manufacturer, the learned Judicial Magistrates held that Mangu Ram and the firm of 262 M/s Ram Pershad Gondamal were entitled to the benefit of section 19, sub section (2) of the Act and accordingly acquitted them by an order dated 18th March, 1971. The Municipal Corporation of Delhi, being aggrieved by the order of acquittal, made an application to the High Court of Delhi under section 417, sub section (3) of the Code of Criminal Procedure, 1898 for special leave to appeal from the order of acquittal. Sub section (4) of section 417 required that the application for special leave should be made before the expiry of sixty days from the date of the order of acquittal and, therefore, after excluding the time taken in obtaining certified copy of the order of acquittal, the application for special leave should have been filed on 25th August, 1971, but it came to be filed two days late, namely, on 27th August, 1971. The Municipal Corporation of Delhi therefore, made an application for condonation of delay by invoking section 5 of the and pleaded that there was sufficient cause which prevented it from making the application for special leave within time. The High Court, by an order dated 3rd November, 1971, condoned the delay as there was in its opinion sufficient cause for not making the application for special leave within the time prescribed by sub section (4) of section 417 and, taking the view that this was a fit case which deserved the exercise of discretion under sub section (3) of section 417, the High Court granted special leave to the Municipal Corporation of Delhi to appeal against the order of acquittal. The appeal was thereafter heard by a Division Bench of the High Court. The High Court took the view that there was no evidence on record to show that M/s Venkateshwara & Co. from whom Phool Gulab was purchased by the firm of M/s Ram Pershad Gondamal was a licensed manufacturer, nor was there any written warranty in the prescribed form obtained by the firm of M/s Ram Pershad Gondamal from M/s Venkateshwara & Co. and hence the defence under section 19 sub section (2) was not available to Mangu Ram and the firm of M/s Ram Pershad Gondamal. Since the certificates issued by the Director, Central Food Laboratory showed unmistakably the presence of non permitted coal tar dye in both the samples, there was no doubt, said the High Court, that the two samples were adulterated and in this view the High Court set aside the acquittal of Mangu Ram and the firm of M/s Ram Pershad Gondamal and convicted them of the offence under section 7 read with section 16 of the Act for selling adulterated samples of Phool Gulab to the Food Inspector. The sentence imposed for the offence in respect of sample O. P. K. 169 was only a sentence of fine since coal tar dye found in that sample subsequently came to be permitted by the amendment of Rule 29, but so far as the offence in respect of sample O. P. K. 170 was concerned, Mangu Ram was sentenced to suffer six months rigorous imprisonment and to pay a fine of Rs. 1,000/ or in default to suffer rigorous imprisonment for a further period of three months, while the firm of M/s Ram Pershad Gondamal was sentenced to pay a fine of Rs. 1000/ . Mangu Ram and the firm of M/s Ram Pershed Gondamal thereupon filed the present petitions for special leave to appeal against the order of conviction and sentence passed against them. 263 There was nothing that could be said on behalf of Mangu Ram and the firm of M/s Ram Pershad Gondamal on the merits of the conviction and sentence since the certificates of the Director, Central Food Laboratory clearly showed the presence of non permitted coal tar dye in both the samples and it was impossible to contend that the two samples were not adulterated. The only argument which could be advanced on their behalf was and that was the only argument pressed before us that the time limit of sixty days prescribed in sub section (4) of section 417 for the making of an application for special leave under sub section (3) of that section was a mandatory and inexorable time limit which could not be relieved against or relaxed and it excluded the applicability of section 5 of the . It was urged that having regard to the clear and specific language of sub section (4) of section 417 which left no scope for doubt or ambiguity, the High Court was statutorily obliged to reject an application for special leave made after the expiry of sixty days from the date of the order of acquittal and it had no jurisdiction to extend this time limit of sixty days by resort to section 5 of the . This contention was sought to be supported before by reference to a decision of this Court in Kaushalya Rani 's vs Gopal Singh(1), Now, prima facie, it might seem at first blush that the decision in Kaushalya Rani 's case(1) is directly applicable in the present case and clinches the decision of the issue in favour of Mangu Ram and the firm of M/s Ram Pershad Gondamal. But a closer scrutiny will reveal that it is not so. The decision in Kaushalya Rani 's case (1) is clearly distinguishable from the present case. The question which arose for consideration in Kaushalya Rani 's case(1) was apparently the same as in the present case, namely, whether the time limit of sixty days prescribed in sub section (4) of section 417 for making an application for special leave under sub section (3) of that . section could be extended by invoking section 5 of the Indian Limitation Act, 1908. This Court held that sub section (4) of section 417 laid down a special period of limitation for an application by a complainant for special leave to appeal against an order of acquittal and "in that sense, this rule of sixty days bar is a special law, that is to say, a rule of limitation which is specially provided for in the Code itself which does not ordinarily provide for a period of limitation for appeals or applications. This Court pointed out that since "the special rule of limitations laid down in sub section (4) of section 417 of the Code is a special law of limitation governing appeals by private prosecutors, there is no difficulty in coming to the conclusion that section 5 of the Limitation Act is wholly out of the way, in view of section 29(2) (b) of the Limitation Act. " The applicability of section 5 of the Indian Limitation Act, 1908 was the held to be excluded in determining the period of limitation of sixty days prescribed in sub section (4) of section 417 by reason of section 29(2)(b) of that Act which provided in so many terms that "for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the remaining provisions of this Act" that is sections other than sections 4, 9 to 18 and 22 "shall not apply." Now, there can be no doubt that if the present case were 264 governed by the Indian Limitation Act, 1908, this decision would wholly apply and the Municipal Corporation of Delhi would not be entitled to invoke the aid of section 5 of that Act for the purpose of extending the period of limitation of sixty days prescribed in sub section (4) of section 417 for an application by a complainant for special leave to appeal against an order of acquittal. But the Indian Limitation Act, 1908 has clearly no application in the present case, since that Act is repealed by the which came into force with effect from 1st January, 1964 and the present case must, therefore, be decided by reference to the provisions of the . There is an important departure made by the in so far as the provision contained in section 29, sub section (2) is concerned Whereas under the Indian. Limitation Act, 1908 section 29, sub section (2),cl. (b) provided that for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law the provisions of the Indian Limitation Act, 1908, other than these contained in sections 4, 9 to 18 and 22, shall not apply and, therefore, the applicability of section 5 was in clear and specific terms excluded, section 29, sub section (2) of the enacts in so many terms that for the purpose of determining the period of limitation prescribed for any suit, appeal or application by any special or local law the provisions contained in sections 4 to 24, which would include section 5, shall apply in so far as and to the extent to which they are not expressly excluded by such special or local law. Section 29, sub section (2), cl. (b) of the Indian Limitation Act. 1908 specifically excluded the applicability of section 5, while section 29, sub section (2) of the in clear and unambiguous terms provides for the applicability of section 5 and the ratio of the decision in Kaushalya Rani 's case(1) can, therefore, have no application in cases governed by the , since that decision proceeded on the hypothesis that the applicability of section 5 was excluded by reason of section 29(2) (b) of the Indian Limitation Act, 1908. Since under the section 5 is specifically made applicable by section 29. sub section (2), it can be availed of for the purpose of extending the period of limitation prescribed by a special or local law if the applicant can show that he had sufficient cause for not presenting the application within the period of limitation. It is only if the special or local law expressly excludes the applicability of section 5, that it would stand displaced. There, as pointed out by this Court in Kaushalya Rani 's case(1) the time limit of sixty days laid down in sub section (4) of section 417 is a special law of limitation and we do not find anything in this special law which expressly excludes the applicability of section 5. It is true that the language of sub section (4) of section 417 is mandatory and compulsive, in that it provides in no uncertain terms that no application for grant of special leave to appeal from an order of acquittal shall be entertained by the High Court after the expiry of sixty days from the date of that order of acquittal. But that would be the language of every provision prescribing a period of limitation. It is because a bar against entertainment of an application beyond the period of limitation is created by a special or local law that it becomes necessary to invoke the aid of section 5 in order 265 that the application may be entertained despite such bar. Mere provision of period of limitation in howsoever peremptory or imperative language is not sufficient to displace the applicability of section 5. The conclusion is, therefore, irresistible that in a case where an application for special leave to appeal from an order of acquittal is filed after the coming into force of the , section 5 would be available to the applicant and if he can show that he had sufficient cause for not preferring the application within the time limit of sixty days prescribed in sub section (4) of section 417, the application would not be barred and despite the expiration of the time limit of sixty days, the High Court would have the power to entertain it. The High Court, in the present case, did not, therefore, act without jurisdiction in holding that the application preferred by the Municipal Corporation of Delhi was not barred by the time limit of sixty days laid down in sub section (4) of section 417 since the Municipal Corporation of Delhi had sufficient cause for not preferring the application within such time limit. The order granting special leave was in the circumstances not an order outside the power of the High Court. We do not, therefore, see any reason to grant special leave to Mangu Ram and the firm of M/s Ram Pershad Gondamal to appeal against the order of the High Court and we accordingly dismiss the petitions for special leave filed by them. P.B.R. Special Leave Petitions dismissed.

The respondent sought special leave to appeal to the High Court under section 417(3) of the Code of Criminal Procedure, 1898 against the acquittal of the petitioner by the trial court. The application was made beyond the period of limitation but the High Court condoned the delay under section 5 of the . In their application for special leave to appeal to this Court the petitioners contended that the time limit of 60 days prescribed under section 417(4) was mandatory and as such the High Court had no jurisdiction to extend the time limit by resort to section 5 of the . Dismissing the special leave petitions, ^ HELD: (1) The order granting special leave was not an order outside the power of the High Court. In a case where an application for special leave to appeal from an order of acquittal is filed after the coming into force of the , section 5 would be available to the applicant and if he can show that he had sufficient cause for not preferring the application within the time limit of 60 days prescribed in sub section (4) of section 417, the application would not be barred and despite the expiration of the time limit of sixty days, the High Court would have the power to entertain it. [265B C] (2) Since under the section 5 is specifically made applicable by section 29(2) it could be availed of for the purpose of extending the period of limitation prescribed by a special or local law if the applicant can show that he had sufficient cause for not presenting the application within the period of limitation. It is only if the special or local law expressly excludes the applicability of section 5 that it stands displaced. Section 29(2) (b) of the Limitation Act, 1908 specifically excluded the applicability of section 5 while section 29(2) of the 1963 Act in a clear and unambiguous terms provides for applicability of section 5. [264F, E] Kaushalya Rani vs Gopal Singh ; , explained.

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Civil Appeals Nos. 2070 to 2074 of 1970. From the Judgment and order dated 4th day of May 1970 of the Bangalore High Court in Writ Petitions Nos. 3958, 4035/68, 18 and 19 of 1969. V.S.Desai, P. C. Bhartari, J. B. Dadachanji, o. c. Mathur and R. Narain for the appellant. A. K. Sen and section S.Javali and B.P.Singh for Respondent No. 1. section N. Prasad and section P. Naydt for Respondent Union of India. The Judgment of the Court was delivered by RAY, C.J. These appeals are by certificate from the judgment of the High Court of Mysore dated 4 May, 1970. The several respondent Co operative Societies filed writ petitions in the High Court for quashing orders dated 11 September 11 1968 passed by the Government of India. The impeached orders granted exemption, partially or wholly, to the appellant under clause 5(3) of the Sugar Cane Control Order, 1966 (hereinafter referred to as the 1966 Control Order) 742 from the payment of additional cane price fixed by the Price Fixation Authority under clause 5(4) of the 1566 Control order. The High Court quashed the orders challenged by the respondents. The use and supply of sugarcane is controlled under the provisions of the . The Government of India promulgated the Sugar Cane Control order on 27 August 1955. The 1955 Control Order empowered the Government, inter alia, to fix the minimum price payable by the manufacturer of sugar to the grower of sugarcane. The Government was competent to fix different prices depending on the areas and qualities of sugarcane or on the basis of recovery of sugar from sugarcane. In 1966 the Sugar Cane Control (Additional Powers) Act, 1962 came in existence. In pursuance of powers conferred by the 1962 Act the Central Government amended the 1955 Control order by introducing clause 3A providing for payment of additional price for sugarcane purchased by producers of sugar during each of the four successive years beginning from 1 November 1958. The 1955 Control order was repealed and replaced by the Sugar cane Control order, 1966 to which reference has already been made. The 1966 Control order saved all orders made and actions taken under the repealed order. Under clause 6 of the 1966 Control order the Government was competent to denote an area where sugarcane is grown is a reserved area for a factory. The sugarcane grown in that area is required to be sold to the factory allotted. The Central Government determines the quantity of sugarcane to be supplied by the growers in the reserved area and the quantity of sugarcane which the factory requires for crushing during any year. The growers are required to enter into agreements with the factory to supply sugarcane of the quantity fixed under the provisions of the 1966 Control order. Restrictions are placed on the growers from using sugarcane grown by them for other purposes. The Government thus controls all aspects of the use of sugarcane grown hl the reserved area. It can prohibit or restrict or otherwise regulate export of sugarcane from any area except under and in accordance with a permit issued in that behalf. Clause 3 of the 1966 Control order provides for fixation of minimum price of sugarcane payable by manufacturers of sugar to the growers. In determining the minimum price, the Government is required to take into account (a) cost of production of sugarcane, (b) return to the grower from alternative crops and the general trend of prices of agricultural commodities; (c) the availability of sugar to the Consumer at a fair price; (d) the price at which sugar produced from sugarcane is sold by producers of sugar; and (e) the recovery of sugar from sugarcane. Clause 5 of the 1966 Control order provides for payment of additional price. Sub clause (1) of clause 5 provides that in respect of sugarcane purchased, by producers of sugar during each of the four successive years beginning from 1 November 1958, the producer is 743 required to pay an additional price in addition to the minimum price A fixed ' under clause 3(1) of the 1966 Control Order. The additional price is fixed accordance with the provisions of the Schedules to the Order. On determination of the price, the same is required to be intimate, in writing to the producer of sugar, growers, Cooperative Societies of growers or the local growers association. Sub clause (5) of clause 5 of the 1966 Control order provides for an appeal to the Government of India from the decision determining additional price. The relevant provision for purposes of the present appeals is sub. clause (3) of clause 5 of the. 1966 control order. Sub clause (3) is as follows : "If the Central Government is satisfied that during any year a factory has made no profit or has made inadequate profit, that Government, may by order in writing, exempt either wholly or partially, any producer of sugar from payment of the additional price due from him under sub clause (1) in respect of sugarcane purchased for that factory during that year. The appellant in Civil Appeals No. 2070 2074 of 1970 is the factory situate at Hospet manufacturing sugar. The appellant buys sugarcane from growers in the area reserved for the said factory. The respondent is a co operative society of growers of sugarcane who k have supplied sugarcane to the appellant factory. The members of the societies entered into agreement with the appellant factory through the respondent societies for the supply of sugarcane. The societies advanced monies to the grower members for their agricultural operations. The societies are recognised both by the Government of India and the appellant factory for the purpose of the 1966 Control order. The minimum price fixed by the Government of India for the seasons subsequent to 1958 59 was said by the sugarcane growers to be inadequate. The growers felt that the factories manufacturing sugar were making profits from the sale of sugar and that the minimum price fixed by the Government for supply of sugarcane did not bear any rational relation to the market price or to the profits made by the producers of sugar. The growers experienced impact of in crease in the cost of growing sugarcane and the restrictions placed by the Government preventing them from selling sugarcane to persons or at prices of their choice. The growers were also prevented from converting sugarcane to "gur" except in accordance with the terms of a license to be obtained. In partial redress of the hardship caused to the sugarcane growers Parliament introduced clause 3A to the Sugar Cane Control (Additional Powers) Act, 1962 for fixation of additional prices for sugarcane for four successive years commencing 1 November, 1958. The provision was thereafter incorporated in the 1966 Control Order. The relevant Authority under the 1966 Control order on 3 July, 1968 fixed the additional price payable by the appellant to the cane 744 growers for sugarcane supplied during the seasons 1960 61 and 1961 62 at Rs. 4.16 and Rs. 6.09 respectively per metric ton. This was made payable in addition to the payments made by the factory to the growers during the said seasons. No appeal was preferred either by the appellant factory or by the respondent Cooperative Societies under clause 5 of the 1966 Control order. The additional price faced by the Authority thereby became final. The appellant, however, did not pay the additional price. The respondent received copies of communication dated 11 September 1968 sent by the Government of India to the appellant exempting it, from making payment of the aforesaid additional price. It appears that the said order was made pursuant to applications made on behalf of the appellant on or about 11 July 1968 seeking exemption on the ground that the appellant had made inadequate profits. The Government communication dated 11 September 1968 stated that it was satisfied that the profits made by the appellant were inadequate. The Government wholly exempted the appellant from paying the additional price form the season 1961 62 and reduced the additional price for the season 1960 61 from 4.16 to 0.70 NP per metric ton. The respondent challenged the validity of the order of the Government granting exemption wholly or partially to the appellant. The High Court accepted the contention of the respondent on the ground that the impugned order was violative of principles of natural justice, because the Government failed to afford any opportunity to the growers to be heard in the matter. The respondent contended that the power of exemption affected the right of growers to get additional price for sugarcane supplied by them and that the Central Government was required to exercise the power judicially and in conformity with the principles of natural justice. Two questions arise for determination in these appeals. First, whether in view of the 1966 Control order opportunity should have been given to the respondent when the Government wanted to grant exemption, wholly or partially, to the appellant from paying additional price. Second, whether the High Court was right in giving direction to the Government to consider giving of an opportunity to the respondent. The appellant sugar factory contends that the cane growers were not required to be heard when the Government grantee exemption to the factories from payment of additional price. The respondent cane growers contend to the contrary. Clause 5 of the 1966 Control order relates to additional price for sugarcane. Clause 5 (1) of the order speaks of payment of additional price found due in accordance, with the provisions of the Schedule. Clause S(3) of the 1966 Control order speaks of exemption from payment of additional price. Clause 5(4) speaks of appointment by the Central Government of persons for determining the additional price under clause 5(1) of the 1966 Control order. Clause 745 5(5) states that any producer of sugar or grower of sugarcane or growers ' cooperative society who feels aggrieved by any decision of the person or authority referred to in sub clause (4) may appeal to he Central Government. In the background of these provisions, the appellant contends that the power to grant exemption is where the Government is satisfied that in any year a factory has made no profit or has made inadequate profit and the same should be determined from the balance sheet and profit and loss accounts of a company and there is no obligation to hear any party. It is also said by the appellant that the determination of additional price and the exemption from payment of the additional price are separate matters independent of each other. The appellant further contended that right to additional price could not vest in the cane growers until the manner of payment had been decided upon by the Central Government under clause 5(6) of the 1966 Control order, These contentions are unacceptable. The provision for granting exemption is part of the procedure prescribed by clause $ of the 1966 Control order. The power to grant exemption cannot be said to be independent of the provisions under clause 5 of the order. The object of the 1966 Control order is to promote sugar industry and to eliminate unnecessary impediments in the production of sugar. It also ensures a fair deal to the growers of sugarcane. The provisions of the Control order are intended to maintain harmony between the growers of sugarcane and the producers of sugar and to enable both of them to share profits reasonably. Therefore, the power conferred on the Government is required to be exercised having regard to the viewpoints of the growers of sugarcane as well as the producers of sugar. It is necessary to give opportunity to the growers of sugarcane as well as the producers of sugar to be heard when the Government exercises powers under 1966 Control order for determining the additional price and granting exemption from payment of additional price. The grant, of exemption from payment of price affects rights and interests of the growers of sugarcane. The Control order contains elaborate machinery for fixation of additional price having regard to all relevant factors. The additional price fixation authority afforded opportunity to both the growers of sugarcane as well as the producers of sugar to be heard in the determination of the additional price. The subsequent order by the Government granting exemption to the factories for payment of additional price takes away rights which had a accrued in favour of the growers of sugarcane. The manner of payment of additional price under clause S(6) of the 1966 Control order does not affect the right and interest of growers. ln providing for payment of additional price, the additional price fixation authority takes into account the relevant considerations relating to the conditions of sugarcane growers as well as the promotion of the sugar industry during the relevant period. The additional price fixation authority ' also considers the conditions and circumstances relating to the appellant factory in determining the additional 746 price payable. It, is, therefore, necessary for the Government to invite the points of view or objections of the growers on the application made by the factories producing sugar seeking exemption from payment of additional price. It is equally necessary for the Government to hear the growers of sugarcane in order to satisfy itself as to the bona fide and accuracy of the appellant 's claim for exemption. The growers should be given an opportunity to show whether the claim by the appellant for exemption from payment of additional price should or should not be granted. The power to grant exemption to factories from payment of additional price is ultimately connected with the right of sugarcane growers to claim additional price. The situations in which a duty will arise to act judicially according to natural justice cannot be exhaustively enumerated. A duty to act judicially will arise in the exercise of a power to deprive a person of legitimate interest or expectation that additional price would be paid. The factors which power to an exercise of powers judicially are the nature of the interest to be affected, the circumstances in which the power falls to be exercised and the nature of the sanction, if any, involved. It is clear that the purpose and purport of the 1966 Control order, the scheme of having sugarcane growing areas reserved for factories and in particular, the payment of additional price point to the inescapable conclusion that the sugarcane growers are to be heard not only when additional price is filed but also when any exemption is granted to factories from payment of additional price. For these reasons, the judgment of the High Court is affirmed. The appeals are dismissed. Each party will pay and bear its own costs. P.H.P. Appeals dismissed.

The respondent are co operative societies of growers of sugarcane who supplied sugarcane to the appellant which is a sugar manufacturing factory. The use and supply of sugarcane is controlled under the provisions of the . The Sugarcane Control order, 1955 empowers the Government to fix the minimum price payable by the manufacturer of sugar to the grower of sugarcane. In 1962, the Sugarcane Control (Additional Powers) Act 1962 came into existence. Pursuant to the Powers conferred by the 1962 Act, the Central Government amended the 1955 Control order by introducing clause 3A providing for payment of additional price for sugarcane purchased by the producers of sugar. The 1955 Control order was repealed and replaced by the Sugarcane Control order 1966. The respondent are recognised by the Government of India and the appellant for the purpose of 1966 Control order. Under the 1966 order the Government was competent to denote an area where sugarcane is grown as a reserved area for factory. The sugarcane grown in that area is required to be sold to the allotted factory. The Government controls all aspects of the use of sugarcane grown in the reserved area. The 1966 order provides for fixation of minimum price of sugarcane payable by manufacturers of sugar to the growers. In determining the minimum price the Government is required to take into account (i) cost of production of sugarcane, (ii) return to the grower from alternative crops and the general trend of prices Of agricultural commodities; (iii) the availability of sugar to the consumer at a fair price; (iv) the price at which sugar is sold by the producers; and (v) the recovery of sugar from sugarcane. The 1966 Control order further provides for payment of additional price in addition to the minimum price. On determination of the price the same ` is required to be intimated in writing to the producers of sugar, growers Co operative Societies of Growers or the local Growers ' Association. An appeal is provided to the Government of India against the determination of the additional price. Clause 5(3) of the 1966 Control order provides that if the Central Government is satisfied that during any year a factory has made no profit or has made inadequate profit that Government may exempt either wholly or partially any producer of sugar from payment of the additional price. The relevant authority under the 1966 Control order fixed additional price payable by the appellants to the respondent. No appeal was preferred either by the appellant or the respondent. The appellants did not pay the additional price. appellant made applications seeking exemption on the ground that the appellants had made inadequate profits. The Government exempted the appellants from paying whose of the additional price for the year 1961 62 and reduced the additional price for the year 1960 61 without giving any opportunity of being heard to the respondent The respondents challenged the validity of the grant of exemption by filing a writ petition in the High Court. The High Court allowed the said writ petition on the ground that the order of the Central Government was violative of principles of natural justice, since no opportunity was given to the respondents to be heard in the matter. 741 Dismissing the appeal by certificate, ^ HELD: (1) Clause 5(1) provides for the payment of additional price and II clause 5(3) provides for exemption from the payment of additional price. Clause 5(5) provides for filing an appeal to the Central Government by any person feeling aggrieved by the decision of the fixation of additional price. The power to grant exemption cannot be said to be independent of the provisions of clause 5 of tho order. The object of 1966 control order is to promote sugar industry and to eliminate unnecessary impediments in The production of sugar. It also ensures a fair deal to the growers of the sugarcane. The provisions of the control order are intended to maintain harmony between the Growers of sugarcane and the producers of sugar and to enable both of them to share profits reasonably. is necessary to give opportunity to be heard both to the growers of the sugarcane as well as the producers of sugar when the Government exercises powers under 1966 Control order for determining the additional price and granting exemption from payment of additional price. [744 H, 745 A E] (2) The grant of exemption from payment of price affects rights and interests of the growers of sugarcane. The order of exemption takes away rights which had accrued in favour of the growers of sugarcane. It is, therefore necessary for the Government to consider the points of view or objections of the growers on the application made by the factories producing sugar seeking exemption from payment of additional price. [745F, G, 746A] (3) The situations in which a duty will arise to act judicially according to. natural justice cannot be exhaustively enumerated. A duty to act judicially will arise in the exercise of power to deprive a person of legitimate interest or expectation that additional price would be paid. The factors which point to an exercise of power judicially are the nature of interest to be affected. the circumstances in which the power falls to be exercised and the nature of the sanctions, if any, involved. [746 C] (4) It is clear that the purpose and purport of the 1966 Control order point to the inescapable conclusion that the sugarcane growers are to be heard not only when additional price is fixed but also when exemption is granted to factories from payment of additional price. [746 D]

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: Criminal Appeal No. 74 of 1971. Appeal by Special Leave from the Judgment and order dated the 25th January 1972 of the Bombay High Court in Criminal Appeal 1025 of 1959. N. H. Hingoorani and Mrs. K. Hingoorani for the Appellant. section B. Wad and Al. N. Shroff for the Respondent. The Judgment of the Court was delivered by V BEG, J. The appellant before us by special leave to appeal was convicted under Section 135(b) (ii) of the (hereinafter referred to as 'the Act '), and sentenced to six months rigorous imprisonment and a fine of Rs. 2,000/ , and, in default, to three months further rigorous imprisonment. Goods in respect of which this offence was found to have been committed were also confiscated. On 21 4 1967, Police Officers of the Anti Corruption and Prohibition Bureau, Greater Bombay, acting on information received, had searched room No. 10 at 56, Sheriff Deoji Street, Bombay. This room was divided by partitions into three parts. In the central portion the police found the appellant and three other persons. This portion was again sub divided with a locked connecting door fixed in the passage to the sub divided part. This was opened by one of the two Godrej lock keys produced by the appellant from a side pocket of his trousers. Eleven wooden boxes covered with jute cloth and secured by iron strips were found there. On opening them, six of them were found to contain cigarette lighters of "Imco Triplex Junior '? brand "Made in Austria". Each of the six boxes were tightly packed with 1200 lighters. The remaining five boxes contained fifty sealed tins of flints for cigarette lighters which bore the following writing: "Tego Lighter Flints of Superior Quality Made in Germany". On the wooden boxes containing the lighters were found written "Dubai" and "Made in Austria". The five boxes containing flints had the words "Dubai" and "Made in West Germany" inscribed on them. A panchnama was prepared before Panchas. A rent receipt in the name of the appellant in respect of room No. 10, in this house, of which a portion was occupied by the appellant, and a bill for the consumption of electricity were also seized from the custody of the appellant together 541 with the Godrej lock and the keys produced by the appellant. Subsequently, the seized articles were made over to the inspector of Central Excise and Customs, Marine and Prevention Division, Bombay, on 24 4 1967, under Section 110 of the . The value of 7200 cigarette lighters was stated as Rs. 14,400/ and of 250 tins of flints as Rs. 15,000/ on which Customs duty of Rs. 15,840/ and Rs. 10,500/ respectively was alleged to be payable. In the complaint filed on 30th October, 1968, by the Assistant Collector of Central Excise, Marine and Prevention Division, Bombay, it is alleged that the cigarette lighters and flints were imported into India without an import licence and in contravention of provisions of Government of India, Ministry of Commerce & Industry, Import Control order No.17/55 dated 7 12 1955 (as amended) issued under Section 3(2) of the Import & Export (Control) Act, 1947, which was to be deemed to be an order passed under Section 11 of the Act. It was submitted that the accused, having been concerned in a fraudulent evasion of payment of Rs. 26,340/ as customs duty to the Government, had committed offences punishable under Section 135(a) and (b) of the Act. The goods were also as a necessary consequence, said to be liable to confiscation under Section 111 (d) of the Act. The appellant had denied being in possession of the offending goods although he had admitted the production of keys from his possession He alleged that the portion of the room from which the goods were recovered was sublet to Dwarumal and Kishen who had kept the goods there. The appellant 's explanation had been disbelieved by the trying Magistrate as well as by the High Court. The production of the key which, according to the prosecution evidence, the appellant had at first refused to produce, proved that the portion in which the boxes were kept was in appellant 's exclusive possession with all that was contained in it. It is possible that he may have sub let other portions of the partitioned room to other persons, but there is no reason to doubt that the appellant was not only in possession of the bodies but knew something about the incriminating nature of their contents. Otherwise, why should he, at first, have refused to produce the key he had ? Furthermore, the appellant had not given any evidence to show that his sub tenants had placed the boxes there, or that there was any reason why he should allow them to use the portion reserved by him for himself. His case rested on his bare assertions in a written statement. Of course, no one had come forward to state or allege that the goods found, in the circumstances stated above? had been imported without payment of duty. The only question raised before us was whether the presumption contained in Section 123 of the Act, corresponding to Section 128(A) of the . Or any other provision of law would place the onus of proving innocent possession of these goods upon the appellant. Section 123 of the Art reads as follows: "123. Burden of proof in certain cases. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that 542 they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized. (2) This section shall apply to gold, diamonds, manufacturers of gold or diamonds, watches, and any other class of goods which the Central Government may by notification in the official Gazette specify". lt is true that lighters and flints were notified as provided in Section 123(2) in the official Gazette of 26 8 1967. Nevertheless, as the provisions of Section 123(1) of the Act only lay down a procedural rule, they could be applied when the case came up for trial before the Presidency Magistrate who actually decided it on 15 7 1969. Indeed, the complaint itself was filed on 30 10 1968. It is immaterial that the appellant was found in possession of the goods on 21 4 1967 There is, however, another objection to the applicability of Section 123(1) of the Act. It is that it would apply only to goods seized under the Act. lt is contended that the goods in respect of which the appellant was prosecuted were not seized under the Act. Reliance was placed for this contention upon Gian Chand & ors. vs the State of Punjab (1) Even if the goods with which we are concerned here were not seized under the Act, as provided by Section 111 of the Act, it is contended on behalf of the State that Section 106, read with Section 114 of the Evidence Act, was sufficient to enable the prosecution to ask the Court to presume that the appellant knew that the goods must have been smuggled or imported in contravention of the law. The appellant had not produced evidence to show that the goods were legally brought into India. Reliance was placed on behalf of the prosecution on: Collector of Customs, Madras & ors. vs D. Bhoormal (2); M/s. Kanungo & Co. vs The Collector of Customs, Calcutta & Ors(3), Issardas Daulat Ram & ors. vs the Union of India & Ors.(4), Anant Gopal Sheorey vs The State of Bombay(5). Learned Counsel for the appellant had in his turn, relied upon The State of Punjab vs Gian Chand & ors.(6). He contended that it was necessary for the prosecution to prove: (1) that, the goods in question were actually smuggled or brought into the country without payment of customs duty at a time when payment of such duty had become obligatory; and, (2) that, the appellant was dealing with them knowing them to be smuggled goods. It was contended that mere possession by the accused of such goods could not enable the prosecution to apply Section 106 of the Evidence Act when the appellant could not know where the goods came from. It was urged that there was no evidence which could enable the appellant to know where the goods came from or when the goods were imported or that duty, if leviable was not P d on them. The admissibility and sufficiency of (1) [1962] (Suppl.) 1 S.C.R. 364. (2) ; (3) A.I.R. (4) [1962] Suppl. (1) S.C.R. 358. (5) ; (6) Criminal Appeal No. 195 of 1962 decided by this Court on 2 4 1968. 543 the inscriptions on the goods and the writing on boxes in which they were found, for proving the place from where they came, or when they were imported, were questioned. The contention was, that even if the appellant is deemed to be in possession with full knowledge of what the goods actually were, the Court could not go further and assume them to be smuggled or imported into the country from another country of their assumed origin after a time when the restrictions on their import had been imposed. Unfortunately, the appellant did not admit the possession of the goods at all. If he could have succeeded in explaining satisfactorily how he was an innocent receiver of such goods without knowing that they were illegally imported or smuggled he may have had a chance of getting the benefit of doubt The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions or them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant 's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or means rea. In any case, there was some evidence to enable the Courts to come to the conclusion that the goods must have been known to the appellant to be smuggled even if he was not a party to a fraudulent evasion of duty. Consequently, the appellant had been convicted only under Section 135(1)(ii) of the Act. We do not find sufficient reasons to interfere with this finding of fact or the sentence imposed. It would also follow that the goods were rightly confiscated. Accordingly, this appeal is dismissed. V.M.K. Appeal dismissed.

Section 123(1) of the , provided that, where any goods to which this section applies are seized under this Act in the reasonable relief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized. On 21 4 1967 Police officers of the Anti Corruption and Prohibition Bureau. Greater Bombay, acting on information received, had searched room No. 10 at 56, Sheriff Deoji Street Bombay. This room was divided by petitions into three parts. In the central portion the police found the appellant and three other persons. This portion was again sub divided with a locked connecting door fixed in the passage to the sub divided part. This was opened by one of the two Godrej lock keys produced by the appellant from a side pocket of his trousers. Eleven wooden boxes covered with jute cloth and secured by iron strips were found there. On opening them. six of them were found to contain cigarette lighters of "Imco Triplex Junior" brand "Made in Austria.". Each of the six boxes were tightly packed with 1 200 lighters. The remaining five boxes contained fifty sealed tins of flints for cigarette lighters which bore the Following writing: "Tego Lighter Flints of Superior Quality Made in Germany" inscribed on them. A panchnama was prepared before Panchas. A rent receipt in the name of the appellant in respect of room No. 10, in this house, of which a portion was occupied by the appellant, and a bill for the consumption of electricity were also seized from the custody of the appellant together with the Godrej locks and the keys produced by the appellant. On 30th October. 1968 the Assistant Collector of ' Central Excise, Marine and Prevention Division. Bombay, filed a complaint alleging that the appellant had committed offences punishable under Section 135(a) and (b) of the . The appellant had denied being in possession of the offending goods although he had admitted the production of keys from his possession. The trying Presidency Magistrate convicted him under section 135(b)(ii) of the and sentenced him to six months rigorous imprisonment and a fine of Rs. 2,000/ , and in default, to three months further rigorous imprisonment. The High Court dismissed his appeal. This appeal has been preferred on the basis of the special leave granted by this Court. It was contended for the appellant that: (1) the presumption contained in s.123(1) of the Act would not place the onus of proving innocent possession of the goods in question upon the appellant; and, (ii) the goods in respect of which the appellant was prosecuted were not seized under the Act. Rejecting the contentions and dismissing the appeal. the court ^ HELD: (1) Though lighters and flints were notified provided in Section 123(2), in the official Gazette of 26 8 1967 the provisions of Section 123(1) which only lay down a procedural rule, could be applied when the case came up for. trial before the Presidency Magistrate. He divided it on 15 7 1969. The complaint itself ' was filed on 30 10 1968. It is immaterial that the appellant was round in possession of the goods on 21 4 1967. [542 B C] (ii) The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were Parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import 540 could arise. The appellant 's conduct, including his untruthful denial of their h possession, indicated consciousness of their smuggled character or means rea. There was some evidence to enable the courts to come to the conclusion that the goods must have been known to the appellant to be smuggled even if he was not party to a fraudulent evasion of duty. [543 B D] Gian Chand & ors. vs The State of Punjab, [1962] Suppl. l S.C.R. 364 Collector of Customs, Madras & ors. vs D. Bhoormull ; M/s, Kanungo & Co. vs The Collector of Customs, Calcutta & ORS. A.I. R. 1972 S.C. 2136, Issaradas Daulat Ram & ors vs The Union of India & ors [1962] Suppl. 1 S.C.R. 358, Gopal Sheorey vs The State of Bombay ; and The State of Punjab vs Gian Chand & ors. Criminal Appeal No. 195 of 1962 decided by this court on 2 4 1968, referred to.

3299.txt

Civil Appeal No. 2473 of 1972. Appeal by Special Leave from the Judgment and order dated the 30th October 1972 of the Madhya Pradesh High Court in Misc. Second Appeal No. 33/72. section N. Andley, H. B. Mangal, Rameshwar Nath and Rajinder Narain for the appellant. G. B. Pai, section K. Bagga, Mrs. section Bagga, R. K. Mehta and V. C. Parashar for respondents. The Judgment of the Court was delivered by UNTWALIA, J. This appeal by special leave has been filed by the tenant defendants. The plaintiff respondents, the landlords, filed a suit against the appellants in the Court of Second Civil Judge, Class II, Gwalior for a decree for eviction from the suit premises and for certain other reliefs. The appellants ' eviction was sought on statement of facts mentioned in paragraph 3 of the plaint which squarely fell within clause (f) of sub section (1) of Section 12 of the Madhya Pradesh Accommodation Control Act, 1961 (hereinafter referred to as 'the Act '). The appellants filed a written statement and in paragraph 3, they denied the respondents ' assertion in plaint, paragraph 3. It appears that the suit which was filed in the year 1966 proceeded to trial in October, 1967 and some evidence was adduced. But eventually, the parties entered into a compromise, filed a petition to that effect in the Trial Court which passed a decree for eviction and other reliefs in January, 1968 in accordance with the terms of the compromise. Pursuant to the said compromise decree the appellants were to vacate the shop the suit promises by 31 12 1970. On their failure to do so, execution was levied by the respondents. The appellants objected to the execution on the ground that the compromise decree was void and inexecutable as being against the provisions of the Act. The execution court accepted the appellants ' objection to the execution of the decree and dismissed the execution case. A miscellaneous appeal filed by the respondents was dismissed by the Third Additional District Judge Gwalior. They preferred a second miscellaneous appeal before the Madhya Pradesh High Court. A learned single Judge following the Bench decision of that Court in Smt. Chandan Bai vs Surja,(1) came to the conclusion that the decree was not a 880 nullity and was executable. Hence this appeal by the tenant judgment deobtors. The point which fails for determination in this appeal is not resintegra and has been the subject matter of consideration in several decisions of this Court. In Bahadur Singh & Anr. vs Muni Subrat Dass & Anr.(1) a decree for eviction based on an award without anything more was found to be a nullity as it was held to have been passed against the prohibitory mandate of section 13(1) of the Delhi and Ajmer Rent Control Act, 1952. Following the said decision the compromise decree was also held to be a nullity in the case of Kaushalya Devi & Ors. vs Shri K. L. Bansal.(2) The earlier two decisions were followed again in Ferozi Lal Jain vs Man Lal and Anr.(3) In all these three cases the decrees were found to have violated section 13(1) of the Delhi Act of 1952. The law was reviewed exhaustively by this Court in K. K. Chari vs R. M. Seshadri.(4) Vaidialingam, J. delivering the judgment on his behalf as also on behalf of Dua, J. pointed out that under the terms of the compromise under consideration in that case the defendant had withdrawn all his defence to the application filed by the landlord and submitted to a decree for eviction unconditionally. The three earlier cases of this Court were distinguished and it was said at page 704. "The true position appears to be that an order of eviction based on consent of the parties is not necessarily void". And finally it was held "it is no doubt true that before making an order for possession the Court is under a duty to satisfy itself as to the truth of the landlord 's claim, if there is a dispute between the landlord and tenant. But if the tenant in fact admits that the landlord is entitled to possession on one or other of the statutory grounds mentioned in the Act, it is open to the Court to act on that admission and make an order for possession in favour of the landlord without further enquiry". One of us (Alagiriswami, J.) while agreeing with Vaidialingam, J. added a few words of his own. In the separate judgment it has been pointed out that the view taken by Grover, J. of the Punjab High Court in Vas Dev vs Milkhi Ram(5) was exactly the position in K. K. Chari 's case. Sarkaria, J. delivering the judgment on behalf of the Court in Nagindas Ramdas vs Dalpatram Inchharam @ Brijram and Otheres(6) took pains to go into the matter elaborately once more and said at page 552: "From a conspectus of the cases cited at the bar, the principle that emerges is, that if at the time of the passing of the decree, there was some material before the Court, on the basis of which, the Court could be prima facie satisfied, about the existence of a statutory ground for eviction, it will be presumed that the Court was so satisfied and the decree for eviction, though apparently passed on the basis 881 of a compromise, would be valid. Such material may take the shape either of evidence recorded or produced in the case, or it may partly or wholly be in the shape, of an express or implied admission made in the compromise agreement, itself. " On facts of the case of Nagindas Ramdas was found to fall in line with that of K. K. Chari. Distinguishing the earlier cases, Chari 's case was followed. Before we state the principles of law governing such a case we would like to point out that the language of Section 12 of the Act is somewhat different from many similar State Statutes. Section 12(1) says: "Notwithstanding anything to the contrary contained in any other law or contract, no suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds only, namely :" Thereafter grounds (a) to (p) have been enumerated. On a superficial reading of the provision aforesaid it would appear that the inhibition related to the filing of the suit only. No suit can be filed for eviction of a tenant except on one or more of the grounds enumerated in Section 12(11). In sub sections (2) to (11) of Section 12 certain conditions have been engrafted to show under what circumstances an order for the eviction of tenant cannot be passed in relation to some of the grounds enumerated in sub section (1). Reading the section as a whole and remembering the beneficial object of the Act for the protection of a tenant based upon public policy, we do not find much difficulty in bringing the section at par with other similar State Statutes and holding as a matter of construction that no decree for the eviction of a tenant from any accommodation can be passed except on one or more of the grounds mentioned in Section 12(1). A Bench of the Madhya Pradesh High Court in Smt. Chandan Bai 's case (supra) seems to have taken too literal a view of the section when in paragraph 5 of the judgment it says "There is nothing in Section 12 of the Act or any other provision which prevents the tenant in vacating the accommodation in spite of the fact that none of the grounds mentioned in Section 12 exists. Similarly, there is nothing in the Act which may prevent the tenant in agreeing to vacate the accommodation in future". It says further in paragraph 10 "Merely enumeration of grounds on which relief can be claimed does not either expressly or impliedly exclude the operation of Order 23, rule 3, because grounds for claiming relief are always limited whether the relief be claimed under the general law or a statute". A similar argument advanced in the case of Nagindas Ramdas (supra) with reference to the relevant provisions of Bombay Rent Act, 1947 was repelled at page 550 and the view taken by a Bench of the Gujarat High Court in the case of Shah Rasiklal Chunilal vs Sindhi Shyamlal 882 Mulchand (1) "that in spite of the fact that there is no express provisions in the Bombay Rent Act prohibiting contracting out, such a prohibition would have to be read by implication consistently with the public policy underlying this welfare measure" was approved. In order to get a decree or order for eviction against a tenant whose tenancy is governed by any Rent Restriction or Eviction Control Act the suitor must make out a case for eviction in accordance with the provisions of the Act. When the suit is contested the issue goes to trial. The Court passes a decree for eviction only if it is satisfied on evidence that a ground for passing such a decree in accordance with the requirement of the Statute has been established. Even when the trial proceeds ex parte, this is so. If, however, parties choose to enter into a compromise due to any reason such as to avoid the risk of protracted litigating expenses, it is open to them to do so. The Court can pass a decree on the basis of the compromise. In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law. In other words, parties cannot be permitted to have a tenant 's eviction merely by agreement without anything more. The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord, in the circumstances is entitled to have such a decree under the law. It is too late in the day to contend that the provisions of Order 23, Rule 3 of the Code of Civil Procedure cannot apply to eviction suits governed by the special statutes. Undoubtedly, a compromise of such suit is permissible under the said provision of law. The protection of the tenant is inherent in the language of Order 23, Rule 3 when it says "Where it is proved to the satisfaction of the Court that a suit has been adjusted by any lawful agreement or compromise. the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the suit". If the agreement or compromise for the eviction of the tenant is found, on the facts of a particular case, to be in violation of a particular Rent Restriction or Control Act, the Court would refuse to record the compromise as it will not be a lawful agreement. If on the other hand, the Court is satisfied on consideration of the terms of the compromise and, if necessary, by considering them in the context of the pleadings and other materials in the case, that the agreement is lawful, as in any other suit, so in an eviction suit the Court is bound to record the compromise and pass a decree in accordance therewith. Passing a decree for eviction on adjudication of the requisite facts on or their admission in a compromise, either express or implied, is not different. We now proceed to consider the facts of the case in hand. The ground for eviction from the accommodation let for non residential purposes mentioned in clause (f) of section 12(1) of the Act is that the accommodation "is required bona fide by the landlord for the purpose of continuing or starting his business. . and that the land 883 lord. . has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned". In paragraph 3 of the plaint the respondents ' necessity was pleaded both in the positive and the negative aspects of clause (f). Both were denied in paragraph 3 of the written statement of the appellants. Paragraph 1 of the compromise petition says: "That due to the necessity of the plaintiffs for their own business opening grocery shop, decree for ejectment may be granted to them against the defendants". In this case it is not necessary to refer to any piece of evidence adduced at the inconclusive trial. The meaning of paragraph 1 of the compromise petition is clear and definite especially in the background of the pleadings of the parties and in our opinion it squarely makes out a case of eviction within the meaning of Section 12(1) (f) of the Act on admission of the appellants. We reject the argument of Mr. Andley, learned counsel for the appellants, that paragraph 1 of the compromise petition was an admission in respect of only the first part, namely, the positive aspect of clause (f) and not of the second part, namely, that the landlord has no other reasonably suitable nonresidential accommodation. The admission, by necessary implication, was in respect of both. In the order recording the compromise the Court said: "On a perusal of the joint compromise it was found that the same is legal and is within the purview of the plaint. Therefore, plaint verification is accepted and the case is decreed in accordance with the conditions of the compromise as under: 1. That the defendants shall vacate the shop in dispute by 31 12 1971". The order so recorded in our judgment was in full compliance with the requirement of Order 23, Rule 3 of the Code of Civil Procedure. The Court found that the compromise was legal, that is to say, lawful and was in accordance with the plaint. The averment in the plaint was, therefore, accepted and the suit was decreed. It is regrettable that though the appellants got about three years ' time to vacate the shop in dispute from the date of the compromise decree, they were ill advised to fight the litigation further and thus cause delay in the vacating of the shop by another five years. We have no doubt in our mind that on the facts and in the circumstances of this case the compromise decree was clearly valid and executable. We uphold the decision of the High Court but on a slightly different basis. For the reasons stated above, the appeal fails and is dismissed with costs. P.H.P. Appeal dismissed.

The respondent landlord filed a suit for eviction against the appellant tenant on the ground of bona fide personal requirement and that he has no other resonably suitable accommodation of his own which is one of the grounds of eviction under the Madhya Pradesh Accommodation Control Act. The appellant filed a Written Statement denying the claim of the respondent. After some evidence was recorded the parties entered into a compromise and filed it in the Court. The compromise deed mentioned that "due to the necessity of the plaintiffs for their own business opening grocery shop, the decree for ejectment may be granted to them against the defendant". The Trial Court passed a decree in terms of the compromise after coming to the conclusion that the compromise was legal. the appellant was given 3 years ' time to vacate the premises under the compromise. On the appellant 's failure to vacate after the expiry of three years, the respondent filed Execution Application. The appellant objected to the execution on the ground that the compromise decree was void and inexecutable as being against the provisions of the Act. The Execution Court accepted the appellant 's objection and dismissed the Execution Case. The District Judge dismissed the appeal filed by the respondent. The High Court allowing the Second Miscellaneous Appeal came to the conclusion that the decree was not a nullity and that it was executable. In an appeal by Special Leave the Appellant contended that the decree was nullity since the Court was not satisfied that the eviction was in accordance with the provisions of the Act. The counsel further contended that even if what is stated in the compromise deed might be accepted as admission, the admission is only about the bona fide requirement and that there is no admission about the landlord not having any other suitable accommodation. ^ HELD: dismissing the appeal: 1. In order to get a decree or order for eviction against a tenant whose tenancy is governed by any Rent Restriction or Eviction Control Act the Suitor must make out a case for eviction in accordance with the provisions of the Act. When the suit is contested the issue goes to trial. The Court passes a decree for eviction only if it is satisfied on evidence that a ground for passing such a decree in accordance with the requirement of the Statute has been established. Even when the trial proceeds ex parte, this is so. If, however, parties choose to enter into a compromise due to any reason such as to avoid the risk of protracted litigation, expenses it is open to them to do so. The Court can pass a decree on the basis of the compromise. In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law. In other words, parties cannot be permitted to have a tenant 's eviction merely by agreement without anything more. The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord, in the circumstances, is entitled to have such a decree under the law. The case of K. K. Chari vs P. M. Seshadri, followed [882 A D] 2. It is too late in the day to contend that the provisions of order 23 rule 3 of the Code of Civil Procedure cannot apply to eviction suits governed by the special statutes. A compromise of suit is permissible under the said provisions of law. [882 E F] 879 3. If the compromise for the eviction of the tenant is found on the facts of a particular case to be in violation of a Rent Control Act, the Court would refuse to record the compromise as it would not be a lawful agreement. If the Court is satisfied on consideration of the terms of the compromise and if necessary by considering them in the context of the pleadings and other materials in the case that the agreement is lawful as in any other suit in an eviction suit the court is bound to record the compromise and pass a decree in accordance therewith. [882 F G] 4. The meaning of the term the bona fide requirement in the compromise deed is clear and definite specially in the background of the pleadings of the parties and it makes out a case of eviction within the meaning of the Act. [883 C]

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Civil Appeal No. 1266 of 1975. Appeal by special leave from the Judgment and order dated 3rd March, 1971 of the Madras High Court in Writ Petition No. 583 of 1971. K. section Ramamurthi, A. T. M. Sampath and E. C. Agarwala, for the Appellant. B. Sen and Vineet Kumar for Respondent No. 2. The Judgment of the Court was delivered by KRISHNA IYER, J. A single fundamental flaw in the order of the Appellate Tribunal (under the ), constrains us to allow this Appeal challenging the High Court 's refusal to interfere with the grant of the permit in favour of Respondent No. 2. Many applicants for one permit for a "short route" pressed their claims before the Regional Transport Authority which evaluated the relevant merits and awarded the permit to Applicant No. 6, who is the Appellant before us. On appeal, Applicant No. 3, who is respondent No. 2 before us, succeeded. Whereupon a Writ Petition was filed without success and the disappointed appellant has come to this Court by special leave. The system of marks, under the Rules framed under the Act by the Tamil Nadu Government, prescribes the various qualifications for applicants for permits for passenger transport under the , Rule 155 A crystallises these considerations and describes them as guiding principles for the grant of stage carriage permits. The rule itself emphasizes what is obvious, that the paramount consideration of the interest of the public, as enshrined in Section 47 (1), must given full weight while awarding permits. That means to say that the various factors set out in rule 155 A are subject to Section 47(1). This is clarified by sub rule (4) of Rule 155 A, which runs thus: "After marks have been awarded under sub rule (3), the applicants shall be ranked according to the total marks obtained by them and the applications shall be disposed of in accordance with the provisions of sub section (1) of Section 47". There is no doubt that bus transport is calculated to benefit the public and it is in the fitness of things that the interest of the travelling public is highlighted while evaluating the relevant worth of the various claimants. There are two circumstances which require to be stressed because they have been overlooked by the appellate tribunal in its disposal of the comparative merits of the rival claimants. Sub rule (5)(i) of Rule 155 A states that preference shall, other things being equal, be given in the disposal of applications in respect of short routes. .to persons who have not held any permit for a stage carriage. Among the considerations which must weigh with the authorities entrusted with the power to grant permits, is business or technical experience in the 216 field of motor vehicles operation. Rule 155 A in Item (D), sub rule (3) specifically states "two marks shall be awarded to the applicants who have business or technical experience in the road transport service as defined in clause (a) of Section 68 A of any class of transport vehicles for a period of ten years or more". Having regard to the marking system as adumbrated in rule 155 A, a broad sheet was apparently prepared and the appellant before us (Applicant No. 6) secured 4 marks as against the second respondent (Applicant No. 3) who got 3.10 marks. Ordinarily, therefore, the applicant who got higher marks should have won the battle. Moreover, in a short route, as in this case, the rule contemplates preference being given to a new entrant, of course, other things being equal. In this case, therefore, the appellant before us, being admittedly a new entrant, was entitled to preference, the route being a short one, other things being equal. The short question that, therefore, fell before the Appellate Authority was as to whether other things were equal. This aspect attracted the attention of the Appellate Authority, but its consideration unfortunately was unsatisfactory. The Appellate Tribunal observed that though the Applicant No. 6 had secured higher marks than Applicant No. 3: "I am inclined, having regard to the public interest in the matter of passenger transport service, to agree with the appellant 's contention that the respondent 's experience as lorry operator cannot be equated with the appellant 's experience in bus operation. " This view, according to him, is tenable under Section 47 (1) since this matter involves grant of bus permit. "The fact that the appellants are bus operators, must necessarily over ride the fact of the respondent being a lorry operator. Though the route in question is a short route and there is a new entrant like the respondent, the respondent cannot automatically be preferred in the absence of other things being equal, in accordance with clause 5(1) of Rule 155 A". The error that has crept into the order of the Appellate Tribunal consists in thinking that the rules or guidelines could be discarded in the name of Section 47(1). Actually, Rule 155 A is in implementation of Section 47(1), but is not exhaustive of all the considerations that will prevail in a given situation. Therefore, it is that there is jurisdiction given to the Tribunal to take note of other considerations in public interest flowing out of Section 47(1). Not that the sub rules of Rule 155 A can be discarded, but that they may be supplemented or outweighed. Not that, in the name of public interest, something opposed to the sub rules of Rule 155 A can be done but that, within the combined framework of Section 47(1) and rule 155 A, there is scope for play of the jurisdiction of the Tribunal to promote public interest. Viewed in this perspective the Appellate Tribunal has actually contravened Rule 155(3)(D). That provision expressly accords two marks for applicants who have a certain experience in road transport service. 'Road transport service ' is defined in clause (a) of Section 68 A and this definition is specifically incorporated in Rule 155 A (3) (D). It follows that the rule makes no distinction between the type of transport vehicle in which experience has been gained whether it be a passenger transport or a lorry transport. The view taken by the appellate tribunal 217 that because the permit is for passenger transport, lorry service experience, even if it falls under Rule 155 A (3) (D), can be ignored, is therefore, illegal. A relevant factor has thus been wrongly excluded. Connected with the same flaw is what we have earlier indicated namely, that the Appellate Tribunal has held that the new entrant (Applicant No. 6) need not be given the preference he is eligible for under Rule 155 A (5) because other things are not equal. According to him, other things not equal because Applicant No. 6 has lorry transport experience while Applicant No. 3 has bus transport experience. We have already explained that this is a fallacy. In this view, the preference that flows in favour of applicant No. 6 under Rule 155 A (5) should not have been denied to him for the reasons set out by the Tribunal. For these reasons, the order of the Appellate Tribunal is liable to be quashed. The well worn ground that mat material consideration, if ignored, makes the order vulnerable, applied. Moreover, these is an apparent mis construction of the relevant rule by the Appellate Tribunal, as we have explained above. This does not mean that this Court will award the permit to one party or the other. That is the function of the statutory body created under the . Moreover, as Mr. Sen, appearing for the second respondent, has rightly pointed out, his client had many other grounds to urge before the Appellate Tribunal to establish his superiority, which have not been adverted to by the Appellate Tribunal because on one ground he succeeded. It is only fair, therefore, that the case is remanded to the Appellate Tribunal for being heard de novo wherein both sides (no other applicant will be heard), will be entitled to urge their respective claims, for the single permit that is available to be awarded. The only point that remains to be decided is as to what is to happen for bus operation during the period the Appeal is to be heard and the further proceedings which may follow. We direct that the second respondent be allowed to ply the bus as he is doing it now until disposal of the appeal by the Appellate Tribunal. It is represented by Mr. Ramamurthy, appearing for the Appellant, that his client had been plying the bus on the route on and earlier occasion till the High Court dismissed the Writ Petition. If there had been any period when both operators had been plying their buses on the route during the course of this litigation, especially at the time the Writ Petition was pending in the High Court, it will be open to the Appellate Tribunal to allow thee Appellant before us (Applicant No. 6) also to ply his bus on the same route. With these directions, we allow the Appeal and direct the Appellate Tribunal to dispose of the motor vehicles Appeal No. 542 of 1970. Parties will bear their own costs throughout. P.H.P. case remanded.

Many applicants for one permit for a short route pressed their claims before the Regional Transport Authority under the . The Transport Authority evaluated the relevant merits and awarded the permit to the appellant. The system of marks under the Rules framed under the Act by the Tamil Nadu Government, prescribes various qualifications for applicants for permits for passenger transport under the Act. The rule emphasises that the paramount consideration of the interest of the public as enshrined in section 47(1) must be given full weight while awarding permits. One of the rules provides that preference shall, other things being equal, be given in respect of the routes to persons who have not held any permit for stage carriage. One of the considerations which must weigh with the authorities is the business of technical experience in the field of motor operation. The appellant secured 4 marks as against 3.1 marks secured by respondent No. 1. In addition, the appellant was entitled to a preference for being a new entrant since the route was a short one. The Appellate Tribunal reversed the order of the Transport Authorities and granted the permit to respondent No. 2 and set aside the permit granted in favour of the appellant on the ground of public interest in the matter of passenger transport service and held that the appellant 's experience as lorry operator cannot be equated with respondent No. 2 's experience in Bus operation. This view was taken by the Tribunal following section 47(1). The appellant filed a Writ Petition in the High Court which was rejected. On appeal by Special Leave, ^ HELD: (1) The rules or guidelines could not be discarded in the name of section 47(1). The Rules made are really in implementation of section 47(1) but is not exhaustive of all the considerations that would prevail in a given situation. The jurisdiction is given to the Tribunal to take note of other considerations in public interest flowing out of section 47(1). The Rules, are, however, not to be discarded but they can be supplemented or outweighed. In the name of public interest something opposed to the Rules cannot be done. The Appellate Tribunal has actually contravened rule 155(3) which accords 2 marks for applicants who have a certain experience in road transport service. Road Transport Service is defined by section 68A(a) and it makes no distinction between the type of transport vehicles in which experience has been gained whether it be of passenger transport or a lorry transport. The distinction made between passenger transport and lorry service experience by the Tribunal is illegal. A relevant factor has thus been wrongly excluded. The order of the Appellate Tribunal is liable to be quashed on the well worn ground that material consideration if ignored makes the order vulnerable. More over, there is an apparent mis construction of the relevant rule. The respondent No. 1 stated that there were many other grounds which he could have urged before the Tribunal but which have not been adverted to by the Tribunal because he could have urged before the Tribunal but which have not been adverted to by the Tribunal because respondent No. 2 succeeded on one ground. It is, therefore, fair that the case should be remanded to the Appellate Tribunal for being heard de novo. [216 E H, 217A E] 215

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ivil Appeal No. 685 Form the Judgment and order dated the 22nd November, 1963 of the Madras High Court in Appeal Nos 329 and 468 of 1959 F. section Nariman, A. Subba Rao, R. V. Pillai and P. Ramaswami, for the appellants. M. Natesan, P. section Srisailam and M. section Narasimhan, for L.rs. Of respondent No. 1 and respondents 2 and 3. FAZAL ALI, J. This is the plaintiffs ' appeal against the Judgment of the High Court of Madras dated November 22, 1963 by certificate. The appeal arises out of a partition suit filed by plaintiffs Nos. 1 to 4 for concellation of partition made between the father of the plaintiffs who is defendant No. 5 and defendant No. 1 the elder brother of defendant No. 5. It appears that as far back as May l, 1940 the two brothers, namely section M. Kuppuswami Chettiar defendant No. 1 and section M. Ranganatham Chettiar defendant No. S, who were originally members of Undivided Hindu Family partitioned their shares by virtue of a registered partition deed dated May 10, 1940. At the time when the partition was made plaintiffs Nos. 2 to 4 were minors and defendant No. 3 was also a minor. Under the partition deed both immovable and movable properties were divided between the two brothers voluntarily through the aid and assistance of D.W. 3 K. Narayanswami who was the family auditor of defendant No. 1 and was his friend and adviser. The partition deed with respect to the immovable properties is Ext. B l which appears at pp. 243 248 of the Paper Book. Under the partition deed two Lists were prepared itemising the properties which were to go to the two brothers. The list of properties is contained in Ext. B 115 of the Paper Book. As regards the movable properties it appears that the partition had taken place a month earlier i.e. On April 12, 1940 and 865 the partition deed is Ext. B 3, which consists of two Schedules Schedule A and Schedule B movables mentioned in Sch. A were allotted to the defendant No. 1 and those contained in Sch, were allotted to the share of defendant No. 5. The plaintiffs ' case was that the two brothers who were members or the Undivided Hindu Family along with the plaintiffs and other minor coparaceners betrayed the interests of the minors and the division made between them was both unjust and unfair and had the effect of depriving the minors of their legal shares in the properties the lion 's share having fallen to the lot of elder brother defendant No. 1 section M. Kuppuswami Chettiar hereinafter referred to as 'S.M.K. '. The plaintiffs? father who is defendant No. 5 being a person of weak intellect did not care to protect the interests of the minors and he accordingly accepted any share that was allotted to him without any objection. Defendant No. 5 section M. Ranganathan Chettiar would be hereinafter referred to as 'S.M.R. ' Plaintiffs also alleged that the partition was secured by practising fraud and undue influence and by suppressing large assets belonging to the family which were taken by defendant No. I by taking advantage of the weakness of the plaintiffs ' father. We might mention at the outset that Mr. F. section Nariman the learned counsel for the appellants did not at all press the plea of fraud and undue influence taken by the plaintiffs before the Trial Court and confined his arguments only to the allegation that the partition offered between the two brothers S.M.K. and S.M.R. was on the very face of it unjust and unfair and detrimental to the interests of the minors. The plaintiffs also laid claim to a sum of Rs. 10,000/ from the cash deposit which is said to have been given to the mother of defendants 1 & 5 but this claim was not pressed before us ill the course of the arguments. Other minor claims which were also made before the Trial Court were not pressed before us. The suit was resisted by defendant No. 1 S.M.K. and his major sons defendants 1 and 4 and a minor son defendant 3 who however attained majority during the pendency of the suit before the Trial Court. We might also mention here that plaintiffs Nos. 2 to 4 sons of S.M.R. were also minors at the time when the suit was filed but plaintiff No. 2 attained majority on October 3, 1958 just about a month and a half before the judgment in the suit was delivered by the Subordinate Jude, Coimbatore. The defendants stoutly denied the allegations made by the plaintiffs and averred that there was absolutely no disparity in the division of the properties, that no fraud ' or undue influence had been practised, that the properties were divided between defendants I and 5 with the explicit consent of defendant No. 5 and that the division of the properties would show that the partition was neither unjust nor unfair, both parties having taken equal shares in the immovable and movable properties. A number of other pleas was also raised by the defendants, but it is not necessary for us to deal with them in view of the points pressed before us by the learned counsel for the appellants. The Trial Court framed as many as 18 issues and after considering the oral and documentary evidence produced before it held that so far as the partition of the immovable properties was concerned which 866 was done by sparate document and was clearly severable from the partition of the movable properties, the partition was neither unjust nor unfair so as to entitle the minors to re open the partition after a long period. The learned Trial Judge, however, was of the opinion that so far as the partition of movable properties was concerned it was ex facie unjust and unfair and the plea of the plaintiffs for re opening the same must succeed. The Trial Court accordingly passed a preliminary decree for re partition of the movable properties and directed the appointment of a Commissioner to go into the valuation of the assets sought to be re partitioned. Both the plaintiffs and the defendants filed separate appeals before the High Court of Madras. The plaintiffs filed an appeal before the high Court against that part of the decree which dismissed their suit for re opening the partition of the immovable properties., while the defendants filed an appeal against the decree of the Trial Court directing reopening of the partition of movable properties and thus decreeing the plaintiffs ' suit to that extent. The High Court decided both the appeals by one common Judgment dated November 22, 1963 and by upholding the findings of the learned Subordinate Judge, Coimbator, the High Court made a slight variation in the decree by setting aside the directions of the Subordinate Judge for the appointment of a Commissioner and by quantifying the value of the disparity in the share of the plaintiffs the High Court passed a decree to the extent of 2/5th share of Rs. 17,700/. The plaintiffs alone have filed the present appeal against the judgment and decree of the High Court after obtaining a certificate from that Court. Before going into the merits of the case, it may be necessary to mention a few unique aspects of the present case. It would appear from the findings arrived at by the two courts that defendant No. 1 was undoubtedly an honest man and defendant No. S the younger brother appears to be an idealist a person to whom the value and prestige of the family was a consideration much above mundane monetary matters. Secondly, the partition between the two brothers was voluntarily made about 35 years ago and the father of the plaintiffs had most willingly and with good grace accepted the partition and the shares that were allotted to him. Thirdly, since a very long time had elapsed since the partition took place, it would be well nigh impossible for any court to determine the value of the assets, some of which might have disappeared, others may be shrouded in mystery, and for determining the rest the necessary data may not be available. It appears to us to be too late in the day in 1975 to appoint a Commissioner in order to go into a situation which existed in 1940 and the to pass a decree which may result in a fresh spate of litigation for another decade. It was possibly this consideration which weighed with the High Court in quantifying the amount of the share of the plaintiffs which they had suffered under the division of the assets. Finally, the plaintiff 's father defendant No. 5 was a shrewd business and after his elder brother had suffered from some illness, he was carrying on the business of the family a few years in before the partition. Both the parties were assisted by an Auditor Mr. K. Narayanswami in effecting the partition by metes and bounds. In these circumstances, therefore, there could be no question of practising 867 any fraud or undue influence as alleged by the plaintiffs and if the partition was unjust or unfair to the minors it was merely because defendant No. 5 made an error of Judgment with respect to some properties. Lastly, we have not been able to find any material to justify the conclusion of the High Court that the difference in the allotment of the shares to the plaintiffs would be 2/5th of Rs. 17,700/ .We shall deal with this point a little later and show that the difference is much more. Mr. Nariman learned counsel for the appellants submitted two points before us. In the first place, he assailed the partition of the immovable properties on the ground that no valuation of the properties was fixed according to the market value and that the plaintiffs were not given any share in the agricultural properties. As regards the movable properties it was argued that the division was wholly unjust and unfair because the lion 's share was taken by defendant No. 1 and the choice made by defendant No. S the father of the plaintiffs was neither wise nor prudent and was extremely detrimental to the interests of the plaintiffs. As an instance of the unfairness of the partition Mr. Nariman pointed out that a comparison of Schedules A and of Ext. B 3 would show that defendant No. 1 was allotted movable properties worth Rs. 1,10,274 2 6, whereas defendant No. 5 was given properties worth Rs. 90,142 4 0 there being a difference of about Rs, 20,000/odd. He also pointed out that shares of Lakshmi Textile Mills were allotted to defendant No. 1 which were extremely valuable and gave very rich dividends, where as defendant No. S was allotted the shares of Lakshmi Sugar Mills which was one of the sick Mills running at a loss whose dividends were insignificant. We shall consider this contention raised by counsel for the appellants a little later. The learned counsel appearing for the respondents Mr. Natesan, however, submitted that the present suit is frivolous and has been filed only with a view to harass the defendants and to re open a partition which was both just and equitable and which was entered by both the brothers with their eyes open and with the aid of their financial expert. Learned counsel for the respondents, further submitted that there is no reliable evidence to show that there was any cash deposits of Rs. 65,000 as mentioned in Sch. B, and if there was one it would have been divided on the spot instead of being postponed to a future date. Similarly it was submitted that so far as the shares are concerned they were chosen by defendant No. S himself and their valuation was equal. As regards the immovable properties we find ourselves in complete agreement with the arguments of the learned counsel for the respondents that the partition of these properties was fair and just and there is no material on the record to show that the partition worked in any way injustice or was detrimental in any way to the interests of the minors; In this collection we might try to illustrate our point from the findings of the Trial Court regarding the valuation of the immovable properties divided between the two; brothers. The partition of immovable properties Ext. B 1 which appears at pp. 243 to 248 of the Paper Book consists of to Schedules A & B. The Trial Court has, after careful consideration of the evidence, very scientifically itemised the properties 868 allotted to each of the brothers and the value of those properties. For A instance, item 1 of Sch. allotted to defendant No. 1 is a tank fed nanja land is Kurichi village measuring 3.80 acres and has been valued at Rs. 4,000/ . Item 2 is a similar land in village Kurichi which is self cultivated and has been valued at Rs. 7000/ . Thus [he total value of items 1 and 2 of Sch. A comes to Rs. 11,000/ . As against this defendant No. 5 was allotted item 2 of Sch. which on the basis of capitalised value at the rate of Rs. 601/ per month has been fixed at Rs. 14,000/ . Items 1 & 2 of Sch. A are the only agricultural properties possessed by the family and the Trial Court has rightly pointed out that whereas defendant No. 1 took the agricultural properties, defendant No. 5 got urban properties not only of the same value but of a higher value. Similarly item No. 3 of Sch. A allotted to defendant No. 1 is a house in the Big Bazaar Street and has been valued at Rs. 16,50/ . As against this the family house in the Oppanakkara Street has been allotted to defendant No. 5 whose value is much more than item No. 3 of Sch. The capitalised value of the family house in the oppanakkara Street on the basis of rental of Rs. 700/ per month would come to near about Rs. 96,000 . Item 4 of Sch. A is a house and site in Ramanathapuram and has been valued at Rs. 7,000/ because it was purchased in 1938 for a sum of Rs. 5,650/ vide Ext. B 139 dated March 6, 1938. The learned Subordinate Judge has roughly put the valuation of the said house and site at Rs. 7,000/ in 194(). As against this item 3 allotted to defendant No. 5 is a shop building in the Big Bazaar Street carrying a rental of Rs. 300/ per month at the time of the partition whose capitalised value would be Rs. 7,000/ . Item No. 5 of Sch. A which was allotted to defendant No. 1 has been valued at Rs. 2,300/ representing the purchase price of the property mentioned in Exts. B 140 to B 142. As against this item 4 of Sch. which has been allotted to defendant No. 5 was purchased for a sum of Rs. 2,100/ . It would thus appear that the division of immovable properties is just, fair and equal. It is true that the properties were not actually valued according to the market rate and that a notional valuation had been given in the partition deed. But in view of the detailed examination by the two Courts of the fact regarding capitalised value of the properties allotted to the two brothers it cannot be said that the partition of immovable properties was either unfair or unjust or in any way detrimental to the interests of the minors. After considering the evidence. , the Trial Court found as follows: "It is thus found from the available evidence that there was no unfairness or inequality in the partition of the immovable properties effected under Exhibit B 1 and that no ground exists for reopening that partition. " The High Court upheld the findings of the Trial Court in these words: "Thus in regard to the division of the immovable proper ties it is not possible for us to say that there was unfairness or fraud or irregularity in the allotment of the properties between the brothers. The scheme of the division of the immovable properties seems to us to be fair and we cannot say that the plaintiffs ' father (5th defendant) acted against the interests of his sons 869 or that the 1st defendant took any advantage of his position as the eldest member of the family and allotted to himself the best among the properties available for division. We there fore confirm the finding of the learned Subordinate Judge that the partition of the immovable properties effected under Exhibit B 1 is binding on the plaintiffs and that the plaintiffs are not entitled to reopen the partition. " It is a well settled practice of this Court not to interfere with a con current finding of fact given by the two Courts below in the absence of any extra ordinary or special reasons. In the instant case we hold that the finding of the l High Court as well as of the Trial Count based on a full and complete consideration of the evidence both oral and documentary and an elaborate and meticulous discussion of all the surrounding circumstances. We, therefore do not feel inclined to interfere with this concurrent finding of fact which is hereby affirmed. We might state that the objection regarding the properties not having been properly valued falls to the ground when we find that instead of notional value mentioned in the partition deed which is Rs. 12,517 13 0 for defendant No. l and Rs. 12,000/ for defendant No. S the capitalised value of the items allotted to the two brothers either on the basis of their purchase price or on the basis of the rent fetched by them is almost equal. The first contention regarding the partition of immovable properties raised by the learned counsel for the appellants being unfair and unjust must therefore be overruled. We now come to the question of the division of movable proper ties. In this connection our attention was drawn by Mr. Nariman to Ext. E 3 which is to be read along with the pencil note of K. Narayana swami D.W. 3, who was the auditor of Defendant No. 1 himself. Exhibit B 3 is the partition deed of movable properties consisting of shares, deposits, promotes, mortgage deeds and cash, particulars of which are given in Schs. A & B. Movable properties mentioned in Sch. A were allotted to defendant No. 1 and those mentioned in Sch. B, were allotted to defendant No. 5 father of the plaintiffs. It will appear from a plain examination of the two schedules that whereas defendant No. 1 admittedly got properties worth Rs. 1,10,274 2 6 defendant No. 5 got properties only worth Rs. 90,142 4 0 there being a clear disparity of Rs. 10,000/ because the share of each of the two defendants would be Rs. 1,00,2081 . On the defendant No. 1 's own documents, therefore? it is clear that a loss of Rs. 10,000/ was caused to defendant No. 5 in the year 1940 and the share of the plaintiffs in this loss would be 2/5th i.e. about Rs. 4,000/ which would swell into a large amount if we add interest for all these 35 years. That apart the learned counsel for the appellants has submitted that the document Ext. B 3 deliberately omits to mention a sum of Rs. 65,000/ which was a cash deposit alleged to have been kept in the safe and out of which Rs. 10,000/ were agreed to be given to the mother of the two brothers and the rest, viz. Rs. 55,000/ were to b divided between the two brothers, each defendant getting Rs. 27,500/ . This is 870 undoubtedly proved by Ext. A 2 where these figures are clearly mentioned. Entry No. l of Ext. A 2 runs thus: Total Settlement section M. K. section M. R. (1) (2) (3) (4) (5) (6) Thanichontham 65,000 55,000 27,500 27,500 Belonging exclusively *Scored out in pencil. This cash amount of Rs. 65,000/ is denied by defendant No. 1 and it is said that this amount might have been hidden money which never came to the share of the parties. D.W. 3 K. Narayanaswami has positively admitted in his evidence that he had made this entry in his on hand writing but he scored out this entry as the amount was not available. Both the Suborclinate Judge, Coimbatore and the High Court have accepted the explanation given by D.W. 3 Narayanaswami although the explanation appears to us to be prima facie false and unconvincing. Even assuming that this entry was made due to some mistake and had to be scored out, we cannot believe that a person of the expert knowledge and status of D.W. 3 Narayanaswami Iyer the Auditor would forget to make a corresponding correction in the total amount which is given below the statement of account signed by him. If the amount of Rs. 65,000/ was scored out, then the total would be Rs. 200116/ in Ext. A 2, but the total shown in pencil in Ext. A 2 is Rs 2,65,116/ which completely demolishes the case of defendant No 1 and the explanation given by D.W. 3 that the entry was made due to some mistake. The Courts below have however, relied on a number of circumstances which are purely of a speculative nature, in order to hold that the plaintiffs have not been able to prove the existence of the cash amount of Rs.65,000/ . One of the circumstances was that according to the evidence of defendant No. 5 the amount of Rs. 65,000/ was taken out from the safe and counted in the presence of defendants 1 and 5 and yet defendant No. 5 did not care to divide it at that time into two equal parts, nor did he insist on the same. Defendant No. S has, however, given an explanation that as his elder brother wanted that this money should be divided later he did not want to join issue on the subject and trusted his elder brother. A perusal of the evidence of defendant No. 5 clearly shows that he is an extremely emotional sort of a person who believes in the respect of the family above all consideration. It is. , therefore, not unlikely that defendant No. 5 quietly accepted the advice of his elder brother to divide the amount later on. It was however argued by the learned counsel for the respondents that defendant No. 5 was a shrewd business man having managed the family affairs for quite some time and if such a huge amount was concealed from him by his elder brother he would have undoubtely raised objection at any time before the suit. This conduct of defendant No. 5 cannot, however, put the plaintiffs out of court. He had decided to abide by the advice of his elder brother and if he thought that his elder brother did not want to divide the amount of Rs. 65,000/ he kept quiet which is quite in consonance with the 871 character of this man as revealed in his evidence and the circumstances of the case. Assuming however that defendant No. 5 did not take any objection, as the amount was very huge the silence of defendant No. 5 or even his acquiescence in allowing his elder brother to swallow this amount was not a prudent act and has caused serious detriment to the interests of the minors which he had to protect, because the minors at that time were members of the Hindu Undivided Family. In view of these circumstances, therefore, we are satisfied that the plaintiffs ' case regarding the deliberate suppression of the cash amount of Rs. 65,000/ has been proved and if this amount would have been available to defendant No. 5, then the plaintiffs would have got 2/5th share of Rs. 55,000/ , (Rs. 10,000/ reserved for the mother) viz. Rs. 27,500/ , as far back as 1940. The argument of Mr. Nariman on this point is, therefore, well founded and must prevail. The only other point that was stressed before us by the learned counsel for the appellants was that the Trial Court was right in ordering the appointment of a Commissioner for going into the assets of the movable properties, particularly the question of the shares of the Lakshmi Mills. We are, however, unable to agree with this argument. Mr. Natesan learned counsel for the respondents has drawn our attention to some important documents to show that the shares were equaly divided between defendants Nos. 1 and 5 and were actually chosen by defendant No. 5 with his eyes open. Exhibit B 153 which is a share market report dated April 5, 1940 shows that the paid up value of each share of Lakshmi Sugar Mills was Rs. 50 but the current price of the share at that time was Rs. 41/8/ i.e. it was Rs. 8/8/ below the paid up value and the dividend paid on the share was only Rs. 9/ yearly. It was, therefore, suggested by counsel for the respondents that defendant No. 5 was given the choice to take the shares of the Lakshmi Mills or the Lakshmi Sugar Mills and in view of the low market rate of the Lakshmi chose to take the shares of the Lakshmi Sugar Mills to the extent of Rs. 10,000/. In lieu of the shares of other Mills defendant No. 5 took a cash amount of Rs. 13,000/ as would appear from Ext. It is true that the shares of Lakshmi Textile Mills went up enormously a few years later in view of the international war situation in the continent but defendant No. 5 could not have foreseen such a contingency and if he had made the choice which he thought would be beneficial to the interests of the minors his conduct would have been at best an error of judgment which would not be sufficient to reopen the choice made by him. Mr Nariman, however, strenuously relied on the evidence of D.W. 3 Narayanaswami Auditor which was to the effect that he expressed great surprise when defendant No. 5 chose the shares of Lakshmi Sugar Mills and in his opinion that was his foolish act. This is, however, a matter of opinion but the fact remains that the market report of the Lakshmi Mills was not encouraging and therefore there was some justification for defendant No. 5 for not opting for the shares of the Lakshmi Mills. In these circumstances we hold that so far as the shares of the various Mills were concerned there was no unjust or unequal distribution between the parties. This item of movable properties, therefore, was correctly divided between the parties. 872 Learned counsel for the respondents submitted that taking a broad view of the whole case the Court should hold that it was not a case of unfair or unjust partition, because both defendant Nos. 1 and 5 were persons who had shrewd business experience and had voluntarily accepted the partition of the properties which was by and large equal. The learned counsel relied on the decision of this Court in Devarajan and Ors. vs Janaki Ammal and Ors(1) where this Court observed as follows: "Generally speaking, a partition once effected is final and cannot be reopened on the ground of mere inequality of shares, though it can be reopened in case of fraud or mistake or subsequent recovery of family property: [see Moro Vishvanath vs Ganesh Vithal Further an allotment bona fide made in the course of a partition by common consent of the coparceners is not open to attack when the shares are not absolutely equal, or are not strictly in accordance with those settled by law. It is true that minors are permitted in law to reopen a partition on proof that the partition has been unfair and unjust to them. Even so, so long as there is no fraud, unfair dealing or over reaching by one member as against another, Hindu law requries that a bona fide partition made on the basis of the common consent of coparceners must be respected and is irrevocable:" It was submitted that the evidence and circumstances of the case clearly show that there was no inequality of shares and the plea of fraud or mistake has not been accepted by the courts and that on the whole the partition was bond fide. It is true that if this was the position the ratio of the decision in Devarajan 's case (supra) would undoubtedly apply to this case. But this Court had taken care to point out in these very observations which are underlined by us that this rule did not apply to the minors who are undoubtedly permitted in law to reopen the partition once it is proved that the partition was unfair or unjust to them. In view of the concurrent finding of fact of the two Courts below that the partition of movable properties, excepting those with respect to the shares, was unfair and unjust, even according to the decision mentioned above the partition with respect to the movable properties has to be reopened. Moreover in an earlier decision of this Court in Bishundeo Narain and Anr. vs Seogeni Rai and Jagernath it was observed: "It is well established that a minor can sue for partition and obtain a decree if his next friend can show that that is for the minor 's benefit. It is also beyond dispute that an adult coparcener can enforce a partition by suit even when there are minors. Even without a suit, there can be a partition between members of a joint family when one of the members is a minor. In the case of such lastly mentioned 873 partitions, where a minor can never be able to consent to the same in law, if a minor on attaining majority is able to show that the division was unfair and unjust, the Court will certainly set it aside. " In our opinion the present case falls within the ratio laid down by the decision cited above. Apart from that there are numerous authorities which have sonsistently held that where a partition is unjust and unfair and detrimental to the interests of the minors the partition would be reopened irrespective of the question of bona fides. In Lal Bahadur Singh vs Sispal Singh and Ors.(1) it was observed that even though the ground of fraud and mistake failed, the partition which affected the interests of the minor could be reopened. Similarly in Chanvira 'Pa ' vs Da 'Na ' 'Va ' & Ors.(2) a Division Bench of the Bombay High Court held that a partition will be binding on the minors only if it was just and legal, but if it was made and finalised there being no means of testing the validity of the assets the partition was not final. The same view was taken in Maruti vs Rama(3) Thus on a consideration of the authorities discussed above and the law on the subject, the following propositions emerge: (1) A partition effected between the members of the Hindu Undivided Family by their own volition and with their consent cannot be reopened, unless it is shown that the same is obtained by fraud, coercion, misrepresentation or undue influence. In such a case the Court should require a strict proof of facts because an act inter vivos cannot be lightly set aside. (2) When the partition is effected between the members of the Hindu Undivided Family which consists of minor coparceners it is bindig on the minors also if it is done in good faith and in bona fide manner keeping into account the interests of the minors. (3) Where, however a partition effected between the members of the Hindu Undivided Family which consists of minors is proved to be unjust and unfair and is detrimental to the interests of the minors the partition can certainly be reopened whatever the length of time when the partition took place. In such a case it is the duty of the Court to protect and safeguard the interests of the minors and the onus of proof that the partition was just and fair is on the party supporting the partition. (4) Where there is a partition of immovable and movable properties but the two transactions are distinct and separable or have taken place at different times. If it is found that only one of these transactions is unjust and 874 unfair it is open to the Court to maintain the transaction which is just and fair and to reopen the partition that is unjust and unfair. The facts of the present case, in our opinion, fall squarely within propositions Nos. (3) and (4) indicated above. In the instant case we find from a perusal of the two schedules 'A ' and 'B ' of Ext. B 3 that there has been ex facie a disparity of about Rs. 10,000/ to which must be added Rs. 27,500/ which we have discussed above. Thus the total disparity comes to Rs. 37,500/ and the share of the minor plaintiffs would be 2/5th which comes to Rs. 15,000/ . This amount of Rs. 15,000/ should have been available to the minor plaintiffs as far back as 1940 when the partition was made and they have been deprived of that amount ever since. We find that in the peculiar facts and circumstances of the case as already stated it will not be in the interests of the minors nor conducive in the interests of justice to order the appointment of a Commissioner for reopening the entire partition when the shares of the minor plaintiffs are easily ascertainable in terms of money and can be quantified. In these circumstances we think the best course is to determine the money value of the share of the plaintiffs and to pass a decree for the same which will protect the minors from protracted litigation which might follow the passing of a preliminary decree. This was the approach made by the High Court but we do not agree with the amount quantified by it. If we add interest at the rate of 6% per annum as prayed for in the plaint on the amount of Rs. 15,000/ ,the interest calculated at this rate for 35 years from 1940 to 1975 would come to Rs. 31500/ . Thus the total amount payable to the plaintiffs comes to Rs. 46,500/ . We, therefore, allow the appeal in part and modify the decree of the High Court to the extent that there will be a decree for a sum of Rs. 46,500/ in favour of the plaintiffs/appellants which represents their share of the movable properties of which they were deprived of. The plaintiffs would be entitled to future interest at the rate of 6% per annum till payment. In the circumstances of the case, there will be no order as to costs. This course, in our opinion, safeguards the interests of the minors to give them their just due and to protect them from a protracted and fruitless litigation. V.P.S. Appeal partly allowed.

(1) A partition effected between the members of an Hindu Undivided Family by their own volition and with their consent cannot be reopened unless it is shown that it was obtained by fraud, coercion, misrepresentation or undue influence. In such a case. the Court should require strict proof of facts, because, an act inter vivos cannot be lightly set aside. (2) When the partition is effected between the members of the Hindu Undivided Family which consists of minor coparceners it is binding on the minors also, if it is done in good faith and in a bona fide manner keeping into account the interests of the minors. (3) But if the partition is proved to be unjust and unfair and is detrimental to the interests of the minors the partition can be reopened after any length of time. In such a case, it is the duty of the Court to protect and safeguard the interests of the minors and the onus of proof that the partition was just and fair is on the party supporting the partition. (4) Where there is a partition of immovable and movable properties, but the two transactions are distinct and separable, or have taken place at different times, if it is found that only one of these transactions is unjust and unfair, it is open to the court to maintain the transaction which is just and fair and to reopen the partition that is unjust and unfair. [873D 874B] In 1940, two brothers, defendants 1 and 5 partitioned their movable and immovable properties by two separate transactions. At that time defendant S had two sons who were minors. They and their minor brothers filed a suit in 1952 for cancellation of the partition and for re opening it on the ground that the partition was unjust and unfair and had the effect of depriving the minors of their legal shares in the properties. The trial court passed a preliminary decree for re partition of the movable properties as it was ex facie unjust and unfair and directed appointment of the Commissioner to go into the valuation of the assets sought to be partitioned while holding that the partition of immovable properties was neither unjust nor unfair. In appeal, the High Court agreed with the findings of the trial court but set aside the direction of the trial court for the appointment of Commissioner; quantified the value of the disparity in the share of the plaintiffs and passed a decree to the extent of 2/5th share of Rs. 17.700. In appeal to this court, passing a decree for a sum of Rs. 46,500/ with future interest in modification of the High Court 's decree, ^ HELD: (1) The division of immovable properties was just fair and equal. The properties were not actually valued according to the market rate and only a notional valuation had been given in the partition deed; but, in view of the detailed examination by the two courts of the facts regarding capitalised value of the properties allotted to the two brothers, it could not be said that the partition of the immovable properties was either unfair or unjust. This court will not interfere with concurrent findings of the fact given by the courts below in the absence of any extraordinary or special reasons. [868E F; 869B C] 2(a) But a perusal of the schedules to the partition deed relating to movable properties shows an ex facie disparity of about Rs. 10,000. [874B] (b) Further, the evidence disclosed that a sum of Rs. 55.000 with defend ant 1, was agreed upon between the brothers to be divided later, but this 7 1127 SCI/75 864 amount was not included in the partition deed. Assuming that defendant 5 had not taken any objection, since the amount was very large, his Silence or his acquiescence in allowing his elder brother to swallow the amount was not a prudent act and has caused serious detriment to the interests of the minors which he had to protect because. he and his minor sons were member of an Hindu Undivided Family. [870H 871B] (c) Taking these two sums into account and calculating the plaintiff 's share in 1940 and adding interest thereon till date of decree, the plaintiffs would be entitled to Rs. 46,500. [874D E] (d) The High Court was right in holding that it would not be in the interest of the minors or. Of justice to order the appointment of a Commissioner for re opening the entire partition when the shares of the plaintiffs are easily ascertainable in terms of money and can be quantified. [874C D] Bishunodeo Narain and vs Seogeni Rai and Jagernath. 556, followed. Devarain and ors. vs Janaki Ammal and Ors. C.A. No. 2298 of 1066 dated r March 20, 1967, Lal Bahadur Singh vs Sispal Singh and ors. T.L.R. 14 All 498; Chanvira 'Pa ' vs Da 'Na ' 'Va ' & ors. I.L.R. and Maruti vs Rama I.L.R. referred to.

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N: Criminal Appeal No. 108 of 1971. Appeal by Special Leave from the Judgment and order dated the 20th November, 1970 of the Allahabad High Court in Criminal Appeal No. 495 of 1968. D. Mukherjee, U. K. Jha and U. P. Singh: for the Appellant. D. P. Unival and o. P. Rana for the Respondent. The Judgment of the Court was delivered by BEG, J. The four appellants Daryao Singh, aged 46 years. Birbal aged 50 years, Dharam Pal aged 29 years and Om Pal, aged 15 years, were tried, alongwith 14 others, for the offence of rioting in the course of which two murders were committed, on 7.6.1967, at about 6.30 a.m., on a path adjoining the field of the appellant Daryao Singh leading to village Parsoli from village Nirpura, in Police Station Doghat, in the District of Meerut. The Trial Court acquitted eleven accused persons giving them the benefit of doubt and convicted seven including the four appellants. Each of the accused persons was charged and convicted under Section 302, read with Sections 149, Indian Penal Code and sentenced to life imprisonment, in addition to charges and convictions under Section 149/324 and 149/34 I.P.C. and either under Section 147 or Section 148 I.P.C. depending upon the weapon alleged to have been used by an accused person. 589 The prosecution case revealed a long standing enmity between two groups of village Nirpura: one to which the appellants belonged and another to which Mukhtara and Raghubir, the murdered men, and the four other injured persons belonged. As is not unusual, the origin of the hostility between the two sides seems to have been a dispute over cultivable land between collaterals who had some joint Khatas. Asa Ram, P.W. 1, claimed to be in separate possession of some plots with his two brothers, including Raghubira (murdered), and his uncle Mukhtara (murdered) . It was alleged by Asa Ram (P.W. 1) that Daryao Singh appellant wanted to take forcible possession of some land cultivated by him. Daryao Singh and others had already filed partition suit which was pending at the time of the occurrence. It appears that Hargyan, the father of the appellant Daryao, a first cousin of Mukhtara, the murdered man, had also been murdered in 1923 over a similar dispute. Asa Ram (P.W.1), and Raghubira (deceased), Bija (P.W. 10) and Asghar (P.W 4) had been convicted and sentenced to life imprisonment. They had been released on parole after five years ' imprisonment On the date of occurrence, Mukhtara, the murdered man, was said to be proceeding with Raghubir, who was also murdered, and Asa Ram, P.W.1, and Bija, P.W.10, all sitting in a buggi driven by Asghar, P.W.4, and Smt. Jahani, P.W.3, the wife of Asa Ram, P.W.1, was said to be following the buggi at a short distance with some food for the party. When this buggi reached the field of Daryao Singh, where a number of persons, said to be eighteen altogether, whose names are mentioned in the First Information Report lodged at Police Station Doghat at a distance of three miles from village Nirpura at 8.30 a.m., were sitting on the boundary. These persons are alleged to have surrounded the buggi and attacked its occupants with balams and lathies shouting that the whole party in the buggi should be killed. give occupants of the buggi, and, after that, Smt. Jahani, who soon joined them, were injured. Two of them, Mukhtara and Raghubir, died very soon after the attack. It was alleged that Dharam Pal, Birbal and Daryao, appellants, and Nahar, Ajab Singh, and Ram Kishan, acquitted persons, were armed with balams, one Salek Chand was armed with a spade, and the rest with lathis. A number of witnesses are said to have arrived in response to the shout of the injured occupants of the buggi. The following injuries are shown to have been sustained by the victims of the attack: 1. MUKHTARA: "1. Vertical abrasion, 1 1/2 in. x 1/2 in. On the head, 4 in. above the middle of the left eye brow 2. Transverse abrasion, 1 3/4 in.x3/4 in. On the head, 5 in. above the right eye brow. Round swelling" 2 in.x2 in. On the right side of the head, 1/2 in. above the ear, there was a depressed fracture 2 in.x2 in. underneath on the bone. Transverse incised wound 1 1/2in.x1/2 in.xboneand brain deep on the head 1 in. behind the middle of the right car. Brain matter was coming out of the wound. 590 5. Transverse incised wound 1 1/4in.x 1/2 in. x bone deep on the A head 3 in. behind the upper part of the right car. The margins of injuries Nos. 4 and 5 were clear cut, smooth and well defined and angles on both the end were acute. Round blue mark 2 in.x2 in. On the right shoulder portion. There was swelling all over the head. There was no reference of injuries Nos. 1 and 6 in the inquest report . RAGHUBIRA 1. Transverse abrasion 1/4 in.x1/2. On the left ankle inner side. Vertical punctured wound in.x1/3 in.x1/4 in. On the back side, of the elbow, margins, clean cut. smooth and wall defined and angles were acute. Transverse lacerated wound on the head, 1 1/2 in. x 2 in. bone deep on the right side 3 in above the car. Round wound on the head 4 1/2 in. above the middle of the right eye brow with margins clean cut". ASA 1. Punctured wound 1/2 in.x1/4 in.x1/4 in. On the left side of the chest with abrasions on the margins, 64 in. below the axile. Abrasion 1/2 in.x1/4 in. On the left shoulder. Abrasion 1/2 in.x1/4 in. oblique, on the right side of the chest extending towards right shoulder from epigastrium. Abrasion 1/4 in.x1/8 in. On the inner side of the left hand I in. above the wrist. Abrasion 1/4in.x1/6 in. On the right arm back side 3 in. above the elbow. Contusion 3/4 in.x1/2 in. On the right side 3 in. below the edge of the iliac crest. Incised wound 1/2 in.x1/10 in. x skin deep 1/2 in. below the left eye. " 4. SMT. JAHANI: 1. Lacerated wound 1 1/3 in. x 1/2 in. bone deep from front to backward 3 1/2 in. above the left ear. Contusion 4 1/4 in.x1 in. On the left scapular region. 2 1/2 in. below the shoulder. Contusion 1 1/2 in.x1/4 in. parallel to the earth extending from the upper and inner end of injury No. 2. These injuries were simple and had been caused by some blunt weapon, like lathi and were about 6 hours old (fresh). I had prepared the injury report exhibit Ka 16 at the time of examination. It bears my signature and is correct." 591 5. ASGHAR: 1. Contusion 2 in.x1/4 in.x1/4 in. going from front to back 31 in. above the nose. Punctured wound 1 in.x ' in.x 4 in. On the left hand, outer side 2 in. below the elbow. BIJAI SINGH: 1. Contused wound 1/2 in.x1/2 in. x skin deep at the part above the nail of the thumb of right hand with contusion 1 1/4 in. x1/2 in. in the inner part of the nail. Contusion 2 1/4 in.x3/4 in. extending from the palm on the 1st and 2nd knuckles whereblood had clotted in an area of 1/2 in. x1/4 . On the palmer side. Abrasion 1/2 in.x1/4 in. On the back and anterior side of right hand, 3 1/2 in. above the wrist. " Injuries were found on the side of the accused on 3 appellants only. They were as follows: (1) OM PAL: 1. Lacerated wound 1/2 in.x4/10 in.x2/10 in. on the inner side of left forearm 3 1/2 in. above the left wrist. Lacerated wound 2/10 in.x2/10 in.x6/10 in. On the inner side of left forearm. Abrasion 3/10 in. X21 10 in. On the upper r side of left forearm, 3 1/2 in. above the left wrist. " 2. DARYAO: "1. Abrasion in.x3/10 in on the left shoulder in front side. Wound with scab 4/10 in.x2/10 in. On the left are outer side, 6 in. below left shoulder". BIRBAL: 1. Lacerated wound 2 in.x3/10 in. bone deep on the front , side of head. Abrased contusion 1 in.x2/10 in. On the left side of head, 3 in. above the left ear. Contusion 1/2 in.x4/10 in. On the right side of head, 2 in. above the right ear. Abrasion 1/4 in.x1/4 in. On the index finger of the right hand upper side on the middle phalux. Abrasion 1/4 in.x1/4 in. On the upper side at the root of the middle finger of right hand. Abrasion 1/2 in.x1/10 in. On the inner side of the lower portion of left fore arm, 3 in. above the wrist. Abrasion 3/10 in.x1/10 in. On the inner side of left wrist. 592 8. Lacerated wound 3/10 in.x1/10 in.x3/10 in. an the A right at a distance of 31 in. from side of thigh, anterior iliac spine". It is significant that in answer to the last question put to Daryao Singh, appellant, in the Committing Magistrate 's Court, under Section 342 Criminal Procedure Code, whether he had nothing else to say, the first thing that came to his mind was that Asa Ram P.W.1, and Bijai, P.W. 10 and Raghubir (deceased) had killed his father about 15 years ago. The defense case seemed quite absurd. It was that, Asa Ram and Bijai and Asghar, after having killed Mukhtara and Raghubir, haul come and attacked the three injured appellants at the time and place given by the, prosecution. Their defense witness, however, in an obvious attempt to explain the injuries of the three appellants, put forward the entirely new version that, when Asa, Bijai, and Asghar, were killing Mukhtara and Raghubir, the three injuries appellants had attempted to save the murdered men and were injured as a consequence. The accused had even filed a First Information Report on these lines. They unsuccessfully tried to prosecute Asa and Bijai and Asghar who could not, as the Trial Court and the High Court had rightly observed, be expected to run berserk suddenly and attack persons on their own side for no explicable reason. The prosecution had, in addition to examining injured witnesses, mentioned above, produced Rattan Singh P.W.2, Kalu, P.W.9, and Lakhi, P.W.7, whose testimony was discarded by it on two grounds: firstly, because each one was shown to have some enmity with some accused person; and, secondly, because they were said to have been standing at a Harat nearly 400 paces away from where` according to the High Court, they could not have seen the occurrence. If there was no obstruction to the range, of vision, and none was shown by evidence, these witnesses could at least make out the number of assailants from this distance as sunlight was there. The prosecution evidence suffered from some quite obvious infirmities. Each of the four injured eye witnesses, while naming each of the eighteen accused persons as participants in the occurrence and specifying their weapons, without any contradiction, had failed to assign any particular part to any of them. Each injured witness said that all the eighteen accused persons, named in the First information Report, were assaulting the injured. This was hardly consistent with either the medical evidence or the very short time the whole occurrence was said to have lasted. It was physically impossible for all the eighteen accused persons to attack simultaneously each of the five victims. However, we cannot interpret the impressions of rustic witnesses, sought to be conveyed through their statements` as though they were made in carefully drawn up documents calling for a literal interpretation. It was likely that each of them had seen some acts of some assailants, but, due to natural discrepancies in their accounts, as each could only depose the part he had observed, each had been instructed to omit this part of his testimony. That may explain how each consistently stated that all the accused persons were attacking 593 his or her party although he or she could not specify which accused attacked which victim. From the manner in which each witness could, without making any mistake, name each of the eighteen accused persons, almost in the same order, and specify the weapon each carried, without any discrepancy, some tutoring could be suspected. Nevertheless, both the Trial Court and the High Court had reached the definite conclusion that the party of assailants consisted of more than five persons. It also found that this party was sitting on the boundary of the field of Daryao, apparently waiting with their weapons for the buggi, carrying Raghubir and Mukhtara and others., to reach the spot where they surrounded it and attacked. It was clear, from the nature and number of injuries of both sides, which we have set out above in extenso, that the attacking party must have consisted of more persons than the party of the male victims who were five in number. Even if these five victims were sitting in the buggi they were not all empty handed. Some of them had lathis which they plied in self defence. The number and location of injuries on both sides also indicated an attack by a group of persons which must have surrounded the party traveling in the buggi. Even if two persons are engaged in stopping the buggi and there are two on each of the two sides of the buggi their number would be six. Again, even if at least one person is assumed to be the assailant of each of the victims, in a simultaneous attack upon them, the number of such assailants alone would come to at least six. It is, however, clear from the injuries on Mukhtara and Raghubir that each was attacked by more than one person because each had injuries with sharp edged weapons and lathis. these facts were enough to come to the conclusion that the total number of assailants could not conceivably have been less than five. The High Court however, after giving the benefit of doubt to four of the accused persons, on the ground that their cases did not differ from those of the others acquitted, came to the obviously correct conclusion that at least the four appellants before us must have taken part in the attack because they admitted their participation in the occurrence which took place at the time and place of the incident in which Raghubir and Mukhtara had lost their lives. Three of the accused persons as already indicated, had received injuries. On their own version, these injuries were sustained in the same occurrence. If, therefore, the prosecution version about the broad character of the incident is correct, the only question which remained was: Against which accused person was the case of participation in the attack established beyond reason able doubt? The High Court came to the conclusion that the admissions of the four accused, corroborated by the injuries on the bodies of three OF them, left no doubt whatsoever that they were, in any case, among the assailants. The others had merely been given the benefit of doubt lest some injustice is done by relying implicitly on partisan witnesses appearing in a type of case in which the innocent ale not infrequently sought to be roped in with the guilty who are, of course, not spared. This did not mean that the total number of assailants was actually less than five as the learned Counsel for the appellants asked us to presume from the fact that fourteen out of the eighteen accused persons were actually acquitted. 594 It is true that the acquittal of an accused person does raise, in the eye of law, a presumption that he is innocent even if he was actually. guilty. But, it is only the acquitted accused person and not the convicted accused persons who can, as a rule, get the benefit of such a presumption. The effect of findings on questions of fact depends upon the nature of those findings. If, for example, only five known persons are alleged to have participated in an attack but the Courts find that two of them were falsely implicated, it would be quite nature; and logical to infer or presume that the participants were less than five in number. On the other hand, if the Court holds that the assailants were actually five in number, but there could be a doubt as to the identity of two of the alleged assailants, and, therefore, acquits two of them the others will not get the benefit of doubt about the identity of the two accused so long as there is a firm finding, based on good evidence and sound reasoning, that the participants were five or more in number. Such a case is one of doubt only as to identity of some participants and not as to be total number of participants. It may be that a definite conclusion that the number of participants was at least five may be very difficult to reach whale the allegation of participation is confined to five known persons and there is doubt about the identity of even one. But, where a large number of known persons (such as eighteen, as is the case before us), are alleged to have participated and the Court acts on the principle that it is better to err on the side of safety, so that no injustice is done to a possibly wrongly implicated accused, and benefit of doubt is reaped by a large number, with the result that their acquittal, out of abundant caution, reduces the number of those about whose participation there can be no doubt to less than five, it may not be really difficult at all, as it not in she case before us, to recall the conclusion that, having laggard to undeniable facts, the number of participants could not possibly be less than five. We have, for the reasons given above, also reached the same conclusion as the learned Judges of the Allahabad High Court. We wish that the High Court had itself given such reasons, which are not at all difficult to find in this case, so that its conclusion on the number of participants may not have appeared ratter abrupt. Justice has not only to be done, but, as have been often said, must manifestly appear to be done. Even if the number of assailants could have been less them five in the instant case (which, we think, on the facts stated above, was really not possible), we think that the fact that the attacking party was clearly shown to have waited for the buggi to reach near the field of Daryao in the early hours of 7.6.1967, shows pre planning. Some Of the assailants had sharp edged weapons. They were obviously lying in wait for the buggi to arrive. They surrounded and attacked the occupants shouting that the occupants will be killed. We do not think that more convincing evidence of a pre concert was necessary. Therefore, if we had thought it necessary, we would not have hesitated to apply Section 34, I.P.C. also to this case. The principle of vicarious liability does not depend upon the necessity to convict a required number of persons. It depends upon proof of facts, beyond reasonable 595 doubt which makes such principle applicable. (See: Yehwant & Anr. vs State of Maharashtra;(1) and Sukh Ram vs State of U.P.)(2). The most general and basic rule, on a question such as the one we are considering, is that there is no uniform, inflexible or invariable rule applicable for arriving at what is really an inference form the totality of facts and circumstances which varies from case to case. We have to examine the elect of findings given in each case on this totality. It is rarely exactly identical with that in another case. Other rules are really subsidiary to this basic verity and depend for their correct application OF the peculiar facts and circumstances in the context of which they are enunciated. In Yeshwant 's case (supra), the question was whether the acquit(ah of an alleged participant, said to be Brahmanand Tiwari, for the murder of a man called Sukal, could make it impossible to apply the principle of vicarious liability to convict, under Section 302/34 I.P.C., Yeshwant, the only other participant in under. This Court observed (at p.303): The benefit of this doubt can only go to the appellant Brahmanand Tiwari and not to the other accused persons 13 who were known well to each eye witness." Distinguishing Krishna Govind Patil vs State of Maharashtra (3) this Court said in Yeshwant 's case (supra) (at p. 302): "We do not think that this decision which depends upon its own facts, as criminal cases generally do, lays down any general principle that, where the identity of one of the participants is doubtful, the whole case must end in acquittal. Such a question belongs to the realm of facts and not of law: ` The following cases were also cited before us: Dalip Singh & vs State of Punjab (4) Bharwad Mepa Dana & Anr. vs State of Bombay;(5) Kartar Singh vs State of Punjab;(6) Mohan Singh vs State of Punjab;(7) Ram Bilas Singh & Ors. vs State of Bihar(8) In the case of Ram Bilas Singh (supra) previous decisions of this Court on the question argued before us have been considered at some length and a passage from Krishna Govind Patil 's case (supra) was also quoted. In none of these cases was it decided that where, out of abundance of caution, a large number of accuse(l persons obtained an acquittal with the result that the number of those whose participation is established beyond reasonable doubt is reduced to less than five, but, at the same time, it is clear that the total number of assailants could not be less than five, the convicted accused persons must necessarily get the benefit of doubt arising in the case of the acquitted accused persons. A case like the one before us stands on the Same footing as any other case where there is certainty that the number of participants was not less than five but there is doubt only as to (1) [1973] I S.C.R. p. 291 @ 302 & 303. (2) [1974) 2 S.C.R. p. 518. (3) ; (4) ; (5) ; (6) ; (7) [1962] Suppl (3) S.C.R. 848. (8) 596 The identity of some of the participants. It has to be remembered that doubts may arise with regard to the participation of a particular accused person in circumstances whose benefit can only be reaped by the accused who raises such doubt. Doubts may also arise about the veracity of the whole prosecution version and doubts about the participation of individual accused persons may contribute to the emergence of such doubts which may cover and engulf the whole case. Never the less, if, as in the instant case, the Courts, whose duty is to separate the chaff from the grain, does hold that the convicted persons were certainly members of an unlawful assembly which must have consisted of more than five persons, we do not see any principle of law or justice which could stand in the way of the application of Section 149 J.P.C. for convicting those found indubitably guilty of participation in carrying out of the common object of an unlawful assembly. The only remaining question arises from the age of Om Pal Which, at the time of trial, was found by the Trial Court to be about 15 years. This means that Section 29 of the Uttar Pradesh Children Act, 1951, was applicable to the case. This Section reads as follows: "29. Commitment of child to approved school (1) Where a child is found to have committed an offence punishable with transportation or imprisonment, the Court, if satisfied on inquiry that it is expedient so to deal with the child, may order him to be sent to an approved school for such period of stay as will not exceed beyond the time when the child will attain the age of 18 years or for a shorter period, the reasons for such period to be recorded in writing. (2) Where prior to the commencement of this Act a youthful offender has been sentenced to transportation Or imprisonment, the State Government may direct that in lieu of undergoing or completing such sentence he shall, if under the age of sixteen years, be sent to an approved school, and thereupon the offender shall be subject to all the provisions of this Act as if he had been originally ordered to be detained in such school. " This question was not raised earlier so that the Trial Court or the High Court may take the action it was open to the Courts to take after due inquiry. Such action, if considered expedient, could only be to send the appellant to an approved school. We may observed that, although the appellant om Pal was said to be armed with a lathi, no specific part was assigned to him by any prosecution witnesses. He was bound, with the background of hostility between two sides and 597 the events mentioned above, to have been misled by the bad example of his elders. No previous participation in such a case and no previous conviction was shewn against him. We, therefore, think that appropriate action under Section 29 of the Children 's Act could have been taken in his case if the question had been raised in time. We hope that the punishment he has already undergone has had a salutary effect in making him conscious of the gravity of the consequences of joining an unlawful assembly. All that we can do now, in the circumstances of Om Pal 's case, is to recommend the remission of the remaining period of om Pal 's sentence to the authorities concerned. Subject to the observations made above with regard to om Pal, we affirm the convictions and sentences and dismiss this appeal.

The 4 appellants were tried along with 14 others for the offence of rioting in the course of which 2 murders were committed at 6 30 a.m on 7 1967. The prosecution revealed a long standing enmity between the tyo groups; one to which the appellants belonged and the other to which the deceased belonged. The defence case was that people belonging to the group of the deceased killed the deceased and that thereafter they attacked the 3 injured appellants. At the trial however, the defence witnesses stated that the 3 witnesses who were injured(l a(tempted to save the deceased and were therefore injured. The prosecution evidence suffered from some quite obvious infirmitied. Each of the 4 injured eye witnesses while naming each of the IX accused persons as participants in the occurrence and specifying their weapons without any contradiction had failed to assign any particular part of any of them. Each injured eye witness said that all 18 accused persons were assaulting the injured. I his was hardly consistent with the medical evidence. The Trial Court acquitted 11 accused giving them the benefit of doubt and convicted 7 including the 4 appellants under section 302 read with section 149. The High Court gave the benefit of doubt to all the accused except the 4 appellants. The High Court came to the conclusion that the 4 appellants had taken part in The attack in view of the admission of the 4 accused about their participating in the occurrence corroborated by the injuries on the bodies of 3 of them. On appeal by Special leave it was contended by the appellants that since 14 out of 18 accused persons were actually acquitted the Court must presume that total number of assailants was less than 5 and that they. therefore cannot be convicted under section t 49 ^ HELD: 1. It is true that the acquittal of an accused person does raise in the eye of law, a presumption that he is innocent even if he was actually guilty. but it is only the acquitted accused person and not the convicted accused person who can as a rule get the benefit of such a presumption. The effect of findings on questions of fact depends upon the nature of those findings 1 only five known persons are alleged to have participated in an attack; and the counts find that 2 of them were falsely implicated it would be quite natural and logical to infer or presume that the participants were less than 5 in number. On the other. hand if the court holds that the assailant were actually 5 in number but there could be a doubt as to the identity of 2 of the alleged assailants and therefore acquits 2 of them the others will not get the benefit of douht. so long as there is a firm finding based on good evidence and sound reasoning that the participants were 5 or more in number. Such a ease is one of doubt only as to identity of some participants and not as to total number of participants. [594A C] 2. It is true that there are some unfirmities in the prosecution evidence However the impression of rustic witnesses sought to he conveyed through their statements cannot be interpreted as though they were made in carefully drawn up documents calling for a literal interpretation. [592 H] 588 3. The number and location of injuries on both sides also indicate an attack by a group of persons which must have surrounded the party of the deceased persons travelling in the Buggi. Even is 2 persons are engaged in stopping the Buggi and there are 2 on each side of the Buggi then the number would be 6. Again, even if one person Is assumed to be the assailant of each of the victims in a simultaneous attack upon them the number of such assailants alone would come to at least 6. The deceased had injuries with sharp edged weapons and lathis. It is therefore clear that each one was attacked by more than one person. These facts were enough to come to the conclusion that the total number of assailants could not conceivably have been less than 5. [593 C E] 4. Even if the number of assailants could have been less than 5 (which can the facts stated was really not possible) we think that the fact that the attacking party was clearly shown to have waited for the Buggi to reach near the field of Daryao in the early hours shows pre planning. Some of the assailants had sharp edged weapons. They were obviously lying in wait for the Buggi to arrive. A more convincing evidence of a pre concert was not necessary. Therefor if necessary. we would not have hesitated to apply section 31 of I.P.C. also to this case. The principle of vicarious liability does not depend upon the necessity to convict the required number of persons but it depends upon proof of facts beyond reasonable doubt which makes such a principle applicable. [594 F H 595 A] Yeshwant & Anr. vs State of Maharashtra [1973] 1 S.C.R. 291 It 302 303 at and Sukh Ram vs State of U.P. ; distinguished. 5.The age of appellant Om Pal at the time of trial was IS years. Section 29 of the U.P. Children Act 1951 was applicable to the case. This question was not raised either before the Trial Court or before the High Court. Although Om Pal accused was said to be armed with a lathi no specific part was assigned to him by the prosecution witnesses He must have been misled by the bad example of his elders. No previous participation in such a case and no previous conviction was shown against him. The appropriate ac(ion under section 29 of the Children Act could have been taken in his case is the question had been raised in time. The Court recommended the remission of the remaining period of Om Pal to the authorities concerned. [548D H. 599A C]

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Civil Appeal No. 1297 of 1970. Appeal by special leave from the Award dated the 10th October 1969 of the Additional Industrial Tribunal, Delhi in I.D. No.174 of 1968. M. K. Ramamurthi, K. R. Nagaraja, section K. Mehta, A. K. Jain and C. K. Srivastava, for the Appellant. A. K. Sen, M. C. Bhandare. Dr. Anand Prakash, P. P. Rao, P. H. Parekh and Mrs. Sunanda Bhandare, for Respondent No. 1. The Judgment of P. N. Bhagwati and P. K. Goswami, JJ. was delivered by Bhagwati, J. A. Alagiriswami, J. gave a dissenting opinion. BHAGWATI J. Here, in this case, once again arises the question as to what is an 'industry ' within the meaning of the . This question has continually baffled and perplexed the Courts in our country. There have been various judicial ventures in this rather volatile area of the law. The Act gives a definition of 'industry ' in section 2(j) but this definition is not very vocal and it has defined analysis, so that judicial effort has been ultimately reduced merely to evolving tests by reference to characteristics regarded as essential for constituting an activity as an 'industry '. The decided cases show that these tests have not been uniform; they have been guided more by an empirical rather than a strictly analytical approach. Sometimes these tests have been liberally conceived, sometimes narrowly. The latest exposition is to be found in the judgment of a Bench of six Judges of this Court 141 in Safdarjung Hospital vs K. section Sethi.(1) But while applying the tests indicated in this decision, it is necessary to remember that the is a legislation intended to bring about peace and harmony between management and labour in an 'industry ' so that production does not suffer and at the same time, labour is not exploited and discontented and, therefore, the tests must be so applied as to give the widest possible connotation to the term 'industry '. Whenever a question arises whether a particular concern is an 'industry ', the approach must be broad and liberal and not rigid or doctrinaire. We cannot forget that it is a social welfare legislation we are interpreting and we must place such an interpretation as would advance the subject and purpose of the legislation and give full meaning and effect to it in the achievement of its avowed social objective. With these prefatory observations, we proceed to state the facts giving rise to the appeal. The Indian Standards Institution (hereinafter referred to as 'the Institution ') is a Society registered under the . The workmen of the Institution represented by the Indian Standards Institution Employees ' Union (hereinafter referred to as 'the Union ') made certain demands which were not accepted by the management and a dispute accordingly arose between the management and the workmen. The dispute was taken in conciliation but the Conciliation officer was unable to bring about settlement and he made, what is commonly known as "failure report" to the Lt. Governor of Delhi. The Lt. Governor thereupon by an order dated 28 9 1968, referred the dispute for adjudication to the Industrial Tribunal under sections 10(1) (d) and 12(5) of the Act. The order of the Lt. Governor set out the demands which were to form the subject matter of adjudication by the Industrial Tribunal. The Union representing the workmen filed a statement of claim in support of these demands. The management opposed the demands on merits but in addition to the defence on merits, they raised a preliminary objection which, if well founded, would strike at the very root of the jurisdiction of the Industrial Tribunal to entertain the reference. The preliminary objection was that the institution was not a industry within the meaning of section 2(j) of the Act and, therefore, the dispute between the management of the Institution and its workmen was not an 'industrial dispute ' as defined in sec. 2(k) and the Lt. Governor had no jurisdiction to refer it for adjudication under the provisions of the Act. Issue No. 1 arising out of this preliminary objection was in the following terms: "Is Indian Standards Institute an industry or not", and this issue was directed to be tried as a preliminary issue. The Industrial Tribunal proceeded to examine the legal position for the purpose of determining when a particular activity can be regarded as an industry within the meaning of section 2(j) of the Act. It observed that there were five tests laid down by the decisions of this Court in Madras Gymkhana Club Employees Union vs The Management of the Madras Gymkhana Club(2) and Cricket Club of India Ltd. vs The (1) ; (2) [1968] 1. section C. R. 742. 142 Bombay Labour Union & Anr.(1) which were required to be satisfied before an activity could be held to be an "industry" and they were as follows: "1. When the operation undertaken rests upon cooperation between employers and employees with a view to production and distribution of material goods or material services; 2. It must bear the definite character of trade or business or manufacture or calling or must be capable of being described as an Undertaking analogous to business or trade resulting in material goods or material services; 3. The activity to be considered as an 'industry ' must not be casual but must be distinctly systematic; 4. The work for which labour of workmen is required, must be productive and workmen must be following an employment calling, or industrial avocation; and 5. When private individuals are the employers, the industry is run with capital and with a view to profits. (These two circumstances may not exist when Government or Local Authority enters upon business, trade, manufacture or an undertaking analogous to trade). " On an application of these tests, the Industrial Tribunal found that the Institution satisfied the first four tests and this indeed was not disputed, but so far as the fifth test was concerned, it was not satisfied since capital was undoubtedly employed in the institution but the institution was not run with a view to profit. The profit motive was ruled out by the objectives of the Institution and as the profit motive was lacking, the Institution could not be held to be an 'industry '. The Industrial Tribunal accordingly, by an order dated 10th October, 1969, held that the reference of the dispute between the management of the Institution and its workmen was outside the power of the Lt. Governor and the Industrial Tribunal had no jurisdiction to entertain the reference or to adjudicate upon it. The workmen were obviously aggrieved by this older made by the Industrial Tribunal since it closed the doors of industrial adjudication and left the workmen without any remedy to redress their grievances and hence they preferred the present appeal against the order of the Industrial Tribunal with special leave obtained from this Court. The , as its long title and preamble show, has been enacted to make provision for investigation and settlement of industrial disputes. It is only an 'industrial dispute ' which can be referred for adjudication under sections 10(1) (d) and 12(5) of the Act. That is a 'industrial dispute ' is to be found in s 2(k) which defines an industrial dispute to mean "any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions (1) ; 143 Of labour, of any person. " This definition, of course, does not in so many terms, refer to 'industry '. But, on the grammar of the expression itself an industrial dispute must necessarily be a dispute in an industry and moreover the expressions 'employer ' and 'workman ' used in the definition of 'industrial dispute ' carry the requirement of 'industry ' in that definition by virtue of their own definitions in sections 2(g) and 2(s). It is therefore, necessary to examine what is the concept of an 'industry ' within the meaning of the Act. Now, the word 'industry ' is defined in section 2(j) and that section reads: " 'industry ' means any business, trade, undertaking, manufacture or calling of employers, and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;" This definition is in two parts. The first part says that it means any business, trade, undertaking, manufacture or calling of employers and then it goes on to say in the second part that it includes ally calling, service, employment handicraft, or industrial occupation or avocation of workmen. This Court had occasion to consider this definition in r the case of State of Bombay vs The Hospital Mazdoor Sabha(1) where this Court sought to expand the concept, of 'industry ' by a process of judicial interpretation to meet the changing requirements of modern currents of socio economic thought. It was pointed out by this Court that "section 2(j) does not define 'industry ' in the usual manner by prescribing what it means: the first clause of the definition gives the statutory meaning of 'industry ' and the second clause deliberately refers to several other items of industry and brings them in the definition in an inclusive way. " But this interpretation of the definition was disapproved by a larger bench of this Court in Management of Safdarjung Hospital vs K. section Sethi (supra). We shall immediately proceed to examine that decision, as that is the decision which presently holds the field and must ultimately govern the determination of the present case. But before we do so, we must refer to another decision of this Court which came a little before Safdarjung Hospital case (supra). That is the decision in Secretary, Madras Gymkhana Club Employee. Union vs Management of the Gymkhana (supra). While dealing with the definition of 'industry ' in this case, it was pointed out by this Court that "denotation of the term 'industry ' is to be found in the first part relating to employers and the full connotation of the term is intended to include the second part relating to workmen" and it was concluded: "If the activity can be described as an industry with reference to the occupation of the employers, the ambit of the industry, under the force of the second part, takes in the different kinds of activity of the employees mentioned in the second part. But the second part standing alone cannot define 'industry '. By the inclusive part of the definition the labour force employed in an industry is made an integral part of the industry for purpose of industrial disputes although industry is (1) ; 144 ordinarily something which employers create or undertake. " We may point out that the concept underlying the observation that "industry is ordinarily something which employers create or undertake" is gradually yielding place to the modern concept which regards industry as a joint venture undertaken by employers and workmen an enterprise which belongs equally to both. But we need not dwell on this any longer, as it is not of immediate concern to us in this case. It is sufficient to point out that the interpretation of the definition of 'industry ' given in Madras Gymkhana case (supra) struck a slightly different note from what it was understood to mean in the State of Bombay vs Hospital Mazdoor Sabha case (supra). But again in Safdarjung Hospital case (supra) this Court found it necessary to qualify what it had said in the Madras Gymkhana case (supra) in regard to the meaning of 'industry ' and after referring to the definition of industry in section 4 of the Common wealth Conciliation and Arbitration Act, 1909 1970 this Court observed: "Although the two definitions are worded differently the purport of both is the same. It is not necessary to view our definition in two parts. The definition read as a whole denotes a collective enterprise in which employers and employees are associated. It does not exist either by employers alone or by employees alone. It exists only when there is a relationship between employers and employees, the former engaged in business, trade, undertaking, manufacture or calling of employers and the latter engaged in any calling service, employment, handicraft or industrial occupation or avocation. There must, therefore, be an enterprise in which the employers follow their avocations as detailed in the definition and employ workmen. The definition no doubt seeks to define 'industry ' with reference to employers ' occupation but include the employees, for without the two there can be no industry. An industry is only to be found when there are employers and employees, the former relying upon the services of the latter to fulfil their own occupations. This Court then proceeded to add that "every case of employment is not necessarily productive of an industry. Domestic employment. administrative services of public officials, service in aid of occupations of professional men, also disclose relationship of employers and employees but they cannot be regarded as in the course of industry". A workman can be regarded as one employed in an industry only "if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers". Thus, a basic requirement of 'industry ' is that the employers must be "carrying on any business, trade, undertaking, manufacture or calling of employers. If they are not, there is no industry as such. " Now, what these expressions mean has been discussed in a large number of cases decided by this Court. These cases have all been reviewed in the Madras Gymkhana case. We are, however, not directly concerned with any of these expressions except 'undertaking ', for the case of the workmen is not that the management of the Institution is 145 carrying on any business, trade, manufacture or calling but It rests on a very limited ground, namely, that the management of the Institution is carrying on an undertaking. It, therefore, becomes necessary to inquire what is the meaning and scope of the term 'undertaking ' as used in the definition in section 2(j). Now, according to its dictionary meaning as given by Webster, "undertaking" means "anything undertaken; any business, work or B. project which one engages in or attempts. an enterprise". It is a term of very wide denotation. But all decisions of this Court are agreed that an under taking to be within the definition in section 2(j) must be read subject to a limitation, namely, that it must be analogous to trade or business. That was the view expressed in the Hospital Mazdoor Sabha case (supra) vide page 879 of the Report and the same view was reiterated in the Safdarjung Hospital case (supra) vide page 187 of the Report. But the question is: when can an undertaking be said to be analogous to trade or business: what are the attributes or characteristics which it must possess in common with trade or business in order to be regarded as analogous to trade or business ? That is a question which is not very easy to decide, but there are decisions of this Court which afford guidance in dealing with this question. This Court pointed out in the Hospital Mazdoor Sabha case (supra) that in order that an undertaking should be analogous to trade or business, it is not necessary that it should possess the two essential features associated with the conventional notion of trade or business namely, profit motive and investment of capital. Gajendragadkar, J., (as he then was), speaking on behalf of the Court observed: "It is not disputed that under section 2(j) an activity can and must be regarded as an industry even though in carrying it out profit motive may be absent. It is also common ground that the absence of investment of any capital would not make a material difference to the applicability of section 2(j). Thus, two of the important attributes conventionally associated with trade or business are not necessarily predicated in interpreting section 2(j)". This view was neither overruled nor departed from in the Safdarjung Hospital case (supra). On the contrary, the decision 1 in Safdarjung Hospital case reaffirmed this view and gave it the seal of approval of a bench of six judges of this Court. This Court speaking through Hidayatullah, C.J., pointed out in that case. "It is not necessary that there must be a profit motive, but the enterprise must be analogous to trade or business in a commercial sense It is an erroneous assumption that an economic activity must be related to capital and profit making alone. An economic activity can exist with out the presence of both". The learned Chief Justice, after referring to the observations of Isaacs and Rich, JJ. in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation(1) stated that these observations "indicate that in those activities in which Government takes to industrial ventures, the notion of profit making and the absence of capital in the true sense of the word are irrelevant". It is, therefore, clear that, according to the decisions of this Court and on this point the decision in Safdarjung Hospital case (supra) does (1) ; 146 not make any departure from that in the Hospital Mazdoor Sabha case (supra) profit motive and capital investment are not essential requisites for an undertaking within the meaning of the definition in section 2(j). There can be such an undertaking without the presence of both or either of those attributes or features. What then are the attributes or features which make an under taking analogous to trade or business so as to attract the applicability of s.2(j). It is difficult to enumerate these possible attributes or features definitely or exhaustively. Indeed, it would not be prudent to do so. So infinitely varied and many sided is human activity and with the incredible growth and progress in all branches of knowledge and ever widening areas of experience at all levels, it is becoming so diversified and expanding in so many directions hitherto unthought of, that no rigid and doctrinaire approach can be adopted in considering this question. Such an approach would fail to measure up to the needs of the growing welfare state which is constantly engaged in undertaking new and varied activities as part of its social welfare policy. The concept of industry, which is intended to be a convenient and effective tool in the hands of industrial adjudication for bringing about industrial peace and harmony, would lose its capacity for adjustment and change. It would be petrified and robbed of its dynamic content. The Court should, therefore, as far as possible avoid formulating or adopting generalisations and hesitate to cast the concept of industry in a narrow rigid mould which would not permit of expansion as and when necessity arises. Only some working principles may be evolved which would furnish guidance in determining what are the attributes or characteristics which would ordinarily indicate that an undertaking is analogous to trade or business. What can fairly be regarded as a sufficiently elastic or flexible working principle for this purpose has been discussed in a number of decisions of this Court, of which we may refer only to three, namely, the Hospital Mazdoor Sabha case (supra), The Madras Gymkhana case (supra) and the Safdarjung Hospital case (supra). Though the language used in these decisions to state the working principle is not uniform and there are minor variations in the formulation according as one aspect is more emphasised than the other, the working principle laid down is basically the same. Gajendragadkar, J., (as he then was) speaking on behalf of the Court in the Hospital Mazdoor Sabha case (supra) stated the working principle in these terms: " . as a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking. Such an activity generally involves the co operation of the employer and the employees; and its object is the satisfaction of material human needs. It must be organised or arranged in a manner in which trade or business is generally organised or arranged. It must not be casual nor must it be for oneself nor for pleasure. Thus the manner in which the activity in 147 question is organised or arranged, the condition of the co operation between employer and the employee necessary for its success and its object to render material service to the community can be regarded as some of the features which are distinctive of activities to which section 2(j) applies. " It was the same working principle which was pithly expressed by this Court through Hidayatullah, J., (as he then was) in the Madras Gymkhana case (supra) where it was stated: " before the work engaged in can be described as an industry, it must bear the definite character of 'trade ' or 'business ' or 'manufacture ' or 'calling ' or must be capable of being described as an undertaking resulting in material goods or material services". This last proposition taken from the judgment in the Madras Gymkhana case (supra) was in so many terms accepted as valid in the Safdarjung Hospital case (supra): vide page 189 of the Report. This Court speaking through Hidayatullah, C.J., pointed out in the Safdarjung Hospital case (supra) at pages 186 and 187 of the Report: "But in the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production distribution and consumption of wealth and the production and availability of material services. industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services. " What is meant by 'material ' services in this context was explained by the learned Chief Justice in these words. "Material services are not services which depend wholly or largely upon the contribution of professional knowledge, skill or dexterity for the production of a result. Such services being given individually and by individuals are services no doubt but not material services. Even an establishment where manly such operate cannot be said to convert their professional services into material services Material services involve an activity carried on through cooperation between employers and employees to provide the community with the use of something such as electric power, water, transportation mail delivery, telephones and the like. In providing these services there may be employment of trained men and even professional men, but the emphasis is not on what these men do but upon the productivity of a service organised as an industry and commercially valuable. Thus the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors etc. are easily distinguishable from an activity such as transport service. The latter is of a commercial character in which something is brought into existence quite apart from 148 the benefit to particular individuals. It is the production of this something which is described as the production of material services. " The learned Chief Justice then proceeded to explain why professions must be held to be outside the ambit of industry. This is what he said: "A profession ordinarily is an occupation requiring intellectual skill, often coupled with manual skill. Thus a teacher uses purely intellectual skill while a painter uses both. In any event, they are not engaged in an occupation ill. which employers and employees co operate in the production or sale of commodities or arrangement for their production or sale or distribution and their services cannot be described as material services. " It was for this reason, observed the learned Chief Justice, that the establishment of a solicitor was held not to be an industry "because there the services rendered by the employees were in aid of professional men and not productive of material goods or wealth or material services(1) The learned Chief Justice pointed out that in the University of Delhi & Anr. v Ramnath(2) the University was also held to be outside the ambit of industry for the same reason. The learned Chief Justice then summarised the working principle the broad test or criterion for determining what is an undertaking analogous to trade or business in these terms: "It, therefore, follows that before an industrial dispute can be raised between employers and their employees or between employers and employers or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must be first established relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the latter following any calling, service, employment, handicraft, or industrial occupation or avocation of workmen in aid of the employers ' enterprise. It is not necessary that there must be a profit motive but the enterprise must be analogous to trade or business in a commercial sense.", and after referring to the observations of Isaacs and Rich, JJ in Federated Municipal and Shire Council Employees of Australia v Melbourne Corporation (supra) pointed out that these observations showed that "industrial disputes occur in operations in which employers and employees associate to provide what people want and desire, in other words, where there is production of material goods or material services." (emphasis added). (1) National Union of Commercial Employers vs M. R. Meher, [1962] Supp. 3 section C. R 157. (2) ; 149 It would thus be seen that the broad test for determining when an undertaking can be said to be analogous to trade or business laid down in the Safdarjung Hospital case (supra) was the same as in the Hospital Mazdoor Sabha case (supra). The Safdarjung Hospital case did not make any real departure the enunciation of this test It is only in the application of this test to the case of hospitals that the Safdarjung Hospital case took a different view and observed that the judgment in the Hospital Mazdoor Sabha case (supra) had taken "an extreme view of the matter which was not justified". There was also one other ground on which the decision in the Safdarjung Hospital case disapproved of the view taken in the Hospital Mazdoor Sabha case and that ground was that the decision in the Hospital Mazdoor Sabha case proceeded on an erroneous basis that an activity, in order to be an undertaking analogous to trade or business, need not be an economic activity and applied a wrong test, namely, 'can such activity be carried on by private individuals or group of individuals? ' It would, therefore, seem that, in view of the decision in Safdarjung Hospital case, this last test applied in the Hospital Mazdoor Sabha case must be rejected as irrelevant and it must be held that an activity, in order to be recognised as an undertaking analogous to trade or business, must be an economic activity in the sense that it is productive of material goods or material services. To summarize, an activity can be regarded as an 'industry ' within the meaning of section 2(j) only if there is relationship of employer and employees and the former is engaged in 'business, trade, undertaking, manufacture or calling of employers ' and the latter, 'in any calling service, employment, handicraft or industrial occupation or avocation ' Though 'undertaking ' is a word of large import and it means anything undertaken or any project or enterprise, in the context in which it occurs, it must be read as meaning in undertaking analogous to trade or business. In order that an activity may be regarded as an undertaking analogous to trade or business, it must be "organised or arranged in a manner in which trade or business is generally organised or arranged". It must not be casual nor must it be for oneself nor for pleasure. And it must rest on co operation between employer and employees who associate together with a view to production, sale or distribution of material goods or material services. It is entirely irrelevant whether or not there is profit motive or investment of capital in such activity. Even without these two features an activity can be an undertaking analogous to trade or business. It is also immaterial "that its objects are charitable or that it does not make profits or even where profits are made, they are not distributed amongst the members",(1) or that its activity is subsidised by the Government. Again it is not necessary that "the employer must always be a private individual. The Act, in terms, contemplates cases of industrial disputes where the Government or a local authority or a public utility service may be employer . "(2) It also makes no difference that the material services rendered by the undertaking are in public interest (1) Management of FICCI vs Workmen, [1972] 2 section C. R. 353 at 376. (2) Madras Gymkhana case, p. 756 of the Report. 150 The concept of public interest in a modern welfare State, where new social values are fast emerging and old dying out, is indeed so wide and so broad and comprehensive is its spectrum and range that many activities which admittedly fall within the category of 'industry ' are clearly designed to subserve public interest. In fact, whenever any industry is carried on by the Government, it would be in public interest, for the Government can act only in public interest Whether an activity is carried on in public interest or not can, therefore, never be a criterion for determining its character as an industry. Having thus examined the legal concept, of industry as expounded in the decisions of this Court, we may now proceed to consider whether the activity of the Institution can be characterised as an industry in the light of the broad test discussed by us. The Institution owes its genesis to the Government of India Resolution No. 1 STD(4)/45 dated 3rd September 1916. Prior to this Resolution, British and American standards were generally adopted for our country. But due to diversity of raw materials available in our country and the processes employed for manufacture, it was increasingly felt that the British and other standards were not always suitable for adoption in our country and it was necessary to establish a central standards organisation for fixing Indian standards. The Government of India, therefore, passed this Resolution for setting up an organisation to be called the Indian Standards Institution with its headquarters at New Delhi. Pursuant to this Resolution, the Institution was registered and establish under the . Clause (3) of the Memorandum of Association sets out objects of the Institution and, so far as material, they are as follows: "(a) To prepare and promote the general adoption of standards on national and international basis relating to structures, commodities, materials, practices, operations, matters and things, and, from time to time, to revise, alter and amend the same. (b) To promote standardization, quality control and simplification in industry and commerce. (c ) . . (d)To co ordinate the efforts of producers and users for the improvement of materials, products, appliances, processes and methods. (e) To provide for the registration of standardization marks applicable to products, commodities, etc., for which it issues standards to be branded on or applied to those products, commodities, etc., which conform to standards set. (f) To provide or arrange facilities for the examination and testing of commodities, processes and practices,, and for any investigations or research that may be necessary. (g). . (h). . (i). . 151 (j) To communicate, information to members on all A matters connected with standardization and to print, publish, issue and circulate such periodicals, books, circulars, leaflets and other publications as may seem conducive to any of the objects of the Institution". The income and property of the Institution, however derived, are directed by cls. (6) and (7) of the Memorandum of Association to be applied towards the promotion of the objects as set forth in the Memorandum of Association and no portion of the income or property is divisible or distributable amongst the members, either during the active life of the Institution or on its winding up or dissolution. The Rules and Regulations of the Institution make various provisions in regard to the mechanics of the functioning of the Institution. Rule 2 lays down that there shall be two categories of members, namely, subscribing members and committee members and their rights and privileges are enumerated in Rule 5. Rule 7 vests the. management of the affairs of the Institution in a general Council and its composition is laid down in Rule 8 and its functions, in Rule 11. Rule 15 provides for the constitution of the Executive Committee and it lays down that the Executive Committee shall have the powers to manage the day to day affairs of the Institution, including administration of ISI (Certification Marks)) Act, 1952 in conformity with policies laid down by the General Council. The Institution can have different branches as may be decided upon by the General Council under Rule 18. Rule 19 says that a division shall constitute the main section of the technical activities of the Institution and Rule 20 declares that the work of a division shall be controlled by a Division Council. What shall be the constitution of a Division Council is laid down in Rule 22 and that Rule provides that a Division Council shall be constituted from the representatives of the respective interests of users, manufacturers and other persons or bodies concerned in or associated with the industries included in the Division. Rule 26 deals with Sectional Committees and it says that the Sectional Committee shall be appointed by a Division Council or if necessary, by Executive Committee for the preparation of a particular standard or group of standards and the Sectional Committee shall be composed of representatives of such interests as, in the opinion of the Division Council or Executive Committee, are concerned with the standards referred to the Committee. It emphasises that on the Sectional Committee all interests shall be adequately represented including scientists and technicians, but consumer interest shall, as far as possible, predominate. G Now, at this stage it would be convenient to explain what are standards and why they are necessary to be established. Standards are technical documents describing constructional, operational and technological requirements of a material, a product or a process for a given purpose. They furnish such details as materials to be used dimensions and sizes to be adopted, performance to be expected, and quality to be achieved; they also give methods of tests for comparing and judging quality of goods produced by the manufacturer. Standards may be of any one or more of the following five categories: (a) 11 1276SCI/75 152 Dimensional Standards which secure interchangeability and eliminate unnecessary variety of types for the same or similar purposes; (b) Performance and quality Standards which ensure that the final article will be fit for the job it is designed to do; (c) Standard Methods of Tests which enable materials or products intended for the same purpose to be compared uniformly; (d) Standard Technical Terms and Symbols which provide a common, easily understood technical language for the industry, and (e) Standard Codes of Practice which set out the most efficient methods of installation, use and maintenance of equipment and recommend methods of technical operations. These are necessary ill order to meet the challenges posed by the fast developing industry economy of the country and mass production of economic goods and services. The manufacturer should be able to produce goods of specified quality so that he can win the confidence and good will of the consumer and build up internal and external markets for high products. He should also be able to increase his productivity, produce goods at minimum cost and achieve overall economy by best utilisation of human and material resources at its disposal. Standards which are based on the consolidated results of science, technology and experience, furnish guidance to the manufacturer in this behalf and confer economic benefits for the development of industry and smooth flow of commerce. The procedure for preparing standards is laid down in Rule 29 of the Rules and Regulations of the Institution. The underlying principles for the preparation of standards are that they shall be in accordance with the needs of the industry and fulfil a generally recognised want, that the interests of both producers and consumers shall be considered and that periodic review shall be undertaken. The work of standardisation on any specific subject can be undertaken only when the Division Council concerned is satisfied, as a result of its own deliberations or of an investigation and consultation with the producer and consumer interests, that the necessity for standardisation has been established. When the subject has been so investigated and the need established the Division Council concerned would refer the work to an appropriate Sectional Committee and the Sectional Committee would then explore and study the subject and prepare a draft of the proposed standard. The draft standard would then be issued in draft form for a period to be determined by the Sectional Committee but not less than three months and widely circulated amongst those likely to be interested for the purpose of securing critical review and suggestions for improvement which, is found desirable, would be incorporated in the draft. This procedure for circulation can, in an appropriate case, be curtailed or dispensed with by the Division Council. The consideration of the comments received as a result of the circulation of the draft standard would be undertaken by the Sectional Committee and the final draft prepared after verification in the appropriate laboratories where necessary. The standard so finalised by the Sectional Committee would then be referred to the Division Council concerned for adoption and on such adoption by the Division Council, it would be published as an Indian Standard. The Institution thus prepares and publishes Indian Standards on different subjects and some of these Indian Standards are also revised 153 so as to keep abreast with the latest developments in manufacturing and testing techniques and to improve the quality of goods. The Annual Report of the Institution for 1967 68 shows that the number of Indian standards in force on 31st March, 1968 was 4564 and during that year 159 existing Indian standards were revised. The activity of the Institution in regard to preparation and publication of Indian standards has continued to increase over the years and, according to the Annual Report of the Institution for 1973 74, the number of Indian standards in force on 31st March, 1974 was 7760 and during that year, as many as 243 existing Indian standards were subjected to revision. Indian standards thus published, whether new or revised, are sold by the sales service of the Institution at its headquarters and at the various branch offices and as the Annual Report for 1973 74 shows, the proceeds from the sales of Indian standards have steadily increased from year to year and reached the figure of Rs. 16,24,170/ during the year 1973 74. The Institution also acts as a sole selling agent for sale of overseas standards on commission basis and from this activity, the Institution derives a large income, which during the year 1973 74 amounted to as much as Rs. 3,20,700/ . The Institution also carries on another activity which is the direct outcome of preparation and publication of Indian standards and that activity is the result of implementation of the Indian Standards Institution (Certification Marks) Act, 1952 (hereinafter referred to as the Certification Marks Act) . Section 2, cl. (1) defines 'standard mark ' to mean the Indian Standards Institution Certification Mark F. specified by the Indian Standards Institution to represent a particular Indian standard. Sub section (1) of section 5 imposes a prohibition that no person shall use, in relation to any article. Or process, or in the title of any patent, or in any trade mark or design, the Standard Mark or any colourable imitation thereof, except under a licence granted under the Act and another prohibition is imposed by sub section (2) of section 5 that no person shall, notwithstanding that he has been granted a licence, use in relation to any article or process the Standard Mark or any colourable imitation thereof, unless such article or process conforms to the Indian Standard. Since the Standard Mark is intended to represent a particular Indian Standard, obviously no one can be allowed to use the Standard Mark or any colourable imitation thereof, except under a licence granted by the Institution, for it is only through the machinery of a licence that the Institution would be able to exercise a check on the person concerned and ensure that the article manufactured or process employed by him conforms to the Indian Standards and that the Standard Mark is not abused by him and it does not become an instrument of deception. It is for this purpose that section 8 confers power on the Institution to appoint inspectors for inspecting whether any article or process in relation to which the Standard Mark has been used conforms to the Indian Standard or whether the Standard Mark has been improperly used in relation to any article or process, with or without licence. 154 The Central Government has, in exercise of the power conferred under section 20 of the Certification Marks Act, made the Indian standards Institution (Certification Marks) Rules, 1955. Rule 4 requires that the design of the Standard Mark in relation to each Indian Standard together with the verbal description of the design of the Standard Mark and the title of the Indian Standard shall be published by the Institution. Rule S provides for the making of an application for grant of a licence . Rule 7 stipulates for the holding of a preliminary inquiry by the Institution before granting a licence and Rule 8 lays down when a licence may be granted or renewed. Under Rule 6, the fees and expenses leviable in respect of grant or renewal of licence and in respect of all matters in relation to such licence are left to be prescribed in the Regulations. Regulation 7 of the Indian Standards Institution provides that every application for the grant of a licence shall be accompanied by 9a fee of Rs. 100/ and every application for a renewal of such licence shall be accompanied by a fee of Rs. 50/ and in addition to this application fee, there shall be paid by every licensee an annual licence fee of Rs. 200/ and a marking fee proportionate to the quantum of the annual production of the article or process in respect of which the licence has been granted. Regulation 9 requires every licensee to institute and maintain to the satisfaction of the Institution a system of control to keep up the quality of his production or process by means of a scheme of inspection and testing attached to the licence and Rule 10 confers power on an Inspector to enter upon the premises of a licensee with a view to ascertaining that the Standard Mark is used in accordance with the terms and conditions imposed by the Institution and that the scheme of routine inspection and testing specified by the Institution is being correctly followed. It will, therefore, be seen that the Standard Mark is the most authentic representation to the consumer that the article or process in respect of which it is used conforms to the relevant Indian Standard and Indian Standard thus becomes meaningful and advantageous by reason of the use of the Standard Mark. But no one can use the Standard Mark without a licence from the Institution and even if there is a licence, the Standard Mark cannot be used in relation to an article or process unless such article or process conforms to the relevant Indian Standard. The issue of licences for use of Standard Marks under the Certification Marks scheme is, therefore, a very important activity of the Institution complementary as well as supplementary to preparation and publication of Indian Standards. The Certification Marks scheme has been making considerable progress from year to year and while, according to the Annual Report of the Institution for 1967 68, the total number of licences issued since the inception of the scheme upto 31st March, 1968 was 1665 and the annual value of goods covered under the scheme was approximately Rs. 3800 million. the total number of licences granted upto 31st March, 1974 increased to 3784 and the annual value of goods covered under the scheme rose to approximately Rs. 5000 million during the year 1973 74 as per the figures contained in the Annual Report for that year, the total income from certification marking does not appear to have been shown separately in the Annual Report of the Institution for the year 155 1967 68, but according to the Annual Report for 1973 74, it was Rs. 5.2 million during that year. The Annual Reports of the institution clearly reveal that from year to year the total number of licences granted by the Institution is steadily increasing and so is the total income from certification marking. The Institution has also several laboratories for the purpose of carrying out testing operations. It has a well equipped library at the Headquarters and there are also laboratories at the branch offices where testing of different articles is carried out. The testing work carried out in these laboratories has shown a consistent rise over the years and while during the year 1967 68 the number of samples received for testing was 3853 and the value of testing work done was Rs. 3,96,468, the number of samples received during 1973 74 was 12726 and the value of testing working done during that year was Rs. 8,76,847.58. The samples tested at the laboratories are not only those submitted by the manufacturers, distributors and consumers, but also those taken by the Inspectors for the purpose of ascertaining whether any article or process in relation to which the Standard Mark is used conforms to the Indian Standard or whether the Standard Mark has been improperly used in relation to any article or process. The laboratories are also used in connection with the preparation of Indian Standards as contemplated in cl. (f) of Rule 29 of the Rules and Regulations of the Institution. Then, the Institution maintains libraries at the Headquarters and at the branch offices which render useful services to the subscribing members, the Committee members, the Staff members and others. The library at the Headquarters, which is open to visitors, has complete sets of overseas standards and specifications and related indices. It has also classified subject catalogues for consultation and retrieval of information on standardization. It also prepares and circulates for the benefit of its users a monthly list of current published information on standardization. It has also brought out fortyone bibilographies at the request of technical staff and Committee members and also published an important bibliography, namely, 'World List of Standards on Paper Products '. Quite often, technical enquiries are received from the industry and the necessary information is supplied by the libraries of the Institution. The libraries also disseminate technical information on national and overseas standards, specifications and other allied subjects. The Institution is also bringing out regularly ISI bulletin, Standards Monthly Additions and miscellaneous publications such as Annual Report, Handbook of ISI publications, brochures, leaflets and a large number of advertisements. These publications are distributed amongst the members and are also sold to non members and they are intended to publicise the activities of the Institution, promote widespread implementation of Indian Standards, propagate the Certification Marks scheme, create awareness about the importance of standardization and quality control and further the standardization movement in the country. The Institution is also making concerted efforts for furthering standardization movement among different sectors of economy 156 through out the country through different media of publicity and for that purpose it contributes articles, reviews and write ups on different aspects of standardization and other activities in newspaper journals, souvenire, reference publications etc. and holds inter alia radio broadcasts, press conferences, exhibitions, seminars, conferences and conventions. It is clear from the resume of the activities of the Institution given above. that the undertaking of the Institution answers the broad test laid down in the Safdarjung Hospital case (supra) and explained by us in the earlier part of the judgment and must be held to be an industry within the meaning of section 2(j). The activities of the Institution arc carried on in a systematic manner and are organised or arranged in a manner in which trade or business is ordinarily organised or arranged. The Institution derives large income from its activities, which was about Rs. 4.5 million in 1967 68 and rose to about Rs. 10.2 million in 1973 74, a bulk of the income being accounted for by sale proceeds of Indian Standards and Certification Marking Fees. The object of the activities of the Institution is to render material services to a part of the community, namely, manufacturers, distributors and consumers. Standards set the recognised level of good quality, corner stone for building domestic and export markets and developing good will and prestige for the manufacturer: they provide the framework for mass production, increase in productivity simplification in production process and enhancement in labour efficiency the make for dimensional interchangeability by setting national and also international patterns of interrelated sizes: they incorporate results of the latest developments in research and technology: they increase consumer confidence and goodwill bringing wide markets and quick turn over with savings for the buyer and they bring more profits and lower costs by optimum utilization of scarce resources. The brochure on "Standards for Textiles" points out that amongst various advantages which accrue from the application of standards in the day to day manufacturing programmes are increased efficiency, less waste of manpower and material, higher productivity through longer runs in the factory, simplified buying, costing and cataloguing and stabilizing and promoting exports by sending goods of uniform quality abroad. The Certification Marking Scheme involving issue of licences for use of Standard Marks, maintenance of laboratories and libraries, bringing out various publications, such as ISI bulletin, Standards Monthly Additions and other brochures and leaflets and publicity through different kinds of media, which constitute the other activities of the Institution apart from preparation and publication of Standards, are intended to promote implementation of Standards, create consciousness about the importance of standardisation and quality control amongst different sectors of the economy and further inplant standardization activity, with a view to helping the manufacturer, to step up production and lower manufacturing cost, increasing labour efficiency by simplifying production processes and ensure dependable and quality goods, increase consumer confidence and goodwill and achieve greater turnover and increased profits by maximum utilization of human and material resources, the distributor, to add to his turnover and to his reputation by marketing uniform quality of goods of high standard 157 assured by compliance with the Standards and the consumer, to benefit from lower prices, higher quality and more safety in short, get value for the money spent by him. The Institution renders what are termed `extension services ' to industries which opt for them and these extension services are made available in three district phases, namely, Pilot Study, Systematic Development and Evaluation. If this is not rendering of material services to a section of the community, we fail to see what other activity can be so regarded. There is also cooperation between the management of the Institution and the employees who are associated together for rendering these material services. It is true that the Standards are prepared by Sectional Committees which are composed of representatives of all concerned, including scientists and technicians, with consumer interest playing a dominant role and they are not exclusively the result of the work carried out by the employees, but the participation of the employees is not altogether absent. Not only do the employees who are technicians participate in the work relating to various aspects of preparation of Standards but the draft standards are also verified in the laboratories of the Institution which are operated by the employees. Moreover, the distribution and sale of Standards prepared and published by the Institution is being made through the employees. The certificate Marketing scheme, maintenance of laboratories and libraries, publication of ISI bulletin, Standard Monthly Additions and other magazines, journals and leaflets and publicity of the activities of the Institution are all carried on with the help of the employees. There are a large number of employees of the Institution belonging to Grades II, III and IV, apart from officers in Grade I. Some of the employees in Grade II are technical people closely associated with the technical activities of the Institution. There can, therefore, be no doubt that the activities of the Institution fall within the category of undertaking analogous to trade or business and must be regarded as an `industry ' within the meaning of section 2(j). This view which we are taking receives support from an earlier decision or this Court in the Ahmedabad Textile Industry Research Association vs The State of Bombay & Ors.(1) There the question was whether the activity of the appellant Association, which was a textile research institute established for the purpose of carrying on research and other scientific work in connection with the textile trade or industry and other trade and industries allied there with or necessary thereto, was an 'industry ' for the purpose of the Act. This Court analysed the activity of the appellant Association and pointed out that it is an "activity systematically undertaken; its object is to render material services to a part of the community (namely, member mills) the material services being the discovery of processes of manufacture etc. with a view to secure greater efficiency, rationalisation and reduction of costs of the member mills. it is being carried on with help of employees (namley, technical personnel) who have no rights in the results of the research carried on by them as employees of the association; it is organised or arranged in a manner in which a trade or business is generally organised: it postulates cooperation between (1) 158 employers (namely, the association) and the employees (namely, the technical personnel and others) which is necessary for its success, for the employers provide monies for carrying on the activities of the association and its object clearly is to render material services to a part of the community by discovery of process of manufacture etc. with a view to secure greater efficiency, rationalisation and reduction of costs. " It was observed by this Court that the undertaking as a whole is "in the nature of business or trade organised with the object of discovering ways and means by which the member mills may obtain larger profits in connection with their industries," and on this view, the Court held that "the appellant association is carrying on an activity which clearly comes within the meaning of the word `industry ' in section 2(j)". This case bears a very close analogy to the present case and indeed, some of the observations made by this Court ill that case particularly those underlined by us aptly describe the nature of the activities of the Institution and the reasoning on which the decision in this case is based is equally applicable in the decision of the present case. There is also one other decision of this Court which amply supports the view we are taking and that is the decision in the Management of the FICCI vs Workmen (supra). The question which arose in that case was whether the Federation of Indian Chambers of Commerce and Industry, for short referred to as FICCI was an industry within the meaning of section 2(j). This Court reviewed most of the earlier decisions on the subject and after summarising the broad test for determining what is an industry, proceeded to analyse the activities of FICCI and pointed out that "the Federation carries on systematic activities to assist its members and other businessmen and industrialists and even non members, as for instance, in giving them the right to subscribe to their bulletin; in taking up their cases and solving their difficulties and in obtaining concessions and facilities for them from the Government. These activities are business activities and material services, which are not necessarily confined to the illustrations given by Hidayatullah, C.J., in the Gymkhana case by way of illustration only, rendered to businessmen, traders and industrialists who are members of the constituents of the Federation. There can in our view be no doubt that the Federation is an industry within the meaning of section 2(j) of the Act. " This decision is also very apposite and helpful and leaves no doubt that the activities of the Institution in the present case are an 'industry ' so as to attract the beneficent provisions of the Act. We, therefore, allow the appeal, set aside the order passed by the Industrial Tribunal and direct the Industrial Tribunal to proceed with the Reference before it on merits on the basis that the activities of the Institution constitute an 'industry ' within the meaning of section 2(j) of the Act. The respondents will pay to the appellants costs of the appeal as also costs of the hearing before the Industrial Tribunal. ALAGIRISWAMI, J. I am sorry I find myself unable to agree with my learned brother Bhagwati J. The facts of the case have been 159 elaborately set out in his judgment and it is unnecessary to repeat them. It would be necessary, however, to refer to one or two other facts which have not been mentioned in their proper place. After the very clear decision by this Court in its judgment in Gymkhana Club Union vs Management(l) and its endorsement in its judgment in Safdarjung Hospital vs K. section Sethi(2) the decision in State of Bombay vs The Hospital Mazdoor Sabha(3) has become irrelevant. The Gymkhana Club case has laid down that any trade, business, undertaking, manufacture or calling of employers is an industry and once the existence of an industry viewed from the angle of what the employer is doing is established, all who render service and fall within the definition of 'workman ' come within the fold, of industry, irrespective of what they do. It was also pointed out that the word 'undertaking ', though elastic, must take its colour from other expressions used in the definition of `industry ', and must be defined as any business or any work or project resulting in material goods or material services and which one engages in or attempts as an enterprise analogous to business or trade. It also pointed out that the test adopted in Hospital Mazdoor case (supra) namely, could the activities be carried on by a private individual or group of individuals for the purpose of holding that running a Government hospital was an industry must be held to have taken an extreme view of what is an industry and that this test is not enlightening. With regard to local bodies it was pointed out that they are political sub divisions and agencies for the exercise of governmental functions, but if they indulge in municipal trading or business or have to assume the calling of employers they are employers whether they carry on or not business commercially for purposes of gain or profit. It was finally held that before the work engaged in can be described as an industry, it must bear the definite character of `trade ' or `business ' or `manufacture ' or `calling ' or must be capable of being described as an undertaking resulting in material goods or material services and the word 'undertaking ' was defined as "any business or any work or project which one engages in or attempts as an enterprise analogous to business or trade. ' These ideas were crystallised in the judgment in Safdarjang Hospital case and for facility of reference I may quote the first conclusion in the headnote. "The definition of industry in section 2(j) of the is in two parts. But it must be read as a whole. So read it denotes a collective enterprise to which employers and employees are associated. It does not exist either by employers alone or by employees alone. It exists only when there is a relationship between employers and employees, the former engaged in business, trade, under taking, manufacture or calling of employers and the latter engaged in any calling, service, employment, handicraft or industrial occupation or avocation. But every case of em (1) [1968]1 section C. R. 742. (2) [1971] I section C. R. 177. (3) ; 160 ployment is not necessarily productive of an industry. A workman is to be regarded as one employed in an industry only if he is following one of the vocations mentioned in relation to the employers, namely, any business, trade, under taking, manufacture or calling of employers. In the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services. Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services. Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery, telephones and the like. In providing these services there may be employment of trained men and even professional men, but the emphasis is knot on what they do but upon the productivity of a service organised as an industry and commercially valuable, in which, something is brought into existence quite apart from the benefit to particular individuals; and it is the production of this something which is described as the production of material services. Thus, the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors, etc. are easily distinguishable from an activity such as transport service. They are not engaged in an occupation in which employers and employees cooperate in the production or sale of commodities or arrangement for the production or sale or distribution and their services cannot be described as material services and are outside the ambit of industry. It, therefore, follows that before an industrial dispute can be raised between employers and employers or between employers and employees or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must first be established a relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the latter following any calling, service, employment, handicraft or industrial occupation or avocation of workmen in aid of the employers ' enterprise. It is not necessary that there must be profit motive, but the enterprise must be analogous to trade or business in a commercial sense. " It criticised the decision in Hospital Mazdoor case in words which have been summarised in headnote 2 as follows: . 161 "The decision in State of Bombay vs Hospital Mazdoor Sabha holding that a Government hospital was an industry took an extreme view of the matter and cannot be justified, because: (a) it was erroneously held that the second part of the definition of 'industry ' was an extension of the first part, whereas, they are only the two aspects of the occupation of employers and employees in an industry; (b) it was assumed that economic activity is always related to capital or profit making and since an enterprise could be an industry without capital or profit making it was held that even economic activity was not necessary; and (c) it was held that since a hospital could be run a business proposition and for profit by private individuals or groups of individuals a hospital run by Government without profit must also bear the same character. This test was wrongly evolved from the observations in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation, ; , which only indicate that in those activities in which Government take to industrial ventures the motive of profit making and absence of capital are irrelevant. The observations, on the contrary show that industrial disputes occur only in operations in which employers and employees associate to provide what people want and desire, that is, in the production of material goods or services, and not the 'satisfaction of material human needs '." and also pointed out that if a hospital, nursing home or dispensary is run as a business in a commercial way there may be found elements of an industry there. Applying these tests it was held that the Safdarjung Hospital was not embarked on an economic activity which could be said to be analogous to trade or business, that there was no evidence that it was more than a place where persons could get treated, that it was a part of the functions of Government and the Hospital was run as a Department of Government and that it could not, therefore, be said to be an industry. The Tuberculosis Hospital was held to be not an industry because it was wholly charitable and a research institute, the dominant purpose of the Hospital being research and training and as research and training could not be given without beds in a hospital, the hospital was run. The Kurji Holy Family Hospital was held not to be an industry on the ground that it objects were entirely charitable, that it carried on work of training, research and treatment and that its income was mostly from donations and distribution of surplus as profit was prohibited. The idea behind these decisions could be crystallised thus: Even where a trade, business, undertaking, manufacture or calling of employers results in production of material goods or rendering of material services, such an undertaking engaged in trade, business, manufacture or calling of employers will not be an industry if it is run on charitable principles or is run by Government or local body as part of its duty. In other words whenever an undertaking is engaged in activity which is not done with a view to exploit it in a trading or 162 commercial sense but for public interest and without any profit motive or in the form of social service or in the form of activity intended to benefit the general public it will not be an industry. The Indian Standards Institution was set up by a Resolution of the Government of India and registered under the . My learned brother Bhagwati J. has set out the Memorandum of Association, the rules and regulations of the Institution and explained what the standards established by the Institution are as also its role in the implementation of Indian Standards Institution (Certification Marks) Act, 1952. It is unnecessary to set out all of them at length. A bare scrutiny of the objects of the Institution would show that they are concerned with broad public interest of the country as a whole and no part of the objects of the Institution has anything to do with serving any private interest. The standards are prepared by committees in which all interests are adequately represented, including scientists and technicians but consumer interest has, as far as possible, to predominate. As pointed out by my learned brother, the Standard Mark is the most authentic representation to the consumer that the article or process in respect of which it is used conforms to the relevant Indian Standard and Indian Standard thus becomes meaningful and advantageous by reason of the use of the Standard Mark. The existence of laboratories and libraries are incidental and in furtherance of the specifications of standards and the application of the Standard Marks. The Institution has no capital, it does not distribute profits and even when it is wound up the assets would not go to any private individual. It is not run with a profit motive. It is thus not an enterprise analogous to business or trade. In fact one can go further and say that its activity is only a manifestation of governmental activity. Instead of itself performing these duties the Government have set up the Institution in effect for the purpose of discharging duties which the Government itself has to do in the service of the general public. What the Institution does it thus to render material services. It is in recognition of the role which the Institution plays as an instrument of Government that it had made a contribution of 40 lakhs and odd out of the income of 73 lakhs of the Institution in the year 1973 74. Thus the material service which the Institution renders is really a subsidised service and it is rendered in public interest. It is an Institution interested and engaged in service to the public. Its activities do not go to swell coffers of anybody. Applying therefore the tests which have been evolved and applied in the Gymkhana Club case and the Safdarjung Hospital case it is obvious that the Institution is not engaged in an industry. The judgments of this Court in Management of FICCI vs Workmen and Ahmedabad Textile Industry Research Association vs The State of Bombay & Ors. are not relevant because in the case of the Federation it was intended to benefit the members of the commercial community and not the public in general. The Ahmedabad Textile Industry Research Association activities were in the nature of business or trade organised with the object of discovering ways and means by 163 which the member mills may obtain larger profits in connection with their industries. The activities of the Indian Standards Institution are not intended to benefit any class of businessmen or to enable them to increase their income. It is a public service institution and therefore must be held not an industry. I would, therefore, dismiss the appeal ORDER In view of the decision of the majority, the appeal is allowed and the Industrial Tribunal should proceed with the Reference before it on the merits. The respondents will pay to the appellants costs of the appeal as also costs of the hearing before the Industrial Tribunal.

The workmen of the Indian Standards Institution, a registered society, under the made certain demands which were not accepted by the management and the dispute arising therefrom was taken in conciliation. Unable to settle it, the Conciliation Officer made a "Failure report" to the Lt. Governor, who referred the dispute for adjudication to the Industrial Tribunal sections 10(1) (d) and 12(5) of the Act. Opposing the claim of the workmen on merits, the management raised before the Tribunal, a preliminary objection that the Institution was not an "Industry" within the meaning of Section 2(j) of the Act and, therefore, the dispute between the management and its workmen was not an "Industrial dispute" as defined in section 2 (k) and the Lt. Governor had no jurisdiction to refer it for adjudication under the provisions of the Act. The Tribunal applying the five tests laid down by the Supreme Court in "Gymkhana Club 's case" and "The Cricket Club 's case" found that though capital was employed in the Institution, it was not run with a profit motive and so the fifth test was not satisfied. So viewing, the Tribunal held that (a) the Institution was not an "industry", (b) that the reference was outside the power of the Lt. Governor and (e) that its jurisdiction to entertain the reference and adjudicate upon it was ousted. Allowing the appeal by special leave against the order of the Industrial Tribunal. (Alagiriswami, J. dissenting), the Court ^ HELD: (Per Bhagwati and P. K. Goswami, JJ.) (i) The definition of an "industrial dispute" in section 2(k) does not in so many words refer to "industry". But on the grammar of the expression itself an "industrial dispute" must necessarily be a dispute in an industry and moreover the expressions "employer" and "workman" used in the definition of "industrial dispute" carry the requirement of industry in that definition by virtue of their own definitions in sections 2(g) and 2(s). [143A B] (ii) According to the dictionary meaning an "undertaking" means "anything undertaken; any business or work or project which one engages in or attempts: an enterprise". It is a term of very wide connotation. But an "undertaking" to be within the definition in section 2(j) of the Act must be read subject to a limitation viz., that it must be analogous to trade or business. In order that an undertaking should be analogous to trade or business, profit motive and capital investment are not essential requisites. There can be such an under taking without the presence of both or either of these attributes or features. No rigid and doctrinaire approach can be adopted in considering the question 139 as to what are the attribute or features which make an undertaking analogous to trade or business. Such an approach would fail to measure up to the needs of the growing welfare State which is constantly engaged in undertaking new and varied activities as part of its social welfare policy. The concept of industry which is intended to be a convenient and effective tool in the hands of industrial adjudication for bringing about industrial peace and harmony. would lose its capacity for adjustment and change. It would be petrified and robbed of its dynamic content. [145 B, D, 146A, C, D] (iii) An activity can be regarded as an "industry" within the meaning of section 2(j) only if there is relationship of employer and employees and the former is engaged in "business, trade undertaking, manufacture or calling of employers" and the latter "in any calling, service employment, handicraft or industrial occupation or avocation", Though "undertaking" is a word of large import and it means anything undertaken or any project or enterprise, in the Context in which it occurs, it must be read as meaning an undertaking analogous to trade or business. In order that an activity may be regarded as an undertaking analogous to trade or business, it must be "organised or arranged in a manner in which trade or business is generally organised or arranged". It must not be casual nor must it be for oneself nor for pleasure. And it must rest on co operation with a view to production, sale or distribution of material goods or material services. It is entirely irrelevant whether or not there is profit motive or investment of capital in such activity. Even without these two features, an activity can be an undertaking analogous to trade or business. It is also immaterial "that its objects are charitable or it does not make profits or even where profits are made, they are not distributed amongst its members", or that its activity is subsidised by the Government. Again it is not necessary that "the employer must always be a private individual. The Act, in terms, contemplates cases of industrial disputes, where the Government or a local authority or a public utility service may be the employer. It also makes no difference that the material services rendered by the undertaking are in public interest. The concept of public interest in a modern welfare State, where new social values are fast emerging and old dying out, is indeed so wide and so broad and comprehensive in its spectrum and range that many activities which admittedly fall within the category of "industry" are clearly designed to subserve public interest. In fact, whenever any industry is carried on by the Government, it would be in public interest, for the Government can act only in public interest. Whether an activity is carried on in public interest or not can, therefore, never be a criterion for determining its character as an industry. [149D H,150A B] State of Bombay vs Hospital Mazdoor Sabha, ; ; Management of Safdarjung Hospital vs K. section Sethi ; , followed. Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation ; Secretary, Madras Gymkhana Club Employees Union vs The Management of the Madras Gymkhana Club [1968] 1 S.C.R. 742; National Union of Commercial Employees vs M. R. Meher [1962] Supp. 3 S.C.R. 157; University of Delhi & Anr. vs Ramnath, [1964] 2 S.C.R. 703; Cricket Club of India Ltd. vs The Bombay Labour Union & Anr. ; , discussed. HELD (Per Alagiriswami, J. contra): Even when a trade, business, undertaking, manufacture or calling of employers results in production of material goods or rendering of material services, such an undertaking engaged in trade. business, manufacture or calling of employers will not be an "industry, if it is run on charitable principles or is run by Government or local body as part of its duty. In other words, whenever an undertaking is engaged in activity which is not done with a view to exploit it in a trading or commercial sense, but for public interest and without any profit motive or in the form of social service or in the form of activity intended to benefit the general public, it will not be an industry. [161 G H. 162A] 140 HELD FURTHER (Per Bhagwati and Goswami, JJ ) (iv) The activities of the Indian Standards Institution fall within the category of undertaking analogous to trade or business and constitute an "industry" within the meaning of section 2(j) of the . [157 E] Ahmadabad Textile Industry Research Association vs The State of Bombay and others; , Management of Safdarjung Hospital vs K. section Sethi, ; , Management of F.I.C.C.I. vs Its Workmen, , followed. Per contra (Alagiriswami, J ) The Institution has no capital, it does not distribute profits and even when it is wound up, the assets would not go to any private individual. It is not run with a profit motive. It is thus not an enterprise analogous to business or trade. In fact, its activity is only a manifestation of Government activity. Instead of itself performing these duties, which the Government itself has to do in the service of the general public. What the Institution does is to render material services. The material service which the Institution renders is really a subsidised service and it is rendered in public interest. It is an institution interested and engaged in service to the public. Its activities do not go to swell the coffers of any body. Applying the tests evolved and applied in the. Gymkhana Club 's case and the Safdarjung 's case, it is obvious that the institution is not engaged in any industry. The activities of the Indian Standards Institution are not intended to benefit any class of businessmen or to enable them to increase their income. It is a public service institution and, therefore, is not an industry. [162D F, 163 A]

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N: Criminal Appeal No. 120 of 1971. Appeal by Special Leave from the Judgment and order dated the 24th July, 1970 of the Allahabad High Court at Allahabad in Criminal Appeal No. 581 of 1968. A. N. Mulla and O. N. Mohindroo for the Appellant. D. P. Uniyal and O. P. Rana for the Respondent. The Judgment of P. N. Bhagwati and R. section Sarkaria was delivered by R. section Sarkaria, J. Beg, J. gave a separate opinion. BEG, J. I have had the advantage of going through the judgement of my learned brother Sarkaria. I confess that I do not feel confident enough about the veracity of the defence case and the evidence found in support of it to be able to hold that it is proved on a balance of probabilities. But, I think that what transpires from a consideration of the whole evidence is enough to entitle the accused to a benefit of doubt for the reasons given below. The findings of the Trial Court on the defence version indicate that a question of law arise here which seems to have troubled several High Courts. It gave rise to two Full Bench decisions of the Allahahad High Court, the first in Parbhoo vs Emperor,(l) and the second in Rishi Kesh Singh & ors. vs the State( '). It does not seem to have been considered in the same form by this Court. r I think this is an appropriate case in which this Court could consider and decide it, and, it is because this aspect of the case was ignored by the Trial Court as well as the High Court that I consider this to be a fit case for a reconsideration of evidence and interference by this Court under Article 136 or the Constitution. The Trial Court, after assuming that there may be some truth in the defence version that Ram Nath had gone to the scene of occurrence with a bhala, said: "Even if Ram Nath had arrived there armed with bhala, there could be no apprehension of death or grievous hurt to any one of the accused persons as the accused persons were armed with gun and pistol and could defend themselves if Ram Nath tried t(3 strike them with 'bhala '. Pratap and Suresh 'accused could not be justified in firing gun shots and pistol shots at Ram Nath in the expectation that Ram Nath may reach the place where Puttu Lal accused was standing and may strike him with 'bhala '. (1) A.l. R. 1941 All. 402 (FB). (2) AIR 1970 All. Sl (FB). 760 Pratap and Suresh accused had started from their house A with gun and pistol before they had known about the reaching of Ram Nath at that place with a 'bhala '. It can reasonably be inferred from the own case of the defence that Pratap and Suresh accused, or at least Pratap accused, had arrived there with the intention of committing the murder of Raj Kumar or of any body who may interfere in the wordy duel between Raj Kumar P.W. and Puttu Lal accused". This shows that the Trial Court was inclined to believe that the defence version was true to the extent that Ram Nath had rushed to the scene of occurrence with a bhala, when a quarrel between the two sides was taking place. But, it overlooked here that Ram Nath, while going to the help of Raj Kumar, had actually expressed his intention to break the heads of members of Puttu Lal 's party. At any rate, according to the prosecution evidence. , Ram Nath was acting in such a way as to appear like a "lion" bent on interference to protect Raj Kumar in a quarrel between the two sides. If this was Ram Nath 's conduct, could he not have done something which gave rise to the right of private defence of person ? If that right had arisen how could shooting him be murder ? Even if it was exceeded the offence could not be culpable homicide amounting to murder. Why should Pratap, the appellant, have spared Raj Kumar who, according to the prosecution evidence itself, had given offence to Puttu Lal in the past and then on the date of incident by actually demolishing a nali and then advancing towards him with his phawra, threatening to strike Puttu Lal, but shoot at Ram Nath who appeared subsequently and was, according to the prosecution version, quite unarmed ? The prosecution evidence is that Puttu Lal had called his son Pratap and asked him to bring his gun only when Raj Kumar had threatened to attack him with his phawra and had advanced towards Puttu Lal. Nevertheless, Pratap and Suresh are alleged to have shot down Ram Nath, even though Ram Nath was empty handed, but did nothing to Raj Kumar who was, according to the prosecution version, more offensive and threatening with a phawrah and was the cause of the whole trouble Such conduct, attributed to Pratap and Suresh, in the setting alleged, seems quite unnatural and eccentric. Raj Kumar, P.W. 1, also stated that Atma Ram, Achhe Ram and Sia Ram, Pradhan, took their stand in parti land at about the same time as Ram Nath had arrived on the scene and had asked Ram Nath not to loose heart or to be discouraged as he was coming to deal with each one of Raj Kumar 's adversaries. Then, at Puttu Lal 's instigation, Pratap and Suresh are alleged to have shot at Ram Nath. Why is it that this version of the obviously interested Raj Kumar, PW 1, is, only supported by two chance witnesses of another village, but neither Atma Ram nor Achhe Ram, nor Sia Ram, Pradhan of village Sant Kuiyan, who had, according to the prosecution version, witnessed the occurrence not produced by the prosecution at all ? The prosecution could select its witnesses. But, why was such an objectionable selection made ? Was it not a case in which the Court should have exercised its power under Section 540 Criminal Procedure Code to summon at least Sia Ram 761 Pradhan, in whose grove Ram Nath was shot, so as to ascertain the whole truth more satisfactorily ? Had not the Trial Court and the High Court too readily assumed that absolute truth fell from the lips of prosecution witnesses as regards the commencement of aggression even when their own statements contained admissions indicating that the whole or the real truth had not been revealed by them ? These are some of the doubts which the rather mechanical examination of evidence by the Trial Court and the High Court do not dispel. The question which arises in this case is: Even if the defence version is not held to be fully established, by a balance of probabilities, were there not sufficient pointers in evidence of what was probably the truth which leaked out from some statements of the prosecution witnesses themselves ? They had indicated the bellicose and threatening attitude of Ramnath while he was advancing. Did this not tend to corroborate the defence version that he was actually advancing menacingly armed with a bhala piosed for an attack with it when he was shot at ? It was held in the case of Rishi Kesh Singh (supra) by a majority of a Full Bench of nine Judges of the Allahabad High Court explaining and relying upon the decisions of this Court discussed there (at p. 51): "The accused person who pleads an exception is entitled to be acquitted if upon a consideration of the evidence as a whole (including the evidence given in support of the plea of the general exception) a reasonable doubt is created in the mind of the Court about the built of the accused". In that case, the result of a consideration of the decisions of this Court in relation to the provisions of Section 105 of the Evidence Act was summed up by me as follows (at page 97 98): ". an accused 's plea of an exception may reach one of three not sharply demarcated stages, one succeeding the other, depending upon the effect of the whole evidence in the case judged by the standard of a prudent man weighing or balancing probabilities carefully. These stages are: firstly, a lifting of the initial obligatory presumption given at the end of section 105 of the Act; secondly, the creation of a reasonable doubt about the existence of an ingredient of the offence; and, thirdly, a complete proof of the exception by 'a preponderance of probability ', which covers even a slight tilt of the balance of probability in favour of the accused 's plea. The accused is not entitled to an acquittal if his plea does not get beyond the first stage. At the second stage, he becomes entitled to acquittal by obtaining a bare benefit of doubt. At the third stage, he is undoubtedly entitled to an acquittal. This, in my opinion, is the effect of the majority view in Parbhoo '. case which directly relates to first two stages only. The Supreme Court decisions have considered the last two stages so far, but the first stage has not yet been dealt with directly or separately there in any case brought to our notice." 18 L925SupCl/75 762 Provisions of Section 105 of the Evidence Act, which are applicable in such cases, contain what are really two kinds of burden of the accused who sets up an exception; firstly, there is the onus laid down of proving the existence of circumstances bringing the case within any of the General exceptions in the Indian Penal Code, or, within any special exception or proviso contained in any other part of the same Code, or in any law defining the offence, and, secondly, there is the burden of introducing or showing evidence which results from the last part of the provision which says that "the Court shall presume the absence of such circumstances". The effect of this obligatory presumption at the end of Section 105 of the Evidence Act is that the Court must start by assuming that no facts exist which could be taken into consideration for considering the plea of self defence as an exception to the criminal liability which would otherwise be there. But, when both sides have led evidence of their respective versions, the accused can show, from any evidence on the record, whether tendered by the prosecution or the defence, that the mandatory presumption is removed. the last mentioned burden is not really a burden of establishing the plea fully but of either introducing or of showing the existence of some evidence to justify the taking up of the plea. The burden resulting from the obligatory presumption is not difficult to discharge and its removal may not be enough nor an acquittal. D Section 105 of the Evidence Act was thus explained in Rishi Kesh Singh 's case (supra) (at P. 95): "Even a literal interpretation of the first part of Section 105 could indicate that 'the burden of proving the existence of circumstances bringing the case ' within an exception is meant to cover complete proof of the exception pleaded, by a preponderance of probability, as well as proof of circumstances showing that the exception may exist which will entitle, the accused to the benefit of doubt on the ingredients of an offence. If the intention was to confine the benefit of bringing a case within an exception to cases where the exception was established by a pre ponderance of probability, more direct and definite language would have been employed by providing that the accused must 'prove the existence ' of the exception pleaded. But, the language used in the first part of Section 105 seems to be deliberately less precise so that the accused, even if he fails to discharge his duty fully, by establishing the existence of an exception, may get the benefit of the exception in directly when the prosecution fails in its duty to eliminate genuine doubt about his guilt introduced by the accused. Again, the last part of Section 105, even if strictly and literally interpreted, does not justify reading into it the meaning that the obligatory presumption must last until the accused 's plea is fully established and not just till circumstances (i.e. not necessarily all) to support the plea are proved. Moreover, a restrictive interpretation of Section 105, excluding an accused 11 from the benefit of bringing his case within an exception until he fully proves it, is ruled out by the declaration of law by the Supreme Court that there is no conflict between Section 763 105 and the prosecution 's duty to prove its case beyond reasonable doubt. Hence, the obligatory presumption, at the end of Section 105, cannot be held to last until the accused proves his exception fully by a preponderance of probability. It is necessarily removed earlier or operates only initially as held clearly by judges taking the majority view in Parbhoo 's case, 1941 All LJ 619 AIR 1941 All 402 (FB)". It was also said there (at p. 89): "The legal position of a state of reasonable doubt may Be viewed and stated from two opposite angles. One may recognise, in a realistic fashion, that, although the law prescribes only the higher burden of the prosecution to prove its case beyond reasonable doubt and the accused 's lower burden of proving his plea by a preponderance of probability only, yet, there is, in practice, a still lower burden of creating reason able doubt about the accused 's guilt, and that an accused 's can obtain an acquittal by satisfying this lower burden too in practice. The objection to stating the law in this fashion is that it looks like introducing a new type of burden of proof, although, it may be said, in defence of such a statement of the law, that it only recognises what is true. Alternatively, one may say that the right of the accused to obtain the benefit of a reasonable doubt is the necessary outcome and counterpart of the prosecution 's undeniable duty to establish its case beyond reasonable doubt and that this right is available to the accused even if he fails to discharge his own duty to prove fully the exception pleaded. This technically more correct way of stating the law was indicated by Woolmington 's case and adopted by the majority in Parbhoo 's case, and, after that, by the Supreme Court. It seems to me that so long as the accused 's legal duty to prove his plea fully as well as his equally clear legal right to obtain the benefit of reasonable doubt, upon a consideration of the whole evidence, on an ingredient of an offence, are recognised, a mere difference of mode in describing the position, from two different angles, is an immaterial matter of form only. Even if the latter form appears somewhat artificial, it must be preferred after its adoption by the Supreme Court". (See: K. M. Nanavati vs State of Maharashtra AIR Applying the principle of benefit of doubt, as I had ' explained above, to the plea of private defence of person in the instant case, I think that, even if the appellant did not fully establish his plea, yet, there is sufficient evidence, both direct and circumstantial, to justify the finding that the prosecution has not established its case beyond reasonable doubt against Pratap on an essential ingredient of the offence of murder: the required mens rea. After examining all the facts and circumstances revealed by the prosecution evidence itself and the defence evidence and considering the effect of non production of the better evidence available which for some unexplained reason, was not produced, I am not satis 764 fied that the plea of private defence of person can be reasonably ruled A out here. This is enough, in my opinion, to entitle the appellant to get the benefit of doubt. I may observe here that the High Court had not only failed to grapple with this difficulty arising from the evidence in the case and some of the findings of the Trial Court, which seemed to think that the intention to murder or the required mens rea for murder must be presumed from the mere fact of homicide (a wholly incorrect approach in a case where a plea of private defence had been raised and sought to be established by some evidence), but, the High Court itself started from a totally unsound premise when it observed: "It was Puttu Lal who was committing aggression by insisting that Raj Kumar should not dismantle the Nali It is again admitted by Puttu Lal that he cried out for help in response to which Pratap arrived armed with a double barrel gun. " In other words, the High Court assumed that a mere insistence by Puttu Lal that Raj Kumar should not dismantle the nali amounted to an "aggression" begun. The word "aggression" is generally used for an actual invasion of the property of another or an attack on the body of another. It is true that it is not necessary that an actual attack should commence before a right of private defence can arise. Nevertheless, a reasonable apprehension of injury could not be said to arise by a mere prohibition to dig up a "nali" or drain. It could arise if a man is advancing aggressively towards others holding out threats to break their heads even if he is armed with a lathi with which he could carry out such a declared intention. The extent of the right or its justification is another matter depending again upon facts which have a bearing on extent of the right or its reasonable exercise. In the circumstances of the case before us, I think, we can hold, that, even if Ram Nath was not positively proved to be threateningly advancing with a bhala poised for attack towards Pratap, appellant, or Puttu Lal, yet, a consideration of all the probabilities and evidence on record leads us to infer that this was reasonably likely to be true. If this was so, it is clear that the appellant must have discharged his gun when Ram Nath had advanced and come near enough in a manner which must have been so menacing as to raise an apprehension of an attack with the bhala. Such an assumption fits in with medical evidence too showing that the shots were fired from a close enough range to cause charring. Another feature of the case is that the High Court itself did not rely on the statements of the alleged eye witnesses when it acquitted Suresh, who was also alleged to have shot with his pistol" giving him the benefit of doubt because, unlike Puttu Lal and Pratap, he had denied his presence or participation in the occurrence and was said to be only distantly related to Puttu Lal. 765 I think, on an analysis of the whole evidence, that the appellant Pratap was also entitled to the benefit of a doubt which could be said to be reasonable. I, therefore, concur in the order proposed by my learned Brother. SARKARIA, J. This appeal by special leave is directed against a judgment of the High Court of Allahabad dismissing the appeal of Partap appellant and maintaining his conviction under section 302, Penal Code. The facts of the prosecution case as narrated at the trial by Raj Kumar, the star witness of the prosecution, were as follows: Raj Kumar had installed a Tubewell in his field known as 'Chharelawala.field ' in the revenue estate of village Sant Kuiyan, in the year 1962. The water pumped out from this tubewell was utilised by him not only for irrigating his own fields but also those of the neighbours against charges. Subsequently, Puttu Lal accused also set up a tubewell in his land situate in the vicinity of Chharelawala field. Puttu Lal, too, started letting out the use of his tubewell on hire. An unhealthy competition ensued between Raj Kumar and Puttu Lal in this water business, and their relations became strained. There was a water channel running from north to south in Raj Kumar 's field through which Puttu Lal used to supply water to others. To the south of Chharelawala field, there is grove belonging to Sia Ram, Pardhan of the village. The tubewell of Puttu Lal is located towards the south of that grove. To the west of the Chharelawala field, is a plot belonging to Puttu Lal. Two or three days before the occurrence in question, there was an exchange of hot words between Raj Kumar and Puttu Lal when the latter insisted on taking water through the said channel. Raj Kumar firmly refused Puttu Lal the use of that channel. on S 1 1967, at about 7.45 a.m., Raj Kumar and his brothers Ramchander and Bhagwan Sahai, started demolishing their channel so that Puttu Lal should not be able to supply water through it. About fifteen minutes thereafter, Puttu Lal and his son, Ram Parkash, appeared on the northern ridge of the grove of Siya Ram. Puttu Lal was carrying a lathi and Ram Parkash a bhala. Puttu Lal asked Raj Kumar and his companions not to demolish the channel. Raj Kumar rudely refused asserting that the channel belonged to him and he had every right to erase it. Raj Kumar advanced towards Puttu Lal threatening to break his head with the spade, and thus settle the matter once for all. On being so threatened, Puttu Lal shouted to his son, the appellant, to come immediately with his gun. In response to Puttu Lal 's call, the appellant, armed with the double barrel licensed gun of Puttu Lal, and Puttu Lal 's other son, Suresh, armed with a pistol, came. A couple of minutes after the arrival of the appellant and Suresh, the deceased Ram Nath who was the son of Raj Kumar 's wife 's brother, came out running from the grove. He shouted to 766 Raj Kumar not to be afraid as he would settle the matter with every A one of the accused and break their heads. On seeing the deceased, Puttu Lal said: "He thinks himself to be a lion, let us see him first of all". On this instigation, Partap fired his gun at Ram Nath from a distance of four or five paces. On receiving the gun shot, Ram Nath turned back when he was hit by a second shot fired by Suresh from his pistol. Ram Nath, dropped dead. The accused then ran away taking their weapons with them. Raj Kumar PW 1 went home, scribed the report. ka 3, and handed it over in the Kain Ganj Police Station, 8 miles away, at 9.30 a.m. After registering a case on the basis of this report, Sub Inspector Kartar Singh reached the spot and started the investigation. He prepared the inquest report and sent the body for post mortem examination. The autopsy was conducted by Dr. section P. Chaturvedi, PW 3, on 6 1 1967, at 12.40 p.m. The Doctor found five gunshot wounds of entry and three of exit on the deadbody. There was blackening around all the wounds of entry. The death, in the opinion of the Doctor, was due to shock and haemorrhage on account of the gunshot wounds of the head and the right lung. The accused surrendered in the court of the Additional District Magistrate, Farrukhabad on 7 1 1969, and thereafter their custody was taken over by the Police. After conducting the preliminary enquiry the Magistrate committed Puttu Lal, Suresh and Partap accused for trial to the court of Session on charges under sections 302/34, 109 Penal Code All the three accused were convicted and each of them was sentenced to imprisonment for life and a fine of Rs. 200/ . The plea of the accused was one of denial of the prosecution case. Suresh pleaded alibi and alleged false implication. Partap pleaded that the deceased was about to strike him with a bhalla and consequently, he fired two shots, in self defence, from his double barrel gun at the deceased. The accused examined Chhote Khan, DW 1. in defence. The trial judge rejected the defence version and convicted and sentenced the accused as aforesaid. In appeal, the High Court acquitted Suresh accused but maintained the conviction of Puttu Lal and Partap. Before the admission of the special leave petition under Article 136 of the Constitution by this Court, Puttu Lal died. Thus only the appellant 's conviction survives for consideration in this appeal. The decision of the courts below rests mainly on the testimony of the three eye witnesses, namely, Raj Kumar, PW 1, Atma Ram PW 2, and Achhey Ram, PW 4. Mr. A. N. Mulla, the learned Counsel for the appellant contends that the evidence of P.Ws. 2 and 4 was not worthy of credence; that being residents of another village and having failed to give a credible reason for their presence at the scene of occurrence, they were chance witnesses of the worst type; that as admitted by their brother" Bisheshar Dayal, PW 15, they were not only related to the deceased but were 767 stock witnesses of the Police. that since the witnesses did not frankly and fully admit their mutual blood relationship" they were of a type to whom truth, even in trifles, appeared to be unpalatable; that the prosecution had failed to examine Siya Ram and Mahabir who were also named as eye witnesses in the F.I.R. and the courts below had erred in not drawing an adverse inference against the prosecution on that score. Although this criticism levelled against P.Ws. 2 and 4 is not totally devoid of force, we do not think it a sufficient ground to depart from the settled rule of practice according to which this Court does not, in the absence of material irregularity, illegality or manifest error, itself reappraise the evidence. In spite of these infirmities, the courts below have believed their presence at the time and place of occurrence. The reasons given by the witnesses for their presence at the spot, may be vulnerable, even wrong. True, they are residents of the neighbouring village, 1 1/2 or 2 miles away, and belong to the caste of the deceased. PW 15 may be bearing some relationship with the deceased. But the fact remains that PWs 2 and 4 have been named as eye witnesses in the F.I.R. which was lodged in the Police Station, 8 miles away, with utmost promptitude. Be that as it may, the fate of the case did not depend on the evidence of these two witnesses. Raj Kumar 's evidence corroborated by the F.I.R. and the other evidence on the record, was by itself, sufficient to hold that the appellant had fired a fatal shot at the deceased from close range with the double barrel gun of his father. Thus, the only question that falls to be considered in this appal is, whether Ram Nath was shot dead by the appellant in the exercise of his right of private defence ? We have carefully scrutinised the judgments of the courts below. In our opinion, their finding in regard to the plea of self defence is clearly erroneous. They appear to have overlooked he distinction between the nature of burden that rests on an accused under section 105 Evidence Act to establish a plea of self defence and the one cast on the prosecution by Section 101 to prove its case. It is well settled that the burden on the accused is not as onerous as that which lies on the prosecution. While the prosecution is required to prove its case beyond a reasonable doubt, the accused can discharge his onus by establishing a mere preponderance of probability. Since the approach of the courts below is basically wrong, it has become necessary to examine the material on record bearing on the plea of self defence. This plea was specifically taken by the appellant at the trial in his examination under section 342, Cr. It was put to Raj Kumar PW 1, the chief witness of the prosecution, in cross examination. Raj Kumar replied: "It is wrong to suggest that Ram Nath would have murdered Partap if Partap had not fired at him. Ram Nath had nothing in his hand. " The courts below have accepted without demur the ipse dixit of Raj Kumar that the deceased was unarmed. We find it impossible to swallow this so improbable a version the credibility of which was extremely underminded by the telling 768 circumstances appearing in the prosecution evidence, itself. It was the admitted case of the prosecution that following the threatening gesture made by Raj Kumar to break Puttu Lal 's head with the spade, and the call given by Puttu Lal, the appellant came there armed with a gun and immediately thereafter, the deceased came running, proclaiming that he would break the heads of and settle the scores with everyone of the accused party. It is further admitted that the deceased had reached at a distance of 3 or 4 paces from the appellant when the latter fired. The blackening found around the wounds of entry on the deadbody by the medical witness, confirm that the deceased was within six feet of the assailant when he received those injuries. Again, it is the case of the prosecution that at the time of the first gun fire the deceased was facing the appellant. The medical evidence also confirms it, inasmuch as two entrance wounds (1 and 5) were located on the front side of the deceased. From this circumstance it is clearly discernible that the deceased was charging at the gunman and had reached within a striking distance when his charge was foiled by the gun fire. It is difficult to believe that the deceased would have behaved in the bold and truculent manner he did, if he were not armed with a formidable weapon. It was put to Raj Kumar by the defence that if the deceased was empty handed as was alleged by the witness how did he proclaim to break the heads of the accused. The witness had no satisfactory answer to it. Conscious that he was suppressing the fact in question, all that he could say in befuddled embarrassment, was: '`I do not know with what weapon he was going to break the heads. " The appellant 's plea that the deceased was going to strike him with a Bhalla, when the gun was fired, was highly probable. one of the reasons given by the learned Judges of the High Court for ignoring this plea was that it was belated and had not been set up by the appellant during his examination in the Committal Court. A glance at the record of that examination would show that he was not properly examined in that court. Only a composite question with regard to all the circumstances of the prosecution case, was put to him in the Committal Court, which he denied. The omission of the appellant to set up the plea of private defence in the Committal Court, therefore, was no ground to brand it as an after thought, particularly when there was foundation for it in the prosecution evidence, itself. The circumstances appearing in the prosecution evidence, and the statement of the appellant recorded under Sec 342, Cr. P.C. did not exhaust the material in support of the plea of self defence. There was the direct testimony of Chhote Khan, DW 1, who testified that he was attracted from his house to the spot by the outcry of Puttu Lal accused which was to the effect, that he was being killed. Witness saw Ram Nath deceased, armed with a spear, running towards the move of Siya Ram. Thereafter, he heard two reports of gun fire. On reaching the grove, the witness saw Ram Nath lying dead with a spear by his side. Partap appellant and Puttu Lal were also seen running away from the scene. Partap was carrying a gun. Witness did not see Suresh and Ram Parkash there. Excepting the precise words of 769 Puttu Lal 's call and the fact of the deceased being armed with a spear, Chhote Khan 's evidence in so far as it goes, fits in with the prosecution story. The High Court has rejected hi, evidence without much discussion for two reasons; firstly, that he was not speaking the truth inasmuch as he stated that Puttu Lal was raising an outcry that he was being killed, because it was no body 's case that any body assaulted or attempted to assault Puttu Lal. Secondly, the witness did not appear and make any statement before the investigating officer. Neither of these was a good ground to reject his testimony but of hand. Chhote Khan was a resident of the same village. The place of occurrence is not situated at a far off distance from the village, Indeed, it was the prosecution case that the appellant and deceased came to the spot after hearing the shouts of Puttu Lal and Raj Kumar. Chhote Khan 's coming to the spot from the village on hearing the same shouts, was therefore, equally probable. In any case, his reaching the scene on hearing the reports of gun fire and seeing Ram Nath lying dead with a spear, was a highly probable fact. Nor could his version that Puttu Lal was raising an outcry that he was being killed, be rejected outright. It was admitted by Raj Kumar in cross examination, that he and his companions had advanced 2 paces towards the accused Puttu Lal and others, threatening to break their heads with the Phawra (spade and that the witness was then carrying (rather brandishing) the spade. It is further admitted that it was after this threat that Puttu Lal gave a call to the appellant to come armed with the gun. In the face of such a threat, it was not improbable for Puttu Lal to cry out for help saying that he was being killed. Chhote Khan was an independent witness. Nothing was brought out in cross examination to show that he was hostile towards the complainant party or had any special interest in the defence. In the light of the above discussion, the conclusion is inescapable that the appellant had succeeded in establishing by a preponderance of probability, that the deceased was within a striking distance, poised for imminent attack on the appellant with a spear, when the latter fired the fatal gunshot. In such a situation, the appellant had reasonable and immediate apprehension that he would suffer death or grieous hurt if he did not fire at the deceased. Thus the death was, in all probability, caused by the appellant in the exercise of his right of private defence. For the foregoing reasons we allow the appeal, set aside the conviction of the appellant and acquit him. V.P.S Appeal allowed .

The appellant, his father and another were charged with murder and convicted by the trial court. The first information referred to eye witnesses, of whom the prosecution examined only two. These two were chance witnesses of another village, but the others who belonged to the village where the occurrence took place, were not examined. The third accused was acquitted on appeal. by the High Court and the father died after his conviction was con firmed by the High Court. The appellants plea of private defence was rejected both by the trial court and the High Court. Allowing the appeal to this Court, ^ HELD (Per M. H. Beg J.): Section 105 of the Evidence Act contains two kinds of burden on the accused who sets up an exception (i) the onus of proving the existence of circumstances bringing the case within any of the general or special exceptions in the I.P.C. Or in any other law; and (ii) the burden of introducing or showing evidence, resulting from the last part of the provision which says that the court shall presume the absence of such circumstances. The effect of the obligatory presumption at the end of Section 105 is that the court must start by assuming that no facts exist which could be taken into consideration for considering the plea of self defence as an exception to the criminal liability which would otherwise be there. But when both sides have led evidence of their respective versions the accused ' can show, from the evidence on record, whether tendered by the prosecution or the defence that the mandatory presumption is removed. The last mentioned burden is not really a burden of establishing the plea fully but of either introducing or showing the existence of some evidence to justify the taking up of the plea. The burden resulting from the obligatory presumption is not difficult to discharge and its removal may not be enough for acquittal. But the right of the accused to obtain the benefit of reasonable doubt is the necessary outcome and counter part of the prosecution 's undeniable duty to establish its case beyond reasonable doubt and that right is available to the accused even if he fails to discharge his own duty to prove fully the exception pleaded. [762A D; 763E] In the present case, even if the appellant did not fully establish his plea. yet, there is sufficient evidence, both direct and circumstantial, to justify the finding that the prosecution has not established its case beyond reasonable doubt against the appellant on an essential ingredient of the offense of murder namely the required mens rea. An examination of all the facts and circumstances revealed by the entire evidence, including the effect of non production of the better evidence available which. for some unexplained reason was not produced, shows that the plea of private defence cannot be reasonably ruled out. Even if the deceased was not positively proved to be advancing threateningly with a spear poised for attack, towards the appellant or his father, yet, a consideration of the whole evidence leads to the inference that this was reasonably likely to be true. [763C 764A E] (1) The trial court was inclined to believe that the defence version was true to the extent that the deceased had rushed to the scene with a spear. It overlooked that the deceased while going to help P.W. 1, had actually expressed his intention to break the heads of the members of the accused party and that he was acting in such a was as to appear to be bent on physically aggressive interference in a quarrel between the two sides. If that was the conduct of the deceased, it is reasonable to infer that he must have done some 758 thing which gave rise to the right of private defence in favour of the appeallant Otherwise, the conduct of the appellant, in sparing, P W. 1, who according to the prosecution had given offence to his father in the past and on the day of the incident. and was advancing towards the father threatening to strike him with a spade, but shooting the deceased who appeared on the scene subsequently and was, according to the prosecution version unarmed becomes inexplicable If the right of self defence had arisen the shooting could not be murder, even if the right was exceeded the offence could not he culpable homicide amounting to murder.[760B F] (2) Further, the prosecution version is supported only by two chance witnesses, hut the other persons, who had according to the prosecution version witnessed the occurrence and whose names were mentioned in the FIR. were neither produced by the prosecution nor were they examined as court witnesses [760G 761B] (3) Moreover the High Court itself did not rely on the statements of the alleged eye witnesses when it acquitted the third accused who was also alleged to have shot with his pistol [764H] Parbhoo vs Emperor, AIR 1941 All 402(FB) and Rishi Kesh Singh ors. vs The State AIR 1970 All] 51 (FB), referred to (Per P. N. Bhagwati and R.S. Sarkaria, JJ) The appellant had established by a preponderance of probability, that the deceased was within a striking distance poised for imminent attack on the appellant with a spear, when the appellant fired the fatal shot, and hence. the death was caused by the appellant in the exercise of the right of private defence.[769F G] (1) Nothing turns on the evidence or the two witnesses who were examined but the approach of the trial court and the High Court to the plea of self defense raised by the appellant was wrong necessitating a review of the evidence by this Court [767D,G] (2) The burden on the accused under s.105, Evidence Act is not as onerous as that which lies on the prosecution under s 101, Evidence Act, to prove its case. While the prosecution is required to prove its case beyond reasonable doubt, the accused can discharge his onus by establishing a mere preponderance of probability [767 T] (3) The plea of private defence was specifically taken by the appellant at the trial in his examination under s 342 Cr.P.C., and was put to P.W. 1. the chief eye witness for the prosecution. The High Court was wrong in branching the plea as an after though on the ground that he did not raise it in the committal court, especially when there is foundation for it in the prosecution evidence itself. The record also shows that only a composite question was put to the appellant and that he was not properly examined in the committal court. [767;768E G] (4) The appellant plea that the deceased was about to strike with his spear when the gun was fired was highly probable. The prosecution case was that, following the threatening gesture made by P.W. 1. to break the father 's head with a spade and the call given by him, the appellant came to the scene of occurrence with a gun; that immediately thereafter the deceased came proclaiming that, he would break the heads of, and settle scores with everyone of, the accused party, and that the deceased had reached a distance of 3 or 4 paces from the appellant and was charging at him with the appellant fired. The prosecution story that the deceased was unarmed is improbable. He would not have behaved in that bold and truculent manner unless he was armed with a formidable weapon. [767H 767D] (5) The defence witness also testified that he was attracted from his house to the scene of occurrence by the outcry of the father, that he saw the deceased 759 armed with a spear running towards the scene of occurrence and that he saw the deceased Lying dead with a spear beside him. He was an independent witness and nothing was brought out in the cross examination to show that he was either hostile towards the complainant 's party or had any special interest in the accused. His version was probable and the High Court Was wrong in rejecting his evidence. [769D F]

3317.txt

:Civil Appeal No. 599 of 1975. (Appeal by special leave from the judgment and order dated the 23 4,1974 of the Madhya Pradesh High Court at Jabalpur in MiSC. Petition No. 542 of 1971. section V. Natu, D. K. Kambarkar and V. N. Ganpule, for the appellant. Ram Panjwani and H. section Parihar, for the respondent. 101 The Judgment of the Court was delivered by FAZAL ALI, J. This is an appeal by special leave against the judgment and order of the Madhya Pradesh High Court dated April 23, 1974 dismissing the writ petition filed by the appellant before the High Court for quashing the order of the Assessing Authorities imposing tax under the on the basis of a number of sales made by the appellant Company in pursuance of multifarious contracts of sale. The appellant Company was formed in pursuance of an agreement dated June 8, 1962 between the President of India and the Central Provinces Manganese ore Company Limited. Before this agreement the said Company which will be hereafter referred to as the 'C.P.M.O.C. ' was a private company incorporated in the United Kingdom and carried on the business of extracting manganese ore from several mines in the erstwhile States of C.P. & Berar and Bombay. By virtue of the agreement referred to above a new Company was formed under which the Government of India, the Government of Maharashtra and the Government of Madhya Pradesh held shares in the ratio of 17% each whereas the original Company C.P.M.o. C. retained shares to the extent of 49%. Thus the position was that in the present commercial venture the Central Government had preponderance of share. The appellant, after the formation of the new Company, was known as Manganese ore (India) Ltd. which will hereafter be referred to as the M.O.I.L. Fresh leases. to extract the minerals from the various mines were issued by the Government in favour of the M.O.I.L. and the Company entered into contracts with buyers in India and outside for selling the manganese ore extracted from the various mines situated in the States of Madhya Pradesh and Maharashtra. A close analysis of the contracts entered into by the appellant Company and the business carried on by it would manifestly reveal that the contracts may be divided into four separate and clear categories. Category I are the contracts by which the manganese ore extracted by the appellant company is sent directly to a foreign company known r as M/s. Philips Brothers on f.o.b. terms. Another such contract was entered into by the appellant with B.I.S.C.(Ore) Ltd., London for sale of oriental manganese ore f.o.b. Visakhapatnam. Copies of these contracts were filed before the High Court as Annexures Q & R. The Regional Assistant Sales Tax Commissioner accepted the contention ,. Of the appellant that so far as the sales under these contracts were concerned, they occasioned export and were clearly exempt from the as they fell within the purview of section 5(1) of the said Act. We might also mention here that the main dispute between the parties is regarding the applicability of sections 3(a), 4(2) (b) and 9 of the , according to which the State of Madhya Pradesh was competent to levy tax on the sales made by the appellant in the course of which the manganese ore moved from the State of Madhya Pradesh to other States in India. The main contention of the appellant before the High Court as also before the Sales Tax Authorities was that all these sales were outside sales and not in the course of 102 inter State trade or commerce and therefore the provisions of the Central Sales Tax Aat did not apply. The Assistant Sales Tax Commissioner negatived the contention of the appellant and hence a writ petition was filed before the High Court. We might also mention that the writ petition was filed by the appellant company before the High Court even before taking recourse to the normal procedure laid down under the Madhya Pradesh General Sales Tax Act, 1958. This was obviously done because the appellant chose to assail the levy of tax on the ground that the Sales Tax Authorities did not possess any jurisdiction to impose the tax inasmuch as the sales were not at all covered by the . We have stressed this fact particularly because before the High Court the appellant raised some questions relating to the merits of the matter which could be properly agitated before an Appellate or Revisional authorities under the Madhya Pradesh General Sales Tax Act. Thus so far as the sales in Category I are t. concerned, the Assistant Sales Tax Commissioner accepted the plea of the appellant and did not levy any tax on those sales. These sales, therefore, did not form the subject matter of the present appeal before us. This position was conceded by both sides. Category II represents contracts which were entered into by the appellant company with the Minerals and Metals Trading Corporation of India Ltd. hereinafter referred to as MMTC under which the appellant despatched manganese ore of varying percentage to the MMTC f.o.b. Bombay. After having received the goods from the appellant the MMTC exported the goods to foreign buyers. The copies of the contracts comprising these sales are Annexures N, O and P, before the High Court. Category III relates to sales as per agreements copies of which are Annexures S, T and U by which the appellant sold to M/s Ram Bahadur Thakur & Company, Bombay and other buyers which in turn sold the goods to the MMTC. As regards these two categories, Category II and Category III, the appellant advanced two fold contentions before us. In the first place it was argued that as the goods were eventually exported by the buyers from India to foreign countries, therefore, the sales made by the appellant were not inter State sales but sales which occasioned exports and, therefore, fell within section 5(1) of the . The High Court after consideration of various aspects of the matter overruled the contention of the appellant and held that as no export was involved so far as the sales made by the appellant to the buyers in India were concerned, therefore, section 5(1) had no application at all. This matter need not detain us further, because it is no longer res integra and is now completely concluded by a Constitution Bench decision of this Court in Md. Serajuddin and others vs State of Orissa(1) where Ray, C.J., speaking for the majority observed as follows: "To establish export a person exporting and a person importing are necessary elements and the course of export is (1) 103 between them. Introduction of a third party dealing independently with the seller on the one hand and with the importer on the other breaks the link between the two for then there are two sales one to the intermediary and the other to the importer. The first sale is not in the course of export because the export commences with the intermediary. The tests are that there must be a single sale which itself causes the export or is in the progress or process of export. There is no room for two or more sales in the course of export. x x x x x The expression "occasions" in Section S of the Act means the immediate and direct cause. But for the contract between the corporation and the foreign buyer, there was no occasion for export. Therefore, the export was occasioned by the contract of sale between the Corporation and the foreign buyer and not by the contract of sale between the Corporation and the appellant." The Court clearly held that where the sale was not directly and substantially connected with export, and where between the seller and ultimate buyers intermediaries were involved, such a sale would not occasion any export and would not fall within the purview of section 5(1) of the . It is not disputed that all the sales covered by Category II and Category III were actually made by the appellant not to any foreign exporter but to buyers inside India whether it was MMTC or whether they were other private firms. In these circumstances, therefore, the sales mentioned above could not be said to be sales which occasioned any export. The High Court, therefor, rightly found that these sales were completed within the territory of India when the goods passed to the buyers. The High Court further found as follows: "For these reasons, it cannot be held that these sales occasioned the export within Section 5(1) of the and were sales in the course of export. " The High court relied on a number of authorities, but in view of the decision of this Court in Md. Serajuddin 's (supra) case it is not necessary for us to consider those authorities at all, because the matter has now been concluded by a decision of this Court. In fact this position was conceded by Mr. Natu appearing for the appellant but he tried to persuade us to refer the case to a larger Bench for reconsidering Md. Serajuddin 's (supra) case. We are, however, unable to agree with the prayer made by the learned counsel for the appellant because this Court has given its decision recently and the doctrine of stare decisis is a very valuable principle of precedent which cannot be departed from unless there are extra ordinary or special reasons to do so. We are unable to find any special reasons for reconsidering Md. Serajuddin 's case (supra), particularly when this Court has laid down the rule, namely, that where the sale is in fact and in law a pure inter State sale, it cannot be treated to be a sale occasioning export. This, therefore, disposes of the first plank of attack made by the appellant 8 390SCI/76 104 on the judgment of the Madhya Pradesh High Court so far the sales contained in Categories II and III are concerned. Category IV is in respect of contracts of sale, copies of which are Annexures 1 to 7 before the, High Court. These sales were admittedly made by the appellant in favour of the buyers within the territory of India but outside the State. It was, however, contended that as the goods purported to have been sold to the buyers did not in fact move from the State of Madhya Pradesh, therefore, there was no inter State sale, but only an inside sale in the State where the goods were delivered, and therefore the State of Madhya Pradesh had no jurisdiction to levy tax under the . The same arguments were applied to Categories II and III on the ground that if the sales comprised in Categories II and III were not sales in the course of export they also were not inter State sales, because the goods which moved from the State of Madhya Pradesh were not actually the goods which were sought to be sold to the buyers in other States in India. The High Court has considered this matter at great length and has relied on a number of authorities. In a recent judgment of this Court in Balabhgas Hulaschand and ors. vs State of orissa(1), after review of all the authorities on the point, this Court held as follows: "That the following conditions must be satisfied before a sale can be said to take place in the course of inter State trade or commerce: (1) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another; (ii) that in pursuance of the said contract the goods in fact moved from one State to another; and (iii)that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move. If these conditions are satisfied then By virtue of section 9 of the it is the State from which the goods move which will be competent to levy the tax under the provisions of the . " On a careful consideration of the facts and circumstances of the present case we are satisfied that the present case is directly covered by the decision of this Court in Balabhgas Hulaschand 's case(1). The learned counsel for the appellant sought to distinguish Balabhgas Hulaschand 's case(1) on the ground that what was despatched from Madhya Pradesh was merely managanese ore of a particular percentage but that was not the property which was sought to be purchased by the buyers in other States. It was contended that under the (1) ; 105 contracts or sale the property which was to be sold was continental A mixture which consisted of various kinds of rocks or manganese ore which were mixed together. What therefore was actually despatched, according to counsel for the appellant, was merely one of the constituents of the goods purported to be sold and not the goods which were ores purchased by the buyers. The High Court in its well reasoned judgment has fully considered this aspect of the matter and has rightly pointed out that there is no mechanical or scientific process by which the continental mixture is made. According to the appellant itself the mixture comes into existence automatically by piling up manganese ore despatched from various States one after the other. In other words, the position is that suppose 1000 tons of manganese ore is sent from Madhya Pradesh and another thousand tons from various mines from Maharashtra, when these ores are stocked at one place by being piled up one upon another they automatically produce continental mixture with various constituents properties and percentages required. Mr. B. Sen appearing for the respondent submitted that what was I actually sold was manganese ore of an average percentage and it was not right to say that actually one of the constituents of the manganese ore was despatched by the appellant from various mines situated in the State of Madhya Pradesh. In fact, manganese ore like iron or coal is a special type of commodity which is not capable of undergoing any scientific process of mixing up resulting in an end product. We find ourselves in complete agreement with the argument of the learned counsel for the respondent. It seems to us that the word 'oriental mixture ' which has no doubt been used in some of the agreements produced by the appellant is a misnomer, because this is merely a technical terminology or just another name for what is known in the commercial world as manganese ore of an average or standard percentage of about 49%. A careful perusal of the agreements would clearly show that what the buyers wanted and what was actually sold to them was manganese ore and after all the goods were stocked together the required percentage under the contracts of sale automatically came into existence. For instance, the relevant provisions of one of the contracts, which has been quoted by the High Court, runs thus "QUALITY: The average quality of the ore to be supplied by sellers should be, without guarantee, 49.25% Manganese, 0.15% Phosphorus, 9% Silica and 7.5% Iron PROVIDED ALWAYS that as such supplies are furnished by mixtures of ores from the sellers ' several mines the aver age quality of the samples taken from deliveries from. each mine shall from the basis of settlement. " It would be seen that what was to be supplied was only manganese ore of the percentage of 49.25%. Properties like Phosphorus, Silica and Iron are inherent constituents of manganese ore and are bound to. be found in every manganese ore. Similarly in another contract 106 which appears at p. 117 of the Paper Book and which was entered into by the appellant with the MMTC the relevant passage runs thus: "The execution of this Sale Agreement is dependent on the sellers being able to rail the ores from the mines to the port for shipment and also of the grant of any necessary export permit. QUALITY: 30,000 (Thirty thousand tonnes(1) of 1000 kgs. each, 5% more or less at Buyers ' option. SPECIFICATIONS: Mn. basis 48 % rejection below 46% Fe. 10% maximum Silica+Alumina 14% maximum Phos. 0.18 % maximum" Here also it would appear that the agreement is only for sale of manganese ore. Although a certain percentage is mentioned but that percentage is derived automatically when the manganese ores are stocked together. In most of the other contracts which have been filed by the appellants, for instance, in another contract which has been entered into between the appellant and the MMTC on February 22, 1968 what is sold is 'oriental grade manganese ore '. Similarly in another contract between the appellant and Ms Ram Bahadur Thakur & Company dated February 28, 1968 the property sold is about 25,000 Metric Tonnes of oriental Mixture of Manganese ore. In another contract which appears at p. 147 of the Paper Book and which is between the appellant and the Universal Ferro & Allied Chemicals Ltd., Tumsar Road, what is sold is 12,000 metric tonnes of Manganese ore. There was another stipulation as to delivery in respect of this contract as follows: "The sellers will load the component ores from their mines into the wagons which will be arranged for by the buyers who shall be the consignors, in the name of the sellers, who shall be the consignors, at such mines ' sidings and for such quantities as may be declared from time to time by the sellers ' Managing Director, the destination of all the ,, wagons being Tumsar in the State of Maharashtra and the railway freight being payable by the buyers at the destination. As aforesaid, after the loading of the component ores into wagons the buyers shall be responsible in all respects in respect of the goods so loaded into the wagons. " The stipulation in this contract that after loading the component ores into the wagons the buyers shall be responsible in respect of the goods 107 is a clear pointer to the fact that the manganese ores that were loaded into the wagons were undoubtedly the goods which were purported to be sold under the contract of sale, otherwise the buyers would not have taken the responsibility for the ores loaded into the wagons if it was really not the ores which the appellant were to supply but merely a constituent thereof. A close perusal of the various contracts of sale entered into by the appellant would, therefore, clearly disclose that it was manganese ore and manganese ore alone which was sought to be sold by the appellant to various buyers in India. The mere fact that certain specifications have been given or certain percentages have been mentioned does not change the character or the quality of the goods that are actually supplied by the appellant to its various purchasers. Another important feature of the contract of sale is that a certain amount of tonnage of manganese ore is to be supplied by the appellant which is stretched over a period of few months which shows that the appellant was to supply the ore in instalments. In these circumstances, therefore, the theory of the ore supplied by the appellant being only one constituent and not the entire goods sold appears to be purely illusory and is not at all supported even by the contracts of sale filed by the appellant. For instance, if a firm placed an order for 1000 bales of cloth to be supplied to it by the seller in the course of five months and in pursuance of this contract if the seller supplies 200 bales every month it cannot be said that the first instalment of 200 bales is not the goods sold but only a constituent of the same. On a parity of reasoning, therefore, the manganese ores loaded by the appellant in the railway wagons in the State of Madhya Pradesh, are clearly included in the contract of sale which itself provides that the supply has to be made within. a specified period of few months. Learned counsel for the appellant placed great reliance on a judgment of the Bombay High Court, a certified copy of which has been filed in this Court in the Central Provinces Manganese ore Company Ltd. vs The State of Maharashtra(1). In the first place this judgment is not at all applicable to the facts of the present case, because the Bombay High Court was not dealing with a sale under the . The High Court was pre eminently concerned with the provisions of the C.P. and Berar Sales Tax Act, 1947 and there is nothing to show that the provisions of that Act were in pari materia to the provisions of the . More than this, we do not want to say about the judgment of the Bombay High Court. Reliance was also placed by the appellant on a decision of this Court in Commissioner of Sales Tax, Eastern Division, Nagpur vs Husenali Adamji and Company & Another(2) which also does not appear to be applicable to the facts of the present case, because the Supreme Court in that case was dealing with the question as to when the title in the goods passes. (1) Sales Tax Reference Nos. 17, 18, 19 and 20 of 1964 decided on April 7, 1969. (2) 10 S.T.C. 297. 108 Lastly it was contended by counsel for the appellant that as the manganese ores despatched by the appellant were unascertained or future goods which would come into existence only after the manganese ores extracted in various mines in Madhya Pradesh and Maharashtra were stocked and piled up one after the other the provisions of section 3(a) of the would not apply. This contention is completely without substance in view of the decision of this Court in Balabhgas Hulaschand 's case, (supra) where it was pointed out that so far as section 3(a) of the is concerned there is no distinction between unascertained and future goods and goods which are already in existence, if at the time when the sale takes place these goods have come into actual physical existence. In the instant case also it was never disputed before the High Court or before us that the manganese ore was loaded into the wagons after being extracted from the mines and that the sales of these manganese ores despatched from Madhya Pradesh to various States actually took place and the goods were ultimately accepted by the buyers in other States. In these circumstances, therefore, it is quite clear in this case that the movement of the goods took place in pursuance of the contracts of sale which ultimately merged into actual sales and it was only there after that the tax was sought to be levied by the State of Madhya Pradesh. It was also not disputed that the tax has been levied only on such sales of the manganese ore despatched from the State of Madhya Pradesh which came from the mines situated in the State of Madhya Pradesh. Thus all the incidents of an inter State sale are pre sent in the instant case and the view taken by the High Court that the sales were covered by section 3(a) of the is absolutely correct and we fully endorse the same. These were the main arguments advanced before us by counsel for the appellant. Apart from these, some small points were also argued by the learned for the appellant. In the first place it was submitted that the Sales Tax Authorities had no jurisdiction to impose a penalty of Rs. 1,000/ for the delay in filing the return under the , because there was no provision in the Central Act making a dealer liable to pay penalty for filing belated returns and recourse could not be taken to the provisions of the State Act on the subject. The High Court negatived this plea following two Division Bench judgments of the Madhya Pradesh High Court. The view taken by the High Court on this point is legally erroneous be cause this Court in M/s. Khemka & Co. (Agencies) Pvt. Ltd. vs State of Maharashtra(1) has pointed out that in the absence of any provision for penalty under the itself it is not open to the Sales Tax Authorities to press into service the provisions of the State Sales Tax Act. In this connection, this Court observed as follows . "It is only tax as well as penalty payable by a dealer under the Central Act which can be assessed, re assessed, collected and enforced in regard to payment. The words (1) ; 109 as if the tax or penalty payable by such a dealer under the A Central Act is a tax or penalty payable under the general sales tax law of the State" have "origin and root in the words" payment of tax including any penalty payable by dealer under the Central Act". x x x x x x For the foregoing reasons we are of opinion that the provisions in the State Act imposing penalty for non payment of income tax within the prescribed time is not attract ed to impose penalty on dealers under the Central Act in respect of tax and penalty payable under the Central Act. x x x x x The Central Act contains specific provisions for penalty. Those are the only provisions for penalty available against the dealers under the Central Act. Each State Sales Tax Act contains provisions for penalties. These provisions in some cases are also for failure to submit return or failure to register. It is rightly said that those provisions cannot apply to dealers under the Central Act because the Central Act makes similar provisions. In this view of the matter, therefore, this part of the order of the High Court must be set aside and the penalty imposed by the Assist ant Sales Tax Commissioner must be quashed. It was then submitted that a purchase tax on a turnover of Rs. 748/ has been levied under section 7(1) of the Madhya Pradesh General Sales Tax Act. It was, however, pointed out by the respondent that the tax was actually lev ed on the purchases made by the appellant from unregistered dealers and is a very petty amount. In view of this concession, learned counsel for the appellant did not press this matter. The finding of the High Court on this point is, therefore, affirmed. F Lastly it was submitted that the Assistant Sales Tax Commissioner was wrong in holding that the turnover in respect of inter State sales was not supported by 'C ' Forms. This is also a matter which relates to the merits of the case which could be properly agitated before the Appellate or Revisional authorities under the State Sales Tax Act. The result is that the penalty of Rs. 1000/ imposed by the Assist ant Sales Tax Commissioner is quashed. All other contentions raised by the appellant fail and the judgment of the High Court on those points is hereby affirmed. The appeal is accordingly dismissed with the modification indicated above, but in the circumstances without any order as to costs.

The appellant Manganese ore (India) Ltd. (a commercial venture where the Government of India, Government of Maharashtra and Government of Madhya Pradesh hold shares in the ratio of 17 per cent each) entered into four types of "contracts of sale" with buyers in India and outside India for selling the manganese ores extracted from the mineral mines leased out to it and situated li in the States of Madhya Pradesh and Maharashtra. They were (a) category I are the contracts where the appellant directly sent the ores to two foreign companies on f.o.b. terms; (b) category II represents contracts which were entered into by the appellant with tho Mineral and Metals Trading Corporation of India Ltd., under which the appellant despatched manganese ore of varying percentage to the M.M.T.C., f.o.b. Bombay and the M.M.T.C. in turn exported the goods to foreign buyers; (c) category III relates to the sales to M/s. Ram Bahadur Thakur & Co., Bombay and other buyers who in their turn sold the goods to M.M.T.C. for export; and (d) category IV relates to the sales in favour of the buyers within the territories of India, but outside the State. According to section 3(a) ant 9 of the , the State of Madhya Pradesh was competent to levy tax on the sales in the course of inter state trade or commerce. Under section 5(1) of the , sales occasioning export or in the course of export are exempt from the purview of the Act. In respect of categories II to IV, the Sales Tax Authorities levied tax under the Central Act, holding that they were in the course of inter State trade or commerce and imposed a penalty of Rs. 1,000/ under the Madhya Pradesh General Sales Tax Act for belated filing of returns. The writ petition filed by the assessee in the Madhya Pradesh High Court failed. Dismissing the appeal by special leave and quashing the penalty imposed, the Court. ^ HELD: As no export was involved so far as the buyers in India are concerned, section 5(1) of the has no application at all. This 100 point is no longer "res integra" in view of the Constitution Bench division of this Court in Md. Serajuddin and others vs State of Orissa, Where the sale Y/as not directly and substantively connected with export, and where between the seller and ultimate buyers intermediaries are involved, such a sale would not occasion any export and would not fall within the purview of section 5(1) of the . [102 G, 103 C D] Md. Serajuddin & others vs State of Orissa, , applied. (2) The doctrine of "Stare Decisis" is a very valuable principle of precedent which cannot be departed from unless there are extraordinary or special reasons to do so, and more so to reconsider a recent constitutional decision. [103 G] (3) Before a sale can be said to take place in the course of inter state trade or commerce, the following conditions must be satisfied: (1) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another. (ii) that in pursuance of the said contract the goods in fact moved from one State to another. and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move. If these conditions are satisfied, then by virtue of section 9 of the Act, it is the State from which the goods move which will be competent to levy the tax under the provisions of the Act. [104 D F] Balabhgas Hulsachand and others vs Stare of Orissa, ; relied on. (4) So far as section 3(a) of the is concerned, there is no distinction between unascertained and future goods and goods which are already in existence, at he time when the sale takes place these goods have come into actual physical existence. [108 Bl Balabhgas Hulsachand and others vs State of Orissa, ; applied. (5) In the absence of any provision for penalty under the itself it is not open to the Sales Tax Authorities to press into the service the provisions of the State Sales Tax. [108 G] (6) In the instant case, a careful perusal of the agreements would clearly show that what the buyers wanted and what was actually sold to them was manganese are and after all the goods were stocked together, the required percentage under the contracts of sale automatically come into existence. The word "oriental mixture" is merely a technical terminology or just another name for what is known in the commercial world as manganese ore. therefore, It is clear that it was manganese ore and manganese ore alone which was sought to be sold by the appellant to various buyers in India. The mere fact that certain specific contracts have been mentioned does not alter the character and quality of the goods that are actually supplied by the appellant to its various purchasers. In these circumstances, therefore, the theory of the ore supplied by the appellant being only one constituent and not the entire goods sold is illusory. [105 D F, 107 B D] Central Provinces Manganese ore Co., Ltd. vs The State of Maharashtra, S.T. Ref. 17 20/1964 decided on 7 4 1969 by Bombay High Court, Commissioner of Sales Tax, Eastern Division Nagpur vs Hussenali Adamji and company and another, 10 S.T.C. 297, (Distinguished).

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Civil Appeal Nos. 354 and A 355 of 1971. From the Judgment dated 28th October 1970 of the Punjab and Haryana High Court at Chandigarh in L.P.As. Nos. 85 and 86/70. M. N. Phadke, P. C. Bhartari and K. K. John for the Appellant (in both the appeals). section K. Mehta, K. R. Nagaraja, M. Qarnaruddin and P. N. Puri for Respondent No. 1 (In CA 354) and Respondents Nos. 1 and 2 (in C.A. 355) Naunit Lal and R. N. Sachthey for Respondent 2 in CA 354 and respondent 3 in CA 355. The Judgment of the Court was delivered by KHANNA, J. This`judgment would dispose of two civil appeals Nos. 354 and 355 of 1971 which have been filed on certificate by Tuhi Ram Sharma appellant against the Full Bench judgment of the Punjab and Haryana High Court. The appellant joined service as Agricultural Inspector in the Agricultural Department of Punjab Government in 1945. Teja Singh, Bhale Ram and Prithvi Singh joined as Agricultural Inspector in the said Agricultural Department on different dates between 1950 and 1958. The appellant was confirmed as Agricultural Inspector in 1959. On May 20, 1961 the appellant was appointed against a temporary post of Block Development and Panchayat officer in the Development Department of the State. By order dated October 28, 1966 the appellant was made substantive permanent Block Development and Panchayat officer with effect from April 1, 1964. As a result of partition of Punjab the appellant as well as Teja Singh, Bhale Ram and Prithvi Singh were allocated to the State of Haryana. On February 26, 1969 the Governor of Haryana passed an order deconfirming the appellant on his request from the post of Block Development and Panchayat officer with effect from that date. On March 20, 1969 the Governor of Haryana passed the impugned order which reads as under: "The Governor of Haryana is pleased to promote temporarily Shri Tuhi Ram Sharma, Agricultural Inspector, now working as Block Development and Panchayat officer as District Agricultural officer in H.A.S. Class IT subject to the approval of the Haryana Public Service Commission and to post him at Rohtak in place of Shri Narain Singh who is transferred to Narnaul as District Agricultural officer, Shri Prithvi Singh who is working against the post of District Agricultural officer, Narnaul is reverted to the post of Agricultural Inspector being the junior most. 718 The character roll file of Shri Tuhi Ram in two parts is sent herewith. Its receipt may please be acknowledged. " Two writ petitions were filed praying the quashing of the above order. one petition was filed by Prithvi Singh respondent and the other was filed by Bhale Ram and Teja Singh respondents. Learned single Judge (Tuli J.) as per judgment dated January 30, 1970 allowed both the writ petitions and quashed the impugned order on the following two grounds: "(i) the impugned promotion had been made in violation of the mandatory requirements of rule 7 of the Haryana Agricultural Service Class II Rules, 1947 (hereinafter called the 1947 rules) which required appointment being made to the service by promotion by selection on the advice of Haryana Public Ser vice Commission inasmuch as Sharma had been promoted without obtaining the advice of the Commission which head to be taken before the selection for promotion was made, and not after having promoted Sharma, and (ii) in view of the binding earlier Division Bench judgment of this Court in Labhu Ram & ors. vs The State of Punjab and Ors. it was held that Sharma had on his confirmation as Block Development and Panchayat officer on October 28, 1966 (with effect from April 1, 1964, vide Annexure A) in the Development Department of the Haryana State, ceased to be a member of the Haryana Agricultural Service from which post alone he could have been promoted to the post in question, and his lien on the post of Agricultural Inspector automatically stood terminated under Rule 3.12 of the Punjab Civil Services Rules Volume I, Part I." It was also observed by learned single Judge that but for the earlier Division Bench judgment in the case of Labhu Ram & Ors. vs State of Punjab, he would have been inclined to hold in favour of Sharma appellant on the second point mentioned above. Four Letters Patent appeals were filed against the judgment of the single Judge. Two of those appeals were by Sharma appellant, while the other two were filed by the State of Haryana. When the appeals came up for hearing before the Division Bench, the learned Judges referred the matter to the Full Bench. In the meantime, on March 5, 1970 the Governor of Haryana in consuitation with the Haryana Public Service Commission promoted Sharma appellant as District Agricultural officer in Class II on regular basis and posted him as such with effect from April 1, 1969. All the learned Judges constituting the Full Bench held that the first ground on which the impugned order had been quashed, namely, non procuring of the advance advice of the 719 Haryana Public Service Commission was not well founded. It was also observed that the earlier case of Labhu Ram was clearly distinguishable and had no bearing. By a majority of two to one the Full Bench upheld the judgment of the single Judge on the second ground, namely, that the lien of the appellant on the post of Agricultural Inspector had automatically been terminated. It is the above conclusion of the majority which has been as . sailed in these two appeals before us. Mr. Phadke on behalf of the appellants has invited our attention to the relevant rules on the subject and has contended that the conclusion of the majority of the learned Judges of the Full Bench that the lien of the appellant on the post of Agricultural Inspector had stood terminated is not well founded. As against that, Mr. Nagaraja has canvassed for the correctness of the above view of the learned Judges of the High Court. After hearing the learned counsel for the parties, we are of the opinion that there is considerable merit in the contention of Mr. Phadke. We may at the outset reproduce the relevant rules of the Punjab Civil Service Rules, Volume I, Part I as applicable to the State of Haryana: "3.12. Unless in any case it be otherwise provided in these Rules, a Government servant on substantive appoint appointment to any permanent post acquires a lien on that post and cases to hold any lien previously acquired on any other post. E, 3.14. (a) A competent authority shall suspend the lien of a Government servant on a permanent. post which he holds substantively; if he is appointed in a substantive capacity. (1) . . . . (2) to a permanent post outside the cadre on which he is borne, or (3) . . . . . . . . . . . 3.15. (a) Except as provided in clause (c) of this rule and in note under rule 3.13, a Government servant 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post. (b) In a case covered by sub clause (2) of clause (a) of rule 3.14 the suspended lien may not, except on the written request of the Government servant concerned, be 720 terminated while the Government servant remains in Government service. (c) Notwithstanding the provisions of rule 3.14(a), the r lien of a Government servant holding substantively a permanent post shall be terminated while on refused leave granted after the date of compulsory retirement under rule 8.21; or on his appointment substantively to the post of Chief Engineer of the Public Works Department. In a case covered by rule 3.14(a)(2), where a Government servant is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne, rule 3.15(b) precludes permanently the termination of his suspended lien unless and until a written request to this effect is received from him. The result is that it is possible for such a Government servant to stop his suspended lien being removed from the parent cadre indefinitely and, thus cause inconvenience to the parent office. Such a situation may be met by appropriate executive action being taken by the controlling officer who may re fuse his consent to such a Government servant being can firmed or retained in a permanent post outside his cadre unless he agrees to his lien on a permanent post in his parent office being terminated. " The learned Judges constituting the majority of the Full Bench 3: in holding that the appellant 's lien on the post of Agricultural Inspector had stood terminated relied upon rule 3.12. Perusal of the above rule shows that normally a Government servant on substantive appointment to any permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post. The opening words of the above rule, however, show that it would apply unless it be otherwise provided in the rules. Rule 3.14(a)(2) carves out an exception to the general rule contained in rule 3.12. According to rule 3.14(a)(2), a competent authority shall suspend the lien of a Government servant on a permanent post. which he holds substantively if he is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne. When the appellant was appointed was Block Development and Panchayat officer in a substantive permanent capacity, his case squarely fell within the ambit of rule 3.14(a)(2) as the post of Block Development and Panchayat officer was outside the cadre of Agricultural Inspectors to which the appellant belonged: In the circumstances, it was imperative for the competent authority to suspend the lien of the appellant on the permanent post of Agricultural Inspector which he had held substantively. The competent authority, however, failed to suspend the lien of the appellant on the post of Agricultural Inspector. The appellant plainly cannot suffer because of such inaction or omission on the part of the competent authority. A reading of the rule leaves no doubt that a duty is cast upon the competent 721 authority to suspend the lien of a Government servant on a permanent post which he holds substantively if he is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne. The imperative nature of the rule is also clear from the use of the word "shall" in clause (a) as against the use of the word "may" in clause (b) of that rule. The appellant, in our opinion, cannot be penalised because of the omission of the competent authority to it in accordance with the mandatory provisions of rule 3.14 (a)(2). Clause (b) of rule 3.15 also makes it clear that in a case covered by sub clause (2) of clause (a) of rule 3.14, the suspended lien of the Government servant concerned may not, except on the written request of that Government servant, be terminated while he remains in Government service. The note to rule 3.15 shows a way out in case any difficulty is experienced on account of the operation of rule 3.14(a) (2). It is nobody 's case that any written request was made by the appellant for terminating his suspended lien on the post of Agricultural Inspector. As such, we find it difficult to uphold the finding of the majority of the learned Judges that the. lien of the appellant on the post of Agricultural Inspector had stood terminated. In our opinion, the third Judge who was in the minority took a correct view of the matter when he observed that the Government servant is not to be penalised and cannot be deprived of the safeguards provided by rule 3.14 because of the fact that the competent authority had not taken the necessary steps. As the Governor has deconfirmed the appellant from the post of Block Development and Panchayat officer, the suspended lien of the appellant on the post of Agricultural Inspector would stand revived with effect from February 26, 1969. The promotion of the appellant in the parent Agricultural Department from the post of Agricultural Inspector to that of District Agricultural officer by the impugned order cannot in the circumstances be held to suffer from any legal infirmity. We accordingly accept the two appeals, set aside the judgments of the learned single Judge and the Full Bench and dismiss the writ petitions filed by Prithvi Singh, Bhale Ram and Teja Singh respondents. The parties in the circumstances shall bear their own costs throughout.

While holding the post of Agricultural Inspector in the Agricultural Department, the appellant was appointed against a temporary post of Block development and Panchayat officer in the Development Department of the State, and was confirmed in that post with effect from April 1, 1964. As a result of the partition of Punjab, the appellant and the respondents (who were also Agricultural Inspectors) were allocated to the State of Haryana. On February 26, 1969 at the request of the appellant, the Governor of Haryana deconfirmed the appellant from the post of Block Development and Panchayat officer with effect from that date. On March. 20, 1969, the Governor passed an order promoting the appellant temporarily as District Agricultural officer describing him as "Agricultural Inspector, now working as Block Development and Panchayat officer". The respondents challenged the order, and the High Court allowed their writ petition holding that the appellant 's lien on the post of Agricultural Inspector from which post alone he could have been promoted to the post of District Agricultural officer automatically stood terminated under r. 3.12 Punjab. Civil Service Rules, on his confirmation as Block Development officer. Allowing the appeal to this Court, ^ HELD: Under r. 3. 12 normally, a Government servant, on substantive appointment to any permanent post, acquires a lien on that post and ceases to hold any lien previously acquired on any other post. But, the opening words of the rule show that it would apply unless it is otherwise provided in the Rules. Rule 3.14 (a) (2) provides otherwise by carving out an exception. It provides that a competent authority shall suspend the lien of a Government servant on a permanent post which he holds substantively, if he is appointed in d substantive capacity to a permanent post outside the cadre on which he is borne. When the appellant was appointed as Block Development and Panchayat officer in a substantive permanent capacity, his case fell squarely within the ambit of r. `3 14(a) (2) as, the post of Block Development and Panchayat officer was outside the cadre of Agricultural Inspectors to which the appellant belonged. The use of the word "shall" in cl. (a) against the use of the word "may" in cl. (b) of the rule shows that it was imperative for the competent authority to suspend the lien of the appellant on the permanent post of Agricultural Inspector which he held substantively. He should not suffer because of the competent authority 's failure to do so. [720 E, H, 721 A] Further, under r. 3.15, in a case covered by r. 3.14 (a) (2) the suspended lien of a Government servant may not, except on the written request of the Government servant,`be terminated while he remains in Government service; but no written request was made by the appellant in the presnt case for terminating his suspended lien on the post of Agricultural Inspector. [712 B, C] Therefore, when the Governor deconfirmed the appellant from the post of Block Development and Panchayat officer, the suspended lien of the appellant on the post of Agriculture Inspector stood revived with effect from February 26, 1969, and his promotion in his parent Agricultural Department from the post of Agricultural Inspector to that of District Agricultural officer by the impugned order, does not suffer from any legal infirmity. [721 D E] 717

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ivil Appeals Nos. 785 of 1971 and 1781 of 1975. Appeal by Special Leave from the judgment and orders dated the 2nd September, 1970 and 25th March, 1974 of the Madhya Pradesh High Court in Misc. Petition Nos. 3/68 and 390/72 respectively. V. M. Tarkunde and K. J. John of M/s. J. B. Dadachanji & Co. for the appellant (In CA 785/71) Ram Panjwani, Dy. Gen. (M.P.) with H. section Parihar for respondent No. 1 (In CA 785/71 & appellant in CA. 1781/75). section P. Nayar for respondent No. 2 (In CA. 785/71) G. L. Sanghi, A. K. Sanghi, C. K. Ratnaparkhi and A. G. Ratnaparkhi for respondent No. 3 (in CA 785/71) M/s. Balakrishnan and Ghatate, for respondents in CA 1781/75. The Judgment of the Court was delivered by UNTWALIA, J. These two appeals by special leave have been heard together as they originate from a common dispute between the parties. They are being disposed off by a common judgment and order. To provide for the regulation of mines and the development of minerals under the control of the Union of India The , Central Act 67 of 1957 hereinafter referred to as the Act, was passed. In section 3 of the Act clause (a) says: "minerals" includes all minerals except mineral oils. " Clause (e) provides: "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, declared to be a minor mineral," For the sake of convenience and to distinguish minor minerals from minerals, the minerals are generally called major minerals and will be described as such hereinafter in this judgment. Provisions of sections 4 to 13 are applicable to the grant of any prospecting licence or a mining lease for a major mineral. In exercise of the power under section 13, the Central Government made the Mineral Concession Rules, 1960 hereinafter called the Central Rules. The State Government was authorised by section 15 of the Act to make Rules for regulating the grant of prospecting licences (now quarry leases) and mining leases in respect of minor minerals. The Government of Madhya Pradesh in exercise of the said power made the Madhya Pradesh Minor Mineral Rules, 1961 hereinafter called the State Rules. In clause (iii) of Rule 2 'quarry lease ' was stated to mean a mining lease for minor minerals. 879 Limestone is found in abundance in the State of Madhya Pradesh. The Central Government issued a notification dated the 1st June, 1958 in exercise of the powers conferred on them by clause (e) of section 3 of the Act declaring "limestone used for lime burning" as a minor mineral. By a subsequent notification dated the 20th September, 1961 the description of the limestone as a minor mineral was changed and only "limestone used in kilns for manufacture of lime used as building material" was declared as a minor mineral. The power to grant a quarry lease for limestone as a minor mineral or a mining lease for limestone as a major mineral rested in the State Government the former under the State Rules and the latter under the Central Rules. Applicants had to apply to the State Government in the respective forms prescribed in the two Rules. Gorelal Dubey the appellant in Civil Appeal No 785 of 1971 made and application on May 7, 1965 to the State Government for a quarry lease for "limestone for burning purpose" for a term of 10 years mentioning in paragraph 3 of the application "minor minerals" against the 6th column "Minor minerals or minerals which the applicant intends to mine. " The land in respect of which the application was made by the appellant measured 8.36 acres and is situated in village Bistara, District Jabalpur. The firm, Ram Chander Badri Prasad Gaur, respondent No. 3 filed an applications before the State Government on June 2, 1965 under the Central Rules in respect of the same area asking the Goverment to grant a mining lease to it for mining limestone as a major mineral By their order dated November 10 1965 a quarry lease was granted by the State Government to the appellant and a Lease Deed was executed on November 10, 1965 including special clause 18A therein. Respondent No. 3 filed an application in revision before the Central Government. They allowed the revision by their order dated December 14, 1967 holding therein that in substance the application for a lease filed by the appellant was an application for major mineral and lease granted was also not for minor mineral, hence the grant of the lease to the appellant was not competent. The Central Government, therefore, directed the State Government to consider the application of respondent No. 3 for grant of mining lease for limestone over an area of 8.36 acres in village Bistara. The appellant filed a writ petition (M.P. No. 3/1968) in the Madhya Pradesh High Court to challenge the order of the Central Government. The High Court dismissed the writ application by order dated September 2, 1970 affirming the view of the Central Government that in substance and in effect the application for and grant of lease to the appellant by the State Government was for a major mineral and not a minor mineral. Since the other two points urged before the High Court were not pressed in argument before us, we need not make any reference to them. The appellant came to this Court against the order of the High Court. Special leave to appeal was granted but stay was refused. The result was that the appellant 's lease could remain in operation for a period of about 5 years and for the last 5 years, respondent No. 3 who was granted a mining lease pursuant 880 to the order of the Central Government has been carrying on its operation of mining limestone as a major mineral. During the pendency of the lease in favour of the appellant, rate of royalty was enhanced by the State Government in exercise of their power under the State Rules. Demands of more royalty were made from the appellant by the State Government. He filed a writ petition (MP No. 328/1968) in the High Court on July 23, 1968 to challenge the demand of the enhanced royalty. After the decision dated September 2, 1970 of the High Court in M.P. 3 of 1968 the appellant amended his M.P. 328/1968 by introducing paras 20A and 20B and a prayer (b)(i) in the writ application to say that he was liable to pay, in view of the decision of the High Court, royalty on the limestone quarried by him at a rate which were chargeable on limestone as a major mineral. On certain grounds, which are not necessary to be detailed here, the High Court allowed M.P. 328/1968 by its judgment and order dated December 14, 1970 and remanded the matter of quantification of the amount royalty due from appellant to the authorities concerned. After remand the authorities determined the amount of royalty due from the appellant at Rs. 16,722/ and demanded the same from him. The appellant filed a writ petition (MP 390) 72) in the High Court to attack the demand of Rs. 16,722/ from him and contended that if royalty was charged from him on the basis of limestone as a major mineral then he had paid Rs. 36,000 and odd more. The High Court by its judgment and order dated March 25, 1974 allowed M.P. 390/1972 and quashed the demand of Rs. 16,722 made by the State Government from the appellant. The State of Madhya Pradesh filed an application for special leave to appeal from the said decision of the High Court. During the course of hearing of Gorelal Dubey 's appeal, special leave was granted by us and thereupon the appeal was registered and numbered as CA 1781/75. Mr. Tarkunde appearing for the appellant in CA 785/71 submitted that in view of the decision of this Court in Smt. Rukmani Bai Gupta vs The State Government of Madhya Pradesh, Bhopal and others the decision of the Central Government as also of the High Court to the effect that the appellant application for and grant of lease to him was in substance a lease for a major mineral is erroneous. He submitted that the order should be quashed and the State Government should be directed to grant a fresh lease to the appellant for another period of 10 years or the balance of the said period as the case may be. Mr. Sanghi appearing for respondent No. 3 endeavoured to point out that the decision of this Court in Rukmani Bai 's case (supra) was distinguishable and the decision of the Central Government and the High Court is correct. He further pointed out that the appellant had himself taken categorical stand in MP 328/1968 and MP 390/1972 that he had quarried limestone as a major mineral, disposed it of as such and was liable to pay royalty only on that basis. Counsel further submitted that there was no renewal clause in the appellant 's lease and the period of 10 years having expired now 881 the appellant was entitled to no relief in this Court. Mr. Ram Panjwani, appearing for the State of Madhya Pradesh supported the appellant on the question of the nature of his lease as being one for a minor mineral and pressed the Govermnent 's demand of Rs. 16,722 in C. A. 1781/75. It appears even after the issuance of the notification dated September 20, 1961 by the Central Government making a change in the description of the limestone as a miner mineral confusion persisted amongst the applicants for quarry lease of limestone as also the governmental authorities. They did not clearly appreciate the distinction between the new description of limestone as a minor mineral given in 1961 notification and the one which had been mentioned in the 1958 notification. In Rukmani Bai 's case the appellant had stated in column 6 of the application "limestone for burning as a minor mineral" and the lease which was granted described it as "Iimestolle for burning". Taking into consideration the totality of the facts it was held by this Court that the application and the grant of the lease was for limestone as a minor mineral. The facts of the instant case are almost identical, the only difference being that in column 6 of the application the present appellant had merely stated 'minor minerals '. But reading the said expression with the expression "limestone for burning purpose" mentioned in para 1 the same result follows. A contrary view expressed by the Central Government and the High Court does not hold good. We, therefore, hold that the application of the appellant was for a minor rnineral and the lease granted to him was for the same. After the adverse decision of the High Court, he was ill advised to take the stand that he was liable to pay royalty on the amount of limestone quarried by him only as a major mineral. We were a bit surprised to know that the amount of royalty which is chargeable on limestone as a major mineral is lower than the one chargeable upon it as a minor mineral. Without further light it seems to us curious. In paragraph 8 at page 996 it was pointed out in Rukmani Bai 's case by this Court with reference to the two notifications issued by the Central Government in the years 1958 and 1961: "The field of minor mineral, in so far as it concerned limestone, was narrowed down. Formerly limestone used for burning for manufacture of lime, whatever may be the uses to which such lime may be put, whether as building material or for other purposes, was within the definition of 'minor mineral ', but after the amendment, it was only lime stone used for burning in kilns for manufacture of lime used as building material that was covered by the definition of minor mineral. When limestone is used for burning for manufactories of lime for industrial or sophisticated purposes otherwise than as building material, it would have to be of superior quality and hence after the amendment, was classified as major mineral, leaving only limestone used for burning in kilns for manufacture of lime used as building 882 material to be regarded as minor mineral. But in both cases, whether under the original notification or the amended notification, limestone was contemplated to be used for burning for manufacture of lime. The only difference was that in the former, burning could be by any means or process and lime manufactured could be for any purpose in cluding building material, while in the latter, burning could be only in the kilns and for manufacture of lime used only as building material and for no other purpose. " It was admitted at the Bar that ordinarily and generally only limestone of inferior grade is used as burning in kilns for manufacture of lime used as building material and limestone of superior grade is used either as such for industrial purposes or a high quality lime produced from it is used for purposes other than building material including industrial or sophisticated purposes. For the purpose of some clarification we may add a few words to point out the distinction between the two notifications. Limestone used for lime burning was a minor mineral under 1958 notification irrespective of the process of burning or the quality of the lime it produced. After the 1961 notification only that type of limestone would be a minor mineral which is capable of being used for burning materials for producing that quality of lime which can ordinarily and generally be used as a building material. The leasee 's responsibility ceases when the limestone quarried by him is used for burning in kilns producing the building material quality of lime. It would be beyond his control to see that the lime so produced was actually used as a building material. But then by and large the question of grant of a lease for quarrying or mining the limestone will have to be decided by the State Government on the basis of the quality of the limestone in a particular area. Mr. Sanghji endeavioured to place materials before us to show that in the area in question was to be found limestone of high grade and quality. He, therefore, submitted that the State Government should not be permitted to waste the national wealth of high grade limestone by granting a quarry lease as a minor mineral merely for the purpose of getting more royalty on it. We see force in this argument but it is not possible for us to decide the contentious question as to whether the limestone found in the area was such that could be used as a minor mineral or was fit to be used as a major mineral. If a major portion in the area is such that can be used as a minor mineral. then a lease in accordance with the State Rules will have to be granted and a special clause like clause 18A may be provided therein if per chance some quality of limestone quarried in the demised area is found to be of high grade. Similarly if the major portion is found to be of high grade limestone, then a mining lease for mining lime stone as a major mineral in accordance with the Central Rules will have to be granted. A special clause may be incorporated in such a lease also. In either event the lease will be liable to be cancelled if the lessee commits any breach of the terms of the lease including the one as to the purpose of using the limestone as a major or a minor mineral. 883 Following Rukmini Bai 's case we have held that the application filed by the appellant and the lease granted to him was for quarrying limestone as a minor mineral. But that does not entitle him to get the relief as he wants from this Court. A peculiar feature of this case, and which may occur in respect of some other area is that there, were two applicants one the appellant was wanted the lease of limestone as a minor mineral and the other respondent No. 3 who wanted it as a major mineral. In such a situation it was not open to the State Government to merely ignore the application of respondent No. 3 and grant lease to the appellant. Nor was it appropriate for the Central Government on the view which has been found to be erroneous by us to direct the State Government to consider the application of respondent No. 3 alone. The proper course in such a situation is to direct the State Government to consider both the applications, determine the question as to whether the quality of the limestone contained in the area in question is such that a lease to quarry it as a minor mineral should be granted or is such that a lease for mining it as a major mineral should be granted and then it should proceed to grant the lease. The proper course which ought to have been followed has neither been followed nor has been directed to be followed. For the reasons stated above, we allow C.A. 785/71, quash the order of the High Court as also of the Central Government. The leaser granted to respondent No. 3 pursuant to the said order shall cease to have effect. The State Government is directed to consider both the applications for grant of lease and dispose of the matter afresh in the light of this judgment. It will be open to the State Government to grant a lease for such period as it deems fit and proper to determine or for the balance of the period of the lease of the party to whom it may be granted. For the past period the appellant will be liable to pay royalty on the amount of limestone quarried by him during the subsistence of his lease on the basis of the royalty payable on a minor mineral and respondent No. 3, similarly, will be liable to pay royalty on the amount of limestone extracted by it during the period of its lease on the basis of the rates chargeable on a major mineral. Learned counsel for Gorelal Dubey during the course of argument had offered to withdraw his writ petitions M.P. 328/68 and M.P. 390/1972 and to pay the sum of Rs. 16,722, if it be found that the lease granted to him was a lease for a minor mineral. In view of our finding recorded above, we allow CA 1781/75, set aside the orders of the High Court made in the two writ petitions and allow them to be withdrawn. We shall make no order as to costs in any of the matters. S.R. Appeals allowed.

In respect of an area of 8.36 acres of land containing limestone in the village Bistara, Jabalpur District, there were two applications before the State Government (Respondent in C.A. 785/71 & Appellant in C.A. 1781/75) empowered to grant prospecting licence or a mining lease for a major mineral under the Mineral Concessions Rules, 1960 or a "quarry lease" under the Madhya Pradesh Mineral Rules, 1961, for a minor mineral as defined in section 3(e) of the one by "GD", (the appellant in C.A. 785/71 and respondent in C.A. 1781/75) dated 7 5 1965 for a quarry lease for "limestone for burning purposes, minor minerals intended" and another by "RC" dated 2 6 1965 for a mining lease for "a major mineral". The "quarry lease" was granted to "GD" on 1 11 1965 and the lease deed was executed on 10 11 1965 with a special clause 18A therein. In revision by "RC" against the order granting quarry lease to GD the Central Government by its order dated 14 12 1967, holding that in substance the application of "GD" was an application for "major mineral" and, there fore. the grant of the "quarry lease" to the appellant was not competent, directed the respondent State to consider the application of "RD" for the grant of mining lease. As the writ petition No. 3/68 assailing the said order, filed by "GD" in the M.P. High Court was dismissed on 2 9 1970, GD obtained a special leave (CA 785/71), but the stay was refused, resulting in his lease running in operation only for a period of about 5 years and "RD" carrying on its operation of mining limestone as a major mineral. During the pendency of the lease in favour of "GD" the rate of royalty was enhanced by the State Government and "GD" filed another writ petition (MP No. 328/1968) in the High Court on 23 7 1968. As the MP 3/68 Was dismissed on 2 9 1970, "GD" amended the application suitable in MP 328/68 with the words "in view of the decision of the High Court, he was liable to pay royalty at a rate which were chargeable as a major mineral". The High Court allowed the writ petition, remanded the matter of qualification of the amount of royalty due from "GD". After the remand, the State Government determined the royalty at Rs. 16,722/ . The said demand was again 877 challenged by "GD" for the third time by way of a writ petition No. MP 390/72 contending that if royalty was charged from him on the basis of a major mineral, then he had paid Rs. 36,000/ and odd more. The writ was allowed in 25 3 1974 during the course of the hearing of CA 785/71 in the Supreme Court and the appeal by special leave (CA 1781/75) obtained by the respondent State against the order dated 25 3 1974 was heard with CA 785/71. Allowing CA 785/71 on merits, following the decision in Rukmani Bai Gupta vs The State Government of Madhya Pradesh, Bhopal and others; , and allowing CA 1781/75 with permission to the appellant to withdraw the writ petitions No MP 328/68 and MP 390/72, the Court: ^ HELD: (1) The facts of the instant case, being almost identical as Smt. Rukmani Bai Gupta 's case, with the only difference that in column 6 of his application the present appellant had merely stated "minor minerals" reading the said expression with the expression "limestone for burning purposes" mentioned in paragraph 1, the same result follows. Therefore, the application of the appellant was for a minor mineral and the lease granted to him was for the same. After the adverse decision of the High Court, he was ill advised to take the stand that he was liable to pay royalty on the amount of limestone quarried by him out as "a major mineral", that the amount of royalty which is chargeable upon it as "a major mineral" is lower than one chargeable upon it as a "minor mineral". [881 CE] Smt. Rukmani Bai Gupta vs The State Government of Madhya Pradesh, Bhopal and others. ; , followed. HELD FURTHER: (2) The distinctive points between the 1958 and 1961 notifications are as under: (a) Limestone for lime burning was a 'minor mineral" under the 1958 notification irrespective of the process of burning or the quality of the lime it produced. [882 C] (b) After the 1961 notification only that type of limesone would be a "minor mineral" which is capable or being used for burning in kilns for producing has quality of lime which can ordinarily and generally be used as a building material. [882 D] (c) The lessees ' responsibility ceases when the limestone quarried by him is used for burning kilns producing the building material quality of lime. It would be beyond his control to see that the lime so produced was actually used as a building material. (3) The question of grant of a lease for quarrying or mining the limestone will have to be decided by the State Government on the basis of the quality of the limestone in a particular area. If a major portion in the area is such that can be used as a "minor mineral" then a lease in accordance with the State Rules will have to be granted and a special clause like clause 18 may be provided therein if per chance some quality of limestone quarried in the demised area is found to be of high grade. Similarly if the major portion is found to be of high grade limestone, then a mining lease for mining limestone as a major mineral in accordance with the Central Rules will have to be granted. A special clause may be incorporated in such a lease also. In either event the lease will be liable to be cancelled if the lessee commits any breach of the terms of the lease including the one as to the purpose of using the limestone as a major or a minor mineral.[882 EH] (4) In situations like the instant case where there were two applicants one wanting the lease of limestone as a minor mineral and the other who wanted it as a major mineral, it was not open to the State Government to merely ignore the application for major mineral and grant lease to the appellant; nor was it appropriate for the Central Government to direct the State Government to consider the application for major mineral. The proper course in such a situation is to direct the State Government to consider both the applications, determine the question as to whether the quality of the limesone contained in the area in question is such that a lease to quarry it as a minor mineral should 878 be granted and then it should proceed to grant the leave. In the instant case the proper course which ought to have been followed has neither been followed nor has been directed to be followed by the Central Government. [883 AD]

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Civil Appeal No. 909 of 1968. (From the judgment and order dated the 28th June, 1967 of the Judicial Commissioner 's Court of Goa, Daman and Diu in Civil Appeal No. 105 of 1965). B. N. Lokur and A. G. Ratnaparkhi for the appellant. D. V. Patel and P. N. Bhardwaj for the respondent. The Judgment of the Court was delivered by FAZAL ALI, J. This is a judgment debtor 's appeal on a certificate of fitness granted by the Additional Judicial Commissioner, Goa, Daman & Diu and arises under the following circumstances. The decree holder/respondent had brought a suit on the original side of the Bombay High Court being Suit No. 203 of 1956 against the appellant/judgment debtor for recovery of certain amount of money. The Bombay High Court passed a decree for Rs. 65,953.79 on June 29, 1960. In the suit brought by the decree holder/respondent summons were served on the defendant/judgment debtor who filed his written statement and thereafter absented himself and did not take any part in the proceedings of the Court. On December 20, 1961 Goa became a part of India and was made a Union Territory of India by the Constitution (Twelfth Amendment) Act, 1962 passed on March 27, 1962. Thereafter the decree holder respondent applied to the Bombay High Court for transferring the decree to Goa Court for execution. This prayer was allowed by the Bombay High Court and by its order dated August 28, 1963 the decree was transferred 11 390 SCI/76 152 to the Goa Court for execution, In pursuance of the order of the Bombay High Court the decree holder filed an execution suit before the Executing Court at Panjim on January 21, 1964. The Executing Court however by its order dated April 26, 1965 held that the decree transferred to it by the Bombay High Court was not executable and accordingly dismissed the execution. Thereafter the decree holder filed a memo of appeal before the Additional Judicial Commissioner on June 1, 1965 and the appeal was admitted on June 5, 1965. On February 24, 1967 the judgment debtor/appellant filed his reply. While the appeal was pending before the Additional Judicial Commissioner the Code of Civil Procedure` was extended to Goa on June 15, 1966. Accordingly the Additional Judicial Commissioner by its order dated June 28, 1967 held that the decree was executable and he accordingly remitted the case to the Executing Court for proceeding in accordance with the law. The Additional Judicial Commissioner also held that in view of article 261(3) of the Constitution of India the decree passed by the Bombay High Court could not be treated to be a nullity and was, therefore, clearly executable. In support of the appeal Mr. B. N. Lokur submitted three main contentions before us: (1) that the decree passed by the Bombay High Court qua Goa Court was a nullity being a decree of a foreign Court. Even if the decree was not a nullity it could be executed by a Goa Court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that the order of the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 & 39 of the Code of Civil Procedure was without jurisdictions in as much as the Code of Civil Procedure had not been applied to Goa. When the order of transfer was passed; and (3) that as the provisions of the Code of Civil Procedure were applied to Goa after the order of the Executing Court was passed and a vested right had accrued to the appellant/judgment debtor the decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution of India. Mr. D. V. Patel appearing for the respondent/decree holder submitted that as the judgment debtor had appeared and had participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity. Secondly it was contended that as the Code of Civil Procedure was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa, the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated. Thirdly it was argued that in view of the provisions of article 261(3) of the Constitution of India there was no bar to the execution of the decree which was passed by a Court which was in the territory of India. The sheet anchor of the argument of the learned counsel for the appellant/judgment debtor, that the decree passed by the Bombay 153 High Court was a nullity either on the ground that it was passed by A a foreign Court or on the ground that the transfer was invalid under section 38 of the Code of Civil Procedure, was the decision of this Court in Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and Ors.(1). In that case it appears that the appellant had instituted a suit in the Court in Gwalior State in May 1947. The respondents did not appear before the Court and the Gwalior Court passed a decree ex parte in November 1948. On September 14, 1951 the Gwalior Court transferred the decree for execution to Allahabad, as a result of which the appellant before the Supreme Court filed an . application for execution of the decree before the Allahabad Court. It was mainly contended before this Court that the decree being that of a foreign Court was a nullity and the execution application was not maintainable. In these peculiar circumstances this Court, after considering the entire law on the subject, concluded as follows: "Our conclusion therefore is that the Allahabad Court had no power to execute the decree either under section 3 or under sections 43 or 44 of the Code of Civil Procedure. Therefore, even if the decree was not a foreign decree, the decree holder 's application for execution was rightly dismissed. An analysis of Shitole 's case (supra) would clearly show that the facts in that case are clearly distinguishable from the facts in the present case and there are indeed a large number of distinguishing features in the case indicated above which are not at all applicable to the present case. In the first place the decree in Shitole 's case(1) was admittedly passed by the Gwalior Court in 1947 when Gwalior being a princely State the Court which passed the decree was undoubtedly a foreign Court. Secondly, the judgment debtors/defendants did not appear before the Gwalior Court at all as a result of which an ex parte decree was passed. According to Private International Law it is well settled that an ex parte decree of a foreign Court is a nullity if the party against whom a decree is passed does not appear at all and does not take part in the proceedings of the Court. Thirdly, it would appear that the provisions of article 261(3) of the Constitution would not apply to the facts of Shitole 's case(1) because the constitutional provisions not being retrospective they could not apply to decrees passed before the coming into force of the ' Constitution. In view of these circumstances therefore it cannot be said that Shitole 's case(1) referred to above is of any assistance to the appellant in deciding the issues involved in this case. On the other hand the decision in Shaligram vs Daulat Rant(2) appears to be directly in point so far as the facts in the present case are concerned. In that case also a decree was passed by the Bombay High Court which was in the territory of India and to which the pro visions of the Code of Civil Procedure applied. The appellant appear ed before the Court and applied for leave to defend and thereafter absented himself. The decree was thereafter transferred to the Court (1) ; (2) ; 154 of District Judge, Bhir in Hyderabad State. This Court held that the decree was executable and observed as follows: "A person who appears in obedience to the process of a foreign Court and applies for leave to defend the suit with out objecting to the jurisdiction of the Court when he is not compellable by law to do so must be held to have voluntarily submitted to jurisdiction of such Court Shaikh Atham Sahib vs David Sahib Mad. Therefore it cannot be said that this decree suffered from the defects which a foreign ex parte decree without such submission would suffer from. The order for transfer was made at a time when the Indian Code of Civil Procedure became applicable to the whole of India including the former territories of Hyderabad State. " In Lalji Raja & Sons vs Firm Hansraj Nathuram(1) this Court reiterated the view taken in Shaligram 's case (supra). It was also pointed out in the aforesaid case that where a party appears before the Court the decree of the Court even if it is a foreign Court is not P a nullity. Learned counsel appearing for the appellant however submitted that since the Code of Civil Procedure was not applicable to Goa the decree became inexecutable and this being a vested right could not be taken away by the application of the Code of Civil Procedure to Goa during the pendency of the appeal before the Additional Judicial Commissioner. It seems to us that the right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can be question of executability of the decree be regarded as a substantive vested right of the judgment debtor. A fortiorari the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retro active in operation and the Appellate Court is bound to take notice of the change in law. In Moharllal Chunilal Kothari vs Tribhowan Haribhai Tamboli(2) it was clearly ruled by this Court that the Appellate Court was bound to apply the law as it was found on the date of the judgment. In this connection this Court observed as follows: "But it was during the pendency of the suit at the appellate stage that the second notification was issued cancelling the first. Hence, the Court was bound to apply the law as it was found on`the date of the judgment. Hence, there is no question of taking away any vested rights in the land lords." (1) ; (2) ; , 715 716. 155 To the same effect is the decision of this Court in Gummalapura Taggina Matada Kotturuswami vs Setra Veeravva and others(1) where this Court observed as follows: "It is well settled that an appellate Court is entitled to take into consideration any change in the law (vide the case of Lachmeshwar Prasad Shukul vs Keshwar Lal Chaudhuri 1940 FCR 84)" B A similar view was taken by a recent decision of this Court in Jose De Costa and another vs Bascora Sadashiva Sinai Narcornin and others(2) where this Court observed as follows: "Before ascertaining the effect of the enactments aforesaid passed by the Central Legislature on pending suits or appeals, it would be appropriate to bear in mind two well established principles. The first is that "while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment" (see Delhi Cloth and General Mills Co. Ltd. vs Income tax Commr. 54 Ind. App. 421 The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. " In these circumstances, therefore, we are unable to accede to the contention of the appellant that the Additional Judicial Commissioner was not competent to take notice of the change in the law. As regards the argument of the learned counsel for the appellant that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal, the decision of this Court in Lalji Raja & Sons ' case (supra) is a clear authority against the pro position adumbrated by the learned counsel for the appellant. In that case this Court appears to have considered this point in all its comprehensive aspects and was of the opinion that the executability of the decree could not be considered to be a vested right. In this connection this Court made the following observations: "Therefore the question for decision is whether the non executability of the decree in the Morena court under the law in force in Madhya Bharat before the extension of 'the Code ' can be said to be a right accrued under the repealed law. We do not think that even by straining the language of the provision it can be said that the non executability of (1) ; , 579 (2) A.I.R. 1975 S.C. 1843,1849. 156 a decree within a particular territory can be considered as a privilege. . . . All that has happened in view of the extension of 'the Code ' to the whole of India in 1951 is that the decree which could have been executed only by courts in British India are now made executable in the whole of India. The change made is one relating to procedure and jurisdiction. . . lt was the invalidity of the order transferring the decree to the Morena court that stood in the way of the decree holders in executing their decree in that court on the earlier occasion and not because of any vested rights of the judgment debtors . . By the extension of the 'the Code ' to Madhya Bharat, want of jurisdiction on the part of the Morena court was remedied that court is now made competent to execute the decree. " It was then argued that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction. We are, however, unable to agree with this contention. To begin with, as the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply because the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa. But that does not put the respondent/decree holder out of Court. The decree could be transferred and was valid and executable. But because of an impediment or an infirmity it could not be executed so long as the Code of Civil Procedure was not made applicable to Goa. Thus the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the Code of Civil Procedure to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on June 15, 1966. It is common ground that this was done during the pendency of the appeal before the Additional Judicial Commissioner passed the impugned order on June 28, 1967. In these circumstances, therefore, it seems to us that this is a fit case in which the doctrine of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared there was any impediment in the execution of the decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable. In Bhagwan Shankar vs Rajaram Bapu Vithal(1) Chagla. C.J. as he then was, while delivering the opinion of the Full Bench of the Bombay High Court, observed as follows: "Therefore, as far as this particular decree was concerned as the defendant, we are assuming, did not submit to the (1) A.I.R. 1951 Bom. 157 jurisdiction of the Sholapur Court, quae the Akalkot Court, A the judgment of the Sholapur Court was a foreign judgment passed by a Court not of competent jurisdiction & therefore the decree could not be executed in the Akalkot Court so long as the Sholapur Court continued to be a foreign Court. But once it is conceded that the decree was not a nullity & it was valid & binding as far as the Sholapur Court was concerned then there is no difficulty. with respect, in understanding & appreciating the judgment which we have to consider in this Full Bench, because if the character of the Akalkot Court changes & if the status of the defendant alters because of that fact, then the impediment which was initially there in the decree being enforced in the Akalkot Court disappears & the decree which was unenforceable till that change came about becomes enforceable & executable in the Akalkot Court. This is nat in any way violating private international law. Private international law remains the same. But under the circumstances of the case the Sholapur Court no longer being a foreign Court quae the Akalkot Court, the question of private international law does not arise at all. The decree is then being executed under the Municipal Law & clearly under the Municipal Law the decree D is executable as it has been passed by a Court of competent jurisdiction. " It would appear therefore that an identical phenomenon had taken place in the case before the Bombay High Court and the Full Bench held that the moment the decree became executable and enforceable the status of the defendant/judgment debtor was altered and the decree became executable. On a parity of reasoning, therefore, in the present case also the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa. As we have indicated above it was the duty of the Appellate Court, namely the Additional Judicial Comm sioner, to take note of the change in law, namely, the applicability of the Code of Civil Procedure to Goa and the repeal of the Portuguese Code which was in force before the provisions of the Code of Civil Procedure were applied. The Additional Judicial Commissioner was, therefore, fully justified in taking the view that the decree was executable and the bar of inexecutability came to an end, when the provisions of the Code of Civil Procedure were applied to Goa. Mr. Patel appearing for the respondent submitted an alternative argument that even if the transfer of the decree under section 38 of the Code of Civil Procedure was not valid, under the Portuguese Code there was no provision which required transfer of the decree to that Court before the same could be executed. Counsel for the appellant objected to this argument on the ground that it was never raised at 158 any stage of the case and being a question of fact as to whether or not there was any such provision in the Portuguese Code it should not be entertained. In these circumstances, we do not think it necessary to go into this question, particularly when the order of the Additional Judicial Commissioner can be upheld on other grounds mentioned by us. Finally it appears that this case is clearly covered by the principles contained in article 261 (3) of the Constitution of India which runs thus: "Final judgments or orders delivered or passed by civil courts in any part of the territory of India shall be capable of execution anywhere within that territory according to law. " This is a constitutional provision which enjoins that a decree shall be executable in any part of the territory of India according to law. It is obvious that in the instant case the decree was passed by the Bombay High Court after the Constitution came into force and this Article would, therefore, clearly apply to the decree passed by the Bombay High Court. The article would also apply to Goa because at the time when the application for execution was made in a Goa Court, the Constitution had already been made applicable to that State also. Mr. Lokur counsel for the appellant, however, submitted that the words 'according to law ' in article 261(3) would clearly show that the decree would be executable only in accordance with the law in force, i.e. the Portuguese Code. It is true that at the time when the executing Court dismissed the suit of the decree holder/respondent the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965 (Act 30 of 1965) the Portuguese Code which was in force in Goa was clearly replaced and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act. Thus when the Code of Civil Procedure was made applicable to Goa during the pendency of the appeal, the Appellate Court, namely, the Additional Judicial Commissioner, was bound to decide the matter in accordance with the law that was in force, namely, the Code of Civil Procedure. In Jose Da Costa 's case (supra) this Court, while dwelling upon the applicability of the Portuguese Code, observed as follows: "Thus considered, it is clear that the procedural provisions of the Portuguese Civil Code were no longer applicable to this case with effect from 15 6 1966. If that be the correct position, there is no legal hurdle in the way of the appellant to the reagitation in this Court of the issue as to prescription left undecided by the court below. * * * * * * To sum up, since on and from 15 6 1966 the Portuguese law relating to Reclamacao stood repealed and no substantive right or obligation had been acquired or incurred under 159 that repealed law within the meaning of the first proviso to section 4(1) of Act 30 of 1965, the appellants cannot be debarred from canvassing in this appeal under Article 136, the plea of prescription notwithstanding the fact that they did not file any Reclamacao in the Court of the Judicial Commissioner. We therefore negative the preliminary objection raised by the respondents. " For these reasons, therefore, we find ourselves in complete agreement with the view taken by the Additional Judicial Commissioner and hold that the decree passed by the Bombay High Court was clearly executable. The Executing Court will now proceed in accordance with the law as directed by the Additional Judicial Commissioner. The appeal fails and is accordingly dismissed but in view of the somewhat uncertain legal position we leave the parties to bear their respective costs in this Court. S.R Appeal dismissed.

In the Civil Suit No. 203 of 1955, on the original side of the Bombay High . Court, filed by the decree holder/respondent against the appellant/judgment, debtor for recovery of certain amount of money, summons were served on the judgment debtor who after filing his written statement absented himself, and did not take any further part in the proceedings of the Court resulting in a decree dated 29 6 1960 for Rs. 65,953.79. On 20 12 1961, Goa became a part of India and was made a Union Territory of India by the Constitution (Twelth Amendment) Act, 1962 passed on 27 3 1962. The decree holder applied to the Bombay High Court for transferring the decree to Goa Court for execution and by an order dated 28 8 1963 the decree was transferred to the Goa Court for execution. The execution application before the Executing Court at Panjim filed on 21 1 1964 was dismissed on 26 4 1965, holding that the decree transferred to it by the Bombay High Court was not executable. An appeal was preferred to the Additional Judicial Commissioner on 1 6 1965 and the appellant Judgment debtor filed his reply. During the pendency of the appeal, the Code of Civil Procedure was extended to Goa on 15 6 1966 by the Goa, Daman and Diu Extension of the Code of Civil Procedure and Arbitration) Act (30) of 1965 and repealing the Portuguese Code. The Additional Judicial Commissioner by its order dated 28 6 1967 held that in view of article 261(3) of the Constitution, the decree passed by the Bombay High Court could not be treated as nullity and, was therefore, executable. On appeal by certificate, the appellant/judgment debtor contended (1) that the decree passed by me Bombay High Court qua Goa Court was a nullity being a decree of a foreign court. Even if the decree was not a nullity it could be executed by a Goa court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that`the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 and 39 of the C.P.C. was without jurisdiction inasmuch as the C.P.C. had not been applied to Goa when the order of transfer was passed. (3) that as the provisions of the C.P.C. were applied to Goa after the order of the Execution Court was passed and a vested right had accrued to the appellant/judgment debtor the 'J decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution. The respondent/decree holder contended (1) that inasmuch as the judgment debtor had appeared and participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity (ii) that as the C.P.C. was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated. and (iii) that in view of the provisions of article 261(3) of the Constitution of India, there was no bar to the execution of the decree, which was passed by a court which was in the territory of India. 150 Dismissing the appeal, the Court, ^ HELD: (1) Where a party appears before the court, the decree of the court, even mf it is a foreign court is not a nullity. [154 D] Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and others; , , distinguished and held not applicable. Shaligram vs Daulat Ram, ; and Lalji Raja & Sons vs Firm Hansraj Nathuram, ; , applied. (2) The right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can the question of executability of the decree be regarded as a substantive vested right of the judgment debtor. A fortiorary, the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retrospective in operation and the Appellate Court is bound to take notice of the change in law. The Additional Judicial Commissioner was competent to take notice of the change in the law. [154 E F, 155 G] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; , 715 716. Gummalapura Taggina Matada Kotturswami vs Setra Veerava and others, A.T.R , 579 and Jose De Costa and another vs Bascora Sedashiva Sinai Naroornin and others, A.I.R. 1975 S.C. 1843, 1849, followed. (3) The proposition adumbrated viz., that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal is wrong, since the executability of the decree could not be considered to be a vested right [155F G] Lalji Raja and Sons. vs Firm Hansraj Nathuram ; , followed. (4) The contention that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction was wrong.[156 C D] As the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply and the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa. But, that does not put the respondent/decree holder out of Court. The decree could be transferred and was valid and executable. But, because of infirmity, it could not be executed so long as the C.P.C. was not made applicable to Goa. Thus, the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the C.P.C. to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on 15 6 1966. [156 D F] HELD FURTHER: (5) The instant case is a fit case in which the doctrine A of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared, there was no impediment in the execution of a decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable. [156 F G] (6) In the instant case, the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa. [157 E F] 151 Bhagwan Shankar vs Rajaram Bapu Vithal, A.I.R. 1951 Bom. 125, 127, approved. (7) article 261(3) of the Constitution enjoins that a decree shall be executable in ally part of the territory of India, according to law. In the instant case, the decree was passed by the Bombay High Court after the Constitution came into force and article 261(3) would apply to the decree passed by the Bombay High Court. The Article would also apply to Goa because at the time when the application for execution was made in Goa Court, the Constitution had already been made applicable to that State also. [158 C D] (8) It is true that at the time when the Executing Court dismissed the suit of the decree holder/respondent, the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965. the Portuguese Code which was in force in Goa was clearly repealed and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act. Thus, when the Civil Procedure Code was made applicable to Goa during the pendency of the appeal, the appellate Court, namely, the Additional Judicial Commissioner was bound to decide the matter in accordance with the law that was in force. Hence, the contention the matter in accordance with the law that was in force. Hence, the contention that the words "according to law" in article 261(3) would mean that the decree would be executable only in accordance with the law in force in the Portuguese Code is not correct. [158 B F] [Jose De Costa and another vs Bascore Sadashiva Sinai Narcornin and others, A.I.R. 1975 S.C. 1843, 1849 followed.]

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ION: Civil Appeal No. 119 of 1975. Appeal by Special leave from the Judgement and order dated 15 4 1974 of the Punjab and Haryana High Court in Civil Writ Petition No. 4289 of 1973. N. N. Goswami and Arvind Minocha for the Appellant. G.B. Pai, section R. Agarwal, Parveen Kumar and Khaitan & Co. for Respondent No. 2. 1011 The Judgment of the Court was delivered by RAY, C.J. This appeal by special leave turns on the question whether the State can be asked by a writ of mandamus to make a reference under section 10(1) of the Industrial Disputes Act (hereinafter referred to as the Act). The appellant was employed by the respondent company Hindustan Dowidat Tools Ltd. The services of the appellant were terminated on 4th September, 1972. The appellant thereafter demanded reinstatement. The Conciliation officer started conciliation proceedings under section 12 of the Act. No settlement could be arrived at. The Conciliation officer sent a report to the State Government under section 12(4) of the Act. The State Government by letter dated 7 June, 1973 informed the appellant that the Government had considered the appellant 's case not fit for reference to the Labour Court for adjudication. The Government in the letter stated as follows: "The Government have not found your case fit for adjudication to a Labour Court because you were working as an Electrical Foreman in this concern, which was a supervisory job and your wages were more than Rs. 500/ per month. Therefore, your case is not covered by the definition of the terms "Workman" given in the Industrial Disputes Act. " The appellant under Article 226 of the Constitution applied for a writ of mandamus directing the State to make a reference. The High Court dismissed the application. The appellant contended that the question whether the appellant was a workman was a disputed question of fact and law which could be decided only by an appropriate Labour Court. The appellant also submitted that if the dispute in question raises questions of law the appropriate Government should not give a final decision on the question. In short, the appellant 's contention is that the issue whether the appellant is a workman or not could only be decided by the Labour Court and, therefore, reference should have been made. Under Section 10 of the Act where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time refer the dispute, inter alia, to a National Tribunal for adjudication. Section 12 of the Act deals with duties of Conciliation officers. If the Conciliation officer cannot arrive at a settlement of the dispute he sends a report to the appropriate Government. Under section 12(S) of the Act if, on a consideration of the report referred to in sub section (4), the appropriate Government is satisfied that there is a case for reference, it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor. 1012 This Court in State of Madras vs C.P. Sarathy and State of Bombay vs K.P. Krishnan & ors. held that the order of the Government acting under section 10(1) read with section 12(5) of the Act is an administrative order and not a judicial or a quasi judicial one. In Bombay Union of Journalists & ors. vs The State of Bombay and Anr. this Court said that in entertaining an application for a writ of mandamus against an order made by the appropriate Government under section 10(1) read with section 12(5) of the Act the Court does not sit in appeal over the order and is not entitled to consider the propriety or the satisfactory character of the reasons given by the Government. If it appears that the reasons given show that the appropriate Government took into account any consideration irrelevant or foreign, then the Court may in a given case consider the case on a writ of mandamus. In K.P. Krishnan 's case (supra) the issues in dispute related to a claim of classification for specified employees and additional bonus and the sole ground on which the Government refused to refer the dispute for adjudication under section 12(5) of the Act was that the employees had adopted go slow tactics during the relevant year. The facts were that the company had nevertheless voluntarily paid three months ' bonus for that year and the report of the Conciliation officer was in favour of the employees. This Court held that the Government acted on irrelevant considerations and issued a writ of mandamus. In the present case, the fact is that the Government found that the appellant was not a workman within the definition of workman in the Act, and, therefore, it was not a fit case for reference for adjudication. The High Court rightly rejected the application. The appeal is, therefore, dismissed. Parties will pay and bear their own costs. S.R. Appeal dismissed.

Under section 12(5) read with 10(1) of the Industrial Disputes Act, if on consideration of a failure report u/s 12(4) from the conciliation officer, the appropriate Government is satisfied and is of opinion that there is an industrial dispute and a case for reference, it may make such reference to the labour court. On considering the "failure report", of the conciliation proceedings in respect of the appellant, an Electrical foreman, the respondent state informed him that his duties being supervisory with wages more than Rs. 500/ his case was not covered by the definition of the terms "workman" under the Industrial Disputes Act and therefore, not a fit case for adjudication. The appellant assailed the said orders under Art.226, which was dismissed. On appeal by special leave the appellant contended that the question whether an employee is a workman or not was a disputed question of fact and law and, therefore could only be decided by a labour court and on a reference only but not by the State Government while exercising its powers u/s 12(5). Dismissing the appeal, the Court ^ HELD: (1) The order of the Government acting under section 10(1) read with section 12(5) of the Industrial Disputes Act passed after subjective satisfaction is an administrative order and not a judicial or a quasi judicial one. [1012A] Sate of Madras vs C. P. Sararthy, and State of Bombay vs K. P. Krishnan & ors. [followed]. (ii) In entertaining an application for a writ of mandamus against an order made by the appropriate Government under section 10(I) read with section 12(S) of the Act the court does not sit in appeal over the order and is not entitled to consider the propriety or the satisfactory character of the reasons. If it appears from the reasons given that the appropriate Government took into account any consideration irrelevant or foreign, then the court may in a given case consider the case for a writ of mandamus. [1012 A C] Bombay Union of Journalists ors vs The State of Bombay

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Civil Appeal No. 1815 of 1969. Appeal by Special Leave from the Judgment and Decree dated the 3rd October, 1964 of the High Court of Judicature at Patna in Appeal from Original Decree No. 152 of 1959. P.K. Chatterjee and Rathin Das for the Appellant. S.V. Gupte and B.P. Singh for Respondents 1 2. 1003 Santok Singh for Respondents 3 4. The Judgment of the Court was delivered by CHANDRACHUD, J. One Trilok Prasad Singh, who was the last male holder in his line, died on May 12, 1948 leaving behind his widow Kachnar Kuer and his step mother Sheo Kuer. On February 12, 1956 Kachnar Kuer executed two registered deeds. By one of these she adopted a son to her deceased husband and by the other, which is described as a Deed of Arpan nama, she created a religious endowment in the name of Sri Gopalji and appointed her mother in law Sheo Kuer as a shebait. Respondents 1 and 2, claiming to be reversioners, filed suit No. 16 of 1956 in the court of the First Subordinate Judge, Gaya, for a declaration that the two deeds were void and illegal and were not binding on their reversionary interest. Kachnar Kuer was defendant 1, the adopted son was defendant 2 and Sheo Kuer was defendant 3 to the suit. During the suit, the defendants were evidently of one mind and they contended by their written statements that the impugned deeds were executed under the authority given by the deceased Trilok Prasad Singh and that respondents 1 and 2 had no right to bring the suit after June 17, 1956 when the came into force The trial court dismissed the suit holding that Trilok Prasad Singh had given authority to Kachnar Kuer to make an adoption and to create an endowment and therefore both the deeds were valid. Against the dismissal of their suit, respondents 1 and 2 filed First Appeal No. 152 of 1959 in the High Court of Patna. By its judgment dated October 3, 1964 the High Court allowed the appeal and decreed the suit holding that Trilok Prasad Singh had not given authority to Kachnar Kuer to take a son in adoption and under the Banaras School of Hindu Law by which the parties were governed, an adoption made by a widow without the authority of her husband was invalid. The High Court also held that Trilok Singh had not authorised Kachnar Kuer to create a religious endowment over any part of his property and since by the Arpan nama a large piece of property was dedicated to the deity the dedication was void. On the question whether, after the coming into force of the , respondents 1 and 2 as reversioners could maintain the suit, the High Court held that on the material date Kachnar Kuer was not in possession of the property and therefore her limited estate could not ripen into an absolute estate under the . Kachnar Kuer made an application to the High Court for a certificate of fitness to appeal to this Court and the High Court by its order dated May 10, 1965 granted a certificate of fitness under Article 133(1) (b) of the Constitution. But after the petition of appeal was lodged in this Court, Kachnar Kuer joined hands with respondents 1 and 2 and purported to enter into a compromise dividing the 1004 property left by Trilok Prasad Singh between themselves. The appellant, Sheo Kuer, who was appointed as a shebait under the deed of Arpan nama has thereafter, obtained special leave to appeal to this Court from the judgment of the High Court. We are, in this judgment, concerned with Sheo Kuer 's appeal, not with the appeal filed by Kachnar Kuer by certificate. The High Court has rejected the evidence led to show that 'Trilok Prasad Singh had given authority to Kachnar Kuer to make an adoption to him. The finding that the adoption is without the authority of the husband and therefore void is not challenged before us either by Kachnar Kuer or by the adopted son and that finding must there. fore be confirmed. Since the evidence on the other question as to whether Trilok Prasad Singh had given authority to Kachnar Kuer to create a religious endowment was closely linked with the question regarding the authority to adopt and since the pattern of evidence on both the questions is identical, the High Court held that Kachnar Kuer did not either have the authority of her husband to instal the deity or dedicate any 1 property to the deity. This finding is not challenged before us by Sheo Kuer, the shebait appointed under the Arpan nama, and therefore we must proceed on the basis that the dedication was created by Kachnar Kuer without the authority of her husband. The point involved for determination in the appeal thus relates to the powers of a Hindu female on whom property has devolved upon the death of her husband, to alienate the property for religious purposes. This question has been the subject matter of several decisions Of the Indian High Courts as also of the Judicial Committee. These decisions, beginning with one of the earliest pronouncements on the subject in Collector of Masulipatam vs Cavly Vencata, upto the decision of this Court in Kamala Devi vs Bachu Lal Gupta have been discussed with fullness and clarity of Mr. Justice Bijan Kumar Mukherjea in his Tagore Law Lectures on the Hindu Law of Religious and Charitable Trust. It is unnecessary to analyse the various Decisions which the learned author has considered because the true position on the subject is crystalised in the decision in Kamala Devi 's case. The law must now be taken as well settled that a Hindu widow possessing a widow 's estate cannot alienate the property which has devolved on her except for special purposes. To support an alienation for purely worldly purposes she must show necessity but she has a larger power of disposition for religious and charitable purposes or for Those purposes which are supposed to conduce to the spiritual` welfare of her husband. As pointed out by the Privy Council in Sardar Singh vs Kuni Behari, the Hindu system recognises two sets of religious acts: those which are considered as essential for the salvation of the soul of the deceased and others which, though not essential or obligatory, are still pious observances which conduce to the bliss of the . deceased 's soul. The powers of a Hindu female to alienate property are wider in respect of acts which conduce to the spiritual benefit of 1005 her deceased husband. The widow is entitled to sell the property, even the whole of it, the income of the property is not sufficient to cover the expenses for such acts. In regard to alienations for pious observances, which are not essential or obligatory, her powers are limited to alienating only a small portion of the property. Applying the principles accepted in Kamala Devi 's case, the simple question for decision, in view of the fact that the Arpan nama was executed for a merely pious purpose and not for an essential or obligatory purpose is whether the alienation effected by Kachnar Kuer in favour of the deity is of a reasonable portion of her husband 's property. Respondents 1 and 2, in paragraph 7 of their plaint, passingly mentioned that Kachnar Kuer had transferred "a considerable portion" of the properties left by her husband. In paragraph 13 of the written statement which Kachnar Kuer filed on behalf of herself and her adopted son, it was stated that in view of the fact that Trilok Prasad Singh had left about 150 Bighas of land, the alienation of about 30 Bighas in favour of the deity could not be said to be unreasonable or excessive. One hundred and fifty Bighas are treated in the area as roughly equal to 90 acres so that 30 Bighas come to about 18 acres. Whether the alienation for a pious purpose is of a reasonable portion of the property must necessarily depend upon the total extent of the property which has devolved upon the widow. The mere circumstance that a 100 acres are alienated by the widow for a pious purpose will not justify the setting aside of the alienation on the ground that 100 acres is large property. The High Court, without adverting to the fact that the widow had alienated only a one fifth portion of the property which had devolved upon her, held that "a dedication of a large part of the property, more than 18 acres of land, cannot be defended on the part of a holder of a widow 's estate ". This is all that the High Court has to say on the point and obviously, what it has said is not enough or relevant for invalidating the alienation. Whether the alienation is of a reasonable portion of the property is not a matter to be decided on precedents because what is reasonable must depend upon the facts and circumstances of each case. But an alienation of a one fifth portion cannot be said to be unreasonable or excessive. The finding of the High Court must therefore be set aside and along with it its judgment allowing the reversioner 's appeal and decreeing their suit. We therefore hold that the Arpan nama executed by Kachnar Kuer in favour of the deity is lawful and valid. In the result we allow the appeal, set aside the judgment of the High Court and direct that the suit filed by respondents 1 and 2 shall stand dismissed with costs. S.R. Appeal allowed.

Kachnar Kuer, on whom the property of her late husband devolved, executed two registered deeds. By one of these she adopted a son to her deceased husband and by the other, a deed of Arpan nama she created a religious endowment in the name of Shri Gopalji, appointing her mother in law Sheo Kuer, the appellant as the shebait. The respondents claiming to be the reversioners filed a suit for declaration that the two deeds were void, illegal and not binding on their reversionary interest. That suit was dismissed on the ground that the late husband of Kachnar Kuer had given authority to her to make an adoption and to create an endowment. On appeal, the High Court reversed the findings of the trial court and decreed the Suit. The High Court however, granted a certificate of fitness ' under article 133(1)(b) of the Constitution and since after obtaining the certificate, Kachner Kuer purported to compromise the suit with the reversioners, Sheo Kuer, the shebait came up in appeal by special leave. Allowing the appeal, ^ HELD. (i) It is well settled that a Hindu widow possessing a widow 's estate cannot alienate tho property which has devolved on her except for special purposes. The powers of a Hindu female to alienate property are wider in respect of acts which conduce to the spiritual benefit of her deceased husband. The widow is entitled to sell the property, even the whole of it, if the income of the property is not sufficient to cover the expenses for such acts. In regard to alienations for pious observations, which are not essential or obligatory, her powers are limited to alienations of only a small portion of her property. [1004 F, H, 1005 A] (ii) Whether the alienation for a pious purpose is of a reasonable portion of the property must necessarily depend upon the total extent of the property t which has devolved upon the widow. [1005 D] (iii) The reasonability of the alienation of a portion of the property depends on the facts and circumstances of each case, but an alienation of 1/5th portion cannot be said to be unreasonable or excessive. [1005 F] Collector of Masulipatam vs Cavaly Vencata 8 M.I.A. 529, Sadar Singh vs Kunj Behari 491 I.A. referred to Kamala Devi vs Bachu Lal Gupta, [1957] S.C.R. P. 452 applied.

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Civil Appeal No. 901 of 1968. Appeal by special leave from the judgment and order dated the 5 10 1966 of the High Court of Judicature at Allahabad in Special Appeal No. 97 of 1965. J. P. Goyal and A. G. Ratnaparkhi for the Appellant. G. N. Dikshit and M. V. Goswami for Respondents. J. This is an appeal by special leave against the judgment of a Division Bench of the High Court of Allahabad dated October 5, 1966, and raises a question of law regarding the applicability of sections 172 and 174 of the U.P. Zamindari Abolition and Land Re forms Act, 1950 (Act No. 1 of 1951). ,, It appears that the case had a checkered career and the dispute between the parties passed through several phases both before the Revenue Courts and in the High Court. In order to appreciate the point of law involved in this appeal, it may be necessary to give a resume of be facts which culminated is the judgment of the High Court under appeal. The dispute refers to lands comprised in Khata Nos. 1002, 1344 and 1411 of village Bishunpur in the District of Rae Bareli (U.P.). It is not disputed that these Khattas originally belonged to one Harbans who died leaving behind three sons, namely Gurdin, Ramcharan and Ramadhin. Ramcharan appears to have died issueless but Ramadhin died leaving a widow Smt. Menda and a daughter from her Smt. Phoola who was respondent No. 1. The other son Gurdin died leaving a son Jit who had contested the present proceedings against Smt. Phoola. During the pendency of the present proceedings Jit also died and the proceedings have been continued by his son Ram Jivan Lallu. The District of Rae Bareli fell in what was previously known as the Oudh Area of the United(1)Provinces. The dispute between the parties appears to have arisen on the death of Ramadhin one of the sons of Harbans who died in 1916 leaving behind his widow Smt. Menda. At the time of the death of Ramadhin in 1916 the tenancy of the lands in dispute was governed by the provisions of the Oudh Rent Act, 1886 hereinafter referred to J as 'the Rent Act of 1886 '. Under the provisions of the Rent Act of 1886 Smt. Menda was to continue in possession of the lands as an heir of Ramadhin but only during the fixed period of the tenancy on the rent payable to the landlord and was not entitled to renewal of the same. The terms and conditions of the tenancy at the time of the death of Ramadhin were governed by s.48 of the Rent Act of 1886 which applied to the oudh Area where the lands in dispute were situate. Under s.48 of the Rent Act of 1886 it is obvious that on It the death of a tenant his widow was to continue in occupation of the lands for the unexpired portion of the period for which the deceased tenant might have held the holding. Accordingly Smt. Menda continued to occupy the lands after the death of her husband in 1916. Meanwhile five years later the Rent Act of 1886 was amended by U.P. Act 4 of 1921 under which the status of a statutory tenant was con feared on a person who was in possession of the lands on the date when the amendment came into force. The amendment introduced a substantial change in s.48 of the Rent Act of 1886 and added clause '(1)(18) to s.3 which runs thus: "(18) "Statutory tenant" means a tenant to whom section 36 or section 37 applies. Explanation. A person who succeeds as an heir of a(1)statutory tenant under section 48 shall not be deemed to be 265 a statutory tenant unless he has obtained a patta from the landlord or has remained in occupation of the holding for three years after the expiration of the period for which he is entitled to retain occupation of the holding under section 48: "Provided that when a holding is held by two or more co tenants no person who succeeds as an heir of any such co tenant under section 48 shall be deemed to be a statutory tenant of the holding unless he has obtained a patta from the landlord, or has remained in occupation of the holding for three years after the expiration of the period for which the heir of the last surviving co tenant is entitled to retain occupation of the holding under section 48." By virtue of the Explanation extracted above, a tenant to whom sections 36 and 37 applied would be deemed to be a statutory tenant. Section 36 of the Rent Act of 1886 runs thus: "Every tenant, not being a tenant with a right of occupancy or a sub tenant, shall be entitled to retain possession of the holding occupied by him at the commencement of the Oudh Rent (Amendment) Act, 1921, at the rent then payable by him, for a period of ten years from the date of the last change in his rent or the last alteration in the area of the holding, or where no such change or alteration has taken place, from the date on which the tenant was admitted to the occupation of the holding." As Smt. Menda was in possession of the holding at the date when the amendment came into force, she would be clearly governed by section 36 and not section 37 of the Rent Act of 1886 which deals with tenants who were admitted to the occupation of the holding after the coming into force of the amendment. Under section 36 the widow was entitled to retain possession of the holding acquired by her for a period of ten years from the date on which she was admitted to the occupation of the holding. Thus the combined effect of section 3(18) and section 36 of the Rent Act of 1886 would be to clothe Smt. Menda with the status and the rights of a statutory tenant. Section 48 made the status of a statutory tenant heritable and provided as follows: "(1) When statutory tenant dies, his heir shall be entitled to retain occupation of the holding at the rent pay able by the deceased for a period of five years from the date of the tenant 's death, and to receive compensation under the provisions of this Act for improvements, if any, made on the holding by his predecessor in interest, but shall not be entitled to a renewal of the tenancy. Provided that a person who succeeds as an heir of a deceased tenant to whom clause (e) of sub section (1) of section 62A applies shall be entitled to retain occupation of the holding at the rent payable by the deceased only for 266 the unexpired portion of the statutory period of the deceased tenant. (2) Subject to any rights which he may have under section 22 as a representative of the deceased, a collateral relative who did not at the date of the death of the, deceased, share in the cultivation of the holding, shall not be deemed to be an heir of the deceased within the meaning of this section. " In the instant case as Smt. Menda had succeeded as an heir to her husband before the amendment of section 48 her case will be governed by the provisions of section 48 and she would be entitled to retain possession of the tenancy but not to a renewal thereof. It appears that soon after the death of Ramadhin the Court of Wards claimed that the tenancy had escheated to the State because Ramadhin had left no heirs and that Ramadhin was only a tenant at will. Menda appears to have resisted the claim of the Court of Wards. which resulted in proceedings before the Revenue Courts which ultimately found that Smt. Menda had acquired the independent rights of a statutory tenant and was, therefore, not liable to be ejected at the instance of the Court of Wards. This order was passed by the Assistant Collector on June 4, 1926 and thereafter Smt. Menda continued in possession of the holding as a statutory tenant under the amended Rent Act of 1921. We might mention here that previous to the passing of the U.P. Tenancy Act, 1939 the areas of Oudh and Agra in the United Provinces were governed by two separate Acts so far as the tenancies were concerned. The areas in Agra were governed by the Agra Tenancy Act and those in Oudh by the Oudh Rent Act. `The U.P. Tenancy Act 17 of 1939 appears to have consolidated the tenancies in the whole of the Province and the legislature passed one Act which would govern all the tenancies in the entire Province. The U.P. Tenancy Act 17 of 1939 was passed on December 16, 1939 and by section 2 there of the Agra Tenancy Act, 1926 and the Oudh Rent Act, 1886 were repealed. Section 29 of the Tenancy Act conferred the status of a hereditary tenant on any person who was a tenant of the land at the commencement of the Act. Thus Smt. Menda who continued to be in possession as a statutory tenant acquire the status of a hereditary tenant, under section 29(a) of the Tenancy Act which runs thus: "29. Every person belonging to one or another of the following classes shall be a hereditary tenant, and subject to any contract which is not contrary to the provisions of section 4 shall be entitled to all the rights conferred, and be subject to all the liabilities imposed on hereditary tenants by this Act, namely: (a) every person who is, at the commencement of this Act, a tenant of land otherwise than as a permanent tenure holder, a fixed rate tenant, a tenant holding on special terms in Oudh, an ex Proprietary tenant, an occupancy tenant, 267 except as otherwise provided in this Act as a sub tenant or a tenant of sir :" The Tenancy Act having conferred heritable rights on the tenants to which section 29 applied also laid down an order of succession in which the rights of the tenants would pass after the death of the tenant. Sections 36 and 37 of the Tenancy Act provided two different modes of devolution in the case of the death of a female tenant. Section 36 runs thus: "36 (1) When a female tenant, other than a tenant mentioned in section 34, who either before or after the commencement of this Act has inherited an interest in a holding as a widow, as a mother, as a step mother, as a father 's mother, or, as a daughter dies or abandons such holding, or surrenders such holding, or a part of such holding or, in the case of a tenant inheriting as a widow or as a daughter, marries such holding or such part of such holding shall, not withstanding anything in section 45, devolve in accordance with the order of succession laid down in section 35 on the heir of the last male tenant, other than a tenant who inherited as a father 's father under the provisions of that section. x x x x " Section 37 of the Tenancy Act runs thus: "when a female tenant, other than a tenant mentioned in section 34 or section 36 dies, her interest in the holding shall devolve in accordance with the order of succession given below: (a) male lineal descendants in the male line of descent: Provided that no member of this class shall inherit if any male descendant between him and the deceased is alive; (b) husband; (c) unmarried daughter, (d) daughter 's son; (e) brother (f) brother 's son. " It will be seen that under section 36 of the Tenancy Act the heirs of the husband precedence over the daughter or the unmarried daughter, whereas in the case of a female tenant falling under section 37 of the Tenancy Act the unmarried daughter gets precedence over the brother the or brother 's son. In other words, the policy of the law was that where a female tenant died having inherited an interest in the property from her husband then the male heirs of the husband should get preference over the female heirs. Where, however, the female tenant had died having an independent and self acquired interest in the holding, her property was to pass in a different manner. We are not concerned in this appeal with either section 36 or section 37 of the Tenancy Act, because Smt. Menda had died some time in September 1952 L522SCI/76 268 when the U.P. Tenancy Act, 1939 had been replaced by the U.P. Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act 1 of 1951) hereinafter to be referred to as 'the Abolition Act. ' In short, therefore, Smt. Menda who originally occupied the lands in suit as a tenant on the death of her husband became a statutory tenant under the Rent Act of 1921, a hereditary tenant under the Tenancy Act and finally she acquired the status of a bhumidhar under the Abolition Act which came into force on July 1, 1952. The relevant portion of section 18 of the Abolition Act may be extracted thus: 18. (1) Subject to the provisions of Sections 10, 15, 16 and 17, all lands (a) in possession of or deemed to be held by an intermediary as sir, khudkasht, or an intermediary 's grove (b) held as a grove by, or in the personal cultivation of a permanent lessee in Avadh, (c) held by a fixed rate tenant or a rent free grantee as such, or (d) held as such by (1) an occupancy tenant, ' (ii) a hereditary tenant, (iii)a tenant on patta dawami or istamrari referred to in section 17 possessing the right to transfer the holding by sale. (e) held by a grove holder, on the date immediately preceding the date of vesting shall be deemed to be settled by the State Government with such intermediary lessee, tenant, grantee or grove holder, as the case may be, who shall, subject to the provisions of this Act, be entitled to take or retain possession as bhumidhar thereof." As Smt. Menda had already become a hereditary tenant under the Tenancy Act she automatically acquired the status of a Bhumidhar under the Abolition Act and by virtue of the legal fiction created by s.18(1) of the Abolition Act, the lands, having been vested in the State Government, were deemed to have been permanently settled with the bhumidhar, namely, Smt. Menda in this case. It is the admitted case of the parties that Smt. Menda died some time in September 1952, i.e. Only a few months after coming into force of the Abolition Act. The controversy between the parties now centers round the question as to who would succeed to the tenancy left by Smt. Menda. In other words, the matter to be decided is whether section 172 or section 174 of the Abolition Act would apply to the present case. It is not disputed that Smt. Menda died leaving a daughter Smt. Phoola and her husband 's brother 's son Jit. These were the two contending heirs for the property left by Smt. Menda. 269 Sections 172 and 174 of the Abolition Act, insofar as they are A relevant, may be extracted as follows: "172. (1) When a bhumidhar sirdar or asami, who has after the date of vesting, inherited an interest in any holding "(a) as a widow, widow of a male lineal descendent, in the male line of descent, mother or fathers mother dies, marries, abandons or surrenders of , such holding or part thereof; or (b) x x x the holding or the part shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provisions of Section 171) or the last male bhumidhar, sirdar or asami. X X "174. When a bhumidhar, sirdar or asami (other than a bhumidhar, sirdar or asami mentioned in Section 171 or 172) who is a woman dies, her interest in the holding shall devolve in accordance with the order of succession given below: (a) son, son 's son, son 's son, son 's son 's son predeceased son 's widow and predeceased son 's predeceased son 's widow in equal shares per stripes: Provided firstly that the nearer shall exclude the remoter in the same branch: Provided secondly that a widow, who has remarried, shall be excluded; (d) daughter; x x x (g) brother 's son; x x x x It is, therefore, clear that the mode of succession to the property of Smt. Menda would depend on the determination of the question whether Smt. Menda had inherited an interest in any holding or had an independent interest in the holding. This matter appears to have been canvassed before the Revenue Courts which upheld the plea of Smt. Phoola. To begin with on the death of Smt. Phoola, Jit was successful in getting his name mutated in respect of the Khattas in dispute as being the nearest heir to Smt. Menda. The mutation was made by the Tahsilder Maharajgunj on July 30, 1954. This mutation appears to have been challenged by Smt. Phoola who claimed to be the daughter of Smt. Menda and therefore a preferential heir to the property as compared to Jit. In 1957 Smt Phoola filed a suit under section 209 of the Abolition Act for the ejectment of Jit from the disputed lands, on the ground that she was the sole legal heir of the 3 L522SCI/76 270 property left by Smt. Menda. In the meanwhile in 1961 a notification under section 4 of the Consolidation Act was issued bringing village Bishunpur m which the lands in dispute were situate under the consolidation operations. Accordingly Smt. Phoola filed an application during the consolidation operations before the Consolidation officer, Bachhrawan, for correction of the records under section 10(1) of " the U.P. Consolidation of Holdings Act and prayed that the name of Jit in the Khattas in dispute may be struck off and Smt. Phoola 's name may be mutated therein. The Consolidation officer accepted the plea of Smt. Phoola and he accordingly struck off the name of it from the Khattas and directed that Smt. Phoola being the legal heir of Smt. Menda her name be mutated in respect of the Khattas. Thereafter Jit filed an appeal against the order of the Consolidation officer before the Settlement officer (Consolidations), Tahsil Maharajgunj, District Rae Bareli. The Settlement officer by his order dated December 26, 1961 dismissed the appeal and upheld the order of the Consolidation officer. Thereafter Jit filed a second appeal be fore the District Deputy Director of Consolidation, Rae Bareli, which was permitted under the U.P. Consolidation of Holdings Act as it was in force then. The District Deputy Director of Consolidation upheld the plea of Smt. Phoola and held that she was entitled , to inherit the property of Smt. Menda being her legal heir in preference to Jit who was merely her husband 's brother 's son and relied upon section 171 of the Abolition Act, and accordingly dismissed the appeal. Thereafter Jit filed a revision before the Joint Director of Consolidation who also dismissed the revision as being concluded by a finding of fact. Thereafter Jit filed a writ petition before the Allahabad High Court on December 21, 1962 and the writ petition was allowed by the Single Judge on August 6, 1965. Phoola then filed a special appeal before a Division Bench of the Allahabad High Court which reversed the decision of the Sing Judge and dismissed the writ petition filed by Jit upholding the plea of Smt. Phoola. There after Jit moved the High Court for granting leave to appeal to this Court and the same having been refused the present appeal by special leave has been filed in this Court. In support of the appeal Mr. J. P. Goyal has submitted that the Division Bench as also the Revenue Courts had taken a wrong view of the law in holding that Smt. Phoola was entitled to succeed to the property left by Smt. Menda. The learned counsel submitted that the present case squarely fell within the ambit of section 172 of the Abolition Act since Smt. Menda had originally inherited the property from her husband Ramadhin and, therefore, according to the order of succession provided in section 171 of the Abolition Act which applied to section 172, Jit who was the son of the brother of Ramadhin would succeed in preference to the daughter of Smt. Menda. The respondents despite service did not appear and we requested Mr. G. N. Dikshit to assist the Court amicus curiae and we are grateful to him for the valuable assistance he rendered to us in deciding the complicated issues of law involved in this appeal. Mr. Dikshit submitted that at the time when Ramadhin died the tenancy was not heritable and therefore the , question of Smt. Menda having inherited the estate of her husband did 271 not arise and the tenancy held by Smt. Menda must therefore be regarded as having been acquired by her in her own right as her self acquired property and, therefore, the Division Bench of the High Court and the Revenue Courts were right in upholding the plea of Smt. Phoola. We have gone through the entire record as also the judgment of the Single Judge and the Division Bench and we think that the Division Bench of the High Court has taken an erroneous view of the law in the present case. The Division Bench found that although it was established that Smt. Menda had inherited the property from her husband Ramadhin yet the finding of the Revenue Courts was that she had acquired the status of a statutory tenant independently and since there was no error of law in this finding of the Revenue Courts there was no reason for the Single Judge to set aside the order of the Joint Director of Consolidation and allow the petition. It was argued before the High Court that the matter was concluded by a Division Bench decision of the Allahabad High Court in Mst. Jaini & ors. vs Ram Prasad(1) and the High Court appears to have brushed aside this decision on a strange process of reasoning which does not appeal to us at all. the High Court observed as follows: "Mr. Misra has strenuously contended that Jaini vs Ram Prasad (1)supra) is clear authority for the proposition that even in the case of a statutory tenant succession would devolve under section 36 which, according to Mr. Misra is a counter part of section 172 read with section 171 of the U.P. Zamindari Abolition Act. Jaini vs Ram Prasad (supra) is clearly distinguishable because that case came up in appeal before this Court and not in the form of a writ or an appeal against the decision of a learned single Judge in a writ petition. " It is obvious that whether a Division Bench decision is given in an appeal from an original suit or in a writ petition the ratio is binding on the subsequent Division Bench, and merely because the previous Division Bench judgment was given in a suit the subsequent Division Bench cannot refuse to follow the same because it was hearing the proceeding in a writ petition. The rule of judicial precedent is a very salutary one and is aimed at achieving finality and homogeneity of judgments. In case the Division Bench under appeal wanted to differ from the previous decision of the Division Bench of the same Court it ought to have referred the matter to a larger Bench but it was not open to it to ignore completely the previous decision on illogical and unintelligible grounds as given by the High Court. We are further of the opinion that the Division Bench having found as a fact that Smt. Menda had inherited the property initially from her husband erred in law in not applying the provisions of section 172 read with section 171 of the Abolition Act as a result of which Jit being her husband 's brother 's son was entitled to succeed to the estate left by Smt. Menda in preference to Smt. Phoola the daughter. We now proceed to give reasons for this conclusion. (1) A.I.R. 1952 All. 852. 272 Section 172 of the Abolition Act as extracted above provides that when a bhumidhar who has after the date of vesting inherited an interest in any holding dies the holding would devolve upon the heirs in accordance with the order of succession mentioned in section 171 of the Abolition Act. It is manifest therefore that in order to determine the applicability of section 172 of the Abolition Act we must go to the origin of the title of the bhumidhar or the main source from " which the bhumidhar has derived interest in the holding. It may be pertinent to note here that the statute uses the words "the holding or the part shall devolve" to denote that if it is found that a widow has inherited an interest in the holding from her husband, then it is the holding that devolves and not interest of the widow which ceased after her death. Thus the statute seeks to make a clear cut distinction between a widow who has inherited an interest from her husband which is dealt with by section 172 of the Abolition Act and a widow who has acquired an independent interest in the holding which is covered by section 172 of the Abolition Act. The High Court appears to have overlooked the fact that merely because Smt. Menda having initially inherited possession or occupation of the holding from her husband acquired other types of interests merely by operation of law, that could not destroy the origin or the source of her title which was inheritance from her husband. Nor can we regard the conferment of the status of a statutory tenant or a hereditary tenant or a bhumidhar under the various laws passed by the U.P. Legislature as amounting to an acquisition u. of a self acquired interest by the widow. It was, however, argued by Mr. Dikshit that under the Rent Act of 1886 before its amendment by Act 4 of 1921 the estate which was held by Ramadhin was not heritable at all and, therefore, Smt. Menda could not have inherited any interest in the tenancy on her husband 's death. In this connection the learned counsel sought to draw a distinction between the provisions of the Agra Tenancy Act which had made the tenancies heritable and the provisions of the Oudh lenience Act which did not make the tenancies heritable. Although the argument appears to be extremely attractive, on closer scrutiny it is not tenable. The words used in section 172 of the Abolition Act are "inherited an interest". The statute has not defined the word "interest" and therefore it must be deemed to be of the widest possible amplitude. It will include not only an absolute interest but also a limited interest, a precarious interest and an inchoate interest or the like. Section 48 of the Rent Act of 1886 before its amendment by Act 4 of 1921 stood as follows: "48. (1) The heir of a tenant who dies during the currency of the tenancy of a holding shall be entitled to retain to occupation of the holding at the rent payable by the deceased for the unexpired portion of the period for which the deceased tenant might have held without liability to enhancement or ejectment, and to receive compensation under the provisions of this Act for improvements, if any, made on the holding by himself or his predecessor in interest, but shall not be entitled to a renewal of the tenancy. x x x The expressions "heir of a tenant" and "shall be entitled to retain occupation" clearly postulate that the right to retain the occupation of 273 the lands in dispute is given only to the heirs of the deceased tenant A which clearly indicates that the person who retains occupation would inherit or succeed to a limited right which the deceased tenant possessed under the Act. In the instant case since Smt. Menda continued to retain occupation of the lands on the death of her husband, she did so only as the heir of her husband and not otherwise, for if that was not to then she could not have been entitled to retain occupation. The word 'entitled" clearly signifies that the occupant must have some right, however precarious or limited it may be. In these circumstances, therefore, there can be no doubt that Smt. Menda 's occupation of the tenancy on the death of Ramadhin was by way of inheritance only. There was no other method by which she could have a right or claim to retain occupation of the holding. It is true that the interest of Smt. Menda was a very limited one and she could have been ejected by the landlord under certain circumstances. But section 48 of the Rent Act of 1886 undoubtedly conferred two important rights on the heir of the deceased tenant (1) the right to retain occupation of the holding on the rent payable; and (2) to receive compensation for the improvements made. In these circumstances, therefore, it cannot be said that the occupation of the lands by Smt. Menda on her husband 's death was purely in her individual or independent capacity or that the possession of the lands amounted to her self acquired property. Section 174 of the Abolition Act would naturally apply only to such cases where` a widow does not inherit an interest from her husband but would include cases where the female tenant had an independent interest, namely, an interest which she possessed in the holding as her self acquired property, her stridden or the like. That is why section 174 of the Abolition Act provides that it is the interest in any holding which devolves and not the holding. Thus the language used in sections 172 and 174 of the Abolition Act unmistakably brings forth the distinction of the two contingencies in which the to sections are to apply. The Revenue Courts have also held as a fact that initially Smt. Menda had inherited the property from her husband but they have construed the conferment of the various kinds of status on Smt. Menda after she had already invented the property as amounting to her self acquired property. It seems to us that the Revenue Courts were wrong in misconstruing the scope and ambit of the words "inherited an interest in any holding" as mentioned in section 172 of the Abolition Act. Section 172 A of the Abolition Act was introduced by an amendment of the Act in 1954 which makes the position absolutely clear, by declaring that where a sirdar or adhivasi who had inherited any interest in any holding as a widow, it would be deemed to be an accession to the holding of the last male holder thereof. We are, however, not at all concerned with 8. 172 A of the Abolition Act, because Smt. 274 Menda had died two years before the amendment came into force and the question of succession to her estate would be governed by section 17 or section 174 of the Abolition Act. In the Division Bench decision in Mst. Jaini 's case (supra) the Allahabad High Court had taken the same view. Malik, C.J., speaking for the Court observed thus: "Section 36 does not require that the tenancy as such should have been inherited by the widow. All that it provides is that the widow should have inherited an interest in the holding. The mere fact that she had to remain in possession for a further period of eight years before she could become the statutory tenant of the holding does not mean that she acquired no interest in the holding as a widow. We fail to see how it could be said, in view of the language of section 36, that her acquisition of statutory rights had nothing to do with the fact that she had inherited an interest in the holding as widow of Bhau. Section 36 was thus clearly applicable." The Division Bench also relied in the aforesaid case on an earlier unreported decision of a Single Judge of that Court in Sital vs Suraj Din(1) where exactly the same view was taken as the one we have taken in the instant case. The observations of the learned Single Judge have been quoted by the Division Bench in the case referred to above thus: "We can assume that she acquired on the passing of the new Act (Act 4 of 1921) a fresh statutory period and a renewal of the tenancy but that does not take away the origin of her title. It is only when a female tenant acquires tenancy rights which do not have their origin in inheritance that the case could be taken out of the` amble of section 36 to be governed by section 37. " It would be seen that in this case the husband of the appellant had died in 1916 as in the instant case and yet the Court held that it is really the origin of the title that has to be seen and if the tenancy rights had their origin in inheritance then sections 36 & 37 would rot apply. For these reasons, therefore, we are satisfied that the origin of the title of Smt. Menda lay in inheritance of the estate of her husband however limited or precarious it may have been. This being the position, the succession to the estate of Smt. Menda would have to be governed by the provisions of section 172 of the Abolition Act which has applied the provisions of section 171 regarding the order of succession. In the order of succession given in section 171 of the Abolition Act brother 's son is a preferential heir. It might be mentioned here that by virtue of the amendment of the Abolition Act in 1954 the married daughter was also introduced as an heir before brother 's son. But this was not the position prior to 1954 when the married daughter was completely excluded from inheritance. It is also not disputed that Smt. Phoola was (1) Second Appeal No.421 of 1943 decided on 20 12 48. 275 a married daughter on the death of Smt. Menda. In these circumstances, therefore, the holding held by Smt. Menda would devolve on Ramadhin 's brother 's son, namely, Jit and thereafter on his heir who is now continuing the present proceedings. Thus the Tahsildar Maharajgunj was fully justified in mutating the name of Jit in respect of the lands in dispute instead of Smt. Phoola. the Revenue Courts as also the Division Bench of the High Court had taken a legally erroneous view in holding that the mode of succession would be governed by section 174 of the Abolition Act as the interest left by Smt. Menda was her self acquired property. The result is that the appeal is allowed, the judgment of the Division Bench is set aside and that of the learned Single Judge is hereby restored. In the peculiar circumstances of this case, and particularly having regard to the fact that the respondents have not appeared to contest the appeal before this Court, we make no order as to costs in this Court. P.B.R. Appeal allowed.

Under section 172 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, when a bhumidar who has, after the date of vesting, inherited an interest in any holding, dies, the holding or the part thereof shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provisions of section 171). Section 174 provides that when a bhumidar who is a woman dies, her interest in the holding shall devolve in accordance with the order of succession given in the section. The appellant was the grandson (son 's son) of one brother while respondent No. I was the only daughter of another brother. On the death of the(1)respondent 's father, her mother continued in possession of the lands as heir of her husband under the provisions of the Oudh Land Act, 1886. U.P. Act 4 of 1921 which replaced the 1886 Act, conferred the status of a statutory tenant upon a person in possession of lands on the date of the amendment. Section 29 of the U.P. Tenancy Act, 1939, which was a consolidating Act, conferred the status of a hereditary tenant on any person who was a tenant . of the land at the commencement of the Act and so the mother acquired the status of a hereditary tenant. The 1939 Act. was replaced by the U.P. Zamindari Abolition & Land Reforms Act. 1950 under which she became a bhumidar. The mother died in 1952. On the death of the respondent 's mother the appellant got his name mutated in the revenue records as the nearest heir of the mother. The respondent Sled a suit under section 21 of the Abolition Act 1950 claiming to be the sole legal heir to the property. She also field an application before the Consolidation officer under the U.P. Consolidation of Holdings Act for mutation of her name in a place of the appellant 's, which was accepted. On appeal to this Court it was contended that it was the appellant 's father who would succeed to the property in preference to the respondent and it was contended for the respondent that when the respondent 's father died, the tenancy was heritable and so the tenancy acquired by her mother was in her own right as self acquired property. Allowing the appeal, ^ HELD: (1) Section 172A which was introduced in 1954 has no application to this case because the mother died two Years before the amendment came into force and the question of succession to her estate would be governed by section 172 or section 174 of the Abolition Act. [274 A] (2) The statute seeks to make a clear cut distinction between a widow who has inherited an interest from her husband dealt with in section 172 and widow who had acquired an independent interest in the holding covered by section 174. [272 C] Mst. Jaini & Ors. vs Ram Prasad, A.I.R. 1952 All. 852, approved. (3) (a) Section 172 uses the word 'holding or the Dart shall devolve ' to denote that if it was found that a widow had inherited an interest in the holding from her husband then it was the holding that devolved and not interest of the widow, which ceased after her death. The High Court had overlooked the fact that merely because the mother having initially inherited possession or 263 occupation of the holding from her husband acquired other types of interest A by operation of law that could not destroy the origin or the source of her title which was inheritance from her husband. Nor did the conferment of the status of a statutory tenant under the various laws passed by the legislature amount to an acquisition of a self acquired interest by the widow. [272B, D) (b) The words "inherited an interest" occurring in section 172 are not defined in the statute and, therefore, they must be deemed to be of the widest possible amplitude. [272F] (4) Section 174 applies only to such cases where the widow did not inherit an interest from her husband but had an independent interest in the holding which she possessed as her self acquired property Under section 174 it is the interest in any holding which devolves and not the holding. The language used in Ss. 172 and 174 of the Abolition Act unmistakably brings forth the distinction between the two contingencies in which the two sections are to apply. [273E F] (5) The High Court having found as a fact that the mother had inherited the property initially from her husband erred in law in not applying the provision of section 172 read with section 171 of the Abolition Act as a result of which her husband 's brother 's son was entitled to succeed to the estate left by her in preference to her daughter (respondent). [271H] (6) The origin of the title of the mother lay in inheritance of the estate of her husband however limited or precarious it might have been. The succession to the estate of the mother would have to be governed by the provisions of section 172 of the Abolition Act. In the order of succession given in section 171 brother 's son was a preferential heir. Before the amendment of the Abolition Act in 1954, married daughter was completely excluded from inheritance. [274G H] In the instant case the respondent having married on the death of her mother in 1952 the holding held by the mother would devolve on the appellants father and thereafter, on the appellant as heir to his father. (7) The expressions 'heir of a tenant ' and 'shall be entitled to retain occupation ' occurring in section 48 of the Rent Act 1886 before its amendment in 1921 clearly postulate that the right to retain the occupation of the lands in dispute was given to the heirs of the deceased tenant, which clearly indicated that the person who retained occupation would inherit or succeed to a limited right which the deceased tenant possessed under the Act. [273A] In the instant case on the death of her husband occupation of the. tenancy by the mother was by no way other than as heir of her husband. It cannot be said that the occupation of the lands by the mother on her husband 's death was purely in her individual or independent capacity or that her possession of the lands amounted to her self acquired property. [273D E] (8) Whether a decision is given in appeal from an original suit or in a writ petition the ratio is binding on the subsequent Division Bench and merely because the previous Division Bench judgment was given in a suit the subsequent Division Bench cannot refuse to follow the same on the ground that it was hearing the proceeding in a Writ petition. The rule of judicial precedent is a salutary one and is aimed at achieving finality of judgments. In case the Division Bench under appeal wanted to differ from the previous decision of the Division Bench of the same court it ought to have referred the matter to a large bench. [271F G]

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Civil Appeal No. 522 of 1971. Appeal by special leave from the judgment and order dated the 26th April, 1968 of the Calcutta High Court in I. T. Reference No. 50 of 1965. N. N. Goswamy and Arvind Minocha for the Appellant. B. B. Ahuja and section P. Nayar for the Respondent. The Judgment of the Court was delivered by FAZAL ALI, J. This appeal by special leave involves the interpretation of the scope, extent and ambit of section 34(1) (b) of the Income tax Act, 1922 with particular reference to the connotation and import of the word `information ' used in section 34(1) (b). Although the question appears to have been settled in one form or the other by the decisions of this Court, the changing and diverse society such as ours ' dealing in complex commercial activities continues to produce multifarious facts of taxable income which has escaped assessment cloaked under difficult propositions and knotty legal problems. It is the onerous task of this Court to dispel the doubts and resolve and reconcile the differing views taken by the High Courts in various situations which every time poses a new problem. The points involved in the instant case have baffled many a legal brain so much so that the High Court also appears to have been in two minds whether to place the information in the instant case as based on the materials already on the record of the original assessment of 1956 57 revealed by closer circumspection or to the information derived from subsequent or fresh facts. Before, however, examining the legal incidents of section 34 of the Income tax Act, 1922, it may be necessary for us to travel into the domain of the facts of the present case which are short and simple. 969 The assessee appellant M/s Kalyanji Mavji & Company is a registered partnership firm dealing in various commercial activities. The said firm filed its return for the year 1956 57 corresponding to the accounting Gujarati Diwali Year 2001 showing a total income of Rs. 7,44,551/ after claiming a deduction of a sum of Rs. 43,116/ being the amount of interest paid by the assessee on the debts incurred for the partnership business. The Income tax officer accepted the return but on appeal to the Appellate Assistant Commissioner the assessment was reduced by a sum of Rs. 9,200/ by his order dated July 3, 1958. For the assessment year 1957 58 the assessee showed the same income and the deduction claimed was allowed. The next year 1958 59, however, presented quite a different complexion. While the assessee filed his return in the year 1958 59, the Income tax officer concerned suspected the correctness of the return particularly the deduction of interest and found that as the amount of the deduction claimed was utilised for giving interest free loans to the partners for clearing up their income tax dues it could not be said to be a loan incurred for the expenses of the partnership business and he accordingly disallowed the deduction claimed by the appellant. This discovery led the Income tax officer to issue notice to the appellant under section 34(1) (b) of the Income tax Act, 1922 hereinafter referred to as `the Act ' for reopening the assessment of the year 1956 57 hereafter to be referred to as `the original assessment ' on the ground that the deduction having been wrongly allowed, taxable income and escaped assessment. After hearing the appellant the Income tax officer completed the assessment and included the sum of Rs. 43,116/ to the total income shown, by the assessee. Thereafter the appellant filed an appeal before the Appellate Assistant Commissioner against the order of the Income tax officer but the appeal was dismissed by the Appellate authority which confirmed the order of the Income tax officer. It may be pertinent to note here, that in his order the Appellate Assistant Commissioner pointed out that in the assessment years 1958 59 and 1959 60 the Income tax officer found that the appellant had no evidence with him to show that the funds borrowed on which the interest was paid were utilised for the purpose of the business and not diverted to the partners. Thereafter the appellant filed a second appeal to the Income tax Appellate Tribunal, "B", Bench Calcutta. The Tribunal after having accepted the facts culminating in the order of the Appellate Assistant Commissioner was of the opinion that the information of the Income tax officer resulting in the notice under section 34(1) (b) of the Act to the assessee was not based on any fresh facts but was derived from the materials on the records of the original assessment. The Tribunal further found that if the Income tax officer while completing the original assessment would have been careful enough to scrutinise the balance sheet he would have at once detected the infirmity on the basis of which the subsequent Income tax officer issued the notice under section 34(1) (b)` of the` Act to the appellant. The Tribunal further was of the opinion that the subsequent Income tax officer merely changed his opinion on the basis of the very materials that were before him when the original assessment was made and that was not sufficient to attract the provisions of section 34(1) (b) of the Act. The Tribunal accordingly allowed the appeal and set aside the order of the Income tax officer issuing notice to the assessee under section 34(1) (b) 970 for reopening the original assessment. Thereafter the respondent, namely, the Commissioner of Income tax approached the Tribunal for making a reference to the High Court under section 66(1) of the Act as a result of which the Tribunal referred the case to the High Court at Calcutta after framing the following question: "Whether on the facts and in the circumstances of the case, the Tribunal, was right in holding that the re assessment made by the Income tax officer under section 34(1) (b) of the Indian Income tax Act, 1922 was incompetent ?" The High Court, after hearing the parties, differed from the view taken by the Tribunal and held that the present case squarely fell within the ambit of section 34(1) (b) of the Act inasmuch as the information on the basis of which the Income tax officer sought to re open the original assessment was based on subsequent facts as also on the materials of the original assessment revealed by more careful and closer circumspection of those materials. The High Court referred to a number of decisions of this Court as also to the decisions of the Calcutta High Court. The appellant sought leave to appeal to this Court against the order of the High Court, which having been refused, the appellant obtained special leave from this Court, and hence this appeal. In support of the appeal it was contended by Mr. Banerjee that the view taken by the High Court is legally erroneous inasmuch as the admitted facts of this case would disclose that the information relied upon by the Income tax officer in order to re open the original assessment was not derive from external sources but amounted to a mere change of opinion on the very facts and materials that were present on the record of the original assessment. It was also submitted that it was not open to the Income tax officer to have re opened the original assessment merely because he took a different view of the matter in the assessment year 1958 59. Lastly it was argued that the High Court had not correctly applied the ratio laid down by this Court in Commissioner of Income tax, Gujarat vs A. Raman and Company(1). Mr. Ahuja appearing for the Revenue submitted that the order of the Income tax officer was fully justified and the High Court had taken the correct view of the law. In order to appreciate the contentions advanced by counsel for the parties, it is necessary to make a brief survey of the provisions of section 34(1) of the Income tax Act, 1922. The section runs thus: "34. (1) If (a) the Income tax officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income tax have escaped assessment for that year, or have been under assessed or assessed at too low a rate, or 971 have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income tax officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under clause (a) at any time and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or reassess such income profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section Provided * * * *" It would be seen that section 34(1) contemplates two categories of cases for re opening the previous assessment (1) where there has been an omission or failure on the part of the assessee to make a return of his income under section 22 or to disclose fully and truly all material facts necessary for his assessment; and (2) where there has been no such omission on the part of the assessee but the Income tax officer on the basis of information in his possession finds that income chargeable to tax has escaped assessment for any year. It is, therefore, manifest that the first category deals with cases where an assessee is himself in default and the second category deals with cases where there is no fault on the part of an assessee but where the income chargeable to tax has actually escaped assessment for one reason or the other and the Income tax officer comes to know about the same. In the instant case, however, we are concerned with clause (b) of section 34(1) extracted supra. Before however proceeding to interpret the ambit and import of section 34(1) (b) it may be necessary to consider the history of section 34 of the Act which appears to have passed through different phases with amendments and additions made to the section from time to time. Section 34 as it stood in 1922 was as follows: "34. If for any reason income profits or gains chargeable to income tax has escaped assessment in any year, or has been assessed at too low a rate, the Income tax officer may, at any time within one year of the end of that year, serve on 972 the person liable to pay tax on such income, profits or gains, or in the case of a company on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or reassess such income, profits or gains, and the provisions of this Act shall, so far as may be apply accordingly as if the notice were a notice issued under that sub section: Provided that the tax shall be charged at the rates at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be. " It would be seen that in the section as it stood in 1922 the word `information ' was not there at all and the section merely empowered the Income tax officer to reopen the assessment of any year where income chargeable to tax had escaped assessment. No conditions or limitations on the power of the Income tax officer were at all laid down under the section. It appears that the appropriate Legislature in its wisdom thought that this would be too wide a power to be given to the Income tax officer and may not be workable. In these circumstances, by the Indian Income tax (Amendment) Act, 1939, this section was recast as under: "34 (1) If in consequence of definite information which has come into his possession the Income tax Officer, discovers that income, profits and gains chargeable, to income tax have escaped assessment in any year, or have been under assessed, or have been assessed at too low, a rate, or have been the subject of excessive relief under this Act the Income tax officer may, in any case in which he has reason to believe that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars 1, thereof, at any time within eight years, and in any other case at any time within four years of the end of that year, serve on the person liable to pay tax on such income, profits or gains, or, in the case of a company, on the principle officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22, and may proceed to assess or re assess such income, profits or gains, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section: Provided * * * " It may be pertinent to note that by virtue of this amendment the concept of the Income tax officer deriving definite information was introduced for the first time. The word 'information ' was qualified by `definite ' and an additional condition was incorporated namely that the Income tax officer discovers that income chargeable to tax had 973 escaped assessment. This provision led the Courts to approach the provisions of the section with greater circumspection and stricter scrutiny as a result of which many cases of escaped assessments had to be set at naught by some decisions of the Courts. This led the Parliament to take a fresh view of the situation. Accordingly by the Income tax and Business Profits Tax (Amendment) Act, 1948, the section was re cast in the present form as quoted above. There were further amendments in 1954 and 1956 with which we are not concerned. Ultimately by the Income tax Act, 1961, the section underwent a complete transformation and even the setting of the section was changed which now forms section 147(a) & (b) of the Income tax, 1961. We are now concerned in this case only with section 34(1) (b) as it stood after the amendment of 1948. Another pertinent fact which may be mentioned here is that although section 34 was the subject of several amendments, yet the word `information ' which was introduced in 1939 has not been defined at all. Since the word `information ' has not been defined, it is difficult to lay down any rule of universal application. At the same time it cannot be disputed that the object of the Act was to see that the tax collecting machinery is made as perfect and effective as possible so that the tax payer is not allowed to get away with escaped Income tax. The fact that the adjective `definite ' qualified the word `information ' and the word `discovers ' which were introduced in the Income tax (Amendment) Act, 1939 were deleted by the Amendment Act of 1948 would lead to the irresistible inference that the word `information ' is of the widest amplitude and comprehends a variety of factors. Nevertheless the power under section 34(1) (b), however wide it may be, is not plenary because the discretion of the Income tax officer is controlled by the word "reason to believe". It was so held by this Court in Bhimraj Pannalal vs Commissioner of Income tax Bihar and Orissa(1), while affirming the decision of the Patna High Court in Bhimraj Panna Lal vs Commissioner of Income tax, Bihar and Orissa(1). This legal proposition, however, is not disputed. It, therefore, follows that information may come from external sources or even from materials already on the record or may be derived from the discovery of new and important matter or fresh facts. The word `information" will also include true and correct state of the law derived from relevant judicial decisions either of the Income tax authorities or other courts of law which decide income tax matters. Where the ground on which the original assessment is based is held to be erroneous by a superior court in some other case, that will also amount to a fresh information which comes into existence subsequent to the original assessment. A subsequent Privy Council decision is also included in the word `information '. Thus it is very difficult to lay down any hard and fast rule. But this Court has in two leading cases laid down some objective tests and principles to determine the applicability of section 34(1) (b) of the Act which we shall now discuss. 974 In Maharaj Kumar Kamal Singh vs The Commissioner of Income tax, Bihar & Orissa(1) the word "information" fell for interpretation by this Court, where it was observed thus: "We would accordingly hold that the word "information" in section 34(1) (b) includes information as to the true and correct state of the law and so would cover information as to relevant judicial decisions. If that be the true position, the argument that the Income tax officer was not justified in treating the Privy Council decision in question as information within section 34 (1) (b) cannot be accepted. * * * * * In our opinion, even in a case where a return has been submitted, if the Income tax officer erroneously fails to tax a part of assessable income, it is a case where the said part of the income has escaped assessment. The appellant 's attempt to put a very narrow and artificial limitation on the meaning of the word "escape" in section 34(1)(b) cannot therefore succeed. " It will be seen that this Court was in favour of placing not a narrow but a liberal interpretation on the provisions of section 34(1) (b) of the Act. This decision was considered by this Court in Commissioner of Wealth Tax, West Bengal vs Imperial Tobacco Company of India Ltd.(2) where Wanchoo, J., speaking for this Court observed as follows: "It may be added that after the decision of this Court in Maharaj Kumar Kamal Singh 's case it is now settled that "information in section 34(1) (b) included information as to the true and correct state of law, and so would cover information as to relevant judicial decisions" and that such information for the purpose of section 34(1) (b) of the Income tax Act need not be confined only to cases where the Income tax officer discovers as a fact that income has escaped assessment. " Similarly in Commissioner of Income tax, Excess Profits Tax, Hyderabad, Andhra Pradesh vs V. Jagan Mohan Rao and ors.(3), while following the decision of this Court in Maharaj Kumar Kamal Singh 's case (supra) it was observed as follows: "In these circumstances it was held by this Court firstly that the word information in section 34(1) (b) included information as to the true and correct state of the law, and so would cover information as to relevant judicial decisions, secondly that `escape ' in section 34(1) was not confined to cases where no return had been submitted by the assessee or where income had not been assessed owing to inadvertence or oversight or other lacuna attributable to the assessing authorities. But even in a case where a return had been submitted, if the Income tax officer had erroneously failed to tax a part of the assessa 975 ble income, it was a case where that part of the income had escaped assessment. The decision of the Privy Council, therefore, was held to be information within the meaning of section 34(1)(b) and the proceedings for re assessment were validly initiated. " The matter was again fully considered by this Court in A. Raman and Company 's case (supra), where Shah, J., speaking for the Court extended the connotation of the word `information ' to two different categories of cases and observed as follows: "The expression "information" in the context in which it occurs must, in our judgment, mean instruction or knowledge derived from an external source concerning facts or particulars, as to law relating to a matter bearing on the assessment. * * * * * Jurisdiction of the Income tax officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information, must, it is true, have come into the possession of the Income tax officer after the previous assessment,`but even if the information be such that it could have been obtained during the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income tax officer is not affected. " An analysis of this case would clearly show that the information as contained in section 34(1) (b) must fulfil the following conditions: (1) The information may be derived from an external source concerning facts or particulars as to law relating to matter bearing on the assessment; (2) That the information must come after the previous or the original assessment was made. In fact the words "in consequence of information" as used in section 34(1) (b) clearly postulate that the information must be subsequent to the original assessment sought to be reopened; and (3) That the information may be obtained even on the basis of the record of the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law. These categories are in addition to the categories laid down by this Court in Maharaj Kumar Kamal Singh 's case which has been consistently followed in several decisions of this Court as shown above. 976 On a combined review of the decisions of this Court the following tests and principles would apply to determine the applicability of section 34(1) (b) to the following categories of cases: (1) Where the information is as to the true and correct state of the law derived from relevant judicial decisions; (2) Where in the original assessment the income liable to tax has escaped assessment due to oversight, in advertence or a mistake committed by the Income tax officer. This is obviously based on the principle that the tax payer would not be allowed to take advantage of an oversight or mistake committed by the Taxing Authority; (3) Where the information is derived from an external source of any kind. Such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of the original assessment; (4) Where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law. If these conditions are satisfied then the Income tax officer would have complete jurisdiction to re open the original assessment. It is obvious that where the Income tax officer gets no subsequent information, but merely proceeds to re open the original assessment without any fresh facts or materials or without any enquiry into the materials which form part of the original assessment, section 34(1) (b) would have no application. Learned counsel for the appellant heavily relied on the decision of this Court in Bankipur Club Ltd. vs Commissioner of Income tax, Bihar and Orissa(1) in support of the proposition that in the instant case the Income tax officer has proceeded to re open the assessment on the basis of the very materials which formed the subject of the original assessment. It was submitted that in the original assessment the assessee had claimed a deduction and had produced the balance sheet and these very factors were also present when the Income tax officer sought to make the assessment for the year 1958 59 and 1959 60, and since no fresh facts were brought to his notice it was not open to him to re open the original assessment. The facts of the case relied upon by the appellant are clearly distinguishable from the facts of the present case. In Bankipur Club Ltd. 's(1) case it appears that the Club had in its return placed all the materials with full details. The facts placed before the Income tax officer were self evident and no calculation or scrutiny was necessary to find out the effect of the materials 977 placed before the Income tax officer. In view of this peculiar situation, Hegde, J., speaking for the Court observed: "The fact that the club had received certain amounts as guests charges from its members had been placed before the Income tax officer. It is not the case of the Income tax officer that he did not come to know all the relevant facts when he made the original orders of assessment. It is also not his case that at the time he made those orders he was not aware of the true legal position. It was for the Income tax officer to show that he had received some information subsequent to his passing the original orders of assessment. No such material was placed before the Tribunal. That being so, the Tribunal, in our opinion, was right in holding that the Income tax officer was incompetent to initiate proceedings under section 34(1) (b). " In the instant case it would appear that three additional facts had come into existence after the original assessment for the year 1956 57 was made by the Income tax officer. These were (i) that for the assessment year 1958 59 the Income tax officer did not accept the assessee 's plea that he should be allowed deduction for a sum of Rs. 43,116/ ; (2) that the Income tax officer came to a finding that the assessee had not proved that the amount of deduction claimed was really in connection with the partnership business but held that this was on account of interest free advance to the partners to pay their income tax dues; and (3) the conduct of the appellant in not clearing the doubts of the Income tax officer when the appellant was given the notice to contest the assessment merely on the question of law also spoke volumes against the assessee and was also an additional factor which weighed with the Income tax officer. It would be seen that the Income tax officer in his order, which is Annexure A to the statement of case filed by the Tribunal, observed as follows: "In the course of the assessment proceedings for 1958 59 however it was discovered that the assessee 's claim of payment of interest on money borrowed was not proper. Inasmuch as the entire money borrowed had been utilised not for the purpose of business but in giving interest free advance to the partners of the firm. . . . . In fact no argument as regards the allowance or disallowance of the interest amount in question was placed but the entire argument of the representative proceeded on the basis that the action u/s 34 itself was illegal. . . . . There is no doubt that there has been under assessment in this case and there is also no doubt that the fact of under assessment has been brought to the notice of the Income tax officer only in the course of the income tax proceedings for 1958 59. " Similarly the appellate Assistant Commissioner in his order, which is Annexure B to the statement of the case, observed as follows: "At the time of the original assessment the appellant claimed an interest of Rs. 43,116/ which was allowed by 978 the I.T.O. in full. However, later on, while making the assessment for the assessment years 1958 59 and 1959 60, the I.T.O. found that the appellant had no evidence with him to show that the funds borrowed on which the interest was paid, in fact, were utilised for the purpose of the business and not diverted to the partners. " These findings by the two authorities have been clearly mentioned in the order of the Tribunal, which, while narrating the facts, observed as follows: "Subsequently, however, when the Income tax officer was making the assessment for the assessment year 1958 59, he discovered that the assessee did not utilise the borrowed money for the purpose of the business but for giving interest free advances to its partners. The Income tax officer, therefore, had reasons to believe that income to the extent of Rs. 43,116/ had been under assessed and he issued notice under section, 34." Thus in view of the findings given by the Income tax authorities the following facts emerge: (1) that at the time of the original assessment the appellant had filed his return claiming a deduction of Rs. 43,116/ and filed the balance sheet in support of his plea; (2) that the balance sheet showed that the capital of the firm was Rs. 8,70,000/ , total drawings by the partners stood at Rs. 29,31,998/ and the loans were Rs. 6,63,292/ The Income tax officer who completed the original assessment appears to have accepted the claim of the appellant because the balance sheet without any further scrutiny and a close calculation would not have revealed that the amount of deduction claimed was really in the nature of interest free loans given to the partners to meet their income tax liabilities: (3) that in 1958 59 the Income tax officer discovered that the deduction claimed by the appellant was not correct and he accordingly called upon it to prove its plea but the appellant led no evidence before the Income tax officer. From this the Income tax officer concluded that the amount sought to be claimed as deduction was not incurred for the purpose of the partnership business. Thus, therefore, the subsequent information was (1) the discovery by the Income tax officer that the deduction was wrongly claimed and his disallowance of that deduction; and (ii) the conduct of the appellant itself in not adducing any evidence or materials to prove its stand that the deduction was validly claimed. 979 We might mention that it was submitted by Mr. Banerjee that in fact the amount sought to be deducted was paid towards the income tax liability of the partners and this was done to protect the business itself and to improve the credit of the partners. Even this specific plea does not appear to have been taken before the Income tax officer. We are, however, not concerned with this particular plea because we are given to understand by the counsel for the appellant that the appeals against the assessment orders for the years 1958 59 and 1959 60 are pending before the Income tax authorities. In these circumstances we are clearly of the opinion that the facts of the present case clearly fall within the tests and principles laid down by this Court in A. Raman and Company 's case (supra) inasmuch as the Income tax officer proceeded on the basis of the information which came to him after the original assessment by fresh facts revealed in the assessment for the year 1958 59 and consisted of the conduct of the appellant itself in not adducing any evidence to support its plea. We are, therefore, unable to agree with the view of the Tribunal that this was a case of a mere change of opinion by the Income tax officer on the materials which were already on the record. our attention was also drawn by the learned counsel for the appellant to the decision of the Bombay High Court in Commissioner of Income tax, Bombay City II vs H. Holck Larsen(1). In this case, Chandrachud, J., as he then was, speaking for the Court after review of the authorities of this Court and other High Courts, observed as follows: "What is obligatory in order to apply section 34(1)(b) is that he must have "information" in his possession in consequence of which he has reason to believe that the income has escaped assessment or is under assessed, etc. The distinction really consists in a change of opinion unsupported by subsequent information on the one hand and a change of opinion based on information subsequently obtained, on the other. In the former class of cases, the assessment proceedings are attempted to be re opened without the discovery of an error and without receiving any information as to fact or law. . . . . Such a reopening is based on a "mere" change of opinion and is without jurisdiction. . . In the latter class of cases, the reopening is based on information leading to the requisite belief and is therefore within the jurisdiction of the officer. " This decision is really based on the question whether it is open to the Income tax officer to change his opinion subsequently on the same materials and reopen the original assessment. We are no doubt inclined to agree with the view expressed by Chandrachud, J., in the aforesaid case, but as this question is not free from difficulty as there is some divergence of judicial opinion on the subject, we would refrain from giving any definite decision on this point, particularly when in 980 the view we take in the instant case, this point does not really arise for determination in this case, which is really based on another principle, namely, that the information was derived by the Income tax officer from fresh facts and is clearly covered by the principles laid down in A. raman and Company 's case (supra). For the reasons given above, we find ourselves in complete agreement with the view taken by the High Court. Accordingly the appeal fails and is dismissed but without any order as to costs. S.R. Appeal dismissed.

The appellant company, a registered partnership firm, filed its income tax returns for the years 1956 57 and also for 1957 58 respectively showing a total income of ' Rs. 7,44,551/ , after claiming a deduction of a sum of Rs. 43,116/ , being the amount of interest paid by the assessee on the debts incurred for the partnership business along with the balance sheet in support of the said deductions. The Income Tax officer accepted the claim on the basis of the balance sheet. When the assessee filed his return for the year 1958 59, the Income Tax officer discovered that the deduction claimed by the appellant was not correct and called upon the assessee to prove its plea. But, the assessee did not lead any evidence before him. The Income Tax officer finding that the deduction of interest claimed was utilised for giving interest free loans to the partners for clearing their income tax dues and, as such, it could not be said to be a loan incurred for the expenses of the partnership firm, not only disallowed the deduction claimed for that assessment year, but also issued a notice under section 34 (1) (b) for the re opening of the original assessment of the previous years on the ground that the deduction having been wrongly allowed, taxable income escaped assessment. Accordingly, the Income Tax officer re assessed him by including Rs. 43,116 to the total income. The appeal to the Appellate Assistant Commissioner failed. However, on second appeal, the Income Tax Appellate Tribunal "B" Bench, Calcutta, set aside the order of the reassessment opining that the information resulting in the reassessment notice under section 34(1)(b) was not based on any fresh facts, but was derived from the materials on the record of the original assessment amounting to a change of opinion and, as such, was not sufficient to attract the provisions of section 34(1)(b). On the application of the respondent Revenue, the Tribunal made a reference under section 66(1) of the Act framing a question, namely, "Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the reassessment made by the Income Tax officer under section 34(1)(b) of the Indian Income Tax Act (1922) was incompetent ?" to the High Court, which answered it in the negative and held that the case squarely fell within the ambit of section 34(1)(b) of the Act inasmuch as the information on the basis of which the Income Tax officer sought to reopen the original assessment, was based on subsequent facts ' as also on the materials of the original assessment revealed by more careful and closer circumspection of these materials. Negativing the following three contentions of the assessee appellant, namely, (i) The information relied upon by the Income Tax officer not having been derived from external sources, it amounted to a mere change of opinion on the very facts and materials that were present on the record of the original assessment not attracting the provisions of section 34(1)(b) of the Act. 967 (ii) It was not open to the Income Tax officer to have reopened the original assessment merely because he took a different view of the matter in the assessment year 1958 59. (iii) That the High Court has not appreciated the ratio laid down by the Supreme Court in Commissioner of Income tax, Gujarat vs A. Raman and Company, , and dismissing the appeal by special leave, the Court ^ HELD: (1) section 34(1) contemplates two categories of cases for reopening the previous assessment (1) where there has been an omission or failure on the part of the assessee to make a return of his income under section 22 or to disclose fully and truly all materials facts necessary for his assessment; and (ii) where there has been no such omission on the part of the assessee but the Income Tax officer, on the basis of the information in his possession, finds that income chargeable to tax has escaped assessment for any year. The first category deals with cases where an assessee is himself in default and the second category deals with cases where there is an default on the part of the assessee but where the income chargeable to tax has actually escaped assessment for one reason or the other and the Income Tax officer comes to know about the same[1971 E F] (2) The word "information" which has not been defined in the Act is of the widest amplitude and comprehends a variety of factors. Nevertheless, the power under section 34(1)(b), however, wide it may be, is not plenary because the discretion of the Income Tax officer is controlled by the words "reason to believe". [973 C & E] Bhimraj Pannalal vs Commissioner of Income tax, Bihar and Orissa, an Bhimraj Panna Lal vs Commissioner of Income tax, Bihar & Orissa, , followed. (3) Since the Income Tax officer was to see that the tax collecting machinery is made as perfect and effective as possible so that the tax payer is not allowed to get away with escaped income tax, in view of the difficulty in laying down any rule of universal application, the following tests and principles would apply to determine the applicability of section 34(1)(b) to the following categories of cases: (i) Where the information is as to the true and correct state of law derived from relevant judicial decisions; (ii) Where in the original assessment the income liable to tax has escaped assessment duel to oversight, inadvertence or a mistake committed by the Income Tax officer on the principle that the tax payer would not be allowed to take advantage of an oversight or mistake committed by the taxing authority; (iii) Where the information is derived from an external source of any kind. Such external source would include discovery of new and important matters or knowledge of fresh, facts which were not present at the time of the original assessment; and (iv) Where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record or the facts disclosed thereby or from other enquiry or research into facts of law. If these conditions are satisfied, then the Income Tax officer would have complete jurisdiction to reopen the original assessment. It is obvious that where the Income Tax officer gets no subsequent information, but merely proceeds to reopen the original assessment without any fresh facts or materials or without any enquiry into the materials which from part of the original assessment, section 34(1)(b) would have no application. [973 C, D, 976 A E] Maharaj Kumar Kamal Singh vs The Commissioner of Income tax, Bihar & orissa [1959] Supp. (1) S.C.R. 10; Commissioner of Wealth tax, West Bengal vs Imperial Tobacco Company of India Ltd. [1966] Supp. S.C.R. 174; Commissioner of Income tax. Excess Profits Tax. Hyderabad, Andhra Pradesh vs V. Jagan Mohan Rao and ors. and Commissioner of Income tax Gujarat vs A. Raman and Company, , discussed. 968 (4) In the instant case the subsequent information was the discovery by the Income Tax officer the deduction was wrongly claimed and the consequent disallowance of that deduction and the conduct of the assessee itself in not adducing any evidence or materials to prove its stand that the claim was validly made which led to the issue of the notice under section 34(1)(b) for reopening the assessment [978 H] (5) The case really fell within the tests and principles laid down in A. Raman Company 's case and within the ambit of section 34(1)(b) inasmuch as the Income Tax officer proceeded on the basis of the information which came to him after the original assessment, by fresh facts revealed in the assessment for the year 1958 59 and consisted of the conduct of the assessee in not adducing any evidence to support its plea. It was not a case of a mere change of opinion by the Income Tax officer on the materials which were already on record. [1979 B C] Commissioner of Income tax, Gujarat vs A. Raman and Company, , applied. Bankipur Club Ltd. vs Commissioner of Income tax, Bihar and Orissa, , 834, distinguished. [On the question "Whether it is open to the I.T.O. to change his opinion subsequently on the same materials and reopen the original assessment" which arose in the decision in Commissioner of Income Tax, Bombay City 2 vs H. Holck Larsen, , 479, relied on by the appellant assessee and also on the contention that in fact the amount sought to be deducted was paid towards the income tax liabilities of the partners, the Court applied "Non liquet"]

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Civil Appeals Nos. 1270, 1315 1316 of 1975. Appeals by Special Leave from the Judgment and Order dated the 26 8 75 of the Joint Judge at Thana in Election Petitions Nos. 3 and 4 of 1974. R. P. Bhat (In CAs. 1315 1316/75, K. R. Chaudhury, K. Rajendra Chaudhury and Mrs. Veena Khanna for the Appellants in CAs. 1315 1316/75 and in C.A. 1270/75. D.V. Patel (In CAs. 1315 16/75, V. N. Ganpule for respondent No. 1 in all the appeals. D. V. Patel, P. H. Parekh and (Miss) Manju Jetley for respondent No. 2 in CAs. 1315 1316/75. M. N. Shroff for respondents 4 and 5 in CAs. 1315 1316/75. The Judgment of the Court was delivered by KRISHNA IYER, J. The first two civil appeals based on admitted, abbreviated facts, revolving round the election of the President of the Basscin Council (and the third raises virtually the same point but refers to the bhibendi Municipal Council) under the Maharashtra Municipalities Act, 1965 (the Municipal Act, for short) has led to long and intricate argument, thanks partly to the haziness and incongruity of the statutory provisions, and the hard job of harmonizing and harmonizing and illumining which, by interpretative effort, has drained us of our faith in the blessings of simplicity, certainty and consistency in Indian codified law. We may pardonably, but hopefully, permit ourselves by way of constructive criticism of perfunctory codification a proliferating source of litigation that it was once thought, "With a Code, all our troubles and cares would magically vanish. The law, codified, would become stable, predictable and certain. The rules of law, purified, would be accessible to, and understood by, not only the legal establishment of bench and bar but the people as well. " 835 Professor Grent E. Gilmore comments: "The law, codified, has proved to be quite as unstable, unpredictable, and uncertain quite as mulishly unruly as the common law, uncodified, had ever been. The rules of law, purified, have remained the exclusive preserve of the lawyers; the people are still very much in our toils and clutches as they ever were if not more so." (Quoted by H. R. Hahlo in Codifying the Common Law: Protracted Gestation Mod. Law. Rev. January 1975, p. 23, 29 30). Election law has necessarily to be Statutory, but a code can be clear in its scheme and must be such that litigation proof elections should become the rule. Legislative nemesis, in the shape of ambiguity induced litigation is a serious political misfortune in the area of elections where lay men go to the polls and people 's verdicts get bogged down in court disputes, attended with desperate delays. Some intelligent care at the drafting stage, some vision of the whole scheme in the framers, will reduce resort to legal quarrels and appellate spirals so that the time consumed in this Court in resolving conflicts of construction in comparatively less important legislations can be spared for more substantial issues of general public importance. Civil Appeals Nos. 1315 and 1316 of 1975 One Shri Rajani, a candidate for Presidentship of the Bassein Municipal Council and Shri Samant, a voter in that municipal area, made common cause and filed two election petitions challenging the declaration in favour of the appellant, Dr. Parulekar, who was the successful candidate, winning by a large plurality of votes. The resume of relevant facts sufficient to appreciate the contentions may straightway be set out. We are confining, as suggested by counsel, to the twin appeals relating to Bassein since the fate of Bhibandi must follow suit. Three candidates, including the two already mentioned, had filed nomination papers on October 21, 1974 for the presidential election of the Municipal Council. At the time of the scrutiny which took place two days later, no objection was raised to the nomination of Dr. Parulekar by anyone and, on the withdrawal of the third candidate within time, there was a straight fight between the appellant and the first respondent. The poll battle which took place on 17 11 74 found the appellant victor and he was so declared. The frustrated first respondent and his supporter, 2nd respondent, challenged the return of the appellant by separate election petitions under section 21 of the Municipal Act. The sole ground on which the petitioners were founded was that Dr. Parulekar, the returned candidate, was disqualified under section 16(1) (g) of the Municipal Act, the lethal vice alleged against him being that on the date of nomination he was holding an office of profit under the Government, as he was then, admittedly, working as a panel doctor appointed under the Employees ' State Insurance Scheme (acronomically, the ESI scheme), a beneficial project contemplated by 836 the ESI Act, 1948. Of course, the appellant doctor submitted his resignation on November 5, 1974 and this was accepted on November 11, 1974. Thus, before the actual polling took place, but after the nomination, he had ceased to be on the ESI panel. Another circumstance which may have some significance in the overall assessment of the justice of the case, although of marginal consequence on the law bearing upon the issues debated at the bar, is that the appellant has been a councillor of the aforesaid municipality since 1962 and he has also been a doctor on the ESI panel throughout the same span of years and no one has chosen to raise the question of disqualification on this score up till the 1st respondent fell to his rival and had no other tenable ground of attack. Necessity is the mother of invention and the respondents, aided by the cute legal ingenuity, may be, dug up the disqualification of 'office of profit ' and, indeed, wholly succeeded before the Election Tribunal, the Joint Judge of Thana. The Trial Judge not merely voided the appellant 's election but declared the 1st respondent President since he was the sole surviving candidate. This order of the Joint Judge has been assailed before us in the two appeals, after securing leave under article 136. Three main contentions have been urged before us by Shri Bhatt, counsel for the appellant, which we will formulate and deal with one by one, although on the merits the most formidable issue is as to whether figuring in the medical list under the ESI scheme amounts to holding an office of profit under Government. With a view to get a hang of the major plea, it is necessary to study the scheme of the ESI Act, even as to get a satisfactory solution of the other two points we have to gather the ensemble of provisions dealing with disqualification of candidates and the triple remedies provided in that behalf by the Municipal Act. The discussion, to be put in proper focus, requires formulation of the submissions of counsel, the foremost in importance and intricacy being whether a doctor on the Medical List made by the Surgeon General of the State holds an 'office of profit ' within the meaning of section 16(1) (g) of the Municipal Act. Next in the order of priority is the question whether a petition for setting aside an election of President on the ground of disqualification for being a councillor is permissible under section 21 of the Municipal Act in view of the special provision in section 44 of the said Act and the rules regarding objections to nominations and appeal therefrom framed under that Act. The last question which, in a sense, is interlinked with the earlier one is as to whether, assuming the appellant to be disqualified, the first respondent can be declared the returned candidate or President, by passing the necessity for a fresh poll getting elected, as it were, through the judicial constituency of discretionary power. It is plain democratic sense that the electoral process should ordinarily receive no judicial jolt except where pollution of purity or contravention of legal mandates invite the court 's jurisdiction to review the result and restore legality, legitimacy and respect for norms. The frequency of forensic overturing of poll verdicts injects instability into the electoral system, kindles hopes in worsted candidates and induces postmortem discoveries of 'disqualifications ' as a desperate gamble in 837 the system of fluctuating litigative fortunes. This is a caveat against overuse of the court as an antidote for a poll defeat. Of course, where a clear breach is made out, the guns of law shall go into action, and not retreat from the Rule of Law. We will proceed to take a close up of the three lines of attack outlined above, and if interference with the election must follow, it will; otherwise not. The appellant is a doctor in Maharashtra where the municipalities are organised, based on popular franchise, in terms of the Municipal Act. It is a heartening omen that this local body, Bessein, has electorally attracted professional men, not mere politicians, into its administrative circle; for the appellant is a 'medic ' while respondent 1 is an 'advocate '. By a margin of over a thousand votes the former won but the lawyer rival has invoked the law to undo the election on the ground of disqualification based on section 16(1)(g) of the Municipal Act. The ban is on one who holds an office of profit under government and the public policy behind the provision is obvious and wholesome. We may read the relevant part of the section: "16(1)(g): No person shall be qualified to become a Councillor whether by election, co option or nomination, who is a subordinate officer or servant of Government or any local authority or holds an office of profit under Government or any local authority;" The short question then is whether the appellant is qualified to be a Councillor (which expression is rightly deemed to include President, vide section 2(7). The disqualifying stain is stated to be that he held an office of profit under the State Government. He did resign before the date of poll but after the date of filing nomination. The nomination was vitiated and subsequent resignation did not confer moksha and the election thus became void. Assuming that if a candidature is stigmatised by a fatal blot at the time of nomination the election also suffers invalidity, despite intervening removal of the disqualification, did the doctor incur the penalty by being on the medical panel of the ESI scheme ? The critical question, apparently simple and limpid, has, when saturated with precedential erudition and lexicographic inundation, become so learnedly obscure and conflictively turbid that were we governed by a radically streamlined methodology of legislation and liberality of interpretation, as obtains in other systems of jurisprudence, much of the forensic work could have been obviated. This is a problem of disturbing social import outside the orbit of these appeals with which alone we are currently engaged. The magnificent concept of judicial review is at its best when kept within the beautiful trellis of broad principles of public policy and tested by the intentionability of the statute. With this predisposition calculated to make judge power functionally meaningful, we proceed to fix the contextual semantics of 'office of profit ' as a disqualificationary factor for running for municipal president. To begin with the 838 very beginning; what is an office ? too simplistic to answer with case that it is derived from 'officium ' and bears the same sense. Indeed, in Latin and English, this word has protean connotations and judicial choice reaches the high point of frustration when the highest courts here and abroad have differed, dependent on varying situations, or statutory schemes, the mischief sought to be suppressed and the surrounding social realities. Then we come to the second question: what is an 'office of profit '? And, thirdly, to the question: when is an 'office of profit ' under Government ? The context purpose signification of expressions of varying imports leaves room for judicial selection. Illustratively, we may refer to two decisions which throw some light but turn on the statutory setting of those cases. For instance, in Ramachandran (AIR 1961 Madras 450, 458) it has been observed: ". We find, in Bacon 's Abridgment at Vol. 6, p. 2, the article headed 'of the nature of an officer, and the several kinds of officers ', commencing thus: 'It is said that the word 'officium ' principally implies a duty, and, in the next place, the charge of such duty; and that it is a rule that where one man hath to do with another 's affairs against his will, and without his leave, that this is an office, and he who is in it is an officer '. And the next paragraph goes on to say: 'There is a difference between an office and an employment, every office being an employment; but there are employments which do not come under the denomination of offices; such as an agreement to make hay, herd a flock, etc; which differ widely from that of steward of a manor, etc. The first of these paragraphs implies that an officer is one to whom is delegated, by the supreme authority, some portion of its regulating and coercive powers, or who is appointed to represent the State in its relations to individual subjects. This is the central idea; and applying it to the clause which we have to construe, we think that the word 'officer ' there means some person employed to exercise, to some extent, and in certain circumstances, a delegated function of Government. He is either himself armed with some authority or representative character, or his duties are immediately auxiliary to those of someone who is so armed." In Statesman vs Deb it is said: "An office means no more than a position to which certain duties are attached. According to Earl Jowitt 's Dictionary a public office is one which entitles a man to act in the affairs of others without their appointment or permission. " Both these decisions may perhaps be generally relevant but not precisely to the point. We were taken through the panorama of case law and statute law relating to corporations, companies, autonomous bodies and other creatures of statute, to bring out the content of 'office of profit under 839 government ' as distinguished from offices under the control of government. Indeed, even the Constitution of India disqualifies a person for being chosen as Member, if he holds any office of profit under the Government. The question may well arise whether the ESI Corporation is under the control of government and can be equated with State so that holding any office thereunder may attract the proscription of section 16(1)(g). We are relieved from this industrious adventure by the stand taken by counsel for the respondents, Shri Patel, that he stakes this part of his case on the sole ground that the appellant doctor is holding an office of profit under the Maharashtra government, as such. He has no case therefore that the doctor is under the control of the ESI Corporation, an institution controlled by the Union government and hence is disqualified. The short issue, therefore, is whether, under the scheme of the ESI Act and the rules framed thereunder, the appellant squarely falls within the description of holder of office of profit under the State Government. This branch of enquiry takes us to an analysis of the provisions bearing on the scheme of the medical project under the ESI Act and the role of the State government therein. We have some assistance from rulings of this Court in resolving the dispute and we may mention even in advance that a seeming disharmony between two decisions of this Court also has to be dissolved. Apparent judicial dissonance may give place to real consonance, if a dissection of the facts and discernment of the reasoning, in the light of which the decisions of this Court are rendered, is undertaken. The ESI Act provides medical facilities for the working class, the primary responsibility for executing the project being shouldered by a statutory corporation created by section 3 of the Act and the infra struture for implementation is organised by the other provisions of Chapter II. A Standing Committee administers the affairs of the Corporation. A Medical Benefit Council is constituted by the Central Government to help in the discharge of the duties of the Corporation which involve expertise. The financial resources come from contributions and other moneys specified in the Act itself and an Employees ' State Insurance Fund has been brought into existence in this behalf. The Corporation, although has a separate legal personality, is under the control of the Central Government. But that is not the pertinent issue before us. The fatal sin is not that the appellant is a doctor under the ESI Corporation but that he is holding an 'office of profit ' under the State Government. We may ignore provisions relating to the powers of the Corporation and turn to the role of Government vis a vis private medical practitioners like the appellant. He is not a full time employee of Government. On the other hand, he runs his own clinic. Even so, it is argued with force that section 58 and a fasciculus of rules framed by the State Government under section 96, viewed as a mini scheme, creates offices of profit which are filled by private doctors like the appellant. The legal spring board is section 58 of the ESI Act and it is best to start off with reading that section: "58. Provision of medical treatment by State Government. (1) The State Government shall provide for in sured persons and (where such benefit is extended to their 840 families) their families in the State, reasonable medical, surgical and obstetric treatment: Provided that the State Government may, with the approval of the Corporation, arrange for medical treatment at clinics of medical practitioners on such scale and subject to such terms and conditions as may be agreed upon. (2) Where the incidence. " Two things are self evident. An obligation to provide medical treatment for insured persons has been saddled on the State Government. Secondly, that Government may discharge this responsibility through arrangement with medical practitioners who run clinics. The bare bones of section 58 have to be clothed with flesh before a viable project comes to life. This is achieved by rules framed unders. 96 especially section 96(1) (d) & (e). We may make it clear that the Corporation 's entry into the field is not inhibited by section 58 as section 59A underscores. But what is posed before us is the appellant 's status as a holder of an office of profit under the Government since he is admittedly a medical insurance officer within the mechanism set up by the rules. Here we seek light from the several rules governing medical insurance officers, their empanelment, control, removal and allied matters. Some empathy with the plan of benefit by the State Government is a pre requisite to an insight into the true nature of a medical insur ance officer in the context of an office of profit. A broad idea can be gained from the key rules and so we sketch the outlines by reference to them, skipping the rest. The Chief officer entrusted with the working of the scheme is the Director Rule 2(3A) defines 'Director ' as the Director, ESI scheme, Government of Maharashtra. This officer, the kingpin of the whole programme, is an appointee of the State Government. The content of medical benefits is covered by r. 4 which extends the medical services to insured persons and runs thus: "4. Provision of general medical services to insured persons by Insurance Medical Practitioners. (1) The State Government shall arrange to provide general medical services to insured persons at clinics of Insurance Medical Practitioners, who have undertaken to provide general medical services under these rules and in accordance with their terms of service. (2) An Insurance Medical Practitioner shall be deemed to be appointed as an Insurance Medical officer for the purposes of the Regulations. " The agency for rendering medical treatment is called Insurance Medical Practitioner. Rule 2(6) defines the Insurance Medical Practitioner as one appointed as such to provide medical benefits under the Act and to perform such other functions as may be assigned to him. Rule 2(2) authorizes the appointment of one or more officers by the State Government to control the administration of medical benefits and they are called 'administrative medical 841 officers '. These officers shall, under r. 5, prepare a list of the practitioners whose applications have been approved by the Allocation Committee (defined in r. 2(13). This list is called the Medical List of Insurance Medical Practitioners. Before a doctor can be included in the medical list, he has to apply to the administrative medical officer in the form specified by the State Government for the purpose. The Insurance Medical Practitioners have to be responsible for rendering medical treatment and must conform to the conditions specified. A Medical Service Committee shall be set up for such areas as may be considered appropriate by the State Government. This Committee investigates into questions between an Insurance Medical Practitioner and a person who is entitled to obtain treatment from that practitioner, etc. On the report of the Medical Services Committee relating to the conduct of an Insurance Medical Practitioner, the Director may take action in one or more of the ways specified in r. 22(2). He may even remove the Insurance Medical Practitioner 's name from the medical list. There is an appeal by the aggrieved doctor to the State Government. Rule 24 relates to investigation into cases of disputed prescriptions, record keeping and certification relating to Insurance Medical Practitioners. The total impact of a detailed study of the various rules framed by the State Government bearing on Insurance Medical Practitioners is that a doctor applies for getting into the Medical List, agrees to abide by the duties and conditions prescribed, is under the control of the Medical Services Committee and may even be removed or resign from the panel. It is clear that he cannot extricate himself from government control by the plea that he is a private doctor because his entry into the Medical List is preceded by an application for inclusion where he undertakes certain responsibilities. Such application is considered by an Application Committee which recommends his name to the Director, Employees State Insurance Scheme. The Surgeon General ultimately grants the prayer for inclusion in the Medical List on the recommendations of the Allocation Committee. It is true that an insurance medical practitioner has the right to resign and also to have the name of any insured person removed from his list. He has duties which are prescribed by the rules vis a vis the patients. He is required to furnish various pieces of clinical information and to do other medical duties as are set out in r. 10. The State Government has the power to remove the name of any individual Insurance Medical Practitioner from the Medical List even as the latter is entitled to give notice to the Director, ESI Scheme that he desires to cease to be an Insurance Medical Practitioner and that his name may be removed from the Medical List. It follows that although he is a private doctor, running a private clinic, he is also an Insurance Medical Practitioner subject to the discipline, directions, obligations and control of the relevant officers appointed by the State Government in implementing the medical benefit scheme. An insurance medical practitioner the appellant is one being a medical practitioner 'appointed as such to provide medical benefit under the Act and to perform such other functions as may be assigned to him, ' the question arises whether this is tantamount to holding an office. 842 The legal provisions under the Act and the rules certainly make of an insurance medical practitioner a category different from one who runs a private clinic and enters into contractual terms for treatment of patients sent by Government, nor is he a full fledged government servant. He is a tertium quid, as it were, but the finer question is whether this category falls squarely within the description of 'office of profit under government '. This very question fell for decision before the Bombay and Calcutta High Courts but the learned Judges, on a study of the identical provisions, arrived at antipodean conclusions. After all, minds differ as rivers differ and, assisted by the flow of logic in these and other rulings cited before us, we will hopefully reach the shore of correct interpretation. The process of mentation, the office of words like office of profit ' which convey many meanings and the inputs into the complex matrix of statutory construction make what looks simple to the lay, sophisticated for the legal, as the case on hand amply illustrates. Back to the issue of 'office of profit '. If the position of an Insurance Medical Officer is an 'office ', it actually yields profit or at least probably may. In this very case the appellant was making sizeable income by way of capitation fee from the medical senice, rendered to insured employees. The crucial question then is whether this species of medical officers are holding 'office ' and that 'under Government '. There is a haphazard heap of case law about these expressions but they strike different notes and our job is to orchestrate them in the setting of the statute. After all, all law is a means to an end. What is the legislative end here in disqualifying holders of 'offices of profit under government '? Obviously, to avoid a confict between duty and interest, to cut out, the misuse of official position to advance private benefit and to avert the likelihood of influencing government to promote personal advantage. So this is the mischief to be suppressed. At the same time we have to bear in mind that our Constitution mandates the State to undertake multiform public welfare and socio economic activities involving technical persons, welfare workers, and lay people on a massive scale so that participatory government may prove a progressive reality. In such an expanding situation, can we keep out from elective posts at various levels many doctors, lawyers, engineers and scientists, not to speak of an army of other non officials who are wanted in various fields, not as fulltime government senants but as part time participants in people 's projects sponsored by government? For instance, if a National Legal Services Authority funded largely by the State comes into being, a large segment of the legal profession may be employed part time in the ennobling occupation of legal aid to the poor. Doctors, lawyers, engineers, scientists and other experts may have to be invited into local bodies, legislatures and like political and administrative organs based on election if these vital limbs of representative government are not to be the monopoly of populist politicians or lay members but sprinkled with technicians in an age which belongs to technology. So, an interpretation of 'office of profit ' to cast the net so wide that 843 all our citizens with specialities and know how are inhibited from entering elected organs of public administration and offering semivoluntary services in para official, statutory or like projects run or directed by Government or Corporation controlled by the State may be detrimental to democracy itself. Even athletes may hesitate to come into Sports Councils if some fee for services is paid and that proves their funeral if elected to a panchayat ! A balanced view, even if it involves 'judicious irreverence ' to vintage precedents, is the wiser desideratum. The general interpretative approach hallowed by Heydon 's case is expressed by the Bench in the Bombay ruling AIR 1958 Bom 314 Deorao vs Keshav thus: "The object of this provision is to secure independence of the members of the Legislature and to ensure that the Legislature does not contain persons, who have received favours or benefits from the executive and who, conse quently, being under an obligation to the executive, might be amenable to its influence. Putting it differently, the provision appears to have been made in order to eliminate or reduce the risk of conflict between duty and self interest amongst the members of the Legislature. This object must always be borne in mind in interpreting article 191. " While we agree that this consideration is important for purity of elective offices, the need for caution against exaggerating its importance to scare away men of skill in various fields coming into socially beneficial projects on part time posting or small fee cannot be ignored. Informed by these dual warnings, we proceed to assess the worth of the rival contentions. Section 58 charges the State Government with the duty to provide medical facilities to insured employees. This obligation may be discharged by arrangements with private clinics. An Insurance Medical Officer is not a government servant, but he is more than a mere private doctor with a contractual obligation, for he undertakes certain functions which are regulated by law viz., rules framed under section 96. The question is not what he is but whether he is 'holding an office of profit '. We have already referred to the principal sections and rules, the broad scheme and infra structure and the rights, duties and degree of control over Insurance Medical Practitioners exercised by the State directly or through its officers. A further elaboration is possible, but is supererogatory. A full study of the Bench decisions of Bombay and Calcutta led to diametrically opposite conclusions thus proving the wide judicial choice available depending on the perspective, the import and the objections one accepts from the two enactments viz. the Municipal Act and the Insurance Act. It is a context purpose quandary. 844 Chainani J., speaking for the Court set out the true approach thus: P. 318, para 12. "In our opinion, the principal tests for deciding whether an office is under the Government, are (1) what authority has the power to make an appointment to the office concerned, (2) what authority can take disciplinary action and remove or dismiss the holder of the office and (3) by whom and from what source is his remuneration paid ? Of these, the first two are, in our opinion, more important than the third one. " Shri A. N. Ray, J. (as he then was) stated his touchstone to be fourfold: "The four tests which have been applied to these cases were stated by Lord Thankerton in the case of Short vs J. and W. Henderson, Limited, reported in These four tests are : (a) the master 's power of selection of his servant, (b) the payment of wages or other remuneration, (c) the master 's right to control the method of doing the work, and (d) the master 's right of suspension or dismissal. Lord Thankerton referred to the observation of Lord Justice Clerk in the judgment under appeal in that case that a contract of service may still exist if some of these elements are absent altogether, or present only in an unusual form, and that the principal requirement of contract of service is the right of the master in some reasonable sense to control the method of doing the work, and that this factor of superintendence and control has frequently been treated as critical and decisive of the legal quality of the relationship. "(1) A few searching questions and implied answers may help a solution. Is the appellant (or those of his ilk under the Scheme) an employee of government? Not more than any other expert consulted by Government for fee paid? But he has obligations of a statutory savour He is 'appointed ' on his application which is processed by the appropriate body, removed if found wanting, obliged to discharge duties, make some reports and subject himself to certain discipline while on the panel. In the words of the Bombay decision : Para 30, p. 323. "In the form of application, a medical practitioner, who desires his name to be included in the medical list, has also to state that he agrees to abide by the terms of service. In other words, he agrees to join a service, see also Rule 22(d), which uses the words 'prejudicial to the efficiency of the Service '. He is also subject to disciplinary action and control. He cannot also resign or give up his post except by giving three months ' notice under Service Rule 845 14. He is also required to maintain records and to submit returns. His employment has, therefore, all the attributes of a service. He must, therefore, be held to be a holder of an office. The fact that he is allowed private practice will not alter the character of his appointment. " The other features pointing in a different direction are not to be overlooked either. Ray J. (as he then was) drew the lines, boldly, when he observed: Para 29, p. 7. "These medical practitioners apply themselves for inclusion in the medical list. Their payment is not out of the government revenue but out of a special fund consisting of contribution made by the employers. Therefore such a fund over which the government has no legal title and which is vested in the corporation under the combined effect of sections 3 and 26 of the Act to which I have already referred indicates beyond any doubt that the remuneration of medical practitioners is paid not out of the public exchequer. The contention of Mr. Advocate General is correct that medical practitioner in the present case gave nothing more than a voluntary undertaking to offer services in lieu of fees for professional service rendered and the inclusion of names in the list and the preparation of the list did not have the effect of making the medical practitioner an employee of the State. " x x x x Para 23, p. 6. "Mr. Advocate General, in my opinion, rightly contended that the medical practitioners were really undertaking and offering services and if the undertaking was treated as a contract between the medical practitioner and the persons in charge of preparation of medical list, namely, the State or the Corporation it was a mere contract for services and not a contract of services. This proposition was extracted from the decision in Gould vs Minister of National Insurance, reported in and also in (1951) I All. E.R. 368. That case was on the construction of the provisions of the National Insurance Act, 1946 and the question was whether the appellant in that case who was a music hall artist and who had entered into a written contract with the second respondent acting on behalf of several companies, under which he undertook to appear in a variety 'act ' at a theatre for one week from September 6, 1948 was an employed person within the meaning of the Act. The first respondent, the Minister of National Insurance, had decided that during that week the appellant was not an 'employed person ' within the meaning of the Act. It was held that the question would turn on the particular facts of each case and the authority of cases based on different statutes would not always be of assistance. It was said 846 that it would be easy in some cases to say that the contract was a contract of service and in others that it was a contract for services, but between these two extremes there was a large number of cases where the line was much more difficult to draw. " Does the destiny of this case depend on murky semantics as to what is an 'office ' filling columns of Law Lexicons and English Dictionaries or the nub of the dispute turn on contract of service versus contract for services? Alas ! Could not the law be made plainer in this area of mass participatory process called elections ? Dickens is still valid about our modern Legislations unresponsive to the common man 's need of comprehensible law and unmindful of the court 's consequential wrestling with etherie differences ! 'The law is a ass a idiot ' (Mr. Bumble in Oliver Twist). The commensense way, rather than the lexicographic street, is the better route to the destination. And that means we have to crystallise our notion of 'office of profit ' and then test the fate of Insurance Medical Practitioners. Profit he does derive, but does he hold an office under Government ? Mere incumbancy in office is no disqualification even if some sitting fee or piffling honorarium is paid (vide: If a lawyer (or doctor in a system of National Health Insurance) is on a panel of Government for looking after cases or other legal work and paid for services rendered but, otherwise, a freelance, does he hold an office under Government ? Shivamurthy Swami(1) clears the ground for the discussion by going to the basics which determine what is an office of profit under Government. These tests are: "(1) Whether the Government makes the appointment; (2) Whether the Government has the right to remove or dismiss the holder; (3) Whether the Government pays the remuneration; (4) What are the functions of the holder ? Does he perform them for the Government; and (5) Does the Government exercise any control over the performance of those functions ?" We are not faced with the plea of office under the Corporation and thus under the Central Government but only with the disqualification of holding an office directly under the State Government via section 58 read with the rules framed under section 96 of the Insurance Act. In this connection, a closer link with the present situation is established by Kanta(2) where an Advocate, acting for Government under the directions of the Government pleader could be said to hold an office of profit. Sikri J., (as he then was) adopted the classic definition 847 of 'office ' given by Justice Rowlatt in Great Eastern Rly Co.(1) as appropriate even in an electoral context and proceeded to apply the ratio to the facts of the case. Observed the learned Judge: "We cannot visualise an office coming into existence, every time a pleader is asked by the Government to appear in a case on its behalf. The notification of his name under rule 8B, does not amount to the creation of an 'office '. Some reliance was also placed on rule 4 of Order 27 C.P.C. which provides that: "The Government pleader in any Court shall be the agent of the Government for the purpose of receiving processes against the Government issued by such Court. " This rule would not apply to the facts of this case because the appellant was appointed only to assist the Government Advocate in a particular case. Assuming it applies, it only means that the processes could be served on the appellant, but processes can be served on an Advocate under Rule 2 of Order XLV of the Supreme Court Rules, 1966. This does not mean that an Advocate on Record would hold an office under the client. The learned Counsel for the respondent, Mr. Chagla, urges that we should keep in view the fact that the object underlying article 191 of the Constitution is to preserve purity of public life and to prevent conflict of duty with interest and give an interpretation which will carry out this object. It is not necessary to give a wide meaning to the word 'office ' because if Parliament thinks that a legal practitioner who is being paid fees in a case by the Government should not be qualified to stand for an election as a Member of Legislative Assembly, it can make that provision under article 191(1)(e) of the Constitution. The case of Sakhawat Ali. vs The State of Orissa(2) provides an instance where the Legislature provided that a paid legal practitioner should not stand in the municipal elections. " This takes us to Sakhawat Ali(2) and to Mahadeo(3) which too afford some luciferous parallels. In Sakhawat Ali (supra) the question arose about a legal practitioner employed on behalf of a Municipality standing as candidate for election to the Municipal Council. Stress was laid on the purity of public life, an object which would be thwarted if there arose a situation of conflict between interest and duty. A lawyer paid by the municipality becoming a councillor is a situation fraught with perils to purity in public life. This factor was emphasized by an express provision in the Municipal Act in that case disqualifying such paid legal practitioners from becoming candidates. Had such a step been taken in our case, the law would have been at least clear, whether it was wise or No. 848 In Mahadeo 's Case(1) a fine distinction from Kanta (supra) arose. There also the disqualification of a lawyer on account of holding an office of profit under the government arose. After quoting Lord Wright in Mcmillan vs Guest(2), trying to define 'office ', the Court proceeded to consider whether a lawyer who accepted a position on the panel of Railway pleaders for conducting suits filed against the Union of India on the terms and conditions therein mentioned, was holding an office of profit. Holding that such an appointment on the panel of lawyers for the Union of India was an office of profit, the Court observed: "If by 'office ' is meant the right and duty to exercise an employment or a position to which certain duties are attached as obsered by this Court, it is difficult to see why the engagement of the appellant in this case under the letter of February 6, 1962 would not amount to the appellant 's holding an office. By the said letter he accepted certain obligations and was required to discharge certain duties. He was not free to take a brief against the Railway Administration. Whether or not the Railway Administration thought it proper to entrust any particular case or litigation pending in the court to him, it was his duty to watch all cases coming up for hearing against the Railway Administration and to give timely intimation of the same to the office of the Chief Commercial Superintendent. Even if no instructions regarding any particular case were given to him, he was expected to appear in court and obtain an adjournment. In effect this cast a duty on him to appear in court and obtain an adjournment so as to protect the interests of the Railway. The duty or obligation was a continuing one so long as the railway did not think it proper to remove his name from the panel of Railway lawyers or so long as he did not intimate to the Railway Administration that he desired to be free from his obligation to render service to the Railway. In the absence of the above he was bound by the terms of the engagement to watch the interests of the Railway Administration, give them timely intimation of cases in which they were involved and on his own initiative apply for an adjournment in proceedings in which the Railway had made no arrangement for representation. It is true that he would get a sum of money only if he appeared but the possibility that the Railway might not engage him is a matter of no moment. An office of profit really means an office in respect of which a profit may accrue. It is not necessary that it should be possible to predicate of a holder of an office of profit that he was bound to get a certain amount of profit irrespective of the duties discharged by him." The next case of considerable importance is Gurugobinda(3) which related to a chartered accountant, a partner of a firm of auditors of two companies which were owned by the Union Government 849 and the State Government. Disqualification for holding an office of profit, again, in this circumstance, was pressed before the Court and section K. Das, Acg. C. J., speaking for the Court observed: "We think that this contention is correct. We agree with the High Court that for holding an office of profit under the Government, one need not be in the service of Government and there need be no relationship of master and servant between them." (P. 319) "In Maulana Abdul Shakur vs Rikhab Chand and another (1958 SCR 387) the appellant was the manager of a school run by a committee of management formed under the provisions of the Durgah Khwaja Saheb Act, 1955. He was appointed by the administrator of the Durgah and was paid Rs. 100 per month. The question arose whether he was disqualified to be chosen as a member of Parliament in view of article 102(1) (a) of the Constitution. It was contended for the respondent in that case that under sections 5 and 9 of the Durgah Khwaja Saheb Act, 1955 the Government of India had the power of appointment and removal of members of the committee of management as also the power to appoint the administrator in consultation with the committee; therefore the appellant was under the control and supervision of the Government and that therefore he was holding an office of profit under the Government of India. This contention was repelled and this court pointed out the distinction between the holder of an office of profit under some other authority subject to the control of Government." (p. 319 320) "It has to be noted that in Maulana Abdul Shakur 's case the appointment of the appellant in that case was not made by the Government nor was he liable to be dismissed by the Government. The appointment was made by the administrator of a committee and he was liable to be dismissed by the same body." (p. 320) "It is clear from the aforesaid observations that in Maulana Abdul Shakur 's case the factors which were held to be decisive were (a) the power of the Government to appoint a person to an office of profit or to continue him in that office or revoke his appointment at their discretion, and (b) payment from out of Government revenues, though it was pointed out that payment from a source other than Government revenues was not always decisive factor. In the case before us the appointment of the appellant as also his continuance in office rests solely with the Government of India in respect of the two companies. His remuneration is also fixed by Government. We assume for the purpose of this appeal that they are Government companies within the meaning of 850 the Indian and 100% of the shares are held by the Government. We must also remember that in the performance of his functions the appellant is controlled by the Comptroller and Auditor General who is himself undoubtedly holder of an office of profit under the Government, though there are safeguards in the Constitution as to his tenure of office and removability therefrom." (p. 321) "Therefore if we look at the matter from the point of view of substance rather than of form, it appears to us that the appellant as the holder of an office of profit in the two Government Companies, the Durgapur Projects Ltd., and the Hindustan Steel Ltd., is really under the Government of India; he is appointed by the Government of India, he is removable from office by the Government of India, he perfoms functions for two Government companies under the control of the Comptroller and Auditor General who himself is appointed by the President and whose administrative powers may be controlled by rules made by the President." (p. 322) "In Ramappa vs Sangappa the question arose as to whether the holder of a village office who has a hereditary right to it is disqualified under article 191 of the Constitution, which is the counterpart of article 102, in the matter of membership of the State Legislature. It was observed therein. "The Government makes the appointment to the office though it may be that it has under the statute no option but to appoint the heir to the office if he has fulfilled the statutory requirements. The office is, therefore, held by reason of the appointment by the Government and not simply because of a hereditary right to it. The fact that the Government cannot refuse to make the appointment does not alter the situation. " There again, the decisive test was held to be the test of appointment. In view of these decisions we cannot accede to the submission of Mr. Chaudhury that the several factors which enter into the determination of this question the appointing authority, the authority vested with power to terminate the appointment, the authority which determines the remuneration, the source from which the remuneration is paid, and the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf must all co exist and each must show subordination to Government and that it must necessarily follow that if one of the elements is absent, the test of a person holding an office under the Government. Centre or State, is not satisfied. The cases we have referred to specifically point out that the circumstance that the source 851 from which the remuneration is paid is not from public revenue is a neutral factor not decisive of the question. As we have said earlier whether the stress will be laid on one factor or the other will depend on the facts of each case. However, we have no hesitation in saying that where the several elements, the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed, and the power to determine the question of remuneration are all present in a given case, then the officer in question holds the office under the authority so empowered." (p. 322 323) The core question that comes to the fore from the survey of the panorama of case law is as to when we can designate a person gainfully engaged in some work having a nexus with Government as the holder of an 'office of profit ' under Government in the setting of disqualification for candidature for municipal or like elections. The holding of an office denotes an office and connotes its holder and this duality implies the existence of the office as an independent continuity and an incumbent thereof for the nonce. Certain aspects appear to be elementary. For holding an office of profit under Government one need not be in the service of Government and there need be no relationship of master and servant (Gurugobinda supra). Similarly, we have to look at the substance, not the form. Thirdly, all the several factors stressed by this Court, as determinative of the holding of an 'office ' under Government, need not be conjointly present. The critical circumstances, not the total factors, prove decisive. A practical view not pedantic basket of tests, should guide in arriving at a sensible conclusion. In the present case, can we say that the post (forgetting the finer issue of office, as distinguished from post) is under the State Government ? The capitation fee is the remuneration the doctor is paid and this comes not from Government direct but from a complex of sources. But Gurugobinda and Gurushantappa(1) took the view that payment of remuneration not from public revenue is a neutral factor. Is the degree of control by Government decisive ? The power to appoint, direct and remove, to regulate and discipline, may be good indicia but not decisive, as pointed out in Gurushantappa. In our case, Government does have, partly direct and partly indirect, control but the conclusion is not inevitable because the doctor is put in the List not by Government directly but through a prescribed process where the Surgeon General has a presiding place. How proximate or remote is the subjection of the doctor to the control of Government to bring him under Government is the true issue. Gurushantappa has highlighted this facet of the question. Indirect control, though real, is insufficient, flows from the ratio of Abdul Shakur(2). The appellant, as elaborated by Ray J (as he then was) in the Calcutta case, was not a servant of government but a private practitioner, was not appointed directly by Government, but by an officer of government on the recommendation of a Committee, was paid not necessarily 852 out of Government revenue and the control over him in the scheme was vested not in Government but in an Administrative Medical Officer and Director whose position is not qua Government servant but creatures of statutory rules. The ultimate power to remove him did lie in Government even as he enjoyed the power to withdraw from the panel. The mode of medical treatment was beyond Government 's control and the clinic was a private one. In sum, it is fair to hold that the Insurance Medical Practitioner is not a free lancer but subject to duties, obligations, control and rates of remuneration under the overall supervision and powers of Government. While the verdict on being under the Government is a perilous exercise in Judicial brinkmanship, especially where the pros and cons are evenly balanced, the ruling in Kanta Kathuria which binds us and the recondite possibility of conflict of duty and interest for a Municipal President who is an Insurance Medical Practitioner under an arrangement with Government induce us to hold that though the line is fine, the appellant is not functioning under the Government in the plenary sense implied in electoral disqualification. After all, the means, i.e., the ban on candidature, must have a substantial link with the end viz., the possible misuse of position as Insurance Medical Practitioner in doing his duties as Municipal President. This question is interlaced, in the present context, with the concept of 'office of profit '. And the twin problems baffle easy solution since an apparent not real conflict of reasoning exists between Mahadeo (decided by a Bench of two Judges) and Kanta (by a Bench of five Judges). Of course Sikri, J. (as he then was) thought that Mahadeo 'in no way militates against the view ' which appealed to the majority in Kanta. Judicial technology sometimes distinguishes, sometimes demolishes earlier decisions; the art is fine and its use skilful. Both the cases dealt with advocates and we have referred to them in the earlier resume of precedents. Even so, a closer look will disclose why we follow the larger Bench (as we are bound to, even if there is a plain conflict between the two cases). Justice Rowlatt 's locus classicus in Great Western Ry. Co. (followed by this Court in many cases) helps us steer clear of logomachy about 'officio ' especially since the New English Dictionary fills four columns ! Rowlatt J. riveted attention on 'a subsisting, permanent, substantive position, which had an existence independent from the person who filled it ' which went on and was filled in succession by successive holders '. So, the first step is to enquire whether 'a permanent, substantive position, which had an existence independent from the person who filled it ' can be postulated in the case of an Insurance Medical Practitioner. By contrast is the post an ephemeral, ad hoc, provisional incumbency created, not independently but as a List or Panel clastic and expiring or expanding, distinguished from a thing that survives even when no person had been appointed for the time being. 'Thin partitions do their bounds divide ' we agree, but the distinction, though delicate, is real. An office of Insurance Medical Practitioner can be conjured up if it exists even where no doctor sits in the saddle and has duties attached to it qua office. We cannot equate it with the post of a peon or security gunmen who too has duties 853 to perform or a workshop where Government vehicles are repaired, or a milk vendor from an approved list who supplies milk to government hospitals. A panel of lawyers for Legal Aid to the Poor or a body of doctors enlisted for emergency service in an epidemic outbreak charged with responsibilities and paid by Government cannot be a pile of offices of profit. If this perspective be correct, Kanta and Mahadeo fit into a legal scheme. In the former, an ad hoc Assistant Government Pleader with duties and remuneration was held to fall outside 'office of profit '. It was a casual engagement, not exalted to a permanent position, occupied pro tempore by A or B. In Mahadeo, a permanent panel of lawyers 'maintained by the Railway Administration ' with special duties of a lasting nature constituted the offices of profit more like standing counsel. If, in our case, had there been a fixed panel of doctors with special duties and discipline, regardless of doctors being there to fill the positions or no, a different complexion could be discerned as in the case of specified number of Government pleaders, public prosecutors and the like, the offices surviving even if they remain unfilled. On the other hand, no rigid number of Insurance Medical Practitioners is required by the rules or otherwise. If an Insurance Medical Practitioner withdraws, there is no office sticking out even thereafter called office of Insurance Medical Practitioner. The critical test of independent existence of the position irrespective of the occupant is just not satisfied. Likewise, it is not possible to conclude that these doctors, though subject to responsibilities, eligible to remuneration and liable to removal all with a governmental savour cannot squarely fall under the expression 'Holding under Government '. Enveloped, though the Insurance Medical Officer is, by governmental influence, and working, though he is, within an official orbit, we are unable to hold that there is an 'office of profit ' held by him and that he is 'under government '. This conclusion avoids the evil of public duty conflicting with private interest and accommodation of more technical persons in semi voluntary social projects in an era of expanding cosmos of State activity. We hold, not without hesitation, that the appellant suffered no disqualification on the score of holding office of profit under government. Is it not a sad reflection on legislative heedlessness that, notwithstanding forensic controversy for a long period not a little legislative finger had been moved to clarify the law and preempt litigation. Judicial pessimism persuades us not to be hopeful even after this judgment. The Court and the Legislature have no medium of inter communication under our system. Its desirability was emphasised by Justice Cardozo, way back in 1921 (when he addressed the Association of the Bar of the City of New York and proposed an agency to mediate between the courts and the legislature). In characteristically beautiful prose he said: "The Courts are not helped as they could and ought to be in the adaptation of law to justice. The reason they are not helped in because there is no one whose business it is to give warning that help is needed. We must have a courier who will carry the tidings of distress. Today 854 courts and legislature work in separation and aloofness. The penalty is paid both in the wasted effort of production and in the lowered quality of the product. On the one side, the judges, left to fight against anachronism and injustice by the methods of judge made law, are distracted by the conflicting promptings of justice and logic, of consistency and mercy, and the output of their labors bears the tokens of the strain. On the other side, the legislature, informed only casually and intermittently of the needs and problems of the courts, without expert or responsible or disinterested or systematic advice as to the working of one rule or another, patches the fabric here and there, and mars often when it would mend. Legislature and courts move on in proud and silent isolation. Some agency must be found to mediate between them." In the light of the conclusion we have reached, the other two grounds raised may not strictly arise for consideration. However, since arguments have been addressed, we had better briefly express our view. It was argued by Shri Bhatt that when the ground for invalidation of the election is a disqualification for membership, the proper procedure is to invoke section 44 and not to resort to an election petition under section 21. On a close study of the two provisions in the light of the ruling of this Court in , we are satisfied that an election petition under section 21 is all inclusive and not under inclusive. What we mean is that even if the invalidation of the election is on the score of the disqualification under section 16 it is appropriate to raise that point under section 21 which is comprehensive. All grounds on the strength of which an election can be demolished can be raised in a proceeding under section 21. The language of the provision is wide enough. Maybe that supervening disqualifications after a person is elected may attract section 44, but we are unable to agree that the latter provision cuts back on the width of the specific section devoted to calling in question an election of a councillor (including the President). We agree in this regard with the Full Bench decision in Dattatraya(1). Likewise is the fate of the feeble argument that because there is a provision for challenging the nomination of a candidate and for appealing against the decision of the returning officer regarding that objection, it is not permissible to urge a ground then available later before the Election Tribunal. In the present case there was no decision by the Returning Officer about the nomination paper, and so we are not confronted by the appellate adjudication by the District Judge about the validity or otherwise of the nomination and its resuscitation before the Election Tribunal. In this view we do not accede to the contention of the appellant based on section 44 or rule 15. The third plea, not aimed at salvaging the poll success of the appellant but in unseating the respondent who has been declared elected by the Tribunal also has no merit from a legal angle although it is unfortunate that in a situation where there are only two candidates 855 and the election of one is set aside by the Tribunal, the other automatically gets returned, without resort to polls. Anyway, in the present case, if the appellant 's election were invalid, there is only a single survivor left in the field, i.e., the first respondent. Naturally, in any constituency where there is only one valid nomination, that nominee gets elected for want of contest. To conclude, since the appellant is not disqualified, the appeals are bound to be allowed and we do so, but in the circumstances, without costs. In the connected appeal C.A. No. 1270 of 1975 the consequence is to conform to what we have held above. Therefore, that appeal is also allowed. The parties will bear their respective costs through out. P.B.R. Appeals allowed.

To provide medical facilities to the workers in factories a statutory body called the Employees State Insurance Corporation has been established by an Act of Parliament. Under the Act financial resources of the Corporation come from contributions and other monies specified in the Act and an Employees State Insurance Fund had been created. The State Government, to which an obligation to provide medical treatment for insured persons had been entrusted, may employ private medical practitioners who run clinics as doctors under the scheme. For inclusion of a name in the medical list of insurance medical practitioners a doctor has to apply to the Administrative Medical Officer. His application is considered by an allocation committee which recommends his name to the Director, Employees State Insurance Scheme and ultimately on approval by the Surgeon General, his name is included in the medical list. The doctor whose name is included in the medical list has to abide by the duties and conditions prescribed, is under the control of the Medical Services Committee and may even be removed or resign from the panel. The appellant, who was a private medical practitioner and whose name was included in the panel of doctors maintained by the Corporation and the respondent, were contestants in an election for the presidentship of a municipal council. At the time of scrutiny of the nomination papers no objection was raised to the appellant 's nomination and in the election that ensued the appellant was declared elected. The respondent challenged the election on the ground that the appellant was disqualified under section 16(1) (g) of the Maharashtra Municipalities Act, 1965 which debars a person who holds an office of profit under Government from becoming a councillor, because on the date of nomination he was holding an office of profit under the Government by reason of his being a panel doctor under the Employees State Insurance Scheme. Between the date of nomination and the date of election, however, the appellant had resigned from the scheme. The election tribunal allowed the respondent 's petition and declared the appellants ' election void. At the same time the respondent was declared as the President. On appeal it was contended that a doctor on the medical list prepared by the Surgeon General of the State does not hold an office of profit within the meaning of section 16(1)(g) of the Act. Allowing the appeal ^ HELD: (1) The legislative end for disqualifying holders of office of profit under Government from seeking elective offices is to avoid the conflict between duty and interest, to cut out the misuse of official position, to advance private benefit and to avert the likelihood of influencing Government to promote personal advantage. At the same time the Constitution mandates the State to undertake multiform public welfare and socio economic activities involving technical persons, welfare workers and lay people on a massive scale so that participatory government may prove a progressive reality. Therefore experts may have to be invited into local bodies, legislatures and the like political and administrative organs based on elections. [842 E G] (2),a) The appellant suffered no disqualification on the score of holding an office of profit under Government. The legal provisions under the Act and the rules make of an insurance medical practitioner a category different from one who runs a private clinic and enters into contractual terms for treatment of patients sent by Government, nor is he a full fledged government servant. 833 He is a tertium quid. [842 A] (b) The doctor under the scheme has obligations of a statutory savour. He is appointed on his application which is processed by the appropriate body, removed if found wanting obliged to discharge duties, make some reports and subject himself to certain discipline while on the panel. [844 F G] (3) (a) For holding an office of profit under Government one need not be in the service of Government and there need be no relationship of master and servant. One has to look at the substance, not the form. [851 D E] Gurugobinda ; referred to. (b) In the present case the capitation fee is the remuneration the doctor is paid and this came not from Government direct but from a complex of sources. The power to appoint, direct and remove, to regulate and discipline, may be good indicia but not decisive. Government had partly direct and partly indirect control but the conclusion is not inevitable because the doctor is put in the list not by Government directly but through a prescribed process where the Surgeon General has a presiding place. How proximate or remote is the subjection of the doctor to the control of the Government to bring him under Government is the true issue. The appellant was not a servant of Government, but a private practitioner, was not appointed directly by Government but by an officer of Government on the recommendation of a Committee, was paid not necessarily out of Government revenue and the control over him in the scheme was vested not in Government but in an administrative medical officer and director whose position is not qua Government servant but creatures of statutory rules. The ultimate power to remove him did lie in Government even as he enjoyed the power to withdraw from the panel. The mode of medical treatment was beyond Government 's control and the clinic was a private one. The insurance medical practitioner is not a free lancer but subject to duties obligations, control and rates of remuneration under the overall supervision and powers of Government. [851 F G; 852 A C] Deorao vs Keshav, AIR 1958 Bom. 314 p. 318, para 12 and Manipopal vs State AIR 1970 Cal. 1, 5 para 20 referred to. (c) The appellant is not functioning under the Government in the plenary sense implied in electoral disqualification. The ban on candidature must have a substantial link with the end viz: the possible misuse of position as Insurance Medical Practitioner in doing his duties as Municipal President. [852 D] (4) (a) The first step is to enquire whether a permanent, substantive position which had an existence independent from the person who filled it can be postulated in the case of insurance medical practitioner or is the post an ephemeral, ad hoc, provisional incumbency created, not independently but as a List or Panel distinguished from a thing that survives. The distinction, though delicate, is real. An office of insurance medical practitioner can be conjured up if it exists even where no doctor sits in the saddle and has duties attached to it qua office. The post of insurance medical practitioner cannot be equated with the post of a peon or a security gunman who too has duties to perform. Viewed from this point Kanta and Mahadeo are reconcilable in the former an ad hoc Assistant Government Pleader with duties and remuneration was held to fall outside office of profit in the latter a permanent panel of lawyers maintained by the Railway Administration with special duties of a lasting nature constituted an office of profit. [852 G H; 853 A] (b) Had there been a fixed panel of doctors with special duties and discipline, a different complexion could be discerned. No rigid number of insurance medical practitioners is required by the rules or otherwise. If an insurance medical practitioner withdraws there was no office sticking out even thereafter called office of Insurance Medical Practitioner. The critical test of independent existence of the position irrespective of the occupant is just not satisfied. Likewise it is not possible to conclude that these doctors though subject to responsibilities, eligible to remuneration and liable to removal cannot squarely fall under the expression holding under Government. Enveloped though the 834 insurance medical officer is by governmental influence and working within the official orbit it is not possible to hold that there is an office of profit held by him and that he is under Government. [853 C E] [Obiter: On a close study of sections 21 and 44 and in the light of the ruling of this court in the election petition under section 21 is all inclusive and not under inclusive, even if the invalidation of the election is on the score of the disqualification under section 16 it is appropriate to raise that point under section 21 which is comprehensive. All grounds on the strength of which an election can be demolished can be raised in a proceeding under section 21. The language of the provision is wide enough. It is not correct to say that section 44 cuts back on the width of the specific section devoted to calling in question an election of a councillor (including the President). [854 D F] If the appellant 's election were invalid there was only a single survivor left in the field. Naturally in any constituency where there was only one valid nomination that nominee gets elected for want of a contest.]

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Civil Appeal No. 914 of 1968. (From the judgment and decree dated the 9th April, 1962, of the Allahabad High Court in first Appeal No. 283 of 1950). Naunit Lal, K. G. Bhargava and Miss Lalita Kohli for the appellant. G. section Pathak, D. P. Singh and M. G. Goswami for respondents nos. 1(a) to 1(f). The Judgment of the Court was delivered by GOSWAMI, J. This appeal by certificate from the judgment and decree of the Allahabad High Court raises an important question with regard to the construction of a will. The respondent Gokul (whose heirs have been impleaded after his death) was the original plaintiff in a suit for declaration that he was the absolute owner under a will of the property in suit and for possession of certain of them. He also claimed certain movable properties with which we are not concerned in this appeal. The property in suit was originally in exclusive ownership and possession of Bhola Chaubey, the testator. Bhola Chaubey, was governed by the Mitakshra School of Hindu Law. He belonged to the class of priests and was an old man of 67 years at the time when he executed the will on September 21, 1916. He had then a legally wedded wife, Smt, Jarian, approaching nearly her forty fifth year and they had no issue in wedlock. The only person whom the testator appeared to have almost treated like a son was the respondent Gokul, doubly related to the testator, being his sister 's son and also his wife 's brother 's son. Gokul had been with him since childhood and the testator got him married. Gokul in return had been serving the testator to his satisfaction and was in enjoyment of his full confidence and affection till the testator 's death in 1918. Gokul was then aged about 23 years. It was directed in the will that Smt. Jarian would get the obsequies and other religious rites of the testator performed by Gokul. After the death of the testator Smt. Jarian and Gokul continued to live in cordiality for nearly 18 years. Feelings, however, got 927 estranged some time after that and there was even litigation, criminal and civil, between Smt. Jarian and Gokul. It appears Smt. Jarian, who died in March, 1948, had executed a gift deed and a will in respect of certain properties in suit in favour of the appellant, Navneet Lal. All this led to the institution of the present suit out of which this appeal has arisen. The case of the appellant was that Bhola Chaubey had given an absolute estate under the will to his wife, Smt. Jarian, and she was, therefore, entitled to deal with the property as she liked and hence the deed of gift and the will in favour of the appellant were perfectly valid. According to the appellant the respondent had no right to file the suit basing upon the will executed by Bhola Chaubey. According to the respondent the will conferred on Smt. Jarian only a life estate during her life and after her death an absolute estate of the testator 's entire property on the respondent. The Civil Judge, Mathura, decreed the respondent 's suit except with reference to the movable property mentioned in Schedule O to the plaint as well as in respect of certain muafi zamindari property in Schedule A to the plaint. The appellant appealed to the High Court at Allahabad and when the matter came up for disposal by a Division Bench of that court, there was a difference of opinion between the Judges. Srivastava, J. held that the testator had no intention of conferring a limited life estate only on his wife and that she acquired an absolute estate by virtue of the will. On the other hand, B. Dayal, J. took a contrary view holding that Bhola Chaubey intended to give merely a life estate to Smt. Jarian and to make Gokul full owner of the property after her death. The appeal was then set down for hearing before a third Judge, (Dhawan, J.) who agreed with B. Dayal, J. resulting in dismissal of the appeal. We are concerned in this appeal only with the construction of the will executed in the year 1916. From the earlier decisions of this Court the following principles, inter alia, are well established: (1) In construing a document whether in English or in vernacular the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances are to be considered; but that is only for the purpose of finding out the intended meaning of the words which have actually been employed. [Ram Gopal vs Nand Lal and others(1)]. (2) In construing the language of the will the court is entitled to put itself into the testator 's armchair [Venkata Narasimha vs Parthasarathy(2)] and is bound to bear in mind also other matters than merely the words used. It must consider the surrounding circumstances, the position of the testator, his family 928 relationship, the probability that he would use words in a particular sense. 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. [Venkata Narasimha 's case supra and Gnanambal Ammal vs T. Raju Ayyar and Others(1)]. (3) The true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the will as a whole with all its provisions and ignoring none of them as redundant or contradictory [Raj Bajrang Bahadur Singh vs Thakurain Bakhtraj Kuer(2)]. (4) The court must accept, if possible, such construction as would give to every expression some effect rather than that which would render any of the expression inoperative. The court will look at the circumstances under which the testator makes his will, such as the state of his property, of his family and the like. Where apparently conflicting dispositions can be reconciled by giving full effect to every word used in a document, such a construction should be accepted instead of a construction which would have the effect of cutting down the clear meaning of the words used by the testator. Further, where one of the two reasonable constructions would lead to intestacy, that should be discarded in favour of a construction which does not create any such hiatus. [Paerey Lal vs Rameshwar Das(3)]. (5) It is one of the cardinal principles of construction of wills that to the extent that it is legally possible effect should be given to every disposition contained in the will unless the law prevents effect being given to it, Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a Court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the will. [Ramachandra Shenoy and Another vs Mrs. Hilda Brite and Other(4)] Bearing in mind the above principles we may now look at the will in question as a whole. This will is written in the urdu language. An official translation is placed on the record. From the contents of the will we find the background and the exact position of relationship of the parties set out earlier. Gokul was residing with Bhola Chaubey 929 and Smt. Jarian. It may bear repetition that Gokul was held in great love and affection by the testator who was keenly anxious for the welfare both of his wife and of Gokul. There is yet another feature which is prominent in the will. The testator was apprehensive of his only brother, Ram Raj and his nephew, Kishnu, who "might trouble his wife and Gokul after his death." From such of the aforesaid prefatory recitals as appear in the will, two objects stand out, namely, that he was deeply interested in the enjoyment of his property movable and immovable after his death by his wife and after her death by Gokul. The second object was that he intended that his property should not fall into the hands of his brother and nephew who had been separate from him since long after some arbitration and even bore ill will against him and his wife. After the above revelation of his mental attitude in the will there follows the following recitals: "So long as I, the executant, am alive, I myself shall remain the owner in possession (malik wa qabiz) of my entire movable and immovable property and of the income from Birt Jijmani. After my death Mst. Jarian, the wedded wife of me, the executant, shall be the owner (malik) of my entire estate, movable and immovable, and of the income from Birt Jijmani and shall have all the proprietary powers (aur usko jamiya akhtiyarat malikana hasil honge). After the death of Mst. Jarian, Gokul aforesaid shall be the owner of the entire estate left by me (malik kamil jaidad matruka meri ka hoga), and he shall have all the proprietary powers and the power of making transfer of all sorts (aur usko jamiya akhtiyarat malikana wa inteqalat har qism hasil honge). If per chance, Mst. Jarian dies in my life time, then Gokul aforesaid will be the absolute owner (malik kamil) of the estate left by me (matrura meri) and he shall have power of making all sort of transfers (aur usko har quism ke akhtiyarat inteqalat hasil honge). Gokul aforesaid should go to Jijmana and should continue to give to Mst. Jarian during her life time the charitable gifts (daan dakshina) which he brings from there. After her death he might continue to be benefited thereby. Jarian should get my obsequies, Barsi (annual death ceremony), Chhamchhi etc. performed through Gokul aforesaid according to the custom prevalent in the brotherhood. It will be the duty of Gokul aforesaid to obey and serve my wife Mst. Jarian. It will be necessary for Mst. Jarian to keep my heir (waris) Gokul aforesaid and to act in consultation with him. At present I have the following immovable properties and the Birt Jijmani. If in addition to these I purchase or get any property the aforesaid persons shall be the owners of that also according to. the aforesaid conditions". Mr. Naunit Lal, on behalf of the appellant, submits that since the testator stated in the will that after his death Smt. Jarian "shall be the 930 owner (malik) of my entire estate. and shall have all the proprietary powers (aur usko jamiya akhtiyarat malikana hasil honge)", it is absolutely clear that he intended to confer upon his wife an absolute estate to his entire property. Mr. G. section Pathak, on behalf of the respondents, contests the proposition. In support of his contention, Mr. Naunit Lal draws our attention to several decisions wherein the word `malik ' has been noticed and explained. The term `malik ' when used in a will or other document as descriptive of the position which a devisee or donee is intended to hold, has been held apt to describe an owner possessed of full proprietary rights, including a full right of alienation, unless there is something in the context or in the surrounding circumstances to indicate that such full proprietary rights were not intended to be conferred, but the meaning of every word in an Indian will must always depend upon the setting in which it is placed, the subject to which it is related, and the locality of the testator from which it may receive its true shade of meaning. [Sasiman Chowdhurain and others vs Shib Narayan Chowdhury and others (1) ]. We find observations to the same effect in Musammat surajmani and others vs Rabi Nath ojha and another(2). It is, approved therein that in order to cut down the full proprietary rights that the word malik imports something must be found in the context to qualify it. Similarly counsel has referred to the expression `malik mustakil ' which was noticed in a decision of this Court in Krishna Biharilal vs Gulabchand and Ors.(3), and this Court observed at page 31 as follows: "The meaning of the expression `malik mustakil ' an urdu word, has come for consideration before this Court in some cases. In Dhyan Singh and anr. vs Jugal Kishore & Anr.(4), this Court ruled that the words `malik mustakil ' were strong, clear and unambiguous and if those words are not qualified by other words and circumstances appearing in the same document, the courts must hold that the estate given is an absolute one We are, however, not required to consider the words `malik mustakil ' in this case. But it is clear that even those words can be qualified by other words and circumstances appearing in the same document. It is, therefore, abundantly clear that the intention of the testator will have to be gathered from all the relevant and material contents in the entire will made in the situation in which the testator was placed in life in the back ground of his property, his inclinations, wishes, desires and attitudes as can be clearly and unambiguously found either from the recitals from the instrument or from absolutely undoubted contemporaneous legally admissible evidence. 931 Reading the present will as a whole and if every disposition has to be rationally harmonised, we find that the testator intended a life estate for his wife so long as she lived. This is consistent with his description of Gokul as "my heir (waris)" after his death. It is further consistent with the recital that "if per chance, Mst. Jarian dies in my life time, then Gokul aforesaid will be the absolute owner (malik kamil) of the estate left by me (matruka meri) and he shall have power of making all sorts of transfers (aur usko har quism ke akhtiyarat inteqalat hasil honge)". In obvious contrast even though Smt. Jarian was made the malik of his entire estate after his death "having all the proprietary rights" nothing is stated about her "power of making all sorts of transfers" which power is expressly mentioned as belonging to him and also exclusively conferred upon Gokul after Smt. Jarian 's death. While describing his own "proprietary powers" the testator made reference to his "power of making transfers of all sorts". This power of making transfer which was prominent in the mind of the testator at the time of execution of the will is conspicuous by total omission in relation to Smt. Jarian 's enjoyment of the property. We have to give due importance to the lexicon in the will and we find that the testator has made a definite distinction between mere ownership of property and ownership of the same coupled with powers of transfer "in every way". Ordinarily, however, without such clear evidence from the recitals in the will itself it may not be possible to hold that ownership of property, which is devised, without any thing more, would not connote absolute ownership of the same with the power of alienation. There is another significant feature in the recitals, when reference is made in the will to acquisition of future property. Says the testator "if in addition to these I purchase or get any property the aforesaid persons shall be the owners of that also according to the aforesaid conditions". The testator thus unerringly conceives of any future property being owned by both, by the widow during her life time and by Gokul after her death in the same manner as the property that had already been bequeathed. The expression "according to the aforesaid conditions" is, therefore, very significant in the context. We also find that during her life time Gokul would be collecting "daan dakshina" of the jijmani to Smt. Jarian and after her death Gokul would enjoy the same. There is no contemplation of any possibility to deprive Gokul of the enjoyment of the property in any event. All the above features run counter to the theory of an absolute estate in favour of Smt. Jarian. There is still another clinching factor. It is clear from the will that the testator had misunderstanding and quarrels with his brother regarding ancestral property and the matter had to be settled by arbitration leading to partition and separate enjoyment of property as far back as 1889. It also appears from the recitals in the will that he had grave apprehension that after his death his only reversioners, his brother and nephew, "might trouble and harass my wife Mst. Jarian and my sister 's son Gokul. " One thing was, therefore, clear that the testator never intended that his property should pass to his brother and nephew. This intention of the testator would 932 best be achieved by holding that there was a devise of a life estate to his wife and an absolute estate thereafter to Gokul indicating a different line of inheritance in the will. On the other hand, if any absolute estate would have been conferred on the widow, then on her death the property would have passed on by inheritance to her husband 's heirs who were none else than the brother and the nephew of the testator. There was no other heir of Mst. Jarian to inherit the property after her death. A Plenitude of absolute estate in favour of the wife will make the absolute bequest to Gokul void in law. No such repugnant interpretation detrimental to the interest of Gokul can be made in the light of the entire tenor of the instrument. Having regard to the context and the circumstances apparent from the will, we are clearly of opinion that the testator intended to bequeath in favour of his widow only a life estate and after her death an absolute estate to Gokul. That being the position the will by Smt. Jarian in favour of the appellant fails and her gift in favour of the appellant also similarly fails on her death. The respondent 's suit is rightly decreed by the courts below. The appeal fails and is dismissed. We will, however, make no order as to costs. S.B. Appeal dismissed.

One 'BC ', governed by the Mitakshra School of Hindu Law, being issueless and apprehending the claim to his property after his death as reversioners by his only brother 'RR ' and his nephew 'K ' who were inimical to him since the partition of their ancestral property in 1899, and possible harassment of his wife and 'G ', the respondent, executed a Will on September 21, 1916, in the Urdu script. The respondent 'G ' being the son of the testator 's sister married to testator 's wife 's brother was doubly related. As per the Will, 'G ' was to perform the obsequies and other annual death ceremonies etc. , being his 'waris ' and the "Malik Kamil ' absolute owner" having all the proprietary powers and the power of making transfers of all sorts", while his wife was to be in possession and enjoyment of the property during her life time. From the date of death of the testator in 1918 for about 18 years the widow and 'G ' lived in cordiality but got estranged later due to estrangement of feelings resulting in several civil and criminal litigation between them. The widow died in 1948 executing a gift deed and a Will in respect of certain properties in favour of the appellant 'NL '. 'G ' filed a civil suit claiming his rights under the Will dated 21 September, 1916, and the appellant defendant contested it on pleas that the widow of 'BC ' having an absolute right over the property under the said Will validly made the gift deed and the Will of 1948 in his favour and that the respondent plaintiff had no locus standi to file the suit. The suit was decreed. On appeal to the Allahabad High Court, as there was a difference of opinion between the Judges of the Division Bench on the nature of the widow 's estate, one opining as the Will conferring a "limited estate" and the other opining as conferring an "absolute estate" the appeal was set down to a third Judge who agreed with the view that the Will conferred only a "limited estate" upon the widow and dismissed the appeal. Confirming the decree of the courts below and dismissing the appeal by certificate, the Court, ^ HELD : (1) The following are the established principles for construing the language of the Will. (a) In construing a document whether in English or in vernacular the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances being considered to find out the intended meaning of such words employed therein. [927F G] (b) In construing the language of the Will the court is entitled to put itself into the testator 's armchair and is bound to bear in mind also other matters than merely the words used like the surrounding circumstances, the position of the testator, his family relationship, the probability that he would use words in a particular sense all 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. [927G H, 928A] (c) The true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the Will as a whole with all its provisions and ignoring none of them as redundant or contradictory. [928B] (d) The court must accept, if possible, such construction as would give to every expression some effect rather than that which would render any of 925 the expression inoperative. The court will look at the circumstances under which the testator makes his Will, such as the state of his property, of his family and the like. Where apparently conflicting dispositions can be reconciled by giving full effect to every word used in a document, such a construction should be accepted instead of a construction which would have the effect of cutting down the clear meaning of the words used by the testator. Further, where one of the two reasonable constructions would lead to intestacy, that should be discarded in favour of a construction which does not create and such hiatus. [928C E] (e) It is one of the cardinal principles of construction of Wills that to the extent that it is legally possible effect should be given to every disposition contained in the Will unless the law prevents effect being given to it. Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the Will. [928E G] Ram Gopal vs Nand Lal and others ; Venkata Narasimha vs Parthasarathy, 42 Indian Appeals 51/72; Gnanambal Ammal vs T. Raju Ayyar and others, ; Raj Bajrang Bahadur Singh vs Thakurain Bakhtraj Kuer, ; Pearey Lal vs Rameshwar Das [1963] Supp. SCR 834/839/842 and Ramachandra Shenoy and Anr. vs Mrs. Hilda Brite and others. , applied. (ii) The term "malik" when used in a Will or other document as descriptive of the position which a devisee or donee is intended to hold, has been held apt to describe an owner possessed of full proprietary rights, including a full right of alienation, unless there is something in the context or in the surrounding circumstances to indicate that such full proprietary rights were not intended to be conferred, but the meaning of every word in an Indian Will must always depend upon the setting in which it is placed, the subject to which it is related and the locality of the testator from which it may receive its true shade of meaning. The intention of the testator will have to be gathered from all the relevant and material contents in the entire Will made in situation in which the testator was placed in life in the background of his property, his inclinations, wishes, desires and attitudes as can be clearly and unambiguously found either from the recitals from the instrument or from absolutely undoubted contemporaneous legally admissible evidence. Hence, even the words "malik muakkil" can be qualified by other words and circumstances appearing in the document. [930 B C & G H] Sasiman Chowdhurain and others vs Shib Narayan Chowdhury and others, 49 Indian Appeals 25/35; Musammat Surajmani and others vs Rabi Nath Ojha and another, 35 Indian Appeals 17; Krishna Biharilal vs Gulabchand and others, (1971) Supp. SCR 27 and Dhyan Singh and anr. vs Jugal Kishore and anr. , [1952] SCR 478, discussed. (iii) In the instant case, the testator intended a life estate for his wife so long as she lived as is clear from the reading of the present Will as a whole. This is consistent with his description of Gokul as "my heir (waris)" after his death. It is further consistent with the recital that "if per chance, Mrs. Jarian dies in my life time, then Gokul, aforesaid will be the absolute owner (malik kamil) of the estate left by me (matruka meri) and he shall have power of making all sorts of transfers (aurusko har qism ke aktiyarat inteqalat hasil honge)". In obvious contrast even though Smt. Jarian was made the malik of his entire estate after his death "having all the proprietary rights" nothing is stated about her "power of making all sorts of transfers" which power is expressly mentioned as belonging to him and also exclusively conferred upon Gokul after Smt. Jarian 's death. While describing his own "proprietary powers" the testator made reference to his "power of making transfers of all sorts". This power of making transfers which was prominent in the mind of the testator at the time of execution of the Will is conspicuous by total omission in relation to Smt. Jarian 's enjoyment of the property. The testator has made the distinction between mere ownership of property and ownership of the same coupled with a transfer in every way. [931 A D] 926 Further, from the recitals in the Will about his only reversioners viz., his brother and nephew "might trouble and harass my wife Mst. Jarian and my sister 's son Gokul", it is clear that the testator never intended that his property should pass to his brother and nephew. This intention would be achieved by holding that there was a devise of a life estate to his wife and an absolute estate thereafter to Gokul indicating a different line of inheritance in the Will on the other hand, if any absolute estate would have been conferred on the widow, then on her death the property would have passed on by inheritance to her husband 's heirs who were none else than the brother and the nephew of the testator. There was no other heir of Mst. Jarian to inherit the property after her death. [931 G H, 932 A B] A plenitude of absolute estate in favour of the wife will make the absolute bequest to Gokul void in law. No such repugnant interpretation detrimental to the interest of Gokul can be made in the light of the entire tenor of the instrument. The testator intended to bequeath in favour of his widow only a life estate and after her death an absolute estate to Gokul. [932B C]

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Civil Appeal No. 128 of 1971. Appeal by special leave from the judgment and order dated the 19th September, 1969 of the Orissa High Court in O.J.C. No. 1759 of 1969. Govind Das, for the appellants. Ex parte for the respondents. The Judgment of the Court was delivered by JASWANT SINGH, J. This appeal by special leave is directed against the judgment and order dated September 19, 1969, of the Orissa High Court in o. J.C. No. 1759 of 1968 allowing the writ petition filed by respondents 1 to 3 herein and quashing the orders. dated May 2, 1967, July 22, 1968, and December S, 1968, passed under sections 27 and 68 of the Orissa Hindu Religious Endowment Act 1951 (Orissa Act II of 1952) hereinafter referred to as 'the Act;. Briefly stated, the facts giving rise to this appeal are: on June 23, 1966, about 40 villagers of village Bantala in Nayagarh Sub Division of Puri District filed an application before the Assistant Commissioner of Endowments Orissa, for appointment of nonhereditary trustees under section 27 of the Act of Shiva Temple known as "Sri Lokenatheshwar Mahadev" situate in the said village alleging that villagers from 11 villages worshipped and offered 'bhog ' to '`Lokenatheshwar Deb ' installed in the temple which is more than hundred years old and possessed about 24 acres of land endowed by The ancestors of the villagers; that a new temple in place of the old one which was in a dilapidated condition had been constructed with the labour and money contributed by the villagers. that marfatdars, respondents l to 3 herein, were mismanaging the affairs of the institution and were not regularly performing the seva and puja etc. of the said deity. On July 31, 1966. the said respondents were directed to submit returns as required under section 17 of the Act. On August 4, 1966, the Inspector of Endowments was directed to make an enquiry and to submit a report regarding the allegations made by the said villagers; Pursuant to the said directions, the Inspector submitted his report on September 6, 1966, stating inter alia that the. 437 temple was a public temple which had been recently constructed by the villagers and marfatdars; that the villagers of Bantala an marfatdars came from one family and the persons managing the institution did not receive notice from him nor showed him the accounts and suggesting the names of five persons for appointment as trustees. On November 4, 1966, a proclamation inviting objections regarding the suitability of persons suggested by the Inspector for appointment as non hereditary trustees was issued to which the aforesaid respondents objected claiming that the institution was a private one and even if it be held to be a public religious institution, they were the hereditary trustees. After making a summary enquiry in the presence of the villagers including respondents 1 to 3, the Additional Assistant Commissioner of Religious Endowments passed an order on May 2. 1967, holding C that the institution was a public one and appointing five non hereditary trustees under section 27 of the Act. The Additional Assistant Endowments Commissioner did not, however, record any finding whether the respondents 1 to 3 were hereditary trustees or not. Aggrieved by this order, respondents 1 to 3 preferred on May 15. 1967 a revision application under section 9 of the Act before the 1 Commissioner of Hindu Religious Endowments, Orissa, Bhubaneswar. On May 27, 1967, the appointed trustees filed a petition under section 68 of the Act for obtaining possession of the institution and its endowments from respondents 1 to 3. On November 10. 1967, respondents 1 to 3 filed a petition under section 41 of the Act claiming that the institution was a private one. It was alternatively claimed by the said respondents that even if the temple be held to be a public one they could not but be held to be hereditary trustees. On July 22, 1968, an order directing delivery of possession of the institution and its endowments to the appointed trustees was passed under section 68 of the Act by the Assistant Commissioner of Endowments, Orissa. On December S, 1968, the aforesaid revision application filed by respondents 1 to 3 was dismissed by the Commissioner of Hindu Religious Endowments and the Inspector of Endowments was directed to execute the writ of delivery of possession. On December 26, 1968, the Inspector of Endowments made a report saying that the writ had been executed and possession as directed had been delivered to the appointed trustees on December 11, 1968. On December 23, 1968 respondents 1 to 3 filed a petition under Articles 226 and 227 of the Constitution, being O.J.C. No. 1759 of 1968, before the High Court of Judicature, Orissa, challenging the aforesaid orders dated May 2, 1967, July 22, 1968 and December S, 1968 and praying that the said orders be quashed. on the said writ petition, it was contended by respondents 1 to 3 that the aforesaid orders dated May 2, 1967 passed by the Additional Assistant Endowments Commissioner appointing non hereditary trustees of the institution under section 27 of the Act and order dated July 22. 1968 passed by the Assistant Endowments Commissioner directing delivery of possession of the institution and its properties to the non hereditary 438 trustees under section 68 of the Act encroached upon the property rights of the respondents and were without jurisdiction and void having been passed without determining under section 41 of the Act as to whether the institution was a private or a public one and without further determining as to whether the respondents were hereditary trustees. The said writ petition was contested on behalf of the appellants on the grounds that the scheme of the Act showed that provisions of section 27 of the Act were independent; that the exercise of` the power under section 27 was subject to final decision m appropriate proceedings under section 41 of the Act and that it was erroneous to contend that the provisions of section 27 could not be invoked without prior determination of the aforesaid questions under section 41 of the Act. lt was, however, conceded on behalf of the appellants at the hearing of the writ petition before the High Court that the impugned orders could not be supported and were liable to be quashed as even a summary enquiry had not been made before appointment of non hereditary trustees under section 27 of the Act. It was also conceded on behalf of the appellants that as an order under section 27 encroached upon the property rights of respondents 1 to 3 and even a summary 1) enquiry is required to be made by observing the principles of natural justice, the said respondents should have been given a full opportunity to substantiate their case to the effect that the institution and its properties were private and they were hereditary trustees. It was, however, strongly contested on behalf of the appellants that the stand of respondents 1 to 3 that the orders dated May 2, 1967 and July 22, 1968 could not be passed without prior determination of the aforesaid questions under section 41 of the Act was not correct. After examining the relevant provisions of the Act and the Rules and taking into account the , fact that respondents 1 to 3 had not been afforded an opportunity to substantiate their case and no evidence had r been taken by the Assistant Endowments Commissioner which might have prima facie gone to show that the institution was a public one and the said respondents were not hereditary trustees, the High Court held that the concession made on behalf of the appellants herein was well bounded; that it would be reasonable to confine the application of section 27 only to cases where in respect of the disputed institution, there had been a prior determination of the controversial rights mentioned in section 41 and that before the Assistant Endowments Commissioner could proceed under section 27 of the Act to appoint nonhereditary trustees in respect of the religious institution, it was necessary for him to come to a finding that the institution was a public one and there were no hereditary trustees thereof in existence and in order to come to such a finding, he should have completed an enquiry under section 41 which coupled with section 44 provided for a judicial determination of these very questions. The High Court further held that since marfatdari right was itself property and the Act had no application to private endowments and respondents 1 to 3 were admittedly in possession of the institution and its properties, they could not be divested of the same without a finding that the institution was public and they were not hereditary. trustees, 439 It would be advantageous at this stage to reproduce the ultimate conclusions arrived at by the High Court: "Before the Assistant Endowments Commissioner proceeds under section 27 to appoint non hereditary trustees in respect of a religious institution, he must first come to a finding that there are no hereditary trustees already in existence. In order to come to such a finding he must first make an enquiry under section 41, which taken alongwith section 44, provides for judicial determination of this very question, involving the property rights of a citizen, by the Assistant Commissioner himself, after notice to the parties and taking evidence. If no determination of this question is made, it will be open to the Assistant Commissioner to start an enquiry under section 41 suo motu. It is only after the completion of the enquiry under section 41 that he can come to a finding about the existence or otherwise of hereditary trustees and only thereafter he can proceed to appoint non hereditary trustees. It is also open to him, in the course of the proceeding under section 41, to pass interim orders for preserving the institution and its properties and also for safe guarding the rights of the aggrieved party pending final determination of the controversy. Any order passed straightaway under section 27 which has the effect of dispossessing the hereditary trustees of their property without first resorting to an enquiry under section 41, would be illegal and contrary to the scheme of the Act. " At the hearing of this appeal, counsel for the appellants has re iterated the stand taken by his clients in the High Court. The short question that arises for determination in this case is whether the Assistant Endowments Commissioner had jurisdiction to proceed under section 27 of the Act without a prior decision of the disputes about the nature of the institution and the existence or other wise of the hereditary trustees. For a proper determination of the aforesaid question. it is necessary to refer to a few provisions of the Act and the rules made there under in so far as they are relevant for the purpose of this appeal. Section 1 (2) makes the Act applicable to all Hindu Public religious institutions and endowments. It excludes from its purview Hindu private religious institutions and endowments. Section 3 (xiii) of the Act defines 'Religious Institution ' as under: "3(xiii). 'religious institution ' means a math, a temple and endowments attached thereto or a specific endowment and includes an institution under direct management of the State Government . A 'religious endowment ' is defined in section 3(xii) as follows: "3(xii). 'religious endowment ' or endowment ' means all property belonging to or given or endowed for 440 the support of maths or temples or given or endowed for the performance of any service or charity connected there with or of any other religious charity, and includes the institution concerned and the permises thereof and also all properties used for the purposes or benefit of the institution and includes all properties acquired from the income of the endowed property." . . . . . . Section 27 of the Act provides as under : "27 (1) . The Assistant Commissioner shall, in cases where there is no hereditary trustee, appoint non hereditary trustees in respect of each religious institution other than maths and specific endowments attached thereto, and in making such appointments the Assistant Commissioner shall have due regard to the claims of persons belonging to the religious denomination for whose benefit the said institution is chiefly maintained. " Section 41 of the Act runs thus: "41. (1) In case of a dispute the Assistant Commissioner shall have power to enquire into and decide the following disputes and matters: (a) whether an institution is a public religious institution; (b) whether an institution is a temple or a math; (c) whether a trustee holds or held office as a hereditary trustee; (d) whether any property or money is of religious endowment or specific endowment; (e) . . . . (f) . . . . (g) . . . . Provided that the burden of proof in all disputes or matters covered by clauses (a) and (d) shall lie on the person claiming the institution to be private or the property or money to be other than that of a religious endowment or specific endowment as the case may be". Section 44 which makes provision for appeals runs thus: "44. (1) Any person aggrieved by any order passed by the Assistant Commissioner under section 41 or sub sections (1) and (6) of section 42 or section 43 may, with in thirty days from the date of receipt of the order under section 41 or section 43 or from the date of the publication of the order under section 42 as the case may be, appeal to the Commissioner. "(2) Any party aggrieved by the order of the Commissioner under sub section (1) or under sub section (1) or 441 (6) of section 42 may appeal to the High Court within thirty days from the date of the order or publication there of as the case may be." Section 68 deals with delivery of possession of a religious institution, its record, accounts and properties to its trustee or executive officer. Section 73 which bars the jurisdiction of ordinary courts lays down that no suit or other legal proceeding in respect of the administration of a religious institution or in respect of any matter or dispute for determining or deciding which provision is made in the Act shall be instituted in any court of law, except under, and in accordance with, the provisions of the Act. Section 74 which relates to the procedure at enquiries and appeals and service of notice is in these terms: C "74(1) In relation to all proceedings before the Commissioner or the Assistant Commissioner, the orders in pursuance of which are under the provisions of this Act appealable to the High Court, the Commissioner or the ., Assistant Commissioner as the case may be, shall have the powers vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters: (a) discovery and inspection; (b) enforcing the attendance of witnesses, and requiring the deposit of their expenses; (c) compelling the production of documents; E (d) examining witnesses on oath, (e) granting adjournments; (f) reception of evidence taken on affidavit; and (g) issuing commissions for the examination of witnesses. and may summon and examine suo motu any person whose evidence appears to him to be material and shall be deemed to be a Civil Court within the meaning of sections 480 and 482 of the Code of Criminal Procedure, 1898, (2) The Commissioner and the Assistant Commissioner shall with resect to all such proceedings be deem ed to be persons acting judicially within the meaning of the Judicial officers Protection Act, 1 850. G (3) The Court hearing on appeal from the order of the Commissioner may direct further enquiry or modify or set aside such order as the Court may deem fit; and unless the appeal is summarily dismissed the Commissioner shall be given an opportunity of being heard before the order passed by him is interfered with in any manner; provided that the operation of the order of the Commissioner shall not be stayed pending the disposal of the appeal". 442 76(1) confers on the State Government general power of making rules to carry out all or any of the purposes of the Act. Sub section (2) of the section specifically enumerates the matters with respect to which the rules can be made and clause (d) thereof enables the State Government to make rules regarding holding of enquiries, summoning and examination of witnesses and production of documents. Rule 43 of the Rules framed under section 76(d) of the Act provides: "In relation to all proceedings before the Commissioner or the Assistant Commissioner against whose orders an appeal lies to the High Court under the provisions of the Act, the Commissioner or the Assistant Commissioner as the case may be shall follow the provisions of the Civil Procedure Code, the Indian Evidence Act and the G.R.C.O. Of the Orissa High Court as far as practicable and in so far as y they are consistent with the Act and the Rules. In every other case the enquiry will always be of a summary nature and shall be conducted as in respect of suits of small cause nature with due notice to persons affected by the enquiry". It is important to note that the Assistant Commissioner can ap point non hereditary trustees under section 27 of the Act only where two conditions are satisfied viz. (1) that the religious institution is not an excepted one and (2) that there is no hereditary trustee of the institution. For the exercise of the power by the Assistant Commissioner under this section, it is, therefore, absolutely necessary that either there should be no dispute about the public nature of the institution and the non existing of hereditary trustees or in case, there is a dispute about any of these matters, a prior determination of such dispute under section 41 of the Act has been made. Without such preliminary determination if an appointment of a non hereditary trustee is made under section 27 of the Act and a direction is given regarding delivery of possession of the institution etc. under section 68 of the Act, it would be manifestly illegal and without jurisdiction. A careful scrutiny of the provisions of the Act makes this position amply clear. As pointed out by the High Court. section 27 does not in terms provide that Assistant Commissioner should make an enquiry as to whether the institution is public or private and whether there are hereditary trustees of the institution or not. These questions have to be gone into under section 41 of the Act which specifically deals of with the investigation and decision of disputes in respect thereof. Consequently, a prior determination under section 41 that the institution is public and has no hereditary trustee is a sine qua non for appointment of trustees under section 27 of the Act. This view also gains strength from the fact that there is a marked difference as regards the procedure to be followed in respect of proceedings under sections 27 and 41 of the Act. Whereas an enquiry, if any, in proceedings under section 27 of the Act because of the non appealable nature of the order passed thereunder in view of section 44 of the Act is of a summary character in which the affected 443 person does not get a reasonable chance of presenting his entire case and evidence is not required to be recorded verbatim, it is otherwise in case of proceedings under section 41 of the Act where the enquiry has to be judicial and Elaborate in view of the fact that the parties are entitled as a matter of right to be heard in support of the claim and to adduce evidence in proof thereof. (See Ramakrishna Padhy vs Ramesh Chandra Das & Ors(1). In the latter case, because of the complicated nature of the questions involved and the appealable character of the orders that may be passed thereunder, the Commissioner or the Assistant Commissioner has to act like a Court and is required to follow, as far as practicable, the provisions of the Code of Civil Procedure, the Indian Evidence Act and the G.R.C.O. Of the Orissa High Court in so far as they are consistent with the Act and the Rules. This becomes clear from a conjoint reading of section 74 of the Act and Rule 43 of the Rules framed under the Act. It would also be relevant to notice that there is no Provision in section 27 of the Act identical to the one contained in order 21, Rule 63 of the Code of Civil Procedure to the effect that the summary decision given thereunder would be subject to the decision that may be given under section 41 of the Act. It has also to be pointed out that successive determination of questions under section 27 and 41 of the Act is not possible in view of the doctrine of res Judicata. It is also significant that the safeguard relating to appeal both on a point of fact and law (See Sri Sadasib Prakash Brahmachari Trustee of Mahiprakash & Ors. `The State of Orissa(2) and the intervention of the High Court which is available in respect of orders made under section 41 of the Act is not available in case of orders under section 27 of the Act. The non availability of the valuable right of an appeal in respect of an order under section 27 of the Act is of fundamental importance and leads to the irresistible conclusion that section 27 cannot exist in isolation and determination of the aforesaid questions is necessary under section 41 of the Act before non hereditary trustees can be appointed. There can. therefore, be no manner of doubt that the Assistant Endowments Commissioner has no jurisdiction to appoint a non hereditary trustee of a religious institution under section 27 of the Act without prior determination of the questions that the institution is a public one and has no hereditary trustees. We are fortified in our view by the decision of this Court in Sri Jagannnth Ramanuja Das & Anr. vs State of Orissa.(9) . In that case, the Bihar State Board of Religious Trusts constituted under the Bihar Hindu Religious Trusts Act, 1950 (I of 1951) passed an order in exercise of the powers conferred on it under section 59 of the Act asking the appellant to furnish to the Board a return of income and expenditure of the temple known as 'Salouna Asthal '. The appellant replied saying that the Asthal was a private institution and not a religious one within the meaning of the Act; that the properties appertaining to the temple did not constitute a religious trust and the appellant H (1) A.I.R. 1959 Orissa 98. (2) (3) ; 444 was not a trustee within the meaning of the Act. On getting unfavorable answer, the appellant made an application to the High Court of Patna under Article 226 of the Constitution challenging the demand which was dismissed. On the matter being brought. before this Court by the appellant, the aforesaid order of the Board was quashed and the respondent was directed not to interfere with the properties appertaining to the 'Salouna Asthal ' without obtaining the necessary declaration under section 43 of the Act. Before concluding we would like to observe that we are not at all impressed by the submission made on behalf of the appellants that if the interpretation placed on the provisions of sections 27 and 41 of the Act by the Orissa High Court is taken as correct, it would become difficult to exercise effective control on public religious institutions as proceedings under section 41 take long time. As rightly observed by the High Court, the courts are meant to interpret the law as it stands. It is not their function to legislate and to imagine difficulties. The argument cannot also be countenanced as it overlooks the explanation appended to section 7 whereunder the Commissioner has been given power to pass such interim orders as he may deem necessary for the proper maintenance, administration and management religious institutions and endowments when a dispute concerning the same is pending. We also find it difficult to accept the submission made by counsel for the appellants that in view of the fact that a duly verified application on proper court fee is necessary for determination of the questions enumerated in section 41 of the Act, no enquiry under the said pro visions of the Act can be held suo motu by the Assistant Endowments Commissioner. The fact that it may be necessary for a private individual to make an application on proper court fee to the Assistant Commissioner for determination of any of the disputes enumerated in section 41 cannot, in the absence of a specific prohibition, debar the said authority from taking action suo motu under the said provisions of the Act. This is, however, a matter with which we are not concerned in the present appeal as respondents 1 to 3 had made an application under section 41 of the Act in which unfortunately no proceedings were taken by the Assistant Commissioner. For the foregoing reasons, we are satisfied that the High Court was right in holding that it was only after completion of the enquiry under section 41 of the Act and determination of the questions that the religious institution was not public and there were no hereditary trustees thereof that the Assistant Commissioner could appoint non hereditary trustees and pass orders regarding delivery of possession to them of the institution. In the result the appeal fails and is hereby dismissed. P.H.P. Appeal dismissed.

Some villages made an application before the Assistant Commissioner of Endowments, Orissa, for appointment of non hereditary trustees under section 27 of the, Orissa Hindu Religious Endowments Act, 1951, for Shiva temple which is more than 100 years old and possesses about 24 acres of land. A new temple was constructed in place of the old dilapidated temple by the money contributed by the villagers. It was alleged that respondents Nos. 1 to 3 were mismanaging the affairs of the temple and were not regularly performing the puja or the duty. An enquiry was ordered pursuant to which the Inspector submitted his report stating that the temple was a public temple and that respondents Nos. 1 to 3 did not show accounts to the Inspector and that, therefore, names of 5 persons were suggested for appointment of non hereditary trustees. A proclamation inviting objections regarding the suitability of 5 persons was issued. After making a summary enquiry in the presence of the villagers including respondents Nos. 1 to 3 the Additional Assistant Commissioner passed an order holding that the institution was a public one and appointed 5 non hereditary trustees under section 27 of the Act. He, however, did not record any finding whether respondents Nos. 1 to 3 were hereditary trustees or not. A revision Application filed to the Commissioner of Hindu Religious Endowments failed. Respondent Nos. I to 3 filed a writ petition in the High Court contending that the order of appointment of non hereditary trustees under section 27 of the Act encroached upon the property rights of the respondents and were without jurisdiction and void having been passed without determining under section 41 of the Act as to whether the institution was a private or a public one and without further determining as to whether the respondent were hereditary trustees. The appellants contended before the High Court that the provisions of section 27 were independent and that it could be invoked without prior determination of the question under section 41. The High Court allowed the writ petition holding that section 27 should be applied only where in respect of the disputed institution there had been a Prior determination of the controversial rights mentioned in section 41 and that before the Assistant Endowments Commissioner could proceed under section 27 of the Act to assess non hereditary trustees it was necessary for him to come to a finding that the institution was a public one and there were no hereditary trustees thereof in existence and in order to come to such a finding he should have completed an enquiry under section 41 which coupled with section 44 provided for a judicial determination of these very questions. Under section 41 in case of a dispute the Assistant Commissioner has power to enquire into and decide whether an institution is a public religious institution and whether a trustee holds office as a hereditary trustee. Under section 27, the Assistant Commissioner has power to appoint non hereditary trustees in respect of each religious institution in cases where there are no hereditary trustees, Dismissing the appeal, ^ HELD: 1. The Assistant Commissioner can appoint non hereditary trustees under section 27 of the Act only where two conditions are satisfied : (i) that the religious institution is not an excepted one, and (ii) there are no hereditary trustees of the institution. 436 For the exercise of the powers under. section 27, therefore, either there should be no dispute about the two conditions or if there is a dispute a prior determination of such dispute under section 41 of the Act has to be made. Without such preliminary determination an appointment of non hereditary trustees under section 41 since there is no specific prohibition. [444D E] 2. Under section 27. the enquiry is of a summary character in which the affected person does not get a reasonable chance of presenting his entire case and evidence is not required to be recorded verbatim. It is otherwise in case of Proceedings under section 41 where the enquiry has to be judicial and elaborate. [442H. 443A] 3. It is also not correct that a duly verified application on a proper court fee is necessary for the determination of the questions enumerated in section 41 of the Act. An enquiry can be made suo moto by the Assistant Endowments. Commissioner for determination of any of the disputes enumerated in section 41 since there is no specific prohibition. [444D E]

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Civil Appeals Nos. 805, 806 and 972 977 of 1973 From the judgment and decree dated the 8th June 1971 and 23rd November 1971 respectively of the High Court of Andhra Pradesh at Hyderabad in Appeal Suit Nos. 766 of 1968, 18 of 1969, 779, 780, 782 to 785 of 1968, respectively. 776 F. section Nariman, J. V. K. Gurunathan, T. V. Narasimhan Murty and A. Subha Rao, for the appellants. P. Ram Reddy and P. P. Rao, for the respondents. The Judgment of the Court was delivered by JASWANT SINGH, J. This batch of Appeals Nos. 805, 806 and 972 to 977 of 1973 by certificate from the judgments and decrees of the High Court of Andhra Pradesh in Appeals Nos. 766 of 1968, 18 of 1969, 779 of 1968, 780 of 1968, 782 of 1968, 783 of 1971, 784 of 1968 and 785 of 1968 raise a simple but an interesting question namely, whether for the supplies of rice made by the appellants in January and February, 1964, they are to be paid price according to the rate specified in the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 dated March 23, 1964 or according to the rate specified in the Rice (Andhra Pradesh) Price Control order as it stood in 1963. The question arises in the following circumstances: The appellants are millers and carry on the business of paddy and rice in the State of Andhra Pradesh. On July 31, 1959, the Governor of Andhra Pradesh in exercise of the powers conferred on him by section 3 of the (Central Act X of 1955) hereinafter referred to as `the Act ' made an order called the Andhra Pradesh Rice Procurement (Levy) order, 1959 clause 3 of the order required every dealer and every miller to sell to the State Government on requisition served on him by the requisitioning authority at the controlled price (a) 40 percent of the quantity of rice held in stock by him at the commencement of the order and (b) 40 percent of the total quantity of rice purchased by him every day beginning with the commencement of the order. Clause 2(a) of the order defined "controlled price" as meaning the maximum price fixed under section 3 of the Act for the sale of rice by the Central Government from time to time (emphasis supplied). On December 19, 1963, the Central Government in exercise of the power conferred on it by section 3 of the Act made an order called the Rice (Andhra Pradesh) Price Control order, 1963, which extended to the districts of Krishna, West Godavari, East Godavari, Guntur, Nizamabad, Warangal and Nellore in the State of Andhra Pradesh. Clause (2) of the order provided that the maximum prices at which the varieties of rice specified in column (1) of the Schedule to that order were to be sold in wholesale quantities would be as specified in the corresponding entries in column (2) of the said Schedule. The said Schedule inter alia provided that Akkulu rice would be sold at Rs. 46.89 per quintal. In compliance with the requisitions served on them by the requisitioning authority of the State of Andhra Pradesh, the appellants sold various quantities of that variety of rice to the Government of that State from January 26, 1964, to February 21, 1964, and were paid at the aforesaid rate of Rs. 46.89 per quintal. By means of the Rice (Andhra Pradesh) Price Control (Second Amendment) order, 1964, dated March 20, 1964, the Central Government amended sub clause (1) of clause 2 of the Rice (Andhra Pradesh) Price Control order, 1963 and ordained that in the said sub clause for the words "the Schedule ', the words and figures schedule I shall be substituted. on 777 March 23, 1964, the Central Government issued the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964. Clause 2 of the order ran thus: 2. In the Rice (Andhra Pradesh) Price Control order, 1963, in Schedule I, for the varieties of rice and the maximum prices thereafter, the following shall be substituted namely: ____________________________________________________________ Varieties or rice maximum price per quintal. ____________________________________________________________ 1. Districts other than Nellore . . Akulu . 52 25 . . ____________________________________________________________ On the issue of this order, the appellants made representations to the Government of Andhra Pradesh requesting that for the aforesaid supplies of Akkulu rice made by them from January 26 to February 21, 1964, they should also be paid at the enhanced price of Rs. 52.25 per quintal. As the representations made by them did not evoke a favourable response, they filed suits in the Court of the Subordinate Judge, Machilipatnam for recovery of the difference between the controlled prices specified in the Rice (Andhra Pradesh) Price Control order, 1963, dated December 19, 1963 and Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964. The suits filed by them were decreed by that Court. Aggrieved by these judgments and decrees the State of Andhra Pradesh preferred appeals to the High Court at Hyderabad which were allowed on the ground that is the supplies of rice were made by the appellants before the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964, they were entitled only to the price specified in the Schedule to the Rice (Andhra Pradesh) Price Control order, 1963. Dissatisfied with these judgments and decrees, the appellants applied for certificate under Article 133(1) (a) of the Constitution which was granted to them. The sole question for determination in these appeals, as already indicated, is whether the appellants were to be paid price for the supplies to rice made by them from January 26, 1964, to February 21, 1964, at the rate of Rs. 46.89 per quintal the rate specified in the Rice (Andhra Pradesh) Price Control order, 1963, dated December 19, 1963 or at the enhanced rate of Rs. 52.25 per quintal as fixed by the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 dated March 23, 1964. Mr. Nariman appearing on behalf of the appellants has laid great emphasis on the word "substituted" occurring in clause 2 of the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 and has urged that the claim of the appellants cannot be validity ignored Elaborating his submission, counsel has contended that as the prices fixed by the Government are meant for the entire season, the appellants have to be paid at the controlled price as fixed vide the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964, regardless 778 of the dates an which the supplies were made. We cannot accede to this contention. It is no doubt true that the literal meaning of the word "substitute" is "to replace ' but the question before us is from which date the substitution or replacement of the new Schedule took effect. There is no deeming clause or some such provision in the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 to indicate that it was intended to have a retrospective effect. It is a well recognized rule of interpretation that in the absence of express words or appropriate language from which retrospectivity, may be inferred, a notification takes effect from the date it is issued and not from any prior date. The principle is also well settled that statutes should not be construed so as to create new disability or obligations or impose new duties in respect of transactions which were complete at the time the Amending Act came into force. (See Mani Gopal Mitra vs The State of Bihar. The aforesaid sales in the instant cases having been made by the appellants before the coming into force of the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964, and the property in the goods having passed to the Government of Andhra Pradesh on the dates the supplies were made, the appellants had to be paid only at the controlled price obtaining on the dates the sales were effected and not at the increased price which came into operation subsequently. This view is in consonance with the provisions of section 3 of the Act and the Andhra Pradesh Rice Procurement (Levy) order, 1959 which clearly indicate that the price payable to the dealers and Millers for the supplies of rice made by them is the control price obtaining on the date when the sale is made. Similar view is taken in the unreported decision dated April 20, 1962 of this Court in K. Appayya Shambhague and Co. vs The State of Mysore & Anr. where it was laid down that the order made under section 3(2) (f) of the Act are offers of sale which the person on whom a requisition is served has no option but to accept and that the price that has to be paid is the controlled price fixed by the Government under section 3(2) (c) of the Act on the date when he goods are ascertained or when the property in the goods passes to the buyer. This decision was followed by the High Court of Andhra Pradesh in The Union of India, represented by the Secretary, Ministry of Food and Agriculture, Government of India, New Delhi vs Kanuri Damodariah & Co. Alluri Venkatanarasiah, where it was held that an order under section 3(2) (f) amounts to an agreement for sale and the price payable for the quantities of rice supplied is a price payable in accordance with the price notified under the provisions of section 3(3) of the Act. In the instant cases, the sale having been made before the coming into force of the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964, the appellants cannot justifiably claim the benefit of the increased price specified in the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964. The acceptance of the. 779 contention raised on behalf of the appellants will lead to grave consequences. It will have the effect of reopening the transactions past and closed and would thus give rise to lots of difficulties. Mr. Nariman has, in support of his contention, relied on the following passage occurring at p. 394 in Craies on Statute Law (Sixth Edition): "Explanatory and declaratory Acts retrospective Where a Statute is passed for the purpose of supplying an obvious omission in a former statute, or, as Parke J. (afterwards Baron Parke) said in R. V. Dursley ; , 469 "to `explain a former statute," the subsequent statute has relation back to the time when the prior Act was passed. Thus in Att. Gen vs Poughtt (1816) 2 Price 381, 392, it appeared that by a Customs Act of 1873 (53 Geo. 3, c. 33) a duty was imposed upon hides of 9s. , but the Act omitted to state that it was to be 9s. per cwt., and to remedy this omission another Customs Act 53 Geo. c. 105) was passed later in the same year. Between the passing of these two Acts some hides were exported, and it was contended that they were not liable to pay the duty 9s. per cwt., but Thomson C. B., in giving judgment for the Attorney General, said: "The duty in this instant was in fact imposed by the first Act, but the gross mistakes of the omission of the weight for which the sum expressed was to have been payable occasioned the amendment made by the subsequent Act, but that had reference to the former statute as soon as it passed, and they must be taken together as if they were one and the same Act. " Where an Act is in its nature declaratory, the presumption against construing it retrospectively is inapplicable. ' This passage has, in our opinion, no bearing on the question before us in view of the fact that the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 is neither explanatory nor declaratory, as sought to be interpreted by the counsel. The contention of Mr. Nariman that the controlled prices fixed by the Central Government for sale of rice are seasonal prices not being based upon any cogent material cannot also be accepted. The High Court was, therefore, right in allowing the aforesaid appeals preferred by the respondent and reversing the judgment and decrees passed by the Subordinate Judge, Machilipatnam. In the result, the appeal, fail and are dismissed with cost, limited to one set. M.R. Appeals dismissed.

Under section 3 of the , the respondent passed the Andhra Pradesh Procurement (Levy) order 1959, requiring every miller and dealer of rice (including the appellants) to sell to the respondent certain specified varieties and quantities of rice at controlled price on requisition being served on him. Clause 2(a) of the order defined "controlled price" as the maximum price fixed by the Central Government from time to time under section 3 of the Act for the sale of rice. On December 19, 1963, the Central Government Passed the Rice (Andhra Pradesh) Price Control order 1963, fixing the maximum price of akkulu rice at Rs. 46.89 per quintal. The appellants sold several quantities of akkulu rice to the respondent from January 26, 1964, to February 21, 1964, and were paid at the controlled rate. On March 23, 1964 the Central Government issued the Rice (Andhra Pradesh) Price Control (3rd amendment) order 1964, and substituted Rs. 52.28 for Rs. 46.89 as the maximum price per quintal, of akkulu rice. The appellant 's claim for the benefit of the enhanced price for the earlier sales was rejected by the Government of Andhra Pradesh. The appellants succeeded before the Subordinate Judge, Machilipatnam in their suits for recovery of the difference between the two controlled prices but lost before the High Court, in appeals preferred by the State of Andhra Pradesh. It was contended before this Court that the prices fixed by the Government are for the entire season, and the appellants are entitled payment at the amended rates, regardless of the dates when the supplies were made, and that the word "substitute" infers retrospective effect. Dismissing the appeals, the Court. ^ HELD: In the absence of express words or appropriate language from which retrospectivity may be inferred, a notification takes effect from the date it is issued and not from any prior date. Statutes should not be construed so as to create new disabilities or obligations or impose new duties in respect of transactions which were complete at the time the Amending Act came into force. [778B C] (2) The property in the goods having passed to the Government of Andhra Pradesh on the dates the supplies the made, the appellants had to be paid only at the controlled prices obtaining on the dates the sales were effects and not at the increased price which came into operation subsequently.[778 D] K. Appayya Shanbhague & Co. vs The State of Mysore and Anr. (Unreported decision S.C. dated 20 4 1962); The Union of India. represented by the Secretary Ministry of Food & Agriculture, Government of India, New Delhi vs Kanuri Damodariah & Co. Alluri Venkatanarasiah (1968) 1 An. W.K. 81 and Mani Gopal Mitra vs The State of Bihar (1969) 2 S.C.R. 411, followed.

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Civil Appeal No. 724 of 1975. (Appeal by Special Leave from the judgment and order dated the 12th September, 1974 of the Andhra Pradesh High Court at Hyderabad in Writ Appeal No. 626. of 1974) A. Subba Rao for the appellant. G. C. Sharma and S.P. Nayar for the respondents. The Judgment of the Court was delivered by GOSWAMI, J. The appellant No. 1 is a registered firm and appellants 2 and 3 are the only two partners of that firm. They are assessees under the Income tax Act. Their assessments have been made for a number of years in Nellare District in the usual course. On January 23, 1973, the Central Board) sent a notice to the appellants under section 127 of the Income tax Act, 1961 brietly the Act) proposing to transfer their case files "for facility of investigation" from the respective Income tax Officer at Nellore to the Income tax Officer, B Ward Special Circle Ii, Hyaderabad, By this notice they were also asked to submit in writing if they had any objection to the proposed transfer within 15 days of receipt of the notice. The appellants made their representation objecting to the transfer and on July 26, 1973, the Central Board passed the impugned order transferring the cases from Nellore to Hyderabad. There is no provison of appeal or revision under the Act against such orders of transfer. The appellants, therefore, preferred an application under article 226 of the Constitution before the High Court of 886 Andhra Pradesh questioning the validity of the order chiefly on the ground of violation of the principles of natural justice inasmuch as no reasons were given nor communicated in the said order. The learned single Judge after having called for the relevant file found that certain reasons were recorded by the Central Board prior to the passing of the impugned order and held that mere failure to communicate the reasons to the appellants was not fatal to the order. The writ petition was, therefore, dismissed. The appellants ' Letters Patent Appeal before the Division Bench of the High Court also met with the same fate. Hence this appeal by special leave. The short question that arises for consideration is whether failure to record the reasons in the order which was communicated to the appellants is violative of the principles of natural justice for which the order should be held to be invalid. Section 5(7A) was the corresponding section in the Income tax Act, 1922 (briefly the old Act). The section may be set out: "The Commissioner of Income tax may transfer any case 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 re issue of any notice already issued by the Income tax Officer from whom the case is transferred". The successor section under the Income tax Act, 1961 is section 127 and the same may be set out: "Transfer of cases from one Income tax Officer to another: (1) The Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one In come tax Officer subordinate to him to another also subordinate to him, and the Board may similarly transfer any case from one Income tax Officer to another. Provided that nothing in this sub section shall be deemed to require any such opportunity to be given where the transfer is from one Income tax Officer to another whose offices are situated in the same city, locality or place. (2) The transfer of a case under sub section (1) may be made at any stage of the proceedings, and shall not render necessary the re issue of any notice already issue by the Income tax Officer from whom the case is transferred. 887 Explanation: In this section and in sections 121 and 125, the word 'case ' in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year". The section was amended by section 27 of Finance (No. , and section 127 since then stands as under: (1) "The Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, where ever it is possible to do so, and after recording his reasons for doing so, transfer any case from any Income tax Officer or officers also subordinate to him and the Board may similarly transfer any case from any Income tax Officer or Income tax Officers to any other Income tax Officer or Income tax Officers. Provided that nothing in this subsection shall be deemed to require any such opportunity to be given where the transfer is from any Income tax Officer or Income tax Officers to any other Income tax Officer or Income tax Officers and the offices of all such Income tax Officers are situated in the same city, locality or place: Provided further that where any case has been transferred from any Income tax officer or Income tax Officers to two or more Income tax Officers, the Income taxers to whom the case is so transferred shall have concurrent jurisdiction over the case and shall perform such functions in relation to the said case as the Board or the Com missioner (or any Inspecting Assistant Commissioner authorised by the Commissioner in this behalf) may, by general or special order in writing, specify for the distribution and allocation of the work to be performed". (2) The transfer of a case under subsection (1) 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 or Income tax Officers from whom the case is transferred. Explanation: In this section and in sections 121, 123, 124 and 125, the word 'case ' in relation to any person whose name is specified in any order or direction issued thereunder means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this 888 Act which may be commenced, after the date of such order or direction in respect of any year. " Unlike section 5(7A) section 127(1) requires reasons to be recorded prior to the passing of an order of transfer. The impugned order does not state any reasons whatsoever for making the order of transfer. It is submitted on behalf of the Revenue by Mr. Sharma that reasons were communicated to the assessees in the notice calling for objection against the proposed transfer. It is, therefore, manifest that the reasons given in that show cause notice, namely, "facility of investigation" can be read as a part of the impugned order although there is no mention of any reasons therein as such. We are unable to accede to this submission. It appears section 5(7A) of the old Act came for consideration in Pannalal Binjraj and Another vs The Union of India and others and this Court observed at page 589 as follows: ". 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 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. There is no presumption against the bona fide 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 their State or from an Income tax officer with in 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 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 deter mining 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". This judgment was rendered by this Court on December 21, 1956, and we find that in the 1961 Act section 127 replaced section 5(7A) 889 where the legislature has introduced, inter alia, the requirement of recording reasons in making the order of transfer. It is manifest that once an order is passed transferring the case file of an assessee to another area the order has to be communicated. Communication of the order is an absolutely essential requirement since the assessee is then immediately made are of the reasons which impelled the authorities to pass the order transfer. It is apparent that if a case file is transferred from the usual place of residence or office where ordinarily assessments are made to a distant area, a great deal of inconvenience and even monetary loss is involved, That is the reason why before making an order of transfer the legislature has ordinarily imposed the requirement of a show cause notice and also recording of reasons. The question then arises whether the reasons are at all required to be communicated to the assessee. It is submitted, on behalf of the Revenue, that the very fact that reasons are recorded in the file, although these are not communicated to the assessee, fully meets the requirement section 127(1). We are unable to accept this submission. The reason for recording of reasons in the order and making these reasons known to the assessee is to enable an opportunity to the assessee to approach the High Court under its writ jurisdiction under article 226 of the Constitution or even this Court under Article 136 of the Constitution in an appropriate case for challenging the order, inter alia, either on the ground that it is based on irrelevant and extraneous condonations Whether such a writ or special leave application ultimately fails is not relevant for a decision of the question We are clearly of opinion that the requirement of recording reasons under section 127(1) is a mandatory direction under the law and non communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee. Mr. Sharma drew our attention to a decision of the Delhi High Court in Sunanda Rani Jain vs Union of India and others, where the learned single Judge has taken a contrary view. For the reasons, which we have given above, we have to hold that the said decision is not correct. The appellant drew our attention to a decision of this Court in Shri Pragdas Umar Vaishya vs Union of India and Other where rule 55 of the Mineral Concession Rules, 1960, providing for exercise of reversional power by the Central Government was noticed. It was held that under rule 55 the Central Government in disposing of the revision application must record its reasons and communicate these reasons to the parties affected thereby. It was further held that the reasons could not be gathered from the nothings in the files of the Central Government. Recording of reasons and disclosure thereof is not a mere formality. 890 Mr. Sharma drew our attention to a decision of this Court in Kashiran Aggarwalalla vs Union of India and other. It is submitted that this Court took the view that orders under section 127(1) are held in that decision to be purely administrative in nature" passed for consideration of convenience and no possible prejudice could be involved in the transfer. It was also held therein that under the proviso to section 127(1) it was not necessary to give the appellant an opportunity to be heard and there was consequently no need to record reasons for the transfer. This decision is not of any assistance to the Revenue in the present case since that was a transfer from one Income tax Officer to another Income tax Officer in the same city, or, as stated in the judgment itself, in the same locality" and the proviso to section 127(1), therefore, applied. When law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated Mr. Sharma also drew our attention to a decision of this Court in S Narayanappa and Others vs Commissioner of Income tax, Bangalore where this Court was dealing with section 34 of the old Act. It is clear that there is no requirement in any of the provisions of the Act or any section laying down as a condition for the initiation of the proceedings that the reasons which induced the Commissioner to accord sanction to proceed under section 34 must also be communicated to the assessee. The Income tax Officer need not communicate to the assessee the reasons which led him to initiate the proceedings under section 34. The case under section 34 is clearly distinguishable from that of a transfer order under section 127(1) of the Act. When an order under section 34 is made the aggrieved assessee can agitate the matter in appeal against the assessment order, but an assessee against whom an order of transfer is made has no such remedy under the Act to question the order of transfer. Besides, the aggrieved assessee on receipt of the notice under section 34 may even satisfy the Income tax Officer that there were no reasons for reopening the assessment. Such an opportunity is not available to an assesse under section 127(1) of the Act. The above decision is, therefore, clearly distinguishable. We are, therefore, clearly of opinion that non communication of the reasons in the order passed under section 127(1) is a serious infirmity in the order for which the same is invalid. The judgment of the High Court is set aside. The appeal is allowed and the orders of transfer are quashed. No costs. S.R. Appeal allowed.

The appellants were assessees under the Income Tax Act under the jurisdiction of the Income Tax officer, Nellore since a number of years on 23 1 1973, the Central Board of Direct Taxes sent a notice to the appellants under section 127(1) of the Income Tax Act proposing to transfer their case files for facility of investigations" from the respective Income. Tax Officer Nellore to the Income Tax Officer 'B ' Ward, Special Circle. II, Hyderabad and called for objections, if any, to the proposed transfer within fifteen days of the receipt of the notice. Despite their representations objecting to the transfer, the Central Board ordered the transfer on 26 7 1973. The validity of the order was questioned before the Andhra Pradesh High Court by an application under Article 226 of the Constitution on the ground of violation of principles of natural justice inasmuch as neither the reasons were given. nor communicated in the said order. The writ petition was dismissed by a single Judge holding that mere failure to communicate the reasons which were found by him to have been recorded in the files, to the appellants was not fatal. The Letters Patent Appeal before the Division Bench failed. Allowing the appeal by special leave and rejecting the contentions of the Revenue. namely. (a) that the reasons given in the notice under section 127(1) calling for objections, namely, "facility for investigations can be read a part of the impugn ed order. (b) that recording of the reasons in the file, although not communicated to the assessee, fully meets the requirements of section 127(1) and (c) that the orders under section 127 (1) being "purely administrative in nature, it was not necessary to give the assessee, an opportunity to be heard and there was consequently no need to record reasons for the transfer, the Court ^ HELD:(1) Unlike section 5(7A) of the 1922 Act, section 127(1) of the Income Tax Act, 1961, requires reasons to be recorded prior to the passing of an order of transfer. Once an order is passed transferring the case file of an assessee to another area, the order has to be communicated. Communication of the order is an absolutely essential requirement since the assessee is then immediately made aware of the reasons which impelled the, authorities to pass the order of transfer. The Legislature has imposed the requirements of show cause notice and also recording of reasons to avoid a great deal of inconvenience and the monetary loss if a case file is transferred from the usual place of residence or office where originally assessments are made to a distant place. [888A, 889A B] (2) The reason for recording of reasons in the order and making these reasons known is to enable an opportunity to the assessee to approach the High Court under its writ jurisdiction under Article 226 of the Constitution or even the Supreme Court under Article 136 of the Constitution in an appropriate case for challenging the order, inter alia, either on the ground it is mala fide or arbitrary or that it is based on irrelevant and extraneous considerations, irrespective of the result of such a writ or special leave application. [889C D] 885 (3) Recording of reasons and disclosure thereof is not a mere formality. The requirement of recording reasons under section 127 (1) of the Income Tax Act is a mandatory direction under the law and non communication thereof is not saved by showing that the reasons exist in the files although not communicated to the assessee. [889 E] Pannalal Binjraj and Another vs The Union of India and Others, , applied. Sunanda Rani Jain vs Union of India and Others, , overruled. Shri Pragdas Umar Vaishya vs Union of India and others, [1967] 12 Madhya Pradesh Journal 868, discussed. (4) When law requires reasons to be recorded in a particular order affecting prejudicially the interest of any person, who can challenges the order in Court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. [890 C] Kashiram Aggarwalla vs Union of India and others, , not applicable. section Narayanappa and others vs Commissioner of Income tax, Bangalore, , distinguished. (5) In the insant case, non communication of the reasons in the order passed under section 127(1) of the Income Tax Act, 1961 is a serious infirmity in the order and it is invalid. [890 G]

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N: Criminal Appeal No. 251 of 1972 and 243 of 1973. Appeals by Special Leave from the Judgment and order dated 22 9 72 of the Madras High Court in Criminal Appeal No. 369/72 and 976/71. Debaratea Mookerjee, M. section K. Sastri and M. section Narasimhan for the Appellants. A. V. Rangam and Miss A. Subhashni, for the Respondents. 877 The Judgment of the Court was delivered by UNTWALIA, J. Criminal Appeal No. 251 of 1972 has been filed under section 2 of the and Criminal Appeal No. 243 of 1973 is by special leave. In all there are six appellants. It would be convenient to refer to them with reference to their accused number given in the judgment of the Sessions Court. They are as follows: Accused No. 1 (A 1) Ramaswami Ayyangar. Accused No. 2 (A 2) Vattappan. Accused No. 3 (A 3) Kaipillai alias Karuppayyan. Accused No. 4 (A 4) Raman. Accused No. 5 (A 5) Kathayyan. Accused No. 6 (A 6) Kulandaiyan. The occurrence giving rise to these two appeals took place on Monday the 21st April, 1971 at about 4.00 p.m. at Sivan Koil tank in village Thaduthalkondapuram. In the said occurrence was seriously injured one Kaliaperumal who later died in the Hospital at about 9.00 p.m. the same evening. Another person injured in the occurrence was also named Kaliaperumal, P.W. 1. The prosecution case is that deceased Kaliaperumal was living with his maternal uncle Pichai Konar, P.W. 7 since infancy. A 1 is the Karnam of the village and A 6 is the Government vetti. A 2 and A 3 are brothers, A 4, A 5 and A 6 are also inter se brothers. A 2 to A 6 worked under A 1. There was enmity between P.W. 7 and the deceased on the one hand and A 1 on the other on account of several causes. The facts showing the enmity between them are stated in the judgments of the courts below and are not necessary to be detailed here. Two days prior to the occurrence Marimuthu, P.W. 10 was driving some cattle, 4 or 5 of them went astray and entered into the Gingillillai (field) belonging to A 1. A 1 's men scolded P.W. 10 and the deceased who was informed about the incident by the former at a tea shop. P.W. 1 was also present there. Deceased Kaliaperumal passed on the information to P.W. 7. Ramalingam, P.W. 4 brother of the deceased was taking his bath in the Sivan Koil tank. Kaliaperumal (deceased) also came there saying something against the Karnam. He also started bathing at the north western corner of the tank. According to the prosecution case, A 1 came there followed by A 2 to A 6. A 2 had a cross stop (an instrument used in Survey and measurement, perhaps the correct name of the instrument is cross staff). A 3 and A 4 were each armed with an Aruval. A 5 had a stick and A 6 was carrying a stick with a spear attached to it. According to the evidence in Court, A 1 told the other accused "Not content to with grazing (his) cattle in my gingilly field, he is also abusing me. Cut him, whatever be the expenses, I will look after that. " Thereupon A 4 asked the deceased Kaliaperumal "Why are you abusing the 'Iyer ' ?" Saying something Kaliaperumal ascended the bank. A 3 and A 4 assaulted him on his head with Aruvals. P.W. 1 ran to separate them when A 2 assaulted him on 878 his head with the cross stop. P.W. 1 attempted to run. Thereupon it is said A 6 obstructed him from running with the help of the stick with spear head. A 4 again cut on the head of Kallaperumal (deceased) with his Aruval. A 2 beat on P.W 's head with the cross stop hour or five times. P.W. 1 fell down unconscious. P.W. 7 and others took the injured to the Government Dispensary Kodavasal. Dr. Radha Singh, Civil Assistant Surgeon, P.W. 15 examined Kallaperumal deceased at 4.55 p.m. and issued a Wound Certificate. Since his condition was serious he was sent to the Government Hospital, Kumbakonam. P.W.15 examined the injuries or P.W. 1 at 5.20 p.m. and found as many as nine injuries on his person. As already stated Kaliaperumal died at about 9.00 p.m. Dr. N. Jayaraj, P.W. 18 performed the autopsy over the dead body. As many as 14 injuries were found. The injuries given on the head with Aruval according to the opinions of the Doctors were sufficient in the ordinary course of nature to cause his death. Various charges were framed against the six accused including that of rioting under section 147 IPC against A 1 and A 5 and section 148 against A 2, A 3, A 4 and A 6. A 1 was further charged under sections 302/149 and sections 302/109. A 2 to A 6 were charged under section 302. An extra charge under section 324 was levelled against A 2 for causing simple hurt to P.W. 1 with the cross stop, an instrument which had sharp edges. A 6 was also charged under section 341 of the Penal Code for preventing P.W. 1 from escaping. The accused denied their complicity in the occurrence and pleaded not guilty. A 1 took a plea of alibi also and asserted that he had gone to Madras in connection with some marriage negotiations. Two days after the date of occurrence he was arrested at Kumbakonam Railway Station when he alighted from the train on his return from Madras. The Trial Judge acquitted A 1, A 5 and A 6 of all the charges. He convicted A 3 and A 4 under section 302 of the Penal Code and awarded a sentence of life imprisonment to each of them. They were acquitted of the charge under section 148. A 2 was convicted only under section 324 with a sentence of 4 months ' rigorous imprisonment and acquitted of all other charges. A 2, A 3 and A 4 preferred an appeal in the Madras High Court against their conviction and the sentences imposed upon them by the Trial Court. State preferred an appeal against the acquittals of A 1, A 5 and A 6 as also against the acquittal of A 2 of the charge under section 302. It, however, did not prefer any appeal against the acquittal of A 2, A 3 and A 4 of the charge under section 148 of the Penal Code. Yet it is surprising to find that the High Court has convicted all the six accused for the offences of rioting, A 1 and A 5 under section 147 with two years ' rigorous imprisonment and A 2, A 3, A 4 and A 6 under section 148 with 3 years ' rigorous imprisonment. Conviction of A 3 and A 4 for the offence of murder under section 302 has been maintained with the aid of section 34. High Court has also convicted A 2, A 5 and A 6 under sections 302/34 and awarded each of them life imprisonment. A 1 has been convicted by the High Court under sections 302/149 and 302/109 with sentence 879 of life imprisonment under each. Conviction of A 2 under section 324 has been maintained. Hence these two appeals. That there was enmity and bad blood between A 1 and P.W. 7 is not open to any doubt. An occurrence did take place on the date, time and place as given by the prosecution. The manner of occurrence in so far as it relates to the attack on the deceased is concerned by A 2 and A 3 has also been proved to the hilt. The factum of assault by A 2 on P.W. 1 also does not admit of any doubt. But the High Court does not seem to be justified in reversing the order of acquittal recorded by the Trial Court in favour of A 1, A 5 and A 6. It was claimed by the prosecution that apart from P.W. 1 there were four more eye witnesses to the occurrence namely Govindaswami, P.W. 3, Ramalingam, P.W. 4, Rajagopal, P.W. 5, and Kaliaperumal, P.W. 6. P.Ws 3 and 4 are brothers of the deceased. P.W. 5 is the brother in law of P.W. 3. P 1 is the statement of P.W. 1 before the police on the basis of which the First Information Report was drawn up. On reading this statement as also the evidence of P.W. 1 in Court, the Trial Judge rightly came to the conclusion that P.Ws. 3, 4, 5 and 6 arrived at the scene of occurrence after it had taken place. None of them had witnessed it. It considered the evidence of each witness, viz. P.Ws. 3 to 6, individually and did not rely upon it. In our judgment, the High Court was not right as against the explicit statement and evidence of P.W. 1 in reading P.Ws. 3 to 6 as eye witnesses to the occurrence. It is significant to note that although P.Ws. 3 and 4 were the brothers of the deceased Kaliaperumal but none of them made any attempt to save him form the attack of the assailants. Had they been present at the occurrence surely they would have tried to save their brother, as was done by P.W. 1. We are, therefore, left with the evidence of P.W. 1 alone. Since he was injured in the same occurrence, undoubtedly, his ocular version of the incident is of great value to the prosecution. The plea of alibi set up by A 1 has not been substantiated at all. The Trial Judge was not right in doubting the prosecution case merely because A 1 had applied for leave on the 18th April 3 days before the occurrence. There was no evidence to show that he was at Madras on the date of occurrence. According to the Investigating Agency, A 1 was arrested not on the Railway platform but near the Railway level crossing of Kumbakonam Railway Station. But the Trial Court was right in saying that the only part attributed to A 1 was the order giving for assault. In the statement Ext. P 1 the only words of order attributed to A 1 are "to cut". In court there was great embellishment and improvement in the evidence of P.W. 1 when he put several sentences in the mouth of A 1 at the time of the alleged order giving. As already stated, A 1 was the Karnam of the village and even if he was at the back of the assault on the deceased it does not stand to reason that he himself would go to the place of occurrence merely for giving the order for assault. The order, if any, must have been given to the assailants in secret by A 1. He must not have come to the place of occurrence merely for this purpose. We 880 are, therefore, of the view that although the High Court in its judgment purported to keep in front the well settled principles of law to justify an interference by it with the order of acquittal, it did commit a mistake in the applications of those principles. Conviction of A 1 by the High Court under any count is not justified. So do we find in the case of A 5 and A 6 that they had not taken any part in the occurrence at all. The alleged obstruction given by A 6 to P.W. 1 when he wanted to run was not believable and has not been believed by the Trial Court. The reasons given by the Trial Court for their acquittal were not such as to justify an interference by the High Court. The view taken by the Trial Court was reasonably possible to be taken. Coming to the case of A 2 we find that he did assault P.W. 1 with the cross staff marked Ext. This cross staff, as alleged, has been recovered from the house of A 1. The Trial Court, rightly, did not believe the story of its recovery from his house. But surely A 2 had used the cross staff for assaulting P.W. 1. A serious question for consideration is whether his conviction under section 302 with the aid of section 34 is justified or not. In this connection we find the statement of P.W. 1 in Ext. P 1 to the following effect: "Raman too with the aruval in his hand dealt a cut at the front portion of his head. I ran there to prevent it. At that time Vattappan with the string fixed wood he was having in his hand beat on my head. " In the Sessions Court also he deposed: "Thereupon, Accused No. 3 immediately cut on the head of Kaliyaperumal in the front portion with the aruval he was having in his hand. I ran to separate them. Immediately Accused No. 2 beat on my head with M.O. 1. . Then accused number 2 beat on my head with M.O. 1, 4 or 5 times. I fell down unconscious. After some time, President Kaliyaperumal, Rajagopal, Mani alias Rajagopal, Ramalingam, Govindaswami these persons came there. From the evidence of P.W. 1 corroborated as it is from his statement in Ext. P 1 it is clear that P.W. 1 wanted to save Kaliyaperumal the deceased, from the murderous attack by A 3 and A 4. A 2 was standing as a guard and did not allow P.W. 1 to protect the deceased. A 2 went to the length of assaulting P.W. 1 and making him fall down unconscious. It is contended that A 2 cannot be held vicariously liable with the aid of section 34 for the act of A 3 and A 4, for two reasons: Firstly, he did not physically participate in the fatal beating administered by A 3 and A 4 to the deceased and thus the "criminal act" of murder was not done by all these three accused within the contemplation of section 34, the act committed by A 2 in regard to the beating of P.W. 1 being a different and separate act of A 2. Secondly, it has not been shown that the act of A 2 in beating P.W. 1 was committed in 881 furtherance of the common intention of all the three, pursuant to a pre arranged plan. The contention is fallacious and cannot be accepted. Section 34 is to be read along with the preceding section 33 which makes it clear that the "act" spoken of in section 34 includes a series of acts as a single act. It follows that the words "when a criminal act is done by several persons" in section 34, may be construed to mean "when criminal acts are done by several persons". The acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise, for instance, one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the execution of the common design. Such a person also commits an "act" as much as his co participants actually committing the planned crime. In the case of an offence involving physical violence, however, it is essential for the application of section 34 that the person who instigates or aids the commission of the crime must be physically present at the actual commission of the crime for the purpose of facilitating or promoting the offence, the commission of which is the aim of the joint criminal venture. Such presence of those who in one way or the other facilitate the execution of the common, design, is itself tantamount to actual participation in the 'criminal act '. The essence of section 34 is simultaneous consensus of the minds of persons participating in the criminal action to bring about a particular result. Such consensus can be developed at the spot and thereby intended by all of them. In the case before us, A 2 obviously, was acting in concert with A 3 and A 4 in causing the murder of the deceased, when he prevented PW 1 from going to the relief of the deceased. Section 34 was therefore fully attracted and under the circumstances A 2 was equally responsible for the murder of the deceased. Under these circumstances we think the High Court was justified in convicting A 2 for the offence of murder of Kaliyaperumal with the aid of section 34 of the Penal Code. There was absolutely no difficulty in maintaining the convictions of A 3 and A 4 for the murder of Kaliyaperumal with the aid of section 34 because both had mercilessly assaulted him with Aruvals on the vital parts of the body. In the case of A 2 also it is quite legitimate to hold that he had shared the common intention of A 3 and A 4 in the commission of the murder of Kaliyaperumal. The conviction of none of the accused for the offence of rioting can be maintained either in law or on facts. In the view which we have expressed above that the High Court was not justified in reversing the acquittals of A 1, A 5 and A 6, there were only 3 left in the party of the assailants. Moreover the State did not file any appeal, as 882 stated already, against the acquittal of A 2, A 3 and A 4 under section 148 of the Penal Code. That being so, they could not be convicted for having formed an unlawful assembly for any criminal common object. None could be convicted, therefore, under sections 147 or 148. Section 149 could not be pressed into service against any. In the result we allow both the appeals in part, restore the order of acquittal recorded in favour of A 1 viz., Ramaswami Ayyangar, A 5 Kathayyan and A 6 Kulandaiyan acquitting them of all the charges, set aside the conviction of the remaining accused under sections 147 and 148 of the Penal Code and maintain the convictions of A 2 Vattappan, A 3 Kaipillai alias Karuppayyan, A 4 Raman under section 302/34 with the sentence of life imprisonment to each. We also maintain the conviction of A 2 under section 324 Indian Penal Code with the concurrent sentence of 4 months ' rigorous imprisonment under the said count. M.R. Appeals partly allowed.

Previous enmity between the appellant Ramaswami Ayyangar and the deceased Kaliaperumal resulted in an occurrence, in which Kaliaperumal got seriously injured and died in the hospital. Various charges were framed against the six accused, including those of murder and rioting. The Trial Judge acquitted three of the accused persons, convicted two under section 302 I.P.C. and one under section 324. Cross appeals were preferred in the High Court; one by the three accused against their convictions, and another by the State, against the acquittals. The High Court convicted all the six accused of the offence of rioting. A 2 to A 6 under section 302 read with section 34, A 1 under Ss. 302/149 and 302/109, and A 2 under section 324. It was contended before this Court that on the facts of the case, the High Court was not justified in interfering with the acquittal of A 1. A 5 and A 6, and that A 2 who did not physically participate in the fatal beating of the deceased, could not be held vicariously liable for the acts of others, and that section 34 was not applicable to him. Partly allowing the appeals, the Court ^ HELD: (1) In the case of an offence involving physical violence, it is essential for the application of section 34 that the person who instigates or aids the commission of the crime must be physically present at the actual commission of the crime for the purpose of facilitating or promoting the offence, the commission of which is the aim of the joint criminal venture. [881 C D] (2) The "act" spoken of in section 34 includes a series of acts as a single act. It follows that the words "when a criminal act is done by several persons" in section 34, may be construed to mean "when criminal acts are done by several persons". The acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise. Such presence of those who in one way or the other facilitate the execution of the common design, is itself tantamount to actual participation in the 'criminal act '. [881 A B & D] (3) The essence of section 34 is simultaneous consensus of the minds of persons participating in the 'criminal action ' to bring about a particular result. Such consensus can be developed at the spot and thereby intended by all of them. [881 D E]

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ivil Appeals No. 2390 2391 of 1972. (From the Judgment and order dated 27 3 1972 of the High Court of Andhra Pradesh in Writ Petition Nos. 3976 3977 of 1971.) Civil Appeal No. 604 of 1975 (From the Judgment and order dated 28 3 1973 of the Andhra Pradesh High Court in Writ Petition No. 685/72). 389 Civil Appeals Nos. 2423 2437 (From the Judgment and order dated 27 3 1972 of the Andhra Pradesh High Court in Writ Petitions Nos. 3974, 3975, 3978, 4015, 4016, 4017, 4018, 4019, 4020, 4021, 4247, 4246, 4248, 4249 and 5779/71). Civil Appeal Nos. 2584 2586 of 1972 (From the Judgment and order dated 28 3 1972 of the Andhra Pradesh High Court in Writ Petition No. 606 and 620, 622/72). Civil Appeals Nos. 281 286of 1973 (From the Judgment and order dated 28 3 1972 of the Andhra Pradesh High Court in Writ Petitions Nos. 4642, 4643, 4644, 4701, 4702 and 5776 of 1971) Civil Appeals No. 539 540 of 1973 (From the Judgment and order dated 27.3.1972 of the High Court of Andhra Pradesh in Writ Petition NOS. 5170, 5173/71). Civil Appeals No. 2019 2034 of 1973. (From the Judgment and order dated 28.3.1972 of the Andhra Pradesh High Court in Writ Petitions Nos. 4512, 4588, 4589, 4590, 4591, 4679, 4683, 4684, 4690, 4943, 4953, 4983, 5115, 5117 and 5118 of 1971) Civil Appeal No. 653 662/74 (From the Judgment and order dated 28.3.1972 of the High Court of Andhra Pradesh in Writ Petitions NOS. 603, 607, 609, 621, 627, 629, 738, 739, 744 and 746/72). Civil Appeals NOS. 637, 1837 1842 of 1973. (From the Judgment and order dated 27.3.1972 of the Andhra Pradesh High Court in Writ Petitions NOS. 343/72 and 5669/71, 254, 256, 260, 334, 562/72). A. K. Sen, for the appellants in CAs 2390 2391 & 2423 2437/72. P. A. Chowdhary, for the appellants in Cas 2019 2034/73. N. Bhaskar Rao, for the appellants in CAs 2390 2391, 2423 2437/72. B. Kanta Rao, for all the appellants. A. K. Sen with section Markandeya and N. Madhusudan Raj, for the appellants in CAs 604/75, 2584 2586/72 and 653 662/74. H A. K. Sen with N. Madhusudan Raj and G. N. Rao, for the appellants in CAs 281 286/73. 390 P. Ram Reddy with P. P. Rao, for the respondents in CAs 2390 2391 & 2423 2437/72, 281 282, 539, 540, 2019 2034/73; rr. 2 4 in CA No. 664/75, 653 662/74 and 2584 2586/72; rr. 1 3 in CA 1042/73 and for rr. in CA 636/73. 1837 1841/73. P. P. Rao for Respondent No. 1 in CA 604/75. section P. Nayar and Girish Chandra for respondent No. 1 in CAs 653 662/74 & rr. in CAS 2584 2586/72. The Judgment of the Court was delivered by RAY, C.J. These appeals are by certificate from the common judgment dated 27 March, 1972 of the Andhra Pradesh High Court dismissing the writ petitions of the appellants. The appellants filed the writ petitions for an appropriate writ or order directing the respondent State of Andhra Pradesh to refund the sums of money collected from the appellants as administrative surcharges. The appellants are dealers in foodgrains and held licences issued in accordance with the provisions of relevant statutes and control orders. Under the provisions of the various Control orders have been issued for maintaining or increasing supplies of any essential commodity or for securing their equitable ` distribution and availability at fair prices. The Control orders contemplate regulation or prohibition or production, supply and distribution of essential commodities and trade and commerce therein. The State Government exercising powers delegated to it by the Central Government in accordance with the provisions of the issued several measures to achieve the objectives of the Control orders. The Government of Andhra Pradesh introduced a scheme known as "Incentive Export Scheme". Under that Scheme all millers who delivered 50 per cent of their purchases to the Food Corporation of India towards mill levy would be eligible for export under the Scheme. Incentive export permits were to be granted in the ratio of 2: 3. The ratio meant that if a miller delivered two additional wagons to the Food Corporation of India he would be entitled to export three wagons on private trade account. The last date for delivering rice to the Food Corporation of India was fixed as 20 May, 1971. The last date for issue of permits was fixed as 31 May, 1971. Permits were of four types. The A type of permits was for export from one block to another within the State. Under these permits administrative charge were Rs. 2.50 per quintal. The type of permits was for export from the State of Andhra Pradesh to other States in the South. The administrative charges under the type permits were RS. 10/ per quintal. The type permits was for export to any State outside Andhra Pradesh. The administrative charges for type permits were RS. 8/ per quintal. The fourth 391 type of permits was for export of broken rice under the A type or the A type permits and the surcharges were Re. 1.00 per quintal. By an order dated 24 July, 1967 under section S of the , l955 the Central Government directed that the powers conferred on it by section 3 (1) of the Essential Commodities ` I Act, 1955 to make orders to provide for matters specified in clauses (a), (b), (c), (d), (e), (f), (h), (i) and (j) of sub section (2) thereof shall, in relation to foodstufls be exercisable also by a State Government subject to the conditions (1) that such power shall be exercised by a State government subject to such directions, if any, as may be issued by the Central Government in this behalf, and (2) . that before making any order relating to any matter specified in clauses (a) and (c) or in regard to regulation of transport of any foodstuffs under clause (d) of section 3 (2) of the , the State Government shall also obtain prior concurrence of the Central Government. By an order dated 30 September, 1967 in exercise of powers conferred by section S of the the Central . Government made an amendment to the order dated 24 July, 1967. The amendment was to the effect that before making an order relating to any matter specified in clauses (a), (c) and (f) or in regard to t distribution or disposal of foodstuffs to places outside the State or in regard to regulation of transport of any foodstuff under clause (d) the State Government shall obtain the prior concurrence of the Central Government. The State of Andhra Pradesh by an order dated 22 July, 1968 pursuant to the representation of the millers for export of rice outside the block but within the State passed orders that permits for export of rice would be issued subject to the fulfilment of their commitments and that administrative charging of Rs. 2.50 per quintal of rice would be collected from the millers before the issue of permits. Under the Southern States (Regulation of Export of Rice) (Order, 1964, Andhra Pradesh Rice and Paddy (Restriction on Movement) order 1965 and the Andhra Pradesh Rice Procurement (Levy and Restriction on Sale order, 1967 every dealer or miller was required to supply a minimum quantity of rice to the State Government or its nominees and the balance, that is to say levy free rice, could be sold in the open market or exported to the places outside the block or State under permit issued by the State Government. The representation of the millers for permission to export rice outside the block or the State was that the denial of permission to export rice would result in deterioration of stocks and consequential loss to both the trade and consuming public. The appellants applied for and obtained permits by fulfilling two principal conditions. One was to satisfy the statutory requirements of supply to the Food Corporation of India and the another was payment of administrative surcharges for every quintal of rice. In the petitions before the High Court the appellant alleged that they paid the surcharge under "trying circumstances", "mistaken belief and impression" that "the respondent has the right to collect the surcharge". The appellants also alleged that having come to know about 392 the correct legal position in the matter they asked the respondents to refund the administrative surcharges. The respondents refused to refund any administrative surcharge. The appellants contended in the petitions that the respondent Government has no right to collect any administrative surcharge, and, therefore the amount should be refunded. The appellants alleged that they made the payments under mistake of law. The High Court held that the levy of administrative surcharge is not backed by valid legislative sanction". The High Court said that the agreements between the State and the appellant millers for export were an executive scheme undertaken by the State but liability to pay tax must be covered by the statute. The High Court expressed the view that there could be no estoppel when both parties are under a mistake of law. The High Court however hold that the appellants were not entitled to any relief on three grounds. First, the administrative surcharges were paid voluntarily by the appellants. The appellants themselves represented for issue of permits. The appellants obtained the permits. They exported rice under the permits. The High Court, therefore, held that the appellants cannot claim refund of the entire amount without giving due credit for the expenses or charges incurred by the Government for the issue of permits and for the supervision of export, transport and other administrative charges. The second reason given by the High Court was that the Court would not be justified in exercising discretion in favour of the appellants who voluntarily paid the administrative charges, obtained the permits and derived considerable profits therefrom. The third reason given by the High Court was that there was undue delay in claiming the refund. The appellants contended that the three grounds on which the High Court dismissed the writ petitions were unsustainable. It is said on behalf of one of the appellants (Civil Appeals No. 2584 to 2586 of 1972) that in their application dated 10 February, 1970 for refund of charges paid by them the appellants gave particulars of payments showing the dates of payment, quantity covered by the permit, the amount of charges paid, the number of permit against which payment was made as well as the challenge under which the payment was made Thereafter the appellants called upon the Collector to furnish copies of regulations under which surcharge was collected. The Collector by letter dated 28 July 1970 informed the appellants that the State Government alone was competent to give the copy of the relevant rule or regulation under which surcharge was collected. The appellants referred to the letters dated 22 December, 1970 and 2 January, 1971 by which the State Government refused to grant certified copy of the rule or regulation on the ground that it was part of the official correspondence not meant to be supplied to the private party. In this back ground the appellants contended that since 10 February, 1970 when the appellants demanded refund the appellants from time to time made application for refund and the last reminder was on 30 December, 1971. Some of the appellants filed their writ petitions in the 393 High Court in the month of September, 1970 and some of them filed A, their writ petitions in the month of January 1972. It was, therefore, said that The applications for refund were all made within three years from the date of payment and the High Court should not have dismissed the writ petitions on the ground of delay. The appellants next contended that the pleadings were not vague and the appellants in Civil Appeals No. 2584 to 2586 of 1972 gave B. all details of the payments and, therefore, the High Court should not have dismissed the writ petitions on the ground of vagueness of particulars and pleadings. It was also said on behalf of the appellants that if the levy as well as collection of administrative surcharges was without authority of law the High Court was in error in refusing any relief to the appellants on the ground that the payments were voluntarily made. The appellants relied on the decision of this Court in The State of Kerala etc. vs k . P. Govindan Tapioca Exporter etc.(l) as an authority for the proposition that the levy of administrative surcharge is illegal. In the Tapioca case (supra) under the Kerala Tapioca Manufacture and Export (Control) order, 1966 no person could export tapioca except in accordance with permit. The State Government Levied administrative surcharge under a scheme. The State contended that the administrative surcharge was in effect and substance a licence fee charged in exercise of the police powers of the State for permitting the appellants by grant of permits to export tapioca. This Court held that the scheme was not an order under any of the provisions of the and no licence fee or fee for grant of permit was imposed by the Kerala Tapioca Control order. The E. Kerala Tapioca Control order only provided for levy of administrative surcharge. The Kerala Tapioca Control order came into existence on 9 June, 1966. Even before the promulgation of the order administrative surcharge was levied under a scheme formulated by the State Government on 15 April, 1966 published in the Kerala Gazette on 3 May, 1966. The rate of administrative surcharge levied on tapioca under the scheme dated 15 April, 1966 varied from time to time. This Court found that the order dated 15 April, 1966 formulating the scheme was not an order under any of the provisions of section 3 of the . The Scheme did not impose any licence fee. The scheme merely provided for levying of administrative surcharge. The orders levying administrative surcharge which followed the Tapioca Control order did not refer to the exercise of any power under the order. Therefore, this Court held that G. the administrative surcharge in the Tapioca case (supra) was bad and the realisations were without any authority of law. The appellants contended relying on the decision of this Court in State of Madhya Pradesh vs Bhailal Bhai(2) that the High Court in exercise of powers under Article 226 has power to order refund and repayment of tax illegally collected. The appellants submitted H: that the State had no power under any statute or any authority to (1) ; (2) ; 394 impose and collect administrative surcharge and, therefore, the payments which were made by the appellants were made under mistake of law and the State was liable to refund them. The appellants contended that the administrative surcharge was neither in the nature of a fee nor was it a tax and there was no authority of law to support the levy and collection of administrative surcharge. It was said on behalf of the appellants that neither the Essential commodities Act, 1955 nor the Southern States (Regulation of Export of Rice) order, 1964 nor the Andhra Pradesh Rice and Paddy order, 1965 nor the Andhra Pradesh Rice Procurement (Levy and Restriction on Sale) order, 1967 conferred any power to levy administrative surcharge. The respondents contended that the permits were granted pursuant to the representation of the appellants that unless they were allowed the movement of rice to places outside their blocks or outside the State they could not sell rice locally because there was no demand. The respondents further said that for ensuring export of rice the administrative machinery had to be set up. The permits were grant ed on terms and conditions of payment of surcharge and the appellants voluntarily paid surcharge and received benefits under permits. The respondents also said that the permits were contractual obligations between the appellants and the respondents. The High Court in exercise of its discretion refused to grant mandamus on a consideration of facts and circumstances of the case. The two principal matters which weighed with the High Court are these. First, the appellants voluntarily paid the amounts and derived full advantage and benefit by utilizing the permits. Second, there is undue delay in claiming refund. Where the High Court has in exercise of discretion refused to grant a writ of mandamus, this Court does not ordinarily interfere. (See Municipal Corporation of Greater Bombay vs Advance Builders (India) Private Limited;(l) D. Cawasji & Co, vs State of Mysore.(2) Refund of illegal taxes stands on a different footing from claiming refund of surcharge paid under terms and conditions of permits. The only basis of tax is legislative sanction and if the legislative sanction fails, the collection of tax cannot be sustained. In the present case the claim for refund is to be judged between the rival contentions. The appellants contend that there is no legislative sanction for collection of administrative surcharge. The respondents on the other hand support the collection of administrative surcharge first as a condition for permit and second as an item of maintenance charges in the maintenance and supervision of the scheme for export of rice. The respondents also contend that the appellants have no right to claim refund under section 72 of the Indian Contract Act because the payments were neither under mistake of law nor under coercion. It is said by the respondents that there is no coercion because the export scheme was voluntary. Again, it is said that there is no mis take because the payments made were in fact due as part of the export scheme initiated at the instance of the appellants. The respondents deny the claim of the appellants on the further ground that the (1) ; at p. 420. (2) [19751 2 S.C.R. Sl I at p. 527 395 appellants having derived the benefit and caused detriment to the A Government are estopped from questioning the validity of the payments voluntarily made. Another ground on which the respondents challenge the claim of the appellants is that the payments were part of the consideration of the agreement entered into by the appellants with State. If it be assumed that the agreements are illegal, the respondent contends that the appellant being a party to the same cannot sue for recovery of money paid. All the matters were covered by the common judgment. In some cases the claims were beyond three years from the date of the payments. In some cases they were within a lesser time but the ground of delay on which the High Court exercised discretion is not confined L purely to period of limitation but is bound up with matters relating to conduct of parties in regard to payments pursuant to agreements between the parties. The remedy under Article 226 is not appropriate in the present cases for these reasons as well. First, several petitioners have joined. Each petitioner has individual and independent cause of action. A suit by such a combination of plaintiffs would be open to misjoinder. Second, there are triable issues like limitation, estoppel and questions of fact in ascertaining the expenses incurred by the Government for administrative surcharges of the scheme and allocating the expenses with regard to quality as well as quantity of rice covered by the permits. The appellants contended that in all cases of claim for refund of money, the payments were voluntary and, therefore, the High 3 Court was in error in refusing refund because of the voluntary character of payment. In cases relating to refund of payments of tax which is illegal the voluntary character of payment is that tax payer has no say but is compelled to pay. In the present cases the questions are whether it can be said that payments of administrative charges were voluntary in order to reap benefits of export of rice covered by the permits. The contention of the respondents that the export scheme was framed at the instance of the appellants and that the administrative surcharge is the consideration for preparation, maintenance and supervision of the scheme raises questions which can be solved by a suit. A mandamus will go where there is a specific legal right. Mandamus may be refused where there is an alternative remedy which is equally convenient, beneficial and effectual. If there is no other means of obtaining justice, the writ of mandamus is grant ed to enable justice to be done. Those are cases where justice can not be done unless a mandamus is to go. R. V. Bristol and Exeter Railway Co.(l) is an authority for the proposition where the Corporation could be compelled to pay a sum of money pursuant to an agreement which could not be enforced by action because the agreement was not under seal. This Court in Lekh Raj vs Deputy Custodian(2) and Har Shankar & Ors. vs Deputy Excise and Taxation Commissioner & ors.(8) held that contractual obligations cannot be enforced through a writ of mandamus. (1) 1845 (3)(1) 1845(3)Ry. & Can. (2) 11966] I S.C.R. 120. (3) ; 396 The view of this Court in Sales Tax officer, Banaras & ors. v A Kanhaiya Lal Mukundalal Saraf(1) was that a mandamus could be issued when the assessments were found to be illegal. In Suganmal vs State of Madhya Pradesh & ors.(2) this Court said that the mandamus for recovery of money could be issued only when the petitioner was entitled to recover that money under some statute. In Burmah Construction Co. vs State of Orissa(8) this Court said that normally the parties are relegated to a suit to enforce civil liability arising out of a breach of contract or a tort to pay an amount of money. An order for payment of money may sometimes be made to enforce a statutory obligation. In the State of Kerala vs Aluminium Industries Ltd.(4) the refund claimed was by reason of the moneys being paid under mistake of law and the collection having been made wrongly. The petitions solely for the writ of mandamus directing the State to refund the moneys in the present case have been rightly refused by the High Court on the grounds of delay, insufficiency of particulars and pleadings, and voluntary payments. The additional reasons in our opinion are that various questions of fact arise as to whether there was really mistake or it was a case of voluntary payment pursuant to contractual rights and obligations. The plea of mistake is a bare averment in the writ petitions. The payments did not disclose the circumstances under which the alleged mistake occurred and the circumstances in which the legal position became known to the appellants. The respondents contradicted the plea of mistake. A triable issue arose as to whether there was a mistake in paying the amounts and when exactly the mistake occurred and under what circumstances. Section 72 of the Contract Act states that a person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it. The mistake is material only so far as it leads to the payment being made without consideration. This Court has said that the true principle is that if one party under a mis take of law pays to another money which is not due by contract or otherwise that is to be repaid. When there is a clear and unambiguous position of law which entitles a party to the relief claimed by him equitable considerations are not imported. A contract entered into under a mistake of law of both parties falls under section 21 of the Contract Act and not section 72. If a mistake of law had led to the formation of a contract, section 21 enacts that the contract is not for that reason voidable. If money is paid under that contract, it cannot be said that the money was paid under mistake of law; it was paid because it was due under a valid contract and if it had not been paid payment could have been enforced. (See Shiba Prasad Singh vs Srish Chandra Nandi(5) See also Pollock & Mulla Contract Act 9th Ed. by J. L. Kapur pp. 519 520). In the present case, the respondents do not support the demand for administrative charges either as a tax or as a fee but as a term and condition of permit and as a (1) (2) A.I.R. 1965 S.C. 1740. (3) [1962] Supp. 1 S.C.R. 242. (4) 16 S.T.C. 689. (5) 76 I.A. 244. 397 term of agreement between the parties for the maintenance and supervision expenses for the scheme for export permits of rice from one block to another within the State or outside the State. It may be stated here that in cases where the State collected administrative changes but could not grant permits the State refund t ed moneys to such Person. It is only where millers have obtained permits and taken advantage thereof that the State contends that there is no mistake and that the payments were made voluntarily with full knowledge of facts. For these reasons the appeals are dismissed. If the parties are so advised they may institute suits and all rival contentions would be . open to both parties. Parties will pay and bear their own costs. V.P.S. Appeals dismissed.

The respondent State Government was exercising powers delegated to it by the Central Government under the . It introduced an 'Incentive Export Scheme ' under which, millers, who delivered 50% of their purchases to the Food Corporation of India towards mill levy, would be eligible for exporting rice either within the State from one block to another or to States outside. On payment of administrative charges. On the representation of the millers (appellants) that they could not sell rice locally because there was no demand, and that unless they were allowed to move rice outside the blocks or outside the State there would be deterioration of stocks resulting in loss to both trade and the consuming public, the State passed orders permittion the export of rice subject to the fulfilment of their commitments to the Food Corporation and the payment of administrative charges; and also set up the necessary administrative machinery for ensuring such export. Permits were accordingly granted on terms and on condition of payment of the surcharge fixed. and the millers paid the surcharge and received the benefits under the permits. Thereafter, they claimed refund of the administrative surcharge on the ground that the State had no right to collect it and that they made the payments under mistake of law. Where the State collected administrative charges but could not grant permits, the State refunded the money, but, where millers obtained permits and had taken advantage thereof, the State contended that there was no mistake on the part of the millers and that the payments were made voluntarily with full knowledge of facts and in discharge of their contractual obligations. The millers filed writ petitions praying for directions to the State to refund the administrative surcharges collected from them, but the High Court held that they were not entitled to the relief on the grounds of delay, insufficiency of particulars regarding expenses and charges incurred by the Government, and the payments being voluntary. Dismissing the appeals to this Court, ^ HELD: The petitions were rightly dismissed by the High Court. Also, since various question of fact are involved as to whether there was really a mistake, or whether it was a case of voluntary payment pursuant to contractual rights and obligations. the remedy under article 226 is not appropriate in the present cases. [396C D] (a) A mandamus will go where there is a specific legal right. If there is no other means of obtaining justice, the writ of mandamus is granted to enable justice to be done. A writ of mandamus for recovery of money could be issued only when the petitioner was entitled to recover that money under some statute. An order for payment of money may sometimes be made to enforce a statutory obligation. A mandamus for refund of tax could be issued when the assessments were held to be illegal; but contractual obligations cannot be enforced through a writ of mandamus. Normally, the parties are relegated to a suit of enforce civil liability arising out of a breach of contract or a tort, to pay an amount of money. Mandamus may also be refused where there is an alternative remedy which is equally convenient, beneficial and effectual [395F 396C] 388 R. V. Bristol and Exeter Railway Co. 1845(3) Ry. & Can. Cas. 777; Lekh Raj v Deputy Custodian, ; Har Shankar & ors. vs Deputy Excise and Taxation Commissioner & Ors., ; ; Sales Tax officer Banaras & ors. vs Kanhaiya Lal Mukundalal Saraf, ; Suganmal vs State of Madhya Pradesh & ors., A.I.R. 1965 S.C. 1740; Burmah Construction Co. vs State of Orissa, [1962] Supp. 1 S.C.R 242 and State of Kerala vs Aluminium Industries Ltd., 16 S.T.C. 689, referred to. (b) The ground of delay on which the High Court, in the exercise of its discretion, refused to grant a mandamus is not confined purely to the period of limitation. Though some of the petitions were filed within 3 years from the date of payment, the delay is bound up with matters relating to the conduct of parties in regard to payments pursuant to agreements between the parties. [395B C] (c) In the present cases, several petitioners have joined in the writ petitions. Since each has an individual and independent cause of action, such a combination would be open to the objection of misjoinder even in a suit. [395C D] (d) The issues regarding limitation, estoppel and questions of fact in ascertaining the expenses incurred by the Government for administrative purposes of the scheme and allocating the expenses with regard to the quality as well as quantity of rice covered by the permits, are triable more appropriately in a suit. [395D] (e) The plea of mistake is a bare averment in the writ petition. The payments did not disclose the circumstances under which the alleged mistake occurred nor the circumstances in which the legal position became known to the millers. Whether there was a mistake in paying the amounts and when exactly the mistake occurred, are also issues triable in a suit. [1396D E] (f) The Government did not support its demand for administrative charges either as a tax or a fee, but as a condition of the permit and as a term of agreement between the parties to meet the maintenance and supervision ex penses for the Scheme of export permits. Under section 72, Contract Act, 1872 if one party, under a mistake of law, pays to another money which is not due by contract or otherwise, that money has to be repaid. The mistake is material only so far as it leads to the payment being made without consideration. But if a mistake of law had led to the formation of a contract. section 21 of the Contract Act enacts that such a contract is not, for that reason, voidable; and if money is paid under that contract, it cannot be said that the money was paid under mistake of law. It was paid because it was due under a valid contract, and if it had not been paid, payment could have been enforced. [396E 397A] The State of Kerala etc. vs K. P. Govindan Tapioca Exporter etc. ; ; State of Madhya Pradesh vs Bhailal Bhai ; and Shiba Prasad Singh vs Srish Chandra Nandi, 76 I.A. 244, referred to. (g) Where the High Court has, in the exercise of its discretion refused to grant a writ of madamus, this Court does not ordinarily interfere [394E] Municipal Corporation of Greater Bomboy vs Advance Builders (India) Private Limited. [1972] I S.C.R. 408 at p. 420 and D. Cawasji d Co. vs State of Mysore [1975] 2 S.C.R. 511 at p. 527, referred to.

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Civil Appeal No. 166, of 1970. (Appeal by special leave from the judgment and order dated the 26 9 1969 of the Patna High Court in Civil Writ Petition Case No. 183 of 1968(1). L. M. Singhvi and U. P. Singh For the appellants. B. P. Singh for the respondent. The Judgment of the Court was delivered by SARKARIA, J. Respondents 1, 2 and 3 herein made an application under Article 226 of the Constitution alleging that the decision of the Bihar State Government fixing the seniority of Respondent 4 below Shri C. P. Singh (Respondent 5(1) and Shri E. Rehman (Respondent 6(1) and above the applicants, in the cadre of Bihar Superior Judicial Service was illegal and ultra vires. They prayed for a writ of mandamus, direction or order quashing the same and directing the State Government to revise the applicant 's seniority vis a vis the opposite parties, (Respondents 4, 5 and 6 herein(1). , The applicants also challenged the upgrading of the posts of Deputy Registrar, Patna High Court and the Secretary, Bihar Legislative Assembly with effect from June 17, 1959 till the posts were held by Respondents 5 and 6, respectively. A Full Bench of the High Court partly allowed the writ application and quashed the order of the State Government placing Respondent 4 below Respondents S and 6 in seniority. The material facts were these: Respondents 4, 5 and 6 were appointed as Munsifs on the same date under one notification. On April 25, 1959, these three officers were holding the posts of Subordinate Judges. Prior to that date, four posts of Additional District and Sessions Judges fell vacant. On April 25, 1959, the High Court, after considering the service records of the Subordinate Judges due for promotion, recommended Respondents 4, 5 and 6 and Shri Sharda Prasad for promotion as Additional District & Sessions Judges in those vacancies. Respondents 5 and 6 on that date were acting as Deputy Registrar, Patna High Court and Secretary, Bihar Legislative Assembly, respectively, and since the release of Respondent 5 from that post was not in public interest, the High Court recommended temporary upgrading of that post. It further recommended 112 that Respondent 6 should act as Additional District and Sessions Judge in the second longer vacancy and in case the State Government did not think it proper to relieve him, the post of Secretary, Bihar Legislative Assembly should be upgraded. Respondent 4 was recommended to be promoted as Additional District & Sessions Judge in the third longer vacancy. He joined in the promoted rank on June 17, 1959 and continued in it till October 1, 1959. Before the actual officiation by Respondent 4 in the promoted rank, the Government by its letter, dated August 5, 1959, had approved the creation of two posts of Additional District and Sessions Judges for a period of one year in the first instance, consequent on the amendment of Bengal, Agra and Assam Civil Court Act, 1887. On May 22, 1959, the Government sanctioned the creation of two posts of Peripatetic District & Sessions Judges for a period of two years. Thus, between April 25, 1959 and June 17, 1959 four extra posts of Additional District & Sessions Judges were created, and were available for the persons found fit and due for promotion from the cadre of Subordinate Judges. On August 17, 1959, the High Court recommended Sarvshri A. N. Sahay, R. B. P. Sinha, C. P. Singh (Respondent 5(1) and E. Rahman (Respondent 6(1) for promotion as Additional District and Sessions Judges. It, however, made it clear that since Respondents 5 and 6 could not be relieved from the posts of Deputy Registrar, High Court and Secretary, Legislative Assembly, they should continue in these posts after the same had been upgraded. The High Court further recommended that in view of the heavy arrears two more posts of Additional District and Sessions Judges be created for the period for which Respondents 5 and 6 were to continue on the posts they were then holding. Ten more posts of Additional District & Sessions Judges fell vacant between November 1, 1959 and April 6, 1960. Thus, there were, in all, fourteen vacancies id the posts of Additional District and Sessions Judges, to one of which Respondent 4 could and should have been ap pointed, if there was no administrative or procedural delay attributable to his fault. Respondents 1, 2 and 3 were appointed as Additional District and Sessions Judges by a Government notification, dated April 21, 1960. Despite the availability of a post and suitability of Respondent 4 to be appointed as Additional District & Sessions Judge, he was promoted to that post on September 19, 1960. Respondent 4 made a representation dated April 10, 1961, to the State Government praying for fixation of his seniority just below Shri E. Rehman in the cadre of Additional District and Sessions Judges. He followed it up by supplementary representations in the same connection. These representations remained pending on the administrative side of the High Court. By a letter dated August 20, 1964, the High Court recommended the rejection of his representations. The Government, however, was of the opinion that there was substance in the representation of Respondent 4. It therefore made a back reference on August S, 1965 to the High Court for reconsideration of the matter. The High Court, however, informed the Government that it did not see any reasons to reconsider the matter. Thereafter the Government took a decision and allowing the representation of Respondent 4, ordered that he should be deemed to 113 have been officiating as Additional District and Sessions Judge with effect from November 1, 1959 and for purposes of seniority, should rank immediately below Respondents 5 and 6 in the cadre of the Superior Judicial Service. The Government was of opinion that on a proper interpretation of Rule 16(e) of the Bihar Superior Judicial Service Rules, it was authorised to fix the seniority from a date from which officiation was possible on account of availability of vacancy. On being satisfied that the delay between October 1, 1959 and September 19, 1960, in the promotion and appointment of Respondent 4 to the post of Additional District and Sessions Judge, when several posts in that cadre were vacant, was wholly an administrative and procedural delay the State Government in order to relieve undue hardship to Respondent 4, relaxed Rule 16(e) of the Service Rules and passed the impugned order which it communicated to the High Court by a letter dated January 24, 1968, which reads as follows: "I am directed to refer to your letter No. 501 dated 18 1 66 on the subject noted above and to say that after a careful consideration of the case of Shri Jitendra Narain at present District and Sessions Judge of Dhanbad, the State Government have been pleased to decide that Shri Narain shall rank immediately below Shri Enayetur Rahman and above Sarvashri Madan Mohan Pd., Rameshwar Pd. Sinha and Chandra Shekhar Prasad Singh, the direct recruits from the Bar in the cadre of the Superior Judicial Service, and for this limited purpose, he will be deemed to have been officiating as Additional District and Sessions Judge with effect from 1st November 1959". Thus, the question before the High Court was one of fixation of the seniority of the writ applicants, the three direct recruits, vis a vis Respondent 4. In this context, the interpretation of Rule 16(e) of the State 's Superior Judicial Service Rules came up for consideration. This Rule provides: "Seniority of direct recruit vis a vis promoted officer shall be determined with reference to the dates from which they F may have been allowed to officiate continuously, in posts in the cadre of the service or in posts outside the cadre on identical time scale of pay and of equal status and responsibility or in posts of higher scale of pay and of higher responsibility in or outside the cadre. " There, as here, it was contended that the meaning of the expression "may have been allowed to officiate continuously" occurring in the above quoted clause is that a notional, continuous officiation in a post in the cadre of the Service or outside it, will give preference to the promoted officer in the matter of seniority over the direct recruit provided there were vacancies in one of which he could or might have been allowed to officiate continuously. The High Court rejected this contention and held that this expression means actual and continuous officiation and not a fictional or notional one. The High Court, however, went further and said that the power to determine seniority being a matter of control exclusively vests in the High Court 114 under Article 235 of the Constitution. If further held that the Government could not fix the seniority of Respondent 4, as they had done by taking recourse to the "hardship rule" framed by them under the proviso to Article 309 of the Constitution. According to it, what the Government could not do directly, could not be indirectly done by it by relaxing the requirement of Rule 16(e). Shri Madan Mohan Prasad (Respondent No. 1 in the original petition(1) has since been appointed to the Bench of the High Court. Consequently, he has withdrawn his appeal (Civil Appeal No. 1928 of 1970(1) which stands dismissed as such with no order as to costs. We are told that Sarvashri Rameshwar Prasad Singh (Respondent 2(1), Jitendra Narain (Respondent 4(1) and Chandrika Prasad Sinha (Respondent 5(1) have also been appointed to the Bench of the High Court, and that Respondents 3 and 6 have since retired from service as District and Sessions Judges. The matter has thus been rendered academic, except, as the Solicitor General says, for the limited purpose of fixing pension and gratuity on the basis of the length of service in the cadre of Superior Judicial Service. Before dealing with the contentions canvassed, it will be appropriate to notice the relevant provisions of the Bihar Superior Judicial Service Rules, 1951. Rule 6 says that of the posts in the cadre of the service, two thirds shall be filled by promotion and one third by direct recruitment. Then there is a proviso which gives the State Government power to deviate from this proportion after consultation with the High Court. Rule 15 deals with confirmation. It says: "15(1)(a). A member of the Service appointed under clause (a) of rule S shall be on probation for a period of one year and shall not be confirmed unless he is found to be suitable in every respect for appointment to the Service: Provided that the period of probation may be extended by the State Government, in consultation with the High Court. (b) When such a member is confirmed in the Service the period spent on probation shall be counted towards leave, pension or increments in the relevant time scale. (2) Promoted officers appointed against substantive vacancies in the cadre shall forthwith be confirmed in the Service. " Then comes Rule 16 which regulates the inter se seniority. It provides: "16(a). Seniority inter se of direct recruits shall be determined in accordance with the date of their substantive appointments to the Service: Provided that a direct recruit appointed to the post of an Additional District Judge shall be junior to a direct recruit appointed to any other post in the schedule. 115 (b) Seniority inter se of promoted officers shall also be determined in accordance with the dates of their substantive appointments to the Service. (c) When more than one direct recruit is appointed at one time, the seniority inter se will be determined in accordance with the order given in the notification making their appointments. B (d) When more than one appointment is made by promotion at one time, the seniority inter se of the officers promoted shall be in accordance with their respective seniority in the Bihar Civil Service (Judicial Branch(1). (e). . . . " There is a Note appended to this rule which clarifies that a period of leave or the annual vacation of the Civil Courts will not be treated as an interruption for the purposes of this sub rule. It will be seen that these rules are silent as to whether any question in regard to inter se seniority of the promoted officers and the direct recruits is to be determined by the High Court or the State Government in consultation with the High Court. Mr. Lal Narain Sinha, Solicitor General contends that this question is concluded by the decision of this Court in Chandramouleshwar Prasad vs Patna High Court and ors.(1). It is therefore proposed to notice that case in some detail. There, the petitioner as well as respondents 3 to 5 belonged to the Judicial Service of Bihar. They had joined service as Munsiffs. In due course, they were promoted as Subordinate Judges. In 1962, the question of promoting them as Additional District and Sessions Judges was considered by the High Court and the Government. The High Court wanted respondents 3 and 4 to function as Additional District and Sessions Judges ahead of the petitioner and its recommendation in that behalf was accepted by the Government. Due to certain circumstances, the petitioner started acting as such earlier than respondents 3 to 5. The Bihar Civil List published in March 1968 showed the petitioner as No. 10 and respondents 3 to S as Nos. 12 to 14 in the cadre. Respondents made a representation to the High Court for correction of the gradation list. The High Court accepted their representation in September 1968. In the same month the District and Sessions Judge at Bihar retired and respondent No. 3 who was the 3rd Additional District and Sessions Judge was asked by the High Court to officiate in the vacancy. The petitioner who was also working as 1st Additional District and Sessions Judge in the same place considered this to be a supersession and memorialised the Government. The latter took action on October 17, 1968 appointing the petitioner as officiating District and Sessions Judge. Thereupon the High Court transferred the petitioner to another District on October 25, 1968. The petitioner moved this Court under article 32 challenging the validity of the order of the High Court transferring him from Errah and posting him as Additional District and Sessions Judge at Singhbhum and the direction (1) ; 116 or the order of the High Court dated September 23, 1962 declaring respondents 3 to S as senior to him in the gradation list of Additional District and Sessions Judges maintained by the High Court. He further prayed that the High Court be directed to allow him to take over charge as officiating District and Sessions Judge at Errah in terms of the Government 's notification dated October 17, 1958. The main ground on which he challenged the direction or order of September 23, 1968 relating to his position in the gradation list was that it was Q in contravention of r.16(b) and r.16(d) of the Bihar Superior Judicial Service Rules, 1951. He took his stand on the notification dated October 17, 1968 of the Government purporting to appoint him temporarily as District and Sessions Judge, Errah. On the question of fixing of seniority, this Court speaking through Mitter J. said: "The position of a person in a Civil List gives no indication of his intrinsic quality as an officer. The list merely shows the length of service of the officers according to the dates of their appointment, their posting at the time when the list is published and their designation and scale of pay at that time. The gradation lsit of the High Court has no legal basis and its preparation is not sanctioned by the Bihar Superior Judicial Service Rules. The seniority inter se of the petitioner and the three respondents will have to be deter mined when the question of their confirmation comes up for consideration We only hope that there will be no such misunderstanding between the High Court and the Secretariat in the future and if there ever be any difference of opinion attempts will be made to resolve them by mutual deliberation without one or the other making an order or giving a direction contrary to the views of the other before deliberation. " In the result this Court held: "that the Government notification of October 17 1968 was not in terms of article 233 of the Constitution and consequently the question of quashing the High Court 's order dated October 25, 1968 does not arise. We also hold that the Gradation List of Additional District r and Sessions Judges prepared by the High Court has no legal sanction and that the seniority of the petitioner and respondents 3 to S can only be determined in the superior Judicial Service where they are now all holding officiating posts when the occasion arises. " It is to be noted that in Chandramouleshwar (supra), this Court was concerned only with cls.(b) and (d) of r.16, while in the present case, we are concerned with fixation of inter se seniority of promoted officers vis a vis the direct recruits which matter is governed by cl.(e) of me said rule. It will be seen from what has been extracted above that in Chandramouleshwar, even while construing cls.(b) and (d), this Court did not say in express terms that the gradation list prepared by the High Court was invalid because under the concerned rules, the 117 High Court had no power to determine inter se seniority of the promoted officers or that the determination of such seniority was a matter for the State Government. All that was held was that the question of determining inter se seniority in terms of cls.(b) and (d) of r. 16 does not arise before their confirmation comes up for consideration. In other words, the question of determining inter se seniority of the promoted officers could not be determined apart from and prior to their confirmation in the Service. Since the Civil List prepared by the High Court had not been drawn up in accordance with the aforesaid rule, it had "no legal basis". Thus, Chandramouleshwar seems to lay down that the question of determining inter se seniority of promoted officers is intertwined with the question of their confirmation in the Service. According to cl. (a) of r. 16, inter se seniority of direct recruits is also to be determined in accordance with the dates of their confirmation in the Service. In this case, however, we arc concerned with fixation of the seniority of direct recruits vis a vis promoted officers. The relevant clause for this purpose is cl.(e) of r.16. The governing criterion, according to this clause, is "the date from which they may have been allowed to officiate continuously in posts in the cadre of the Service or in posts outside the cadre on identical time scale of pay and of equal status and responsibility or in posts of higher scale of pay and of higher responsibility. " D Reading clause (e) together with cls. (a) and (b) of r. 16, it is clear that before fixing the seniority of direct recruits vis a vis promoted officers, it will be necessary as a preliminary step, to prepare two separate seniority lists, one of direct recruits under cl. (a) and the other of promoted officers under cl. (b) of r. 16, in the chronological order of their confirmation. This Court has recently held in The High Court of Punjab and Haryana etc. vs The State of Haryana and ors.) that the power of confirmation of District Judges is a part of the power of control vested in the High Court under article 235 of the Constitution. Since the Bihar Superior Judicial Service Rules, make the chronological order of confirmation an integral part of the process of fixation of the order of p seniority in the Service, the inference is that both these powers were intended to be exercised by one and the same authority. Since Article 235 of the Constitution vests the power of confirmation in the High Court, it stands to reason that the power of determining the seniority in the Service is also with the High Court of course, in determining the seniority the High Court is bound to act in accordance with the Rules validly made by the Governor under the Proviso to article 309 of the Constitution. Be that as it may, it is not necessary to pursue the discussion further. Appointment of three of respondents to the Bench of the High Court and retirement of two others has rendered the matter largely, if not entirely, academic. We further agree with the High Court that the words "may have been allowed to officiate continuously" in cl.(e) of r.16 mean actual (1) ; 118 and continuous officiation and not a fortuitous or fictional officiation. A A notional construction of the clause would lead to anomalous results. The State Government therefore, could not on an interpretation of r.16(e) says that for the limited purpose of seniority respondent 4 would rank below respondents 2 and 3 but above the writ petitioners and will be deemed to have been officiating as Additional District and Sessions Judges with effect from November 1, 1969. Such a deeming officiation, as rightly held by the High Court, for the purpose of determination of seniority on a construction of cl.(e) was not permissible. For the foregoing reasons, the appeal fails and is dismissed without any order as to costs. P.B.R. Appeal dismissed.

Rule 6 of the Bihar Superior Judicial Service Rules, 1951, says that of the posts in the cadre of the service, two thirds shall be filled by promotion and one third by direct recruitment. Clause (e) of r. 16 provides that seniority of direct recruits vis a vis promoted officers shall be determined with reference to the dates from which they may have been allowed to officiate continuously in a post in the cadre of the Service. Respondents 1, 2 and 3 who were direct recruits were appointed as Additional District & Sessions Judges with effect from April 21, 1960. Respondents 4, 5 and 6 belonged to the judicial service of the State. Respondents 5 and 6 were promoted as Additional District & Sessions Judges. But despite the availability of a post from November 1, 1959, and suitability of respondent 4, he was appointed to that post only on September 19, 1960. His representation that his seniority should be fixed below that of respondent 6 was rejected by the High Court. But, the State Government said that in order to relieve undue hard ship to respondent 4, he should be deemed to have been officiating as Additional District & Sessions Judge with effect from November 1, 1959 and that for the purposes of seniority he should rank immediately below respondents 5 and 6 on the view that on a proper interpretation of r. 16(e) of the Rules, the Government was authorised to fix the seniority from a date from which officiation was possible on account of availability of vacancies. Respondents 1 to 3 (direct recruits(1) in a writ petition impugned the Government 's action in fixing the seniority of respondent 4 below that of respondents 5 and 6 but above them. Before the High Court the State contended that the meaning of the expression "might have been allowed to officiate continuously" in r. 16(e) is that a notional, continuous officiation in a post in the cadre of the service or outside it, will give preference to the promoted officers in the matter of seniority over the direct recruits provided there were vacancies, in one or which he could or might have been allowed to officiate continuously. The High Court rejected this contention and held that this expression meant actual and continuous officiation and not a fictional or notional one. Dismissing the appeal, ^ HELD: (1)(a) The words "may have been allowed to officiate continuously" in cl. (e) of r. 16 mean actual and continuous officiation and not a fortuitous or fictional officiation. A notional construction of the clause would lead to anomalous results. The State Government, therefore, could not, on an interpretation of r. 16(e) say that for the limited purpose of seniority respondent 4 would rank below respondents 5 and 6 but above the writ petitioners (respondents I to 3(1) and will be deemed to have been officiating as Additional District & Sessions Judges with effect from November 1, 1959. Such a deeming officiation for the purpose of determination of seniority on a construction of cl. (e) was not permissible. [117 H 118 B] (b) Reading cl. (e) together with cl. (a) and (b) of r. 16, it is clear that before fixing the seniority of direct recruits vis a vis promoted officers it will be necessary, as a preliminary step, to prepare two separate lists one of direct recruits under cl. (a) and the other of promoted officers under cl. (b) of r. 16 in the chronological order of their confirmation. [117 D E] 111 (2) The power of confirmation of District Judges is a part of the power of control vested in the High Court under article 235 of the Constitution. Since the Bihar Superior Judicial Service Rules make the chronological order of confirmation an integral part of the process of fixation of the order of seniority in the service, the inference is that both these powers were intended to be exercised by one and the same authority. Since article 235 of the Constitution vests the power of confirmation in the High Court, the power of determining the seniority in the service is also with the High Court. In determining the seniority the High Court is bound to act in accordance with the rules validly made by the Governor under the proviso to article 309 of the Constitution. [117 E G] Chandramouleshwar Prasad vs Patna High Court and others ; , followed. High Court of Punjab and Haryana etc. vs The State of Haryana and others ; , distinguished.

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Civil Appeal No. 1297 of 1975. From the judgment and order/decree dated the 30th May, 1975 of the Delhi High Court in S.A.O. 43 of 1973. A. K. Sen, R. L. Kohli, section K. Bagga, Mrs. section Bagga and Miss Yash Bagga for the Appellant. Y. section Chitaley, R. P. Singh, R. K. Jain and M. Mudgal for Respondent No. 1. The Judgment of the Court was delivered by KRISHNA IYER,J. This fifth deck appeal, by certificate under article 133 of the Constitution, stems from a humdrum but protected litigation under the rent control law by a tenant who has lost all alone the way. If we may prologise, this special law hopefully set up a quasi judicial machinery for summary trial and speedy disposal and prescribed eviction save upon simple grounds safeguarding the security of tenants of buildings against being inequitably ejected. But this very case discloses the chronic distortion in processual justice, caused by a slow motion spiral of appeals and plethora of technical pleas defeating the statutory design. 908 The obvious legislative policy and project in this class of simplistic landlord tenant litigation demands a radically non traditional judicial structuring and legal engineering, by passing sophistications and formalisms and tier upon tier of judicial reviews. Both these imperatives are conspicuously absent in current rent control litigation a dismal failure which the legislature will, we hope, awaken to rectify. Post audit of socio economic laws in action, with a view to over see if legal institutions and jural postulates actually achieve legislatively mandated objectives in special classes of dispute proceessing, makes for competent and credible implementation of laws and saves the time of the higher courts and the money of the public at present consumed exasperatingly but avoidably. The price of legislative inaction in these areas is popular disenchantment with laws and tribunals. Factual matrix The appellant is the tenant of a building in Delhi having been inducted into possession by the respondent landlord under a letting of May 19, 1954, evidenced by a deed which fixed the term merely as less than a year (a circumstance out of which a minor ripple of legal argument has arisen). At the time of the lease the (for short, the TP Act), had not been extended to Delhi although, later, on December 1, 1962, the said Act was made applicable to this area. The landlord had been receiving rent from the tenant until the time he filed a petition for eviction (1967), the statute which regulated the right to eviction being the Delhi Rent Control Act, 1958 (59 of 1958) (for short, the Rent Act). The eviction petition set out two grounds out of the many specified in section 14 of the Rent Act, viz. ,unauthorized sub letting of a portion of the premises and possession, by the tenant, of alternative accommodation. Both these grounds having been made out, the evictibility under the Rent Act became inevitable. But, in the High Court, the appellant tenant fell back on certain defences grounded on ss.106 and 111 of the TP Act on the score that no notice to quit had been given, nor notice of forfeiture, as prescribed by those sections. There is no dispute that neither notice to quit nor notice of forfeiture determining the tenancy had been given by the landlord. The core of the controversy thus turns on the need to comply with the requirements of sections 106 and/or 111 of the TP Act and the fatal effect of failure in this behalf. The landlord seeks to break through these defences by urging that the lease has expired by efflux of time limited thereby under section 111(a) and no notice terminating the tenancy under section 106 is needed and further that the forfeiture of the tenancy caused by sub letting contrary to the terms of the deed of demise can be availed of by the landlord even in the absence of a notice as contemplated by section 111 (g) because the TP Act, as amended by the Amending Act of 1929, did not, in terms, apply to the present lease and the principles of justice, equity and good conscience, which alone applied, did not desiderate the technical requirement of a notice in writing of an intention to determine the lease. The Rent Controller, at the floor level, ordered eviction and the Appellate Tribunal affirmed it, upholding the vice of sub letting without consent of the landlord in the manner specified in section 14(1)(b) as 909 also the disability spelt out in section 14(1) (h) on acquiring vacant possession of alternative residence. The resistence founded on the TP Act was also over ruled by the appellate Tribunal. But, when the case reached the High Court in second appeal, under section 39 of the Rent Act, the learned Single Judge felt that certain points of law spun out of the TP Act deserved consideration by a Division Bench and referred the appeal for determination accordingly to a larger Bench. The Division Bench which heard the appeal dismissed it but granted a certificate of fitness for appeal to the Supreme Court under article 133 of the Constitution, restricting it, however, to but one ground urged before it. Shri A. K. Sen, for the appellant, made a gentle hint that the High Court had heard long arguments in March 1974 but could resolve its doubts to deliver a judgment only in May 1975 so much so the freshness of counsel 's submissions might have faded somewhat and so we should have a closer look at his points de hors the judgment under appeal. If this fact of a long hiatus between hearing and decision were true, it must have inflicted a heavy strain on the memory of the learned Judges which it is a healthy practice to avoid. However, after listening to Shri A. K. Sen, we feel that his fears are unfounded. A preliminary pre emptive objection was urged by the respondent that the High Court having circumscribed the certificate to a single point no other submissions should be permitted. We see no force in this untenable insistence on tying down the appellant. Once a certificate of fitness has been granted under article 133, the appeal, in all its amplitude, is before this Court and every point may be urged by the appellant provided this Court permits it, having regard to the circumstances. Perhaps, a certificate under article 132, or special leave under Art, 136 may stand on a different footing if the Court limits the grounds in any manner. Of course, conceding the Court 's plenary power in appeals on certificate under article 133, it is still within the Court 's discretion not to allow a new point to be taken up [The rulings in ; and 1964(2) SCR 930 lay down the law on this point]. The contentions We have already indicated that, under the Rent Act two grounds for eviction have been good by the landlord. Indisputably, sub letting has been substantiated. Even so, it is argued that only where a lease has been duly determined giving rise to a right to present possession under the TP Act can the landlord sue for recovery of the building. The scheme of the Rent Control law, speaking generally, is to put further fetters on landlords seeking eviction from urban buildings where, in the absence of such new barriers, they will be entitled to ejectment. The acute scracity of accommodation is the raison de 'etre of the law. It is not as if the rent control statutes are a bonanza for the landlords and confer a relaxed right to eject where, under the general law, they do not have such a right in praesenti. To hold otherwise is to pervert the purpose and substitute an added danger for an extra dyke. It follows that even where under a particular rent control statute the landlord makes out grounds for eviction, he can institute proceedings in this behalf only if de hors the said grounds he has cause of action under the TP Act. 910 We agree that, if the rent control legislation specifically provides grounds for eviction in supersession, not in supplementation, of what is contained in the T.P. Act, the situation may conceivably be different. But, in the Delhi Rent Act,as in many other like Statutes, what is intended to be done is not to supplant but to supplement, not to eliminate the statutory requirements of determination of tenancy but to superimpose a ban on eviction which otherwise may be available in conformity with the TP Act without fulfilment of additional grounds. 'No order . . for the recovery of possession of any premises shall be made. in favour of the landlord against a tenant ' is a blanket ban in section 14(1) of the Rent Act. It is followed by enumeration of specific grounds proof of which may authorize the Controller to make an order for the recovery of possession of the premises. It follows that before a landlord can institute proceedings for recovery of possession, he has to make out his right (a) under the TP Act; and (b) under the Rent Act. In Manujendra Dutt this Court considered the question elaborately and observed: "The Thika Tenancy Act like similar Rent Acts passed in different States is intended to prevent indiscriminate eviction of tenants and is intended to be a protective statute to safeguard security of possession of tenants and therefore should be construed in the light of its being a social legislation. What section 3 therefore does is to provide that even where a landlord has terminated the contractual tenancy by a proper notice such landlord can succeed in evicting his tenant provided that he falls under one or more of the clauses of that section. The word 'notwithstanding ' in section 3 on a true construction therefore means that even where the contractual tenancy is properly terminated, notwithstanding the landlord 's right to possession under the or the contract of lease he cannot evict the tenant unless he satisfied any one of the grounds set out in section 3. Rent Acts are not ordinarily intended to interfere and with contractual leases and are Acts for the protection of tenants and are consequently restrictive and not enabling, conferring no new rights of action but restricting the existing rights either under the contract or under the general law. * * * * * The right to hold over, that is, the right of irremovability thus is a right which comes into existence after the expiration of the lease and until the lease is terminated or expires by efflux of time the tenant need not seek protection under the Rent Act. For he is protected by his lease in breach of which he cannot be evicted. (See Maghji Lakshamshi and Bros vs Furniture Workshop [1954] AC 80, 90). In Abasbhai vs Gulamnabi ; , this Court clearly stated that the Rent Act did not give a right to the 911 landlord to evict a contractual tenant without first determining the contractual tenancy. In Mangilal vs Sugan Chand (AIR 1965 SC 101) while construing section 4 of the Madhya Pradesh Accommodation Control Act (XXIII of 1965), a section similar to section 3 of the present Act, this Court held that the provisions of section 4 of that Act were in addition to those of the and therefore before a tenant could be evicted by a landlord, he must comply with both the provisions of section 106 of the and those of section 4. The Court further observed that notice under section 106 was essential to bring to an end the relationship of landlord and tenant and unless that relationship was validly terminated by giving a proper notice under section 106 of the , the landlord could not get the right to obtain possession of the premises by evicting the tenant (See also Haji Mohammad vs Rebati Bhushan 53 C.W.N. 859). " We are inclined to hold that the landlord in the present case cannot secure an order for eviction without first establishing that he has validly determined the lease under the TP Act. We are therefore thrown back to an examination of the argument pressed by the appellant tenant that independently of the rent control law, the respondent has no subsisting cause of action. The contention is two fold. Firstly, the lease is one where the time is not limited and therefore section 111(a) will not apply and is terminable on the part of the lessor only in the manner provided by section 106, i.e., by 15 days ' notice expiring with the end of the month of the tenancy. Admittedly, no such notice was given. The counter contention of the landlord, apart from the plea of statutory tenancy requiring no further notice to determine, is that the lease is for a specified period even though it expresses itself as for a term less than one year and under section 111 (a) has expired by efflux of time. We cannot agree to this feebly asserted argument. A lease merely stating that it is for a period less than one year is ex facie for an indefinite period and, as such, cannot expire by efflux of time. Nor are we convinced that, notwithstanding the acceptance of rent for the period of 11 years the landlord had not assented to the holding over of the tenancy and that what emerged was a statutory tenancy which did not require notice in law for valid determination. Possibly so; not necessarily. However, we need not explore this aspect further in the view that we take of the other submission of the landlord that the lease has been determined by forfeiture, not in terms of section 111 (g) of the TP Act, but on the application of the principles of justice, equity and good conscience. We will examine this latter contention in some detail, as it is decisive of the fate of the case. The Rent Act contemplates no elaborate pleadings but filling out of particulars in a pro forma which takes the place of a plaint. No specific averment of forfeiture and consequent determination of the lease is found in the petition. Having regard to the comparative informality 912 of these proceedings and the quasi judicial nature of the whole process, such an omission cannot be exaggerated into a lethal infirmity. What is perhaps more pertinent is that the petitioner was innocent of the plea of forfeiture throughout the stages of the trial before the Rent Controller. When the case reached the appellate stage, it was specifically urged that the tenancy 'stood terminated by forfeiture under section 111 (g) of the TP Act. The Tribunal studied the terms of the rent deed, Exhibit AW 3/1 and held that there was an express condition against sub letting and a provision that on breach thereof the lessor had the right to move for eviction something equivalent to a right to re enter. The tenant remonstrated against this new plea being permitted in appeal but the Court construed the statement in the pro forma in column 18 B, that no notice is necessary, to mean that there was a determination by forfeiture even without the issuance of a notice. More over, the Court noticed the fact that the question was only one of law and should be permitted in the interests of justice. After some consideration of the issue the Tribunal reached the result 'that the tenancy stood determined by forfeiture and therefore no notice was required '. We need not tarry further on the tenability of this conclusion since the matter has been more fully examined at the High Court level. Arguments before us have proceeded on the footing that a sub tenancy has been created and this amounts to a breach of condition with a provision for re entry. The tribunal in appeal held that no notice was necessary since the lease was created prior to the extension of the TP Act to Delhi. Although there is some confusion in this order about the determination of the lease being under section 111(g) or outside it, the thrust of the holding is found in these concluding words: "However, as held by the Supreme Court in Narender, Lokmanya Lodhi vs Narmada Bai & Ors. the provisions in section 111 (g) as to notice in writing as a preliminary to a suit for ejectment based on forfeiture of a lease is not based on the principles of justice, equity or good conscience and would not govern the bases made prior to the coming into the force of the TP Act or to a lease executed prior to the coming into force of the TP Act. The lease in question was admittedly created before December 1, 1962 and, therefore, the requirement of the notice in writing could not be insisted upon. " In short, the clincher was 'justice, equity and good conscience '. The critical phase of the case thus beckons us, the last court of law and justice, to the final valley of the forensic battle. Does the TP Act apply to a lease executed prior to the extension of that Act to the area, even though the event that determines the tenancy viz., forfeiture, occurs after such extension ? Secondly, if the TP Act does not apply proprio vigore to such demises and their determination, can the principles of justice, equity and good conscience be invoked to transplant the twin rules in section 111(g) of the said Act? Thirdly, and this is the crux of the matter if such transfusion is permissible, 913 is the synergetic operation of breach of a condition of the lease providing for re entry and a written notice of forfeiture on that score obligatory in terms of section 111(g) or can written notice of forfeiture be dispensed with as being no part of equity or justice but a technical or formal statutory requirement? What, in short, is the status of the formula of justice, equity and good conscience, in the legal pharmacopoeia of India? Shri A. K. Sen urges that the procedural interdict against raising the objection based on section 111(g) is of no consequence. While the law goes to the root of the case and is perfectly plain and the facts indubitably manifest on the record, the refusal to examine and uphold the objection, if valid, is to surrender the judicial function of doing justice according to law at the illegitimate altar of technical inhibition. Moreover, he argues, the plea based on section 111(g) in some form or other, is writ large in the Tribunal 's order and the High Court 's judgment. New nuances and clearer focus may be allowed where the point of law has been broadly touched upon. Face to face with the issue of forfeiture under section 111(g), the appellant presses the position that since admittedly no notice in writing, as laid down in the section, has been issued, the eviction proceeding can be shot down by that legal missile alone. Before the amending Act of 1929, all that was necessary for the lessor to determine the demise on forfeiture was to do 'some act showing his intention to determine the lease '. The rule of English law before the enactment of the Law of Property Act, 1925 appears to be that a suit for ejectment is equivalent to re entry. It has been held in India that an act showing the lessor 's intention to determine the lease can take the form of the institution of an action in ejectment. The statutory law, as it now stands, however is that the happening of any of the events specified in section 111(g) does not, ipso facto, extinguish the lease but only exposes the lessee to the risk of forfeiture and clothes the lessor with the right, if he so chooses, to determine the lease, by giving notice in that behalf. Mulla states the law correctly thus: "Forfeiture of a lease requires the operation of two factors: (1) A breach by the lessee of an express condition of the lease which provides for re entry on such breach and (2) a notice by the lessor expressing his intention to determine the lease." (Mulla on TP Act, p. 746 747, 6th Ed.) The notice has to be in writing. In Namdeo Lokman Lodhi(1) this Court laid down the law to the same effect. Mahajan J., observed: "Section 111(g) in the terms makes the further act an integral condition of the forfeiture. In other words, without this act there is no completed forfeiture at all. Under the old section an overt act evidencing the requisite intention was 914 essential. As the law stands today, under the Act, notice in writing by the landlord is a condition precedent to a forfeiture and the right of re entry. " It cannot be gainsaid that a notice, as envisioned in section 111(g) not having been given to the lessee in the present case, determination of the demise under section 111(g) cannot be claimed by the lessor. Thus, if the fortune of the landlord were to turn on the application of the TP Act as it stands now, the ejectment proceeding must be rebuffed. Counsel for the respondent seeks to sustain his case on the submission that the TP Act does not apply to the lease in question and therefore a forfeiture giving rise to a determination of the lease follows upon breach of a condition in the lease, to wit, sub lease of a portion of the building, plus an act indicative of the landlord 's intention to terminate the tenancy. According to counsel, in the absence of a specific statutory provision, the rules of justice, equity and good conscience govern the situation and this element is amply fulfilled by the filing of the eviction petition itself. We are, therefore, called upon to consider whether the provisions of the TP Act apply to the lease of 1952 executed in Delhi and, secondly, if it does not whether its present provision, as amended in 1929, has to be treated as a rule of justice, equity and good conscience, or the mere institution of legal proceedings for ejectment would be tantamount to an act evidencing the intention of the lessor to avail himself of the forfeiture clause and sufficient to satisfy justice, equity and good conscience. A little legal history helps to appreciate this part of the controversy. The TP Act came into force on July 1, 1882; but it extended in the first instance to the whole of India except certain saved territories including Delhi. It was actually extended to Delhi only in 1962. Section 2(c) of the Act provides that 'nothing herein contained shall be deemed to affect any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability '. There is some dispute as to what 'nothing herein contained ' connotes. Shri A. K. Sen submitted that the Act had come into force as early as 1882 and while transactions created before that date (July 1, 1882) would not be affected by its provisions, subsequent transactions would be governed by that Act even though they may have been executed before the extension of the Act to a particular area. His brief contention was, to start with, that even if the Act was extended to Delhi in 1962, once it was so extended the whole Act came into force in its totality in that area and only those transactions which were expressly saved by section 2 viz., 'legal relations constituted before this Act comes into force ' escaped from its operation. So much so the present lease being of 1954 would be covered by section 111 (g). Our attention was drawn by him to section 63 of the Amending Act in this connection. Shri Chitaley, for the respondent, countered this contention by another extreme stand. According to him, the Act came into force in Delhi only when it was extended to that place, viz., in 1962. Therefore, transactions prior to that date swam out of its operation altogether. A third possibility, a sort of via media or golden mean, also 915 came up for consideration as a close up of the relevant provisions was taken. This view was that while transactions which came into existence in an area before the Act was extended to that area, would be tested for their validity by the law extant when the transaction was entered into, the remedies and other incidents would be conditioned by the TP Act if it had been extended to the area when the remedy was sought to be enforced. Shri Chitaley wanted us to accept Namdeo (supra) as an authority for his proposition and relied on certain passages therein. The problem presented before us cannot be disposed of in an easy fashion and deserves serious examination. In the present case, we are relieved of that obligation for the weighty reason that the appellant has all along staked his case on the application of the rules of justice, equity and good conscience and not on the textual rigour of section 111(g) applied proprio vigore. We have already indicated that although this question was not canvassed before the trial Court, the appellate tribunal did consider it as a point of law. In doing so, the learned Tribunal applied what he considered to be the principles of justice, equity and good conscience and dispensed with the drastic insistence on notice in writing. In the High Court, the position taken up by the appellant did not disturb the application of justice, equity and good conscience. On the contrary, the Division Bench emphatically asserted that the appellant never disputed this proposition. Indeed, both in regard to notice to quit and notice of forfeiture, the appellant accepted the application, not of the TP Act as such, but of the rules of justice, equity and good conscience. We may as well except the relevant statement in the judgment of the High Court: "In the present case, the provisions of the TP Act had not been extended to Delhi during the material period and these provisions would therefore, not be applicable to the tenancy in question. It was not disputed before us that in view of this only such of the principles embodied in the provisions of sections 106 and 111 of the TP Act would regulate the matter as could be held to be consistent with the rules of equity, justice and good conscience. It was also not disputed before us that even though the provision of section 106 of the TP Act laying down the manner in which a tenancy may be terminated are technical in character, in that they require such termination 'by fifteen days ' notice expiring with the end of the month of the tenancy '. It would be consistent with the requirements of equity, justice and good conscience that a tenant has reasonable notice of termination even though it does not expire with the end of the month of a tenancy. It was also not disputed that in the present case, no notice whatever was sent to the tenant of the application for eviction when the notice was sought to be justified on the ground that no such notice was necessary because the tenancy stood determined either by efflux of time limited thereby in terms of the principle embodied in section 111(a) of the TP Act or by forfeiture following the breach by the tenant of the express condition regarding sub letting in terms of the principles embodied in section 111(g) of the said Act. " 916 If the appellant 's case was that the TP Act applied of its own force, he would have urged so in the High Court, especially because the appellate tribunal had dealt an eviction blow on him by applying the rules of justice, equity and good conscience. Moreover, the categorical statement in the judgment of the High Court confirms the view that the appellant stuck to his stance of justice, equity and good conscience. Nay more. Even in the grounds of appeal to this Court" he has only harped on justice, equity and good conscience and invoked section 111(g) as embodying equity and good conscience. For the first time he has, by a volta face, switched to the TP Act as against the rules of justice, equity and good conscience. It is too late in the day to set up a new case like that. There are many reasons why. Even though we have power to permit a new plea, we should not exercise it here. We decline our discretion to allow the appellant to travel into the new statutory territory of section 111(g). He has to stand or fall by his submission that justice, equity and good conscience is the alter ego of section 111 (g) of the TP Act in its dual requirements of (a) the breach of a condition providing for re entry and (b) notice in writing to the lessee of an intention to determine the lease. Once we assume the inapplicability of the TP Act to the lease in question an assertion of the respondent which we do not feel compelled to consider in this appeal we are confronted by the concept of justice, equity and good conscience which, admittedly, comes into play in the absence of any specific legislative provision. In India and in other colonies during the Imperial era a tacit assumption had persuaded the courts to embrace English law (the civilizing mission of the masters) as justice, equity and good conscience. Throughout the Empire in Asia and Africa, there was an inarticulate premise that English law was a blessing for the subject peoples. Robert M. Seldman writes about Sudan: "The courts were simply directed to decide cases on the basis of 'justice, equity and good conscience ' [Civil Justice Ordinance, , 10 Laws of the Sudan 13 (1955) ]. However, the judges were all English lawyers; and with magnificent insularity it developed that 'justice, equity and good conscience ' meant not merely English common law but English statutory law as well. The author has been told by an English barrister who tried a case in the Sudan some years ago that he was amazed to discover that 'justice, equity and good conscience ' meant in his case the English Sales of Goods Act, 1862." (Law and Economic Development in Independent, English Speaking, Sub Saharan Africa Wisconsin Law Review Vol. 1966, Number 4, Fall) The Judicial Committee of the Privy Council struck a similar note in Maharaja of Jeypore vs Rukmani Pattamahadevi(1) where Lord Phillimore stated: "They are directed by the several charters to proceed where the law is silent, in accordance with justice, equity, 917 and good conscience, and the rules of English law as to forfeiture of tenancy may be held and have been held to be consonant with these principles and to be applicable to India." Unfortunately, even after liberation, many former colonies, including India, did not shake off this neo colonial jurisprudence (See A.I.R. 1950 Bom. 123). This is the genesis of the idea that Indian 'good conscience ' is English Common Law during the reign of Empress Victoria ! The imperatives of Independence and the jural postulates based on the new value system of a developing country must break of from the borrowed law of England received sweetly as 'justice, equity and good conscience '. We have to part company with the precedents of the British Indian period tying our non statutory area of law to vintage English law christening it justice, equity and good conscience '. After all, conscience is the finer texture of norms woven from the ethos and life style of a community and since British and Indian ways of life vary so much that the validity of an anglophilic bias in Bharat 's justice, equity and good conscience is questionable today. The great values that bind law to life spell out the text of justice, equity and good conscience and Cardozo has crystallised the concept thus: "Life casts the mould of conduct which will some day become fixed as law. " Free India has to find its conscience in our rugged realities and no more in alien legal thought. In a larger sense, the insignia of creativity in law, as in life, is freedom from subtle alien bondage, not a silent spring nor hot house flower. So viewed, the basic question is: What is the essence of equity in the matter of determining a lease on the ground of forfeiture caused by the breach of a condition ? Can any technical formality be exalted into a rule of equity or should a sense of realism, read with justice, inform this legal mandate ? If Law and Justice in the Indian context must speak to each other, statutory technicality such as 'notice in writing ' prescribed in section 111(g) of the TP Act cannot be called a rule of equity. It is no more than a legal form binding on those transactions which are covered by the law by its own force. The substance of the matter the justice of the situation is whether a condition in the lease has been breached and whether the lessor has, by some overt act, brought home to the lessee his election to eject on the strength of the said breach. This Court, in Namdeo (supra) has explained the rule of justice, equity and good conscience. It observed, at p. 1015: "It is axiomatic that the courts must apply the principles of justice, equity and good conscience to transactions which come up before them for determination even though the statutory provisions of the are not made applicable to these transactions. It follows therefore that the provisions of the Act which are but a statutory recognition of the rules of justice, equity and good conscience also govern those transfers. If, therefore, we are satisfied that the particular principle to which the legislature 918 has now given effect by the amendment to section 111 (g) did in fact represent a principle of justice, equity and good conscience, undoubtedly the case will have to be decided in accordance with the rule laid down in the section, although in express terms it has not been made applicable to leases executed prior to 1929 or even prior to the coming into force. The main point for consideration thus is whether the particular provision introduced in sub section (g) of section 111 of the in 1929 is but a statutory recognition of a principle of justice, equity and good conscience, or whether it is merely a procedural and technical rule introduced in the section by the legislature and is not based on any well established principles of equity. The High Court held, and we think rightly, that this provision in subsection (g) of section 111 in regard to notice was not based upon any principle of justice, equity and good conscience. In the first instance it may be observed that it is erroneous to suppose that every provision in the and every amendment effected is necessarily based on principles of justice, equity and good conscience. It has to be seen in every case whether the particular provisions of the Act relied upon restates a known rule of equity or whether it is merely a new rule laid down by the legislature without reference to any rule of equity and what is the true nature and character of the rule. Now, so far as section 111 (g) of the Act is concerned, the insistence therein that the notice should be given in writing is intrinsic evidence of the fact that the formality is merely statutory and it cannot trace its origin to any rule of equity. Equity does not concern itself with mere forms or modes of procedure. If the purpose of the rule as to notice is to indicate the intention of the lessor to determine the lease and to avail himself of the tenant 's breach of covenant it could, as effectively, be achieved by an oral intimation as by a written one without in any way disturbing the mind of the chancery judge. The requirement as to written notice provided in the section therefore cannot be said to be based on any general rule of equity. That it is not so is apparent from the circumstance that the requirement of a notice in writing to complete a forfeiture has been dispensed with by the legislature in respect to leases executed before 1st April, 1930. Those leases are still governed by the unamended sub section (g) of section 111. All that was required by that sub section was that the lessor was to show his intention to determine the lease by some act indicating that intention. The principles of justice, equity and good conscience are not such a variable commodity, that they change and stand altered on a particular date on the mandate of the legislature and that to leases made between 1882 and 1930 the principle of equity applicable is the one contained in subsection (g) as it stood before 1929, and to leases executed after 1st April 1930, the principle of equity is the 919 one stated in the sub section as it now stands. Question may also be posed, whether according to English law a notice is a necessary requisite to complete a forfeiture. " Of course, in that case, Mahajan, J. has dwelt at length on the English law of landlord and tenant and the discussion is partially suggestive of the English law of real property being a good guide to the Indian Judges ' good conscience. But the ratio is clear that processual technicalities and even substantive formalities cannot masquerade as justice and equity. The touchstone is simply whether the formal requirement of the law is part of what is necessarily just and reasonable. In this perspective, the conclusion is clear that a notice in writing formally determining the tenancy is not a rule of justice or canon of commonsense. Realism, married to equity, being the true test, we are persuaded that the pre amending Act provision of section 111 (g) is in consonance with justice. If so, the mere institution of the legal proceeding for eviction fulfils the requirement of law for determination of the lease. The conscience of the Court needs nothing more and nothing else. The rule in Namdeo (supra) settles the law correctly Reference was made at the bar to the ruling in Mohd. Amir(1) To understand that decision we have to make a distinction between the principles embodied in section 111(g) and the provisions thereof. Not all the stipulations and prescriptions in the section can be called the principles behind it. In this light there is no contradiction between the two cases of this Court the earlier one of Namdeo (supra) and the later Mohd. Amir(1). We are satisfied that the situation in the present case is squarely covered by the earlier ruling. The High Court is right in its view. It is a fitting finale to this part of the argument that in the High Court arguments proceeded on the footing that the Supreme Court has ruled in Namdeo (supra) that 'there being no requirement in English law of a written notice to the lessee of the intention of the lessor to determine the lease on forfeiture, the provision of a notice would not be considered as being consistent with the rules of equity, justice and good conscience '. We have already made our comments on the anglophonic approach and do not wish to reiterate them here. However, there are certain pregnant observations in the judgment under appeal pertinent to the present discussion. Observed the High Court: "In the case of Namdeo Lokman Lodhi the Supreme Court was directly concerned with the question of the requirement of written notice engrafted into the clause (g) by the amendment of 1929 was of a technical nature or could be said to be consistent with the English rule regarding forfeiture and therefore, in consonance with the principles of justice, equity and good conscience and the question was clearly answered in the negative." 920 The irrelevance of the English law as such to notions of good conscience in India notwithstanding, we agree that a written notice is no part of equity. The essential principles, not the technical rules, of the TP Act form part of justice, equity and good conscience. The conclusion emerges that the landlord 's termination of the tenancy in this case is good even without a written notice. Many other niceties of law were presented to us by Shri A. K. Sen to extricate the tenant from eviction. They are too unsubstantial and intricate for us to be deflected from the sure and concurrent findings, read in the background of an alternative accommodation being available to the tenant. We dismiss the appeal but direct that this order for eviction shall be executed only on or after March 1, 1976. The over all circumstances justify a direction that the parties do bear their costs throughout. P.H.P. Appeal dismissed.

The respondent landlord let out the building in question to the appellant tenant in the year 1954, when the Transfer of Property Act was not applicable to Delhi where the property is situated. The Transfer of Property Act was made applicable to Delhi in the year 1962. In 1967, the respondent filed a suit for eviction against the appellant without terminating the tenancy under the Transfer of Property Act on the grounds of unauthorised subletting and acquisition of alternative accommodation by the tenant. A decree for eviction was passed by the Rent Controller which was affirmed by the Appellate Tribunal. In the High Court it was contended by the appellant that neither notice to quit nor notice of forfeiture determining the tenancy was given by the landlord as required by sections 106 and 111 of the Transfer of Property Act. The respondent contended that the lease had expired by efflux of time under section 111(a) and no notice terminating the tenancy was necessary and that forfeiture of the tenancy caused by the subletting contrary to the terms of the agreement can be availed of by the landlord even in the absence of a notice as contemplated by section 111(g). The High Court dismissed the petition filed by the appellant but granted a certificate of fitness under Article 133 restricting it to one ground urged before the High Court. The respondent raised a preliminary objection that since the certificate was granted only on one point the appellant could not be permitted to make any other submissions. The appellant contended that the lease is one where the time is not limited and, therefore, is terminable only by 15 days notice as required by section 106 of Transfer of Property Act. The respondent contended that the lease was for a fixed period and expired by efflux of time. In any evnt a notice in writing is not necessary to terminate the lease. Institution of legal proceedings serves that purpose. ^ HELD: (1) Once a certificate of fitness has been granted under Article 133, the appeal, in all its amplitude, is before the Court and every point may be urged by the appellant provided this Court permits it having regard to the circumstances. It is however, within the court 's discretion not to allow a new point to be taken up. [909D E] (2) The scheme of the Rent Control Law, is to put further fetters on landlords seeking eviction where in the absence of such acute barriers the landlords would be entitled to ejectment. Even where under a particular Rent Control Statute the landlord makes out grounds for eviction he can institute proceedings in this behalf only if de hors the said grounds he has cause of action under the Transfer of Property Act. The landlord cannot secure an order for eviction without first establishing that he has validly determined the lease under the transfer of Property Act. [909G H,911C] (3) A lease merely stating that it is for a period less than one year is ex facie for an indefinite period and as such cannot expire by efflux of time. 907 Nor are we convinced that the acceptance of rent for the period of 11 years does not amount assenting to the holding over of the tenancy by the landlord. [911E F] (4) The Rent Act contemplates no elaborate proceedings but filing out of the particulars in a proforma which takes the place of a plaint. No specific averment of forfeiture and consequent determination of the lease is found in the petition. The question arises whether a written notice of forfeiture for the breach of the condition of the lease is obligatory in terms of section 111(g) or whether written notice of forfeiture can be dispensed with as being no part of the equity or justice but a technical or formal statutory requirement. Before the amendment of Transfer of Property Act in 1929 all that was necessary for the lessor to determine the demise on forfeiture was to do some act showing his intention to determine the lease. The rule of English Law 'before the enactment of the law of Property Act, 1925, appears to be that a suit for ejectment is equivalent to a re entry. The appellant did not urge in the High Court that the Transfer of Property Act was applicable in its own force. We decline our discretion to allow the appellant to travel into the new statutory territory of section 111 (g). [911G H, 913A, D E, 916C] (5) In India and in other colonies throughout the Imperial Era a tacit assumption had persuaded the courts to embrace English Law (the civilizing mission of the masters) as justice, equity and good conscience. Unfortunately, even after liberation, this neo colonial jurisprudence was not shaken off. Free India has to find its conscience in our rugged realities and no more in alien legal thought. So viewed, the basic question is what is the essence of equity in the matter of determination of a lease on the grounds of forfeiture caused by the breach of a condition. The substance of the matter the justice of the situation is whether a condition in the lease has been breached and whether the lessor has by some overt act brought home to the lessee his election to eject on the strength of the breach. The touchstone is simply whether the formal requirement of the law is part of what is necessarily just and reasonable. In this perspective the conclusion is clear that a notice in writing formally determining the tenancy is not a rule of justice or cannon of commonsense. Realism married to equity being the true test, we are persuaded that pre amending Act provision of section 111 (g) is in consonance with justice. The mere institution of the legal proceeding for eviction fulfills the requirements of law for determination of the lease. The conscience of the Court needs nothing more and nothing less. The essential principles, not the technical rules, of the Transfer of Property Act form part of justice, equity and good conscience. [916D, 917A, D, E F,919B C, 920A]

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Appeal No. 511 of 1976. (Appeal by Special Leave from the order dated 19 8 1975 of the First Labour Court Ahmedabad in Appln. 493/75). R.P. Bhatt, D.K. Agarwal, K. K. Jain and Bishamber Lal, for the Appellant. 710 V. M. Tarkunde, K.L. Hathi, P.C. Kapur and Miss M. Tarkunde, for the Respondent. The Judgment of the Court was delivered by GOSWAMI, J. A complaint was made to the Labour Court by the respondent, Mazdoor Mahajan Mandal, Baroda (briefly the union) alleging the lock out declared by the appellant to be illegal. The appellant, Priya Laxmi Mills Ltd. (briefly the management) resisted the petition. After examining the oral and documentary evidence the Labour Court came to the conclusion that the lock out was illegal under clauses (a) and (h) of sub section (1) of section 98 of the Bombay Industrial Relations Act, 1946 (briefly the Act). A brief reference to the facts will be appropriate at this stage. The present appellant purchased this textile mill from M/s. Sayaji Mills Ltd. in 1972 when it had about 2500 work men besides officers. It is said that in 1974 the textile industry suffered adverse market conditions, accumulation of stocks, shortage of raw materials and bank credit squeeze in consequence of which the management started experiencing acute financial difficulties which were aggravated by a spate of litigation between the appellant and the previous owners. The appellant somehow continued to pay the wages of the workmen upto February 1975 although in an irregular manner. The mill works in three shifts. By a notice of April 13, 1975, the management notified a lay off from the first shift of April 14, 1975, till further notice. The lay off was in the departments of spinning, weaving, grey folding and engineering as per the lists containing the names of the workmen and the members of the staff connected therewith. Other departments, however, were allowed to continue to work as usual. It was mentioned in the notice. of lay off that a workman, if eligible, shall be paid lay off compensation as provided under the law. The permanent workmen of laid off departments who were eligible to get compensation under the law were required to present themselves in the respective departments at the start of their respective shifts and get themselves marked as "laid off". Naturally, therefore, although, the workmen were laid off they had to attend the mill premises for being marked present at the time of the commencement of the shift in order to be able to claim lay off compensation. In view of the mounting tension on account of irregular payment of wages for quite some time and the subsequent lay off, negotiations were also afoot between the management and the union without much headway. According to the management the workmen refused to accept the decision of lay off and they continued to remain inside the mill premises even after getting their presence marked. Some employees remained in the department while a large number of them collected outside the department and refused to go out of the mill premises. It is said that the workmen started staging a 'dharna ' daily in the administra 711 tive office of the mills thereby disrupting its normal and smooth working. This state of affairs continued from April 14, 1975, to April 21, 1975. The workmen did not pay any head to the request of the management to leave the premises after they had been marked present. In this background, on April 21, 1975, at about 4.00 P.M. a section of the workmen forcibly entered the Guest House No. 2, and trespassed into the living room of Shri L. Grover, Establishment Officer of the mills, dragged him out of the room and took him into the administrative office and kept him there under restraint and illegal confinement for about 24 hours. The workmen also removed the personal belongings of Shri Grover. They also gheraoed and kept under restraint and illegal confine ment the Deputy Executive Director, Shri V.K. Bagla, the Deputy Chief Executive (Works) Shri S.C. Gandhi and other senior officers in the mill premises with effect from 7.00 P.M. on April 21, 1975. The officers were kept in illegal confinement without food and other basic amenities of life continuously for 21 hours. It is said that the officers were abused and humiliated. The workers also held out threats to their lives. The management also referred to other alleged unruly and undisciplined behaviour of the workmen. The officers were ultimately brought out with the help of the police authorities at about 4.00 P.M. on April 22, 1975. The employees, however, continued 'dharna ' inside the mill premises on April 22 and the night between April 22 and April 23. It is, thus, the management 's case that under the .circumstances mentioned above the company was compelled to declare a lock out from the first shift of April 23, 1975: It may be appropriate to set out the lock out notice dated April 23, 1975: "We hereby give notice to all concerned that a lock out is declared with effect from the begin ning of l st shift commencing at 7.00 a.m. on 23 4 1975 in our mills for the following or any of the reasons given below: (a) On or about 4.30 p.m. on 21 4 1975 a section of the workmen forcibly entered into the mill Guest House No. 2 and trespassed into the room in which Shri L. Grover, the Establishment Officer of the mills resides, dragged him out of the room and took him to the Administrative Office of the mills and kept him there under restraint and illegal confinement for about 24 hours. The work ers also removed personal belongings of Shri Grov er. (b) The workers gheraoed, kept in restraint and illegal confinement. our Dy. Executive Direc tor, Shri V.K. Bagla, Dy. Chief Executive (Works) Shri S.C. Gandhi, and other senior officers in the mill premises with effect from 7.00 p.m. of Monday, the 21st April 75. Those officers were kept in illegal confinement without food and other basic amenities of life continuously for 21 hours. (c) The workers not only kept the above mentioned officers under wrongful restraint but also abused and humiliat 712 ed them. Threats were advanced to the life of these officers and to the effect that the mill property will also be damaged. (d) The workers employed in spinning and weaving departments including their preparatories and partly engineering department have been laid off with effect from 14 4 75. These workmen, in stead of leaving the factory premises after lay off attendance staged dharana daily in the adminis trative office of the mills thereby disrupting its normal and smooth working. (f) The workers have also arrested the move ment of cloth bales from mill godowns thereby disrupting the bales of the finished goods. The lock out hereby declared will cover all the departments of the mills except the Watch and Ward and essential service which will continue to function as usual and will not be affected by this notice. " X X X X The union denied, the various allegations made against the workmen, and stated that the lock out was carried out with a view to pressurise the union and the workmen to accept the management 's terms with regard to the mode of payment of their salary as well as the lay off arrangements introduced by the management. Both sides produced documentary evidence as well as examined witnesses. The management examined four witnesses whereas the union examined two witnesses on their behalf. After examining the entire evidence the Labour Court came to the conclusion that the lockout was an illegal lock out. Hence this appeal by special leave. The question that falls for decision is whether the lock out in question is illegal under section 98(1)(a) of the Act. We are not required to consider whether it is also illegal under section 98(1)(h) of the Act as referred to by the Labour Court. According to section 98(1)(a), "a lock out shall be illegal if it is commenced or continued in cases where it relates to any industrial matter specified in Schedule III or regulated by any standing order for the time being in force". We are not required to consider the second part of section 98(1)(a) which refers to the standing order. Sched ule III enumerates seven items out of which we are required to consider only item 6(ii) which reads as follows : "Employment including unemployment of persons previously employed in the industry concerned". Before we proceed further we may take note of the definition of lock out which is found in sec tion 3 (24) of the Act: " 'Lock out ' means the dosing of a place or part of a place of employment or the total or partial suspension Of 713 work by an employer or the total or partial refusal by an employer to continue to employ persons em ployed by him, where such closing, suspension, or refusal occurs in consequence of an industrial dispute and is intended for the purpose of (a) compelling any of the employees directly af fected by such closing, suspension or refusal or any other employees of his, or (b) aiding any other employer in compelling persons employed by him, to accept any term or condition of or affecting employment. " This definition is differently worded from what is there in the . We, however, find that in the Trade Disputes Act, 1929, lock out is similarly defined as in the present Act. By section 2(1) of the Industrial Disputes Act, lock out "means the closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of per sons employed by him". This Court, while interpreting the above defini tion, in Management of Kairbetta Estate, Kotesiri vs Rajamanickam and others, C) observed as follows : "Even so, the essential character of a lock out continues to be substantially the same. Lock out can be described as the entithesis of a strike. Just as a strike is a weapon available to the employees for enforcing their industrial demands, a lock out is a weapon available to the employer to persuade by a coercive process the employees to see his point of view and to accept his demands. " It should, however, be made clear that lock out can be declared also for reasons similar to those described in the present notice of lock out. In that case although it will be lock out in anoth er sense, it may not be a lock out within the meaning of section 3 (24) of the Act. That kind of a lock out with the avowed object of preventing violence and threat to life and property may even be justified on facts in a given case. In such a situation 'it may be difficult to prove that it is an illegal lock out since in an illegal lock out the sole object is to compel the workmen to accept the terms of the employer which the workers consid er as unreasonable and oppressive. In the instant case although we do not approve of the Labour Court 's observations in the order to a possible effect that threats and gheraoes "are the normal behaviour when an occasion like this takes place", we cannot say that its ultimate conclusion after appreciation (1) ; 714 of the evidence is such that it may call for inter ference in an application under Article 136 of the Constitution. The Labour Court has given a finding at paragraph 15 of the as follows : "Coming now to the other important ingredient viz. intention on the part of 'the management to compel the workers directly affected by such clos ing to accept any term or condition affecting employment, it appears that there was such an intention on the part of the management. The opponent company, because of the financial diffi culties which they were facing wanted the workers to agree to accept lay off and also agree to accept wages not on the specified days as per the existing awards, etc. but as and when the management could pay . In my opinion, therefore it could be said that all the ingredients of an illegal 'lock out ' were present in this case". The Labour Court has taken note of the fact that there was no evidence of any violence being caused to the property of the mill notwithstanding the presence of a huge crowd said to be in a riotous mood. The tribunal also took the view that the officers were not confined in. their rooms as such as represented but they themselves did not like to come out perhaps due to apprehension. The Labour Court was of opin ion that the situation was not of such a grave nature which called for such a drastic step like a lock out. The Labour Court seems to be of the further view that since the manage ment has been in continuous financial difficulties heading towards a closure and closure would have put the management under an obligation to pay compensation under section 25 FFF under the , opportunity was taken to declare a lock out on the slightest opportunity. It is not possible for us to reappraise the evidence and come to a different conclusion on the facts in this appeal. We are also unable to hold that the conclusions of the Labour Court are perverse or even against the weight of evidence on record. The only question, therefore, that survives is whether on the finding of the Labour Court the lock out is illegal. It is contended on behalf of the appellant that item 6(ii) in Schedule Iii to the Act which deals with the unemployment of persons previously employed in the industry concerned cannot govern a case of lay off. According to counsel lay off is not unemployment since the relationship of master and servant is not snapped. We are unable to accept this contention. Lay off is not defined in the Act but has been defined in section (KKK) of the : " 'lay off ' (with its grammatical variations and cognate expressions ) means the failure, refus al or inability of an employer on account of short age of coal, power or raw materials 715 or 'the accumulation, of stocks or the breakdown of machinery or for any other reason to give employ ment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched". X X X X X Even according to the dictionary meaning, lay off means to discontinue work or activity; to dismiss or discharge temporarily. When workers are in employment and they are laid of, that immediately results in their unemployment, howsoever temporary, and such an unemployment will clearly come under item 6(ii) in Schedule III of the Act. It is not disputed that "unemployment" is an industrial matter as defined under section 3(18) of the Act. Since unemployment is an industrial matter under item 6(ii) of Schedule III to the Act, the lock out which has been found by the Labour Court to have direct connection with lay of is clearly illegal under section 98(1)(a) of the Act. In the result the appeal fails and is dis missed with costs. P.B.R Appeal dis missed.

According to section 98(1)(a) of the Bombay Industrial Rela tions Act, 1946 a lock out shall be illegal if it is com menced. or continued in cases where it relates to any indus trial matter specified in Schedule III, Item 6(ii). Item 6(ii) states "employment including unemployment of persons previously employed in the industry concerned". On account of financial and other difficulties the appellant laid off workers in some departments of the mill. After. a few days the management declared a lock out alleg ing that the workers gheraoed some officers in the mill, started 'dharna ' and behaved in an unruly manner. The Labour Court, to which the dispute was referred, held that there was no evidence of violence or of gheraoes, that the situation in the mills was not of such a grave nature as called for a lock out and that the management resorted to the lock out on the slightest opportunity in order to avoid payment of compensation, since it was in continuous financial difficulties heading towards a closure and closure would have put the company under obligation to pay compensation. Dismissing the appeal, HELD: (1) A lock out can be declared for reasons similar to those described in the present notice of lock out. In that case although it will be lock out in another sense it may not be a lock out within the meaning of section 3(24) of the Act. That kind of lock out with the avowed object of pre venting violence and threat to life and property may be justified on facts in a given case. In such a situation it may be difficult to prove that it is an illegal lock out since in an illegal lock out the sole object is to compel the workmen to accept the terms of the employer which the workers consider as unreasonable and oppressive. [713 F G] But in the instant case though the views of the Labour Court that threats and gheraoes "are the normal behaviour when an occasion like this takes place" should be disap proved, the ultimate conclusion after appreciation of the evidence was not such as would call for interference in an application under article 136 of the Constitution. [713 H] (2) Though the Act has not defined 'lay out ', even according to the dictionary meaning, lay off means to dis continue work or activity; to dismiss or discharge tempo rarily. When workers are in employment and they are laid off, that immediately results in their unemployment, howso ever temporary. and such an unemployment will clearly come under item 6(ii) in Schedule III of the Act. Since unemploy ment is an industrial matter under item 6(ii) of Schedule Iii of the Act, the lock out which had been found by the Labour Court to have direct connection with lay off is clearly illegal under section 98(1)(a) of the Act. [715 BC]

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Appeal No. 195 of 1954. Appeal by special leave from the judgment and order dated the 20th May, 1953 of the CustodianGeneral of Evacuee Property, New Delhi in Revision No. 387 R/Judl/53. Achhru Ram, (Ganpat Rai, with him) for the appellant. C. K. Daphtary, Solicitor General of India, (Porus A.Mehta and R. H. Dhebar, with him) for respondents Nos. 1 & 2. 1955. October 28. The Judgment of the Court was delivered by JAGANNADHADAS J. This is an appeal by special leave against the order of the Custodian General of Evacuee Property dated the 20th May, 1953, revising an order of the Additional Custodian of East Punjab, Delhi, dated the 20th March, 1952. The two questions raised before us on the facts and circum stances, to be stated, are (1) whether the Custodian General had the revisional power which he purported to exercise, and (2) was the order of the Custodian General on its merits such as to call for interference by this Court. The appellant before us, one Mrs. Indira Sobanlal, is a displaced person from Lahore. She was the owner of a house. at Lahore known as 5, Danepur Road. Malik Sir Firoz Khan Noon of West Pakistan owned 766 bighas of agricultural land in a village called Punjab Khore within the State of Delhi. An oral exchange is said to have taken place between these two. , of the said properties, on the 10 th October, 1947. In pursuance of that exchange Malik Sir Firoz Khan Noon is said to have taken possession of the Danepur Road House. The appellant is also said to have been put in possession of the said agricultural lands in Punjab Khore presumably by way of attornment 1120 of tenants who were in actual cultivating possession of the lands. Under section 5 A of the East Punjab Evacuees ' (Administration of Property) Act, 1947 (East Punjab Act XIV of 1947), as amended in 1948 and applied to the State of Delhi, such a transaction required confirmation by the Custodian. In compliance with this section the appellant made an application on the 23rd February, 1948, to the Additional Custodian of Evacuee Property (Rural), Delhi, for confirmation of the above transaction of exchange and of the consequent transfer to her of the property in agricultural land. In view of certain rules which came into force later and which prescribed that the application was to be in a set form furnishing certain particulars, the appellant filed an amended application dated the 14th August, 1948, furnishing the required particulars. This application was not disposed of by the Additional Custodian, for reasons not clear on the record, until the 20th March, 1952. On that date he passed an order confirming the exchange. Meanwhile, however, a, proposal was put up to the Additional Custodian by his Revenue Assistant to allot agricultural lands of the village Punjab Khore, including those covered by this exchange, to a number of refugee cultivators. The proposal was approved by the Additional Custodian on the 12th June, 1949. In pursuance thereof a detailed allotment was made to twenty six individual allottees on the 27th October, 1949. There is a report of the Rehabilitation Patwari dated the 27th February 1950, on the record showing that the allottees entered into possession of the land and cultivated their respective lands and settled down in the village. After the order confirming the exchange was passed by the Additional Custodian on the 20th March, 1952, the appellant filed an application on the 5th May, 1952, asking to be placed in possession, and for a warrant of delivery of possession to be issued against the various allottees and tenants of the land. The Naib Tehsildar recommended that possession may be given to the appellant and that the Patwari may be informed accordingly to take the necessary action in the matter. But it does 1121 not appear from the record whether this was done, or whether possession was in fact delivered. At this stage, a notice under section 27 of the (Central Act XXXI of 1950), appears to have been issued to the appellant by the Custodian General to show cause why the order of the Additional Custodian dated the 20th March, 1952, confirming the exchange and the further orders dated the 20th and 28th July, 1952, sanctioning mutation and other consequential and incidental orders made in connection therewith be not set aside. This notice appears to have been issued asking the appellant to show cause on the 4th May, 1953. The case was adjourned to the 12th May, 1953, at the request of counsel for the appellant and thereafter a more detailed notice dated the 14th May, 1953, was issued setting out the various grounds on which the previous orders were sought to be set aside. The learned Custodian General passed the order now under appeal on the 20th May, 1953, setting aside the order of confirmation. He directed the Custodian to decide the case after giving notice to all those who might be affected by the confirmation of this transaction. As the earlier part of his order shows, the reference to the persons affected was to those who were allotted the lands in question by virtue of the order of the Additional Custodian of the year 1949 above referred to. To appreciate the first question that has been raised as to the validity of the exercise of revisional powers by the Custodian General on the above facts, it is necessary to set out the course of the relevant legislative measures from time to time. To meet the unprecedented situation of sudden migration of vast sections of population on a large scale from West Punjab to East Punjab and vice versa, leaving most of the properties which they had, moveable and immoveable, agricultural and nonagricultural, the concerned Governments bad to take wide legislative powers to deal with the situation, to set up the necessary administrative machinery, and to evolve and give effect to their policies in regard thereto from time to time. The earliest of these legislative measures so far as we are concerned, was the East Punjab Evacuees (Administration of Property) Act, 1947 (East Punjab Act XIV of 1947), which came into force on the 12th December, 1947. This Act was amended by the East Pun jab Evacuees ' (Administration of Property) (Amendment) Ordinance, 1948 (East Punjab Ordinance No. II of 1948) and later by East Punjab Evacuees ' (Administration of Property) (Amendment) Act, 1948, (East Punjab Act XXVI of 1948), which inserted two new sections, 5 A and 5 B I prescribing the requirement of confirmation Of transactions relating to eva cuee property and providing a right of appeal or revision therefrom. These sections were specifically made applicable to transactions on or after the 15th August, 1947. The above Punjab Legislative measures were extended to the State of Delhi by Central Government notifications under the Delhi Laws Act, dated the 29th December, 1947, the 28th January, 1948, and the 22nd April, 1948, respectively. In so far as these measures applied to Chief Commissioners ' Provinces they were repealed by the Administration of Evacuee Property (Chief Commissioners ' Provinces) Ordinance, 1949, (Central Ordinance No. XII of 1949) which came into force so far as Delhi is concerned on the 13th June, 1949. This Ordinance, in its turn, was repealed and a fresh Central Ordinance came into force in its place, applicable to all the Provinces of India except Assam and West Bengal. That was Administration of Evacuee Property Ordinance. , 1949, (Central Ordinance No. XXVII of 1949), which came into force on the 18th October, 1949. This Central Ordinance in its turn was repealed and replaced by the (Central Act XXXI of 1950) which came into force on the 17th April, 1950. It is necessary to notice at this stage that until the Central Ordinance XXVII of 1949 was passed, the Evacuee Property law was regulated by the respective Provincial Acts and were under the respective Provincial administrations. Central Ordinance 1123 No. XXVII of 1949 provided for a centralised law and centralised administration which was continued by Central Act No. XXXI of 1950. One of the main steps taken for such centralised administration was to create the office of Custodian General with powers of appeal and revision as against the orders of Provincial Custodians. Section 5 of the Central Ordinance No. XXVII of 1949 authorised the Central Government to appoint a Custodian General of Evacuee Property in India for the purpose of discharging the duties imposed on him by or under the Ordinance, while the appointment of Provincial Custodians, Additional, Deputy or Assistant Custodians, was still left to the various Provincial Governments. These provisions were continued by sections 5 and 6 of Central Act XXXI of 1950. As regards the transactions by evacuees relating to evacuee property, the first legislative interference in East Punjab and Delhi appears to have been by virtue of East Punjab Evacuees (Administration of Property) (Amendment ') Ordinance, 1948 (East Punjab Ordinance No. II of 1948) and the East Punjab Evacuees ' (Administration of Property) (Amendment) Act, 1948 (East Punjab Act XXVI of 1948) which inserted two new sections 5 A and 5 B into the East Punjab Act XIV of 1947. The said sections were as follows: "5 A. (1) No sale, mortgage, pledge, lease, exchange or other transfer of any interest or right in or over any property made by an evacuee or by any person in anticipation of his becoming an evacuee, or by the agent, assign or attorney of the evacuee or such person, on or after the fifteenth day of August, 1947, shall be effective so as to confer any rights or remedies on the parties to such transfer or on any person claiming under them unless it is confirmed by the Custodian. (2) An application for confirming such transfer may be made by any person claiming thereunder or by any person lawfully authorised by him. (3) The Custodian shall reject any application made after the thirty first day of March, 1948 or after 142 1124 the expiration of two months from the date the transaction was entered into, whichever is later. (4) The Custodian shall hold a summary enquiry into an application, which is not rejected under subsection (3) and may decline to confirm the transaction if it appears to the Custodian that (a) the transaction was not a bona fide one for valuable consideration; or (b) the transaction is in the opinion of the Custodian prejudicial to the prescribed objects; or (c) for any other reason, to be given by the Custodian in writing, the transaction ought not to be confirmed. (5)If the Custodian confirms the transaction, he may confirm it unconditionally or subject to such conditions and terms as he may consider proper. (6)The Custodian, if the order is not pronounced in the presence of the applicant, shall forthwith give notice in writing to the applicant of any order passed by him under sub sections (3), (4) or (5). " 5 B. If the original order under section 5 A is passed by an Assistant or Deputy Custodian of Evacuee Property, any person aggrieved by such order may appeal within sixty days from the date of the order to the Custodian of ]Evacuee Property who may dispose of the appeal himself or make it over for disposal to the Additional Custodian of Evacuee Property; and subject only to the decision on such appeal, if any, the order passed by the Assistant or 'Deputy Custodian of Evacuee Property, or any original or appellate order passed by the Custodian or Additional Custodian of Evacuee Property shall be final and conclusive". It will be seen that these two sections enjoined that transfers by an evacuee or intending evacuee relating to his property from and after the 15th August, 1947, required confirmation and provided for appeal or revision from the orders passed on applications therefor and subject thereto, such orders were made final and conclusive. The requirement as to confirmation has been substantially continued in more or less the same form by sections 25, 38 and 40 respectively of 1125 the successive legislative measures with certain modi fications which are not material for this case. But so far as the appealability or revisability of an order passed on an application for confirmation is concerned. , there have been changes from: time to time. It will be seen from section 5 B of the East Punjab Act, XIV of 1947, as quoted above, that any original order passed by the Custodian or Additional Custodian is not subject to appeal or revision and it is specifically declared to be final and conclusive. Central Ordinance No. XII of 1949 by section 30(1) (b) thereof provided for an appeal to the High Court against an original order of a Custodian or Additional Custodian or authorised Deputy Custodian but there was no provision for revision of such an order. Under the Central Ordinance No. XXVII of 1949 the position was substantially different. Section 24 thereof, inter alia, provided that. any person aggrieved by an order made under section 38 (which corresponds to the previous section 5 A of the East Punjab Act XIV of 1947) may prefer an appeal in ,such manner and within such time as may be prescribed, to the Custodian General where the original order has been passed by the Custodian, Additional Custodian or an Authorised Deputy Custodian. Section 27 thereof provided for revisional powers of the Custodian General but it was specifically confined to appellate orders and there was no power given thereunder for revision by the Custodian General of an original order passed by the Custodian. But under Central Act XXXI of 1950 which repealed and replaced this Ordinance the position became different. The provision for appeal under section 24 thereof was virtually the same as before, in so far as it is relevant here. But as regards revision, however, section 27 of the Act provided for the revisional powers of the Custodian General in the following terms: "27. (1) The Custodian General may at any time, either on his own motion or on application made to him in this behalf, call for the record of any proceeding in which any district judge or Custodian has passed an order for the purpose of satisfying him 1126 self as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit: Provided that the Custodian General shall not pass an order under this sub section prejudicial to any person without giving him a reasonable opportunity of being heard. . . . . . . " The question relating to the validity of the revisional powers exercised by the Custodian General in the present case arises with reference to the provisions above mentioned. It is not disputed that Malik Sir Firoz Khan Noon was an evacuee. Nor is it disputed that this property in Punjab Khore which was the subject matter of the exchange was evacuee property. Though the exchange in question was alleged to have taken place on the 10th October, 1947, at a time when there was no restriction against any evacuee dealing with the property he left behind, it is indisputable that section 5 A of the East Punjab Act XIV of 1947 which has been specifically made retrospective from the 15th August, 1947, operates in respect of the present transaction also. It, therefore, requires confirmation under the said section and under the corresponding sections in the subsequent legislative measures in this behalf. It was in compliance with this requirement that the appellant made an application for confirmation on the 23rd February. 1948, and that a subsequent amended application was filed on the 14th August, 1948. It is these applications that were disposed of on the 20th March, 1952, by the Additional Custodian, Delhi, by an order confirming the exchange, which has since been revised by the Custodian General on the 20th May, 1953. The main contention of the learned counsel for the appellant is to the powers which are vested in the Custodian General to revise the original orders of the Custodian or Additional Custodian under section 27 of the Central Act XXXI of 1950 are not applicable to an order passed by the Custodian or Additional 1127 Custodian on an application made long prior to the time when the office of the Custodian General was set up and he was clothed with powers of revision. It is urged that on the date when the application for confirmation was first made on the 23rd February, 1948, an order passed under section 5 A by the Custodian or Additional Custodian is final and con clusive under section 5 B. It is strongly urged that the subsequent repeal and re enactment of these provisions cannot affect the right vested in the appellant to obtain a final and conclusive order from the Custodian or Additional Custodian on her application for confirmation. Section 6 of the General Clauses Act and the Privy Council case in the Colonial Sugar Refining Co. Ltd. vs Irving(1) were relied on in support of this contention. To determine the validity of this contention, it is necessary to trace the course of the various relevant statutory provisions from time to time which repealed the prior corresponding legislative measures and to determine the effect thereof. The East Punjab Act XIV of 1947 was replaced by the Central Ordinance No. XII of 1949 relating to Chief Commissioners ' Provinces. Section 40 thereof which repealed the prior Act was as follows: "40. (1) The East Punjab Evacuees ' (Administration of Property) Act, 1947 (East Punjab Act XIV of 1947), as in force in Ajmer Merwara and Delhi, is hereby repealed. (2)Notwithstanding such repeal, anything done or any action taken in the exercise of any power conferred by the Act aforesaid shall, in relation to the Provinces of Ajmer Merwara and Delhi, be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance, and any penalty` incurred or proceeding commenced under the said Act shall be deemed to be a penalty incurred, or proceeding commenced under this Ordinance as if this Ordinance were in force on the day when such thing was done, action taken, penalty incurred or proceeding commenced". When this Ordinance was in turn repealed by (1) 1128 Central Ordinance No. XXVII of 1949, the repealing section 55 was as follows: "55. (1) The Administration of Evacuee Property Ordinance, 1949 (XII of 1949), as in force in the Chief Commissioners ' Provinces is here by repealed. (2). . . . . (3)Notwithstanding the repeal by this Ordinance of the Administration of Evacuee Property Ordinance, 1949, or of any corresponding law, anything done or any action taken in the exercise of any power conferred by that Ordinance or law shall be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance, and any penalty incurred or proceeding commenced under that Ordinance or law shall be deemed to be a penalty incurred or proceeding commenced under this Ordinance as if this Ordinance were in force on the day on which such thing was done, action taken, penalty incurred or proceeding commenced". Ordinance No. XXVII of 1949 was in its turn repealed by Central Act XXXI of 1950. This Act was amended by an Ordinance and later by an Act of, the same year. Section 58 is the repealing provision of this Act as so amended. The material portion thereof is as follows: "58. (1) The Administration of Evacuee Property Ordinance, 1949 (XXVII of 1949) is hereby repealed. (2). . . . . . (3)The repeal by this Act of the Administration of Evacuee Property Ordinance, 1949 (XXVII of 1949). . shall not affect the previous operation thereof, and subject thereto, anything done or any action taken in the exercise of any power conferred by or under that Ordinance shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act, as if this Act were in force on the day on which such thing was done or action was taken". Thus in the transition of the Evacuee Property law 1129 relating to Delhi, from the East Punjab Act XIV of 1947 to the present Central Act XXXI of 1950, there have been three repeals. The first two repealing provisions are in almost identical terms but the third is somewhat different. The difference is in two respects. (1) The provision in the previous repealing sections that "any penalty incurred or proceeding commenced under the repealed law shall be deemed to be a penalty incurred or proceeding commenced under the new law as if the new law were in force on the day when the penalty was incurred or proceeding commenced" is now omitted. (2) The provision that "anything done or any action taken in exercise of any power conferred by the previous law shall be deemed to have been done or taken in exercise of the powers conferred by the new law as if the new law were in force on the day when such thing was done or action taken" is continued. But it is specifically provided that this is subject to the repeal not affecting the "previous operation of the repealed law" which in the context clearly means the previous operation of the repealed law in respect of "anything done or any action taken". The question thus for consideration is what is the result brought about by these provisions. Before proceeding to determine it, it is desirable to consider whether section 6 of the General Clauses Act can be relied on. The position as regards section 6 of the General Clauses Act in the case of repeal and re enactment has been considered by this Court in State of Punjab vs Mohar Singh( ') and laid down as follows at page 899: "Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. (1) ; , 899. 1130 The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot therefore subscribe to the broad proposition that section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or con trary to the provisions of the section. Such incom patibility would have to be ascertained from a consideration of all the relevant provisions of the new law. . . ". In the present case sub section (3) of section 58 of Central Act XXXI of 1950 purports to indicate the effect of that repeal, both in negative and in positive terms. The negative portion of it relating to "the previous operation" of the prior Ordinance appears to have been taken from section 6(b) of the General Clauses Act, while the positive portion adopts a "deeming" provision quite contrary to what is contemplated under that section. Under the General Clauses Act the position, in respect of matters covered by it, would have to be determined as if the repealing Act had not been passed, while under section 58 of Central Act XXXI of 1950, the position so far as the positive portion is concerned has to be judged as if the repealing Act were in force at the earlier relevant date. Therefore where, as in this case, the repealing section which purports to indicate the effect of the repeal on previous matters, provides for the operation of the previous law in part and in negative terms, as also for the operation of the new law in the other part and in positive terms, the said provision may well be taken to be self contained and indicative of the intention to exclude the application of section 6 of the General Clauses Act. We are, therefore, of the opinion that the said section cannot be called in aid in this case. Now, as to the meaning of section 58(3) of Central Act XXXI of 1950, it must be admitted that this is not free from difficulty. This kind of provision in a 1131 repealing Act appears rather unusual. Learned counsel for the appellant urges that the positive portion of this provision, i.e., "anything done or any action taken in exercise of any power conferred by or under, the Ordinance shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the day on which such thing was done or action was taken" applies only to purely administrative matters and that his case falls within the scope of the first portion, viz., "the repeal. . shall not affect the previous operation of the (repealed) Ordinance". His contention is that the application for, confirmation which was made by the appellant in 1948 and which remained pending until Act XXXI of 1950 came into force and superseded the earlier legislation in this behalf, had to be disposed of in accordance with sections 5 A and 5 B of the East Punjab Act XIV of 1947, as amended in 1948; that the order of confirmation passed by the Additional Custodian in such a pending application was not open to appeal or revision but became final and conclusive. It is urged that on the filing of the application in 1948, the appellant got a vested right to have it determined under section 5 A with the attribute of finality and conclusiveness under section 5 B attaching to such determination. According to the learned counsel this follows from the "previous operation" of the repealed law and is in consonance with the principle laid down by the Privy Council in Colonial Sugar Refining Co. Ltd. vs Irving(1). It appears to us that these contentions are unsustainable. Colonial Sugar Refining Co. Ltd. vs Irving(1) relates to the case of a right of appeal against an order passed or to be passed in a pending action. Their Lordships treated the right of appeal to a superior tribunal in a pending action as an existing right and held that the suitor cannot be retrospectively deprived of it except by express words or by necessary implication. This doctrine was affirmed by the Privy Council in Delhi Cloth & General Mills Co. Ltd. (1) 143 1132 vs Income Tax Commissioner, Delhi(1) in its application to the converse case in the following terms: "Their Lordships can have no doubt that provisions which, if applied retrospectively, would deprive of their existing finality orders which, when the statute came into force, were final, are provisions which touch existing rights". It may be noticed that in the case in Delhi Cloth & General Mills Co. Ltd. vs Income Tax Commissioner(1), the orders of the High Court from which appeals were sought to be filed to the Privy Council were dated the 6th January, 1926 and 12th January, 1926. As the Indian Income tax Act stood at the time and according to the interpretation of section 66 thereof by the Privy Council in Tata Iron & Steel Co. vs Chief Revenue Authority, Bombay(2) there was no appeal to the Privy Council. The legislature by an amendment of the Income tax Act, which came into force on the 1st April, 1926, inserted therein section 66 A and gave a right of appeal against such orders as provided therein. In this situation the Privy Council repelled the contention that the litigant could avail himself of the new provision by pointing out the finality of the orders fought to be appealed against and referring to it as an existing right. This is obviously so because finality attached to them. , the moment orders were passed, prior to the new Act. In the present case, the position is different. The action was still pending when Central Act XXXI of 1950 came into force. No order was passed which could attract the attribute of finality and conclusiveness under section 5 B of the East Punjab Act XIV of 1947. Further the possibility of such finality was definitely affected by the repealing provision in Central Ordinance No. XII of 1949 and Central Ordinance No. XXVII of 1949, which specifically provided that a pending action was to be deemed to be an action commenced under the new Ordinance as if it were in force at the time and therefore required to be continued under the new Ordinances. Each of these Ordinances provided for (1) Lahore 284. (2) (1923] L.R. 50 I.A. 212. 1133 appeal against such an order and the second of them provided for the exercise of revisional power against an appellate order of the Custodian. Learned counsel for the appellant contends that, even so, the finality and conclusiveness, which would have attached to an order made under section 5 A, if made before Ordinance XII of 1949 was promulgated, was affected only to the extent of its being subject to an appeal and not to revision. But once the attribute of finality in respect of such an order is affected by subsequent legislation, it does not appear to be of consequence that it was affected first by a provision for appeal and later by provisions for appeal and revision. It is difficult to see that such provisions, in those cir cumstances, are anything more than alterations in procedure. However this may be, it appears to be clear that while a right of appeal in respect of a pending action may conceivably be treated as a substantive right vesting in the litigant on the commencement of the action though we do not so decide no such vested right to obtain a determination with the attribute of finality can be predicated in favour of a litigant on the institution of the action. By the very terms of section 5 B of East Punjab Act XIV of 1947, finality attaches to it on the making of the order. Even if there be, in law, any such right at all as the right to a determination with the attribute of finality, it can in no sense be a vested or accrued right. It does not accrue until the determination is in "fact made, when alone the right to finality becomes an existing right as in Delhi Cloth and General Mills Co. Ltd. vs IncomeTax Commissioner(1). We are, therefore, of the opinion that the principle of Colonial Sugar Refining Co. Ltd. vs Irving(2) cannot be invoked in support of a case of the kind we are dealing with. Nor can this be brought under the ambit of the phrase "previous operation of the repealed law". What in effect, learned counsel for the appellant contends for is not the "previous operation of the repealed law" but the "future operation of the previous (1) Lahore 284, (2) 1134 law". There is no justification for such a construction. Besides, if in respect of the pending application in the present case, the previous repealed law is to continue to be applicable by virtue of the first portion of section 58(3) the question arises as to who are the authorities that can deal with it. The application can be dealt with by the Custodian and on appeal by the Custodian General only as functioning under the previous law. But as such Custodian or Custodian General they have disappeared by virtue of the repeal. It is only the second portion of section 58(3) which continues them as though the appointments were made under the new Act a position which could scarcely be controverted. To the extent of the future operation, if any, of the repealed law they can have no function. Indeed, a comparison of the wording of section 58 of Act XXXI of 1950 with the wording of section 6 of the General Clauses Act would show that if the legislature intended either that pending proceedings were to be continued under the previous law or that anything in the nature of vested right of finality of determination or some right akin thereto was to arise in respect of such pending proceedings, the negative portion of section 58(3) would not have stopped short with saving only the "previous operation" of the repealed law. It would have borrowed from out of some portions of the remaining sub sections (c), (d) and (e) of section 6 of the General Clauses Act, and provided in express terms for the continuance of the previous law in respect of pending pro ceedings. Obviously no particular sub section of section 6 of the General Clauses Act could be borrowed in toto as that would contradict the positive portion of section 58(3) of Act XXXI of 1950 and would be inconsistent with the idea underlying it. We are,therefore, clearly of the view that the appellant cannot call in aid the principle of the case in Colonial Sugar Refining Co. Ltd. V. Irving(1), nor can his case fall within the ambit of the first portion of sub section (3) of section 58 of Act XXXI of 1950. The next question for consideration is how the (1) 1135 second and positive portion of section 58(3) of Act XXXI of 1950 is to be understood. This portion says that "anything done or any action taken in exercise of any power conferred by or under the (repealed) Ordinance, shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the day on which such thing was done or action was taken". To appreciate the meaning of this it is desirable to have a general idea of the scheme of the repealed Ordinance, the powers exercisable thereunder, and the nature of the things that may be done, or action that may be taken, thereunder. The powers exercisable are to be gathered from various sections and broadly speaking fall under the follow ing categories. To make appointments sections 5 and 6. 2. To make enquiries sections 7, 16, 19 and 38 and to make declarations or issue notifications as a result thereof. To make various kinds of consequential or administrative order such as those under sections 9, 10, 11, 12 and 21. 4. To hear and dispose of appeals, reviews or revisions sections 24, 25, 26 and 27. 5.Power of the Central Government, to exempt, to give directions, to take action with regard to evacuee property, to delegate powers and to make rules sections 49, 50, 51, 52 and 53. In addition there are provisions which bring about various consequences such as vesting in the Custodian, valid discharge by payment to the Custodian, attachment, and so forth, sections 7 (2), 8, 11, 13, 16 (3), 19 (3), 20 and 22, etc. The above enumeration is by no means intended to be exhaustive but is merely to illustrate the scheme of the various provisions in the Ordinance with reference to which section 58 of the Act has to be understood. There are also rules framed by virtue of section 53 of the Ordinance under which various powers may be exercised, things done, and action taken. If section 58 (3) of Central Act XXXI of 1950 which 1136 repealed the prior Ordinance is understood with reference to the above scheme, there is no reason to confine the operation of the second portion of section 58(3) to administrative action as suggested by learned counsel for the appellant. Broadly speaking, the second portion of section 58(3) refers to the whole range of, things that may be done, or action that may be taken, under the previous Ordinance and the rules framed thereunder, while the first portion of section 58(3) relates to the legal consequences resulting under the Ordinance or the rules from certain facts or from completed acts or things done thereunder. Without attempting to be meticulously accurate, it may be stated in general terms, that the scheme underlying section 58(3) appears to be that every matter to which the new Act applies has to be treated as arising, and to be dealt with, under the new law except in so far as certain consequences have already ensued or acts have been completed prior thereto to which it is the old law that will apply. In this view of section 58, the application of the appellant for confirmation pending on the date when Central Act XXXI of 1950 came into force had to be dealt with and disposed of under this Act and the order of confirmation passed in 1952 would clearly be subject to the revisional power of the Custodian General under section 27 of the said Act. It is next contended that the revisional power cannot be exercised when there was an appeal provided but no appeal was filed, that it was open to the Assistant Custodian who appeared before the Custodian General in support of the notice for revision or to the allottees of the property in whose interest the revisional order appears to have been passed, to file an appeal under the Act as persons aggrieved. Section 27 however is very wide in its terms and it cannot be construed as being subject to any such limitations. Nor can the scope of revisional powers be confined only to matters of jurisdiction or illegality as is contended, because under section 27, the Custodian General can exercise revisional powers "for the purpose of satisfying himself as to the legality or 1137 propriety of any order of the Custodian". We are thus clearly of the opinion that the contention of the learned counsel for the appellant that the exercise of revisional powers in this case by the Custodian General is without jurisdiction or is illegal, must fail. The next question to be considered is as regards the merits of the revisional order of the Custodian General which is under appeal before us. Learned counsel for the appellant attacked it on various grounds. He urged that the ground on which the learned Custodian General set aside the Additional Custodian 's order, viz., absence of notice to the prior allottees is wholly untenable. He contended that the allottees had no kind of interest in the land which entitled them to contest the application for confirmation, that they were at best only lessees for three years which was due to expire very shortly after the order of confirmation was passed by the Additional Custodian. He pointed out that as soon as the application for confirmation was filed on the 23rd February, 1948, general notice by beat of drum and affixture in the locality and by publication in the Indian News Chronicle article was given, that the persons in possession at the time were only the previous tenants on the land, who either attorned to the appellant or left the village, that the allottees came into possession much later and pending the disposal of the confirmation proceedings and presumably subject to its result. He also pointed out that even when the rules in this behalf came into force under Act XXXI of 1950, it was discretionary with the Custodian to give notice to persons other, than the transferor and transferee, if he considered them to be interested, and urged that since the same officer, Shri R. Dayal, made the allotment as also the confirmation, he must be taken to have exercised his discretion properly in not giving any notice to them, in view of the imminent expiry of the three years term for which they were put in possession. It is strongly urged that having regard to the above considerations and to the categorical findings of the Custodian General himself that the 1138 transaction which was confirmed, was perfectly bona fide, the setting aside of the order of confirmation against which no appeal was filed by any one, and the consequential disturbance of the vested property rights of the appellant, was in the nature of perverse exercise of revisional power. The learned Solicitor General appearing for the respondent contended that the finding of the CustodianGeneral about the bona fides of the transaction was only tentative, that the allottees, though provisionally placed in possession for three years had, what has come to be recognised as, a quasi permanent interest, that they had a genuine interest in opposing the confirmation sought, which related to a large tract of agricultural land, and which would reduce the pool of agricultural lands available for rehabilitation of displaced agriculturists and that confirmation of transactions relating to such land was opposed to the policy and directives of the Government and that the confirmation should not, in the circumstances, have been lightly granted by the Additional Custodian without notice to the allottees and a proper consideration of the policies and directives in this behalf. In reply thereto learned counsel for the appellant urged that the alleged policies or directives are not relevant matters for consideration by the Custodian in these proceedings which must be taken to be quasi judicial, if not judicial, unless such policies or directives are embodied in rules made by the Central Government under section 56(2) (q) and that no such rules were prescribed by the relevant dates and that even the Custodian General himself in his order under appeal discounted the usefulness of any reference to notifications and directives for the purposes of this case. It was also urged that the matters which could be taken into consideration are regulated by section 40(4) of Act XXXI of 1950 and that clause (c) thereof must be construed as referring to matters ejusdem generis with clauses (a) and (b) But in the view we take of the order under appeal and the course we propose to adopt, we do not wish to express any opinion on the merits of the above arguments. 1139 The order under appeal is one passed by virtue of the wide powers of revision vested in the Custodian General under section 27 of the Act. The jurisdiction which has been challenged having been found in favour of the Custodian General, this Court would normally be slow to interfere with the order on its merits. But with respect to the learned CustodianGeneral, his order is such that it is difficult to maintain it. The learned Solicitor General himself has been obliged to put forward arguments in support of it which cannot be clearly gathered from the order itself. It is also difficult together from it whether the remand to the Additional Custodian for reconsideration, after notice was a general and open remand where all questions on the merits are to be reconsidered or was only a limited remand and if so what the limitations are. If it was meant to be an open general remand, as the concluding portion of his order seems to indicate, his definite findings on points (1) and (2) which he formulated for himself and the doubt he has expressed in his order about the usefulness of examining afresh the various notifications and directives to which his attention was drawn by the Assistant ,Custodian, would render it difficult for any Custodian on remand to consider any of those matters. If so, the remand would appear to serve no substantial purpose. In the circumstances, and in fairness to the learned Custodian General, the only proper course would be to set aside his order under appeal and to remit the matter back to him for fresh consideration. On such fresh consideration he will give full opportunity to both sides for presentation of their respective points of view. If on the rehearing, he decides to remand the case to the Custodian, he will clearly indicate what are the matters to be considered by him. The learned Custodian General may also consider the feasibility of his dealing with the matter finally by himself, calling for a report, if need be, from the Custodian on specified matters, in order to obviate any further delay by appeal and revision in this already protracted matter.

The appellant, a displaced person from Lahore, was the owner of a house there and on the 10th of October, 1947, she arranged to have it exchanged with certain lands in a village in the State of Delhi, belonging to M, an evacuee. On the 23rd of February, 1948, she made an application to the Additional Custodian of Evacuee Property (Rural), Delhi, for confirmation of the transaction of ex 1118 change under section 5 A of the East Punjab Evacuees ' (Administration of Property) Act, 1947, as amended in 1948 and applied to the State of Delhi. Under section 5 B of the Act an order if passed by the Custodian or Additional Custodian would not be subject to appeal or revision, and would become final and conclusive. But the application was not disposed of until the 20th of March, 1952, and on that date the Additional Custodian passed an order confirming the exchange. In the meanwhile, there were changes in the law relating to evacuee property by which the East Punjab Act as applied to the State of Delhi witness repealed and re enacted, and ultimately Central Act XXXI of 1950 was passed which, among other things, conferred by section 27 revisional powers on the Custodian General. The Custodian General issued a notice under section 27 to the appellant and, after hearing her, set aside the order of confirmation and directed the matter to be reconsidered by the Custodian. It was contended for the appellant that the order of confirmation by the Additional Custodian was not open to revision, on the ground that on the filing of the application in 1948 the appellant got a vested right to have it determined under section 5 A, with the attribute of finality and conclusiveness under section 5 B attaching to such determination, and that the subsequent repeal and re enactment of these provisions cannot affect such a right, in view of section 6 of the General Clauses Act, and section 58(3) of Act XXXI of 1950. Held (i) that section 6 of the General Clauses Act (X of 1897) was not applicable to the case, as section 58(3) of Act XXXI of 1950 was a self contained provision indicative of the intention to exclude the operation of section 6; (ii)that the right to a determination with the attribute of finality, assuming that such a right exist,. ;, is not a vested right and it does not accrue until the determination is in fact made, when alone it becomes an existing right. Colonial Sugar Refining Co. Ltd. vs Irving ([1905] A.C. 369) and Delhi Cloth & General Mills Co. Ltd. vs Income Tax Com missioner ([1927] I.L.R. ; 54 I.A. 421), distinguished; (iii)that the words "the repeal shall not affect the previous operation of the repealed law" in section 58(3) of Act XXXI of 1950 cannot be construed as meaning "the repeal shall not affect the future operation of the previous law"; and (iv)that the scheme underlying section 58(3) is that every matter to which the new Act applies has to be treated as arising, and to be dealt with, under the now law except in so far as certain consequences have already ensued or acts have been completed prior to the new Act, to which it is the old law that will apply. In view of section 58, the application of the appellant for con firmation pending on the date when Act XXXI of 1950 came into force, had to be dealt with and disposed of under this Act and the order of confirmation passed in 1952 was subject to the revisions power of the Custodian General under s, 27 of the said Act, 1119 Quaere. Whether a right of appeal in respect of a pending action can be treated as a substantive right vesting in the litigant on the commencement of the action.

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Appeal No. 92 of 1953. Appeal under section 110 of the Civil Procedure Code from the Judgment and Decree dated the 8th November 1949 of the Bombay High Court in Appeal from Original Decree No. 195 of 1947 arising out of the Judgment and Decree dated 20th December 1946 of the Court of Civil Judge, Senior Division, Sholapur in Special Suit No. 78 of 1945. C.K. Daphtary, Solicitor General of India (R. A. Govind, with him) for the appellants. J.B. Dadachanji, Sri Narain Andley and Rajinder Narain, for respondents. October 11. The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J. This appeal is from a reversing decree of the Bombay High Court in a suit for the possession of certain immovable properties which was dismissed by the Civil Judge, Senior Division, Sholapur. The value of the properties has been found to be over Rs. 10.000. The original decree was on 20 12 1946. The decree of the High Court allowing the plaintiff 's claim was on 8 11 1949. The defendants applied for leave to appeal to the Federal Court on 6 1 1950. The High Court directed the trial court to find the value of the property which was the subject matter of the suit at the time of the suit and on the date of the passing of the decree in appeal. On 22 1 1951 the lower court ascertained the value as stated above. 'The High Court thereafter granted leave to appeal on 1 10 1951, overruling the objections raised by the plaintiff to the grant of such leave. The maintainability of this appeal has been questioned before us by Mr. Dadachanji, learned counsel for the respondents, in a somewhat lengthy argument. His main contention was that article 133 of the 874 Constitution applies to the case, and as the value is below Rs. 20,000, no appeal can be entertained. It is the correctness of this argument that we have to consider. On the date of the decree of the High Court, the defendants had a vested right of appeal to the Federal Court, as the properties were of the requisite value, and on 6 1 1950 they sought a certificate of leave to appeal, which was bound to be granted. The Constitution establishing the Supreme Court as the final appellate authority for India came into force on 26 1 1950. Did the vested right become extinguished with the abolition of the Federal Court? If the court to which an appeal lies is altogether abolished without any forum substituted in its place for the disposal of pending matters or for the lodgment of appeals, the vested right perishes no doubt. We have therefore. to examine whether the Constitution which brought the Supreme Court into being makes any provision for an appeal from a reversing decree of the High Court prior to the date of the Constitution respecting properties of the value of Rs. 10,000 and more being entertained and heard by the Supreme Court. Article 135 is in these terms: "Until Parliament by law otherwise provides, the Supreme Court shall also have jurisdiction and powers with respect to any matter to which the provisions of article 133 or article 134 do not apply if jurisdiction and powers in relation to that matter were exercisable by the Federal Court immediately before the commencement of this Constitution under any existing law". Article 133 runs as follows: "(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India if the High Court certifies (a) that the amount or value of the subject matter of the dispute in the court of first instance and still in dispute on appeal was and is not less than twenty thousand rupees or such other sum as may be specified in that behalf by Parliament by law; or 875 (b)that the judgment, decree or final order involves directly or indirectly some claim or question respecting property of the like amount or value; or (c) that the case is a fit one for appeal to the Supreme Court; and, where the judgment, decree or final order appealed from affirms the decision of the court immediately below in any case other than a case referred to in sub clause (c), if the High Court further certifies that the appeal involves some substantial question of law. . . " It is reasonably clear that article 133 does not apply to this "matter". The language is prospective, and the judgment, decree or final order from which the appeal is to be taken is that of a High Court in the territory of India that is a High Court established under the Constitution. The territory of India comprises the territory of the States. Article 214 says that there shall be a High Court for each State, and clause (2) thereof provides that "the High Court exercising jurisdiction in relation to any Province immediately before the commencement of this Consti tution shall be deemed to be the High Court for the corresponding State". We can compendiously speak of the High Court prior to the Constitution and the High Court after the Constitution as the Provincial High Court and the State High Court. A High Court in the territory of India means a State High Court, and article 133 provides for appeals against any judgment, decree or final order in a civil proceeding of such High Court. Though article 133 does not apply, we have still to see whether it is a matter as regards which jurisdiction and powers were exercisable by the Federal Court immediately before the commencement of the Constitution. It is unnecessary to refer in detail to the earlier enactments defining the jurisdiction of the Privy Council, and the Government of India Act, 1935 establishing the Federal Court and conferring a limited jurisdiction on the same. It is sufficient to point out that as the law then stood, the Federal Court had jurisdiction to entertain and hear appeals 111 876 from a decree of a High Court which reversed the lower court 's decree as regards properties of the value of more than Rs. 10,000. The aggrieved party had a: right to go before it, without any special leave being granted. It was a matter over which jurisdiction was "exercisable" by the Federal Court. The construction that it was "exercisable" only if the matter was actually pending before the Federal Court and that it could not be said to be pending until the appeal is declared admitted under Order XLV of the Civil Procedure Code is too narrow, and does not give full and proper scope to the meaning of the word "exercisable" in the article. Pending matters are dealt with under article 374(2), and we must give some meaning to the provisions of article 135. As soon as the decree of the High Court came into existence, the jurisdiction of the Federal Court to bear an appeal from that decree became exercisable, provided certain conditions as to security and deposit were complied with, which are not material for our present purpose. Reference may be made here to paragraph 20 of the Adaptation of Laws Order, 1950, as amended in 1951, which provides "Nothing in this Order shall affect the previous operation of, or anything duly done or suffered under, any existing law or any right, privilege, obligation or liability already acquired, accrued or incurred under any such law. . " By this Order section 110, Civil Procedure Code was adapted to the new situation but the requirement as to value Was raised from 10,000 to 20,000. What is provided is that this adaptation will not affect the right of appeal already accrued. If we accede to the argument urged by the respondents, we shall be shutting out altogether a large number of appeals, where the parties had an automatic right to go before the Federal Court before the Constitution and which we must hold was taken away from them for no fault of their own, merely because the Supreme Court came into existence in place of the Federal Court. An interpretation or 877 construction of the provisions of the Constitution which would lead to such a result should be avoided, unless inevitable. The Full Bench decision of the Madras High Court in Gundapuneedi Veeranna and three others vs Gundapuneedi China Venkanna and seven others(1) was a case where the decree of the High Court and the application for leave to appeal were both after the Constitution came into force. Whether in all matters where there was a right of appeal under section 110 of the Civil Procedure Code it continues in respect of all suits filed prior to the Constitution is a question that does not arise for decision now. On the merits, the appeal is unassailable. The family whose genealogical tree is given in the opening portion of the judgment of the trial Judge owned what may be compendiously described as Sangam properties and Peta Velapur Mahal properties, and all of them were of the nature of watan. The Sangam lands were held by the eldest branch represented by Yeshwant Rao (son of Panduranga Rao) by right of lineal primogeniture. When Yeshwant Rao and his widow Tarabai died in November 1924, these properties went to the plaintiff Shankar Rao 's branch as the next senior in line. The Peta Velapur Mahal properties were held in three shares by Narsinga Rao, Vithal Rao and Krishna Rao, the fourth brother Shyama Rao having no right as he was insane. Defendants 1, 2 and 3 represent Krishna Rao 's branch. After Yeshwant Rao 's death, Lakshman Rao, the grandfather of defendants I and 2, filed a suit No. 1064 of 1925 for a declaration that he was the nearest heir to the Sangam properties, the Peta Velapur Mahal properties and the cash income appertaining to the inamdar 's right in Sangam. He got a declaratory decree that he was the nearest heir of the deceased Yeshwant Rao, and had a right in such capacity to take possession of ill the properties, excluding the inam income and the Sangam lands specified in Schedule B of the decree and a small item of property situated in the same village and specified in Schedule G. As regards the excluded items, Shankar (1) I.L.R. 878 Rao, the first defendant, (plaintiff in the present suit) was held to be the heir. On appeal to the High Court, the decree of the Subordinate Judge was confirmed, except as regards the cash allowance of three villages Nevare, Tambure and Limbagaon, which was also declared to belong to Shankar Rao. As the decree was only a declaratory decree, a fresh suit had to be filed by Narayana Rao, son of Lakshman Rao, to recover possession of the Peta Velapur Mahal properties at Mahalung, Lavang and Wafegaon. This was Civil Suit No. 2148 of 1936. Recovery was also sought of some cash and the value of some ornaments and clothes, etc. The claim was resisted by Shankar Rao, and his main plea was that in lieu of the properties claimed, a large number of lands at Sangam had originally been given to the plaintiff 's branch, and that unless those properties were given back, the plaintiff could not claim to recover the Velapur Mahal properties. The suit ended in a compromise decree. Shankar Rao was to deliver actual possession of the lands to the plaintiff as owner together with costs and mesne profits and the plain tiff was to abandon the rest of the claim. The decree states, "The defendant has given up all the contentions in his written statement". After possession was taken of the Velapur Mahal properties under the decree, the plaintiff, Shankar Rao, brought this suit to recover from defendants I and 2 the Sangam lands to which he referred in his earlier written statement alleging that they were given to their grandfather in lieu of maintenance. The defendants have made the answer that the items of Sangam lands claimed by the plaintiff were given to their ancestor, Krishna Rao absolutely under the deed of 1867, and that since then they had been in the enjoyment as owners thereof. The Civil Judge dismissed the plaintiff 's suit finding that the case of the plaintiff to the effect that the lands were given to Krishna Rao for maintenance under the deed of 1867 was unfounded. But on appeal by Shankar Rao (the plaintiff), the High Court reversed this decree construing the deed of 1867 as a deed under which absolute owner 879 ship was not transferred to Krishna Rao and that the specified items of Sangam lands were given to him provisionally and conditionally till Krishna Rao obtained possession of the Peta Velapur Mahal lands which were then under a mortgage. We have examined the deed closely and do not find any warrant for the view taken by the learned Judges on appeal. The deed is Exhibit No. 35, and it is printed at page 63 of the Paper Book. The correctness of the translation is admitted. It was executed by Narsinga Rao of the first branch in favour of Krishna Rao of the last branch, predecessor in title of defendants 1 to 3. After reciting that Krishna Rao was entitled to a one third share in the income appertaining to the Deshmuki rent of the family at Peta Velapur Mahal, it proceeds to say, ". . In lieu of the land of that Mahal and in respect of the cash allowance of the Haqdari rights we have given to you for a 1/3 share of land of this Mahal the following lands from the village of Sangam which is continued with us by Vadilki right (the right of primogeniture)". The deed proceeds to set out the items by areas, assessment, and boundaries, and then goes on: "In all 6 numbers have been given by us to you in lieu of your entire income from the said Mahal. Now, five and half Pavs out of the said land are in your Vahiwat ' at present and the remaining land was to have been given over to your vahiwat, but we having formerly mortgaged the said village to Ramchandra Pandurang Deshpande, 5 'Pavs ' of land is not in your Vahiwat this day. Hence on the expiry of 6 years, the period of the mortgage, you may carry on the entire Vahiwat of the land passed in your favour in writing as aforesaid without any hindrance. We have no claim of inheritance left on the aforesaid land". The deed concludes with a provision made for the residence of the donee in an open space in the same villagers It further states: ". There are four shops and a wada at the Kasba of Velapur, and a one third share thereof has been allotted to your share over which we have no 880 claim of inheritance left". It is obvious from this document that the one third share of Krishna Rao 's branch in the Peta Velapur Mahal properties was retained by Narasinga Rao and that in lieu thereof Krishna Rao was given six items of the Sangam properties, the whole of which could not then and there be given over into his possession and management as there was a usufructuary mortgage over a portion of the lands which was to expire after the lapse of six years from that date. The lands referred to as mortgaged are the Sangam lands and not the Peta Velapur Mahal lands as wrongly assumed by the High Court. There is absolutely nothing said about the properties being given for maintenance to ]Krishna Rao. On the other hand, in two places we find that any right to inheritance was given up. In fact, this case of the plaintiff was given up before the trial Judge. It is true that there was an exchange of properties, but there is nothing to warrant the view of the learned Judges that it was provisional or conditional, and that the Sangam lands were to be returned when the Velapur Mahal properties went into the possession and management of Krishna Rao 's branch. To say that such an arrangement was implied is to ignore the plain terms of the deed. The properties now in dispute are the items covered by the deed. They did not form the subject matter of the two previous litigations. Since 1867, the date of Exhibit No. 35 they have always been in the possession of the defendants ' branch as owners. It must also be remembered that the earlier suits of 1925 and 1936 proceeded on the basis that the defendants ' branch was the heir to the properties left by the deceased, Yeshwant Rao. There is no other question which arises for discussion or decision. It follows that, the trial Judge was right in holding that the plaintiff 's claim to recover possession of the suit properties covered by the deed of 1867 was entirely baseless. The decree of the High Court is reversed and that of the trial Judge is restored with costs throughout payable by the plaintiff to the defendants.

This appeal to the Supreme Court was from a reversing decree of the Bombay High Court in a suit for possession of certain immovable properties. The suit was dismissed by the trial court on 20 12 1946, the value of properties being found to be over Rs. 10,000. The decree of the High Court allowing the plaintiff 's claim was passed on the 8th November 1949. The defendants applied to the High Court for leave to appeal to the Federal Court on 6 1 1950 which was granted on 1 10 1951. One of the questions for determination was whether article 133 of the Constitution applied to the case and the appeal was competent to the Supreme Court. Held, that article 133 did not apply as it relates expressly to appeals against any judgment, decree or final order in a civil proceeding of a High Court in the "territory of India". Held further that on the date of the decree of the High Court, the defendants had a vested right of appeal to the Federal Court as the properties were of the requisite value and on 6 1 1950 a certificate of leave to appeal was bound to be granted. Held also that the appeal was competent to the Supreme Court by virtue of the provisions of article 135 of the Constitution as the jurisdiction and powers in relation to the matter in dispute were exercisable by the Federal Court immediately before the commencement of the Constitution under an existing law inasmuch as the Federal Court had jurisdiction to entertain and hear appeals from a decree of a High Court which reversed the lower court 's decree as regards properties of the value of more than Rs. 10,000. The construction contended for by the respondent that the jurisdiction was exercisable under article 135 by the Federal Court only if the matter was actually pending before the Federal Court and that it could not be said to be pending until the appeal is declared admitted under Order XLV of the Civil Procedure Code is 873 too narrow and does not give full and proper scope to the meaning of the word 'exercisable ' in the Article.

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: Criminal Appeal No 219 of 1975 (Appeal by special leave from the judgment and order dated the 20th October, of the Andhra Pradesh High Court at Hyderabad in Criminal Misc. Petition No 1890 of 1975) P B Basi Reddy, and AV V Nair for the appellants. M R K Chaudhary and B K Kanta Rao for respondent No 1 525 P. Ram Reddy, and P Parameshwara Rao, for respondent Nos. 2 and 3 The Judgment of the Court was delivered by SARKARIA, J. Whether in view of Clause (a) of the First Proviso to s, 22(1) of the Code of Criminal Procedure, 1973, a Magistrate who receives a complaint, disclosing an offence exclusively triable by the Court of Session, is debarred from sending the same to the police for investigation under section 156(3) of the Code, is the short question is that falls to be determined in this appeal by special leave. The question arises in these circumstances: Respondent 1 herein made a complaint on July 26" 1975 before the Judicial Magistrate, First Class, Dharamavaram against the appellants herein alleging that. On account of factions existing village Thippapalli the appellants formed themselves into an unlawful assembly, armed with deadly weapon, such as axes, spears and sticks, on the night of June 20" 1975 and entered the houses of several persons belonging to the opposite party, attacked the inmates and forcibly took way jewels, paddy, ground nuts and other valuables of the total value of two lakhs of rupees. It was further alleged that the miscreants thereafter went to the fields and removed parts of machinery worth over Rs. 40,000/ , installed at the wells of their enemies. On these facts it was alleged that the accused had committed offences under sections 147, 148, 149, 307, 395, 448, 378 and 342 of the Penal Code. The offences under sections 307 and 395 are exclusively triable by the Court of Session. The Magistrate on receiving the complaint forwarded ii to the Police for investigation with this endorsement: "Forwarded under section 156(3), Cr. Procedure Code to the Inspector of Police, Dharmavaram for investigation and report on or before 5 8 1975. " The appellants moved the High Court of Andhra Pradesh by petition under section 482 of the Code of Criminal Procedure, 1973 (which corresponds to section 561 A of the old Code) praying that the order passed by the Magistrate be quashed inasmuch as "it was illegal, unjust and gravely prejudicial to the petitioners". The learned Judge of the High Court. who heard the petition. , dismissed it by an order dated October 20, 1975. Hence this appeal. Mr. Basi Reddy appearing for the appellants contends that the High Court has afield to appreciate the true effect of the changes brought by the Code of 1973. According to the Counsel, under the new Code, is a complaint discloses an offence triable exclusively be court of Session, the Magistrate is bound to proceed with that complaint himself before issuing process to the accused. The point pressed into argument is that clause (a) of the first Proviso to section 202(1), the new Code peremptorily prohibits the Magistrate, to direct investigation of such a complaint by the Police or any other person. The cases, Gopal Da vs State of Assam(l),. Jamuna Singh vs Bhadai She (2), referred to by the High Court are sought to be distinguished (1) (1961) A.I.R. 19(;1 section C. 986 (2) [1964] 5 S S.C.R. 37. 526 on the ground that they were decided under the old Code, section 21)2 of which did not provide for any such ban as has been expressly enacted in the 1st Proviso to section 202 of the new Code. As against this, Mr. Ram Reddy, whose arguments have been adopted by Mr. Chaudahry, submits that the powers conferred on the Magistrate under section 156(3) of the Code are independent of his power to send the case for investigation under. section 22 of the Code; that the power under section 156 (3) can be invoked at a stage when the Magistrate has not taken cognizance of the case while section 202 comes into operation after the Magistrate starts dealing with the complaint in accordance with the Provisions of Chapter XV. It is urged that since in the instant case, the Magistrate had sent the complaint for police investigation without taking such cognizance section 202 including the ar enacted therein, was not attracted. In the alternative, it is submitted that the ban in the 1st Proviso to section 202, becomes operative only when the Magistrate after applying his mind to the allegations in the com plaint and the other material" including the statement of the complainant and his witnesses, if any, recorded under section 200,, is prima facie satisfied that the offence complained of is triable exclusively by the Court of Session. The point sough to be made out is that a mere allegation in the complaint that the offence committed is one exclusively triable by the Court of Session, does not oust the jurisdiction of the Magistrate to get the case investigated by the police or other person. The word "appears" according to Counsel, imports a prerequisite or condition precedent, the existence of which must be objectively and judicially established before the prohibition in the 1st Proviso to section 202 becomes operative. It is added that in the instant case,, the existance of this condition precedent was not, and indeed could not he established. It appears to us that this appeal can be disposed of on the first ground canvassed by Mr. Ram Reddy. Before dealing with the contention raised before us, it will be appropriate to notice the relevant provisions of the old and the new Code. Section 156 of the Code of 1973 reads thus: "156(1). Any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable case Which a Court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIII. (2) No proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate, (3) Any Magistrate empowered under section 190 may order such an investigation as above mentioned. " 527 This provision is substantially the same as section 156 of the Code of A 1898, excepting that in sub section (1) for the words "Chapter XV relating to the place of inquiry or trial," the words "Chapter XIII" have been substituted. Sections 200 and 202 of the 1898 Code and the 1973 Code, placed in juxtaposition, read as follows: 1898 Code section 200: A Magistrate taking cognizance of an offence on complaint shall at once examine the complaint and the witnesses present, if any, upon oath and the substance of the examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate: Provided as follows: (a) when the complaint is made in writing, nothing herein contained shall be deemed to require a Magistrate to . examine the complainant before transferring the case under section 192; (aa) when the complaint is made in writing, nothing herein contained shall be deemed to require the examination of a complainant in any case in which the complaint has been made by a Court or by a public servant acting or purporting to act in the discharge of his official duties: (b) where the Magistrate is a Presidency Magistrate, such examination may be on oath or not as the Magistrate in each case thinks fit, and where the complaint is made in writing need not be reduced to writing. but the Magistrate may, if he thinks fit, before the matter of the complaint is brought before him, require it to be reduced to writing; (c) when the case has been transferred under section 192 and the Magistrate so transferring it has already examined the complainant, the Magistrate to whom it is so transferred shall not be bound to re examine the complainant. 202 Postponement of issue of Process: (1) Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance, or 1973 Code section 200: A Magistrate taking cognizance of an offence on complaint shall ex. mine upon oath the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate. Provided that, when the complaint is made in writing, the Magistrate need not examine the complainant and the witnesses (a) if a public servant acting or purporting to act in the discharge of his official duties or a Court has made the complaint; or (b) if the Magistrate makes over the case for enquiry or trial to another Magistrate under section 192; Provided further that if the Magistrate makes over the case to another Magistrate under section 192 after examining the complainant and the witnesses, the latter Magistrate need not re examine them. 202 Postponement of Issue of process: (1) Any Magistrate, on receipt of a complaint of an offence which he is authorised to take cognizance or 528 which has been transferred to him under section 192, may, if he thinks fit, for reasons to be recorded in writing, postpone the issue of process for compelling the attendance of the person complained against, and either inquire into the case himself or, if he is a Magistrate other than a Magistrate of the third class, direct an inquiry or investigation to be made by any Magistrate subordinate to him, or by a police officer, or by such other person as he thinks fit for the purpose of ascertaining the truth or falsehood of the complaint; Provided that, save where the complaint has been made by a Court, no such direction shall be made unless the complainant has been examined on oath under the provisions of section 200. (2) If any inquiry or investigation under this section is made by a person not being a Magistrate or a Police officer. such person shall exercise all the powers conferred by this Code on an officer in charge of a Police station. except that he shall not have the power to arrest without warrant. (2A) Any Magistrate inquiring into a Case under this section may, if he thinks fit, take evidence of witnesses on oath. (3) This section applies also to the police in the towns of Calcutta and Bombay. which has been made over to him under sec. 192, may if he thinks fit, postpone the issue of process against the accused and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: Provided that no such direction for investigation shall be made: (a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or (b) where the complaint has not been made by a Court, unless the complaint and the witnesses present (if any) have been examined on oath under Section 200. ` (2) If any inquiry under sub section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath : Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainants to produce all his witnesses and examine them on oath. (3) If an investigation under sub section (I) is made by a person not being a police officer, he shall have for that investigation all the powers conferred by this Code on an officer incharge of a police station except the power to arrest without warrant. Before proceeding further, we may have a look at section 190 of the new Code. This section is captioned "Cognizance of offences by Magistrates". This section so far as it is material for our purpose, n provides: "Subject to the provisions of this Chapter, any Magistrate of the First Class and any Magistrate of the second class specially empowered in this behalf may take cognizance of any offence (a) upon receiving a complaint of facts which constitute such offence; 529 (b) upon a police report of such facts; (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed. (2) . . . . . It is well settled that when a Magistrate receives a complaint, he is not bound to take cognizance if the facts alleged in the complaint, disclose the commission of an offence. This is clear from the use of the words "may take cognizance" which in the context in which they occur cannot be equated with must take cognizance". The word "may" gives a discretion to the Magistrate in the matter. If on a reading of the complaint he finds that the allegations therein disclose a cognizable offence and the forwarding of the complaint to the police for investigation under section 156(3) will be conducive to justice and save the valuable time of the Magistrate from being wasted in enquiring into a matter which was primarily the duty of the police to investigate, he will be justified in adopting that course as an alternative to taking cognizance of the offence, himself. This raises the incidental question: What is meant by "taking cognizance of an offence` ' by a Magistrate within the contemplation of section 190? This expression has not been defined in the Code. But from the scheme of the Code, the content and marginal heading of section 190 and the caption of Chapter XIV under which sections 190 to 199 occur, it is clear that a case can be said to be instituted in a Court only when the Court takes cognizance of the offence alleged therein. The was in which such cognizance can be taken are set out in clauses (a), (b) and (c) of Section 190(1). Whether the Magistrate has or has not taken cognizance of the offence will depend on the circumstances of the particular case including the mode in which the case is sought to be instituted and the nature of the preliminary action, if any, taken by the Magistrate. Broadly speaking, when on receiving a complaint, the Magistrate applies his mind for the purposes of proceeding under section 200 and the succeeding sections in Chapter XV of the Code of 1973, he is said to have taken cognizance of the offence within the meaning of section 190(l)(a). If, instead of proceeding under Chapter XV, he has in the judicial exercise of his discretion, taken action of some other kind, such as issuing a search warrant for the purpose of investigation, or ordering investigation by the police under section 156(3), he cannot be said to have taken cognizance of any offence. This position of law has been explained in several cases by this Court. the latest being Nirmaljit Singh Hoon vs The State of West Bengal and anr(1). The position under the Code of 1898 with regard to the powers of a Magistrate having jurisdiction, to send a complaint disclosing a cognizable offence whether or not triable exclusively by the Court of (1) ; 36 833SCI/76 530 Session to the Police for investigation under section 156(3)" remains unchanged under the Code of 1973. The distinction between a police investigation ordered under section 156(3) and the one directed under section 202, has also been maintained under the new Code; but a rider has been clamped by the 1st Proviso to section 202(1) that if it appears to the Magistrate that an offence triable exclusively by the Court of Session has been committed, he shall not make any direction for in vestigation. Section 156(3) occurs in Chapter XII, under the caption: "Information to the Police and their powers to investigate"; while section 202 is in Chapter XV which bears the heading "Of complaints to Magistrates". The power It order police investigation under section 156(3) is different from the power to direct investigation conferred by section 202(1). The two operate in distinct spheres at different stages. The first is exercisable at the pre cognizance stage, the second at the post cognizance stage when the Magistrate is in seisin of the case. 'That is to say in the case of a complaint regarding the commission of a cognizable offence, the power under section 156(3) can be invoked by the Magistrate before he takes cognizance of the offence under section 190(1)(a). But if he once takes such cognizance and embarks upon the procedure embodied in Chapter XV, he is not competent to switch back to the pre cognizance stage and avail of section 156(3). It may be noted further that an order made under sub section (3) of section 156, is in the nature of a peremptory reminder or intimation to the police to exercise their plenary powers of investigation under section 156(1). Such an investigation embraces the entire continuous process which begins with the collection of evidence under section 156 and ends with a report or chargesheet under section 173. On the other hand section 202 comes in at a stage when some evidence has been collected by the Magistrate in proceedings under Chapter XV, but the same is deemed insufficient to take a decision as to the next step in the prescribed procedure. In such a situation, the Magistrate is empowered under section 202 to direct within the limits circumscribed by that section, an investigation "for the purpose of deciding whether or not here is sufficient ground for proceeding ". Thus the object of an investigation under section 202 is not to initiate a fresh case on police report but to assist the Magistrate in completing proceedings already instituted upon a complaint before him. In the instant case the Magistrate did not apply his mind to the complaint for deciding whether or not there is sufficient ground for proceeding; but only for ordering an investigation under section 156(3). He did not bring into motion the machinery of Chapter XV. He did not examine the complaint or his witnesses under section 200, Cr. P.C., which is the first step in the procedure prescribed under that Chapter. The question of taking the next step of that procedure envisaged in section 202 did not arise. Instead of taking cognizance of the offence he has. , in the exercise of his discretion, sent the complaint for investigation by police under section 156. 531 This being the position, section 202(1), 1st Proviso was not attracted. A Indeed, it is not necessary for the decision of this case to express any final opinion on the ambit and scope of the 1st Proviso to section 202(1) of the Code of 1973. Suffice it to say, the stage at which section 202 could become operative was never reached in this case. We have therefore in keeping with the well established practice of the Court, decided only that much which was essential for the disposal of this appeal, and no more. For the foregoing reasons, we answer the question posed" in the negative, and dismiss this appeal. M.R. Appeal dismissed.

On receiving a complaint against the appellants, for allegedly Committing offences under sections 147, 148, 307, 395, 448, 378 and 342, I.P.C., the Judicial Magistrate, F.C. Dharmavaram., forwarded it to the police under section 156(3) Cr. P.C. for investigation The appellants filed an application in the High Court under section , against the Magistrate 's order, hut the same was dismissed. it was contended before this Court that the complaint included offences triable exclusively by the Sessions Court, and under section 202(1) Proviso l(a), 1973, the Magistrate was prohibited from directing the police to investigate it, that he was bound to proceed with it himself before issuing process to the accused. The appeal was, inter alia, contested on the ground that . the powers conferred on the Magistrate under section 156(3) of the Code are independent of his power to send the case for investigation under section 2021 af the Code. Section 156(3) can be invoked before the Magistrate takes congnizace of the case but section 202 comes into operation only after he start; dealing with the com Plaint in accordance with the provisions of Chapter XV. Dismissing the appeal of the Court, ^ HELD: (1) The power to order police investigation under , 156(3) different from the power to direct investigation conferred by section '202(1). 'The.` two operate in distinct spheres at different stages. The first is exercisable at the re cognizance stage, the second at the post cognizance stage when the Magistrate is in seisin of the case. An investigation under section 202 is "for the purpose or deciding whether or not there is sufficient ground for proceeding". its not to initiate a fresh case on police report, but to assist the Magistrate in completing proceedings already instituted upon a complaint before him. The stage at which section 202 could become operative was never reached in this case. [530 H; 531B] (2) When on receiving a complaint, the Magistrate applies his mind for the purposes of proceeding under section 200 and the succeeding sections in chapter XV of the Code of 1973 he is said to have taken cognizance of the offence within the meaning of section 190(l)(a). If instead of ' proceeding under Chapter XV. he has in the exercise of his discretion, taken action of some other kind, he cannot be said to have taken cognizance of any offence. [526D G] Nirmaljit Singh Hoon . The State West Bengal ond Anr. [1973] 3 section ,53, referred to.

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Civil Appeals Nos. 1076 1079 of 1971. Appeals by special leave from the judgment and order dated the 8th January, 1970 of the Allahabad High Court in special appeals Nos. 965 to 968 of 1964. V. M. Tarkunde, E.C. Agarwala and Miss Manik Tarkunde, for the appellant. G. N. Dikshit, Shivapujan Singh, advocate for O. P. Rana, for the respondents. The Judgment of the Court was delivered by KHANNA, J. This judgment would dispose of four civil appeals Nos. 1076 to 1079 of 1971 which have been filed by special leave by Ratna Sugar Mills Ltd. against the judgment of Allahabad High Court affirming on appeal the decision of the learned single Judge 1063 whereby the appellant 's four petitions under article 226 of the Constitution of India to challenge the order dated December 18, 1963 of the Board of Revenue directing the levy of holding tax under the U.P. Large Land Holdings Act, 1957 (U.P. Act No. 31 of 1957) (hereinafter referred to as the Act) on the land of the appellant for the assessment years 1365, 1366, 1367 and 1368 Fasli had been dismissed. In 1951 the appellant acquired land measuring 277.08 acres situated in village Argupur Kalan, tehsil Shahganj, district Jaunpur. According to the appellant, the said land was acquired for the purpose of setting up a factory for the production of paper and pulp. A licence was granted to the appellant in that connection. The appellant filed an application under section 143 of the U.P. Zamindari Abolition and Land Reforms Act for treating its land situated in village Agrupur Kalan as industrial land. In the course of those proceedings, the Tahsildar submitted a report on August 24, 1959 as under: "As regards Argupur Kalan the whole area is recorded as sirdari of Ratna Sugar Mills and they pay Rs. 1495/ as annual land revenue. It is recorded in the Mills from before Zamindari Abolition and Mills Authorities continue to pay the recorded land revenue to Government. The whole area is lying Banjir and lies on both the sides of the railway line and Belwai Station. It has not at all been brought under cultivation nor the Mill has derived any benefit from it. It is really meant for industrial purposes but due to financial difficulties, they could not use it as such. " The Sub Divisional Officer, however, rejected the application filed on behalf of the appellant under section 143 of the U.P. Zamindari Abolition and Land Reforms Act. The result was that the land in dispute could not be declared to be land for industrial purpose. Appeal filed by the appellant against the order of the Sub Divisional Officer was dismissed by the Collector. While the proceedings under section 143 of the U.P. Zamindari Abolition and Land Reforms Act were pending, the Commissioner held for assessment years 1365 and 1366 Fasli in an appeal filed by the appellant that the land in dispute was meant for industrial purposes and had on that account remained uncultivated. The appellant was held not liable to pay holdings tax for the land in dispute for the assessment years 1365 and 1366 Fasli. Two revisions were filed by the State against the above order of the Commissioner. Subsequently for the years 1367 and 1368 Fasli the Commissioner held that the appellant was liable to pay holdings tax for the land in dispute under the Act. The appellant filed two revisions to the Board of Revenue against that order of the Commissioner. The four revisions, two filed by the State and two filed by the appellant, were decided by the Board of Revenue by a common order dated December 18, 1963. The revisions filed by the State were accepted by the Board, while those filed by the appellant were rejected. The 1064 Board held that as the land held by the appellant was sirdari and not Bhumidari land, it could not be declared to be meant for industrial purposes. The appellant was held liable to pay holdings tax for the land in question. Four petitions under article 226 of the Constitution were thereupon filed by the appellant to challenge the order of the Board of Revenue. The learned single Judge held that the land in dispute constituted land as defined in the Act and the appellant was liable to pay holdings tax for the same. The order of the learned single Judge, as already mentioned, was affirmed on appeal by the Division Bench. Before dealing with the question involved in these appeals, it would be appropriate to refer to the relevant provisions as well as the objects and reasons. The Act was published on November 1, 1957 but according to sub section (3) of section 1, it was to be deemed to have come in force on the first day of July 1957. The objects and reasons which were mentioned in the Bill were as under: "For securing successful implementation of the Second Five Year Plan, it has become necessary to augment the revenues of the State. The Agricultural Income Tax Act, which was enacted at a time when zamindari system was in force, has become out of date in the context of post war zamindari era. The principle of social justice enshrined in our Constitution also demands that disparities between agricultural incomes be reduced. More efficient exploitation of agricultural lands is essential for increasing the food production in the State. Those big holders who do not fulfil their duty towards society will have to sell up, as they should, if they fail in making increased contribution to the exchequer in the form of holding tax under this legislation. With these objects in view, the Agricultural Income Tax Act, 1948, is being replaced and this Bill is being introduced. The Bill seeks to levy a holding tax on all land holdings the annual value of which exceeds Rs. 3,600. A cultivator who does not cultivate more than 30 acres of land would be exempt from this tax. The Bill is so designed as not to affect the small cultivator. It is proposed to levy the tax on a graduated scale so that the larger the holding, the greater the incidence of the tax. " Section 3 of the Act is the charging section. According to sub section (1) of that section, there shall, save as hereinafter provided, be charged, levied and paid, for each agricultural year, on the annual value of each land holding, a tax called the holding tax at the rates specified in the Schedule provided that no such tax shall be charged on any land holding the area whereof does not exceed thirty acres. Section 2(15) of the Act defines land as under: "(15) `land ' means land, whether assessed to land revenue or not, which is held or occupied for a purpose 1065 connected with agriculture, horticulture, animal husbandry, pisciculture or poultry farming and includes uncultivated land held by a landholder as such": The definition of land holder is given in section 2(16) and the same reads as under: "(16) 'land holder ' means (i) an intermediary, where the land is in his personal cultivation or is held as sir, khudkasht or grove, and (ii) any other person who holds or occupies land otherwise than as (a) an asami. (b) a sub tenant. (c) a tenant of sir, or (d) a sirtan. and includes a manager or a principal officer, as the case may be: Explanation In this clause asami does not include an asami of Gaon Samaj:" The Act took the place of the U.P. Agricultural Income Tax Act, 1948 which stood repealed in pursuance of section 28 of the Act from the date the Act came into force. It may also be pointed out that this Act has been itself subsequently repealed by section 45 of the U.P. Imposition of Ceilings on Land holdings Act, 1961 as from June 30, 1961. In appeal before us Mr. Tarkunde on behalf of the appellant has argued that the land in question does not constitute land as defined in section 2(15) of the Act and as such the appellant is not liable to pay holding tax on the said land. The land in question, according to the learned counsel, is held for industrial purposes and not for purposes of agriculture, horticulture, animal husbandry, pisciculture or poultry farming. The above contentions have been controverted by Mr. Dikshit on behalf of the State and, in our opinion, the contentions are not well founded. The land in dispute is shown to be Banjar land in the revenue records. Although the appellant acquired the land in 1951 for the purpose of setting up a factory, somehow the factory could not be set up and the land remained uncultivated. The appellant holds the land as a sirdr. An application was filed by the appellant for permission to use the land in question for industrial purposes, but that permission was not granted, the order of the Sub Divisional Officer in this respect was affirmed on appeal by the Collector. A sirdar under section 146 of the U.P. Zamindari Abolition and Land Reforms Act, has the right to the exclusive possession of the land and entitled to use it for any purpose connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming. It is, therefore, apparent that after the order which was 1066 made on the appellant 's application under section 143 of the U.P. Zamindari Abolition and Reforms Act, the appellant cannot be said to hold the land in dispute for industrial purpose. The purpose for which the appellant could after that date use the land was agriculture, horticulture or animal husbandry including pisciculture and poultry farming. The fact that the appellant did not cultivate the land in question would not warrant exemption from the liability to pay the holding tax. The definition of the "land" includes uncultivated land held by a land holder as such. The High Court held that the words "as such" did not pertain to the purpose for which the land is held but have reference to the land being held by the land holder in his capacity as a landholder. We see no sufficient ground to take a different view. In any case even if the words "as such" be construed to mean that the land should be held for the purpose of agriculture, horticulture, animal husbandry, pisciculture or poultry farming, the land in question should be taken to satisfy that requirement, because those are the only purposes for which the said land can now be used. The word "lands" used in the Act, as mentioned in the case of Raja Jagannath Baksh Singh vs State of Uttar Pradesh & Anr., is wide enough to include all lands whether agricultural or not. The object of the Act, as mentioned in the objects and reasons, is more efficiency exploitation of agricultural land for increased food production. The appellant, in our opinion, cannot escape liability for payment of holding tax by keeping the land in question uncultivated. There is no merit in these appeals and the same are dismissed with costs. One hearing fee. M.R. Appeals dismissed.

The appellant acquired some land in district Jaunpur, for setting up a factory, but did not use the land for such purpose. Under the U.P. Large Land Holdings Act, 1957, he was required to pay holdings tax for the assessment years 1365 to 1368 Fasli. The appellant 's application section 143 of the U.P. Zamindari Abolition and Land Reforms Act, for treating his land as industrial land was rejected by the Sub Divisional Officer. On appeal, the Collector affirmed the order. In further appeal to the Commissioner, the appellant succeeded as regards the years 1365 and 1366 Fasli. The State filed revision petitions. Subsequently the Commissioner held that the appellant was liable to pay holdings tax for the years 1367 and 1368 Fasli. The appellant also preferred revision applications. The Board of Revenue decided all the revision petitions in favour of the State, holding that the appellant 's land was "sirdari" and not bhumidari, and it could not be meant for industrial purposes. The appellant 's petitions under Article 226 of the Constitution were rejected by a Single Judge of the High Court on the ground that the disputed land constituted "land as defined in the Act, and that he was liable to pay the tax. On appeal, the Division Bench of the High Court affirmed the order. It was contended before this Court that the land is held for industrial purposes, and is not "land" under sec. 2(15) of the Act. Dismissing the appeals, the Court, ^ HELD: The appellant holds the land as a sirdar. Permission to use the land in question for industrial purposes was not granted. The word "lands" used in the Act is wide enough to include all lands whether agricultural or not. The appellant cannot escape liability for payment of holding tax by keeping the land in question uncultivated. [1065 G, 1066C D] Raja Jagannath Baksh Singh vs State of Uttar Pradesh and Another, ; , referred to.

3481.txt

APPEALS Nos: 276 395 AND 397 404 OF 1975 Appeals by Special Leave from the Judgments and orders dated 21.2.72., 8.3.72., 2].2.72., 10.3.72., 21.3.72., 16.]2.71. , 24.3.72., 21.3.72. 21.3.72., 22.3.72., 25.2.72., 8.3.72., 21.2.72., 10.3.72. , 8.3.72. 10.3.72 10.3.72. , 18.2.72., 16.l2.71. 9.3.73. , 8.3.72.,25.2.72., 16.12.71. , 25.3.72., 15.3.72., 25.3.72., 25.2.72., 25.3.72., 25.2.72., 14.3.72., .14.3.72., 21.3. 2.,14.3.72. , 14.3.72. 21.3.72.,21.3.72. , 14.3.72., 25.3.72., 25.372., 21.3.72., 21.3.72., 21.3.72, 21.3.72., 24.3.72, 24.3.72., 24.3.72., 24.3.72., 25.3.72., 21.3.72., 3.4.72., 21.3.72., 3.4.70. 24.3.72., 24.3.72 24.3.72., 24.3.72., 24.3.72., 24.3.72, 25.372. , 25.3.72., 25.3.72 25.372., 25.372., 3.4.72., 3.4.72., 3.4.72., 3.4.72., 3.4.72. , 14 3.72. 3.9.71., 3.9.71., 16.7.71., 14.3.71. , 29.3.72., 14.3.72., 14.3.72. , 14.3.72, 5.4.72. , 5.4.72. , 5.1.72., 5.4.72., 18 2 72., 23.2.72., 10.3.72. , 20.1.72., 9.1.72. , 31.1.72. 31.1.72., 31.1.72., 31.1.72., 8.3.72., 2.2.72 3.2.72., 25.2.72., 2.2.72., 10.3.72. , 4.2.72. , 25.9.72. , 25.9.72, 6.10.72., 1.2.73. , 13.2.73., 30.1.73., 9.4.73., 13.2.73., 14.2.72., 13.3.72., 13.3.72., 24.3.72., 18.7.72., 4.9.73. 25.2.72, 17.5.71., 21.3.72., 3.4.72., 21.3.72., 16.7.71., 5.4.72. , In Special Appeal Nos. 616, 643, 617, 644/74 and Civil Misc Writ Nos 2268,448,2280,2254,2255/69 and Special Appeal Nos 730 752, 647,615,611,648,645605,610/71 and Civil Misc. Writ No. 149/68 and Special Appeal No.86, 796.775/71 and W.P No. 450 69 and Writ No 451, 218, 5706 2915/69,S. A. No. 690/71 C. Misc Writ No.3037/69 and S.A. No.613/71 and C. Misc Writ No.2090/69 and Civil Misc. Writ Nos 2094, 2119, 2122, 2172, 2188 2189 92, 2180 2182, 2187,2256, 2273, 2274,2276 2279, 2282 2284.2334 2347, 2576,2608 2611,2649 2690,2742 2743, 2759,2760,2811,2850, 2916,2918,2919,3075,3400/69 and 543 546, 786,1039,1246, 1248, 2169,3881, 4035,4428,4563,4821,211,250, 256, 7253, 607, 614, 618.628,7655.691 694, 729. 732. 751, 776, 787, 799. 805171 and Civil Misc. Writ No.1525,1529,3387.7051,7253, 7588, 7575, 7980 and Special Appeal Nos.6,102, 115, 166,309/72 and 1902/73 and Special Appeal No.774171 and Civil Misc. Writ No. 2121/69,2194/69 70,3375/69 and writ Petition No.3627/70,260/71 respectively. 534 B. Sen and o. P. Rana for the Appellant. Yogeswar Prasad, section K. Bagga and (Mrs.) section Bagga, for the Respondent in CA 399/75 and 400 405/75. (Miss) Kamlesh Bansal, for Respondent in CAs. 310, 312, 238,403,357,and 313/75 L. C. Goyal, for Respondent in CA No. 396/75. The Judgment of the Court was delivered by JASWANT SINGH, J. This batch of 127 appeals by special leave which are directed against various judgments rendered by the High Court of Judicature at Allahabad in writ petitions and special appeals and relate to enforcement of certain obligations of licensees for retail vend of country liquor shall be disposed of by this judgment. The facts leading to these appeals are The State of Uttar Pradesh has,, under the U.P. Excise Act 1910 (Act No. IV of 1910) (herein after referred to as 'the Act ') which contains provisions relating to all aspects and manifestations of intoxicating liquors and intoxicating drugs, that is to say, their import, export, transport, manufacture, sale and possession, the exclusive right or privilege of manufacturing and selling liquor in that State. Section 24 of the Act lays down that subject to the provisions of section 31, the Excise Commissioner may grant to any person a licence for the exclusive privilege (1) of manufacturing or of supplying by wholesale, or of both, or (2) of selling by wholesale or by retail, or (3) of manufacturing or of supplying by wholesale, or of both and or selling by retail any country liquor or intoxicating drug within any local area. Section 31 provides that every licence, permit or pass granted under the Act shall be granted (a) on payment of Such fee (if any); (b) subject to such restrictions and on such conditions; (c) shall be in such form and contain such particulars, as the Excise Commissioner may direct either generally or in any particular instance in this behalf; and (d) shall be granted for such period as the State Government may, in like manner, direct. Section 33 of The Act invests the authority granting a licence under the Act to require the grantee to execute a counterpart a agreement in conformity with the tenor of his licence and to give such security for the performance of such agreement or to make such deposit in lieu of security as such authority may think fit. Section 28 of the Act which deals with imposition of excise duty or countervailing duty reads: "28. (1) Duty on excisable article. An excise duty or a countervailing duty as the case may be at such rate or rates as 535 the Local Government shall direct, may be imposed, either A generally or for specified local area, on any excisable article (a) imported in accordance with the provisions of section 12 (1); or (b) exported in accordance with the provisions of section 13; or (c) transported; or (d) manufactured, cultivated or collected under any licence granted under section 17; or (e) manufactured in any distillery established, or any distillery or brewery licensed, under section 18 . " Section 29 of the Act lays down the manner in which the duty may be levied. One of the ways provided in the section for levy of the duty is by payment upon issue for sale from a warehouse established or licensed under section 18(d) of the Act. Sections 40 and 41 of the Act empower the State Government and the Excise Commissioner (subject to the previous sanction of the Government) to make rules for the purposes set out therein. These rules are contain in the Excise Manual, Uttar Pradesh (Volume I). Paragraph 38 of the Excise Manual shows that there are four licence fee systems in vogue in the State of Uttar Pradesh. One of such systems is 'The auction fee system ' under which the amount of licence fees inter alia for the retail sale of ' country spirit under the distillery system and for the manufacture and retail sale of country spirit under the outstill system is determined by competition among bidders. According to paragraph 332 licences for the wholesale and retail vend of intoxicants are usually granted for the excise year which commences from April 1 and lasts upto March 31. In accordance with the requirements of the auction system, auctions were held throughout Uttar Pradesh during the months of February and March, 1969 on various dates and at various places for the grant of licences to sell country spirit by retail at the specified shops during the excise year 1969 70. Before holding The auctions, rates of` excise duty and prices of different varieties of country liquor as also the conditions of ' licences for sale of county spirit for 1969 7() were announced. No announcement was, however, made as to whether the exemption from sales tax in respect of sale of country liquor granted vide Notification No. ST 1149/X 802(33) 51 dated April 6,, 1959. issued under section 4 of the U.P. Sales Tax Act, 1948 was or was not likely to be withdrawn. The respondents herein participated in the aforesaid auctions and being the highest bidders were granted licences for retail sale of country spirit for the period beginning from April t, 1969 to the end of March., 1970. 536 Each one of these licences contained infer alia the following condition: "3. (a) The licensee shall lift each month the proportionate quota for the month, if any, fixed for his vend and deposit still head duty realisable thereon. On his failure to lift the monthly proportionate quota in any month, he shall be liable to pay compensation to the State Government at the rate equal to the rate of still head duty per litre of spiced spirit and still head duty per litre of plain spirit as may be in the area in which the shop is situated on the quantity falling short of such monthly proportionate quota and such com pensation shall be paid by the 7th of the month following the month to which such shortfall relaters. (b) He shall be bound to sell the whole quantity of country spirit obtained for the shop from the warehouse on his failure to do so, he shall be liable to pay to the State Government compensation at the rate equal to the rate of stillhead duty per litre of spiced spirit and stillhead duty per litre of plain spirit as may be in force in the area in which the shop is situated on the unsold quantity of country spirit during the period of the contract to which the licence relates. (c) In the event of the licensee being required to pay compensation to State Government under the aforesaid condition due to the short lifting of the quota or non deposit of such compensation, the amount of said compensation may be realised from the amount of security deposited by him. The resultant deficiency in the amount of security shall be made good by the licensee within seven days of such adjustment. Tn case the short lifting of proportionate monthly quota or short deposit of compensation continues for two consecutive months or the license fails to make up the deficiency in the amount of security within the prescribed period of seven days his licence may be cancelled in addition to the recovery of the deficiency in payment of compensation as arrears of land revenue. " On the day following the commencement of the aforesaid licences i.e. on April 2, 1969, the Government of Uttar Pradesh issued Notification No. ST 1603/X 900 (12)/67 under section 3 A and 4 of the U.P. sales Tas Act, 1948, superseding the earlier Notification No. ST 1149/X 802 (33) 51 dated April 6, 1959, issued under section 4 of the U. P. Sales Tax Act, 1948, and imposing sales tax on the turnover in respect of the country spirit at the rate of ten paise per rupee at the point of retail sale with immediate effect. The respondents herein having failed to lift and sell the minimum quotas of liquor prescribed in their licences were required by the excise authorities of the State to pay, by way of compensation, the amounts of excise duty leviable on the short falls. Aggrieved by this demand, the respondents moved the High Court under Articles 226 537 Of the Constitution for issue of appropriate writ or directions retraining the appellants herein from recovering the aforesaid amounts contending inter alia that the condition of their licences on the basis of which the demand was made was invalid, unconstitutional and unenforceable. The respondents in six appeals Nos. 399 to 404 of 1975 also challenged Notification No. ST 1608/X 900(12)/67 (dated April 2, 1969) (supra) which superseded the earlier Notification No. ST 1149/X 802(33)51 dated April 6, 1959 and imposed sales tax on the turnover in respect of the country. liquor at the rate of ten paise per rupee at the point of retail sale by the vendor with effect from April 2, 1969 on the ground that since the state Government did not announce at the time of the aforesaid auction that Notification No. ST 1149/X 802(33)51 dated April 6, 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 of 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. The High Court allowed all these petitions in toto. Having failed to secure certificates of fitness from the High Court, the appellants applied for and obtained special leave to appeal from this Court. The common question of law that arises for determination in all these appeals is whether the condition incorporated in the licences of the respondents that they would lift the fixed minimum quantity of liquor and sell the same at their allotted shops and in case of their default or failure to d(h so, they would be liable to pay compensation equal to the amount of excise duty leviable on the unlifted quantity is valid and enforceable. This point is no longer res integra. In Bimal Chandra Banerjee vs State of Madhya Pradesh(1) this Court held that: "No tax can be imposed by any bye law or rule or regulation unlegs the statute under which the subordinate legislation is made specially authorises the imposition. In the present case, the legislature has levied excise duty or countervailing duty on the excisablc articles which have been either imported. exported. transported, manufactured. cultivated or collected under any licence granted under section 13? or manufactured in any distillery or brewery established or licensed number the. Act; and the State Government has not been empowered to levy any duty on liquor which the contractors failed to lift. Therefore, the State Government was exercising a power which it did not possess and hence the rule imposing the condition in the licences and the demand notices are invalid." Thus the aforesaid question arising for determination by us stands already settled by the ratio of the decision of this Court in Bimal Chandra Banerjees case (supra.) (1) ; 538 It will also be noticed that neither section 28 nor section 29 nor any other provision of the Act authorises the levy of the amounts sought to be recovered from the respondents. The decision of this Court is Panna Lal and Ors. vs State of Rajasthan and ors.(1) which is sought to be relied upon on behalf of the appellants is clearly distinguishable. In that case, the contractual obligation of the appellants to pay the guaranteed sum or the stipulate(d sum mentioned in the licences was not dependent on the quantum on liquor sold by them and no excise duty was charged or chargeable on undrawn liquor under the licences. The excise duty there was collected only in relation to the quantity and quality of the country liquor which was drawn. We have, therefore, not the lightest hesitation in holding that the demand made by the appellants though disguised as compensation, is in reality a demand for excise duty on the unlifted quantity of liquor which is not authorised by the provisions of the Act. This being the sole point involved in appeals other than Appeals Nos. 399 to 404 of 1975 the former Appeals cannot succeed. In the result they are dismissed with costs. Appeals Nos. 399 to 404 of 1975 which raise another point as well viz. the validity of the appellants ' demand from the respondents in respect of sales tax at the rate of ten paise per rupee on the retail sales of country spirit made by the latter with effect from April 2, 1969 stand on a slightly different footing. Section 3 A and 4 of the U.P. Sales Tax Act, 1948 clearly authorise the State Government to impose sales tax. The fact that sales of country liquor had been exempted from sales tax vide Notification No. ST 1149/X 802(33) 51 dated April 6 1959 could not operate as an estoppel against the State Government and preclude it from subjecting the sales to tax if it felt impelled to do so in the interest of the Revenues of the State which are required for execution of the plans designed to meet the ever increasing pressing needs of the developing society. It is now well settled by a catena of decision that there can be on question of estoppel against the Government in the exercise of its legislative, sovereign or executive powers. While speaking for the Court in M. Ramanathan Pillai vs State of Kerala(2) the learned Chief justice quoted with approval the following statement contained in American Jurisprudence 2d. at page 783 paragraph 123: "In American Jurisprudence 2d at page 783 paragraph 123 it is stated ' 'Generally. a state is not subject to an estoppel to the same extent as an individual or a private corporation. " otherwise, it might be rendered helpless to assert its powers in government. Therefore as a general rule the doctrine of estoppel will not be applied against the State in its governmental public or sovereign capacity." (1) [1976] t S.C.R. 219 (2) ; 539 In State of Kerala and Anr. vs The Cawalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. Ltd.(l) where the respondent company established itself in the State of Kerala for production of rayon cloth pulp on an understanding that the Government would bind itself to supply raw material and later the Government on finding that it was not able to supply the material undertook not to legislate for the acquisition of the private forests for a period of 60 years if the company purchased forest lands for the purpose of its supply of raw material and accordingly, the company did purchase 30,00 acres of private forests from an estate for Rs. 75 lakhs for the aforesaid purpose but the Government enacted Act 26 of 1971 expropriating vast forest areas without paying compensation as a measure of agrarian reform whereupon the respondent company sought to invoke the doctrine of equitable estoppel against the Government, Palekar, J. delivering the majority judgment observed: "We do not see how an agreement of the Government can preclude legislation on the subject. The High Court 'has rightly pointed out that the surrender by the Government of its legislative powers to be used for public good cannot avail the company or operate against the Government as equitable estoppel." Approving the decision of the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. ( ') where the observations of Lord Denning in Robertson vs Minister of Pensions (8) that the action of the War office which was an agent of the Crown in assuming authority over the matter and assuring the appellant who had been serving on the army that his disability had been accepted as attributable to military service bound the Crown and through the Crown the Minister of Pensions, who while administering the Royal warrant issued by the Crown has to honour all assurances given by or on behalf of the Crown were unequivocally disapproved by observing that the character or an act done by an officer of a Government, however high or low in the hierarchy in face of a statutory prohibition, is not affected by the fact that it had been induced by a misleading assumption of authority and neither a Minister. nor any subordinate officer of the Crown can, by conduct or representation, bar the Crown from enforcing a statutory prohibition. It was held by Bench of this Court ill Assistant Custodian Exacuee Property and ors. vs Brij Kishore Agarwala and Ors(4) that the Evacuee Department was not bound by the reply given by the Assistant Custodian to the first respondent 's enquiry that the property in question was not an evacuee property. Following the above decision. the High Court of Jammu & Kashmir has in Malhotra and Sons and Ors. vs Union of India and ors (5). rightly held that . "The courts will only bind the Government by its promises to prevent manifest injustice or fraud and will not make the Government a slave of its policy for all times to come when (1) [1973] 2 s.c.c. 713. (2) (3) (4) ; (5) A.I.R. 1976 J. & K. 41. 540 the Government acts in its Governmental, public or sovereign capacity. " We may as well refer here to the celebrated decision Of the Supreme Court of the United States in Federal Crop Insurance Corporation vs Morrill(1). In that case where the agents of the petitioner a wholly Government owned Corporation, created by the Federal Crop Insurance Act to insure producers of wheat against loss in yields due to unavoidable causes including drought, advised the respondents in ignorance of and contrary to the duly promulgated controlling regulation which expressly precluded insurance coverage of spring, wheat re seeded on winter wheat acreage that their entire 460 acres spring wheat crop including the spring wheat which had been reseated on winter wheat acreage in the 1945 crop year was insurable by the Corporation and recommended to the Corporation ranch office acceptance of the respondents formal application which, however, did not disclose that any part of the insured Crop was reseeded and the Corporation accepted the application and a few months later, most of the respondents ' crop was destroyed by drought, and the Corporation on the loss being notified to them refused to pay the loss on the ground that the wheat crop insurance regulations expressly prohibited the insurance of spring wheat which was re seeded on winter wheat acreage, the Court by majority held that though a private insurance Corporation would be bound on similar facts. the same was not true of a Government Corporation engaged in the insurance field and the latter was not estopped from repudiating the liability. The following observations made by the court in Federal Crop Insurance Corporation vs Merrill (supra) are worth quoting: "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 therefore conducted by private enterprise or engages in competition 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 he 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 authority. "Men 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. " In his Treatise on the Law of Estoppel, Melville M. Bigelow has stated that in State vs Williams,(2) State vs Bevars,(2) and Wallace vs Maxwell(4) it has been held that estoppel does not operate against the Government or its assignee. (1) L cd. (2) (3) (4) 10 Ird. 541 The High Court was, therefore, clearly in error in ignoring that the Government cannot divest itself of the right incidental to its office by conduct which, in the case or a private person, would amount to estoppel and in characterizing the demand for sales tax made by the appellants as illegal. Accordingly Appeals Nos. 399 to 404 of 1975 are partly allowed, and it is held that the demand made by the appellants from the respondents in these appeals in respect of sales tax on the turnover of sales of ' country spirit made by them between April B, 2, 1969 and March 31, 1970 was valid and could not be struck down. The parties in these six appeals shall pay and bear their own costs. P.H.P. Appeals partly allowed.

The State of Uttar Pradesh has under the U.P. Excise Act, 1910. the exclusive right or privilege of manufacturing and selling liquor in that State. Section ' '4 of the Act provides that subject to the provisions of section 31 the Excise Commissioner may grant to any person a licence for the exclusive privilege of manufacturing or of supplying any country liquor etc. Section 31 provides for the conditions for the grant of licence. Section 33 invests the authority granting a licence to require the grantee to execute a counterpart agreement in conformity with the tenor of the licence. Section 28 authorises imposition of an excise duty or a countervailing duty by The local Government on any excisable article. Sections 40 and 41 of the Act empower the State Government and the Excise Commissioner subject to the previous sanction of the Government to make rules. Para 38 of the Excise Manual which contains the rules made under the Act shows that there are 4 licence fee systems in vogue. One of such systems is the auction fee system under which the amount of licence fee is determined by competition amongst bidders at an auction. The respondents were the highest bidders at various auctions. Before holding the auctions, the rates of excise duty and prices of different varieties of country liquor and also the conditions of licence were announced. No announcement was made as to whether the exemption from sales tax in respect of sale of country liquor granted by the notification dated 6 4 1959 was or was not likely to be withdrawn. one of the conditions of the licences was that the licensee shall lift each month certain quota of liquor and on the failure to lift the monthly quota the licensee shall be liable to pay compensation to the state Government calculated at the rate of duty per litre on the unlifted quota. On the day following the day when the licences were granted, the Government of U.P. issued a notification under section 3A and 4 of the U.P. Sales Tax Act, 1948, superseding the earlier notification exempting the payment of sales tax and imposing sales tax on the turnover in respect of country spirit at the rate of 10 P. per rupee. The respondents having failed to lift and sell the minimum quotas of liquor the appellant called upon them to pay by way of compensation the amount; of excise duty on the shortfalls. Aggrieved by the demand, the respondents moved the High Court under article 226 of the Constitution for issue of appropriate writ or direction restraining the appellants from recovering the aforesaid amounts. The respondents in special appeals also challenged the notification issued under the sales Tax Act on the ground that the State Government did not announce at the time of the action that the earlier notification was likely to be withdrawn and that the appellant informed the respondents at the time of the auction that there was no sales tax on the sale of country liquor. The appellants were, therefore, estopped from making the demand in respect of the sales tax and recovering the same from them. The High Court allowed all the petitions in toto. On appeal by special leave, 533 ^ HELD: (1) Neither section 28 nor section 29 nor any other provisions of the Act authorise the levy of the amounts sought to be recovered from the respondents. The demand made by the appellant though disguised as compensation is in reality a demand for excise duty on unlifted quantity of liquor which is not authorised by the provisions of the Act. [538 A C] Bimal Chandra Banerjee vs Stale of Madhya Pradesh, ; , followed. Panna Lal and Ors. etc. vs State of Rajasthan and others, [1976] I S.C.R. 219. distinguished. Appeal dismissed. (2) Sections 3A and 4 of the U.P. Sales Tax Act clearly authorise the State Government to impose sales tax. The fact that sales of country liquors had been exempted from sales tax by the earlier notification could not operate as estoppel against the State Government and preclude it from subjecting the sales to tax if it felt impelled to do so in the interest of the revenues of the State. There can be no question of estoppel against the Government in exercise of its legislative sovereign or executive powers (case law reviewed). The Government cannot divest itself of the right incidental to its office by conduct which in the case of a private person would amount to estoppel. The six appeals therefore, are partly allowed

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ase, there was not a whisper of the application under section 25A (1) of the Act by the appellant on March 15, 1957, when the penalty proceedings were initiated against it. Even on March 20, 1958. when the penalty was imposed, there was no order under section 25A(l) of the Act lt was only on March 26, 1962, that the partition was recognised and order 506 under section 27A(1) of the Act was passed. There was, thus, no bar to the imposition or the impugned penalty. [509E F] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 886 of 1971. (From the judgment and order dated the 18.9.1969 of the Allahabad High Court in I. T. R. Misc. Case No. 836 of 1963.) G. C. Sharma, V. N. Ganpule, D. K. Jain, Anup Sharma and P. C. Kapur, for the appellant. B. Sen and 5. P. Nayar, for the respondent The Judgment of the Court was delivered by JASWANT SINGH, J. This is an appeal by certificate of fitness granted by the High Court of Judicature at Allahabad under section 66 A(2) of the Indian Income tax Act, 1922 (hereinafter referred to as 'the Act ') from its judgment dated September 18, 1969 in I.T.R. Misc. Case No. 836 of 1963. The facts giving rise to this appeal are: The appellant, a Hindu undivided family consisted of Gauri Shankar, the father, and his three sons viz. Chandrabhan, Bengali Lal and Brij Kishan. Gauri Shankar, the karta of the family who was incharge of the affairs of the family during the relevant year which extended from April 13, 1945 to April 12, 1946, the assessment year being 1946 47, died on April 2, 1946. He was succeeded by his son, Chandrabhan as Karta of the family. The appellant had, in the first instance, filed a return showing an income of Rs. 9,701 j . On scrutiny of the relevant material, the Income Tax Officer found a number of discrepencies in the accounts of the appellant and also noted the existence of cash credits to the appellant 's account in the books of another firm viz. M/s. Tilyani Glass Works and a certain sum deposited in an account styled as Abdul Wahid Khan & Sons. He thereupon issued a notice dated March 15, 1957, calling upon the appellant to explain the discrepencies in the accounts as also in the cash credits and to show cause why a penalty under section 28(1)(c) of the Act be not imposed upon it. In response to the notice, a representative of the appellant appeared before the Income Tax officer and voluntarily agreed to a sum of Rs. 15,000/ being treated as its income. After hearing the Appellant 's representative the Income Tax Officer felt satisfied that the appellant had deliberately concealed its income and furnished an inaccurate return. Accordingly, by his order dated March 20, 1958, he added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ . Meanwhile, on March 19, 1957, an application under section 25 A of the Act was made to the Income Tax officer for an order recording partition of joint family property in definite portions, which according to the application had taken place amongst the members of the Hindu undivided family on June 22, 1956. The Income Tax Officer on being satisfied after making enquiries that a complete partition of the joint family property has taken place, recorded an order under section 25A (1) of the Act on March 26, 1962, accepting the partition with effect 507 from June 22, 1956, as claimed. Against the penalty of Rs. 26,000/ imposed the Income Tax Officer by his order dated March 20, 1958, the appellant preferred an appeal to the Appellate Assistant Commissioner, who reduced the Penalty to Rs. 15,000/ . Not satisfied with THIS reduction, the appellant went up in further appeal to the Income tax appellate Tribunal and raised before it a number of contentions Amongst other things, it was urged before the Tribunal that since the Hindu undivided family had disrupted on June 22, 1956, as accepted by the Income Tax officer in his aforesaid order date March 26, 1962, passed under section 25 A(l) cf the Act, the imposition of the penalty by the Income Tax officer on March 20, 1958, after the disruption of the family was bad in law and could not be sustained. While rejecting the other contentions raised on behalf of the appellant, the Tribunal upheld this contention by its order dated March 6, 1963. Thereupon the Commissioner of Income tax, U.P. made application before the Income tax Appellate Tribunal under section 66(1) of the Act requesting that the following question of law arising from its decision be referred to the High Court: "Whether in the facts and circumstances of the case the imposition of penalty under section 28 ( 1 ) (c) on the Hindu Undivided family after it had disrupted within the meaning of section 25 A is bad in law". Acceding to the request of the Commissioner of Income Tax, the Tribunal referred the above mentioned question to the High Court which answered the same in the negative The appellant thereupon applied to the High Court and obtained the aforesaid certificate of fitness for appeal to this Court. This is the matter is before us. E Relying on Commissioner of Income Tax vs Sanichar Sah Bhim Sah(1), section A. Raju Chattiar & Ors. vs Collector of Madras & Anr.(2) Mahankali Subha Rao, Mahankali Nageswara Rao & Anr. vs Commissioner of Income Tax Hyderabad(3) and Commissioner of Income tax Punjab vs Mothu Ram Prem Chand(4) counsel for the appellant has reiterated before us that since the Hindu undivided family had dissolved on June 22, 1956 as accepted by the Income Tax officer vide his order dated March 26, 1962 passed under section 25 A of the Act and the Act did not provide any machinery for imposition of the penalty on the Hindu family after its disruption, the imposition of penalty on March 20, 1958 was had in law and could not be sustained. Counsel appearing on behalf of the Revenue has, on the other hand, urged that imposition of impugned penalty cannot be challenged as in view of section 25 A(3) of the Act, a Hindu undivided family must be (deemed to have continued in existence till the date of the passing of the order under section 25 A(l) of the Act. For a proper determination of the question, it is necessary to refer to section 25 a of the Act which at the relevant time stood as under: 25 A. (1) Where, at the time of making an assessment ll under section 23, it is claimed by or on behalf of any member (1) (1957) 27 (2) (3) (4) 508 of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income tax Officer shall make such inquiry thereinto as he may think fit, and if he is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions, he shall record an order to that effect: Provided that no such order shall be recorded until notices of the inquiry have been served on all the members of the family (2) Where Such an order has been passed, or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family, whose joint family property has been partitioned on or after the last day on which it carried on such business. profession or vocation, The Income tx Officer shall make an assessment of the total income received by or on behalf of the joint family as such, as if no partition(LPN had taken place, and each member or group of members shall in addition to any income tax for which he of may be separately liable and notwithstanding anything contained in sub section (1) of section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it; and the Income tax officer shall make assessments accordingly with provisions of section 23. Provided that all the members and groups of members whose joint family property has been partitioned shall be liable jointly and severally for the tax assessed on the total income received by or on behalf of the joint family as such. (3) Where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family.`` lt will be noticed that sub section (3) of the above quoted section embodies a legal fiction according to which a Hindu family which has been previously assessed as 'undivided ' is to be continued to be treated as 'undivided ' till the passing of the order under sub section of the section. This view strength from two decisions of this Court in Additional Income tax Officer Quddapah A. Thimmayya & Anr(1) and Joint family of Udayan Chinubhai etc vs Commissioner of Income tax Gujarat(2) where it was held that so long(r as No order under section 25 a(I) of the Act is recorded, the jurisdiction of the Income tax officer to continue to assess as undivided despite partition under personal law a Hindu family which has hitherto been asseesed in that status remains unaffected. It will be profitable in this connection (1) (2) 509 to refer to the following observation made in A. Thimmayya 's case (supra) "The section makes two substantive provisions (i) that a Hindu undivided family Which has been assessed to tax shall he deemed, for The purposes of The Act, to continue to be treated as undivided and therefore liable to be take in that stats unless an order is passed in respect of that family recording, partition of its property as contemplated by sub station (t); and (ii) if at the time of making an assessment it is claimed by or on behalf the members of the family that the property of the joint family has been partitioned; the members or groups of members in definite portions, i.e. a complete partition of the entire estate is made resulting in such physical division of the estate as it is capable of being made. the Income tax Officer shall hold an inquiry, and if he is satisfied that the partition had taken place the shall record an order to that effect . The Income tax Officer may assess the income of the Hindu family hither to assessed as undivided notwithstanding partition, is no claim in that behalf has been make to him or is he is not satisfied about the truth of the claim that the joint family property has been partitioned in definite politics if on account of some error or inadvertence he fails Lo dispose of the claim. In all these cases his jurisdiction to assess the income of the family hitherto assessed as undivided remain unaffected, for the procedure for making assessment of tax is statutory". In face of the aforesaid decisions of this court, it is Court it is not necessary to burden the record by discussing the decisions cited by counsel for the appellant. In the present case, there was not a whisper of the application under section 25 A(1) of the Act by the appellant on March 15, 1957 when the penalty proceedings were initiated against it. Even on March 20, 1958, when the penalty was imposed, there was no order under section 25 A(1 ) of the Act. It was only on March 26, 1962, that the partition was recognised and order under section 25 A(1) of the Act was passed. There was thus no bar to the imposition of the impugned penalty. Accordingly, we find no force in the contention of counsel for the appellant and are of the opinion that the question as was in the rightly by the High Court.

In response to a show cause notice dated March 15, 1957, under section 28(1)(c) of the Income Tax Act, before imposing a penalty for deliberate concealment of its income, the appellant, through its authorised representative, voluntarily agreed to a slum of Rs. 15,000/ being treated as income of Hindu Undivided Family. The Income Tax officer, by his order dated March 20,1958, added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ which on appeal was reduced to Rs. 15,000/ . Meanwhile, on March 19, 1957, the appellant filed an application under section 25A of the Act for an order recording partition of joint family property in definite portions from June 22, 1956, claiming that date to be the date of partition. The Income Tax officer, after due enquiries, accepted the disruption of the Hindu Undivided Family as claimed by his order dated March 26, 1962. This led the appellant to contend that, in view of ' the orders dated March 26, 1962, of the Income Tax officer, the imposition of the penalty by him on March 20, 1958 was bad in law and could not be sustained. The Tribunal uphold the contentions of the appellant resulting in a reference under section 66(1) of the Act to the High Court of Allahabad (Lucknow Bench), which reversed the decision or the Tribunal. However, the High Court granted a certificate of fitness for appeal to this Court. Dismissing the appeals the Court, ^ HELD: Sub section (3) of section 25A of the Income Tax Act embodies a legal fiction according to which a Hindu family which has been previously assessed as "undivided" is to be continued to be treated as "undivided" till the passing of the order under sub section (1) of section 25A. So long as no order under section 25(A)(1) 1 of the Act is recorded, the jurisdiction of the Income Tax officer to continue to assess as undivided despite a partition under personal law, a Hindu family which has hitherto been assessed in that status, remain unaffected. [508G H] Additional Income Tax Officer, Quddapah vs A. Thimmayya vs Commissioner of Income Tax, Gujrat , applied. Commissioner of Income Tax vs Sanchar Sah Bhim Sah section A. Raju Chattiar & Ors. vs Collector of Madras & Anr. ; Mahankali Subba Rao Mahankali Nageswara Rao & Anr. v, Commissioner of income Tax. Hyderabad and Commissioner of Income Tax, Punjab vs Mothu Ram Prem Chand , not applicable

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ON: Civil Appeal 885/1968. (From the judgment and order dated 6 11 1967 of the Madhya Pradesh High Court in Second Appeal No. 913 of 1965). 647 section V. Gupte, R. P. Pandey and section section Khanduja, for the appellants. F. section Nariman, J. B. Dadachanji, P. C. Bhartari, K. L. John for the respondents. The Judgment of the Court was delivered by GUPTA, J. Damadi Lal, Sheo Prasad and Tirath Prasad who were members of a Hindu Joint Family brought a suit for ejectment on July 31,1962 against their tenants Begamal and Budharmal on the grounds mentioned in clauses (a) and (f) of section 12(1) of the Madhya Pradesh Accommodation Control Act, 1961. The relevant provisions are in these terms: "Sec. 12. Restriction on eviction of tenants. (1) Notwithstanding anything to the contrary contained in any other law or contract, no suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds only, namely (a) That the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which a notice of demand for the arrears of rent has been served on him by the landlord in the prescribed manner; x x x x x x x x x x (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 there of or for any person for whose benefit the accommodation is held and that the landlord or such person has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned. " Plaintiffs ' case under section 12(1)(a) was that the defendant tenants had defaulted in paying rent for the period October 1, 1961 to May 31, 1962 and did not also pay or tender the amount in arrears within two months of the service of the notice of demand. Clause (f) of section 12(1) was invoked on the allegation that the accommodation let was required bona fide by the plaintiffs for the purpose of starting their own business. Before the suit was instituted the plaintiffs had determined the tenancy from May 31, 1962 by a notice dated May 7 1962. The house in dispute which is in Bazar Chowk in District Satna was let out to the defendants at a monthly rent of Rs. 275/ for the purpose of their business. The plaintiffs reside in village Nadan, Tahsil Maihar, where they carry on their business. The trial court by its judgment and decree dated November 11, 1964 dismissed the suit for eviction. There was some dispute between 648 the parties as to the rate of rent; ultimately the plaintiffs admitted that the rent was fixed at Rs. 175/ per month with effect from August 1, 1961 by the Rent Control Authority and a sum of Rs. 1200/ , which was the amount in arrears, had been tendered to the plaintiffs by cheque on May 26, 1962 which the plaintiffs refused to accept. The trial court was of opinion that the refusal was valid because "tendering by cheque is no valid tender" unless there was an agreement that payment by cheque would be acceptable and that the defendants were therefore defaulters within the meaning of section 12(1)(a). However, in view of the dispute as to the amount of rent payable by the tenants, which was not determined during the pendency of the suit as required by section 13(2), the trial court held that no order for eviction under section 12(1)(a) could be made in this case and passed a decree for Rs. 1200/ in favour of the plaintiffs. On the question of the plaintiffs ' requirement of the premises for their own business, the trial court found itself unable to accept the evidence adduced on behalf of the plaintiffs. Of the witnesses examined by the plaintiffs on the point, the evidence of P.Ws. 1, 3 and 4 was not relied on because none of them was considered to be an independent witness and, further, because it was apparent from their evidence that what they said was what they were tutored to say by the plaintiffs. The other three witnesses were plaintiffs Damadi Lal and Tirath Prasad (P.W.2 and P.W. 6 respectively) and Radhey Sham (P.W. 5), a son of plaintiff Sheo Prasad. They were also disbelieved because of the following reasons. Damadi Lal tried to give the impression that plaintiffs had no business except the cloth business and the grocery shop at Nadan. He tried to conceal that they had a moneylending business and also agricultural lands. Tirath Prasad stated that the main source of income of the family was from the moneylending business. Tirath Prasad also disclosed that the plaintiffs had already a partnership business in cloth at Satna though Damadi Lal and P.W. 5 Radhey Sham did not admit this. It also appears in evidence that the plaintiffs had yet another cloth business at a place called Ramnagar which was managed by Radhey Sham. The plaintiffs claimed that they would start a business at Satna, but Damadi Lal 's evidence is that they had no income or saving. Tirath Prasad also said that their income was not even sufficient for their maintenance. Admittedly, plaintiffs had in their possession one room in the house which was let out to the defendants. The plaintiffs did not adduce any evidence to show how the said accommodation was unsuitable or insufficient for them to start their own business. It was also admitted that the plaintiffs had filed a suit for ejectment on an earlier occasion, but the defendants having agreed to pay increased rent the suit was not proceeded with. According to the defendants the present suit was not instituted on the defendants ' refusal to increase the rent further to Rs. 500/ a month. For the above reasons the trial court did not accept the case of bona fide requirement holding that P.W. 2, P.W. 5 and P.W. 6 were in the habit of suppressing the truth to suit their own purpose. 649 On appeal by the plaintiffs, the first appellate court reversed the decision of the trial court and decreed the suit. The appellate court agreed with the trial court that sending a cheque did not amount to a valid tender of rent and, as the tenants did not apply under section 13(2), they were not entitled to protection against eviction on the ground of default. As regards the plaintiffs ' case of requirement, the court found, that the criticism of the plaintiffs ' witnesses was not justified. The appellate court thought that the fact that Tirath Prasad was carrying on a cloth business at Satna which Damadi Lal had kept back from court was irrelevant in view of the plaintiffs ' claim that some members of the family wanted to start a new business at Satna. According to the appellate court the further fact that P.W. 5 Radhey Sham was running a cloth business at Ramnagar was indicative of the growing need of the plaintiffs ' family. The room in the plaintiffs ' possession in the disputed house was not found suitable or sufficient for a wholesale business that the plaintiffs intended to start. Referring to the trial court 's finding that the plaintiffs had no money to start a new business at Satna, the court found that the evidence did not support this. The appellate court therefore held that the plaintiffs required the premises for their own business. Dissatisfied with this decision, the defendants preferred a second appeal to the High Court. During the pendency of the second appeal in High Court both the defendants died. Budharmal died on or about January 27, 1966 and his legal representatives were brought on record and substituted in his place without objection. Begamal died on March 2, 1967 and his heirs applied for being brought on record in his place as appellants. The plaintiffs made an application praying for an order that the appeal had abated as a consequence of the death of both the defendants. In this application the plaintiffs contended that Budharmal and Begamal were "merely statutory tenants and their right to resist ejectment on the basis of Madhya Pradesh Accommodation Control Act was merely a personal right" which was not heritable and had "not devolved upon their heirs". By its order dated July 26, 1967 the High Court allowed the application for substitution made by Begamal 's heirs overruling the plaintiffs ' objection. Ultimately on November 6, 1967 the High Court allowed the appeal setting aside the decree of the lower appellate court and restoring that of the trial court dismissing the suit. The High Court found that the defendants were not in arrears of rent. Differing from both the courts below the High Court held that the cheque which the defendants had sent to the plaintiffs in payment of the amount in arrears within a month of the service of the writ of summons on him amounted to a valid tender of rent as required by section 13, and in view of section 12(3) no order for eviction could be made. Section 12(3) provides that no order for eviction of a tenant shall be made on the ground of default if the tenant makes payment or deposits rent as required by section 13. This is what the High Court held on the validity of tender of rent by cheque: "The question is as to whether, instead of presenting the cash, if a cheque is sent to the landlord, that is sufficient tender of the arrears of rent or not. . In the highly deve 650 loped society, payment by cheque has become more convenient mode of discharging one 's obligation. If a cheque is an instrument which represents and produces cash and is treated as such by businessmen, there is no reason why the archaic principle of the common law should be followed in deciding the question as to whether the handing over of the cheque is not a sufficient tender of the arrears of rent if the cheque is drawn for that amount. It is no doubt true that the issuance of the cheque does not operate as a discharge of the obligation unless it is encased, and it is treated as a conditional payment, yet, in my view, this is a sufficient tender of the arrears if the cheque is not dishonoured. In the present day society, I am of the view, an implied agreement should be inferred that if the payment is made by a cheque, that mode of payment would be accepted. " On the ground of bona fide requirement, the High Court found that there was no evidence to show that the plaintiffs had sufficient funds to start the wholesale business for which they sought to get possession of the disputed premises. This is a point which has a bearing on the guanines of the plaintiffs ' claim. The High Court took note of the fact that the plaintiffs made an attempt to keep back from the Court that they were carrying on business at two more places, one at Satna, and another at Ramnagar. In this connection the High Court also referred to the defendants ' case that the plaintiffs sought to increase the rent from Rs. 275/ to Rs. 500/ a month and that when the defendants had the rent reduced by the Rent Controller to Rs. 175/ per month, the present suit was filed. The High Court found that these circumstances which the trial court took into consideration were ignored by the lower appellate court. The High Court accordingly held that the plaintiffs had failed to prove their case of bona fide requirement, set aside the decree of the appellate court, and restored that of the trial court dismissing the suit. Before us, Mr. Gupte for the plaintiff appellants raised three contentions:(1) Begamal and Budharmal both of whom were statutory tenants had no heritable interest in the demised premises and, on their death, the right to prosecute the appeal in the High Court did not survive to their heirs and legal representatives; (2) payment by cheque was not a valid tender of rent and accordingly the suit should have been decreed on the ground of default; and (3) the High Court had no jurisdiction in second appeal to reverse the finding of the first appellate court on the question of reasonable requirement which was a finding of fact. In support of his first contention Mr. Gupte relied on two decisions of this Court, Anand Nivas (Private) Ltd. vs Anandji Kalyanji Pedhi & Ors. and Jagdish Chander Chatterjee and Ors. vs Sri Kishan & Anr. The statute considered in Anand Nivas ' case was Bombay 651 Rents, Hotel and Lodging Rates Control Act, 1947 as amended in 1959. The question there was, whether a tenant whose tenancy had been terminated had any right to sublet the premises. Of the three learned Judges composing the Bench that heard the appeal, Hidayatullah and Shah JJ. held that a statutory tenant, meaning a tenant whose tenancy has determined but who continues in possession, has no power of subletting. Sarkar J.delivered a dissenting opinion. Shah J. who spoke for himself and Hidayatullah J. observed in the course of their Judgment: "A statutory tenant has no interest in the premises occupied by him, and he has no estate to assign or transfer. A statutory tenant is, as we have already observed, a person who on determination of his contractual right, is permitted to remain in occupation so long as he observes and performs the conditions of the tenancy and pays the standard rent and permitted increases. His personal right of occupation is incapable of being transferred or assigned, and he having no interest in the property there is no estate on which subletting may operate. " It appears from the Judgment of Shah J. that "the Bombay Act merely grants conditional protection to a statutory tenant and does not invest him with the right to enforce the benefit of any of the terms and conditions the original tenancy". Sarkar J. dissenting held that word 'tenant ' as defined in the Act included both a contractual tenant , a tenant whose lease is subsisting as also a statutory tenant, and the latter has the same power to sublet as the former. According to Sarkar J. even if a statutory tenant had no estate or property in the demised premises, the Act had undoubtedly created a right in such a tenant in respect of the property which he could transfer. Jagdish Chander Chatterjee 's case dealt with the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, and the question for decision was whether on the death of a statutory tenant his heirs succeed to the tenancy so as to claim protection of the Act. In this case it was held by Grover and Palekar JJ., relying on Anand Nivas ' case, that after the termination of contractual tenancy, a statutory tenant enjoys only a personal right to continue in possession and on his death his heirs do not inherit any estate or interest in the original tenancy. Both these cases, Anand Nivas and Jagdish Chander Chatterjee, proceed on the basis that a tenant whose tenancy has been terminated, described as statutory tenant, has no estate or interest in the premises but only a personal right to remain in occupation. It would seem as if there is a distinct category of tenants called statutory tenants having separate and fixed incidents of tenancy. The term 'statutory tenancy ' is borrowed from the English Rent Acts. This may be a convenient expression for referring to a tenant whose tenancy has been terminated and who would be liable to be evicted but for the protecting statute, but courts in this country have sometimes borrowed along with the expression certain notions regarding such tenancy from the 652 decisions of the English courts. In our opinion it has to be ascertained how far these notions are reconcilable with the provisions of the statute under consideration in any particular case. The expression 'statutory tenancy ' was used in England in several judgments under the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, to refer to a tenant protected under that Act, but the term got currency from the marginal note to section 15 of the Rent and Mortgage Interest (Restrictions) Act, 1920. That section which provided inter alia that a tenant who by virtue of that Act retained possession of any dwelling house to which the Act applied, so long as he retained possession, must observe and would be entitled to the benefit of all the terms and conditions of the original contract of tenancy which were consistent with the provisions of the Act, carried the description in the margin "conditions of statutory tenancy". Since then the term has been used in England to describe a tenant protected under the subsequent statutes until section 49(1) of the Housing Repairs and Rent Act, 1954 for the first time defile 'statutory tenant ' and 'statutory tenancy '. 'Statutory tenant ' was define as a tenant "who retains possession by virtue of the Rent Acts and not as being entitled to a tenancy, and it was added, " statutory tenancy ' shall be construed accordingly". This definition of 'statutory tenancy ' has been incorporated in the Rent Acts of 1957 and 1965. In England "statutory tenancy" does not appear to have had any clear and fixed incidents; the concept was developed over the years from the provisions of the successive Rent Restrictions Acts which did not contain a clear indication as to the character of such tenancy. That a statutory tenant is entitled to the benefit of the terms and conditions of the original contract of tenancy so far as they were consistent with the provisions of the statute did not, as Scrutton L. J. observed in Roe vs Russell, "help very much when one came to the practical facts of life", according to him "citizens are entitled to complain that their legislators did not address their minds to the probable events that might happen in cases of statutory tenancy, and consider how the legal interest they were granting was affected by those probable events". He added, ". it is pretty evident that the Legislature never considered as whole the effect on the statutory tenancy of such ordinary incidents as death, bankruptcy, voluntary assignment, either inter vivos or by will, a total or partial subletting; but from time to time put into one of the series of Acts a provision as to one of the incidents without considering how it fitted in with the general nature of the tenancy which those incidents might affect". On the provisions which gave no clear and comprehensive idea of the nature of a statutory tenancy, the courts in England had been slowly "trying to frame a consistent theory", "making bricks with very insufficient statutory straw". Evershed M. R. in Boyer vs Warbey said: "The character of the statutory tenancy, I 653 have already said, is a very special one. It has earned many epithets, including "monstrum horrendum", and perhaps it has never been fully thought out by Parliament". Courts in England have held that a statutory tenant has no estate or property in the premises he occupies because he retains possession by virtue of the Rent Acts and not as being entitled to a tenancy; it has been said that he has only a personal right to remain in occupation, the statutory right of "irremovability", and nothing more. We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal right to remain in occupation, without ascertaining what his rights are under the statute. The concept of a statutory tenant having no estate or property in the premises which he occupies is derived from the provisions of the English Rent Acts. But it is not clear how it can be assumed that the position is the same in this country without any reference to the provisions of the relevant statute. Tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or properly in the subject matter of the tenancy, and heritability is an incident of the tenancy. It cannot be assumed, however, that with the determination of the tenancy the estate must necessarily disappear and the statute can only preserve his status of irremovability and not the estate he had in the premises in his occupation. It is not possible to claim that the "sanctity" of contract cannot be touched by legislation. It is therefore necessary to examine the provisions of the Madhya Pradesh Accommodation Control Act, 1961 to find out whether the respondents ' predecessors in interest retained a heritable interest in the disputed premises even after the termination of their tenancy. Section 2(i) of the Madhya Pradesh Accommodation Control Act, 1961 defines 'tenant ' to mean, unless the context otherwise requires: "a person by whom or on whose account or behalf the rent of any accommodation is, or, but for a contract express or implied, would be payable for any accommodation and includes any person occupying the accommodation as a sub tenant and also any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act; but shall not include any person against whom any order or decree for eviction has been made". The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him, thus putting him on par with a person whose contractual tenancy still subsists. The incidents of such tenancy and a contractual tenancy must therefore be the same unless any provision of the Act conveyed a contrary intention. That under this Act such a tenant retains an interest in the premises, and not merely a personal right of occupation, will also appear from section 14 which contains provisions restricting the tenant 's power of subletting. Section 14 is in these terms: 654 "Sec. 14 Restrictions on sub letting. (1) No tenant shall, without the previous consent in writing of the landlord (a) sublet the whole or any part of the accommodation held by him as a tenant; or (b) transfer or assign his rights in the tenancy or in any part thereof. (2) No landlord shall claim or receive the payment of any sum as premium or pugree or claim or receive any consideration whatsoever in cash or in kind for giving his consent to the sub letting of the whole or any part of the accommodation held by the tenant. " There is nothing to suggest that this section does not apply to all tenants as defined in section 2(i). A contractual tenant has an estate or interest in premises from which he carves out what he gives to the sub tenant. Section 14 read with section 2(i) makes it clear that the so called statutory tenant has the right to sub let in common with a contractual tenant and this is because he also has an interest in the premises occupied by him. Considering the position of the sub tenant of a statutory tenant in England, Lord Denning said in Solomon vs Orwell. "When a statutory tenant sub lets a part of the premises he does not thereby confer any estate or interest in the sub tenant. A statutory tenant has no estate or interest in himself and he cannot carve something out of nothing. The sub tenant, like the statutory tenant, has only a personal right or privilege." In England the statutory tenant 's right to sub let is derived from specific provisions of the Acts conceding this right to him; in the Act we are concerned with in this appeal, the right flows from his status as a tenant. This is the basic difference between the English Rent Restrictions Acts and the Act under consideration and similar other Indian statutes. In a Special Bench decision of the Calcutta High Court, Krishna Prosad Bose vs Sm. Sarajubala Dasi, Bachawat J. considering the question whether a statutory tenant continuing in occupation by virtue of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 could sub let the premises let to him, said: "The Rent Control and Tenancy Acts create a special world of their own. They speak of life after death. The statutory tenancy arises phoenix like out of the ashes of the contractual tenancy. The contractual tenant may die but the statutory tenant may live long thereafter. The statutory tenant is an ex tenant and yet he is a tenant. " The concept of statutory tenancy under the English Rent Acts and under the Indian statutes like the one we are concerned with in this appeal rests on different foundations. It must therefore be held that 655 the predecessors in interest of the present respondents had a heritable interest in the premises and consequently the respondents had the right to prosecute the appeal in the High Court. Mr. Gupte 's first submission thus fails On the ground of default, it is not disputed that the defendants tendered the amount in arrears by cheque within the prescribed time. The question is whether this was a lawful tender. It is well established that a cheque sent in payment of a debt on the request of the creditor, unless dishonoured, operates as valid discharge of the debt and, if the cheque was sent by post and was met on presentation, the date or payment is the date when the cheque was posted. The question however still remains whether in the absence of an agreement between the parties, the tender of rent by cheque amounts to a valid discharge of the obligation. Earlier, we have extracted a passage from the High Court 's Judgment on this aspect of the case. We agree with the view taken by the High Court on the point. Rent is payable in the same manner as any other debt and the debtor has to pay his creditor in cash or other legal tender, but there can be no dispute that the mode of payment can be altered by agreement. In the contemporary society it is reasonable to suppose such agreement as implied unless the circumstances of a case indicate otherwise. In the circumstance of this case, the High Court, in our opinion, rightly held that the cheque sent to the plaintiffs amounted to valid tender of rent. The second contention urged on behalf of the appellants must also be rejected. Mr. Gupte 's last contention relates to the plaintiffs ' bona requirement of the premises. The trial court found on the evidence that the plaintiffs ' claim was unjustified. The first court of appeal reversed that finding and held that the plaintiffs ' requirement was bona fide. The High Court in second appeal agreed with. the trial court in holding that the landlord had no bona fide requirement. Mr. Gupte contended that the High Court had no jurisdiction in second appeal to upset the finding of the lower appellate court on this issue which, according to him, was a finding of fact. Mr. Nariman for the respondent relied on the decision of this Court in Madan Lal Puri vs Sain Das Berry to argue that the question was a mixed question of law and fact and that it was within the jurisdiction of the Court in second appeal to examine the correctness of the finding. In answer Mr. Gupte referred to another decision of this Court Mattulal vs Radhey Lal which, relying on an earlier decision of this Court in Sarvate T. B. vs Nemi Chand, held that such a finding was one of fact and not a finding on a mixed question of law and fact. We do not think that for the purpose of this case we need express any opinion on the apparent conflict between these two decisions. Plaintiffs ' case was that they had cloth and grocery business at village Nadan and that they desired to start a wholesale cloth and grocery business at Satna. The trial court 's finding was based inter alia on the evidence 656 that the plaintiffs had not adequate funds to start a new wholesale business. The lower appellate court reversed the finding of the trial court on the ground that there was no evidence that the plaintiff had no money to start a new business; the lower appellate court 's finding rests mainly on this consideration. The High Court pointed out that plaintff Damadidas alias Damadi Lal (P. W. 2) stated in his evidence that their income from the business at Nadan was sufficient " only for meeting the expenses of livelihood"; plaintif Tirath Prasad (P.W. 6) also admitted that "our present income is not sufficient even for our maintenance because there are many members in the family" It thus appears that the lower appellate court overlooked a very mate rial part of the evidence bearing on the question. It is well establish ed that if a finding of fact is arrived at ignoring important and relevant evidence, the finding is bad in law. (see Radha Nath Seal vs Haripada Jana & Ors. We therefore think that the High Court was within its jurisdiction in setting aside the finding of the lower appellate court and restoring that of the trial court on this point. In the result the appeal fails and is dismissed but in the circumstances of the case we make no order as to costs. P.B.R. Appeal dismissed.

Section 12(1) of the Madhya Pradesh Accommodation Control Act, 1961, enacts that notwithstanding anything to the contrary contained in any other law or contract no suit shall be filed in any civil court against a tenant for his eviction from any accommodation except on one or more of the grounds given in the section. The ground given in cl. (a) is that the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which the notice had been served on him by the landlord and the ground in cl. (f) is that the accommodation let for non residential purpose is required bona fide by the landlord for the purpose of continuing or starting his business. The appellants brought a suit under section 12(1)(a) and (f) of the Act for ejectment of their tenants. The suit was dismissed by the trial court on the ground (i) that since the dispute as to the amount of rent payable by the tenants had not been determined during the pendency of the suit under section 13(2) no order for eviction could be made; (ii) that there was no bona fide requirement of the premises by the appellants for their own business and (iii) that the refusal by the appellant to accept the arrears of rent by cheque was valid because tendering by cheque was not valid tender in the absence of an agreement to that effect. The first appellate court decreed the suit. During the pendency of the second appeal in the High Court the tenants died. The High Court allowed substitution of their legal representatives over ruling the appellants ' objection that the deceased tenants were mere statutory tenants and that the right to resist ejectment on the basis of the Rent Control Act was merely a personal right which was not heritable. On merits, the High Court held that (i) offer of rent by cheque amounted to valid tender by the tenant and (ii) the appellants had failed to prove their case of bona fide requirement of the premises for their own use. Dismissing the appeal, ^ HELD: There is no force in the contention that the defendants who were statutory tenants had no heritable interest in the demised premises and on their death the right to prosecute the appeal in the High Court had not survived to their heirs and legal representatives. The predecessors in interest of the respondents had a heritable interest in the premises and consequently the respondents had the right to prosecute the appeal in the High Court. [655A] (1) (a) The concept of statutory tenancy under the English Rent Acts and under the Indian statutes rests on different foundations. The term statutory tenancy which is used for referring to a tenant whose tenancy has been terminated and who would be liable to be evicted but for the protecting statute, is 646 borrowed from the English Rent Acts. Courts in England have held that a statutory tenant has no estate or property in the premises he occupies because he retains possession by virtue of the Rent Acts and not as being entitled to a tenancy. But in this country it is not possible to proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only personal right to remain in occupation without ascertaining what his rights are under the statute. [654H: 653A C] Anand Nivas (Private) Limited vs Anandji Kalyanji Pedhi vs Sri Kishan & Anr. , ; ; Roe vs Russel, ; Haskins vs Lewis ; Keeves vs Dean (207) and Boyer vs Warbey , referred to. (b)Tenancy has its origin in contract. A contracual tenant had an estate or property in the subject matter of the tenancy and heritability is an incident of tenancy. It cannot be assumed that with the determination of the tenancy, the estate must necessarily disappear and the statute can only preserve his status of irremovability and not the estate he had in the premises in his occupation. [653D] (c) The definition of a tenant contained in section 2(i) makes a person continuing in possession of a premises after the determination of his tenancy a tenant, unless a decree or order for eviction had been made against him, thus, putting him on par with a person whose contractual tenancy still subsists. [653] (d) Section 14 which deals with restrictions on sub letting read with the definition contained in section 2(i) makes it clear that the so called statutory tenant has the right to sub let in common with contractual tenant and this is because he also has an interest in the premises occupied by him. [654D] (2)(a) The High Court rightly held that the cheques sent to the appellants amounted to valid tender of rent. It is well established that a cheque sent in payment of a debt on the request of the creditor, unless dishonoured, operates as a valid discharge of the debt and if the cheque was sent by post and was met on presentations the date of payment is the date when the cheque was posted. [655B D] (b) Rent is payable in the same manner as any other debt and the debtor has to pay his creditor in cash or other legal tender, but there can be no dispute that the mode of payment can be altered by agreement. In the contemporary society it is reasonable to suppose payment by cheque as implied unless the circumstances of a case indicate otherwise. [655C] (3) The High Court was within its jurisdiction in setting aside the finding of the lower appellate court and restoring that of the trial court on the question of bona fide requirement of the premises by the appellants. The lower appellate court overlooked a very material part of the evidence bearing on the question. It is well established that if a finding of fact is arrived at ignoring important and relevant evidence the finding is bad in law. [651B C] Radha Nath Seal vs Haripada Jana & Ors. AIR 1971 S.C. 1049, followed. Madan Lal Puri vs Sain Das Berry AIR 1973 S.C. 585; Mattulal vs Radhey Lal AIR 1974 S.C. 1956; and Sarvate T. B. vs Nemi Chand , refered to.

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Appeal No. 1437 of 1971. (Appeal by Special Leave from the Judgment and order dated 28 4 1970 of the Delhi High Court in Income Tax Refer ence No. 50/ 65) V.S. Desai, Mrs, Leila Seth and Parveen Kumar for the Appellantt. S.T. Desai & M.N. Shroff, for the Respondent. The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave is directed against the judgment of the Delhi High Court dated April 28, 1970 in a reference made by the Income tax Appellate Tribu nal (Delhi Bench A) under section (36(1) of the Income tax Act, 1922, hereinafter referred to as the Act. in respect of the following question, "Whether on the facts and circumstances of the case the sum of Rs. 7 lakhs received from M/s Orissa Cement Ltd. was pursuant to an adventure in the nature of trade and as such tanable under the Indian Income tax Act, 1922 ?" The High Court has answered the question in the affirmative. We shall refer to the facts giving rise to the controversy in some detail when we state them in a chronological order. It may be mentioned, mean while, that the Dalmia Cement Ltd., hereinafter called the appellant, owned certain cement facto ries and it placed an order for the supply of four complete units of cement manufacturing machinery with M/s F.L. Smidth and Co., Copenhagen, on February 7, 1946. to increase the production in the following factories, , 1. Shantinagar, 2. Dandot, 3. Dalmianagar, 4. Dalmiapuram. Since the factory in Dandot fell within the territory of Pakistan on constitution with effect from August 15, 1947, the appellant transferred the machinery which was meant for the Dandot factory (hereinafter referred as the Dandot machinery), to a new company known as Orissa Cement Ltd. some time in 1950 51, and charged only the invoice price which it had paid to M/s F.L. Smidth and Co. The appellant thereafter asked for a higher price and after some negotia tions the Orissa Cement Ltd. agreed on December 4, 1951, to pay a further sum of Rs. 7 lakhs, in lieu of which 70,000 fully paid up ordinary shares of Rs. 10/ each. were given to the appellant in that company. The Income tax Officer treated that amount as income earned by the appellant pursu ant to an adventure in the nature of trade in 1952 53 as sessment year, and taxed it as such. On appeal, the Assistant 4 1234SCI/76 556 Appellate Commissioner also held in his order dated Septem ber 16, 1958 that the transfer of the Dandot machinery was an adventure in the nature of trade and the payment of Rs. 7 lakhs was a revenue receipt which was rightly taxed by the Income tax Officer. The matter went up in appeal to the Income tax Appellate Tribunal (Delhi Bench) which remanded the case to the Income tax Officer by its order dated Sep tember 13, 1960, for report on certain specific points. On receipt of the Income tax Officer 's report, the Tribunal held that the transaction in question was "certainly an adventure in the nature of trade" and dismissed the appeal. It however drew up a statement of the case, and that is how the aforesaid question of law was referred to the High Court under section 66(1) of the Act. The High Court held that by the time the appellant placed the despatch order with M/s Smidth & Co., "its intention was to purchase it with an idea to resell" and that the fact that it was a single and iso lated transaction did not materially affect the case. In reaching that conclusion the High Court took the subsequent developments into consideration, and rejected the contention that the machinery was purchased by way of an "investment". The present appeal has been filed against that judgment of the High Court dated April 28, 1970. Under section 10 of the Act, income tax is payable by ,m assessee under the head "Profits and gains of business, profession or vocation", inter alia, in respect of the profits and gains of any "business" carried on by him, and the controversy in this case is whether the receipt of the additional sum of Rs. 7 lakhs, over and above the cost of the Bandot machinery, could be said to arise out of any "business" of the appellant. The term "business" has been defined as follows in clause (4) of section 2 of the Act, "(4) "business" includes any trade, commerce, or manufacureor any adventure or concern in the nature of trade, commerce or manufacture. " The question in this case is whether the transaction was an "adveuture" in the "nature of trade" within the meaning of the definition ? Some decisions have been rendered by this Court on the point, and our attention has been invited to the decisions in Narain Swadeshi Weaving Mills vs Commis sioner of Excess Profits Tax, (1) Kishan Prasad and Co. Ltd. vs Commissioner of Income tax Punjab,(") G. Venkattaswami Naidu & Co. vs The Commissioner of Income tax,(3) Soroj Kumar Mazurndar vs The Commissioner of Income tax West Bengal Calcutta, (4) and Janki Ram Bahadur Ram vs Commissioner of Income tax, Calcutta(5). Even so, on gener al principle can, for obvious reasons, be laid down to cover. all cases of this kind because of their varied na ture, so that each case has to be decided on the basis of its own facts and circumstances. It is however well settled that even a single and isolated transaction can be held to be capable of falling within the definition if it bears clear indicia of trade (vide Natgin (1) (2) (3) [1959] Supp. (1) S.C.R. 646. (4) (1959) Supp. (2) S.C.R. 846. (5) ; 557 Swadeshi Weaving Mills vs Commissioner of Excess Profits, G. Venkataswami Naidu & Co. vs The Commissioner of Income tax, and Sarol Kumar Mazumdar vs The Commissioner of Income tax, West Bengal, Calcutta (supra)). It is equally well settled that the fact that the transaction is not in the way or business of the assessee does not in any way alter the character of the transaction (vide G. Venkataswatni Naidu & Co. vs The Commissioner of Income tax, and Saroj Kumar Mazumdar vs The Commissioner of InCome tax, West Bengal, Calcutta (supra). It would not therefore help the appel lant 's case merely to urge either of these points for the answer to the question will depend on a consideration of all the facts and circumstances. The question under consideration is essentially a mixed question of fact and law. It will therefore be desirable, in the first instance, to re state the relevant facts in a chronological order; As has been stated, the appellant owned some cement factories in various parts of India including the one in Dandot. It placed an order with M/s. Smidth & Co., Copenha gen, for the supply of four complete units of machinery for the manufacture of cement, to increase the production of its factory at Dandot and three other factories. A firm order for all the four units was placed on February 7, 1946. It was confirmed by M/s. F.L. Smidth & Company on August 6, 1947 and the appellant was informed that the supply of the Dandot machinery would be made in various months from Febru ary 1948 to October 1948. India was partitioned, and Paki stan came into existence on August 15, 1947. Dandot fell in the territory of Pakistan. The appellant, which was an Indian Company, did not however cancel the order in respect of the Dandot machinery. On the other hand, a Director of the appellant informed the Orissa Government in his letter dated November 25, 1947 that it had "got a cement plant for which it had placed order a couple of years back", of which early delivery was expected, and that it would be willing to put it in Orissa on "suitable terms." The appellant 's General Manager held discussions with the Orissa Government on January 8, 1948 for the setting up of a cement factory in Orissa. It was recorded in the note of the proceedings of that meeting that the appellant had ordered machinery for replacing its cement plant, the said machinery was expected to be shipped at an early date and parts of it would start arriving in March 1949. It was further stated that the complete supply of the plant was estimated to take about six months, and if the negotiations were fruitful the first lot of cement would be produced by the beginning of 1950. The appellant 's representative insisted that a final decision might be taken at an early date so that the machinery which had to be chipped from abroad could be diverted, depending upon the decision, to the Calcutta or Bombay port. The appellant thereafter wrote a letter to M/s. F.L. Smidth and Co. (Bombay) Ltd. on September 9, 1948 directing that the plant meant for the Dandot works might be diverted to Oris sa. It was specially stated in the letter as follows, "There are certain equipments in the specifications of the plants for extension No. 3 and 4, which were peculiar to the layout and design for the extension at Dandot and Shanti 558 nagar and they will not now fit in exactly in the same manner in our proposed new factories. As such, it is essen tial that the whole specifications are carefully scrutinised and manufacture of the items which are peculiar to the lay out of Dandot and Shantinagar Works only should be kept in abeyance in order to suit the local conditions. " The plants were expected to arrive from March 1949 onwards, but this would not have been possible without an import licence. The appellant obtained the licence from the Gov ernment of India and intimated to M/s. F.L. Smidth and Co. in its letter dated August 2, 1948 that it had been permit ted to import in the Indian Dominion the two plants meant for Dandot and Shantinagar. The suppliers were accordingly requested to intimate the dates upto which extension was required for the import of the machinery. A formal agree ment was made between the appellant and the Orissa Govern ment on December 23, 1948. The Dandot machinery arrived in due course. It was delivered by the appellant to Orissa Cement Ltd. and its actual cost was debited to it. Quite some time thereafter, on April 7, 1970, a Director of the appellant wrote a letter to the Industries Minister of the Orissa Government that the machinery supplied to the orissa Cement Ltd. should be revalued and the appellant allowed a higher price than the invoice price due to a rise in the cost of the cement .plant at the time of supply as compared with the price at the time when it was originally ordered by the appellant. The name of one F.B. Mogensen was suggested for the revaluation of the machinery. This was agreed to by the State Government on June 4, 1950. Mogensen reported that the Orissa Cement Ltd, had benefited to the extent of almost Rs. 21 lakhs in the bargain. The Orissa Government passed a resolution dated December 4, 1951 allowing a fur ther sum of Rs. 7 lakhs to the appellant and, in lieu of cash payment, allotted 70,000 fully paid up ordinary shares of Rs. 10/ each of the Orissa Cement Ltd. to the appellant. The above facts clearly establish that, (i) Even though the appellant initially placed an order on February 7, 1948 for the purchase of the Dandot Machinery for improving the production in the Dandot factory, and the supply was not to commence until February. 1948, it did not make any effort to cancel that order even after Dandot was included in the territory of Pakistan with effect from August 15, 1947. (ii) On the other hand, in pursuance of an enquiry by the Government of Orissa whether the appellant would be interested in putting up a cement plant in the State, one of the appellant 's Directors informed the State Government on November 25, 1947 that it had got a cement plant for which it had placed an Order a couple of years ago and that it could be put up in Orissa on suitable terms. The appellant 's General Manager in fact met the State Government authorities in January, 1948 where it was reiterated 559 that the machinery ordered by the appellant was expected to start arriving in March 1949 and could be diverted to Calcutta and that if the appellant 's negotiations with the State Government were suc cessful, the first lot of cement could be supplied by the beginning of 1950. (iii) The negotiations with the Orissa Govern ment proved successful and the appellant wrote a letter to M/s. F.L. Smidth and Co. on August 2, 1948 informing it that it had obtained the permis sion of the Government of India to import the Dandot machinery in India. The appellant also informed the suppliers on September 9, 1948 that it should divert the Dandot machinery to Orissa and supply the same according to the revised specifica tions to suit the local conditions. (iv) A formal agreement was executed by the appellant and the Orissa Government on December 23, 1948 for the setting up of a cement factory in Orissa. (v) The Dandot machinery arrived and was sup plied by the appellant to the Orissa factory against cost price, which was debited to the Orissa Cement Company. It would thus appear that, long before the Dandot machinery was due, the appellant knew that it could not be used in Dandot. It has been found that after the partition of the country the appellant could have cancelled the order for the import of the machinery but it did not do so and decided to import it with a view to supplying it to Orissa on suitable terms. It therefore resold it to the Orissa factory in accordance with the terms and conditions of its negotiations with the State Government. The intention of resale was therefore there almost from the beginning, and was really the dominant intention in importing the machinery after the partition of the country. It is also quite clear that the appellant was not inclined to make it a gratuitous sale, but agreed to it only when it was able to secure a suitable agreement with the State Government for the setting up of a factory in Orissa. It was in fact. the appellant 's own case that the price of the Dandot machinery had gone up substan tially. Even so, the appellant did not care to utilise it for any of its own plants, but sold it to Orissa Cement Ltd. The appellant therefore did not only have the dominant intention of selling the Dandot machinery to its own advan tage but, in doing so, it acted with the set purpose of taking an advantage of its position as the owner of the imported machinery of which the price had on the appellant 's own showing, gone up much higher. It was therefore a real transaction by way of an adventure in the nature of trade and was as such a business transaction within the meaning of section 2(4)of the Act. It does not matter if the appel lant did not earn a profit immediately on delivering the machinery, and sold it without any profit in the first instance, for there can be no denying the fact that even if the appellant had not earned any profit whatsoever at the time of the sale or even thereafter, the transaction in the facts and circumstances of the case, would nonetheIess have been adventure in the 560 "nature of trade" and no other.) We are fortified in this view by the decisions in Narain Swadeshi Weaving Mills vs Commissioner Excess Profits Tax (supra) and G. Venkataswami Naidu and Co. vs The Commissioner of Income tax (supra). It is true that the question of asking for payment in excess of the cost price was raised by the appellant some time later, but its subsequent course of conduct in bringing about a substantial profit is a clear pointer to the real intention behind the sale. It was for that reason that the appellant 's Director addressed a letter to the Minister of Inustries of the Orissa Government on April 7, 1950 stating that the Dandot machinery should be revalued and the appel lant allowed a higher price due to the rise in its price at the time of the supply. The entire correspondence in that respect has not been placed on record by the appellant, but it appears that the appellant was able to secure a further sum of Rs. 7 lakhs, under an agreement dated December 4, 1951 in lieu of which it was able to secure 70,000 fully paid up shares of Rs. 10/ . The appellant succeeded in doing so merely because it was able to substantiate its claim for a higher price, or profit, on the sole ground that it was entitled to it because of the increase in the price at the time of the sale. There is therefore nothing wrong in the view which has prevailed with the High Court that it was an adventure in the nature of trade. It has been argued by Mr. V.S. Desai, for the appellant that as it was a single and isolated transaction of purchase and sale,, the onus of proving that it was a transaction in the nature of trade lay on the department. This is a correct proposition of law and, .as would appear from what has been stated above, we have examined the controversy on the assumption that the burden of proving that the transac tion was an adventure in the nature of trade lay on the department. The ancillary argument of Mr. V.S. Desai that a question like the present has to be examined with reference to the indicia or characteristics of the trade, is also quite correct, but counsel has not been able to contend, in the face of the facts and circumstances mentioned above, which indicia or characteristics could be said to be lacking to take it out of the category of an adventure in the nature of trade. All that Mr. V.S. Desai has pointed out is that there was no intention to make a profit when the Dandot machinery was sold to the Orissa Cement Ltd., and it has been urged that would be sufficient to take it out of the category of an adventure in the nature of trade. Reference in this connection has been made to the decisions in Kishan Prasad & Co. Ltd. vs Commissioner of Income tax, Punjab (supra), G. Venkataswami Naidu and Co. vs The Commissioner of Income tax (supra), Saroj Kumar Mazurndar vs The Commissioner of In come tax, West Bengal, Calcutta (supra), and Ajax Products Ltd. vs Commissioner of Income tax, Madras(1). We have given our reasons for the contrary view that the transaction would be an adventure in the nature of trade even if the question of profit was left out of consideration, and that the appellant in fact acted with the set purpose of resell ing the (1) 561 Dandot machinery to its advantage and not by way of a favour or a gratuitous act. We have also shown how the appellant ultimately claimed and succeeded in securing a higher price merely on the ground that there was an appreciable increase in the price after the purchase of the Dandot machinery. Lastly, it has been argued by Mr. V.S. Desai that in purchasing the machinery the appellant made a capital in vestment so that it was merely a capital asset. This argu ment is also futile for, as has been shown, the appellant made the purchase with the dominant intention of reselling the machinery to advantage and made the resale only when it was able to enter into an agreement with the Orissa Govern ment lot the setting of a cement factory in that state on terms and conditions which were suitable from its point of view. It may also be stated that even in its own profit and loss account and balance sheet, the appellant treated the sale price as a revenue receipt and not as a capital invest ment. It was therefore an after thought to Claim that the initial purchase was by way of an investment and was a capital asset. The facts of Kishan Prasad and Co. Ltd. vs The Commis sioner of Income tax, Punjab (supra), Saroj Kumar Mazumdar vs The Commissioner of Income tax, West Bengal, Calcutta (supra) and Janki Ram Bahadur Ram vs Commissioner of Income tax, Calcutta (supra) referred to by Mr. V.S. Desai were different. In the case of Kishan Prasad and Co. Ltd. (supra) there was agreement to give the managing agency to the assessee on the erection of the mill because it had subscribed to shares worth Rs. 2 lakhs. The mill was not erected and the assessees sold the shares. There was there fore justification for holding that the purchase of the shares was an investment to acquire the managing agency and was not an adventure in the nature of trade. In Saroj Kumar Mazumdar 's case (supra) there was a single transaction of sale of rights for the purchase of land measuring 3/4 acres by the assessee who was an Engineer by profession. His construction activities declined and that was why he sold his rights in the land for Rs. 74,000 odd in excess of the amount paid by him. The Incometax department however failed to prove that the assessees dominant intention was to embark on a venture in the nature of trade as distin guished from capital investment. That was also therefore a different case. In the case of Janki Ram Bahadur Ram (supra) the assessee was a dealer in iron scrap and hard ware. He agreed to purchase all rights of a company in a jute pressing factory, but sold it at a profit. It was held that as the property purchased by the assessee was not such that an inference that a venture in the nature of trade must have been intended could be raised, the profit was not liable to tax. It was held that a person purchasing a jute press might intend to start his own business or he might let it out on favourable terms. The property was in fact let out by the earlier owner before the date of sate. That was also therefore quite a different case and cannot avail the appellant. In the remaining case of Ajax Products Ltd. (supra) it was held that on the facts the assessee company having acquired the sick mill to open new line of business, the purchase was, really in the nature of an investment and the purchase and sale did not amount to an adventure in the nature of trade. That was therefore also quite a different case. 562 It would thus appear that in spite of the fact that the appellant withheld some of the correspondence bearing on the controversy, the Department has succeeded in proving that the transaction of sale in question was an adventure in the nature of trade and fail within the definition of "business" in clause (4) of section 2 of the Act. The High Court has rightly answered the question in the affirmative, and as we find no merit in this appeal, it is dismissed with costs. M.R. Appeal dismissed.

In 1946, the appellant ordered cement manufacturing machinery from a in Denmark, for its factory in Dandot, but long before the machinery was due, the Country was parti tioned and Dandot went to Pakistan. Instead of cancelling his order, the appellant imported the machinery. It was found that the appellant did so with the intention of sell ing it at a profit, to the Orissa State. At the time of the sale, the appellant charged only the invoice price initially paid by it, but later, obtained a profit. The Income Tax Officer treated the profit as income earned pursuant to an adventure in the nature of trade, and taxed it as such. The appellant 's appeals were rejected by the Appellate Taxation Authorities. The matter was then referred to the High Court section 66 (1 ) of the income Tax Act, but was dismissed. The appellant contended that making a profit was not its intention at the time of sale, and that being a single and isolated transaction of purchase and sale, it was not an adventure in the nature of trade within the meaning of section 2(4) of the Act, and that the onus of proving anything to the contrary, lay upon the Department. Dismissing the appeal, the Court HELD: (i) It is well settled that even a single and isolated transaction can be held to be capable of failing within the definition of "business" if it bears clear indi cia of trade. The fact that the transaction is not in the way of business of the assessee does not in any way alter the character of the transaction. [556H, 557A] Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax (251` I.T.R 765), G. Venkataswami Naidu . & Co. vs The Commissioner of Income Tax [1959] Supp. (1) S.C.R. 646, Sarol Kumar Mazumdar vs The Commissioner of Income Tax, West Bengal, Calcutta [1959] Supp. (2) S.C.R. 846 followed. (2) It is a correct proposition of law that as it was a single and isolated transaction of purchase and sale, the onus of proving that it was a transaction in the nature of trade lay on the department [560 D E] (3) The appellant had the dominant intention of selling the Dandot machinery to its own advantage, and acted with the set purpose of taking an advantage of its position as the owner of the imported machinery Even if the appellant had not earned any profit whatsoever at the time of the sale or very soon thereafter, the transaction, in the facts and circumstances of this case, would nonetheless have been an adventure in the "nature of trade", and a business transac tion within the meaning of Section 2(4) of the Act. [560H, 561B, 562A B] Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax (Supra). and G. Venkataswami Naidu & Co. vs The Commissioner of Income Tax (Supra) followed. Kishan prasad & Co. Ltd. vs Commissioner of Income Tax, Punjab Saroj Kumar Mazumdar vs The Commis sioner of Income Tax. West Bengal, Calcutta (Supra). janki Ram Bahadur Ram vs Commissioner of Income Tax., Calcutta ; and Ajax products Ltd. vs Commissioner of IncomeTax, Madras distinguished.

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Civil Appeals Nos. 1867 1924, 1952 of 1975 and 9 to 66 of 1976. From the Judgments and orders dated the 18 4 75, 28 4 75 and 27 5 75 of the Mysore (Karnataka) High Court in Writ Appeal Nos. 1034 1039/74 and 116 to 143/75, 951 74, 922 923/74, 32/75, 1035 of 1974 and 976 to 1033/74 respectively. L. N. Sinha, Sol. General in C.A. No. 1891 and 1952 for the appellants in C.As. 1867 1924 and Respondent in CA 1952/75 and K.S. Puttaswamy, 1st Addl. Government Advocate (In Cas. 1867 1924 and 1952/75) B. R. G. K. Achar. section G. Sundaraswamy, K. section Gourishanker and K. N. Bhatt for the Appellants in C.As. 1952/75 and Respondents in C.A. 1891/75. L. N. Sinha, Sol. General in (CA 9) K. section Puttaswamy, Asstt. Government Advocate, Narayan Netter and B. R. G. K. Achar for the Appellants in C.As. 9 to 66 of 1976. section V. Gupta (In CA 1890/75), section section Javali and B. P. Singh for Respondents in CAs. 1875 to 79, 1882 83 1885, 1887 90, 1893, 1895, 1897, 1902 08, 1909, 1910, 1912, 1914, 1917, 1920, 1923 24/75 and for R. 2 in C.As. 1867, 1874, 1880 81, 1884, 1889 1901, 1903 1906 07 and 1921/75 and for Respondent in Appeals Nos. 9, 13 18, 20, 21, 39 44, 54, 56, 58, 60 63 and for Respondent No. 1 in Cas 19, 22 23, 37, 43, 46, 51, 55, 59, 65 and Respondent No. 2 in C.As 38 of 1975. The Judgment of the Court was delivered by RAY, C.J. These appeals are by certificate from the judgment dated 18 April, 1975 of the High Court of Karnataka. The respondents were the petitioners in the High Court. The respondents are either holders of Bane lands in the District of Coorg or holders of such lands who purchased timber standing on them from such holders. The respondents in the High Court asked for writ directing the Divisional Forest officer of the State to issue permits to the respondents to remove trees standing on Bane lands as particularised in the petition. 1090 The Divisional Forest Officer refused permits to the respondents to cut trees and remove timber. The two grounds on which the respondents challenged the order of refusal are these. First, the respondents claimed a vested right to redeem the trees on Bane lands on payment of 50 per cent of the value of timber under Coorg Land and Revenue Regulation of 1899 and the rules framed thereunder. Second the respondents claimed that, by section 75 of the Karnataka Land Revenue Act, 1964, an absolute right was conferred on them in respect of trees on Bane lands and the Government have no right even to demand 50 per cent of the value. The learned Single Judge referred to the provisions of Coorg Land and Revenue Regulation of 1899 and in particular rule 97 thereof. The learned Single Judge came to the conclusion that rules conferred a right on the holders of Bane land to redeem the trees standing on such Bane lands. He also held that under the rules, the respondents were required to pay 50 per cent of the value of the timber to the State along with other incidental charges. The contention of the State that the Coorg Land and Revenue Regulation, 1899 was repealed and, therefore, the respondents had no right under those Regulations to remove timber was repelled by the learned Single Judge. The learned Judge held that section 202 of the Karnataka Land Revenue Act of 1964 did not affect the right acquired by the holders of Bane lands in spite of repeal of the Coorg Land and Revenue Regulation of 1899. In this view of the matter, the learned Single Judge did not consider it necessary to express any opinion on the second contention of the respondents whether under section 75 of the Karnataka Land Revenue Act of 1964, the State had no right to demand 50 per cent of the value. The Division Bench on appeal held that the respondents could be divided into two categories. As to the first category, the Division Bench in sub paragraph (1) of paragraph 59 of the judgment said that those who deposited before 15 January, 1974, 50 per cent of the value of timber as determined by the Divisional Forest officer, could be granted permits to cut and remove timber. If there was any difference between the 50 per cent of the actual value of timber and the amount paid on the basis of determination by the Divisional Forest officer, the Divisional Forest officer would recover the difference as mentioned in the said paragraph 59(1). In sub paragraph (2) of paragraph 59, the Division Bench dealt with respondents who did not fall within category 1, but made applications before 15 January, 1974. The Solicitor General appearing for the State with his usual fairness said that he did not want to take up time of the Court in going into the merits of the appeals. He accepted the conclusions of the High Court in paragraph 59 of the judgment. The result is that the conclusions of the High Court in paragraph 59 are affirmed. The matter, however, does not end there because counsel for the respondents submitted that the Division Bench went into the nature and tenure of Bane lands and expressed views which are not correct 1091 and which in any event were not necessary for the purpose of the present case. The learned Single Judge rightly did not express any view on the second question as to whether the Bane land holders could ask for removal of trees without payment of full value. The Division Bench, however, in paragraphs 16 and 20 dealt with the legal position of Bane lands prior to 1 November, 1899, in paragraph 30 on the legal position between 1 November 1899 and 1 April 1964 and in paragraphs 36 and 43 on the legal position after 1 April 1964. The Division Bench of the High Court in paragraphs 17 and 19 of the judgment dealt with Bane and Kumki lands and equated the same. It may be stated here that one of the respondents Consolidated Coffee Ltd., also filed an appeal from the judgment of the High Court. The Solicitor General contended that the Consolidated Coffee Ltd. was not competent to file an appeal because the company had obtained relief and could not, therefore, attack the judgment. Having heard the Solicitor. General and counsel for the respondents, we are of opinion that the course adopted by the learned Single Judge was correct. The Division Bench of the High Court need not have gone into the question on the nature and tenure of Bane lands and expressed opinion on rights of the parties. These observations were not necessary. We, therefore, hold that we affirm the conclusions of the Division Bench of High Court as stated in paragraph 59 of the judgment and make it clear that the observations and opinions expressed by the Division Bench on the nature and tenure of Bane lands and rights of the parties will not bind the parties on these questions in future. It will be open to both parties, namely, the appellants and respondents to urge their rival contentions on these questions if in future there will be any dispute between the parties. The directions given by the Division Bench in paragraph 59 of the judgment will be followed by the parties. The directions are explicable because of 15 January 1974 being taken as the dividing line with regard to persons who made payment and persons who did not make payment consequent upon the repeal of Rule 137 of the Karnataka Forest Rule, 1969. The appeals are dismissed. Parties will pay and bear their own costs. S.R. Appeals dismissed.

"Bane lands" are forest lands granted for the service of the "Warg", holding rice fields to which they are allotted to be held, free of revenue, for grazing, leaf manure/firewood and for timber required in the Warg, capable of being alienated only along with the Warg lands u/s 97 of the Coorg Land and Revenue Regulation 1899, which is in pari materia with Rule 151 A and B made under the Indian Forest Rules 1954. The holders of the Bane Land had the right to redeem the trees standing on such Bane lands subject to the payment of seignorage etc. Under Rule 137 of the Karnataka Forest Rules 1969, effective from 1st March 1969, redemption of the growth on "Bane lands" was allowed on payment of 50% of the value of the timber. Rule 137 was however deleted w.e.f. 15th January 1974. The various appellants who were holders of "Bane Lands" challenged, under article 226. the orders of the Forest authorities demanding full value of the timber sought to be "redeemed" by them contending that (i) they had vested right to redeem the trees on Bane lands on payment of 50% of the value of timber under the Coorg Land and Revenue Regulations of 1899 and (ii) Section 75 of the Karnataka Land Revenue Act, 1964 vested in them an absolute right in respect of the trees on Bane lands and the Government therefore had no right even to demand 50% of the value. All the writs were accepted by the Mysore High Court following its earlier decision in I.L.R. (Karnataka) 1975 Vol. 25, p. 443 (Ramaraju Naidu vs Divl. Forest officer) holding that the Rules conferred a right on the holders of Bane lands to redeem the trees standing on such lands on payment of 50% of the value of the timber to the State along with other incidental charges. The court did not express any opinion whether the State had no right to demand 50% of the value under the Karnataka and Revenue Act of 1964. Allowing the State appeal against I.L.R. (Karnataka) 1975 Vol. 25 page 443 the Division Bench held [in State of Karnataka vs Ramaraju Naidu I.L.R. (Karnataka) 1975 Vol. 25 p. 1361] that (i) the Bane holders had no propriety right to the soil of Bane Land and to the trees standing thereon but only limited privilege to collect grass leaves timber etc. for domestic purposes (ii) Even after section 75(1) of the Karnataka Land Revenue Act was enacted the Bane holders did not become holders or occupants as defined in the Act and ownership of trees did not accrue to them and (iii) Section 79 of the Karnataka Land Revenue Act which preserved the preexisting privileges of Bane holders has no application to Bane lands. Keeping 15 1 74, the date of deletion of Rule 137 of the Karnataka Forest Rules 1969, the Division Bench, however directed that (1) the respondents who deposited before 15th January 1974, 50% of the value of timber as determined by the Forest officer could be granted permits to cut and remove timber, with liberty to the Forest officer to recover and any differential amount between the 50% of the actual value of timber and amount paid on the basis of prior determination and (ii) those respondents who have made applications under rule 137 before 15th January 1974, but not deposited the amount could also be granted permits on deposit of 50% of the value of timber. Dismissing the State appeals, by certificate, the court ^ HELD: (1) The learned single judge in ILR (Karnataka) 1975 Vol. 25 p. 443 rightly did not express any view on the second question as to whether 1089 the Bane Land holders could ask for removal of trees without payment full of value u/s 75 of the Karnataka Land Revenue Act, 1964. [1091A] Ramaraju Naidu vs Divl. Forest Officer I.L.R. (Karnataka) 1975, Vol. 25 p. 443 (partly affirmed). (ii) The directions given by the Division Bench are explicable because of 15th January 1974 being taken as the dividing line with regard to persons who made payments and persons who did not make payment consequent upon the repeal of Rule 137 of the Karnataka Forest Rules, 1969. [109lF] [Their Lordships left open to the parties to urge their rival contentions on the questions of the nature and terms of Bane lands and right, if in future, there will be any dispute between them, in view of their making clear that the observations and opinions of the High Court Division Bench should not operate as res judicata]

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Civil Appeal No. 1141 of 1974. Appeal from the Judgment and Order dated 10th June 1974 of the Jammu & Kashmir High Court at Srinagar in Election Petition No. 4 of 1972. 3 A. K. Sen, Altaf Ahmed and M. Veerappa, for the appellant. G. section Pathak, O. C. Mathur, Shri Narain and J. B. Dadachanji, for the Respondent. The Judgment of the Court was delivered by FAZAL ALI, J. This is an election appeal against the judgment of the High Court of Jammu & Kashmir dated June 10, 1974, by which the learned Judge allowed the election petition filed before him by the respondent Ali Akbar Khan and set aside the election of the returned candidate Mohd. Yasin Shah who is the appellant before us. The returned candidate will, for short, be referred to by us as 'the appellant ' and the respondent Ali Akbar Khan will be referred to as 'the petitioner '. It appears that during the elections held in the year 1972 in the State of Jammu & Kashmir both the appellant and the petitioner were the candidates for election to the Karnah Assembly Constituency of the District of Baramulla in the State of Jammu & Kashmir. There were other candidates also some of whom had withdrawn. One Mohd Yunis was the Congress candidate for this constituency but he was defeated. The petitioner, according to the appellant was merely a covering or a shadow candidate for the Congress candidate Mohd Yunis. The petitioner filed his nomination paper on February 7, 1972 and his proposer was P.W. 1 Ghulam Mohiuddin. According to the petitioner the nomination paper was presented to the Returning Officer R.W. 3 Abdul Rehman Mir on February 7, 1972 by the petitioner who was accompanied with his proposer Ghulam Mohiuddin who had signed as the proposer. The Returning Officer received the nomination paper and granted a receipt for the same. A sum of Rs. 250/ being the election deposit was also deposited and other formalities were duly observed. February 9, 1972, was the last date fixed for the scrutiny of the nomination papers of all the candidates. According to the petitioner he reached the office of the Returning Officer at about 10 A.M. on February 9, 1972, but as he was suffering from dysentery he went to attend the call of nature and instructed his proposer P.W. 1 Ghulam Mohiuddin to take time on his behalf if the name of the candidate was called out. The petitioner 's case before the High Court was that the Returning Officer after scrutinising the nomination papers accepted all of them but rejected the nomination paper of the petitioner on the ground of his absence in spite of the fact that P.W. 1 Ghulam Mohiuddin requested him to wait for the petitioner who had gone to attend the call of nature. It was further alleged that when the petitioner returned he beseeched the Returning Officer not to reject his nomination paper but the Returning Officer refused to reopen the matter as the nomination paper of Mohd. Yunis the Congress candidate had been accepted. The nomination paper of Mohd Yasin Shah the appellant was also accepted. Thereafter the poll was held on March 8, 1972 and the results were declared on March 12, 1972. The appellant Mohd Yasin Shah was declared elected, while Mohd Yunis was defeated. After the results were declared the petitioner applied for a certified copy of the order of rejection of his nomination paper on April 1, 1972, and according to him the Returning Officer tried to avoid giving the copy of the said order which was ultimately given 4 to him on April 3, 1972, April 2, being a Sunday. The sheet anchor of the case of the petitioner was that the Returning Officer was particularly biased against him and he rejected the nomination paper in order to support the returned candidate in whom he was interested. The petitioner further pleaded that the only ground on which the nomination paper was rejected was that the petitioner did not appear when the Returning Officer called out his name at the time of the scrutiny of his nomination paper. The petitioner further averred that under the law the Returning Officer could not have rejected his nomination paper on the ground of his absence even if it was so. Not content with these allegations the petitioner went to the extent of making a serious and irresponsible allegation against the Returning Officer by averring that the Returning Officer had committed forgery by subsequently adding certain words in the order of rejection and overwriting the signature of the proposer Ghulam Mohiuddin on the nomination paper. Thus, in short, according to the petitioner as his nomination paper was improperly rejected by the Returning Officer, the election of the appellant was void on that ground alone. The petitioner filed the present election petition with the allegations aforesaid on April 12, 1972. It was alleged that at the time when P.W. 1 Ghulam Mohiuddin was examined as a witness there was some overwriting on the signature of Ghulam Mohiuddin the proposer of the petitioner on the nomination form. Accordingly the petitioner made an application to the Court for permission to file an amended petition by incorporating the fact that the overwriting was brought into existence after the scrutiny of the nomination papers was over and behind the back of the petitioner. The learned Judge, after hearing the parties, ultimately allowed the application and accordingly an amended petition was filed by the petitioner where the allegations regarding interpolation etc. were made. The appellant was also given an opportunity to file his additional written statement. The petition was stoutly resisted by the appellant who denied, inter alia, all the allegations made by the petitioner and contended that there was absolutely no overwriting on the signature of Ghulam Mohiuddin nor was any forgery committed by the Returning Officer. It was further averred that as neither the petitioner nor his proposer was present when the scrutiny of the nomination paper of the petitioner was taken up by the Returning Officer and as the appellant himself raised the objection that the signature of Ghulam Mohiuddin on the nomination paper was not genuine the Returning Officer having applied his mind upheld the objection and rejected the nomination paper on the ground that the signature of Ghulam Mohiuddin was not genuine as it could not be verified. The appellant also vehemently denied the allegation that the Returning Officer was in any way biased or prejudiced against the petitioner. On the other hand it was averred that the Returing Officer was an independent officer and since the petitioner was a candidate of the Congress if the Returning Officer could have any leaning at all it would be towards the petitioner rather than the appellant who was an independent candidate opposing the Congress party. The learned Judge, after taking the evidence of the 5 parties, came to the conclusion that from the order of the Returning Officer it would appear that the nomination paper of the petitioner was rejected mainly on the ground of his absence which was not a lawful ground on which the nomination paper could have been rejected under section 47(2) of the Jammu & Kashmir Representation of the People Act. On the question of the overwriting the learned Judge held that there was no doubt that there was overwriting on the signature of P.W. 1 Ghulam Mohiuddin on the nomination form of the petitioner and perhaps the overwriting was made some time after the scrutiny. But the learned Judge refrained from giving any finding as to who made the interpolation and in what circumstances. As regards the allegation that the Returning Officer had committed forgery the learned Judge does not appear to have accepted the same or given any clear finding on this point, and he steered clear of this fact by observing that as the first part of the order of the Returning Officer rejecting the nomination paper was based on the ground of the absence of the petitioner, the Returning Officer became functus offcio and any subsequent observation which he may have made was irrelevant. The learned Judge further seems to have held that the petitioner was not present when the scrutiny of his nomination paper was taken up and the Returning Officer was not justified in law in rejecting his nomination paper on that ground alone. On these findings the learned Judge held that as the nomination paper of the petitioner was illegally rejected the election of the appellant was void and was liable to be set aside under section 108(1)(c) of the Jammu and Kashmir Representation of the People Act hereinafter referred to as `the Act ', as amended upto date. In support of the appeal Mr. Altaf Ahmed learned counsel for the appellant who was followed by Mr. Asoke Sen submitted that the learned Judge has misconstrued the order passed by the Returning Officer rejecting the nomination paper of the petitioner and that the judgment of the High Court is against the weight of the evidence on the record. It was also argued that the learned Judge completely overlooked some of the essential features appearing in the case which completely demolished the petitioner 's case. Mr. G. section Pathak appearing for the petitioner, however, supported the judgment of the High Court and contended that the order of the Returning Officer was mainly passed on the ground of the absence of the petitioner which was not justified by the provisions of section 47(2)(c) of the Act. He also submitted that a bare perusal of the order of the Returning Officer would clearly show that the second part of the order regarding the genuineness of the signature of the proposer Ghulam Mohiuddin appears to have been inserted subsequently. Lastly, it was submitted that although this Court could reappraise the evidence for itself it should not interfere with the judgment of the High Court on facts unless the High Court had committed an error in its appreciation of evidence or overlooked any material fact. It was further argued that this Court should keep in mind the slowness of the appellate court to disturb a pure finding of fact based on appreciation of evidence by the Trial Court which had the initial advantage of watching the demeanour of the witnesses examined by it. There can be no dispute with the propositions adumbrated by Mr. Pathak, but we would like 6 to mention that it is well settled that the sanctity and purity of electoral process in the country must be maintained. The election of a duly returned candidate cannot be set at naught on the basis of interested or partisan evidence which is not backed by cogent circumstances or unimpeachable documents. In Rahim Khan vs Khurshid Ahmed & Ors.(1) this Court observed as follows : "We must emphasize the danger of believing at its face value oral evidence in an election case without the backing of sure circumstances or indubitable documents. x x x There is no x ray whereby the dishonesty of the story can be established and, if the Court were guillible enough to gulp such oral versions and invalidate elections, a new menace to our electoral system would have been invented through the judicial apparatus. We regard it as extremely unsafe, in the present climate of kilkennycat election competitions and partisan witnesses wearing robes of veracity, to upturn a hard won electoral victory merely because lip service to a corrupt practice has been rendered by some sanctimonious witness. The Court must look for serious assurance, unlying circumstances or unimpeachable documents to uphold grave charges of corrupt practices which might not merely cancel the election result, but extinguish many a man 's public life." In D. Venkata Reddy vs R. Sultan & Ors.(2) this Court, in which one of us (Fazal Ali, J.) was also a party, reiterated the principles in the following words : "In a democracy such as ours, the purity and sanctity of elections, the sacrosanct and sacred nature of the electoral process must be preserved and maintained. The valuable verdict of the people at the polls must be given due respect and candour and should not be disregarded or set at naught on vague, indefinite, frivolous or fanciful allegations or on evidence which is of a shaky or prevaricating character. It is well settled that the onus lies heavily on the election petitioner to make out a strong case for setting aside an election. In our country election is a fairly costly and expensive venture and the Representation of the People Act has provided sufficient safeguards to make the elections fair and free. In these circumstances, therefore, election results cannot be lightly brushed aside in election disputes. " We would now proceed to discuss the various aspects of the case in the light of the principles enunicated by this Court in the aforesaid cases. To begin with, we might mention that most of the facts on which evidence appears to have been led by the petitioner were not pleaded in the election petition at all. For instance, the definite case made out by the petitioner in his evidence was that at the time of the scrutiny of the nomination papers when the name of the petitioner was called out P.W. 1 Ghulam Mohiuddin the proposer of the 7 petitioner was present who drew the attention of the Returning officer to the fact that the petitioner had gone to attend the call of nature and that he should wait for him but the Returning Officer refused to wait and rejected the nomination paper on the ground of the absence of the petitioner. It was further sought to be proved in the evidence that on return the petitioner tried to persuade the Returning Officer to reopen the matter and in fact filed an application before him for recalling the order of rejection of the nomination paper but the Returning Officer was so much prejudiced against him that he tore of the petition submitted before him by the petitioner. It will be noticed that neither in the original petition nor in the amended one there is any mention of the fact that P.W. 1 Ghulam Mohiuddin drew attention of the Returning Officer and asked him to wait, nor is there any mention of the fact that the petitioner on his return submitted a petition to the Returning Officer which was torn into pieces by the Returning Officer. We shall show that these facts are also not proved even by some of the witnesses examined by the petitioner. It may be pertinent to note here that while in paragraph 14 it was mentioned that when the nomination form of the petitioner was taken up it was reported to the Returning Officer that the petitioner had gone to attend the call of nature but significantly enough it is not mentioned therein as to who was the person who had drawn the attention of the Returning Officer. It seems to us that even at the time of filing his amended petition which was filed after the trial had started the petitioner was not certain of his ease and had not yet decided to allot this part to his proposer Ghulam Mohiuddin. P.Ws. 1, 2 and 6 have no doubt asserted in their evidence that P.W. 1 Ghulam Mohiuddin requested the Returning Officer to wait for the petitioner who had gone to attend the call of nature. P.W. 1 Ghulam Mohiuddin who was the proposer of the petitioner and therefore the most interested witness in this case has no doubt testified to the fact that he had drawn the attention of the Returning Officer when the nomination paper of the petitioner was taken up for scrutiny but the Returning Officer did not heed his request and rejected the nomination paper. This witness also stated that petitioner himself told the Returning Officer that he was going to attend the call of nature and that he should wait for him. But the witness does not appear to be sure of his statement as he immediately volunteered to state that as there was lot of noise at that time evidently the Returning Officer did not hear him. The petitioner also says the same thing. P.W. 2 Qazi Mohammad Abdullah also tries to support the fact that at the time of scrutiny the petitioner was not present and Ghulam Mohiuddin P.W. 1 informed the Returning Officer that the petitioner had gone to attend the call of nature. This witness, however, did not support the allegation of the petitioner that a petition was submitted by him before the Returning Officer which was torn by him. The witness stated thus: "The petitioner did not submit any petition before the Returning Officer in my presence on the day of scrutiny. There was no such incident in my presence such as the filing of a petition before the Returning Officer and the tearing off that petition by him." 8 P.W. 6 the petitioner himself no doubt supported his case that he had gone to attend the call of nature when the scrutiny of his nomination paper was taken up and had instructed P.W. 1 Ghulam Mohiuddin to remain present and to ask the Returning Officer to wait. Thus this fact is not proved by any independent witness. On the other hand the fact that Ghulam Mohiuddin did not respond to the call even though he was instructed, as the petitioner would have us believe, is admitted even by a witness of the petitioner, namely, P.W. 4 Ghulam Qadir Mir, who deposed as follows: "At the time when the scrutiny of the nomination paper of Ali Akbar Khan was taken up, he himself was not present there. His proposer Ghulam Mohi ul Din was present there. The name of Ali Akbar Khan was called out but no one responded and so the Returning Officer wrote down that the candidate was absent and his nomination paper was being rejected. In my presence nothing else happened there. " It would therefore appear from the evidence of this witness that even though Ghulam Mohiuddin was present he did not at all respond when the name of the petitioner was called out. This knocks the bottom out of the story put forward by the petitioner that Ghulam Mohiuddin had been instructed to ask the Returning Officer to wait or that Ghulam Mohiuddin stood up and requested the Returning Officer to wait for the petitioner. Thus the entire story given out by P.Ws. 1, 2 and 6 on this point is falsified by one of the witnesses examined by the petitioner himself. There is yet another circumstance which throws considerable doubt on this part of the story of the petitioner. P.W. 5 Girdhari Lal counsel engaged by the petitioner at the time of scrutiny according to whose evidence Ghulam Mohiuddin had signed the nomination form in his presence, was also present at the time when the scrutiny of the nomination paper of the petitioner was taken up and in spite of this fact when the name of the petitioner was called out and according to the witness the Returning Officer announced that since he was absent his nomination paper was rejected this witness did not enter a protest on behalf of his client, the petitioner, that the Returning Officer could not have rejected the nomination paper on the ground of the absence of the petitioner. This somewhat unusual conduct on the part of the witness who is a lawyer of some experience clearly shows that neither Ghulam Mohiuddin was present nor the petitioner was present and it is therefore extremely doubtful if this witness was also present at the time when the scrutiny of the nomination paper of the petitioner was taken up by the Returning Officer. As against this contradictory and discrepant evidence there is consistent evidence of the appellant 's witnesses R.Ws. 1, 2, 3 and 4 to the effect that neither the petitioner nor his proposer Ghulam Mohiuddin was present when the scrutiny of the nomination paper of the petitioner was taken up. R.W. 3 is the Returning Officer himself and he appears to us to be an absolutely independent witness being a high Government officer of sufficient experience and there is abso 9 lutely no reason for him to depose falsely against the petitioner. The Returning officer stated thus: "When in spite of repeated calls neither the petitioner nor his proposer turned up before me, then I began to write out the order on the back of the nomination form. " R.W. 1 Mohammad Anwar Shah Masoodi also appears to be an independent witness who was an active Congress worker but he did not see eye to eye with the Congress on the candidature of Mohd Yunis for the constituency in question. There is nothing to show that this witness was in any way interested in the appellant. This witness also categorically stated that neither the petitioner nor the proposer of the petitioner turned up at the time when the name of the petitioner was called out. R.W. 2 Ghulam Hassan Malik who was also one of the candidates from the Karnah Assembly Constituency and who is a lawyer also corroborated the evidence of the Returning Officer and of R.Ws. 1 & 3 that no one stood up on behalf of the petitioner when the name of the petitioner was called out and that the proposer of the petitioner was also not present at that time in the room. This witness has further stated that no one brought it to the notice of the Returning Officer that the petitioner was ill or that he would be coming soon. The evidence of the witnesses examined by the appellant, therefore, is fully corroborated by the evidence of P.W. 4 Gulam Qadir Mir a witness of the petitioner as shown above. Furthermore we find it difficult to believe why the Returning Officer who was an independent person and a Government Officer would refuse to wait for the petitioner if his attention was really drawn to the fact that the petitioner was ill and had gone to attend the call of nature by Ghulam Mohiuddin or any body on behalf of the petitioner. This fact, therefore, clearly shows that the case of the appellant that neither the petitioner nor his proposer was present at the time when the scrutiny of the nomination paper of the petitioner was taken up is true. Even the learned Judge is also inclined to accept this part of the case of the appellant. On a consideration of the evidence of the parties referred to above we are clearly of the opinion that the petitioner has failed to prove that at the time when the scrutiny of his nomination paper was taken up by the Returning Officer either the petitioner or his proposer Ghulam Mohiuddin was present and made any request to the Returning Officer to wait which was not acceded to by the Returning Officer. Apart from the interested testimony of P.W. 1, 3 and 6 that the petitioner had submitted a petition to the Returning Officer which was torn out by him there is no reliable evidence to prove this fact. To begin with, this fact is not at all mentioned even in the election petition filed by the petitioner even after amendment. The petitioner admits in his statement that he did not mention this fact while instructing his lawyer. Furthermore, if indeed the Returning Officer actually behaved in the manner as the petitioner would have us believe, then it was a very serious matter and the petitioner is not likely to have 10 slept over the matter but would have filed a regular complaint against the Returning Officer to his higher superiors. In fact when there was a delay of only one day in the giving of the copy of the rejection order the petitioner made a great fuss and furore over this petty lapse. Is it possible to believe that the petitioner would sit quiet if the Returning Officer had behaved in such a manner with him by tearing off the petition which was submitted to the Returning Officer ? Apart from that P.W. 3 Mohammad Maqbool Mir at p. 87 of the Paper Book has clearly admitted that in his presence no petition was filed by Ali Akbar Khan before the Returning Officer. Even P.W. 5 who was the lawyer of the petitioner stated that he cannot say that Ali Akbar Khan presented any petition before the Returning Officer which the latter tore off. P.W. 4 also says that he did not see the petitioner Ali Akbar Khan or his proposer presenting any application to the Returning Officer which the latter tore off. Thus the mischievous allegation made by the petitioner against the Returning Officer is completely disproved not only from his own conduct but also by the evidence of his own witnesses as discussed above. Finally even though a very serious allegation was made against the Returning Officer personally, yet, when he was deposing as a witness for the appellant, no suggestion was put to him that any petition was presented to him which he tore off instead of taking any action thereon. Further while P.W. 1 Ghulam Mohiuddin categorically stated in his evidence that the petition which was submitted to the Returning Officer was scribed by Abdul Ahad the petition writer, yet the petitioner made no attempt to examine Abdul Ahad in order to prove this part of his case. In these circumstances, therefore, we disbelieve this part of the case of the petitioner that he had filed any petition to the Returning Officer for reopening the order rejecting his nomination paper. It seems to us that this allegation was a made up story and appears to have been invented in order to make out a case that the Returning Officer was biased against the petitioner and that is why the nomination paper of the petitioner was illegally rejected by him. The petitioner has however miserably failed to prove this part of the case. If this story is found to be false, it would also demonstrate the falsity of the main allegation made by the petitioner regarding the overwriting on the signature of Ghulam Mohiuddin as also interpolation in the order passed by the Returning Officer rejecting the nomination paper of the petitioner. This brings us now to the question as to the nature of the order passed by the Returning Officer which is Ext. RW 3/3. Before, however, taking up this matter it may be necessary to dispose of the case of the petitioner regarding the overwriting alleged to have been made subsequently on the signature of Ghulam Mohiuddin on the nomination paper Ext. PW 5/2. The definite case of the petitioner was that at the time when the nomination paper was filed before the Returning Officer R.W. 3, or even at the time of the scrutiny on February 9, 1972, there was no overwriting at all which appears to have been made subsequently. On the other hand the case of the appellant is that the overwriting was already there from before and in fact it was deliberately made so as to afford a ground to the peti 11 tioner to set aside the election of the appellant in case he was duly elected. It was suggested that this lacuna was deliberately left so as to invite the Returning Officer to reject the nomination paper and then use this infirmity to upset the election of the appellant. In support of this case the appellant relied upon the following circumstances: (i) that the petitioner was a mere covering or shadow candidate of the Congress and was not at all interested in contesting the election; (ii) that once the nomination paper of Mohd Yunis who was the official candidate of the Congress was accepted the petitioner was not at all interested in pursuing his election and it was for this reason that when the scrutiny of the nomination paper of the petitioner was taken up neither the petitioner nor his proposer was present and an imaginary story was invented that the petitioner was ill and had gone to attend the call of nature and Ghulam Mohiuddin the proposer asked the Returning Officer to wait but he rejected the nomination paper of the petitioner; and (iii) that P.W. 1 Ghulam Mohiuddin the proposer of the petitioner has in an unguarded moment admitted in his statement that on the very day when the nomination paper was rejected i.e. on February 9, 1972, the petitioner informed the witness that he will file a case in the Court against Mohd Yasin the appellant. P.W. 1 deposed thus: "The petitioner had only then informed me after the rejection i.e. on 9 2 1972 that he will now file a case in the Court against Mohammad Yasin respondent. " This statement clearly lets the cat out of the bag and shows that the petitioner 's intention really was to prepare a ground for setting aside the election of the appellant if he was duly elected. Unless this was so, it is not understandable why the petitioner should have made such a statement to P.W. 1 on the date when the nomination paper was rejected and when he obviously did not know whether or not the appellant would succeed in the election. We shall now deal with each of these circumstances relied upon by the appellant in support of his case that the entire story of overwriting etc. was a figment of the imagination of the petitioner 's mind and perhaps the whole thing was stage managed so as to invite the Returning Officer to reject the nomination paper of the petitioner. The appellant has clearly stated in his evidence that the petitioner was merely a covering candidate of the Congress and was put up only as a shield to take the place of Mohd Yunis if the nomination paper of Mohd Yunis was rejected. R.W. 1 who, as we have already pointed out, was an independent witness and was an active worker of the Congress at one time has also categorically asserted that the petitioner was a covering candidate of the Congress. The witness stated thus: "The petitioner was a candidate set up by the Congress that is to say he was a covering candidate. The congress had given the mandate to Kh. Mohd Yunis but the latter 12 had set up the petitioner as a candidate by way of precaution. " The evidence of this witness appears to have a ring of truth in it. He has clearly stated that he did not agree with the Congress Organization when a mandate was given to Mohd Yunis to stand from the Assembly constituency of Karnan, because in his opinion Mohd Yunis had lost his popularity and there was little chance of his being elected. The result of the election demonstrated that the apprehension of this witness was undoubtedly correct, because while the appellant was duly returned, Mohd Yunis was defeated. In these circumstances we do not see any reason to distrust the evidence of this witness on this point. R.W. 2 Gulam Hassan Malik who was a lawyer and also a candidate has also stated that the petitioner Ali Akbar Khan was a covering candidate of Mohd Yunis. The appellant also in his evidence categorically asserted that the petitioner was a covering candidate of the Congress for Mohd. Yunis. It is true that the petitioner has not admitted this fact, but the somewhat contradictory stand taken by him on this point clearly shows that he was undoubtedly a covering candidate. The witness (petitioner) said that if his nomination paper had been accepted he would not have contested as an independent candidate but he had been assured that if the nomination paper of Mohd. Yunis as also of the petitioner were accepted then the Congress was to decide as to who would contest the election. At the same time the petitioner admitted that the mandate of the Congress was given to Mohd Yunis prior to the filing up of the nomination forms. Indeed if the mandate was given by the Congress party to Mohd. Yunis alone, the petitioner was bound to be a dummy candidate only. Another intrinsic circumstance that supports this fact is that while Mohd Yunis and other candidates filed a number of nomination papers so that if one of them was rejected on the ground of any defect or infirmity the remaining nomination forms may be accepted and the candidature of the candidates would not run into difficulty, the petitioner admittedly filed only one nomination paper and did not think it necessary to file another nomination paper. These facts taken together with the subsequent conduct of the petitioner and his proposer Ghulam Mohiuddin in not being present at the time of the scrutiny of the nomination paper as found by us lends sufficient support to the case of the appellant that the petitioner was merely a dummy candidate. As regards the other circumstances that after the nomination paper of Mohd. Yunis was accepted, the petitioner was not at all interested in fighting the elections, we find that there is overwhelming evidence to support this inference. We have already pointed out that from the evidence led by the parties it has been established that neither the petitioner nor his proposer were present at the time when the scrutiny of nomination paper was taken up by the Returning Officer on February 9, 1972. In these circumstances, therefore. it follows as a logical corollary that the story of the petitioner that a request made to the Returning Officer by Ghulam Mohiuddin to wait for the petitioner or 13 that any petition was filed before the Returning Officer which was torn by him is a complete myth and has been invented to give credence to the made up story bolstered up by the petitioner. Another intrinsic circumstance which shows that the petitioner was not at all interested in pursuing his election is the fact that the two important persons who were very much interested in his nomination paper not being rejected did not lodge any protest before the Returning Officer or took the trouble of drawing the attention of the Returning Officer that the nomination paper could not be rejected due to the absence of the petitioner. One of these persons was no one else but Girdhari Lal the counsel of the petitioner himself. According to his evidence he knew full well that P.W. 1 Ghulam Mohiuddin had signed the nomination paper in his presence and yet when the nomination paper was taken up for scrutiny he did not care to tell the Returning Officer that as the proposer had signed in his presence there was no question of rejecting his nomination paper. Similarly Mohd. Yunis who was the official candidate of the Congress also remained completely silent and did not draw the attention of the Returning Officer when the nomination paper of the petitioner who was also a Congress candidate was rejected. All these facts, therefore, lead to the inescapable conclusion that the petitioner was not at all interested in contesting the election and by his deliberate conduct he created a situation in which the nomination paper could be rejected so that if necessary he could use this lacuna to upset the election of the appellant. As regards the last circumstance, namely, that the whole thing appears to have been stage managed by Mohd. Yunis in order to furnish a ground for setting aside the election of the appellant in case he was elected appears to be probable, particularly in view of the admission made by P.W. 1 Ghulam Mohiuddin to which a reference has already been made. The best person to explain these facts would have been Mohd. Yunis himself and the petitioner has not examined him as a witness at all. It appears from the order sheet that Mohd. Yunis was summoned and he was present but the petitioner did not choose to examine him. It seems to us that Mohd. Yunis being fully aware that he was the architect of the whole drama did not want to face the Court. Apart from this circumstance, the evidence led by the petitioner on the question that there was some overwriting in the signature of his proposer P.W. 1 Ghulam Mohiuddin on the nomination form subsequent to the date of the scrutiny is far from convincing. In view of our finding that neither the petitioner P.W. 6 nor Ghulam Mohiuddin P.W. 1 were present on February 9, 1972 when the nomination paper of the petitioner was taken up for scrutiny by the Returning Officer, these two witnesses are not at all competent to depose as to whether or not on that date there was any overwriting in the signature of P.W. 1. In these circumstances, therefore, the evidence of P.W. 1 and 6 will have to be excluded on this point. Even so it will be interesting to note that the petitioner P.W. 6 does not say that there was any overwriting on the signature of P.W. 1 Ghulam Mohiuddin on the nomination form but he states that on a perusal of the nomination paper it appears that some ink was spread over his 14 signature. An examination of the signature of Ghulam Mohiuddin would reveal to the naked eye that there is no question of the spreading of any ink over the signature but what has been done is that there is clear overwriting on the signature. P.W. 2 Qazi Mohammad Abdullah appears to be a close acquaintance of the petitioner and had helped him in engaging the services of Girdhari Lal for the purpose of filling up the nomination paper which was also done at his own house. This witness also states that Ghulam Mohiuddin had affixed his signature in his presence with the fountain pen of the petitioner. He further asserts that on the date of his deposition he found that there was an overwriting over the signature of Ghulam Mohiuddin. This witness was one of the proposers of Mohd. Yunis who had set up the petitioner as his dummy candidate as held by us. In these circumstances, therefore, this witness was interested and has tried to help the petitioner. Moreover he does not say that on February 9, 1972 when the scrutiny of the nomination paper of the petitioner was taken up by the Returning Officer he had an opportunity to inspect the nomination paper in order to find out whether there was any overwriting on the signature. His evidence, therefore, does not exclude the possibility of the over writing having been made after Ghulam Mohiuddin had signed the nomination paper at the residence of the witness and before the nomination paper was filed or its scrutiny taken up. Furthermore, the witness admits that he is also a Congress worker and knew the petitioner for the last four years. For these reasons, therefore, in the first place the evidence of this witness is interested, and secondly it does not appear to be of any assistance to the petitioner. The other witness examined on this point is P.W. 3 Mohd. Maqbool Mir. A perusal of the evidence of this witness convinces us that he is an utterly unreliable witness. Although a lawyer of sufficient experience the witness seems to have scant regard for the purity of the legal profession or the norms of professional ethics. He was a counsel of the appellant and had been engaged by him at the time of filing of the nomination paper and its scrutiny. He was present on February 9, 1972 before the Returning Officer on behalf of the appellant. He further admits that he had also agreed to become the agent of other contesting candidates. The order Ext. RW 3/3 clearly mentions that the witness did raise objection on behalf of the appellant regarding the genuineness of the signature of P.W. 1 Ghulam Mohiuddin and yet the witness who appears to have transferred his loyalty to the petitioner deposes with impunity that he did not raise any objection regarding the genuineness of the signature of Ghulam Mohiuddin and that the overwriting did not exist at the time of the scrutiny. The dramatic manner in which he has made his appearance as a witness for the petitioner speaks volumes against the credibility of his testimony. He admits that he had never appeared before the High Court and he happened to come to Srinagar on November 13, 1972 to make some purchases for his uncle who was proceeding on a pilgrimage to Mecca. As he happened to be in the Court premises his name was called out and he was directed to appear as a witness without receiving any summons from the Court. The 15 appellant has categorically stated in his evidence that he had informed this witness that he might have to be examined on his behalf in the trial before the High Court and yet the witness knowing full well that he was the retained counsel of the appellant readily agreed to depose for the petitioner. Finally the witness admits that he deals with about 100 cases per month and yet he does not pay any income tax. In view of these circumstances, therefore, we are not in a position to place any reliance on the evidence of this witness. In fact the learned Judge was also not inclined to place implicit reliance on the testimony of this witness and in this connection the learned Judge observed as follows: "There have been great comments made with regard to the veracity and dependability of the statement of this witness and if the matter had rested only on the testimony of this witness, then it could have been said that some how or other this witness had changed sides and has come to depose but his testimony and the statements made by him have to be judged in the light of the other evidence and the facts and circumstances of the case. " We are now left with the evidence of P.W. 5 Girdhari Lal. This witness was admittedly counsel for the petitioner and was therefore thoroughly interested in supporting the case of the petitioner. The witness has also stated that the nomination paper bore the signature of Ghulam Mohiuddin but at the time when he was deposing there was some overwriting in his signature. The witness says that he was present at the time of the scrutiny and had inspected the nomination form and found that the signature of Ghulam Mohiuddin did not contain any overwriting at that time. He, however, admits that the petitioner Ali Akbar Khan was not present when the scrutiny was taken up and his nomination paper was rejected by the Returning Officer. Indeed if this was so, as a retained counsel for the petitioner, it was his duty to point out to the Returning officer that under section 47 of the Act the Returning officer was not legally competent to reject the nomination paper merely on the ground of the absence of the petitioner or his proposer. He, however, remained absolutely silent. This clearly shows that either he was aware that the overwriting on the signature of Ghulam Mohiuddin was already there at the time of the scrutiny or that he did not know about it, nor did he care to examine the nomination paper at that time. The witness admitted at p. 106 of the Paper Book that the rejection of the nomination paper on the ground of the absence of the candidate or his proposer was in his opinion improper under section 47 of the Act. In spite of this fact it is not at all understandable why he did not draw the attention of the Returning officer to this fact, if the Returning officer had rejected the nomination paper merely on the ground of the absence of the petitioner or his proposer. In these circumstances, therefore, there appears to have been a method in his silence which indicate that he was a privy to the whole show put up by the petitioner and wanted that somehow or the other the nomination paper of the petitioner may be improperly rejected so as to afford a ground to his client to 16 upset the election of the successful candidate. In these circumstances, therefore, we are not in a position to place any reliance on the evidence of this witness. This is all the evidence that the petitioner has led in support of his case that the overwriting on the signature of Ghulam Mohiuddin was made subsequent to the scrutiny of the nomination form. As against this there is clear and categorical evidence of the appellant Mohd. Yasin Shah R.W. 4 who stated thus: "After examination of the nomination form, I raised objection that the signature of the proposer appeared to be doubtful and I also said that probably it is not his signature. No one at that time appeared to rebut this objection of mine and to assert that it was the signature of the proposer. " His evidence was fully corroborated by the Returning officer Abdul Rehman Mir, R.W. 3, who has clearly stated thus: "The nomination form already marked Ext. P.W. 5/2 was presented before me in the same condition in which it is at present. I was also the Returning officer of Lolab, Kupwara assembly constituencies besides the Karnah assembly constituency. " We have already pointed out that R.W. 3 is an independent witness being a high Government officer. The allegations made by the petitioner against him have not at all been substantiated and appear to be totally unfounded as found by us. There is neither any suggestion nor any evidence to show that he was in any way interested in the appellant or biased against the petitioner. On the other hand, R.W. 3 being an independent Government officer would naturally have no leanings towards either party. Furthermore, the most important question to be determined was, if any overwriting was made, who would be interested in making the same ? It is obvious that the Returning officer had absolutely no motive to make any overwriting on the signature of P.W. 1. The Returning officer has also admitted in his statement that after the scrutiny the record was deposited by him personally with the District Treasury Officer, Baramulla, as per the directions of the Deputy Commissioner, Baramulla, who was also the District Eelection officer. In these circumstances, therefore, why should the Returning officer have taken the grave risk of tampering with the record after the same was deposited with the District Treasury officer on the directions of the Deputy Commissioner, Baramulla, and why should he at all do it ? Perhaps it was for this reason that the learned Judge did not like to go into this question at all and refrained from making any observation on this aspect of the matter but casually observed that the overwriting might have been brought into existence after the scrutiny. We think that there is absolutely no evidence to support this fact. Finally there is another intrinsic circumstance which shows that the overwriting must have been there when the nomination paper 17 was filed or was taken up for scrutiny by the Returning Officer. The order of the Returning officer Ext. R.W. 3/3 clearly shows that an express objection was taken by Mohammad Maqbool Mir on behalf of Mohammad Yasin that the signature of the proposer was not genuine. If the overwriting would not have been there, there was absolutely no occasion for the appellant to have raised any such objection. We have examined the signature purported to be of Ghulam Mohiuddin, P.W. 1, and we find that there is clear over writing by which various letters of the signature of Ghulam Mohiuddin have been tampered with. The Returning officer has also deposed that he had given time to the candidates to examine the nomination papers at the time of the scrutiny in order to submit objections, if any. The appellant and his counsel examined the nomination paper of the petitioner and did raise an objection regarding the genuineness of the signature of his proposer P.W. 1. This objection has been recorded in the order passed by the Returning Officer. In view of these circumstances we see no reason at all to distrust the evidence of the Returning officer R.W. 3 on the point that the nomination paper was in the same condition at the date of the scrutiny as it was on the date when he was deposing. There is yet another matter on which there appears to be a serious controversy between the parties. The petitioner 's case was that the appellant Mohd. Yasin had not at all raised any objection to the genuineness of the signature of P.W. 1. Ghulam Mohiuddin on the nomination form and that the aforesaid objection was subsequently incorporated by the Returning officer in his order by committing interpolation. On the other hand the appellant 's definite case was that after inspecting the nomination paper he raised a clear objection before the Returning officer regarding the genuineness of the signature of the proposer Ghulam Mohiuddin and this objection was not only recorded by the Returning officer at that very time but was also sustained. The case of the appellant is substantially corroborated by the recitals in Ext. R.W. 3/3 the order passed by the Returning officer which must be presumed to be genuine as there is nothing to show that it was either interpolated or brought into existence subsequently. The petitioner 's case, however, rests purely on the oral evidence of a few interested witnesses. To begin with, so far as the evidence of P.W. 1 Ghulam Mohiuddin and P.W. 5 The petitioner is concerned the same would be of no assistance in deciding this question because as held by us these two persons were not present at the time of the scrutiny and therefore they were not competent to depose whether or not any objection was taken by the appellant regarding the genuineness of the signature of Ghulam Mohiuddin. It is true that P.W. 3 Mohammed Maqbool Mir. who was the counsel for the appellant has stated that he never raised any objection on behalf of the appellant at the time of the scrutiny. We have already discussed the evidence of this witness and held that he was an utterly uncreliable witness for the reasons which we have already given. Moreover he appears to be a turn coat type of witness and has changed sides as observed by the learned Judge. Finally his evidence is clearly contradicted by the document Ext. R.W. 3/3 wherein it is clearly mentioned that the witness Mohd. Maqbool did raise objection regarding 18 the genuineness of the signature of P.W. 1 Ghulam Mohiuddin on behalf of the appellant before the Returning officer at the time of the scrutiny. In these circumstances, therefore, we are not able to place any reliance on the evidence of this witness. The last witness on the point is P.W. 4 Gulam Qadir Mir who has no doubt stated that no objection was taken by any body at the concerned time. This witness, however, was an agent of a different candidate and was not at all interested in the appellant and as, according to him, he was at some distance from the Returning officer it is possible that he may not have heard the objection taken by the appellant before the Returning officer. At any rate, the evidence of this witness by itself is not sufficient to demolish other circumstances appearing in the case, particularly the recitals in the documents R.W. 3/3. As against this, R.W. 1, who, as we have already pointed out, is an independent witness, and being a candidate himself was present at the time when the scrutiny of the nomination took place, and his interest was by no means identical with the appellant and, therefore, had no reason to depose falsely to help the appellant. This witness has categorically stated thus: "Respondent No. 1 (appellant) at that time raised an objection that he was challenging the signature of the proposer on the nomination paper of the petitioner. * * * * * * When there was an objection to the nomination paper of the petitioner by Mohd. Yaseen then he (Returning officer) scrutinised the nomination paper and passed an order which was announced in the absence of the petitioner. " Similarly, R.W. 3 the Returning Officer has also clearly deposed that an objection was raised by the appellant which was recorded in his order. The evidence of R.Ws. 1 and 3 finds ample corroboration from the recitals in the document Ext. R.W. 3/3. Apart from this R.W. 2 who is no doubt a counting agent of the appellant has testified to the fact that the appellant had raised an objection regarding the genuineness of the signature of P.W. 1 Ghulam Mohiuddin. As the evidence of this witness is corroborated by two independent witnesses R.Ws. 1 & 3 we see no reason to disbelieve him. Lastly there is the categorical statement of the appellant himself that he did raise an objection. In these circumstances, therefore, we are satisfied that the evidence led by the appellant far out weighs the interested oral testimony led by the petitioner. In these circumstances, therefore, we find that it has been proved beyond doubt that the appellant did raise an objection regading the genuineness of the signature of P.W. 1 Ghulam Mohiuddin before the Returning officer on February 9, 1972, at the time of the scrutiny of nomination papers. It is, therefore, established that at the time when the nomination paper of the petitioner was taken up for scrutiny the overwriting on 19 the signature of P.W. 1 Ghulam Mohiuddin was already there and there is a strong possibility that the overwriting had been deliberately made at the instance of the petitioner so as to furnish a ground for setting aside the election of the successful candidate if the official candidate of the Congress failed to win the election. Mr. Pathak learned counsel for the petitioner submitted that a bare perusal of the order of the Returning officer would clearly show that there has been some tampering. Before examining this contention we may mention that from the evidence and circumstances discussed above, the following facts emerge: (i) that the petitioner was a dummy candidate of the Congress; (ii) that R.W. 1 Mohd. Anwar Shah Masoodi had expressed his clear apprehension that there was very little chance of Mohd. Yunis the official candidate of the Congress to win the election, and, therefore, there was every motive for the petitioner to have prepared some ground for asailing the election of the appellant in case he was successful; (iii)that on the date of the scrutiny of the nomination papers neither the petitioner nor his proposer were present before the Returning officer; (iv) that at the time of the scrutiny the appellant either personally or through his counsel definitely raised an objection about the genuineness of the signature of P.W. 1 Ghulam Mohiuddin on the nomination paper Ext. P.W. 5/2; and (v) that the overwriting on the signature of P.W. 1 Ghulam Mohiuddin was present even at the date of the scrutiny and perhaps even on the date when the nomination paper was filed before the Returning officer. In the background of these proved facts, we would now examine whether or not the contention raised by the learned counsel for the petitioner is correct. The order passed by the Returning officer rejecting the nomination paper of the petitioner which is Ext. R.W. 3/3 runs thus: "The candidate and the proposer are not present. Hence rejected, also an objection has been raised to the genuineness of the proposer 's signature by one Mohd. Maqbool counsel for Mohd. Yaseen Shah candidate. I could not verify it for absence of candidate and the proposer. " It was contended by Mr. Pathak that this order runs into two parts. By the first part of the order the Returning officer appears to have rejected the nomination paper merely on the ground of the absence of the candidate and the proposer. By the second part, which 20 according to the counsel for the petitioner appears to have been added subsequently, the objection taken by the appellant regarding the genuineness of the proposer 's signature has been recorded, and even so, the Returning Officer has not given any decision on this point. We have perused the original order passed by the Returning officer very carefully, but we find that the entire order has been written in the same ink with the same pen and appears to have been written in one sitting. There is nothing to show that the second part of the order was added subsequently because the strokes of the letters, the ink which has been used and the general tenor of the writing appears to be the same throughout. In these circumstances, therefore, we reject the contention of the petitioner that the second part of the order was added subsequently. We accordingly hold that the allegations made by the petitioner against the Returning Officer in paragraph 26 of the election petition are totally unfounded and the petitioner has miserably failed to prove the same. The entire order of the Returning Officer was written in one sitting and there can be no question of any interpolation having been made by him nor had the Returning Officer any motive to do so. Nevertheless it is true that after having written the order "Hence rejected", the Returning officer appears to have recorded the fact that an objection was raised regarding the genuineness of the proposer 's signature. For this R.W. 3 the Returning officer appears to have given a very convincing and reasonable explanation. He says that while he was writing his order and had not completed the same, an objection was taken by Mohd. Maqbool counsel for Mohd. Yaseen regarding the genuineness of the signature of the proposer. At that time the clerk had already put the seal and, therefore, the Returning officer recorded the objection raised by the appellant in the space left and completed his order and thereafter he signed above the seal. The Returning officer R.W. 3 in this connection stated thus: "When in spite of repeated calls neither the petitioner nor his proposer turned up before me, then, I began to write out the order on the back of the nomination form. .After the scrutiny by them, Mohammed Yaseen as; well as his counsel brought this fact to my notice that the signature of the proposer on the nomination form of the petitioner was not genuine. . The portion in my order regarding the non appearance of the petitioner or his proposer as well as the portion regarding the objection about the genuineness of the signature were written by me contemporaneously at the time of passing the order on the nomination form in respect of the scrutiny. The seal is not below my order but it is just in the midst of the portion of my order and the reason for this is that at the time of the scrutiny when I was passing the order, my clerk was also standing by my side and he was affixing the seal and it so happened that while I was hearing the objection in respect of this nomination form, the clerk affixed the seal at that place. " The Returning officer further stated in his evidence that he upheld the objection of the appellant as there was no body on behalf of the 21 candidate to rebut the objection raised by the appellant. The explanation given by the Returning Officer is fully corroborated by the evidence of the appellant and his witnesses, particularly R.W. 1, who is undoubtedly an independent witness. As we have already held that the Returning Officer was an independent witness and a Government official, there is absolutely no reason why he should have added a part of the order subsequently. It was then contended by Mr. Pathak that even though the Returning Officer recorded the objection taken by the appellant he has not expressed any final opinion or taken any decision in the matter. Our attention was drawn to section 47(2) (c) of the Act which runs thus: "47. (2) The returning officer shall then examine the nomination papers and shall decide all objections which may be made to any nomination and may, either on such objection or on his own motion, after such summary enquiry, if any, as he thinks necessary, reject any nomination on any of the following grounds: * * * * * * (c) that the signature of the candidate or the proposer on the nomination paper is not genuine. " It was submitted that the Returning Officer has nowhere held as a fact that the signature of the proposer was not genuine. He has merely indicated the objection raised by the appellant but has not examined the validity of that objection and, therefore, the order must be read as having rejected the nomination paper merely on the ground of the absence of the candidate and his proposer. It is true that under section 47(2) (c) which is the only relevant provision which applies to this case it was not open to the Returning Officer to reject the nomination paper merely on the ground of the absence of the candidate or his proposer. The learned Judge seems to have accepted the petitioner 's argument that on his interpretation of the order and found that the nomination paper was rejected merely on the ground of the absence of the candidate and his proposer. The learned Judge has also held that having rejected the nomination paper any subsequent observations which the Returning Officer made would have to be ignored as he became functus officio. This interpretation of the learned Judge has been adopted by Mr. Pathak learned counsel for the petitioner. On a close and careful reading of the order of the Returning Officer, as a whole, we are unable to agree with the interpretation put by the learned Judge or adopted by the learned counsel for the petitioner. We have already pointed out the facts proved which clearly show that at the time when the Returning Officer passed the order he had before him the signature of Ghulam Mohiuddin with an overwriting. Both P.W. 1 Ghulam Mohiuddin and counsel for the petitioner have categorically admitted in their statements that the signature in the present form with the overwriting was not the signature of Ghulam Mohiuddin. P.W. 1 at p. 66 of the Paper Book deposed as follows: 22 "Question: Do you accept this signature to be yours in its present form as it stands ? Answer: I do not accept this to be my signature in the forms as it stands at present." Similarly P.W. 5 who is counsel for the petitioner and in whose presence P.W. 1 had signed the nomination paper also admits in clear terms thus: "In the present form I do not accept that it is the signature of Ghulam Mohi ul Din." Thus if the person who had signed the nomination paper and the lawyer in whose presence Ghulam Mohiuddin had signed the nomination paper were convinced that the signature as overwritten was not the signature of Ghulam Mohiuddin, how can we find fault with the Returning Officer if he also, on a bare perusal of the nomination paper, doubted the genuineness of the signature ? The suspicion of the Returning Officer regarding the genuineness of the signature of the proposer was further reinforced by the fact that a specific objection on this point was taken by counsel for the appellant as recorded in the order itself. Thus the order read as a whole clearly shows that the nomination paper was rejected not only on the ground that the candidate or his proposer was not present but also on the ground that the signature of the proposer on the nomination paper was not genuine. It is true that the Returning Officer has not given any clear finding on this point, but section 47 of the Act does not require well reasoned decision. All that is necessary is that the Returning Officer should apply his mind and determine the question in a summary manner. The Returning Officer has, in the instant case, indicated objection taken by the appellant regarding the genuineness of the signature of the proposer and has also clearly observed that in view of the objection it is not possible to verify the signature in the absence of the candidate and the proposer. Thus the absence of the candidate and the proposer has been used not for the purpose of rejecting the nomination paper but for the purpose of supporting the conclusion of the Returning Officer that the signature of the proposer was not genuine. Even assuming for the sake of argument that the Returning Officer had in effect and in substance rejected the nomination paper on the ground of the absence of the candidate and the proposer which was not a valid ground for rejection of the nomination paper, this does not put an end to the controversy. There is abundant authority for the proposition that even if the ground on which the nomination paper has been actually rejected is not a permissible ground, if the successful candidate can make out a case that the nomination paper could have been properly rejected on one of the grounds mentioned in section 47 of the Act, the rejection would not be improper and the election would be upheld. This Court considered this question in N. T. Veluswami Thevar vs G. Raja Nainar & Ors.(1) and observed as follows: "The argument is that if the jurisdiction of the Tribunal is co extensive with that of the returning officer, then the 23 enquiry before it must be confined to the grounds which were urged before the returning officer. Now, the observations quoted above were made statedly with reference to R. 47, and assuming that they apply to an enquiry under section 100(1)(c), the question still remains, what is the jurisdiction of the returning officer in hearing objections to nomination papers ? His jurisdiction is detined in section 36(2), and the Tribunal must therefore have jurisdiction to decide all the questions which can be raised under that section. The fact that a particular ground which could have been raised was not, in fact, raised before the returning officer does not put an end to his jurisdiction to decide it, and what he could have decided if it had been raised, could be decided by the Tribunal, when raised. " p. 635. "They held, with one solitary exception, that it is permissible, and indeed, it is stated in Mengh Raj vs Bhimandas (1952) , 310 as settled law that the rejection of a nomination paper can be sustained on grounds not raised before the returning officer. If the legislature which must be taken to have knowledge of the law as interpreted in those decisions wanted to make a departure from it, it would have said so in clear terms, and in the absence of such an expression, it would be right to interpret section 100(1) (c) as not intended to alter the law as laid down in those decisions." p. 636. "The question now under consideration came up directly for decision before the High Court of Rajasthan in Tej Singh vs Election Tribunal, Jaipur it was held that the respondent to an election petition was entitled to raise a plea that the nomination of the petitioner rejected on one ground by the returning officer was defective on one or more of the other grounds mentioned in section 36(2) of the Act, and that such a plea, if taken, must be enquired into by the Election Tribunal. " p. 637 "An unreported judgment of the Andhra Pradesh High Court in Badrivishal Pitti vs J. V. Narsing Rao Special Appeal No. of 1957 has been cited before us, and that also takes the view that in an enquiry before the Election Tribunal, it is open to the parties to support an order of rejection of a nomination paper on grounds other than those which were put forward before the returning officer. We are in agreement with these decisions." p. 637 Mr. Pathak learned counsel for the petitioner sought to distinguish this decision on the ground that while it is open to the Tribunal, or the High Court in the instant case, to examine other grounds on which the nomination paper could have been rejected, yet in the present state of pleadings no such question appears to have been raised before the High Court. This argument does not appear to be factually 24 correct. This plea was specifically raised by the appellant in paragraph 8 of his written statement relevant part of which may be extracted thus: "The answering respondent challenges the genuieness of the signature of the proposer of the petitioner which could neither be rebutted nor challenged by the petitioner or his proposer as both were absent and hence the rejection of the petitioner was announced by the Returning Officer, who under the circumstances was justified under section 47 of the R.P. Act to reject the nomination paper of the petitioner and as such this rejection cannot be deemed to be in law as improper rejection and the petitioner cannot now challenge the same as there is no infirmity in the order of rejection by the Returning Officer. " Furthermore in the additional written statement, filed by the appellant after the learned Judge allowed the petitioner to amend his election petition, this point was reiterated in paragraph 2(iv) thus: "That the signature of the proposer on the nomination form as was also challenged before the Returning Officer is not genuine and the rejection is not improper." In paragraph 4 of the said additional written statement it was stated thus: "That the signature of the proposer Ghulam Mohi uddin not being genuine on the nomination form the rejection is not improper and the petition is liable to be dismissed." The learned Judge had framed issue No. 1 in the widest possible terms which includes rejection of the nomination paper even on the ground that the signature of the proposer was not genuine which is undoubtedly a valid ground under section 47(2) (c) of the Act. The issue framed by the learned Judge was as follows: "1. Whether the nomination paper of the petitioner was improperly and illegally rejected ? O.P.P." It is manifest that this issue covers the decision on the question as to whether various grounds on which the nomination paper could have been improperly rejected including the ground mentioned in section 47(2) (c) of the Act. namely, the fact that the signature of the proposer was not genuine. Even the learned Judge clearly understood the pleadings of the appellant to include the fact that the nomination paper was rejected because of the genuineness of the signature of the proposer. In this connection the learned Judge in his order dated November 7, 1972 observed as follows: "It appears from the petition that the ground was the absence of the petitioner at the time of the scrutiny of the nomination paper but it also appears from the written statement filed by the respondent as well as from the order 25 of the Returning Officer that the nomination paper had also been rejected because of the genuineness of the signature of the proposer. The nomination paper can be rejected on the question of the genuineness as contemplated by clause (c) of Section 47 of the J & K Representation of the People Act of the State. " It was for these reasons that the learned Judge did not think it necessary to recast the issue, because he thought that the plea taken by the appellant in his written statement was fully covered by the issue already framed. In these circumstances, it is clear that the appellant had clearly raised the question that the nomination paper of the petitioner could be properly rejected under section 47(2) (c) of the Act even on the ground that the signature of the proposer was not genuine. The learned Judge committed and error in not deciding this particular plea taken by the appellant when he found that the Returning Officer had improperly rejected the nomination paper on the ground of the absence of the candidate and the proposer. We have, however, examined the various aspects of this question and from the facts found by us it is clear that the overwriting in the signature which was present at the date of the scrutiny also throws considerable doubt on the genuineness of the signature of the proposer Ghulam Mohiuddin as clearly admitted by him and the lawyer of the petitioner himself. The fact that the proposer and the petitioner were both absent on the date of the scrutiny lends sufficient support to the inference that the signature of the proposer Ghulam Mohiuddin on the nomination form does not appear to be genuine. It is also clearly established as found by us that the appellant did raise an objection regarding the genuineness of the signature of the proposer Ghulam Mohiuddin on the nomination form and that there was no one present on behalf of the candidate to rebut or refute the objection taken by the appellant. On the other hand P.W. 5 who was the counsel for the petitioner and in whose presence the proposer Ghulam Mohiuddin had signed the nomination form was actually present at the time of the scrutiny and yet, for reasons best known to him, he did not choose to stand up and point out to the Returning Officer that the objection raised by the appellant was not tenable because the proposer had signed the nomination form in his presence. Lastly the signature which contains the overwriting ex facie shows that it was not genuine. In these circumstances. therefore, the only irresistible inference that could be drawn would be that the signature containing the overwriting in the present form, which was in existence even at the time of the scrutiny, could not have been the signature of P. W. 1 Ghulam Mohiuddin. To add to this is the fact that P.W. 1 himself clearly admitted that in the present form, namely, the signature containing the overwriting, he was not in a position to admit that it was his signature. This assertion was fully supported by P.W. 5 Girdhari Lal counsel for the petitioner in whose presence P.W. 1 is said to have signed the nomination form. The learned Judge appears to have entered into the domain of speculation by brushing aside the clear and categorical admission made by P.W. 1 on the ground that the question put to him 26 had placed him on the horns of a dilemma. Once it is proved that the signature in the present form existed even at the time of the scrutiny, then the question put to the witness P.W. 1 was most relevant and the answer given by the witness was both clear and unambiguous. We do not see any vagueness or ambiguity in the answer given by the witness. Instead of taking the clear admission of P.W. 1 on its face value the learned Judge tried to brush it aside on purely speculative grounds. In these circumstances we are unable to agree with the view taken by the learned Judge which is based on a misreading and misinterpretation of the evidence of P.W. 1. For the same reason, we reject the contention of Mr. Pathak that the admission of P.W. 1 was vague. In these circumstances, therefore, we hold that it has been proved to the satisfaction of the Court that the signature of P.W. 1 Ghulam Mohiuddin which contained the overwriting was not his genuine signature. The nomination paper of the petitioner, therefore, could have been properly rejected on the ground that the signature of the proposer was not genuine. Thus the rejection of the nomination paper by the Returning Officer could be supported even on a ground different from the one which may have been taken by the Returning Officer. This being the position the rejection of the nomination paper was proper, and the election of the appellant could not be assailed under section 108(1)(c) of the Act under which the election could be declared void only if there was an improper rejection of the nomination paper. In the instant case, the rejection of the nomination paper by the Returning Officer being proper one, section 108(1)(c) was not at all attracted. It was lastly contended by counsel for the petitioner that this Court ought not to interfere with the decision of the learned Judge unless there were special reasons for doing so. In support of his contention the learned counsel relied upon a decision of this Court in Laxminarayan and another vs Returning Officer and others(1) where this Court observed as follows: "Section 116A of the Act provides for an appeal to this Court from an order of the High Court dismissing an election petition. The appeal lies both on issues of law and of facts . . . . The power of the appellate Court is very wide. It can reappraise the evidence and reverse the trial court 's findings of fact. But like any other power it is not unconfined: it is subject to certain inherent limitations in relation to a conclusion of fact. While the trial court has not only read the evidence of witnesses on record but has also read their evidence in their faces, looks and demeanour. The appellate Court is confined to their evidence on record. appellate Court is confined to their evidence on record. bility lies is entitled to great weight. " (See Saraveeraswami vs Talluri A.I.R. However, the appellate court may interfere with a finding of fact if the trial court is shown to have overlooked any material feature in the evi 27 dence of a witness or if the balance of probabilities as to the credibility of the witness is inclined against the opinion of the trial Court. " The propositions enunciated by the Court are well established and there can be no dispute with the propositions mentioned above. In the instant case, however, we find that the approach of the learned Judge was not correct. We have already pointed out a number of salient features appearing in the evidence which have rendered the case of the petitioner inherently improbable. The learned Judge appears to have overlooked these essential features. Further, the learned Judge himself had observed that issue No. 1 which he had framed was wide enough to include the plea of the appellant, and even if the order of the Returning Officer in rejecting the nomination paper on the ground of the absence of the candidate or his proposer was wrong, it could still be supported on the ground that the signature of the proposer was not genuine. The learned Judge has not determined this aspect of the matter. In these circumstances, therefore, we feel that the judgment of the High Court is erroneous both on fact and in law and although the appellate Court is extremely slow in disturbing the findings of fact, in the instant case, we are satisfied that the judgment of the High Court is against the weight of the evidence on record and preponderance of probabilities. For the reasons given above, the appeal is allowed, the order of the High Court setting aside the election of the appellant Mohd. Yasin Shah is quashed and the election petition filed by the petitioner is hereby dismissed. The appellant will be entitled to his costs throughout. P.B.R. Appeal allowed.

Section 47(2) of the Jammu & Kashmir Representation of the People Act enacts that the Returning Officer shall examine the nomination papers and shall decide all objections which may be made to any nomination and may, either on such objection or in his own motion, after such summary enquiry, if any, reject any nomination on the ground, among others, that the signature of the candidate or the proposer on the nomination paper is not genuine. For the general election to the State Assembly the appellant and the respondent (petitioner) filed nomination papers. The nomination paper of the respondent was rejected by the Returning Officer on the ground that when his nomination was called neither he nor anyone on his behalf was present. After the words 'Hence rejected ' recorded on the nomination paper the Returning Officer had also added that the signature of the proposer was not genuine. In the election that ensued the appellant was declared elected. The respondent in his election petition alleged (i) that though at the time of scrutiny the Returning Officer was informed by his proposer that the respondent had gone out to ease and requested him to wait for a while, the Returning Officer rejected the nomination paper and refused to reopen the matter even on the respondent 's request immediately thereafter and (ii) that the Returning Officer committed forgery by subsequently adding certain words in the order of rejection and by over writing the signature of the proposer on the nomination paper. The High Court held (i) that the Returning Officer was not justified in law in rejecting the nomination paper of the respondent on the ground that he was not present at the time of scrutiny, and (ii) that the Returning Officer having become functus officio any subsequent observations which he might have made was irrelevant and since the nomination paper was illegally rejected the election was void and was liable to be set aside under section 108(1)(c) of the Act. Allowing the appeal to this Court, ^ HELD: The judgment of the High Court is erroneous both on fact and in law and is against the weight of evidence on record and preponderance of probabilities. [27 D] (1) Although the appellate Court should be slow to disturb a pure finding of fact based on appreciation of evidence by the Trial Court, it is well settled that the sanctity and purity of electoral processes must be maintained. The election of a duly elected candidate cannot be set at naught on the basis of interested on partisan evidence not backed by cogent circumstances or unimpeachable documents. [6 H] Rahim Khan vs Khurshid Ahmed & Ors. [1975] 1 S.C.R. 643, 656 and D. Venkata Reddy vs R. Sultan & Ors. ; , referred to. In the instant case the approach of the High Court was not correct. It had overlooked many essential features. Secondly the High Court had observed that issue No. 1 was wide enough to include the appellant 's plea that even if the order of the Returning Officer in rejecting the nomination paper on the ground of absence of the candidate or his proposer was wrong, it could 2 still be supported on the ground that the signature of the proposer was not genuine. Yet it had not determined this aspect of the matter. [27 C] (2) The order of the Returning Officer read as a whole clearly shows that the nomination paper was rejected not only on the ground that the candidate or his proposer was not present but also on the ground that the signature of the proposer on the nomination paper was not genuine. It is true that the Returning Officer had not given any clear finding on this point but section 47 of the Act did not require a well reasoned decision. All that was necessary was that the Returning Officer should apply his mind and determine the question in a summary manner. Even if the ground on which the nomination paper had been actually rejected was not a permissible ground, if the successful candidate could make out a case that the nomination paper could have been properly rejected on one of the grounds mentioned in section 47 the rejection would not be improper and the election would be upheld. [22 D H] N. T. Veluswami Thevar vs G. Raja Nainar & Ors. [1959] Supp. 1 S.C.R. 623 followed. (i) In the instant case the fact that P.W. 4 had stated in his evidence that when the Returning Officer called the name of the petitioner no one on his behalf responded knocks the bottom out of the respondent 's story that the proposer had been instructed to request the Returning Officer to wait or that the Returning Officer had not acceded to his request. [8 D] (ii) On a perusal of the Returning Officer 's original order it was clear that the entire order had been written in the same ink, with the same pen and appears to have been written in one sitting. There is nothing to show that the second part of the order was added subsequently because the strokes of the letters, the ink used and the general tenor of the writing are the same throughout. [20 B] (iii) As regards that portion of the Returning Officer 's order written by him after writing "Hence rejected" his explanation was that while he was writing his order and had not completed the same, objection was taken by the appellant regarding the genuineness of the proposer 's signature and since the clerk had by then put the seal, he had recorded the appellant 's objection in this space left and completed his order and signed above the seal. This was corroborated by independent witnesses and there is no reason why the Returning Officer should have added a part of the order subsequently. [20E, 21 A] (iv) The Returning Officer, while indicating the appellant 's objection regarding the genuineness of the signature of the proposer also observed that it was not possible to verify the signature of the proposer in the absence of the candidate as well as the proposer. Thus the absence of the candidate and the proposer had been used, not for the purpose of rejecting the nomination paper, but for the purpose of supporting the conclusion of the Returning Officer that the signature was not genuine. [22 F] (v) It has been satisfactorily proved that the signature of the proposer which contained overwriting was not his genuine signature and, therefore, the nomination paper had been properly rejected and the election could not be assailed under section 108(1)(c) of the Act. From the facts found it was clear that the over writing present in the signature at the time of scrutiny threw considerable doubt on the genuineness of the proposer 's signature. The fact that the proposer and the respondent were absent at the time of scrutiny lends sufficient support to the inference that the signature of the proposer was not genuine. [26 C D]

3490.txt

Civil Appeal No. 1155 of 1971. (Appeal by Special Leave from the Judgment and Order dated 17 11 1969 of the Allahabad High Court in First Appeal No. 178/61). section C. Manchanda, Sadhu Singh, R. N. Kapoor, Mrs. Nirmala Gupta, Uzzal Singh and J. M. Khanna for the appellant. Gobind Das, P. P. Rao, Girish Chandra and section P. Nayar for the respondents. The Judgment of the Court was delivered by BEG, J. This is an appeal by special leave against the judgment and order of a Division Bench of the Allahabad High Court given by it on 17th November, 1969, dismissing a plaintiff 's first appeal arising out of an original suit for a declaration that the order passed by the Commissioner of Income tax, Lucknow, on 2nd April, 1956, reducing the appellant in rank from the post of an Income tax Officer to that of an Income tax Inspector, was void and inoperative. It appears that the appellant was in service upto 30th April 1958, when he was prematurely retired. The appellant also claimed Rs. 20,904/ as arrears of salary, but he reduced this claim to Rs. 16,561.29. The appellant was originally appointed on 22nd November 1922, as Lower Division Clerk, and, thereafter, promoted as Income tax Inspector in 1942. He was promoted to the post of Income tax Officer in 1945. His case was that he had worked to the entire satisfaction of his immediate superior officers and higher authorities and had earned a number of certificates highly appreciative of his work. He was confirmed early in 1952 as an Income tax Officer. He was, however, placed under suspension on 30th September, 1953, by the Commissioner of Income Tax, U.P., Lucknow, on the basis of a preliminary enquiry on allegations involving corruption and violation of service rules. 582 Charges were framed on 30th December, 1953, by Shri A. K. Bose, Deputy Director of Investigations, who was appointed by the Commissioner of Income tax as the Inquiring Officer. The preliminary enquiry had been conducted by Shri G. section Srivastava, Inspecting Assistant Commissioner of Income tax, Meerut. That first charge was that the appellant had entered into partnership with others, under the name of Gautam Cycle Mart, Meerut, in 1939, in contravention of the Government Servants ' Conduct Rules. The second charge was that he had made various investments in the name of various members of his family far in excess of and disproportionate to the known sources of his income. His high standard of living and expenditure were also mentioned there. The third and the last charge gave particulars of thirteen assessment cases in which the appellant was alleged to be either "grossly negligent, careless, inefficient, and/or corrupt in the performance of his duties as Income tax Officer". The appellant 's defences included alleged confused nature of charges characterized by him as "vague, over lapping, intermingled" and wrongly joined together. He also pleaded that there had been an enquiry in 1949, by Shri A. R. Sachdeva, Asstt. Inspecting Commissioner, into some of the matters mentioned in the charges, and about others in 1952 by Shri R. N. Srivastava, another Inspecting Commissioner, and that the appellant had been exonerated of the allegations and imputations made against him on each occasion. One of his defences was that a fresh enquiry into the same charges was not permissible under the Departmental rules and was also barred by rules of natural justice. He also complained of failure to give him opportunity to produce nine witnesses in his defence with some documents. It is evident that the questions raised by the appellant depended on findings of fact. All relevant facts had been examined by the officer who held the enquiry and by the punishing authority. No malafides against either the Inquiring Officer, Shri A. K. Bose, Deputy Director Investigation, or against the punishing authority was alleged. There are, however, suggestions that Shri G. section Srivastava and Shri R. N. Srivastava, Inspecting Assistant Commissioners, were pursuing the appellant for some unknown reason which we do not find stated anywhere. We fail to see how these two officers, who neither conducted the actual departmental trial nor could have any influence over the punishing authority, could cause any miscarriage of justice or do anything to vitiate the departmental trial merely because they held preliminary inquiries before framing charges. The defence of the appellant seemed something similar to the much too common a defence of the accused in criminal trials attributing all their misfortunes to the hostility of the police. 583 The question whether the appellant was given a reasonable opportunity to lead evidence and to be heard or not is largely a question of fact. It is only when an opportunity denied is of such a nature that the denial contravenes a mandatory provision of law or a rule of natural justice that it could vitiate the whole departmental trial. Prejudice to the government servant resulting from an alleged violation of a rule must be proved. The plea that the appellant has been subjected to trial on allegations which had been the subject matter of previous enquiries overlooks that no charge was framed as a result of any previous enquiry. Therefore, the two authorities cited: The State of Assam & Anr. vs J. N. Roy Biswas, and R. T. Rangachari vs Secretary of State, do not help the appellant. If an inquiry is held, at a particular stage, possibly to determine whether regular proceedings should be drawn up or started, it does not debar a departmental trial. That was the nature of the previous enquiries. It appears that it is only after the appellant 's activities had become more notorious that further enquiry was undertaken and regular charges framed. It is possible that the appellant may have been emboldened by the failure of officers to report earlier that charges should be framed and tried. In any case, this could not stand in the way of the first regular enquiry in the course of which charges were actually framed and fully enquired into by Officers whose integrity and sense of justice is not challenged. As for the denial of the opportunity to produce nine witnesses in defence, all that is suggested is that these witnesses could only state what opinions they had formed about the work, efficiency, and integrity of the appellant. They could not say anything about the particular instances which formed the subject matter of the charges against the appellant. It is not uncommon for astute Govt. servants, facing such enquiries, to give long lists of witnesses and documents so as to either prolong an enquiry or to prepare grounds for future litigation. Unless the exclusion of evidence is of a kind which amounts to a denial of natural justice or would have affected the final decision it could not be material. In the case before us, it has not even been shown how the witnesses whose production was said to have been disallowed could help the appellant 's case on specific charges. Indeed, we do not know whether any evidence which the appellant tried to produce was really wrongly excluded and at what stage and for what reasons. All these are questions of fact which should be, initially, raised in the departmental trial. After that, if there was any patent error a writ petition lay. Finally, the 584 trial Court and the High Court had considered at some length all relevant questions raised. Learned Counsel for the appellant has handed over a very carefully and laboriously prepared statement of facts of the case to show us that the evidence did not support the charges levelled against the appellant. It was also submitted that, apart from the charges relating to partnership in the Gautam Cycle Mart, no other charge was found substantiated. Furthermore, it was submitted that, after the inquiring officer had found that the Gautam Cycle Mart was started in 1942 and not in 1939, the appellant should have been given a further opportunity to meet a new case. No rule was cited in support of such a technical objection to the nature of the charge which would cover the starting of the Gautam Cycle Mart at any time subsequent to 1939 also. In any case, it was for the appellant to satisfy the Departmental authorities, which had looked into the case upto its final stages, that he had suffered some injustice which to be set right. He had been given a second opportunity by the punishing authority before it inflicted the punishment of demotion. Nothing further was required by law. And, it was probably because the appellant was absolved of charges involving corruption in the discharge of his duties that he was given the lesser punishment of demotion and neither dismissed nor removed from service. A suit challenging the validity of departmental proceedings cannot be treated as an appeal from the findings in the departmental proceedings or the punishment inflicted upon the Govt. servant even if these are erroneous. A question which could effect the result in a civil suit has to be of such nature that it goes to the root of the jurisdiction and the conduct of the department trial and vitiates the result. It is only if the departmental proceeding in null and void that a plaintiff in such a suit could obtain the relief he had asked. We are unable to see what point had been raised by the appellant which could have had that effect upon the departmental proceedings. In Smt. Ujjam Bai vs State of & Anr. , this Court said (at P. 835): "A tribunal may lack jurisdiction if it is improperly constituted, or if it fails to observe certain essential preliminaries to the inquiry. But it does not exceed its jurisdiction by basing its decision upon an incorrect determination of any question that it is empowered or required (i.e.) has jurisdiction to determine". After citing a passage from Halsbury 's Laws of England, 3rd Edn. 11, page 59, this Court held (at p. 836): 585 The characteristic attribute of a judicial act or decision is that it binds, whether it be right or wrong. An error of law or fact committed by a judicial or quasi judicial body cannot, in general, be impeached otherwise than on appeal unless the erroneous determination relates to a mauer on which the jurisdiction of that body depends. These princi ples govern not onnly the findings of inferior courts stricto strictio also the findings of administrative bodies which are deemed be acting in a judicial capacity. Such bodies are deemed to have been invested with power to err within the limits of their jurisdiction; and provided that they keep within those limits, their decisions must be accepted as valid unless set aside on appeal". Learned Counsel for the appellant said all that could possibly be said on behalf of his client. He pointed out that the High Court had given its judgment eight months after it had heerad argumenst. He urged that the result was that the High Court did not deal with a number of submissions made because they had, apparently, been forgotten. The Civil Procedure Code does not provide a time limit for the period between the hearing of arguments and the delivery of a judgment. Nevertheless, we think that an unreasonable delay between hearing of arguments and delivery of a judgment, unless explained by exceptional or extraordinary circumstances, is highly undesirable even when written arguments are submitted. It is not unlikely that some points which the litigant considers importan may have escaped notice. But, what is more important is the litigants must have complete confidence in the results of litigation. This confidence tends to be shaken if there is excessive delay between hearing of arguments and delivery of judgments. Justice, as we have often observed, must not only be done but must manifestly appear to be done. On 4th March, 1971, however, the High Court refusing the certificate of fitness of the case for appeal to this Court observed that questions had been attempted to be raised before it in asking for certification which had not been argued at the time when the first appeal was heard by the High Court. We find that one of the learned Judges who dismissed the application for a certificate of fitness of the case had also heard the arguments in the first appeal. There is no affidavit before us that any particular points argued before the Division Bench had not been referred to or dealt with by the Bench. Moreover, the Division Bench had probably not dealt with all arguments on questions of fact because it did not consider it necessary to do so. After all, it was not hearing an appeal against the findings of the departmental authorities. It pointed this out. Furthermore, after hearing the arguments of the learned Counsel for the appellant, we are ourselves unable to see any point which could be raised on behalf of the appellant capable of vitiating the departmental proceedings. Unless such a point could be raised, there could be no declaration that the departmental proceedings were null and void. There is also an application before us for revocation of grant of special leave to appeal by this Court on the ground that some material 586 facts were suppressed or misrepresented for the purpose of obtaining special leave. Although the special leave petition does not state that all the points sought to be raised by it were not argued before the Division Bench, this is not enough to merit cancellation of the special leave to appeal which was granted by this Court. At the time of grant of special leave, the order refusing grant of certificate of fitness of the case for appeal to this Court must have been before this Court. We are unable now to see the point on which special leave was granted. But, that too would not, by itself, merit a revocation of special leave at this stage after hearing arguments. We, therefore, dismiss both the appeal and the application for revocation of special leave. Parties will bear their own costs. P.B.R. Appeal dismissed.

After holding a departmental enquiry on certain charges of contravention of Government Servants ' Conduct Rules, the appellant was reduced in rank. His suit for a declaration that the impugned action was void and inoperative was dismissed. The High Court dismissed his appeal. On appeal, it was contended that the departmental enquiry was vitiated on account of material irregularities, and that, as a result of excessive delay, between the date of hearing and delivery of judgment by the High Court, it did not deal with a number of submissions made by him and thereby caused prejudice. Dismissing the appeal to this Court, ^ HELD: (1)(a) The question whether the appellant was given a reasonable opportunity to lead evidence and was sufficiently heard or hot is largely a question of fact. It is only when an opportunity denied is of such a nature that the denial contravenes mandatory provision of law or a rule of natural justice that it could vitiate the whole departmental trial. Prejudice to the Government servant from an alleged violation of a rule must be proved.[583C] (b) The plea that the appellant had been subjected to trial on allegations which had been the subject matter of previous enquiries overlooks that no charge was framed as a result of any previous enquiry. If an enquiry was held at a particular stage, possibly to determine whether regular proceedings should be drawn up or started, it did not debar a departmental trial. [583D] State of Assam & Anr. vs J. N. Roy Biswas ; and R. T. Rangachari vs Secretary of State, AIR 1937 PC 27, held inapplicable. (c) It was not shown whether any evidence which the appellant tried to produce was really wrongly excluded and at what stage and for what reasons. All these are questions of fact which should be raised in the departmental trial. After that if there was any patent error a writ petition lay. [584A] (d) A suit challenging a departmental proceeding cannot be treated as an appeal from the findings in those proceedings or against a punishment inflicted upon the Government servant even if these were erroneous. A question which could affect the result in a civil suit has to be of such a nature that it goes to the root of the jurisdiction that the conduct of the departmental trial illegally and vitiates the result. It is only if the departmental proceeding is null and void that a plaintiff could obtain the reliefs he had asked for. [584E F] Smt. Ujjam Bai vs State of U.P. & Anr. [1963] 1 S.C.R. 778 @ 835, 836, referred to. (e) Unless a point could be raised on behalf of an appellant which is capable of vitiating the departmental proceedings there could be no declaration that the departmental proceedings were null and void. [585H] 581 (2) The Civil Procedure Code does not provide a time limit for the period between the hearing of arguments and the delivery of a judgment. Nevertheless, an unreasonable delay between the hearing of arguments and delivery of judgment, unless explained by exceptional or extraordinary circumstances, is highly undesirable even when written arguments were submitted. It is not unlikely that some points which the litigant considered important might have escaped notice. But, what is more important is that litigants must have complete confidence in the results of litigation. This confidence tends to be shaken if there excessive delay between hearing of arguments and delivery of judgments.

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n No. 74 of 1975. L.N. Sinha, Sol. General of India and B. Datta, for the Petitioner. A. K. Sen, B. P. Singh, Shambhu Nath Jha and U.P. Singh for the Respondents (For State of Bihar) R 1 and R 2. D. Mookherjee, and S.K. Nandy, for the Respondent (State of Assam) R 3 and R 4. The Judgment of the Court was delivered by RAY, C.J. The Petitioner in this Writ Petition raises the question that the supplies of crude oil made by the Petitioner Oil and Natural Gas Commission, referred to as the Commission to Indian Oil Corporation Limited, referred to as the Corporation are not exigible to Salestax either by the State of Assam or the State of Bihar under the or the Bihar Sales Tax Act respectively. The petitioner contends that the supplies by the Commission to the Corporation are pursuant to directions/orders of the Central Government, and, therefore, there is no Contract of sale. The petitioner in particular contends that the Com mission is obliged to supply to the Corporation and the petitioner has no volition or freedom in the matter. The petitioner, therefore, contends that there is no contract of sale between the Commission and the Corporation. The second contention of the petitioner is that if it be held to be sales these are inter state sales under section 3(a) of the and the State of Bihar is not competent to levy Sales tax under section 16(5) of the Bihar Sales Tax Act. In order to find out as to whether the transactions between the Commission and the Corporation amounted to a Sale, it is necessary to ascertain the correct facts. The letter dated 15 June 1968 is important. It is written by the Corporation to the Commission. The Corpora tion States as follows "I am writing to confirm that Indian Oil Corporation would be in a position to receive 300 tonnes a day of Lakwa crude via the Oil Pipeline any time from today. We would also wish you to augment the supplies so as to reach about a 356 million tonnes per annum as soon as possible. The above 300 tomes 'will be in addition to the ' supplies that we are receiving currently from OIL (Oil India Ltd.) and by rail from Rudrasagar. Kindly arrange to supply full analytical data regarding the crude that you would be sending from Lakwa. I would also suggest that the pricing arrangement may also be worked out regarding the supply and intimated to us, if necessary, after consulting OIL. " The next important document relates to the Minutes of the meeting held at the Office of the Chairman of the Corpo ration at New Delhi on 8 August, 1968. The representatives of the Corporation, the Commission and Oil India Limited were present. Crude oil supplied both by the Commission and Oil India Limited come through the pipeline belonging to Oil India Limited to refineries at Gauhati and Barauni belonging to the Corporation. The manner of measurement and of payment for crude is ascertained by the Corporation from the Commis sion and Oil India Limited. At the meeting held on 18 October 1968, the Central Government representatives and representatives of the peti tioner, Oil India Limited and the Corporation were present. It was decided that crude oil which was being delivered to the refineries of the Corporation at Gauhati and Barauni is a mixture of Oil India Limited crude and the Commission crude. Oil India Limited would send the bills for the entire quantities of crude, so delivered, giving the bifur cation of crude belonging to Oil India Limited and the Commission with API gravity of each. The document dated 23 February, 1968 records the price of crude oil purchased by the Corporation from the Commis sion and the basis on which payment should be made. Another document dated 17 February, 1969 written by the Central Government to Oil India Ltd., shows that crude oil would be supplied to the Barauni, Gauhati and Digboi refin eries as mentioned therein. For the Barauni Refinery, Oil ' India would supply a certain quantity and the Commission the balance. In case the Commission 's supply fell short, it would be made good by Oil India Limited. For the Gauhati Refinery, certain quantity would be supplied by Oil India Limited and the remainder would be deemed to have been supplied by the Commission. The requirements of Digboi refinery would be met by Oil India Limited. The next document is dated 7 August 1973 incorpo rating the Minutes of the meeting held on that day at the Ministry of Petroleum & Chemicals to discuss the Sales Tax liability of the Commission crude Sold to the Corporation. The representatives of the Ministries of Petroleum & Chemi cals and of Finance, the Commission and Oil India Limited were present. After discussion, it unanimously decided that whatever principle had been adopted in the past for computation of pipeline tariff payable by the Commission should also be adopted 357 for payment of Sales tax by the Commission. Since for tariff computation all of Commission 's crude is deemed notionally to be delivered to Barauni Refinery and none to Gauhati Refinery, the Sales tax liability of the Commission would also accrue on the principle that all of its crude was being sold to Barauni Refinery. The Commission is described by the Solicitor General to be a statutory body which has no option either with regard to the production or supply and the directions and decisions of the Government leave no choice with the Commission in regard to supplies. This Court in Salar Jung Sugar Mills Ltd. Etc. vs State of MysOre & Ors. C) laid down the following proposi tions: First, statutory orders regulating the supply and distribution of goods by and between the parties under Control Orders in a State do not absolutely impinge on the freedom to enter into contract. Second, directions, deci sions and orders of agencies of the Government to control production and supply of commodities, may fix the parties to whom the goods are to be supplied, the price at which these are to be supplied, the time during which these are to be supplied and the persons who has to carry out these direc tions. In such cases it cannot be said that compulsive directions rob the transactions of the character of agree ment. The reason is that the transfer of property which constitutes the agreement in spite of the compulsion of law is neither void nor voidable. It is not as result of coer cion. The statute supplies the consensus and the modality of consensus is furnished by the statute. There is privity of contract between the parties. The other third, fourth, fifth and sixth propositions are these. Third, such a transaction is neither a gift nor an exchange nor a hypothecation nor a loan. It is a trans fer of property from one person to another. There is con sideration for the transfer. There is assent. The law presumes the assent when there is transfer of goods from one to the other. Fourth, a sale may not require the consensual element and that there may, in truth, be a compulsory sale of property with which the owner is compelled to part for a price against his will and the effect of the statute in such a case is to say that the absence of the transferor 's con sent does not matter and the sale is to proceed without it. In truth, transfer, is brought into being which ex facie in all its essential characteristics is a transfer of sale. Fifth, delimiting areas for transactions or denoting parties or denoting price for transactions are all within the area of individual freedom of contract with limited choice by reason of ensuring the greatest good for the greatest number of achieving proper supply at standard or fair price to eliminate the evils of hoarding and scarcity on the one hand and ensuring availability on the other. Sixth, after all the transactions in substance represent the out going of the business and the price would come into computation of prof its. Judged by the principles laid down by this Court in Salar Jung Sugar Mills ' case, which is a decision by a seven Judge Bench, there (1) [1972] 2 S.C.R. 228. 358 is no doubt that the transactions in the present case amounted to a sale of crude oil by the Commission to the Corporation. It is true that the Government decided and directed the Commission to supply to the Indian Oil Corpora tion at a price to be fixed, but the transaction is in course of business conducted by the Commission. It is the business of the petitioner under the statute to plan, promote, organise and implement programmes for the development of petroleum resources and the production and sale of petroleum products produced by it and to perform such functions as the Central Government may, from time to time, assign to the Commission. These are the functions of the Commission under section 14 of the Oil & Natural Gas Commission Act, 1959. Further, section 29 of the Act states that "the Commission shall be deemed to be a Company within the meaning of any enactment for the time being in force providing for the levy of any ' tax or fee by the Central Government or a State Government and shall be liable to pay such tax or fee accordingly". Section 31 contemplates power of the Central Government to make rules inter alia prescrib ing the conditions subject to which, and the mode in which, contracts may be entered into by or on behalf of the Commis sion. The provisions of the Oil & Natural Gas Commission Act show that the Commission is engaged in the business of producing crude oil in Assam and the supply of the crude oil. The supply to the Corporation is a sale transaction fulfilling all the ingredients of a sale. The supply of crude oil by the Commission to the Barauni Refinery of the Corporation is also a sale in the course of inter state trade. The movement of crude oil from Assam to Barauni is pursuant to the Contract for sale of crude oil. The directions given by the Government are because of the character and constitution of the Commission. Direc tions and decisions do not detract from the sale of crude oil by the Commission to the Corporation. These statutory Corporations work in collaboration with the Central Govern ment particularly the Ministries of Petroleum and Finance for policy and planning. The State of Bihar raised a feeble contention that it was not an inter State sale. The delivery may be in Assam or in Bihar at Barauni but the movement of goods is the result of contract and as an incident to the agreement between the Commission and the Corporation. The State of Assam has lawfully levied the Central Sales Tax on the petitioner. The State of Assam is entitled to levy Central Sales Tax on the petitioner. The Commission has been paying Sales Tax since the commencement of sales. It is made clear that it is open to the Commission to make applications for refund, if any, in accordance with the Sales Tax Law. For the foregoing reasons the Writ Petition is dis missed. Parties will pay and bear their own costs. V.P.S. Petition dis missed.

Under the , it is the business of the Oil and Natural Gas Commission to plan, promote, organise and implement programmes for the development of petroleum resources and the production and sale of petroleum products produced by it and to perform such functions as the Central Government may, from time to time, assign to it. Under section 29 of the Act, the Commission shall be deemed to be a Company, liable for any tax or fee levied by the Central or State Government. Section 31 empowers the Central Government to make rules prescribing the conditions subject to which, and the mode in which, contracts may be entered into by or on behalf of the Commis sion. The Commission is engaged in the business of produc ing crude oil in Assam and supplying it to the refineries of the Indian Oil Corporation at Gauhati in Assam and Barauni in Bihar. It was decided by the Government of India and agreed to by the Commission; that the crude is deemed no tionally to be delivered only to Barauni Refinery and not to Gauhati Refinery, and that payment of Sales tax by the Commission is to be on the same principle. The Commission however challenged, in a petition to this Court, its liability to pay any sates tax either under the Central Sales Tax Act to the State of Assam or the State Sales Tax to the .State of Bihar, on the ground, that, in supplying crude oil to the Corporation there was no contract of sale between the Commission and the Corporation, because, the supply was pursuant to. directions and orders of the Central Government and the Commission had no volition or freedom in the matter. The Commission also contended that assuming that they are sates they are inter state sales, under the , and the State of Bihar was not competent to levy any State sales tax. HELD: (1) The supplies of crude oil by the Commission to the Brauni Refinery of the Corporation satisfy all the ingredients of a sale and amount to sales by the Commission to the Corporation. [356 A] (a) Statutory orders regulating the supply and distribu tion of goods by and between the parties under Control Orders do not absolutely impinge on the freedom to enter into contract. [357 C] (b) Directions, decisions and orders of agencies of the Government to control production and supply of commod ities, may fix the person who has to carry them out, the parties to whom the goods are to be supplied, and he price at which, and the time during which they are to be supplied. In much cases it cannot be said that compulsive. directions rob the transactions of the character of agreement. There is privity of contract between the parties, he statute supplying the consensus and the modality of consensus. [357 D E] (c) Such a transaction is a valid transfer of, property for consideration and he law presumes assent when there is transfer of goods from one to the other. [357 F] (d) Also, a sale may not require the consensual element and there may compulsory sale of property under a statute for a price fixed against the owner 's will. (e) Delimiting areas for transactions or denoting par ties or price for transactions are all within the area of individual freedom of contract with limited choice by reason of ensuring the greatest good for the greatest number by achieving proper supply as standard or fair price. [357 G] . (f) The transactions in substance represent the outgoing of the business and the price would come into computation of profits. [357 G] Salar Jung Sugar Mills Ltd. Etc. v, State of Mysore & Ors. [1972] 2 S.C.R. 228 followed. (2) The movement of crude oil from Assam to Barauni in Bihar is pursuant to and as an incident to the contract for, sale between the Commission and the Corporation. The Sales are therefore inter state sales. and under the Central Sales tax Act only the. State of Assam is entitled to levy central sales tax on the Commission. [358 G]

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l Appeals Nos. 487 488 of 1976. (Appeal by Special Leave from the Judgment and Order 19.12.1973 of the Gujarat High Court in Civil Revision Application No. 540 and 678 of 1970). S.K. Dholakia and R.C. Bhatia, for the appellants. R.P. Bhatt and H.S. Parihar for 1. N. Shroff, for the re spondent. The Judgment of the Court was delivered by UNTWALIA, J. In these appeals by special leave the ques tion which fails for our determination is whether the deci sion of a Bench of this Court consisting of two learned Judges in Phul Rani & Ors. vs Naubat Rai Ahluwalia(1) is correct. If not, whether the appellants are entitled to get a decree for eviction in respect of the suit premises against the defendant respondent. Thakordas Bhagwandas the father of the three appellants was owner of the suit premises. He was a partner in a partner ship firm styled as Jai Hind Silk Weaving Works. There were three more partners in the firm one of whom was Shantilal Thakordas, appellant No. 1, son of Thakordas Bhagwandas. The other two were outsiders. The suit was filed against respondent Chimanlal Maganlal Telwala for his eviction from the premises on several grounds. The only ground which need to be mentioned for the purpose of the disposal of this appeal is Thakordas 's claim of requiring the premise. reasonably and bona fide for occupation by himself within the meaning of section 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The necessity pleaded by the original plaintiff was that he required the premises for the use of the partnership firm aforesaid in which he was a partner. The Trial Court decreed the suit in part on April 30, 1965 and passed a decree for eviction of the tenant from a portion of the suit premises. Both sides went up in appeal before the First Appellate Court. Thakordas was dead and his heirs, namely, the present appel lants were the appellants in one appeal and respondents in the other. The first Appellate Court by its judgment dated November 10, 2966 maintained the partial decree made by the Trial Court with slight modification. Both the parties went in revision before the Gujarat High Court. The High Court set aside the decree dated November 10, 1966 of the First Appellate Court and remanded the case to it for a fresh disposal of the appeal after trying out an additional issue of comparative hardship of the landlord and the tenant as also the question as to whether the substituted heirs of the original plaintiff required the premises reasonably and bona fide for their occupation. The first Appellate Court after remand again passed a decree for eviction from a portion of the suit premises on March 31, 1970. Two (1) ; 343 revisions were taken to the High Court one by the appel lants and the other by the respondent. Following the decision of this Court in Phul Rani 's case (supra) the High Court allowed the respondent 's revision, rejected that of the appellants and dismissed their suit for eviction in toto. Hence these appeals. The foremost and the first question urged before us by Mr. Dholakia was that Phul Rani 's case was not correctly decided. We agree with this contention and say with respect that we do not subscribe to the view expressed by the Bench of this Court in that case. The original plaintiff in that case had filed the application for eviction under section 14(1)(e) of the Delhi Rent Control Act, 1958. The application was dismissed in the first instance by the Additional Rent Controller, Delhi on the ground that the notices to quit were not valid. Plaintiff filed an appeal but died during its pendency. His widow, son and two married daughters and two children of a deceased daughter were allowed to be substituted by the Rent Control Tribu nal where the appeal was pending. The case was remanded by the Tribunal and after remand the Additional Rent Controller held that some of the substituted persons require the prem ises bona fide for their occupation. The tenant 's appeal to the Tribunal failed. The High Court of Delhi on a fur ther appeal by the tenant took the view that the right to sue did not survive to the heirs of the plaintiff and on that ground it dismissed the ejectment application. The case came up to this Court. The view of the High Court was affirmed. The relevant words of personal requirement of the premises in section 14(1)(e) of the Delhi Act are: "for occupation as a residence for himself and members of his family." The original plaintiff had pleaded: "The premises are required bonafide by the petitioner for occupation as a residence for him self and members of his family and that the peti tioner has no other reasonably suitable residential accommodation." This Court took the view: "Thus, the requirement pleaded in the eject ment application and on which the plaintiff has rounded his right to relief is his requirement, or to use an expression which will effectively bring out the real point, his personal requirement. If the ejectment application succeeds we will forget for a moment that the plaintiff is dead the prem ises in the possession of the tenant may come to be occupied by the plaintiff and the members of his family but that does not make the requirement pleaded in the application any the less a personal requirement of the plaintiff. That the members of his family must reside with him is his requirement, not theirs. Such a personal cause of action must perish with the plaintiff. " In our considered opinion in face of the wordings of section 14(1)(e) of the Delhi Act, the view expressed in Phul Rani 's case, as stated 6 114SCI/76 344 above, is not correct. If the law permitted the eviction of the tenant for the requirement of the landlord "for occupation as a residence for himself and members of his family", ' then the requirement was both of the landlord and the members of his family. On his death the right to sue did survive to the members of the family of the deceased landlord. We are unable to take the view that the require ment Of the occupation of the members of the family of the original landlord was his requirement and ceased to be the requirement of the members of his family on his death. 'After the death of the original landlord the senior member of his family takes his place and is well competent to continue the suit for eviction for his occupation and the occupation of the other members of the family. Many of the substituted heirs of the deceased landlord were undoubtedly the members of his family and the two married daughters and the children of a deceased daughter in the circumstances could not be held to be not members of the family of the deceased landlord. But even so the appellants cannot succeed in this ap peal. Firstly it is doubtful whether the requirement of the premises by the landlord for occupation by the partnership firm in which he is a partner will be tantamount to "occupa tion by himself" i.e. by the landlord. Certain decisions of some High Courts were brought to our notice taking the view that it is so. We refrain from expressing our opinion in that regard. We assume, as seems to have been the view of the High Court in this case, that the requirement of the premises for the use of a partnership firm by the landlord in which he is a partner is covered by section 13(1)(g) of the Bombay Act. Yet on the facts of this case there is 'an insurmountable difficulty in the way of the appellants. From the judgment dated March 31, 1970 of the First Appel late Court it would appear that on the death of Thakordas in June, 1965 a new partnership was constituted. One of his sons Shantilal who was a partner from before was taken as a partner in the new partnership alongwith Thakordas 's another son Dhanvantlal Thakordas, appellant No. 2. There were some outsider partners. Harish Thakordas, appellant No. 3, a minor son of Thakordas had not been admitted to the benefits of the partnership. He had, therefore, no interest in the partnership firm Jai Hind Silk Weaving Works. The Appellate Court took the view that the .substituted plaintiffs wanted to use the suit premises for ,the purpose of godown for keeping the yarn clothes and machinery articles and also for a retail shop and show room of the partnership. This in no sense could be the requirement of appellant Harish even assuming that it could be said tO be the requirement of his two cider brothers appellants 1 and 2. In that view of the matter we have got to dismiss the appeal although Mr. Dholakia, learned counsel for the appellants succeeded in persuading us to differ from the ratio of Phul Rani 's case. Counsel for the appellants endeavoured to bring their case within one of the exceptions noted in Phul Rani 's case. He submitted that a decree had already been passed in favour of the original plaintiff by the Trial Court and that could not be disturbed on his death either in appeal or revision. We do not accept the contention as sound or 345 correct. In Phul Rani 's case no final opinion was expressed on this question. Moreover, we find that on the earlier occasion the High Court had set aside the decree and re manded the suit to the First Appellate Court for a fresh decision. There was, therefore, no decree in existence to attract the exception. In the result the appeals fail and are dismissed but without costs. P.H.P. Appeals dis missed.

Thakordas, father of 3 appellants, was the owner of the suit premises. He was a partner in a firm which. had 3 other partners. One of the partners was appellant No. 1, the son of Thakordas and two partners were outsiders. A suit for eviction was filed against the respondent on the ground that Thakordas required the premises for the said firm reasonably and bona fide within the meaning of section 13(1)(g) of the Bombay Rent Act, 1947. The trial court passed a decree for eviction in respect of a portion of the premises. Thereafter, Thakordas died and the present appellants who are his sons filed an appeal. Likewise the tenant also filed an appeal. Appellants No. 1 and 2 togeth er with some outsiders continued the firm. However, appel lant No. 3 a minor son of Thakordas was not admitted to the benefit of the partnership. The First Appellate Court confirmed the decree of the trial court. The revision application filed by the tenant was allowed and one filed by the appellants was dismissed by the High Court relying on the decision of this Court in Phul Rani & Ors. vs Naubat Rai Ahluwalia [19731 3 SCR 679. In an appeal by special leave, the appellants contended: 1. Phul Rahi 's case was not correctly decided and the right of Thakordas survived in favour of the appellants. The requirement of the firm in which the landlord is a partner will be the requirement of the landlord. Since the decree had already been passed in favour of Thakordas before his death it could not be disturbed on his death either in appeall or in revision. Dismissing the appeal, HELD: (1) Phul Rani 's case was wrongly decided. If the law permitted the eviction of the tenant for the require ments of the landlord "for occupation as a residence for himself and members of his family" then the requirement was both of the landlord and the members of his family. On his death, the right to '.sue did survive to the members of the family of the deceased landlord. After the death of the original landlord the senior member of his family takes his place, and is well competent to continue the suit for evic tion for his occupation and the occupation of the other members of the family. [343 H, 344 A B] (2) It is doubtful whether the requirement of the prem ises by the landlord for occupation by the firm in which he is a partner will tantamount to occupation by himself. Even if it is assumed that it will amount to occupation by the landlord, since in the new firm the minor son of Thakordas was not admitted to the benefits of the partnership he had no interest in the said firm. Therefore, as far as appellant No. 3 is concerned, he could in no sense be said to require the premises. [344 C G] (3) The conclusion in Phul Rani 's case that if a decree had been already passed in favour of the plaintiff that could not be disturbed on his death is not correctly decid ed. In fact, no final opinion was expressed in Phul, Rani 's case on that question. [344 H, 345 A] 342 Phul Rani & Ors. vs Naubat Rai Ahluwalia [1973] 3 S.C.R. 679, overruled.

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Appeal No. 766 of 1976. Appeal by Special Leave from the Order dated 29 11 75 of the Industrial Tribunal, Orissa in Industrial Dispute Case No. 5/75 and Special Leave Petitions (Civil) Nos. 1844A and 1845/76 L.N. Sinha, Sol. Gen, Govind Das, (Mrs.) section Bhandare, M. section Narasimhan, A. K. Mathur and A.K. Sharma, for the Appel lant. J. P. Goyal and Shree Pal Singh; for the Respondent. Gobind Das, P.H. Parekh and (Miss) Manju Jatly; for the petitioner [In S.L.P. (Civil) Nos. 1844A and 1845/76]. The Judgment of the Court was delivered by GOSWAMI, J. The Appellant, the Paradip Port Trust, is a major port governed by the provisions of the and is managed by Board of Trustees consti tuted under the provisions of the said Act. Under section 5 of the said Act the Board of Trustees is a body corporate having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold or dispose of property and may sue or be sued in the name of the Board. An industrial dispute was raised by the Paradip Shramik Congress representing the workmen with regard to the termination of the service of one Nityananda Behera, a temporary teacher in the Paradip Port Trust High School. The dispute was referred to the Industrial Tribunal (Cen tral) Bhubaneswar, Orissa, under section 10( 1 ) (d) of the (briefly the Act). The respondents (hereinafter to be referred to as the Union) appeared before the Tribunal through the Adviser and General Secretary of Paradip Shramik Congress. The appel lant sought to be represented before the Tribunal through Shri T. Misra, Advocate, who was a "Legal 539 Consultant" of the Trust. The appellant filed their au thority in Form 'F ' under rule 36 of the Orissa Industrial Dispute Rules in his favour. The appellant subsequently filed also a Power of Attorney executed by the Chairman of the Board of Trustees in favour of Shri T. Misra who was admittedly a practising Advocate of the Orissa High Court. An objection was taken by the Union to the representa tion of the Paradip Port Trust (hereinafter to be described as the employer) by Shri T. Misra, Advocate, and the Union refused to give their consent to his representation as required under section 36(4) of the Act. The Tribunal after hearing the parties upheld the objec tion of the Union. The Tribunal examined the terms and conditions of the appointment of Shri T. Misra as Legal Consultant of the employer and held as follows : "His duties and the restrictions on his practice which have been extracted above and the terms as to his professional fees, etc. indicate that the relationship of the first party and Shri Misra is clearly that of a client and his lawyer and not that of employer and employee. Hence, Shri Misra cannot be said to be Officer of the first party. " The Tribunal further held: "Merely by execution of a power of attorney, the restrictions attached to a legal practitioner contained in sub section (4) of the Act cannot be circumvented. I would accordingly bold that Shri Misra who is a legal practitioner cannot represent the first party before this Tribunal even if he holds a power of attorney executed in his favour by the first party? The appellant has obtained special leave of this Court against the above order of the Tribunal. We have heard the Solicitor General on behalf of the appellant and Shri Goyal for the respondents. Along with the above, appeal two Special Leave petitions Nos. 1844 A and 1845 of 1976 are also posted for hearing for admission and we have heard Mr. Gobind Das at great length. The two Special Leave Petitions are by the management of Keonjhar Central Cooperative Bank Ltd. One application is relating to rejection by the Tribunal of the Bank 's prayer for representation before the Tribunal through its Advocate, Shri B.B. Rath, on the ground of objection by the Union under section 36(4) of the Act. The second application relates to the, order of the Tribunal allowing Shri A.C. Mohanty, Advocate and Vice President of the Keonjhar Central Cooperative Bank Employees Union under section 36(1) of the Act notwithstanding the objection of the management. Industrial law in India did not commence with a show of cold shoulder to lawyers as such. There was an unimpeded entrance of legal practitioners to adjudication halls before tribunals when the Act first came into force on April 1, 1947. Three years later when the Labour Appellate Tribu nals were constituted under the Industrial Disputes (Appel late Tribunal) Act 1950, a restriction was imposed on the parties 3 1234SCI/76 540 in engagement of legal practitioners before the Appellate Tribunal without consent of the parties and leave of the Tribunal. When this was introduced in the appellate forum, the same restriction was imposed for the first time upon representation of parties by legal practitioners before the Industrial Tribunals as well [see Section 34 of the Indus trial Disputes (Appellate Tribunal) Act, 1950]. In view of the recent thinking in the matter of preferring legal aid to the poor and weaker sections of the people it may even be possible that the conditional embargo under section 36(4) may be lifted or its rigour considerably reduced by leaving the matter to the Tribunals permission as has been the case under the English law. Restriction on parties in respect of legal representa tion before Industrial Courts is not a new phenomenon. It was there in England in the Industrial Courts Act, 1919 (9 & 10 Geo 5 c 69) and. does not appear to be altered even by the Industrial Relations Act, 1971. Section 9 of the English Act provides that except as provided by rules, "no person shall be entitled to appear on any such proceedings by counsel or solicitor. " However, rule 8 of the Industrial Court (Procedure) Rules 1920 allows persons to appear by counsel or solicitor with permission of the court. The Act envisages Investigation and settlement of indus trial disputes and with that end in view has created various authorities at different levels all independent of one another. The word adjudication occurs only with reference to labour courts, industrial tribunals and national tribu nals. These bodies are manned by Judges of High Courts or by officers with appropriate Judicial and labour law experi ence. The conciliation proceedings held by a Board or a Conciliation Officer are mainly concerned with mediation for promoting settlement of industrial disputes. It is reason able to suppose that the presence of legal practitioners in conciliation may divert attention to technical pleas and will detract from the informality of the, proceedings imped ing smooth and expeditious settlement. Legal practitioners entrusted with their briefs cannot be blamed if they bring forth their legal training and experience to the aid and benefit of their clients. But labour law operates in a field where there are two unequal contestants. The Act, there fore, takes care of the challenge of the situation in which the weaker party is pitted against the stronger before adjudicating authorities. That appears to be one of the reasons for introducing consent of the parties for represen tation by legal practitioners. Employers, with their purse, naturally, can always secure the services of eminent coun sel. The question that arises for consideration will turn on the interpretation of section 36 of the Act which may be quoted: 36(1) A workman who is a party to a dispute shall be entitled to be represented in an proceed ing under this Act by (a) any member of the executive or other office bearer of a registered trade union of which he is a member; 541 (b) any member of the executive or other office bearer of a federation of trade unions to which the trade union referred to in clause (a) is affiliated; (c) where the worker is not a member of any trade union, by any member of the executive or other office hearer of any trade union connected with, or by any other workman employed in the industry in which the worker is employed and autho rised in such manner as may be prescribed. (2) An employer who is a party to a dispute shall be entitled to be represented in any pro ceeding under this Act by (a) an officer of an association of employers of which he is a member; (b) an officer of a federation of associa tions of employers to which the association re ferred to clause (a) is affiliated; (c) where the employer is not a member of any association of employers by an officer of any association of employers connected with, or by any other employer engaged in, the industry in which the employer is engaged and authorised in such manner as may be prescribed. (3)No party to a dispute shall be entitled to be represented by a legal practitioner in any concili ation proceedings under this Act or in any proceed ings before a Court. (4) In any proceeding before a Labour Court, Tribunal or National Tribunal, a party to a dispute may be represented by a legal practitioner with the consent of the other parties to the proceeding and with the leave of the Labour Court, Tribunal or National Tribunal, as the case may be. " Section 36 provides for representation of parties before the Tribunals and the Labour Court. Under section 36(1) a workman who is a party to a dispute shall be entitled to be represented in any proceeding under the Act by three classes of officers mentioned m (a), (b) and (c) of that sub sec tion. Similarly under section 36(2) an employer who is a party to a dispute shall be entitled to be represented in any proceeding under the Act by three classes of officers mentioned in (a), (b) and (c) of that sub section. By sub section (3) a total ban is imposed on representation of a party to a dispute by a legal practitioner in any concili ation proceedings under this Act or in any proceedings before a Court of enquiry. Then comes section 36(4) which introduces the requirement of prior consent of the opposite party and 542 leave of the Tribunals and of the Labour Court, as the case may be, for enabling a party to be represented by a legal practitioner. Under the scheme of the Act the parties to an industrial dispute are employers and employers; employers and workmen; and workmen and workmen [section 2(K)]. The definition of "appropriate Government" under section 2(a) of the Act lays bare the coverage of industrial disputes which may be raised concerning, amongst others, several types of corporations, mentioned therein, companies, mine, oil field, cantonment board and major port. The definition of employer under section 2(g), which is a purposive but not an exhaustive definition, shows that an industrial dispute can be raised in relation to an industry carried on even by the Government and by local authorities. It need not be added that indus try is also carried on by private owners, private companies and partnerships. Employers and workmen will, therefore, be drawn from numerous sources. Leaving aside for the present industrial disputes between employers and employers and workmen and workmen, such disputes, almost, always are between employers and workmen. Prior to the insertion of section 2A in the Act by the Amendment Act 35 of 1965 a dispute raised only by a single individual workman did not come under the category of an industrial dispute within the meaning of section 2(k). Left to himself, no remedy was available to such an aggrieved individual workman by means of the machinery provided under the Act for adjudication of his dispute. Such an individual dispute, for example, relating to the discharge or dismissal of a single workman, however, became an industrial dispute only if a substantial body of workmen or a union of workmen espoused his cause. The trade union of workmen, therefore, comes to be recog nised as a live instrument under the Act and has an active role to play in collective bargaining. Thus, so far as workmen are concerned, union is, alsmost, always involved in the dispute from the inception. Since the dispute, itself, in a large number of cases takes the character of industri al dispute from participatory involvement of the trade union, the Act confers an unbartered right upon the workmen to be represented by a member of the executive or by an office bearer of a registered trade union. It is, there fore, in the very scheme of things that a workman 's absolute right to be represented by an office bearer of the union is recognised under the Act. Indeed it would have been odd in the entire perspective of an industrial dispute and the objects and purposes of the Act not to give due recognition to the union. But for a provision like section 36(1 ) of the Act, there may have been difficulty under the general law in the way of the office bearers of the union represent ing workmen before the adjudicating authorities under the Act unless, perhaps, regulated by the procedure under sec tion 11 of the Act. To put the matter beyond controversy an absolute right is created in favour of the workmen under section 36(1) in the matter of representation. Having made such a provision for the workmen 's representation the employer is also placed at par with the workmen in similar terms under the Act and the employer may also be represented by an officer of the association of employers of which the employer is a member. The 543 right is extended to representation by the office bearers of the federation of the unions and by the officers of the federation of employers. The provisions of section 36(1) and 36(2) confer on the respective parties absolute rights of representation by persons respectively specified therein. The rights of representation under section 36(1) and section 36(2) are unconditional and are not subject to the condi tions laid down under section 36(4) of the Act. The said two sub sections arc independent and stand by themselves. As stated earlier, section 36 deals with representation of the parties. Neither the Act nor section 36 provides for appearance of the parties themselves when they are individu als or companies or corporations. The Tribunals and the Labour Courts being quasi judicial authorities dealing with rights affecting the parties cannot adjudicate their dis putes in absence of the parties. It is, therefore, incum bent upon the Tribunals and Labour Courts to afford reasona ble opportunity to the parties to appear before them and hear them while adjudicating industrial disputes. This position is indisputable. Section 36, therefore, is not exhaustive in the sense that besides the persons specified therein there cannot be any other lawful mode of appearance of the parties as such. As indicated earlier section 36 does not appear to take count of companies and corporations as employers. It is, however, common knowledge that industri al disputes are raised in a predominantly large number of cases where companies or corporations are involved. Since companies and corporations have necessarily to appear through some human agency there is nothing in law to pre vent them from being represented in any lawful manner. As Salmond says :, "Every legal person, therefore, has corresponding to it in the world of natural persons certain agents or representa tives by whom it acts . . . . "(Salmond on Jurispudence, 12th Edition, page 312.) It is not intended under the Act that companies and corporations are confined to representation of their cases only through the officers specified in section 36(2) of the Act. They can be represented by their directors or their own officers authorised to act in that behalf in a lawful manner provided it is not contrary to any provision of the Act. This would not, however, mean that the companies and corporations, and for the matter of that any party, are free to engage legal practitioners by means of a special power of attorney to represent their interests before the Tribunals without consent of the opposite party and leave of the Tribunal. Again, although under section 36(2)(c) there is provi sion for the contingency of an employer not being a member of an association of employers, the device of representation provided therein would not fit in the case of a Government Department or a public corporation as an employer. These categories of employers, known to the Act, will be put to the most unnatural exercise of enlisting the aid of an outside 544 association, albeit connected with the same type of indus try, to defend their cases before Tribunals. Such an absurd intent cannot be attributed to the legislature in enacting section 36, which will be, if that section is the be all and end all of the types of representations envisaged under the Act. The impossibility of the position indicated above a crucial pointer to section 36 being not exhaustive but only supplemental to any other lawful mode of represen tation of parties. The parties, however, will have to conform to the conditions laid down in section 36(4) in the matter of representation by legal practitioners. Both the consent of the opposite party and the leave of the Tribunal will have to be secured to enable a party to seek representation before the Tribunal through a legal practitioner qua legal practitioner. This is a clear significance of section 36(4) of the Act. If, however, a legal practitioner is appointed as an officer of a company or corporation and is in their pay and under their control and is not a practising advocate the fact that he was earlier a legal practitioner or has a legal degree will not stand in the way of the company or the corporation being represented by him. Similarly if a legal practitioner is an officer of an association of employers or of a federation of such associations, there is nothing in section 36(4) to prevent him from appearing before the Tribunal under the provisions of section 36(2) of the Act. Again, an office bearer of a trade union or a member of its executive, even though he is a legal practitioner, will be entitled to represent the workmen before the Tribunal under section 36(1) in the former capacity. The legal practi tioner in the above two cases will appear in the capacity of an officer of the association in the case of an employer and in the capacity of an office bearer of the union in the case of workmen and not in the capacity of a legal practitioner. The fact that a person is a legal practitioner will not affect the position if the qualifications specified in section 36(1) and section 36(2) are fulfilled by him. It must be made clear that there is no scope for enquiry by the Tribunal into the motive for appointment of such legal practitioners as office bearers of the trade unions or as officers of the employers associations. When law provides for a requisite qualification for exercising a right fulfilment of the qualification in a given case will entitle the party to be represented before the Tribunal by such a person with that qualification. How and under what circumstances these qualifications have been obtained will not be relevant matters for consideration by the Tribunal in considering an application for representation under section 36(1) and section 36(2) of the Act. Once the qualifications under section 36(1) and section 36(2) are fulfilled prior to appearance before Tribunals, there is no need under the law to pursue the matter in order to find out whether the ap pointments are in circumvention of section 36(4) of the Act. Motive of the appointment cannot be made an issue before the Tribunal. 545 We may note here the difference in language adopted in section 36(1) and section 36(2). While section 36(1) refers to "any member of the executive" or "other office bearer," section 36(2), instead, mentiones only "an officer." Now "executive" in relation to trade union means the body by whatever name called to which the management of the affairs of the trade union is entrusted section 2(gg). "Office bearer" in relation to a trade union includes any member the executive thereof but does not include an auditor section 2(III). So far as trade unions are concerned there is no difficulty in ascertaining a member of the executive or other office bearer and section 36(1) will create no difficulty in practical application. But the word "officer" in section 36(2) is not defined in the Act and may well have been, as done under section 2(30) of the Companies Act. This is bound to give rise to controversy when a particular person claims to be an officer of the association of employers. No single test nor an exhaustive test can be laid down for determining as to who is an offi cer in absence of a definition in the Act. When such a question arises the Tribunal, each individual case, will have to determine on the materials produced before it wheth er the claim is justified. We should also observe that the officer under section 36(2) is of the association or of the federation of associations of employers and not of the company or corporation. The matter of representation by a legal practitioner holding a power of attorney came up for consideration before the Full Bench of the Appellate Tribunal of India in the year 1951 (see Kanpur Hoisery workers ' Union vs J.K. Hosiery Factor) ', Kanpur)(1). The provision for representation which applied to the Appellate Tribunal was section 33 of the repealed Industrial Disputes Appeallate Tribunal) Act, 1950. This section corresponds to section 36 of the with which are concerned. Although the Appel late Tribunal rejected the claim of the party to be repre sented by the legal practitioner on the basis of a power of attorney, with which we agree, the reasons for its conclu sion based solely on the ground of section 36 being exhaus tive do not meet with our approval. The Appellate Tribunal took the view that the Act intended to restrict the repre sentation of parties to the three clases of persons enumer ated in sub sections (1) and (2) of section 33. The Appel late Tribunal was of the view that sub sections(1) and (2) of section 33 were intended to be exhaustive of the persons (other than the party himself) who might represent either of the party. Since holding of a power of attorney is not one such mode the claim of the legal practitioner failed, ac cording to the Appellate Tribunal. The Rajasthan High Court in Duduwala & Co. and others vs Industrial Tribunal and another(2) took the same view. Our attention has been drawn to the decisions of the Calcutta and Bombay High Courts where in a contrary view has been taken with regard to the interpretation of section 36 as being exhaustive [see Hall & Anderson, Ltd. vs S.K. Neogi and another(3) and Khadilkar (K. K.) General Secretary, Engineering Staff Union Bombay vs Indian Hume Pipe Company, Ltd.,Bombay, and another] (4). For the reasons already given by us we are (1) [1952] I L.L.J. 384. (2) A.I,R. (3) [1954] I.L.L.J. 629. (4) [1967] I.L.L.J. 139 546 of opinon that the views of the Labour Appellate Tribunal and that of the Rajasthan High Court in this aspect of the matter are not correct and the Calcutta and Bombay High Courts are right in holding that section 36 is not exhaus tive. The Solicitor General contends that "and" in section 36(4) should be read as "or" in which case refusal to con sent by a party would not be decisive in the matter. The Tribunal will then be able to decide in each case by exer cising its judicial discretion whether leave, in a given case, should be given to a party to be represented by a lawyer notwithstanding the objection of the other party. It is pointed out by the Solicitor General that great hardship will be caused to public corporations if the union is given a carte blanche to finally decide about that matter of representation by refusing to accord its consent to repre sentation of the employer through a legal practitioner. It is pointed out that public corporations, and even Government running a transport organisation like the State transport, cannot be expected to be members of any employers ' associa tion. In their case section 36(2) will be of no avail. To deny them legal representation would be tantamount to denial of reasonable opportunity to represent their cases before the Tribunal. It is submitted that since such injustice or hardship cannot be intended by law the final word with regard to representation by legal practitioners before the Tribunal should rest with the Tribunal and this will be effectively implemented if the word "and" in section 36(4) is read as "or". This, it is said, will also achieve the object of the Act in having a fair adjudication of disputes. We have given anxious consideration to the above submis sion. It is true that "and" in a particular context and in view of the object and purpose of a particular legislation may be read as "or" to give effect to the intent of the Iegislature. However, having regard to the history of the present legislation, recognition by law of the unequal strength of the parties in adjudication proceedings before a Tribunal, intention of the law being to discourage repre sentation by legal practitioners as such, and the need for expeditious disposal of cases, we are unable to hold that "and" in section 36(4) can be read as "or". Consent of the opposite part is not an idle alternative but a ruling factor in section 36(4). The question of hardship, pointed out by the Solicitor General, is a matter for the legislature to deal with and it is not for the courts to invoke the theory of injustice and other conse quences to choose a rather strained interpretation when the language of section 36 is clear and unambiguous. Besides, it is also urged by the appellant that under section 30 of the , every advocate shall be entitled "as of right" to practise in all courts, and before only tribunal section 30(i) and (ii). This right conferred upon the advocates by a later law will be properly safeguarded by reading the word "and" as "or" in section 36(4), says counsel. We do not fail to see some difference in language in section 30(ii) from the provision in section 14(1) (b) of the , relating to the right of advocates to appear before courts and tribu nals. For example, under section 14(1) (b) of the 547 Bar Councils Act, an advocate shall ;be entitled as of right to practise save as otherwise provided by or under any other law in any courts (other than High Court) and tribunal. There is, however, no reference to "any other law" in sec tion 30(ii) of the . This need not detain us. We are informed that section 30 has not yet come into force. Even otherwise, we are not to be trammelled by section 30 of the for more than one reason. First, the is a special piece of legislation with the avowed aim of labour welfare and representation before adjudicatory authorities therein has been specifical ly provided for with a clear object in view. This special Act will prevail over the which is a general piece of legislation with regard to the subject matter of appear ance of lawyers before all courts, tribunals and other au thorities. The is concerned with.representation by legal practitioners under certain conditions only before the authorities mentioned under the Act. Generalia Specialibus Non Derogant. As Maxwell puts it: "Having already given its attention to the particular subject and provided for it, the legis lature is reasonably presumed not to intend to alter that special provision by a subsequent general enactment unless that intention be main fested in explicit language . or there be something in the nature of the general one making it unlikely that an exception was intended as regards the special Act. In the absence of these conditions, the general statute is read as silently excluding from its operation the cases which have been provided for by the special one. "(1) Second, the matter is not to be viewed from the point of view of legal practitioner but from that of the employer and workmen who are the principal contestants in an industrial dispute. It is only when a party engages a legal practi tioner as such that the latter is enabled to enter appear ance before courts or tribunals. Here, under the Act, the restriction is upon a party as such and the occasion to consider the right of the legal practitioner may not arise. In the appeal before us we find that the Tribunal, after considering the materials produced before it, held that Shri T. Misra could not claim to be an officer of the corpora tion simply because he was a legal consultant of the Trust. The Tribunal came to this conclusion after examining the terms and conditions governing the relationship of Shri Misra with the Trust. He was neither in pay of the company nor under its control and enjoyed freedom as any other legal practitioner to accept cases from other parties. It is significant to note that one of the conditions of Shri Misra 's retainer is that "he will not appear in any suit or appeal against the Port until he has ascertained from the Chairman that his services on behalf of the Port will not be required. " That is to say, although on a retainer and with fixed fees for appearance in eases there is no absolute ban to appear even (1) Maxwell on lnterpretation of Statutes 11th Ed. P. 169. 548 against the Port. This condition is not at all consistent with the position of an officer of the Trust. We agree with the opinion of the Tribunal that Shri Misra cannot be held to be an officer of the Trust. A lawyer, simpliciter, cannot appear before an Industri al Tribunal without the consent of the opposite party and leave of the Tribunal merely by virtue of a power of attor ney executed by a party. A lawyer can appear before the Tribunal in the capacity of an office bearer of a registered trade union or an officer of associations of employers and no consent of the other side and leave of the Tribunal will, then, be necessary. In the result the appeal is dismissed with costs. Necessarily the Special Leave Petitions also fail and stand dismissed.

The appellant is a major port. An industrial Dispute was raised by the respondent workmen with regard to the termina tion of the services of one of the employees. The dispute was referred to the Industrial Tribunal under section 10(1)(d) of the . The appellant sought to be represented through Shri T. Mishra, Advocate, who was described as "Legal Consultant" of the appellant. Mr. Misra admittedly is a practising advocate of the Orissa High Court. An objection was taken by the respondent to the representation of the appellant by Mr. Misra. The respond ents refused to give their consent as required by section 36(4) of the Act. The Tribunal came to the conclusion that the relationship between the appellant and Mr. Misra is that of a client and his lawyer and not that of an employer and employee. The Tribunal also held that merely by execution of a power of attorney the restrictions attached to a legal practitioner contained in subsection (4) by Section 36 cannot be circum vented. Dismissing the appeal, HELD: 1. The Industrial Law in India did not commence with a show of cold shoulder to lawyers. For the first time restriction was imposed in the year 1950 on the engagement of legal practitioners before the Appellate Tribunal without consent of the parties and leave of the Tribunal. The restrictions on legal representations before the Industrial Courts existed in England also. The act envisages investi gation and settlement of industrial disputes and with that end in view has created various authorities at different levels all independent of one another. It is reason,able to suppose that the presence of legal practitioners in concili ation may divert attention to technical pleas and will detract from the informality of proceedings impeding smooth and expeditious settlement. Legal practioners entrusted with their briefs cannot be blamed if they bring forth their legal training and experience to the aid and benefit of their clients. But Labour Law operation operates in a field where there are two unequal contestants. The Act, therefore, appears to be taking care of the challenge of the situation in which a weaker party is pitted against the stronger before adjudicating authorities. Under section 36 (1) a workman who is a party to a dispute is entitled to be represented in any proceeding under the Act by 3 classes of officers mentioned in sub clauses (a), (b) and (c) of that sub section. By sub section (3) a total ban is imposed (a), (b) and (c) of a party to a dispute by legal practi tioners in any conciliation proceedings under the Act or in any proceedings before a Court of enquiry. Under section 36(4) a parry who desired to be represented by a legal practitioner has to take prior consent of the opposite party and leave of the Tribunal. [539G, H, 540A, E F, 541H, & 542A] 2. The rules of representation under section 36(1) and (2) are unconditional and are not subject to the conditions laid down in section 36(4). [543A] 3. Section 36 deals with the representation of the parties. Neither the Act nor section 36 provides for ap pearance of the parties themselves when they are individuals or Companies or. Corporations. The Tribunals and Labour Courts being quasi judicial authorities dealing with the rights affecting the parties cannot adjudicate their dis putes in the absence of the parties. It is therefore, incum bent on the Tribunals and Labour Courts to afford reasonable opportunity to the parties to appear before them and hear them while adjudicating the industrial disputes. [543B C] 538 Section 36 is not exhaustive. It is not intended under the Act that Companies and Corporations are confined 10 representation of their cases only through the officers specified in section 36(2) of the Act. They can be repre sented by the Director, their own officers. However, they cannot engage legal practitioners by means of special power of attorney. [543C, F] 4. If a legal practitioner is appointed as an officer of a Company or Corporation and is. in their pay and under their control and is not a practising advocate. the fact that he was earlier a legal practitioner or has a legal degree will not stand in the way of the Company or the Corporation being represented by him. Similarly, if a legal practitioner is an officer of an association of employers or an office bearer of a Trade Union, there is nothing in section 36(4) to prevent him from appearing before the Tribunal. [544 C D] There is no scope for the enquiry by the Tribunal into the motive for the appointment of such legal practitioner as office bearer of the Trade Union or the Employers ' Associa tion. [544 F] 5. The contention that 'and ' should be read as 'or ' in section 36(4) is negatived. Consent of the opposite party is not an idle alternative but a ruling factor in Section 36(4). [546 E F]

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Appeal No. 317 of 1976. Appeal from the Judgment and Order dated the 13th Febru ary, 1976 of the Jammu & Kashmir High Court in Election Petition No. 2 of 1972. M.N. Phadke, Altaf Ahmed and Veerappa for the Appellant. Ghulam Quadir Mir (In person) for Respondent No. 1. Ex parte for Respondents 2 5. The Judgment of the Court was delivered by KHANNA, J. During the general elections held in March 1972 five candidates, namely, the appellant and respondents No. 1 to 4, contested tile election for the Jammu & Kashmir State Legislative Assembly from Rajpura constituency. There was a sixth candidate, namely, Mohamed Abdullah Sheikh, respondent No. 5, but his nomination paper was rejected. The appellant secured 9,079 votes and was declared elected. Respondent No. 1 was the nearest rival and he secured 8,248 votes. Respondents 2 to 4 secured 1,340, 1,126 and 1,217 votes respectively. 2,034 votes were declared invalid at the time of counting. After the declaration of the result of the election, respondent No. 1 filed election petition out of which the present appeal arises. Two prayers were made in the election petition: (1) that the election of the appel lant be declared to be void; and (2) that respondent No. 1 be declared to have been duly elected. The High Court accepted the first prayer and declared the election of the appellant to be void. The second prayer that respondent No. 1 be declared to have been duly elected was not granted. The present appeal has been filed by the appellant against the judgment of the High Court insofar as it has declared his election to be void. Cross objections have been filed by respondent No. 1 and it has been prayed on his behalf that he be declared to have been duly elected. The election petition was founded on the following three grounds: (1 ) Improper rejection of the nomination paper of respondent No. 5. (2) Improper rejection of the votes which had been cast in favour of respondent No. 1 (hereinafter referred to as the respondent); and (3) Improper reception of the votes in favour of the appellant on the day of polling at the following polling stations: 1. Lassipora Polling station No. 49 2. Nowpora Pain Polling station No. 50 299 3. Drubgham B Polling station No. 24 4. Drubgham A Polling station No. 23 4. Drugbham A Polling station No.23 5. Aliaipora Polling station No. 51 6. Chandgham Polling station No. 46 7. Arihal Polling station No. 35, and 8. Tikan Batapora Polling station No. 26. According to the case of the respondent as set up in the election petition, the result of the election was materially affected because of the improper rejection at the time of counting of the votes which had been cast in his favour and by the improper reception of the votes in favour of the appellant on the day of polling. Giving particulars in respect of the third ground, namely, that there was improper reception of votes in favour of the appellant on the day of polling, the respondent stated that the total number of votes at Lassipura (polling station No. 49) was 824. All those votes were shown to have ben polled, although 162 voters registered in that area did not cast their votes. The figure of 162 included 16 persons who were dead before the date of polling. Electoral numbers of those 162 voters, including 16 dead persons, were also mentioned in the peti tion. The votes of 162 persons were thus stated to have been improperly received. Similar allegations were made in respect of Nowpora Pain (polling station No. 50), Drubgham B (polling station No. 24), Drubgham A (polling station No. 23), Alaipora (polling station No. 51), Chandgam (polling station. No. 46), Arihal (polling station No. 35) and Tikan Batapora (polling station No. 26). We may add at this stage that the first ground, namely, that relating to the improper rejection of the nomination paper of respondent No. 5, was not pressed at the trial of the election petition, and as such no 1onger survives. The election petition was resisted by the appellant and he denied the various allegations made by the respondent. He also pleaded that the allegations in the election peti tion were vague, indefinite and uncertain. Objection was also raised regarding the maintainability of the petition on the grounds that it had not been properly verified and there war misjoinder of parties. The petition was initially heard by Wasi ud Din J. It thereafter came up for hearing before Jalal ud Din J. Ultimately, it came up for hearing before Mufti Baha ud Din Farooqi J. who finally decided the petition and gave the judgment under appeal. During the pendency of the petition, orders were made on three occasions for inspection of the ballot papers. The first order was made by Wasi ud Din J. on August 13, 1973. The learned Judge, considered the prayer for inspection of ballot papers under three heads: "(1) Request for inspection of ballot papers which were rejected at the time of counting; (2) Request for inspection a ballot paper account (Form No. 16) in respect of the var ious polling stations and of the ballot papers relevant thereto; 300 (3) Request for inspection of marked copies of electoral rolls at polling stations Lassipora, Drubgham A & B, Achan, Chandgham, Afthal, Nowpora Pain, Tikam Batopora, Alaipo ra. " Prayer under the first and third heads was rejected but that under the second head was allowed to the extent of the inspection of form No. 16 in respect of Lassipora, Nowpora Pain, Drubgham B, Drubgham A, Alaipora, Chandgham, Arihal and Tikan Batopora polling stations. Inspection of a few ballot papers, of which the numbers were specified, relating to some of the polling stations was allowed. On November 2, 1973 the learned Judge amplified his previous orders in these words: "My order as it stands should be read to Clearly signify which I am amplifying here also that the sorting of the ballot papers will be done by the Deputy Registrar but in the presence of the learned counsel for both the parties. The learned counsel for the parties will not be allowed to handle the ballot papers until they are sorted out by the Deputy Registrar and after this is done, the respective learned counsel for the parties can handle and inspect the ballot papers. " On June 13, 1974 the learned Judge, on an application made by the respondent, allowed inspection of ballot papers of two more polling stations, viz., Chandgham and Alaipora. The respondent also made prayer for leave to inspect the ballot papers of other polling stations, but the prayer in that behalf was rejected. The following directions were further issued by the learned Judge: "The petitioner has also made a prayer that the Deputy Registrar be given directions to ascertain if the 34 series of two inspected polling stations Nos. 24 and 50 are not mixed in the fourth trunk which has been produced. The Deputy Registrar will of course see to this and such other discrepancies which may come to his notice, he will make a separate note and he will also make a note on the envelope if he found the discrepancy." After Wasi ud Din J. relinquished his office, the case was assigned to Jalal ud Din J. An application was then made on July 29, 1974 by the respondent seeking permission to in spect ballot papers and other documents pertaining to the various polling stations, This application was disposed of by Jalal ud Din J. as per order dated January 6, 1975 in these words: "I, therefore, allow the application of the petitioner for inspection of ballot papers in respect of four veiling stations, namely, 26 Tikan Batapora from serial No. 015051 to 15700, 35 Arihal A from serial No. 020901 to 021550, 49 Lassipora from serial No. 031051 to 031900, 23 Drubgham from serial No. 013201 to 013800 and also the counterfoils of 15 Nowpora Pain, 24 Drubgham B. 46 Chandgham and 51 Alaipora, the polling stations of which the ballot papers have already been inspected by the petitioner. 1, however, do not accede to the request of the petitioner to inspect electoral roll and 301 counterfoils and from 16 of the entire con stituency. The inspection as ordered will be held by and in presence of the counsel for the parties. But the Deputy Registrar will see that neither the candidate nor their counsel shall, handle the record. The Deputy Registrar will further make a separate note and record of the discrepancies found, if any. The inspection will be held during vacation on a date to be fixed by the Deputy Registrar." In the judgment under appeal the learned Judge held that 59 votes validly polled in favour of the respondent were im properly rejected at the time of counting. It was further found that 901 votes, including 28 votes of dead voters, were improperly polled. Out of 901 votes, 351 votes were found to have been polled in favour of the appellant. De tails of those 351 votes were as under: Alaipora polling station No. 51 200 Arihal polling station No. 35 51 Takin Batapora P.S. No. 26 100 Regarding the remaining 550 votes, the learned Judge found that the evidence was not clear, and observed as under: "The evidence, however, is not clear as regards the fate of the remaining 550 such votes. But having regard to overall circum stances of the case it will not be unreasona ble to conclude that respondent No. 1 was the greatest beneficiary of these 550 votes al though the precise number by which he was benefited out of those votes may not be easily ascertainable. To these circumstances may be added the circumstance that 59 votes validly polled in favour of the petitioner were im properly rejected at the time of counting, as held by me before. The cumulative effect of these circumstances is that the respondent No. 1 was able to get an undue advantage of no less magnitude and may be, even greater than that reflected in his declared success over the petitioner by 831 votes. In this view it must be held that the result of the election, insofar as respondent No. 1 is concerned, was materially affected by the improper rejection of votes in favour of the petitioner at the time of counting and the improper reception of votes on the day of poll and that his election must be declared to be void. But that should not entitle the petitioner to a declaration that he was duly elected as the total number of the votes improperly received in favour of respondent No. 1 on the date of poll could not be exactly worked out. The prayer for such de claration must be rejected. " In the result, the election of the appellant was declared to be void. The prayer of the respondent for a declaration that he be declared to have been elected was rejected. When this appeal came up for hearing before this Court on September 3, 1976, we passed an order wherein we referred to the finding of the High Court that it cannot be said as to who was the beneficiary of the 550 votes which were found to have been improperly polled. We thereafter stated in that order: 302 "In our opinion, it is necessary to find out as a result of further inspection as to how many d those 550 votes were in favour of the appellant, and how many, in favour of respondent No. 1 and the other contesting candidates. For this purpose, we depute the Registrar (Judicial) of this Court to make an inspection in the presence of the parties and their counsel and submit a report to this Court within six weeks from today. The Regis trar may also have to locate the 55 ballot papers referred to in the judgment of the High Court at pages 31 51 of the cyclostyled judg ment. He may also, if necessary, refer to the reports of the Deputy Registrar of the High Court. The appeal should be put up for further hearing as soon as the report is ready. " The Registrar of this Court thereafter submitted his report dated September 15, 1976. The Registrar dealt with most of the matters but in respect of some of the matters he sought further directions. Necessary directions were thereafter issued by this Court on September 17, 1976. As a result of those directions, the Registrar had to scrutinise 571 ballot papers in all instead of 550 votes. The final report of the Registrar is dated September 24, 1976. The result of the reports of the Registrar taken along with the findings of the High Court may be set out: (1) Votes found by the High Court to have been improperly received in favour of the appellant 351 (2) Votes which were found to have been improperly received in favour of the appellant as per the first report of the Registrar 286 (3) Votes which were found to have been improperly received in favour of the appellant as per the second report of Registrar. 141 Total 778 (4) Total number of votes polled by the appellant as per the results of the election 9,079 (5) Valid votes polled by the appellant 9,079 778=8301 (6) Votes which were found to have been improperly received in favour of the respondent as per the first report 25 (7) Votes which were found to have been improperly received in favour of the respondent as per the second report 19 Total 44 (8) Total votes polled by the respondent as per the result of the election 8,248 (9) Votes validly polled in favour of the respondent which were found by the High Court to have been improperly rejected at the time of counting 59 303 (10) Total number of votes thus polled by the respondent 8,248+59=8,307 (11) Valid votes polled by the respondent 8,307 44=8,263 (12) Excess of votes validity polled in favour of the appellant over those of of the respondent. 38 Some votes were found by the Registrar to have been im properly received in favour of respondents 2 to 4, but it is not necessary to set out those votes. In appeal before us Mr. Phadke on behalf of the appel lant has urged that in view of the final picture as it emerges from the reports of the Registrar, the appeal should be allowed and the election petition be dismissed as the appellant secured more valid votes than the respondent. The above stand has been controverted by the respond ent, who has argued the case in person. At an earlier hearing we requested Mr. Gambhir to argue the case amicus curiae in view of the fact that the respondent was not represented by counsel. The respondent thereafter stated that he Would like the matter to be argued by counsel of his own choice. Mr. Shaukat Hussain thereafter appeared on behalf of the respondent. At the final hearing the respond ent, as mentioned above, chose to argue the case in person. Perusal of the election petition filed by the respondent shows that apart from the ground not subsequently pressed of the improper rejection of the nomination paper of respondent No. 5, the only ground on which the respondent challenged. the election of the appellant was the improper reception of votes in favour of the appellant and the improper rejection of the votes cast in favour of the respondent. This ground is based upon sub clause (iii) of clause (d) of sub section (1) of section 108 of the Jammu and Kashmir Representation of the People Act, 1957 (Act 4 of 1957) corresponding to sub clause (iii) of clause (d) of sub section (1) of section 100 of the Representation of the People, Act 1951 fact 43 of 1951). According to the above provision, if the High Court is of the opinion that the result of the election, in so far as it concerns a returned candidate, has been materially affected by the improper reception, refusal or rejection of any vote of the reception of any vote which is void, the High Court shall declare the election of the returned candidate to be void. Keeping the above provision in view, we may now turn to the facts of the present case. The High Court found that 351 votes had been improperly received in favour of the appellant. The High Court further found that 59 votes which had been validly polled i.n favour of the, respondent were improperly reject ed at the time of counting. In addition to. that, the High Court found that 550 votes had been improperly received, but it was not possible on the material on record to find out as to who was the beneficiary of those votes. The High Court all the same was inclined to believe that the appellant must have been the major beneficiary of those 550 votes. This necessarily involved an element of surmise and conjecture. To find out the exact position, we directed the Registrar of this Court to 304 scrutinise the 550 ballot papers in question and to make a report as to how many of those votes were cast in favour of the appellant and how many in favour of the respondent and the other candidates. The Registrar thereafter submitted reports and we have already set out the outcome of those reports taken along with the findings of the High Court. It would appear from the figures set out above that, exclud ing all the votes which were found to have been improperly received by the appellant and also giving credit to the respondent for 59 votes which were found by the High Court to have been improperly rejected at that time of counting, the net result still is that the appellant has a lead of 38 votes over the respondent. There is, therefore, no escape from the conclusion that the election of tile appellant should be upheld. In an election petition founded upon the ground that the result of the election was materially af fected by the improper reception or rejection of votes, the court has first to decide whether certain ballot papers were improperly received or were improperly rejected. Once ,that controversy is resolved, the rest is purely a matter of arithmetical calculation. If the result of arithmetical calculation is that the returned candidate has still a lead over his nearest rival, his election would not be declared to be void on the ground of improper reception or improper rejection of votes. Improper reception or improper rejec tion of votes can result in invalidating an election only if such improper reception or improper rejection materially affects the result of the election. In the course of his arguments, the respondent has submitted that a number of improprieties were committed in the conduct of election and therefore the election of the appellant be declared to be void. Although it does appear from the material on record to which our attention was invited by the respondent that irregularities were committed in the conduct of the election, the respondent cannot derive any benefit on that account. As already mentioned, the respondent sought to challenge the election of the appellant only on the ground of improper reception and improper rejection of certain votes. The election of the appellant was not challenged on the ground of any irregular ity or non compliance with the provisions of the Constitu tion or of the Representation of the People Act or of any rules or orders made thereunder. Nor was the election of the appellant assailed on the ground of being vitiated by corrupt practice. As it is not permissible to widen the scope of an election petition beyond the grounds actually set up in the election petition, the respondent cannot seek relief on grounds which were not taken by him in the elec tion petition. It has also been urged by the respondent that the number of votes which were improperly received was larger than that found by the High Court. Nothing cogent has, however, been brought to our notice in support of the above submission to induce us to interfere with the finding of the High Court in, this respect. Lastly, the respondent submits that 153 ballot papers of Lassipora polling station cast in favour of the appellant should be rejected as 305 they bore the initials and not the full signatures of the presiding officer. Our attention in this respect is invit ed to clause (h) of rule 56(2) of the Jammu and Kashmir Conduct of Election Rules, 1965, according to which the returning officer at the time of counting shall reject a ballot paper if it does not bear both the mark and the signatures which it should have borne under the provisions of sub rule (1) of rule 3 8. According to sub rule (1 ) of rule 3 8, every ballot paper shall before issue to elector, be stamped by such distinguishing mark as the Election Commission may direct, and be signed in full on its back by the presiding officer. It is not disputed that the ballot papers in question bore the distinguishing mark. The only contention of the respondent, as already mentioned, is that the ballot papers in question bore the initials and not the full signatures of the presiding officer. In this respect we find that no express ground on that score was set up by the respondent in the election petition. This apart, we that the matter is covered by the first proviso to sub rule (2) of rule 56 which reads as under; "Provided that where the returning offi cer is satisfied that any such defect as is mentioned in clause (g) or clause (h) has been caused by any mistake or failure on the part of a presiding officer or polling officer, the ballot paper shall not be rejected merely on the ground of such defect. " The above proviso which is based upon the principle that a vote validly cast should not be excluded from consideration because of the mistake or omission of the presiding or polling officer, makes it plain that where the returning officer is satisfied that any defect mentioned in clause (h) has been caused by the mistake or failure on the part of a presiding officer or polling officer, the ballot paper shall not be rejected merely on the ground of such defect. The fact that the returning officer in the present case did not reject the ballot papers in question on the ground that they bore only the initials and not the full signatures of the presiding officer would go to show that the returning offi cer was satisfied that the alleged defect was caused by the mistake or failure on the part of the presiding officer: There can indeed be hardly any doubt on the point that the defect referred to by the respondent occurred because of the mistake or failure of the presiding officer. We, there fore, see no cogent ground to exclude from consideration 153 ballot papers polled in favour of the appellant. Before we conclude, we may observe that some other con tentions were also advanced on behalf of the appellant. In view of the fact that the appeal in any case has to be allowed because of the arithmetical calculations referred to above, it is not necessary to go into those contentions. As a result of the above, we accept the appeal, set aside the judgment of ,the High Court and dismiss the election petition. Crossobjections filed by the respondent are dismissed. Looking to all the facts, we leave the parties to bear their own costs throughout. P.B.R. Appeal al lowed.

100(1) (d)(iii) of the Jammu & Kashmir Representation of the People Act, 1957 provides that if the High Court is of opinion that the result of the election in so far as it concerns a returned candidate, has been materially affected by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, the High Court shall declare the election of the returned candidates to be void. The appellant was declared elected to the State Assembly in the General Elections. In his election petition the respondent, a defeated candidate, contended that improper rejection at the time of counting of votes cast in his favour and improper reception of votes at the time of poll ing in favour of the appellant had materially affected the result and that therefore the appellant 's election should be declared void. The High Court held that certain votes had been improp erly received in favour of the appellant, certain votes validly polled in favour of the respondent were improperly rejected at the time of counting; and in respect of 550 votes which were found to have been improperly received, the High Court held that the appellant was the greatest benefi ciary of those votes although the precise number by which he was benefited could not be easily ascertained. In appeal, this Court directed the Registrar to scruti nise the 550 ballot papers to find out as to how many of those votes were cast in favour of the appellant and the other candidates. The result of the investigation showed that the appellant had a lead of 38 votes over the respond ent. Allowing the appeal HELD: There is no escape from the conclusion that the election of the appellant should be upheld. [303H] (1) In an election petition founded upon the ground that the result of the election was materially affected by the improper reception or rejection of votes, the Court has first to decide whether certain ballot papers were improperly received or were improperly rejected. Once that controversy is resolved, the rest is purely a matter of arithmetical calculation. If the result of arithmetical calculation is that the returned candidate has still a lead over his nearest rival, his election would not be declared to be void on the ground of improper reception or improper rejection of votes. Improper reception or improper rejec tion of votes can result in invalidating the election only if such improper reception or improper rejection materially affects the result of the election. [303H] In the instant case, even after excluding all the votes found to have been improperly received by the appellant and also giving credit to the respondent for the votes found by the High Court to have been improperly rejected at the time of counting, the net result still was that the appellant had a lead over the respondent. (2) As it is not permissible to widen the scope of an election petition, the respondent could not seek relief on grounds which were not taken by him in the election peti tion. The respondent could not derive any benefit on the irregularities committed in the conduct of election. The election was not challenged on the ground of any irregulari ty or non compliance with the provisions of the Constitution or of the Representation of the People Act nor was the election assailed on the ground of corrupt practice. [304D & C] 298 (3) The contention of the respondent that if the ballot papers which bore the initials and not the full signatures of the presiding officer are rejected, the appellant 's election should be declared void, is without force. The ballot papers bore the distinguishing marks as required by r. 38(1). The fact that the returning officer did not reject the ballot papers on the ground that they bore only the initials and not the full signatures of the presiding officer showed that the returning officer was satisfied that the alleged defect was caused by the mistake or failure on the part of the presiding officer. There can be no doubt that the mistake occurred because of the mistake or failure of the presiding officer. The first proviso to r. 56(2) of the Rules provides that where the returning officer is satisfied that any defect mentioned in cl. (g) or cl. (h) of this Rule has been caused by any mistake or failure on the part of a presiding officer or polling officer, the ballot paper shall not be rejected merely on the ground of such defect. [305B C]

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il Appeal No. 1936. of 1972. Appeal by Special Leave from the Judgment and Order dated the 2nd and 3rd day of August, 1971 of the Bombay High Court in Second Appeal No. 1064 of 1970. V.M. Tarkunde, S.B. Wad, (Mrs.) J. Wad and AMiss) Manek Tarkunde for the Appellant. D. V. Patel, S.C. Pratap and P.H. Parekh for Respondent No. 1 M.N. Shroff for respondent No. 2. This appeal by special leave is directed against the judgment of the High Court of Bombay dated August 2/3, 1971 by which the plaintiff 's suit for declara tion and injunction has been dismissed. The plaintiff is an association of hoteliers and restaurant keepers doing business within the, local limits of Sangli Municipality in the State of Maharashtra. Under the provision of the Prevention of Food Adulteration Act, 1954 hereinafter referred to as 'the Act ' and the rules framed thereunder by the Maharashtra Government the members of the plaintiff association were required to take a licence for the business conducted by them. The Municipality insisted that the members of the plaintiff Association should pay two sets of fees one under item 1 and another under items 3 to 8 of Appendix (1) to the Schedule. These fees were demanded by the Municipality on the ground that the members were both manufacturers and retail dealers and were, therefore, liable to pay fees in both these capacities. The Appendix (1) to the Schedule was a part of the rules framed by the Maharash tra Government under section 24 of the Act. The plaintiff, howev er, contended that the members of the plaintiff Association were not liable to pay two fees as they were essentially retail dealers and would have to pay fees under items 3 to 8 of. the appendix because they could not be said to be either wholesale dealers or manufacturers. The plaintiff also 141 claimed a declaration that the Municipality had no right to charge two fees from the plaintiff and also prayed. for an injunction restraining the Municipality from doing so. There was a prayer for refund of Rs. 3,990/ being the excess amount realised by the Municipality from the plain tiff. The suit was resisted by the Municipality on the ground that under the rules framed by the Maharashtra Gov ernment, the Municipality was legally entitled to levy two sets of fees from the plaintiff as indicated above. The suit was dismissed by the Trial court of the Joint Civil Judge, Junior Division, Sangli, who held that the plaintiff was not entitled to the declaration sought for and neither to, the refund as the Municipality was fully justified in realising the two sets of fees from the plaintiff. Against this decision the plaintiff went up in appeal to the Extra Assistant Judge, Sangli who by his judgment dated August 27, 1970 reversed the judgment of the Trial Court and decreed the plaintiff 's suit holding that the plaintiff was entitled to the declaration sought for as the Municipality. was not entitled to realise two sets of fees under Appen dix (1) referred to above. learned Judge also passed a decree for refund of Rs. 3,990/ in favour of the plaintiff. The Sangli Municipality went up in second appeal to the High Court of Bombay which ultimately succeed ed and the High Court, agreeing with the view taken by the Trial Court, dismissed the plaintiff 's suit. Thereafter the plaintiff obtained special leave from this Court and hence this appeal. As seen above, the facts of this case .lie within a very narrow compass and the point involved is a pure question of law which depends upon the interpretation of certain provi sions of the Act and the Rules made by the Maharashtra Government. Before, however, analysing the provisions of the Act and the Rules made thereunder it may be necessary to, state a few admitted facts. It is not disputed that the appellant is an Association of hoteliers and restaurant keepers who are engaged in preparing eatables and other articles of food and selling the same to their customers. It is also not disputed that by and large, the members of the plaintiff association prepare the articles in a part of the premises where the hotel or restaurant is situated and after preparing the eatables they sell the same to the customers visiting those places. There was some controversy on the question as to the import and ambit of the word "manufac ture", but counsel for the appellant did not dispute seri ously, and rightly, that for the purpose of this case the preparation of the articles of food would be included within the ambit of the term "manufacture". In these circumstances, therefore, we need not dilate on this point any further. Mr. V.M. Tarkunde, learned counsel for the appellant, submitted that as. the main business of the members of the plaintiff association was retail sale of the articles pre pared by them, they were essentially retail sellers and they could be charged fees only in this capacity. It is thus contended that the case of the appellant would clearly fall within the ambit of items 3 to 8 of Appendix (I). It was vehemently argued that by no stretch of imagination could the 142 association 's members be charged fees as manufacturers or wholesale dealers in view of the nature of their trading activity. The plaintiff also placed reliance on a communi cation by the Director of Health to the Municipal Council expressing his opinion that the Municipality was not justi fied in realising two sets of fees from the plain . tiff 's members and that they were liable to pay fees only under items 3 to 8 of Appendix (1). This, however, was merely an opinion of an Officer and would not carry any weight when we are interpreting the statutory provisions of the Act and the Rules. On the other hand, Mr. D.V. Patel appearing for the respondent Municipal Council submitted that the trading activity of the appellant 's members and two separate capaci ties one as manufactures and another as retail dealers, and, therefore, the Municipality was entitled to realize fees on both these counts. It was further argued by Mr. Patel that if the Municipality was not allowed to realise fees from the appellant 's members as manufacturers, the Food Inspector appointed by the Municipality would have no jurisdiction to inspect the premises and check the articles manufactured by them for the purpose of sale. We have given our anxious and careful consideration to the arguments of both the parties and we are clearly of the opinion that the argument of learned counsel for the appel lant is well founded and must prevail. To begin with, the Rules framed by the Maharashtra Government which were pub lished in the Maharashtra Government Gazette dated April 26, 1962, as amended upto date, define "manufacturer" thus: " 'manufacturer ' means a person engaged in manufacturing any article of food for the purpose of trade;" "Retail dealer" is defined thus: " 'retail dealer ' means a dealer in any article of food, other than a wholesale dealer;" "Wholesale dealer" has been defined as the person engaged in the business of sale or storage for sale or distribution of any article of food for the purposes of resale. Appendix ( 1 ) runs thus: "Schedule of Licence Fees chargeable under Section 24(2) of , for licensing certain trades. 143 Appendix (1) Fees for the grant or renewal of a licence. [See rule 5(3) and (4A)] Sr. Fresh Renewal No. Category Licence of Licence 1 2 3 4 Rs. Rs. 1. Wholesale dealer or manufacturer or both (other than those covered by Appendix (2) 30 20 2. Hawker or itinerant vendor or both 3 1 3. Retail dealer with annual turnover upto Rs. 1,000 3 1 4. Retail dealer with annual turnover exceeding Rs.1,000 but not exceeding Rs. 5,000 5 2 5. Retail dealer with annual turnover exceeding 5,000 but not exceeding Rs. 10,000 10 3 6. Retail dealer with annual turnover exceeding Rs.10,000 but not exceeding Rs.15,000 15 5 7. Retail dealer with annual turnover exceeding Rs.15,000 but not exceeding Rs. 25,000 20 10 8. Retail dealer with annual turnover exceeding Rs.25,000 25 15 There cannot be the slightest doubt that the. word "manufac turer" as defined in el. (d) of r. 2 had been used in the widest possible sense so as to, include not only manufac ture through a laboratory process but also preparation of an article of food. In our opinion, however liberally the word "manufacture" may be construed, it will not in clude the trading activity of persons, the dominant nature of which is to supply articles of food prepared or produced by them to their customers. In other words, where the bulk of food articles sold by the restaurant keepers are prepared by them in what may be reasonably called a part of the premises of the restaurant where the articles are sold, the preparation of manufacture of those articles is incidental or ancillary to the retail sale, the dominant purpose of the trading activity being sale of food articles by retail. We, therefore, think that the words. "wholesale dealer" or "manufacturer" in item 1 of Appendix (1) will not apply to hoteliers and restaurant keepers whose main business is to conduct retail sale of their articles prepared by them in what may be termed a part of the same premises. It was, however, argued by Mr. Patel that if this view is taken, it would debar the Food Inspector from inspecting the premises where the articles of food are prepared and checking the same inasmuch as under the conditions of the licence, the Food Inspector his to maintain certain stand ards and norms and comply with certain conditions in the process of preparation of the articles. We are, however, unable to find any provision in the Act which in any way prevents the Food Inspector from making routine inspection and cheek of persons whe 144 ther licensed or not. This will be clear from an analysis of the various provisions of the Act which we shah show presently. It seems to us that the Food Inspector being a creature of the parent statute, namely, the being referred to as 'the Act ' has got an independent statutory status, whose duties and functions are defined by the Act itself. The powers of the Food Inspector are derived from and flow from the statute itself. It is a different matter that under the Rules framed by the Government of a State the food Inspector may be entrusted with certain additional duties but that does not take away the statutory powers possessed by the Food Inspec tor. To begin with, section 2(xi) of the Act defines "premises" thus: " 'premises ' include any shop, stall, or place where any article of food is sold or manufactured or stored for sale;" A perusal of this definition would manifestly reveal that "premises" include any place where any article of food is sold or manufactured or stored irrespective of the question whether the manufacturer or the seller is licensed or not. The word "premises" does not contain any limitation so as to confine it only to those premises which are licensed. Section 7 of ,the Act contains an express prohibition pre venting any person from manufacture or sale of any adulter ated article of food. The relevant provision of section 7 runs thus: "No person shall himself or by any person on his behalf manufacture for sale, or store, sell or distribute (i) any adulterated food; (ii) any misbranded food; (iii) any article of food for the sale of which a licence is prescribed, except in accordance with the conditions of the licence; (iv) any article of food the sale of which is for the time being prohibited by the Food (Health Authority in the interest of public health; (v) any article of food in contravention of any other provision of this Act or of any rule made thereunder, or (vi) any adulterant. " This provision also does not contain any restriction of limitation and takes within its fold any person whether licensed or not who manufactures, stores or sells any adul terated food. Clause (iii) of section 7 no doubt makes sale of any article of food without a licence an offence but clause (i) is independent of clause (iii). Clause (iv) 145 of section 7 authorises the Food (Health) Authority to prohibit the sale of any article of food in the interest of public health. Section 9 of the Act is the provision for appoint ment of Food Inspectors and may be extracted thus: "9. Food Inspectors. (1) The Central Government or the State Government may, by notification in the Official Gazette, appoint such persons as it thinks fit, having the prescribed qualifications to be Food Inspectors for such local areas as may be assigned to them by the Central Government or the State Government, as the case may be: Provided that no person who has any financial interest in the manufacture, import or sale of any article of food shall be appointed to be a food inspector under this section. (2) Every Food Inspector shall be deemed to be a public servant within the meaning of Section 21 of the Indian Penal Code and shall be officially subordinate to. such authority as the Government appointing him may specify in this behalf. " Section 10 of the Act contains the powers, duties and func tions of the Food Inspectors. The relevant portion of this statutory provision may be extracted thus: "10. Powers of Food Inspectors. (1 ) A food inspector shah have power (a) to take samples of any article of food from (i) any person selling such article; (ii) any person who. is in the course of conveying, delivering or preparing to deliver such article to a purchaser or consignee; (2) Any food inspector may enter and inspect any place where any article of food is manufactured, or stored for sate, or stored for the manufacture of any other article of food for sale, or exposed or exhibited for sale or where any adulterant is manufactured or kept, and take samples of such article of food or adulterant for analysis; (4) If any article intended for food appears to any food inspector to be adulterated or mis branded, he may seize and carry away or keep in the safe custody of the vendor such article in order that it may be dealt with as hereinafter provided and he shall, in either case, take a sample of such article and submit the same for analysis to public analyst; 11 1458SCI/76 146 It would be seen that sub sections (2) and (4) of section 10 clearly empower the Food Inspector without any restriction or limi tation to enter and inspect any place where any article of food is manufactured, or stored for sale, or exposed or exhibited for sale and inspect the article for the purpose of finding out whether or not the article is adulterated. Sub section (4) of section 10 empowers the Food Inspector even to seize any adulterated or misbranded article and carry away the same and keep it 'in safe custody. It is, therefore, clear whether an activity is licensed or not, the place where the activity is carried on is always subject to in spection by the Food Inspector under the provisions of section 10. Section 16(1) clauses (c) and (d) particularly provide for penalties and punishment for any person who prevents a Food Inspector either from taking a sample or from exercis ing any power conferred on him by the Act. Thus it is plain that the question of a trader obtaining a licence or not has absolutely nothing to do with the statutory duties which a Food Inspector has to perform and any person whether he is licensed or not would be liable to penalties under the Act if he tries to prevent or interfere in the due discharge of the duties by the Food Inspector. Section 23 of the Act is the provision which empowers the Central Government to make rules in order to carry out the provisions of the Act. Clause (c) of section 16(1) provides for laying down special provisions for imposing rigorous control over the production, distribution and sale of any article and clause (g) authorises the Central Government to define the conditions of sale or conditions for li cence of sale of any article of food in the interest of public State Government to make rules for the purpose of giving effect to the provisions of the Act. Clause (a) of sub section (2) of section 24 empowers the State Government to define the powers and duties of the Food (Health) Authority. The section also contains provisions for levy of a fee. It is under this provision that the Maharashtra Rules were made by the Government. The Central Rules, namely, the Prevention of Food Adulteration Rules, 1955, framed under section 23 of the Act also contain provisions defining the duties of a Food Inspector. The relevant part of r. 9 of the Central Rules may be extracted thus: "9. Duties of Food Inspector. It shall be the duty of the food inspector (a) to inspect as frequently as may be prescribed by the Food (Health) Authority or the local authority all establishments licensed for the manufacture, storage or sale of an article of food within the area assigned to him; (f) to make such enquiries and inspections as may be necessary to detect the manufacture, storage or sale of articles of food in contravention of the Act or rules framed thereunder; (h) when so authorised by the health officer, having jurisdiction in the local area concerned or the Food (Health) Authority, to detain imported packages which he has reason 147 to suspect contain food, the import or sale of which is prohibited; Thus it is clear that apart from the wide powers given to the Food Inspector by the statute itself, even the Central Rules framed by the Central Government confer additional powers on the Food Inspector. The Maharashtra Rules referred to above do not contain any provision which in any way runs counter to either the Central Rules framed by the Central Government or the provisions of the Act. The rules merely contain certain additional provisions regarding the condi tions of licence and certain other additional duties to be performed by the Food Inspectors. Thus an analysis of these provisions would plainly reveal that the Food inspector does not derive his powers from the Rules regulating licence of a trader, but the fountain of his authority flows from the, statutory provi sions itself. There is no provision in the Rules which in any way prevents or interferes with the discharge of the duties of a Food Inspector. The power to inspect and check is a plenary power which has been conferred on the Food Inspector by the statute itself and no rule made by the Government can ever interfere with this power. In these circumstances, it is difficult to accede to the contention of Mr. Patel that unless the members of the plaintiff association are licensed as manufacturers also, it will not be possible for the Food Inspector to inspect and check the premises where the articles are prepared. The Act is a social piece of legislation meant to control and curb adul teration of articles of food and being in the interest of public health it has to be liberally construed and no limi tations can be inferred on the powers of the Food Inspector whose primary duty is to see that the 'adulterated articles are neither manufactured, nor stored, nor sold. For these reasons, therefore, the main contention of Mr. Patel on this score is overruled. The contention of counsel for the respondent regarding powers of the Food Inspector may be tested from another angle of vision on the touchstone of practical reality. Suppose a particular State Government does not choose to frame any Rules at all under the provisions of the parent Act (the ), can it be argued with any show of force that in such cases the Food Inspector would become absolutely powerless and wholly ineffective The answer must be in the negative, because it is manifest that the duties and functions of the Food In spector spring from the parent statute and are not in any way co related to the additional duties provided for in the Rules which may be framed by the State Government. Thus even from this point of view, the argument put forward by the respondent fails. Coming now to. the Appendix (1),itself, it would appear that item 1 and items 3 to 8 postulate two different contin gencies. Item 1 takes within its fold wholesale dealer or manufacturer or both. There is no mention of a retail dealer in this item. Thus before a trader falls within the purview of item 1 of Appendix (1), it must be shown that he is either a wholesale dealer or a manufacturer or both. We have already pointed out that where the dominant nature of the trading activity of a 148 person is neither that of a manufacturer nor as a wholesale dealer, but he is engaged in retail sale ', item 1 would have no application. The mere fact that the trader prepares the articles for the purpose of selling the same to his customers would not make him either a wholesale dealer or a manufacturer. In the first place, the appellant 's members cannot be wholesale dealers because there is nothing to show that they deal in articles for the purpose of re sale. On the other hand, the nature of their trading activity is one of retail sale. In these circumstances the case of the appellant clearly falls within items 3 to 8 of Appendix (1). The High Court was, therefore, in error in taking the view that the case of the appellant was covered both by item 1 as also items 3 to 8 of Appendix (1) and was, therefore, not justified in reversing the judgment of the Extra Assistant Judge. On a consideration, therefore, of the facts and circum stances of the case, we are clearly of the opinion that in the instant case the members of plaintiff association who are mostly restaurant keepers conducting the business of retail sale, the preparation of the articles being merely an ancillary activity, are liable to pay .the licence fee under items 3 to 8 of Appendix (1) and not under item 1 of the Appendix (1) to the Schedule. The plaintiff is, therefore, entitled to the declaration sought for and is also entitled to the refund of Rs. 3,990/ . We, therefore, allow this appeal, set aside the judgment of the High Court, decree the plaintiff 's suit and restore the judgment and decree of the Extra Assistant Judge. In the peculiar circumstances of this case, there will be no order as to costs. P.B.R. Appeal allowed.

Rule 2(d) of the Maharashtra Prevention of Food Adul teration Rules. 1962 defines a manufacturer as a person engaged in manufacturing any article of food for the pur poses of trade. Clause (e) defines a. "retail dealer" as a dealer in any article of food other than wholesale dealer and cl. (g) defines a "wholesale dealer" as a person engaged in the business of sale or storage for sale or distribution of any article of food, for the purposes of resale. Fees payable by a wholesale dealer or manufacturer for the grant or renewal of a licence are prescribed in item 1 and those payable by a retail dealer in items 7 and 8 of Appendix 1. Members of the appellant association, who are hoteliers and restaurant keepers prepare articles of food in a part of their respective premises and sell them to the customers visiting them. The respondent municipality charged from members of the association licence fee both under item 1 and items 7 and 8 of Appendix 1 on the ground that each of them is both a manufacturer and a retail dealer. The appellant 's suit for declaration that the municipality had no right to charge two sets of fees from the members who are essentially retail dealers and for refund of excess amount realised by the municipality was dismissed by the trial court. The first appellate court allowed the appellant 's appeal: but the High Court on further appeal by the municipality re stored the order of the trial court. Allowing the appeal to this Court. HELD: The High Court was in error in holding that the members of the association were covered both by item 1 as also by items 3 to 8 of Appendix 1. Members of the appellant association are liable to pay licence fee under items 3 to 8 of Appendix (1) and not under item 1.[148 B C] 1 (a) Item 1 took within its fold a wholesale dealer or manufacturer or both. It does not mention of a retail dealer. Before a trader falls within the purview of item 1 it must be shown that he is either a wholesale dealer or a manufacturer or both. Where the dominant nature of the trading activity is neither that of a manufacturer nor a wholesale dealer but is a retail sale, item 1 would have no application. The fact that the trader prepares the articles for selling them to his customers would not make him either a wholesale dealer or manufacturer. [147H; 148 A B] (b) The words 'wholesale dealer ' or 'manufacturer ' in item 1 will not apply to hoteliers and restaurant keepers whose main business is to conduct retail sale of their articles prepared by them in a part of their premises. [143G] (c) The word 'manufacturer ' as defined in r. 2(d) had been used in the widest possible sense to include not only manufacture through a laboratory process but also prepara tion of an article of food. However liberally the word 'manufacturer ' is construed, it will not include the trading activity of persons the dominant nature of which is to supply articles of food prepared or produced by them to their customers. [143E] 140 2(a) There is no force in the contention that unless the members of the Association are licensed as manufacturers the Food Inspector cannot enter for inspection any premises where the articles are prepared. The question of a trader obtaining a licence has nothing to do with the statutory duties of a Food Inspector. The Food Inspector does not derive his powers from the rules regulating licence of a trader, but his duties spring from the statutory provisions. There is no provision in the rules which in any way prevents or interferes with the discharge of his duties. [147C E; 146C] (b) Apart from the wide powers given to the Food Inspec tor by the Statute, Rules framed by the Central Government confer additional powers on the Food Inspector. The Maha rashtra Rules do not contain any provision which in any way runs counter to either the Central Rules or the Act. The rules merely contain certain additional provisions regarding the conditions of licence and additional duties to be per formed by the Food Inspector. [147B] (c) Even assuming that a particular State Government did not frame any rules under the Act it cannot be said that the Food Inspector would be absolutely powerless and cannot exercise effective control. His duties and functions spring from the parent statute and are not in any way corre lated to the additional duties provided for in the rules framed by the State Government. [147G]

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Appeal No. 1698 of 1971. (Appeal by Special Leave from the Judgment and Order dated 8 4 1971 of the Kerala High Court in T.R.C. No. 46/69). S.T. Desai, A.G. Meneses, Markos Vellapilly and K.J. John, for the Appellant. K.T. Harindra Nath and K.M.K. Nair for the Respondent. The Judgment of the Court was delivered by KHANNA, J. This is an appeal by special leave against the judgment of the Kerala Hight Court dismissing revision petition of the petitioner against the order in appeal of the Appellate Tribunal whereby the Tribunal refused to include certain items in the sales tax registration certifi cate of the appellant. The appellant, Travancore Tea Estates Co. Ltd., is a company incorporated in England having its registered office in London. The appellant carries on the business of tea planting in India at Vandiperiyar in Peermade Taluk in Kerala State. Eight tea estates are owned by the appel lant in Peermade Taluk. To manufacture tea grown in those estates, the appellant maintains separate tea facto ries in each of those estates. On an application made by the appellant for registration under. the (Act 74 of 1956) (hereinafter referred to as the Act), the sales tax authorities granted registration certif icate to the appellant on January 9, 1963. Aggrieved by the non inclusion of certain items of goods in the registration certificate the appellant filed writ petition in the Kerala High Court. The High Court directed the Sales Tax Officer to decide the question regarding the inclusion of items in the light of the decisions of this Court in 1. K. Cotton Spinning & Weaving Mill3 ' Co. Ltd. vs 757 The Sales Tax Officer (1) and Indian Copper Corporation Ltd. vs Commissioner of Commercial Taxes.(2) The Sales Tax Officer thereafter allowed the inclusion of some of the items of goods asked for by the appellant in the registra tion certificate but refused to include certain other goods in that certificate. The appellant thereupon preferred appeal before` the Appellate Assistant Commissioner of Sales Tax, Kottayam, who partly allowed the appeal by di recting further inclusion of certain items. The Appellate Assistant Commissioner however, declined to include the following items in the certificate in respect of which prayer had been made by the appellant: "1. Fertilisers, chemicals, weedicides, insecti cides, fungicides and pesticides for use in tea cultivaton: 2. Cement and other building materials for installing and housing tea machinery and equip ments: 3. Building materials, iron and hose pipes, sanitary fittings for use in estates and estate factories , ' 4. Weighing and measuring and packing equipments for use in tea estates; and 5. All other articles and things for use in manufacture and processing of sale of tea. " The appellant then took the matter in further appeal before the Appellate Tribunal and prayed for the inclusion in the certificate of the above mentioned items. The Appellate Tribunal did not accept the prayer of the appellant and dismissed the appeal. Revision petition was thereupon filed by the appellant before the Kerala High Court against the order of the Tribunal. In appeal before the High Court it was stated on behalf of the appellant in respect of the first item relating to fertilisers, chemicals, weedicides and insecticides, that they were used for cultivation of tea leaves. The conten tion of the appellant was that the growing and manufacturing of tea constituted one integrated process and therefore the items of goods required for growing tea should be deemed to be goods intended for use in the manufacture of tea within the meaning of section 8(3)(b) of the Act. This contention had also been advanced by the appellant earlier before the Tribunal but the Tribunal rejected this contention as in its view "the legislature has not included production by agriculture as one of the operations for which goods can be purchased under section 8 of the ". The Tribunal further held that merely because the agricultural, process of the company is connected with the process of manufacture, production of tea did not form part of the manufacture and processing of tea. The High Court disa greed with this reasoning of the Tribunal and observed that the expression "in the manufacture of goods" in section 8(3) (b) of the Act normally encompasses the entire process carried on by the dealer of converting the raw material into finished goods. In the opinion of the High Court, the growing of tea leaves (1) 16 S.T.C. 563. (2) 16 S.T.C. 259. 758 was so integrally connected with the manufacture of tea that it could reasonably be taken as a part of the process of manufacturing tea. This circumstance, however, in the opin ion of the High Court, by itself was not sufficient to make the goods eligible for inclusion in the registration certif icate. The High Court accordingly observed: "Under rule 13 read with section 8(3) (b) the use of the goods in the manufacture or processing of goods for sale will not be a sufficient ground for inclusion in the certificate. The further requirement is that the goods must be for use as raw materials or processing materials or machinery, plant, equipment, tools, stores, spare parts, accessories, fuel or lubricants. The first item, namely, fertilisers, chemicals, insecticides, etc. in our opinion cannot fall within the category of a raw material or processing material or machinery etc. The learned counsel for the company sought to contend that fertilisers, chemicals etc. would come within file category of stores mentioned in section 8(3)(b) and that as such it is eligible for specification in the certificate. We are unable to agree with this submission. The word 'stores ' in the context in which it appears in rule 13 has to be necessarily goods intended for use in the manu facture or processing of goods for sale and it is not possible to hold that fertilisers, chemicals, weedicides, insecticides etc. can come within this category. They are not in any way directly con nected with the manufacturing or processing of tea. As pointed out earlier, the expression 'in the manufacture ' can take within its compass only processes which are directly related to the actual production. As such the claim for inclusion of this item in the Sales Tax Registration Certifi cate cannot be supported. " The prayer of the appellant regarding items (2), (3) and (4) was also disallowed in the light of the observations of this Court in the case of 1. K. Cotton Spinning & Weaving Mills Co. Ltd. (supra). Item No. (5), in the opinion of the High Court, was too vague and indefinite to deserve inclusion in the certificate. In the result the revision petition was dismissed. Before dealing with the contentions advanced, it may be useful to refer to the relevant provisions. Section 7 of the Act makes provision for registration of dealers. Section 8 of the Act deals with rates of tax on sales in the course of inter State trade or commerce. Clause (b) of sub section (1) of that section provides that every dealer, who in the course of inter State trade or commerce sells to a registered dealer other than the Government goods of the description referred to in sub section (3) shall be liable to pay tax under this Act which shall be 3 per cent, of his turnover. The percentage before July 1, 1966 was two. Sub section 3(b) reads as under: "(3) The goods referred to in clause (b) of sub section (1) 759 (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power;" The Central Sales Tax (Registration and Turnover) Rules, 1957 have been framed by the Central Govern ment. Rule 13 of the rules reads as under: "13. The goods referred to in clause (b) of sub section (3) of section 8 which a registered dealer may purchase, shall be goods intended for use by him as raw materials, processing materials, machinery, plant, equipment tools stores, spare parts, accessories, fuel or lubricants, in the manufacture or processing of goods for sale, or in mining, or in the generation of electricity or any other form of power. " The question with which we are concerned in this appeal is whether the items of goods in respect of which prayer of the appellant for being included in the registration certif icate was refused, answer to the description of goods as given in the above rule. Mr. Desai on behalf of the appellant has not pressed the case of the appellant in respect of item No. (5) which was found by the High Court to be vagne and indefinite. He has also not made any sub missions in respect of items (2) and (3) relating to Cement and building materials. The main contention of Mr. Desai has related to item No. (1) pertaining to fertilisers, chemi cals, weedicides, insecticides, fungicides and pesticides for use in tea cultivation. According to the learned coun sel, cultivation and the growing of tea leaves was so inte grally connected with the manufacture of tea that it could be taken to be part of the process of manufacturing tea. As fertilisers and othergoods mentioned in item (1) were needed for tea clutivation, the same should, according to the learned counsel, be held to be intended for use in the manufacture or processing of tea for sale. Regarding item (4), the case of the appellant is that though weighing equipment used in the factories has been allowed to be included in the certificate, the weighing equipment used for the purpose of cultivation has not been included in the certificate. The weighing equipment to be used for culti vation should also, it is urged, be included in the certifi cate. The above contentions have been controverted by Mr. Narendra Nath, and he has urged that neither the goods mentioned in item No. (1) nor the weighing equipment needed for cultivation are directly, connected with the process of manufacturing tea. After giving the matter our earnest consideration, we are of view that the contention of Mr. Narendra Nath is well founded. 760 Rule 13 has been the subject matter of two. decisions of this Court In the case of Indian Copper Corporation (supra), the assessee was a dealer engaged both in mining operations of copper and iron ore and the manufacturing of finished products from the ore for sale. This Court held that the two processes being inter dependent, it would be impossible to exclude vehicles which are used for removing from the place where the mining operations were concluded to the factory where the manufacturing process started, from the registration certificate. The expression "goods intended for use in the manufacturing or processing of goods for sale" was held to include such vehicles as were intended to be used for removal of processed goods from the factory to the place of storage. The mere fact that there is a statutory obligation imposed upon the owner of the factory or the mine to maintain hospital facilities would not, in the opinion of this Court, supply a connection between the goods and the manufacturing or processing of goods or the mining opera tions so as to make them goods intended for use in those operations. The expression "intended to be used". it was further held, cannot be equated with "likely to facilitate" the conduct of the business of manufacturing or of process ing goods or of mining. In J. K. Cotton Spinning & Weaving Milis Co. Ltd. (supra) the appellant manufactured for sale cotton tex tiles, tiles and other commodities. Certain items of goods in the certificate of registration of the appellant were deleted by the sales tax authorities on the ground that they had been earlier erroneously included in the ' certificate. This Court in that context dealt with the scope and ambit of section 8(3) (b) of the Act read with rule 13. It was held that the expression "in the manufacture of goods" in section 8(3)(b) should normally encompass the entire process car ried on by the dealer of converting raw materials into finished good 'section Where any particular process is so inte grally connected with the ultimate production of goods that, but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would fail within the expression "in the manufacture of goods. " It was further held that the process of design ing might be distinct from the actual process of turning out finished goods. But there was no warrant for limiting the meaning of the expression "in the manufacture of goods" to the process of production of goods only. The expression "in the manufacture" was held to take in within its compass all processes which are directly related to the actual production. Drawing and photographic materials directly related to the actual production of goods were held to be goods intended for use "in the manufacture of goods". Build ing materials, including lime and cement, not required in the manufacture of tiles for sale was, however, held to be not raw material in the manufacture or processing of goods or even as "plant". We may now turn to the present case. The question which essentially arises for determination is whether fertilisers and other goods mentioned in item No. (1) are intended for use by the appellant as equipment or stores in the manufac ture or processing of tea meant for 761 sale, as urged on behalf of the appellant. The contro versy between the parties has centred round the point as to whether fertilisers and other goods mentioned in item No. (1) can be said to be goods intended for use in the manufac ture or processing of tea meant for sale. So far as this question is concerned, we find that the growing and plucking of tea leaves from the plants and the processing of those leaves in the factories are parts of a continued activity. The assertion of Mr. Desai that the tea leaves would lose their value unless they are processed in the factory soon after they are plucked is not being questioned. It does not, however, follow from that that the cultivation of tea plants and the growth of tea leaves is not something distinct from the manufacturing process to which tea leaves are subjected in the factories. The fact that the time lag between the plucking of tea leaves and their being subjected to manufac turing process in the factories is very little would not detract from the conclusion that the cultivation and growth of tea plants and leaves is something distinct and separate from the manufacturing process to which those leaves are subjected in the factories for turning them into. tea meant for sale. Income which is realised by sale of tea by a tea company which grows tea on its land and thereafter subjects it to manufacturing process in its factory is an integrated income. Such income consists of elements or components. One element or component consists of the agricultural income which is yielded in the form of green leaves purely by the land over which tea plants are grown. The second element or component consists of non agricultural income which is the result of subjecting green leaves which are plucked from the tea plants grown on the land to a particular manufacturing process in the factory of the tea company. Rule 24 of the Income tax Rules, 1922 and rule 8 of the Income tax Rules, 1962 prescribe the formula which should be adopted for apportioning the income realised as a result of the sale of tea after it is grown and subjected to the manufacturing process in the factory. Sixty per cent. is taken to be agricultural income and the same consists of the first element or component, while 40 per cent represents non agricultural income and the same comprises the second ele ment or component (see Tea Estate India (p.) Ltd. vs Commis sioner of Income tax(1). Fertilisers and the other goods mentioned in item No. (1) are intended for use not in the manufacturing process in respect of tea meant for sale, they are essentially needed for the cultivation and growth of tea plants and leaves. There is no direct relationship between use of fertilisers and other goods mentioned in item No. (1 ) and the manufac turing process in respect of tea meant for sale. What is meant by manufacture of tea is clear from pages 863 4 of Vol. 21 of Encyclopedia Britannica (1965 Edition) wherein it is observed: "Black and green teas result from different manufactur ing processes applied to the same kind of leaf. After plucking, the leaf is withered by being spread on bamboo trays in the sun, or on withering tats within doors. The process takes 18 to 24 hours. Next it is rolled. by hand or by machines. The object of rolling is to break 762 the leaf ceils and liberate the juices and enzymes sealed within. The roll may last as long as three hours. Then it is taken to the roll breaker and green leaf sifting machine and after that fermented in baskets, on glass shelves or on cool cement floors under damp cloth for 4 or 41/2 hours. The firing process (drying) follows, in pans or baskets or in firing machines. It takes 30 to 40 min. The difference between black tea and green tea is the result of manipula tion. Green tea is manufactured by steaming without fermen tation in a perforated cylinder or boiler, thus retaining some of the green colour. Black tea is allowed to ferment after being rolled and before firing. In the case of black tea the process of fermentation, or oxidation, reduces the astringency of the leaf and, it is claimed, developes the colour and aroma of the liquor. In making green tea, the fermentation process is arrested by steaming the leaf while it is green and by light rolling before drying. " The cultivation and growth of tea plants and leaves cannot, in our opinion, be comprehended in the expression "in the manufacture or processing of goods for sale". Cultivation and growth of tea plants no 'doubt results in the production of raw material in the form of green tea leaves which are ultimately processed into tea meant for Sale, but such cultivation and growth are in the very nature of things prior to the manufacturing process and do not answer to the description of manufacture and processing of tea meant for sale. There is a vital difference between an agricultural operation and a manufacturing process, and the same should not be lost sight of. What is needed for being used purely in an agricultural operation cannot be held to be goods required for use in a manufacturing process. We are, therefore, of the opinion that the appellant was not entitled to get fertilisers and other goods mentioned in item No. (1 ) included in the registration certificate. The same reasoning would also hold good in respect of weigh ing machine used not in the factories but in the tea fields. appeal consequently fails and is dismissed with coats. V.P.S. Appeal dismissed.

Section 8 of the , deals with rates of tax on sales in the course of inter State trade or commerce. Section 8(1)(b) provides that every dealer, who in the course of inter State trade or commerce sells to a registered dealer goods of the description referred to in sub section (3) shall be liable to pay tax at 3% of his turnover. Section 8(3)(b) refers, inter alia to goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re sale by him, or subject to any rules made by the Central Government in this behalf,, for use by him in the manufac ture or processing of goods for sale. Rule 13 of the Cen tral Sales Tax (Registration and Turnover) Rules, 1957, framed under the Act, provides that the goods referred to in section 8(3)(b) which a registered dealer may purchase shall be goods intended for use by him inter alia as raw materials and processing materials in the manufacture or processing of goods for sale. The appellant owned tea estates in the respondent State and was also maintaining factories for the manufacture of tea. It prayed for inclusion in its Certificate of regis tration, ( 1 ) fertilisers, chemicals, weedicides, insec ticides, fungicides and pesticides for use in tea cultiva tion; and (2) weighing and measuring and packing equip ments for use in tea estates. The Department refused to include them and the Tribunal and the High Court confirmed the orders. In appeal to this Court it was contended that, (1) cultivation and the growing of tea leaves was so integrally connected with the manufacture of tea that it could be taken to be a part of the process of manufacturing tea, and since fertilisers etc. were needed for tea cultivation, the same should be held to. be intended for use in the manufacture or processing of tea for sale; and (2) since weighing equipment used in the factories had been included in the certificate, the weighing equipment used for the purpose of cultivation should similarly be included. Dismissing the appeal, HELD: (1) The goods in item (1) are intended for use not in the manufacturing process in respect of tea meant for sale but are only needed for the cultivation and growth of tea plants and leaves. There is no direct relationship between the use of fertilisers etc. and the manufacturing process and hence, they were rightly not included in the registration certificate. [761 G] (a) Cultivation and growth of tea plants result in the production of raw material in the form of green tea leaves which are ultimately processed into tea meant for sale. But such cultivation and growth are, in the very nature of things, prior to the manufacturing process and do not answer to the description of manufacture and processing of tea meant for sale. There is a vital difference between an agricultural operation and a manufacturing process. What is needed for use purely in an agricultural operation cannot be held to be required for use in a manufacturing process. [762 D] (b) The fact that the time lag between the plucking of tea leaves and their being subjected to the manufacturing process is very little would not detract 756 from the conclusion that the cultivation and growth of tea plants is distinct and separate from the manufacturing process. [761 C] (c) Rule 24 of the Income Tax Rules, 1922, and r. 8 of the Income Tax Rules, 1962, prescribe the formula which should be adopted for apportioning the income realised as a result of the sale of tea after it is grown and subjected to the manufacturing process in the factory, thus recognis ing the difference between the agricultural income which is yielded in the form of green leaves purely by the land over which tea plants are grown, and the non agricultural income which is the result of subjecting the green leaves plucked to a particular manufacturing process. [761 E] (2) The same reasoning holds good in respect of weighing machines used, not in the factories but, in the tea fields. [762 E] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The Sales Tax Officer 16 STC 563. and Indian Copper Corporation Ltd. vs Commission of Commercial Taxes 16 STC 259 fol lowed. Tea Estate India (P) Ltd. vs Commissioner of Income tax referred to.

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Appeal No. 1947 of 1975. Appeal by Special Leave from the Judgment and Order dated 9 10 1975 of the Gujarat High Court in Special Civil Application No. 1339/75. V.M. Tarkunde, P.H. Parekh, Miss Manju Jatley and (Miss) Mardk Tarkunde, for the Appellants. D.V. Patel and M.N. Shroff, for Respondent No. 1. K.L. Hathi and P.C. Kapur, for Respondent No. 2. 879 The Judgment of the Court was delivered by GUPTA, J. The first appellant is an association of the manufacturers of Mangalore pattern roofing tiles in south Gujarat area, the other appellant, a partnership firm, is a member of the association. The question that falls to be determined in this appeal by special leave is whether entry 22 added by the Gujarat Government by notification dated March 27, 1967 to Part 1 of the Schedule to the covers Mangalore pattern roofing tiles. Entry 22 reads as follows; "Employment in potteries Industry. Explanation: For the purpose of this entry potteries industry includes the manufacture of the following articles of pottery, namely: (a) Crockery (b) Sanitary appliances and fittings (c) Refractories (d) Jars (e) Electrical accessories (f) Hospital ware (g) Textile accessories . (h) Toys (i) Glazed Tiles" We may also refer to certain other provisions of the Minimum wages Act which3 provide the context to the question arising for decision. Section 2(g) defines "scheduled employment" as meaning "any employment specified in the Schedule or any process or blanch of work forming part of such employment". The schedule is in two parts. which relates to employment in agriculture only As not relevant for the purpose of this appeal. Section 3 authorises the appropri ate Government to fix or revise the minimum rates of wages payable to employees in scheduled employments. Section 5 prescribes the procedure for fixing and revising minimum wages. In fixing minimum rates of wages in respect of any scheduled Section 5 prescribes the procedure for fixing and revising minimum wages. In fixing minimum rates of wages in respect of any scheduled. employment for the first time or in revising the rates so fixed, the appropriate Government must either appoint committees to hold, neces sary enquiries and advise it in this regard, or publish its proposals in the matter for the information of persons .likely to be affected thereby. The Government will fix or revise the minimum rates of wages after consid ering the advice of the committees or the representations received in regard to the proposals published, as the case may be. Section 7 empowers the appropriate Government also to appoint an advisory board for coordinating the work of the committees appointed under section 5, and advising the Government generally in the matter of fixing and revising minimum rates of wages. Section 19 880 authorises the Government to appoint Inspectors for the purposes of the Act, Sections 22 and 22 A lay down the penalties for paying to an employee any amount less than what is due to him under the Act, or contravening any provi sion of the Act or any rule or order made thereunder; the punishment may extend to imprisonment for six months with a fine of Rs. 500/ . Under section 27 the appropriate Gov ernment after giving by notification in the official gazette not less than three months ' notice of its intention to add to either Part of the Schedule any employment in respect of which it is of opinion that minimum rates of wages should be fixed, add such employment to the schedule by another notification and the schedule in its application to the State concerned shall be deemed to be amended accordingly. Before proceeding to consider the rival contentions, we may briefly state the facts in the background. On November 13, 1966 the Gujarat Government issued a notification under section 27 declaring its intention to add "employment in potteries industry" with an 'Explanation ' to of the Schedule to the Minimum wages Act, and by notification dated March 27, 1967 the entry was added as entry No. 22. Later a committee was appointed under sec tion 5 (1 ) to fix minimum rates of wages in potteries industry. The committee submitted its recommendations some time in 1968. It appears from the letter dated July 10, 1968 addressed to the Government by the advisory committee forwarding its report that the Committee had not taken into consideration roofing tiles in the recommendations made. By a notification dated January 8, 1969 the Government fixed the minimum rates of wages in respect of potteries industry on the basis of the committee 's report. On March 25, 1970 a proceeding was started against the second appellant on the complaint of an Inspector alleging that the partners of the firm had failed to. produce for his examination the muster roll and the wages Register. The appellant was acquitted by the magistrate who held that entry 22 did not cover roofing tiles and as such the Act was not applicable to the industry of the accused. The State preferred an appeal to, the High Court against the order of acquittal. The High Court affirmed the acquittal on merits but observed that the manufacture of roofing tiles was included in entry 22. In 1974 the Gujarat Government appointed another committee under section 5 ' of the Act to revise the minimum wages in potteries industry. This time the committee treated the manufacture of roofing tiles as included in item 22 and sent its report to the Government. On May 12, 1975 the State Government issued a notification accepting the recommenda tions of the committee and gave effect to the revised rates from the next day, i.e. May 13, 1975. The appellants filed a writ petition in the Gujarat High Court challenging the validity of the notification dated May 12, 1975. By its order dated October 9, 1975 the High Court dismissed the writ petition on the view that "Mangalore pattern roofing tiles manufactories would be covered ' within the entry". This is how the scope of entry 22 arises for consideration in this appeal. The question turns on a true construction of the Explanation to entry 22 which says that for the purpose of this entry potteries industry "includes" the manufacture of the nine "articles of pottery" 881 specified therein. Pottery in a wide sense will take in all objects that are made from clay and hardened by fire, from crude earthen pots to delicate porcelain. Mr. Patel appear ing for the respondent, State of Gujarat, contends that the Explanation indicates that potteries industry in entry 22 is intended to cover all possible articles of pottery includ ing Mangalore pattern roofing tiles. Referring to the well known use of the word 'include ' in interpretation clauses to extend the meaning of words and phrases occur ring in the body of the statute, Mr. Patel submits that the Explanation, when it says that potteries industry 'in cludes ' the nine named objects, what is meant is that it includes not only these objects but other articles of pot tery as well. It is true that 'includes ' is generally used as a word of extension, but the meaning of a word or phrase is extended when it is said to include things that would not properly fall within its ordinary connotation. We may refer to the often quoted observation of Lord Watson in Dilworth vs Commissioner of Stamps, (1) that when the word 'include ' is used in interpretation clauses to enlarge the meaning of words or phrases in the statute "these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include". Thus where 'includes ' has an extending force, it adds to the word or phrase a meaning which does not naturally belong to it. It is difficult to agree that 'includes ' as used in the Explanation to entry 22 has that extending force. The Explanation says that for the purpose of entry 22, potteries industry includes the manufacture of the nine "articles of pottery" specified in the Explanation. If the objects specified are also "articles of pottery", then these objects are already comprised in the expression "potteries industry". It hardly makes any sense to say that potteries industry includes the manufacture of articles of pottery, if the intention was to enlarge the meaning of potteries industry in any way. We are also unable to. agree with Mr. Patel that the articles specified in the Explanation may have been men tioned out of abundant caution to emphasize the comprehen sive character of the entry, to indicate that all rarities of pottery are included therein. argument, though more plausible, does not also seem acceptable '. It is possible that one might have doubts. whether things like refractories or electrical or textile accessories would pass under the description pottery as that word is used in common parlance, but the Explanation also mentions crockery and toys regarding which there could be hardly any doubt. The inclusion in the list of objects which are well recognised ' articles of pottery makes it plain that the Explanation was added to the entry not by way of abundant caution. The contention of Mr. Tarkunde for the appellants is that the articles mentioned in the Explanation were intend ed to be exhaustive of the objects covered by entry 22. According to Mr. Tarkunde if the legislature wanted to bring within the entry all possible articles of pottery then there was hardly any point in mentioning only a few them by way of Explanation. To this Mr. Patel 's reply is that it (1) (1899) A.C. '105 106. 882 is well known that where the legislature wants to exhaust the significance of the term defined, it uses the word 'means ' or the expression 'means and includes ', and that if the intention was to make the list exhaustive, the legisla ture would not have used the word 'includes ' only. We do not think there could be any inflexible rule that the word 'include ' should be read always as a word of extension without reference to the context. Take for instance entry 19 in the schedule which also has an Explanation .containing the .word 'includes '. Entry 19 is as follows: "Employment in any tobacco processing establishment, not covered under entry No. 3. Explanation. For the purpose of this entry, the expression "processing" includes packing or unpacking, breaking up,. sieving, thrishing, mixing, grading, drying, curing or otherwise treating the tobacco (including tobacco leaves and stems) in any manner. " Entry 3 to which entry 19 refers reads: "Employment in any tobacco (including bidi making) manufactory. " It is clear from the Explanation to entry 19 that there could be no other way or manner of "processing" besides what is stated as included in that expression. Though include ' is generally used in interpretation clauses as a word of enlargement, in some cases the context might sug gest a different intention. Pottery is an expression of very wide import, embracing all objects made of clay and hardened by heat. If it had been the legislature 's inten tion to bring within the entry all possible articles of pottery, it was quite unnecessary to add an Explanation. We have found that the Explanation could not possibly have been introduced to extend the meaning of potteries indus try or the articles listed therein added ex abundanti caute la. It seems to us therefore that the legislature did not intend every thing that the potteries industry tums out to be covered by the entry. What then could be the purpose. of the Explanation ? The Explanation says that, for the purpose of entry 22, potteries industry 'includes ' manufac ture of the. nine articles of pottery named therein. It seems to us that the word 'includes ' has been used here in the sense of 'means ', this is the only construction that the word can bear in the. context. In that sense it is not a word of extension, but limitation; it is exhaustive of the meaning which must be given to potteries industry for the purpose of entry 22. The use of the word 'includes ' in the restrictive sense is not unknown. The observation of Lord Watson in Dilworth vs Commissioner of Stamps,(1) which is usually referred to on the use of 'include ' as a word of extension, ' is followed by these lines: "But the word 'i nclude ' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expres sions defined. It may be equivalent to 'mean and include ', and in that case it may afford an ( 1899)A.C. 105 106 883 exhaustive explanation of the meaning which, for the pur poses of the Act, must invariably be attached to these words or expressions". It must therefore be held that the manufac ture of Mangalore pattern roofing tiles is outside the purview of entry 22. The appeal is allowed with costs against respondent No. 1, dated May 12, 1975 in so far as it applies to the Manga lore pattern roofing tiles is quashed. The members of the first appellant are permitted to withdraw any sum they had deposited in the Gujarat High Court pursuant to the order of this Court made on April 2, 1976. M.R, Appeal allowed.

By a Notification issued under the , the Government fixed the minimum rates of wages in respect of potteries industry, on the basis of a committee 's report. Later, proceedings were started against the second appellant, a partnership firm .manufacturing Mangalore type roofing tiles, on the complaint of an inspector alleging that the partners of the firm had failed to produce their muster roll and the wages register for his examination. The Magistrate acquitted the appellant holding that Entry 22 did not cover roofing tiles. The High Court affirmed the ac quittal on merits, but opined that manufacture of roofing tiles was included in the potteries industry. The appellants contended that the Articles mentioned in the explanation were exhaustive of the objects covered by entry 22, and did not cover roofing tiles, while the re spondent State contended that the Explanation "includes" not only the objects mentioned therein, but other articles like roofing tiles. Allowing the appeal, the Court, HELD: (1) The word "includes" is generally used as a word of extension, but has been used here the sense of means '; this is the only construction that the word can. bear in the context. In that sense it is not a word of extension, but limitation; it is exhaustive of the meaning which must be given to potteries industry for the purpose of Entry 22. [882 G H] Dilworth vs Commissioner of Stamps applied. (2) The manufacture of Mangalore pattern roofing tiles is outside the purview of Entry 22. The explanation could not possibly have been introduced to extend the meaning of potteries industry or the articles listed therein added ex abundanti cautela. [882 D F; 883 A]

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ivil Appeal Nos. 1853(A) and 1854 of 1971. Appeal from the Judgment and Order dated the 18th April, 1969 of the Madras High Court Madras in Tax Cases Nos. 18 and 19 of 1966. V.S. Desai, J. Ratnamurthi and M.N. Shroff, for the Appel lant. T.A. Ramachandran, for Respondent. The Judgment of the Court was delivered by KHANNA, J. This judgment would dispose of two civil appeals Nos. 1853(A) and 1854 of 1971 which have been filed on certificate by the Commissioner of Income tax against the judgment of Madras High Court (reported in answering the following two questions referred to it in two references under section 66(1) of 79 the Indian Income tax Act, 1922 in the affirmative in favour of the assessee and against the revenue: "1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that for computing the reduction in rebate under Para D of Part II to the First schedule to the Finance Act, 1959 (in R. A. No. 169 of 1965 66) and of Finance Act, 1958,(in R.A. No. 168 of 1965 66) in the composition of profits of the year from which the dividend had been declared should be looked into, and 2. Whether the Appellate Tribunal was right in law in holding that the paid up capital of the assessee company should be proportionately reduced for the purpose of reducing the rebate in Corporation Tax in the manner directed. " The matter relates to the assessment of the respondent company for the assessment years 1958 59 and 1959 60. For sake of convenience we may set out the facts relating to the assessment year 1958 59. It is the common case of the parties that the decision about that year would also govern the point of controversy relating to the other year. The assessee is a private limited company. In the previous year ending on December 31, 1957 relevant for the assessment year 1958 .59, it declared a dividend of Rs. 99.000. Its paid up capital was Rs. 1,65,000. The total income of the assessee company was determined at Rs. 73,255 made up as under: Rs. Business Nil Other sources 26,554 Capital gains 46,701 Total income 73,255 As the dividend of Rs. 99,000 declared by the assessee company was in excess of 6 per cent of the paid up capital of the company, the Income tax Officer worked up the super tax payable by the. assessee as under: RS. Corporation tax @ 50 % on Rs. 26,554 13,277 less rebate @ 30 % on Rs. 26,554 7,966.20 Reduction in rebate Up to 6%0 of the paid up capital 9900 . Nil 6% to 10% of the paid up capital in 6600 @ 10% 660.00 Balance at 20% 82500 @ 20% 1,65,00.00 17,160.00 Balance carried forward to next year 9,193.80 The assessee company objected to the above computation of the super tax and took the matter in appeal to the Appel late Assistant Commissioner. It w.as urged on behalf of the assessee that the dividend of Rs. 99,000 declared during the year ending 1957 was 80 out of the profits of the previous year which ended on December 31, 1956. According to the assessee, the dividend income determined for the assessment year 1957 58 was Rs. 1,74,196 which included capital gains to the extent of Rs. 1,10,105. The dividend of Rs. 99,000, it was urged, should be apportioned between the capital gain of Rs. 1,10,105 and the other income of Rs. 64,091 after taking into account the tax payable thereon. The assessee computed the figures as under: Rs. Capital receipts not assessable 44,279 Capital gains is assessed less tax 75,423 Other income less tax 22,492 1,42,194 The assessee claimed that rebate should be reduced only with reference to the sum of Rs. 15,659 being proportionate part of the dividend declared during the previous year ending on December 31, 1957 which had come out of the other income assessed to income tax and super tax in the assessment year 1957 58. The figure of Rs. 15,659 was arrived at by the assessee as under: 99,000 x 22,492 1,42, 194 The Appellate Assistant Commissioner accepted in princi ple the assessee 's contention that the components of the dividend should be considered with reference to the profits of the previous year. He, however, computed proportionate dividend at a higher figure by including the capital gains of Rs. 75,423 with the sum of Rs. 22,492 as shown below: Rs. Net available profits attributable to assessed income (22,492 75,423) 97,915 Net available profits 1,42,194 Dividends declared 99,000 97,915 99,000 Proportionate dividend: =68,171 1,42,194 The Appellate Assistant Commissioner retained the paid up capital at Rs. 1,65,000 as per balance sheet with out apportionment on the basis of taxed and non taxed in come. The department took the matter in appeal to the Appel late Tribunal. The Tribunal dismissed the appeal hold ing that the "previous year" under Explanation (iii) to Paragraph D of Part II to the First Schedule to the Finance Act, 1958, refers only to the previous year out of the profits of which the dividends were declared and therefore the composition of the profits and gains of the company out of which dividends were declared had to be looked into for working out the proportion under Explanation (iii) to Para graph D of Part II to the First Schedule to the Finance Act of 1958. At the instance of the Commissioner, the questions reproduced above were thereafter referred to the High Court. 81 In appeal before the High Court, it was argued on behalf of the revenue that dividends having been distributed during the accounting year relevant to the assessment year in question, it is that year alone which has to be taken into consideration for calculating the supertax under the appro priate Finance Act. The fact that such profits were trace able to the profits earned during the year prior to the accounting year, according to the submission, was not of significance and had to be ignored for the purpose of work ing out the quantum of rebate in such super tax made avail able in the Finance Act. It was accordingly urged that the year of distribution, namely, the accounting year, is the only basis for the calculation of the rebate. As against that, it was submitted on behalf of the assessee that it would be unreal if the years in which the profits had been admittedly earned was to be ignored and reliance was placed for calculation of rebate on the ministerial act of distri bution. The High Court, while answering the questions referred to it in favour of the assessee and against the revenue, observed us under: "If, therefore, 'distribution ' is thus to be understood as a ministerial act resulting from the indoor management of the company, can that be the sine qua non to decide the question of quantum of rebate to which the company would be entitled under a particular Finance Act? If the year in which distribution is to be effected is considered for purposes of the Finance Act and for the determination of the quantum of rebate, then it would result in a notional implementation of the benefit contemplated by the legislature to a company in the nature of a rebate and would not amount to a realistic approach of such a vital problem connected with the finances of the company. It may be that in any particular year when distribution of dividends have been made, the paid up capital might have been reduced or increased, as the case may be. Is that paid up capital going to be taken as the basis for working out the relative benefits or disadvantages to be enjoyed or suffered by a company? We are of the view that it is neither the intention of the legislature, nor could it be said to be a reasonable inference of the provisions thereto. In fact, the Explanation to the Fi nance Act, 1958, which elucidates the term 'paid up capital ', gives the key to the interpretation of the word 'distribution '. 'Paid up capital ' means the paid up capital of the company on the first day of the previous year relevant for the assessment year ending on 31st March, 1959. It is, therefore, clear that the paid up capital of the company during the assessment year cannot be said, for purposes of Paragraph D of Part II of the First Schedule to the Finance Act, 1958, to. be the paid up capital of the year in which the profits arose and from which dividends were distributed during the assessment year. " Before dealing with the contentions advanced, it may be appropriate to refer to the relevant provisions. According to. section 55 of the Indian income tax Act, 1922, in addi tion to the income tax 7 1458SCI/76 82 charged for any year there shall be charged, levied and paid for that year in respect of the total income of the previ ous year of any individual, Hindu undivided family, company, local authority, unregistered firm or other associ ation of persons, not being a registered firm, or the part ners of the firm or members of the association individually, an additional duty of income tax (in this Act referred to as super tax) at the rate or rates laid down for that year by a Central Act. Clause (b) of section 2 of the Finance Act, 1958 (Act No. 11 of 1958) provides, inter alia, that subject to the provisions of subsections (2) and (3) with which we are not concerned, for the year beginning on the first day of April 1958. "(b) super tax shall, for the purposes of section 55 of the Indian Income tax Act, 1922 (XI of 1922) (hereinafter referred to as the Income tax Act), be charged at the rates specified in Part II of the First Schedule. " We are concerned in the present case with Paragraph D of Part II of the First Schedule to the Finance Act, 1958. The relevant part of the above paragraph reads as under: RATE OF SUPER TAX In the case of every other company, RATES OF SUPER TAX On the whole of the total income . . . 50%: Provided that , (i) . . . (ii) a rebate at the rate of 40 per cent on so much of the total income as consists of dividends from a subsidiary Indian company and a rebate at the rate of 30 per cent on the balance of the total income shall be allowed in the case of any company which satisfies condition (a) but not condition (b) of the preceding clause; (iii). . . Provided further that, (i) the amount of the rebate under clause (i) or clause (ii) shall be reduced by the sum, if any, equal to the amount or the aggregate of the amounts, as the case may be, computed as hereunder: . . . . . (c) in addition, in the case of a company referred to in clause (ii) of the preceding proviso which has distributed to its shareholders during the previous year dividends in excess of six per cent of its paid up capital, not being dividends payable at a fixed rate 83 (A) in the case of a company which is not such as is referred to in sub section (9) of section 23A of the Income tax Act : on that part of the said dividends which exceeds 6 per cent, but does not exceed 10 per cent of the paid up capital; at the rate of 10% on that part of the said dividends which exceeds 10 per cent of the paid up capital; at the rate of 20% Explanation. For the purpose of this paragraph (i) . . . . (ii) . . . . (iii) where any portion of the profits and gains of the company is not included in its total income by reason of such portion being exempt from tax under any provision of the Income tax Act, the 'paid up capital ' of the company, the amount distributed as dividends (not being dividends payable at a fixed rate), the amount representing the face value of any bonus shares and the amount of any bonus issued to the shareholders shall each be deemed to be such proportion thereof as the total income of the company for the previous year bears to its total profits and gains for that year other than capital receipts, reduced by such allowances as may be admissible under the Income tax Act which have not been taken into account by the company in its profit and loss account for that year. " In appeal before us Mr. Desai on behalf of the appel lant has urged that dividend having been distributed during the accounting year relevant to the assessment year in question, it is the profits and gains of that year alone which should be taken into consideration for calculating the rebate in the levy of super tax. The fact that such divi dend was distributed out of the profits earned in the years prior to that was, according to. the learned counsel, irrelevant. Particular stress in this context has been laid upon the language of clause (iii) of the Explanation con tained in Paragraph D of Part II of the First Schedule to the Finance Act,1958. As against that, Mr. Ramachandran who has argued the case amicus curiae has canvassed for the correctness of the view taken by the High Court. We have set out above the relevant part of Paragraph D of Part II of the First Schedule to the Finance Act, 1958. The language in which the above paragraph is couched is so complex and is hedged in with so many exceptions and provi sos that it can hardly be regarded as a model of clari ty in legislative draftsmanship. Paragraph D initially prescribes the rate of super tax at 50 per cent on the total income of the company. The first proviso then makes 84 provision for rebate in the assessment of the super tax. The rebate for a company like the respondent with no income in the form of dividend from a subsidiary company is to be at the rate of 30 per cent. The second proviso carves out reduction in the rebate. Clause (c) of that proviso sets out the formula for calculating that reduction at a sliding scale in case the amount of distributed dividend exceeds 6 per cent of the paid up capital. There then follows a third proviso but we are not concerned with that. At the end comes the Explanation consisting of three clauses. For the purpose of the present case, the relevant clause is (iii). The said clause makes provision in cases which fall within its ambit for a further reduction in the reduction mentioned above. To put it in other words, the paragraph seeks to prescribe the rate of super tax. It then proceeds to grant some relief to the tax payer in the levy of . super tax. It thereafter makes a cut in that relief. Finally, it prescribes a cut in that cut. The intelligence of even those with legal background gets staggered in this continu ous process of carving exceptions to exceptions. It seems more like a conundrum, baffling the mind and requiring special acumen to unravel its mystique. One can only wonder as to how the ordinary tax payers, most of whom are laymen, can keep abreast of such laws. Yet the maxim is that every one is presumed to know the law. The one redeeming feature is that the above pattern was given up after 1959. From 1960 to 1964 there was another pattern. Since 1965 the charge of super tax has been discontinued and the rates of income tax have been so increased as to absorb fully the former levy of super tax. The fate of these appeals, as would appear from the above, depends upon the wording of clause (iii) of the Explanation. The said clause contemplates, inter alia, that in calculating the amount deemed to have been distributed as dividends, certain proportion of the amount actually dis tributed has to be taken into. account. The said clause, shorn of the portions with which we are not concerned, reads as under: Where any portion of the profits and gains of the company is not included in its total income by reason of such portion being exempt from tax under any provision of the Income tax Act, . the amount distributed as dividends . . shall. be deemed to be such proportion thereof as the total income of the company for the previous year bears to its total profits and gains for that year other than capital receipts, reduced by such allowances as may be admissible under the Income tax Act which have not been taken into account by the company in its profit and loss account for that year. The above clause provides a formula which has to be applied for determining the amount of dividends which shall be deemed to have been distributed in considering the quantum of rebate for assessing the super tax payable by a company. The occasion for applying this formula is indi cated by the opening lines of the clause and arises when any portion of the profits and gains of the company 85 is not included in its total income by reason of such por tion being exempt from tax under the provisions of the Income tax Act. Once such an occasion arises, we have to apply the formula contained in the tatter part of the clause. According to that formula, the amount distributed as dividends shall be deemed to be such proportion thereof as the total income of the previous year bears to its total profits and gains for that year other than capital re ceipts, reduced by certain allowances with which we are not concerned. The words "for the previous year" and "for that year" indicate that in finding for the purpose of rebate the amount of dividends which shall be deemed to have been distributed, we have to look to the figure of total income and the amount of profits and gains other than capital receipts of the company reduced by certain allow ances in the previous year alone and not earlier years. Clause (iii) introduces a fiction with regard to the amount of dividends which shall be deemed to have been distributed. Such a fiction can operate only within the limits prescribed by the language of the statute creating that fiction. The language used in clause (iii) points to the conclusion that the taxing authorities have to take into account the company 's total income and the profits and gains other than capital receipts reduced by certain allowances only in the previous year, i.e., the year in which the dividend was distributed. The fact that those profits and gains accrued in years prior to the previous year and in cluded portions which were exempt from tax under the provi sions of the Income tax Act would not be of much relevance as the language of the clause requires the taxing authori ties to look to the position of profits and gains in the previous year alone. We would, therefore, modify the answer given by the High Court to question No. (1) and answer the aforesaid question in the negative. The correct answer, in our opinion, should be that for computing the reduction in rebate under Paragraph D of Part II of the First Schedule to the Finance Act, 1958 the position of profits and gains as it existed in the previous year should be taken into account and not in the years prior to that. No arguments have been addressed before us on the answer to question No. (2). We accordingly accept the appeals, set aside the judg ment of the High Court and answer question No. (1) in the negative as indicated above. The parties in the circum stances shall bear their own costs in this Court and in the High Court. M.R. Appeals allowed.

The Income tax officer took into account the respond ent 's entire dividend income of the year ending December 30, 1957, while calculating the super tax payable by it for the assessment year 1958 59. In appeal against the computation the respondent contended before the Appellate Assistant Commissioner that the dividend income included profits earned during the previous years, and that rebate should be reduced only with reference to the proportionate part of the dividend declared during 1957 which had come out of the other income assessed to income tax. and super tax in the assessment year 1957 58. The respondent 's contention was accepted in principle. The Department 's appeal was dis missed by the Appellate Tribunal. The matter was then referred to the High Court under section 66(1) of the Indian Income Tax Act, 1922, and decided in favour of the assessee. Allowing the appeals the Court, HELD: For computing the reduction in rebate under para graph D of Part II of the First Schedule to the Finance Act, 1958, the position of profits and gains as it existed in the previous year should be taken into account and not in the years prior to that Clause (iii) introduces a fiction with regard to the amount of dividends which shall be deemed to have been distributed. The taxing authorities have to take into account the company 's total income and the profits and gains other than capital receipts reduced by certain allow ances only in the previous year, i.e., the year in which the dividend was distributed. The fact that those profits and gains accrued in years prior to the previous year and in cluded ' portions which were exempt from tax under the provi sions of the Income tax Act would not be of much relevance. [85 A D]

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Appeal No. 156 of 1971. From the Judgment and Order dated 19 10 1970 of the Gujarat High Court in Special Civil Appln. No. 1177/70. B.R.L. Iyengar, S.K. Dholakia and R.C. Bhatia, for the appellant. B.B.Ahuja, for respondent No. 1. The Judgment of the Court was delivered by UNTWALIA, J. The appellant 's writ petition filed in the High Court of Gujarat was dismissed in limine by a Bench of the High Court on October 19, 1970. The Commissioner of Income tax, Gujarat II, respondent No. 1 was the authority against whom several reliefs had been claimed in the writ petition. Subsequently were added the other members of the family of the appellant as respondents to the writ petition. The appellant obtained a certified from the High Court for appeal to this Court under sub clause (b) of clause (1) of Article 133 of the Constitution of India as it stood before the 30th Constitution Amendment Act. Hence tills appeal to this Court. Having heard Mr. B.R.L. Iyengar, Senior Advocate for the appellant at some length we found that the appellant was ill advised to file the writ petition and to. pursue the matter upto this Court. The appeal being devoid of any substance must fail. We proceed to state the facts and discuss the points urged before us very briefly. One BapalaI Purshottamdas Modi was the head of a Hindu Undivided family. The joint family possessed many immovable properties and carried on business of various types such as money lending etc. Bapalal had five sons namely Vadilal, Ramanlal, Jayantilal, Gulabchand and Kantilal. Ramanlal died long ago in or about the year 1933. Jayantilal died in 1956. The appellant is one of the sons of Jayantilal. The appellant 's case in the writ petition was that Bapalal was the karta of the Hindu Undivided family. He executed a general power of attorney on October 5, 1948 in favour of his third son Gulabchand to manage his (Bapalal 's) separate property. On October 22, 1954 Bapalal relinquished his right, title and interest in the joint family properties on taking a sum of Rs. 75,000/ leaving the corpus and management of the joint family properties to his four sur viving sons and Rajnikant, son of late Ramanlal. These five members also executed a memo of partition on October 24, 1954 disrupting the erstwhile Hindu Undivided family and partitioning the properties. In course of the proceedings for assessment of the income tax for the assessment year 1955 56 against the Hindu Undi vided family of Bapalal Purshottamlal Modi, an application under Section 25A of the Income tax Act, 1922 was made claiming partition w.e.f. October 24, 1954. Notices of the enquiry under section 25A were served on all the members of the family. At the enquiry the statements of various persons including the appellant were recorded by the Income tax Officer. He, by his order, dated January 28, 1960 disallowed the 114 claim under section 25A of the Income tax Act, 1922. It is asserted that in the year 1961 a suit for partition had also been filed and the City Civil Court Ahmedabad passed a decree for partition on June 30, 1965. In an appeal filed before the Appellate Assistant Commissioner from the order of the Income tax Officer dated January 28, 1960 reliance was placed on the Civil Court partition decree also. The Appellate Assistant Commissioner, however, dismissed the appeal by his order dated September 30, 1965. A second appeal to the Income tax Appellate Tribunal was dismissed on March 28, 1969. InCometax assessment was made against the Hindu Undivided family for the year 1955 56. Assessments were also made against the Hindu Undivided family, sometimes treating it as Association of Persons or Unregistered Part nership Firm as per returns filed from time to time, for the subsequent years upto the assessment year 1965 66. Copies of all the assessment orders were enclosed with the writ petition aS Annexure 'I ' collectively. Appeals taken to the Tribunal from some of the assessment orders were also dismissed. Notices were being issued and served under sections 22 and 23 of the Income tax Act, 1922 for the assessment years which were governed by the said Act. In respect of the assessment years 196.2 63 onwards notices were. issued and served under sections 142 and 143 of the Income tax Act, 1961. A large sum of tax and penalty became due as the demands from time to time were partly paid. The Income tax authorities took steps for realization of the income tax dues against the appellant 's family and got attached various properties. In Civil Suit No. 806 of 1961 in which the preliminary partition decree was passed on June 30, 1965, respondent Kantilal had been appointed as a re ceiver Later on one Mr. Bhatt was appointed Receiver. A Savings Bank Account No. 412002 was being operated by the Receiver. The Income tax Officer attached the entire amount of Rs. 56,294.43 in the said account by his orders dated May 12, 1970. Thereupon, the appellant filed the writ petition challenging the various orders passed in the pro ceeding under section 25A of the Income tax Act, 1922; the assessments made for the years 1955 56 to 1965 66 and the attachment orders on various grounds. In a single writ petition rambling allegations were made challenging the multifarious proceedings and the orders on various ground 's and the following prayers were made: "(a) declaring void and illegal and quashing the proceedings of the income tax authorities making assessments on Hindu Undivided Family, Association of persons and unregistered partnership firm afore said for the years beginning from the assessment year 1955 56 and also the proceedings for the recovery of the taxes so assessed, and (b) quashing the orders of the income tax Au thorities refusing to record partition and direct ing the Respondent and his Subordinates to record under Section 25A of the Act that the erstwhile joint family property has been divided or parti tioned in definite portions, each member getting an equal share, on October, 1954; 115 (c) directing the respondent and his subordi nates to cancel o.r withdraw the impugned orders and all steps taken for the recovery of the amounts so. assessed; (d) directing the respondent and hi.s subordi nates not to take any further steps for the recov ery of the tax so assessed; (e) quashing all the penalty orders and such other orders passed in pursuance of the assessment proceedings aforesaid; (f) quashing all the orders of attachment or in the nature attachment passed by the Income tax Authorities in these proceedings for the assessment year 1955 56 onwards, and (g) to pass such other and further orders as your Lordships deem just and expedient in the circurm stances of the case. " It seems to us that the High Court rightly dismissed the appellant 's petition in limine. Since the valuation under Article 133(1)(b) was beyond Rs. 20,000/ , the appellant was granted a certificate as a matter of course. It was pointed out to. the appellant 's counsel that so many proceedings and orders could not be challenged in one writ petition and he was asked to make his submissions in the appeal confining the writ petition to one matter only. Counsel chose to confine it to the attack on the attachment order of the Income tax Officer in respect of the money lying in the Savings Bank Account. While doing so, he traversed the entire allegations in the petition by adopting an ingenious method. Counsel submitted that the attachment had been made for realization of the income tax dues based upon various orders which were void and ultra vires. All those orders could be attacked collaterally while attacking the attachment order. Mr. Iyengar urged the following points in,support of the appeal. (1 ) That the orders of the various authorities rejecting the claim of the partition under section 25A of the Income tax Act, 1922 were without jurisdiction and on their face suffered from many infirmities of law. (2) That after Bapalal relinquished his inter est in the joint family properties and ceased to be the karta, there was no karta of the family. Gulabchand a junior member of the family could not act as a karta. Other members of the family did not accept him to be the karta. (3) That even after the death of Bapalal in the year 1958 various notices under the Income tax Act were issued and served in the name of Bapalal Purshottamdas Modi a dead person and hence the entire proceedings and assessment orders were nullities. 116 (4) That the appellant had no opportunity of taking any part in the income tax proceedings and his property cannot be made liable for realization of the dues determined in such proceedings. None of the points urged on behalf of the appellant merits any detailed discussion. We were taken through the power of attorney executed by Bapalal in favour of Gulabchand, the deed of relin quishment executed by him on October 22, 1954 and the alleged memorandum of partition of October 24, 1954; the orders of the Income tax officer, the Appellate Commissioner and the Tribunal in the proceedings under section 25A of the Income tax Act, 1922. In our opinion. the orders do not suffer from any infirmity of law or any such defect which will make them void. Notice of the enquiry had been given to all the members as admitted by the appellant himself. He had been examined in the proceedings. Sub section (3) of Section 25A pro vides. that where an order accepting partition had not been passed in respect of a Hindu family as sessed as undivided such family shall be deemed for the purposes of the Act to continue to be Hindu undivide family. A partition preliminary decree came much later. The income tax authorities had their own view to take. They were not bound by the decree. No reference was taken under the income tax Act challenging the order of the Tribunal dismiss ing the appeal. It was clear from some of the assessment orders that Gulabchand was acting as a karta even during the life time of Bapalal as he had retired to live in Brindaban. At the relevant time no body disput ed his authority to act as karta. His eldest brother Vadilal was an old man of about 70 years of age. His eider brother Jayantilal father of the appellant died in the year 1956. In these circum stances he appears to have acted as the karta with consent of all the other members. A junior member of the family could do so. See Mulla 's Hindu Law 296, fourteenth edn. Where occurs the following passage: "So long as the members of a family remain undivided, the senior member of the family is entitled to manage the family properties," includ ing even charitable properties (q); and is presumed to be the manager until the contrary is shown(r). But the senior member may give up his right of management, and a junior member may be appointed manager(s) . " Notices were being issued in the name of the family which was carrying on the business in the assumed name of Bapalal Purshottamdas Modi. They were neither issued to nor served on Bapajal the dead person. In response to the notices returns were being filed by the managing member of the family. At no stage before the income tax authorities a contention was raised that the notice was served on a dead person. There is no substance in the third point. Coming to the fourth and the last point urged on behalf of the appellant we find that the appellant is bound by the assess ment made in respect of the income of his family which continued in the eye of law to be joint. The share 117 of the appellant 's properties received by him from the joint family or the income thereof is liable for the income tax dues in question. The appellant, as we have said above, was ill advised to file a misconceived petition on wholly un tenable grounds. In the result the appeal fails and is dismissed with costs to respondent No. 1. S.R. Appeal dismissed.

Bapalal Purshottamdas Modi was the karta and head of a Hindu Undivided Family possessing many immovable properties and carrying on business of various types including money lending. Bapalal had five. sons, viz. Vadilal Ramanlal, Jayantilal, Gulabehand and Kantilal; out of whom Ramanlal and Jayantilal predeceased him in 1933 and 1956 respectively and the appellant was one of the sons of Jayantilal. As per the general power of attorney dated 5 10 1948, executed by Bapalal in his favour, Gulabchand, the third son was acting as a karta and was filing the various tax returns without any objection. whatsoever by the other members of the Hindu Undivided Family. Bapalal relinquished all his rights in the joint family property on 22 10.54 leaving the corpus of the joint family properties to his four surviving sons and Rajnikant, son of Ramanlal. All of them executed on 24 10 54, a memo of partition disrupting the Hindu Undivided Family and partitioning the properties the course of the proceedings of the income tax assessment for the assessment year 1955 56 against the H.U.F. of Bapalal Purshottamlal Modi, an application under section 25A of the Income Tax. Act, 1922 claiming partition was made. The claim was disallowed by ' the I.T.O. by his order dated 28 1 1960. During the pendency of the appeal, a suit for partition was filed in 1961 and a decree for partition was obtained on June 30, 1965. The. appeal to the Appellate Assistant Commissioner was dismissed on September 30, 1965 and the second appeal 10 the Income Tax Appellate Tribunal was also dismissed on March 28. 1969. The appellants did not ask for a reference to the High Court, as provided under the Act, but went on filing the returns in respect of the subsequent assessment years. When the Income Tax Officer got attached the entire amount in the, Savings Bank A/c towards the tax liability by an order dated May 12. 1970, the appellant filed a writ petition challenging the various orders passed in the pro ceedings under section 25A for the assessment years 1955.66 to 1965 66 and the several attachment orders. The High Court dismissed the writ in limine, but granted a certificate under article 133(1)(b) of the Constitution. Dismissing the appeal, the Court, HELD: (1) Sub section (3) of section 25A provides that where an order accept ing partition had not been passed in respect of a Hindu Undivided Family assessed as undivided, such family shall be deemed for the purposes of the Act to con tinue to be Hindu Undivided Family. The Income Tax Officers who had their own view to take, were not bound by the de cree, since in the instant case the partition preliminary decree came much later and there was no reference under the Income Tax Act challenging the order of the Tribunal. [116 C D] (2) A junior member of the family can, with the consent of all the other members. act as a karta, if the senior member gives up his right. [116 E] 113

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Appeal No. 333 of 1969. (Appeal by Special Leave from the Order dated the 22 8 1968 the Punjab and Haryana High Court in L.P.A. No. 427 of 1968). B. Sen and H.K. Puri, for the appellant S.K. Mehta, P.N. Puri and K.R.Nagaraja. for respondent No. 5. The Judgment of the Court was delivered by BEG, J. This appeal by special leave is directed against the judgement of a Division Bench of the High Court of Punjab & Haryana. dismissing in litnine an appeal against a judgment and order of a 123 learned single Judge of that Court by which a Writ Petition made to the High Court had been granted. We have been taken through the very detailed judgment of the learned single Judge where all the relevant facts are considered in detail. The questions which have been raised before us are: firstly, whether the learned single judge was justified in considering the facts of the case and recording certain findings of fact without having even the advantage ' of the record of the proceedings of the Deputy Chief Settle ment Commissioner, and other officers who had given certain other findings in favour of the appellant; secondly, whether the learned single Judge 's findings of fact are correct; and, thirdly, whether any such apparent error was disclosed in the proceedings of the authorities acting under the Refugees Rehabilitation and Settlement Act as to justify interference by the High Court. It was urged that a mistake apparent on the face of the record has to be one which does not necessitate delving deep into facts on record to discov er it after a re examination of questions of fact which ought to be left to the authorities empowered to give these findings. It is true that the High Court does not sit as a Court of appeal to substitute its own judgment for that of the authorities which are empowered to give their decisions in such cases. Apart from jurisdictional errors, the High Court may correct errors apparent on the face of the record. An error to be apparent must, according to a rough test laid down by this Court in S.L. Hedge & Ors. vs M.B. Tirumale(1), be one which does not take prolonged arguments to bring it to the surface. These propositions are quite well estab lished. It is, however, also a settled rule of practice of this Court not to interfere with the exercise of discretionary powers of High Courts under Article 226 of the Constitution merely because two views are possible upon the facts of a case. Furthermore, in order to induce this Court to inter fere under Article 136 of the Constitution the the question must involve at least a matter of public or general importance or the injustice suffered by an individual due to an error of law should be so gross as to touch the con science of this Court in which case it would be deemed to be one of more than private importance. The case before us is one of a competition between two auction purchasers of the same property put up for sale at two different auctions by the Managing Officer, Amritsar. The first was in favour of the respondent Smt. Rup Kaur, held on 20th August, 1959, and the second in favour of. Beant Singh, the appellant, held on 10th May, 1961, on the assumption that the first auction could be cancelled. The broad material facts, apparent from the original official record, which is now before us, are stated below. At the auction sale on 20th August, 1959, held by the Managing Officer, Amritsar, Rup Kaur 's bid of Rs. 32,000/ , being the highest, was accepted and this fact was communi cated to her by a letter dated (1) [1960] (1) S.C.R. 890. 124 11th September, 1959, sent through her son and general attorney M.S. Grewal. This letter was in the following terms: "Dear Sir/Madam, I am to inform you that your bid for Rs. 32,000/(Rupees thirty two thousands only) in respect of property No. B XII 18 S 14 (Portion I and III) Hide Market Amritsar has been accepted as per terms and conditions of the auction. You have executed an indemnity bond in lieu of the earnest money due from you for adjustment against the compensation admissible on your verified claim(s). For this purpose please furnish if you have not already done at the time of auction the registration number of your compensation application, so as to reach this office within seven days of the issue of this letter. In case you intend to associate any other claimants with you in the purchase of the above mentioned property you should also submit affidavits of association duly completed by you and by each of your asso ciates, as per specimen attached to this office within the period specified above. The balance of the purchase money, if any, found due from you, after scrutiny of your compensation application and that of your associates will be communicated to you in due course. Yours faithfully, Sd/ District Rent & Managing Officer, Amri tsar". The above mentioned letter showed that the contesting re spondent being a displaced person had executed an indemnity bond and had to furnish some information so that adjustment of the compensation due to her may be made against the amount which she had to deposit. What was that information? On the margin of the front page of this letter is a partial ly illegible writing running from top to bottom of the printed full scap sheet on the original record. With some difficulty the following part only can be read: "You are required to submit the following documents regarding provi sional possession within seven days from the receipt of this letter failing which your case wilt be . " After "will be" nothing is found written. It is disputed between the parties whether this writing in hand of the margin existed on the letter received by Smt. Rup Kaur 's attorney. Howev er, even looking at the copy on the original record, the meaning is not at all intelligible. If it existed, it could only confuse and not enlighten the recipient as to what was to be done. An order was then passed, on 8th March, 1961, which runs as follows: 125 "ORDER, Smt. Roop Kaur through her attorney Shri M.S. Grewal the auction purchaser of unit No. B.XIII 18 S 14 (Portion I and III) Hide Market Amritsar has failed to deposit the balance sale price amounting to Rs. 28,000/ in spite of issue of registered notice for 2 1 61. Her bid is, therefore, cancelled and earnest money forfeited. Settlement Officer Jullndur may be requested to deduct Rs. 3200/ as earnest money out of CA No. P/J/I0110. The applicant may be informed accordingly and property disposed of in the next sale programme. Announced. Dated 8 3 61. Sd/ Distt. Rent & Managing Officer, Am ritsar". This order does not state that parties were duly heard. It is disputed whether the notice mentioned in it, alleged to have been sent to Smt. Rup Kaur on 18 12 1960 asking her to. appear on 2 1 1961, was received by the contesting respond ent. ' Even if the learned Single Judge 's finding that it was not received at all by her were not correct, the time fixed for her appearance was too short. Furthermore, the allega tion that she had been called upon, presumably by the letter dated 11 9 1959 to deposit Rs. 28,000/ was, on the face of it, untrue. Despite a report in her favour by the Regional Settlement Commissioner, who investigated the facts and reported to the Chief Settlement Commissioner, that she had not been properly served, justice was denied to her by the Chief Settlement Commissioner on 26 6 1963. The learned single Judge had examined the facts and pointed out other obvious illegalities at earlier stages showing that provisions of Rules 90 and 92 and 105 of the Displaced Persons Compensation & Rehabilitation Rules 1955 were not complied with in cancelling the sale. According to Rup Kaur, who filed some application on 9th May, 1961, when she learnt what had happened, she had also filed an appeal against the order of 8th March, 1961, and made a request for extension of time for payment of the balance of the purchase money, but, on 14th June, 1961, the following order was passed by the Assistant Settlement Commissioner on her appeal: "This is an appeal against the order of Distt. Rent & Managing Officer Amritsar dated 8 3 61 whereby he cancelled the appellants bid and forfeited the earnest money on account of his failure to deposit the balance price of property No. B. XIII 18 S 14 (Portion I & III) Hide Market Amritsar purchased by him at the open auction within the specified time. For all intents and purposes this appeal is for extension of time to deposit the balance purchase price. 126 Extension of time is an administrative matter for which no judicial action is called for. Dismissed. Inform the appellant accordingly". The learned Single Judge pointed out that the above mentioned order of the Appellate authority was also void for contravening the provisions of Rule 105 as interpreted by a Full Bench of the High Court of Punjab in Hira Lal Kher vs The Chief Settlement Commissioner, New Delhi(1), so that it was the duty of the Settlement Commissioner, to fix a date for hearing and to inform the 'appellant it was not discharged. Apparently, the appeal was decided without informing the contesting respondent Smt. Rup Kaur when her appeal would be heard. Rule 105, which was thus contra vened, provides: "105. Provisions of Order XLI of the Code of Civil procedure apply to appeals and revisions. Except as otherwise expressly provided in the Act or in these rules, the procedure laid down in order XLI of the Code of Civil Procedure 1908 (Act V of 1908) shall,. so far as may be applicable, apply to the hearing and disposal of ap.peals and revisions and the Act". Furthermore, extension of time was not just an "adminis trative matter". The question whether Rup Kaur had made out a case for it or not should have been quasi judicially considered and decided. Indeed, if provisions of the Civil Procedure Code were applied to these appeals and extension of time was only a relief sought, the discretion to grant it or refuse it had to be judicially and judiciously exercised. The order was made on an apparently wrong assumption. The learned single Judge had restored the position to what it was when the letter dated 11th September, 1959, was received by M.S. Grewal, the son and general attorney of Rup Kaur, and had directed the Managing Officer to proceed in accordance with Law. After having heard Learned Counsel for both sides at some length, we are not satisfied that any injustice has been done to the appellant who will, no doubt, get back whatever money he may have deposited. We think, that, in the circumstances of the case, it could not be said that the learned single Judge 's conclusion, that provisions of Rule 90 had not been complied with in dealing with the case of Rup Kaur, who had suffered injustice, was erroneous. The learned Judge had stated his conclusion as follows: "A mere reading of the above quoted provision shows that one of the conditions precedent entitling the Rehabilitation Authorities to cancel the sale and to forfeit the initial deposit is the service on the auction purchaser of a notice specified in sub rule (11), sub rule (12) or sub rule (13) of rule. The petitioner admittedly complied with the requirement of the notice under sub rule (12) of rule 90 (Annexure "F") and no notice in terms of the requirements of subrule (13) of rule 90 was ever admittedly issued to or (1) 127 served on the petitioner. In these circumstances, the Rehabilitation Authorities has no jurisdiction whatsoever for cancelling the sale in favour of the petitioner on account of alleged non payment of the balance of the purchase price and for forfeiting the initial deposit made by her. In this view of the matter, the impugned orders cancelling the sale in favour of the petitioner and forfeiting her initial deposit are wholly without jurisdiction and cannot possibly be sustained. Errors of law in the orders of the Chief Settlement Commissioner and the order Rehabilitation Authorities are apparent on their face inasmuch as the said orders have been passed in absolute ignorance of the statutory provisions referred to above". We, therefore, see no reason to interfere with the view taken by the High Court. Consequently, we dismiss this appeal. But, in the circumstances of the case, the parties will bear their own costs. M.R. Appeal dis missed.

The property under dispute was put up for sale at two different auctions by the Managing Officer, Amritsar. The Rehabilitation authorities cancelled the bid of the first auction purchaser Smt. Rup Kaur, holding that she had failed to deposit the sale price in spite of issuing her a regis tered notice, and at the. second auction the appellant 's bid was accepted. In a petition filed under article 226, a Single Judge of the High Court found the findings of facts to be erroneous and the impugned order void, and granted a writ in favour of Smt. Rup Kaur. On appeal, the decision was upheld by a Division Bench of the High Court. Dismissing the appeal the Court, HELD: (1) The High Court does not sit as a court of appeal to substitute its own judgment for that of the au thorities which are empowered to give their decisions, but apart from jurisdictional errors, the High Court may correct errors apparent on the face of the record. An error to be apparent must be one which does not take prolonged arguments to bring it to the surface. The Single Judge 's conclusion that provisions of Rule 90 of the Displaced Persons Compensation and Rehabilitation Rules, 1955, had not been complied with, was not erroneous. [123C D. 126E F] S.L. Hegde & Ors. M.B. Tirumale [1960] (1) SCR 890, ap plied Hiralal Kher vs The Chief Settlement Commissioner New Delhi , referred to. (2) It is a settled rule of practice of this Court not to interfere with the ' exercise of discretionary powers of High Courts under article 226 of the Constitution merely be cause two views are possible upon the facts of a case. For interference by this Court, the question must involve at least a matter of public or general importance or the injus tice suffered by an individual due to an error of law should be so gross as to touch the conscience of this Court in which case it would be deemed to be one of more than private importance. [123E F]

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ivil Appeal No. 1020 of 1975. (Appeal by Special Leave from the Judgment and Order dated the 18 4 1975 of the Maharashtra State Co op. Appel late Court in Appeal No. 54 of 1975.) J. L. Nain, U. R. Lalit, and V. N. Ganpure, for the appel lant. V.M. Tarkunde, Sharad Manohar, P.H. Parekh and Miss Manju Jetley, for respondent No. 1. M.C. Bhandare, Mrs. section Bhandare, N.S. Narasimhan, K.C. Sharma, ,A. K. Mathur and ,4. K. Sharma, for respondent No. 2. 343 The Judgment of the Court was delivered by RAY, C.J. This appeal by special leave is from the judgment dated 18 April 1975 of the Maharashtra State Co operative Appellate Court. The question for consideration in this appeal is whether a mortgagor can exercise his right of redemption after a mortgagee under an English Mortgage with power to sell mortgaged property without the intervention of the court gives notice to the mortgagor to sell the mortgaged property by public auction and sells it by public auction. The appellant is the auction purchaser. The respondents are Flora Co operative Housing Society in liquidation the mortgagors (hereinafter referred to as the Society) and the Maharashtra Co operative Housing Finance Society Ltd., the mortgagee (hereinafter referred to as the mortgagee). In 1964 the Society was registered as a Housing Society with 12 members. The paid up capital of the Society was Rs.21,000/ . The Society wanted 12 flats to be constructed in one structure of ground and two upper floors. The Society purchased plot No. 153 in Santa Cruz at Bombay, measuring 1002 sq. yards. The price was Rs.1,02,000/ . In 1966 the Society mortgaged the land and the incomplete structure in favour of the mortgagee. The mort gage was for the sum of Rs.70,000/ . It was an English mortgage. In 1968 the mortgagee advanced a further sum of Rs.42,000/ . In 1966 Fair Deal Builders entered into a contract with Society to build. The work was stopped. Thereafter in 1967 the Society entrusted the work to Maharaja Builders. In 1968 the contract with Maharaja Builders was terminated. The work was given in 1969 to Kamal Construction Company, who abandoned it in incomplete stage. On diverse dates between 29 August 1967 and 29 November 1970, notice was given by the mortgagee to the Society for non payment to the mortgagor and to sell the property by public auction. On 9 March 1971 the Assistant Registrar of Co opera tive Societies, Maharashtra, appointed a Special Liquidator of the Society under section 102 of Maharashtra Co operative Societies Act, 1960. The Assistant Registrar communicated the order of appointment liquidator to the mortgagee on 22 April 1971. The order of appointment of a liquidator was published in Maharashtra Government Gazette on 29 April 1971. The mortgagee advertised through Government auc tioner for public auction of the property. The public auction was held on 14 April 1971. The claim was for Rs.1,22,888.22 paise. The appellant was declared the highest bidder for Rs.1,31,001/ . The terms of sale inter alia were that 25 per cent was to be paid in advance and the balance in 30 days. The sum of Rs.33,000/ was paid as 6 1546SCI/76 344 25 per cent advance and the balance purchase price of Rs.98,001/was paid to attorneys of the mortgagee. The auction purchaser took possession on 17 April 1971. On 13 August 1971 the Society filed a dispute before the Officer on Special Duty under the Maharashtra Co operative Societies Act against the auction purchaser and the mortga gee for injunction against completing sale. The Society obtained an ex parte injunction restraining transfer. On 29 September 1971, the interim injunction was vacated. Thereafter the Society filed an appeal against the said order before the Appellate Tribunal. In the meantime the appellant filed a writ petition in the Bombay High Court under Article 227 of the Constitution. On 16 June 1972 there was an interim order by the High Court in the writ petition. The Society undertook not to dispose of property until disposal of dispute. Both par ties were allowed to keep watchmen. The Society borrowed a sum of Rs.1,31,000/ and paid the same to the mortgagee on 15 October 1972. On 16 January 1975 the Officer on Special Duty delivered judgment. He held that the dispute was maintain able under section 91 of the Maharashtra Co operative Socie ties Act. The Society was held not competent to challenge the auction sale held on 14 April 1971. It was also held that the validity of auction was not affected. The mortgagee was held entitled to exercise power of sale as a secured creditor without being affected by the winding up order against the Society. It was also held that the mortgagee did ' not commit any breach of the statutory provisions of section 69 of the . The sale was pot vitiated. It was found that there was no irregularity at the auction and there is no ground for setting aside the sale. The society was entitled to redeem the proper ty because the conveyance was not complete. The auction purchaser filed before the Maharashtra State Cooperative Appellate Court an appeal against the said order. In appeal the plaint was allowed to be amended and prayer for redemption was allowed to be introduced. On 18 April 1975 the Maharashtra State Cooperative Appellate Court dismissed the appeal and held that the dispute as initiated by the Society fell within the ambit of section 97 of the Maharashtra Cooperative Societies Act. The Appel late Court further held that there was no complete sale within the meaning of section 69(3) of the and the equity of redemption was therefore not lost. It was further held that the auction price was grossly inadequate. The auction sale was not a sale after a fair competition. The Mortgage Deed provided inter alia as follows : 345 "it is hereby agreed and declared that it shall be lawful for the mortgagees at any time without any further consent on the part of the mortgagors to sell the said mortgaged premises . . The aforesaid power shall be deemed to be a power to sell or concur in selling the said mortgaged premises in default of payment of the mortgage money without the intervention of the court within the meaning of section 69 of the . " Clauses (7), (8) and (33) in the Conditions of Sale may be referred to. Clause (7) provided as follows. Upon payment of the balance Of the purchase price, the purchaser shall be enti tled to a conveyance from the vendors. The vendors shall in the conveyance of the property purchased by purchaser give the usual covenant required of a limited owner against encumbrances. The vendors shall give no other covenant required of an absolute of full owner. The vendors shall not be required to procure the consent of the mortgagors or of any other person in the conveyance. Clause (8) was as follows. After payment of the balance of the purchase money the purchaser shall be entitled to the rents and profits of the said property. The vendors as the mortgagees are not in possession of the property and will not do anything to deliver possession of the proper ty to the purchaser. The vendors as the mortgagees shall not be able to give vacant or symbolic possession of the property to the purchaser. On payment of the balance of the purchase price the purchaser shall at his own cost be at liberty to take such steps as the purchaser may deem neces sary for obtaining possession of the property from the mortgagors. Clause (33) provided as follows. If the mortgagors shall deposit all the amounts due to the vendors as mortga gees in court or pay the same to the vendors or their attor neys between the date of sale and the completion thereof and if as a result thereof the vendors have to reconvey the property to them or if the vendors cannot thus proceed with the sale and the sale is not completed on that account the vendors shall return the said deposit to the purchaser without any interest and/or costs and the vendors as such mortgagees shall not be held liable for any damage. Counsel for the appellant advanced these contentions. First, under section 69 of the a mortgagor confers on the mortgagee a power of sale through Court Or without intervention of court. The power of sale is of the entire legal estate of the mortgagor. Second, when such a power is conferred it is agency coupled with interest under section 202 of the , the agency cannot be revoked without payment to mortgagee. Third,if the power is acted upon revocation even on payment cannot nullify acts pursuant to powers. Reliance was placed on sections 203 and 204 of the . Fourth, if the act done pursuant to power is that the property is put up for sale and it is knocked down it is an act done by the mortgagee for mortgagor In 346 other words it is as if an act done by the mortgagor. The, sale pursuant to the power is a subsequent act within the meaning and this subsequent act will extinguish the mortgagor 's right of redemption. Fifth, in a suit for specific performance by auction pur chaser the purchaser will be entitled to specific perform ance because it is a sale by mortgagor. Counsel for the appellant relied on two English deci sions. These are: Waring (Lord) vs London and Manchester Assurance Co. (1), and Property & Bloodstock Ltd. vs Emer ton(2) in support of the propositions that the mortgagor 's right to redemption would be extinguished when the mortgagee exercised the power of sale and the third party entered into a binding contract to purchase the property. The English decisions are based on the provisions of the English Law of Property Act. The provisions create a statu tory power of sale, which gives to a mortgagee power to sell the mortgaged property, and it means that the mortgagee has power to sell out and out by private contract or by auction, and subsequently to complete the conveyance. The English decisions are that if a mortgagee exercises power under section 100(1)(i) of the Law of Property Act, 1925, to sell the mortgaged property by public auction or by private contract it is binding on the mortgagor before completion unless it is proved that he exercised it in bad faith. It was said in the Property & Bloodstock case (supra) that the contract for sale by the mortgagees to the pur chaser precludes the mortgagor from his right of redemp tion pending completion even if the property is sold subject to one or more conditions. The English decision naturally notices distinction between condition precedent and the terms of contracts of sale, namely, conditions dealing with matters of title for carrying out the contract. The mere fact that the label "condition" happens to be attached to conditions does not preclude its being in the latter catego ry of "condition" or matter of title. The condition that the sale is subject to the reversioner 's licence being obtained where necessary. is held in the English decision to be commonly regarded as no more than a term of the contract relating to title. The provisions in the relevant to the purpose of present appeal are sections 54, 60 and 69. Under section 54 of the , sale is a transfer of ownership in exchange for a price paid or promised or part paid and partpromised. Such transfer in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a rever sion or other intangible thing can be made only by a regis tered instrument. A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. An English Mortgage is defined in section 58(e) of the . Where the mortgagor binds himself to repay the mortgage money on a certain date, and transfers the mortgaged pro (1) (1935) Chancery 310. (2) (1968) L.R. Chancery 94. 347 perty absolutely to the mortgagee, but subject to a proviso that he will retransfer it to the mortgagor upon payment of the mortgagemoney as agreed, the transaction is called an English mortgage. The Rights and Liabilities of Mortgagor are dealt with in section 60 of the . It is that at any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgagemoney, to require the mortgagee (a) to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee, (b) where the mortgagee is in possession of the mortgaged property to deliver possession thereof to the mortgagor and (c) at the cost of the mortgagor either to re transfer the mortgaged property to him or to such third person as he may direct, or to execute and to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished. There is a proviso that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court. The right conferred by section 60 of the Trans fer of Property Act is called a right to redeem. Therefore, the said section 60 provides for a right of redemption provided that the right has not been extinguished by the act of parties. Section 69 of the deals with mortgagees ' power of sale. Under the said section 69(1)(c), a mortgagee has power of sale without the intervention of the Court where power is conferred by the mortgage deed and the mortgaged property or any part thereof was on the date of the execution of the mortgage deed, situate within the towns of Calcutta, Madras, Bombay or in any other town or area which the State Government, may, by notification in the official Gazette, specify. The principal question in this appeal is whether the right to redemption has been extinguished by any act of the parties. The English decisions are based on the provisions of the Law of Property Act, 1925. In England sale is ef fected by the contract of sale, and in India an agreement for sale is not a sale or transfer of interest. In England, a mortgagee gets an equitable interest in the property. Under the English doctrine a contract of sale transfers an equitable estate to the purchaser. The Court does not assist the mortgagor by granting him a remedy unless there is collusion on the part of the mortgagee. In India there is no equity or right in property created in favour of the purchaser by the contract between the mortgagee and the proposed purchaser. In India, there is no distinction between legal and equitable estates. The law of India knows nothing of that distinction between legal and equitable property in the sense in which it was under stood when equity was administered by the Court of Chan cery in England. Under the Indian law, there can be but one owner that is, the legal owner. See Rani Chhatra Kumari vs Mohan Bikram (1) (1) (1931) 58 I.A. 279. 348 A contract of sale does not of itself create any inter est in, or charge on, the property. This is expressly declared in section 54 of the . See Rambaran Prasad vs Ram Mohit Hazra(1) & Ors. C) The fidu ciary character of the personal obligation created by a contract for sale is recognised in section 3 of the and in section 91 of the Trusts Act. The personal obligation created by a contract of sale is de scribed in section 40 of the as an obligation arising out of contract and annexed to the owner ship of property, but not amounting to, an interest or easement therein. In India, the word "transfer" is defined with reference to the word "convey". The word "transfer" in English law in its narrower and more usual sense refers to the transfer of an estate in land. Section 205 of the Law of Property Act in England defines: "Conveyance" includes a mortgage, charge, lease, assent, vesting declaration, vesting instru ment. The word "conveys" in section 5 of the transfer of Property Act is used in the wider sense of conveying owner ship. The right of redemption which is embodied in section 60 of the is available to the Mortga gor unless it has been extinguished by the Act of parties. The combined effect of section 54 of the Transfer of Proper ty Act and section 17 of the Indian Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption. In India it is only on execution of the conveyance and registration of transfer of the mortgagor 's interest by registered instru ment that the mortgagor 's right of redemption will be extin guished. The conferment of power to sell without interven tion of the Court in a Mortgage Deed by itself will not deprive the mortgagor of his right to redemption. The extinction of the right of redemption has to be subsequent to the deed conferring such power. The right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale. The mortgagor 's right to redeem will survive until there has been completion of sale by the mortagee by a registered deed. In England a sale of property takes place by agreement but it is not so in our country. The power to sell shall not be exercised unless and until notice in writing requir ing payment of the principal money has been served on the mortgagor. Further section 69(3) of the Transfer of Proper ty Act shows that when a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale. Therefore, until the sale is complete by registration the mortgagor does not lose right of redemp tion. It is erroneous to suggest that the mortgagee is acting as the agent of the mortgagor in selling the property. The mortgagor exercises his right under a different claim. The mortgagee 's right is different from, (1) ; 349 the mortgagor 'section The mortgagee exercises his right under a totally superior claim which is not under the mortgagor, but against him. In other words, the sale is against the mort gagor 's wishes. Rights and interests of the mortgagor and the mortgagee in regard to sale are conflicting. In view of the fact that only on execution of convey ance, ownership passes from one party to another it cannot be held that the mortgagor lost the right of redemption just because the property was put to auction. The mortgagor has a right to redeem unless the sale of the property was complete by registration in accordance with the provisions of the Registration Act. The decision in Abraham Ezra Issac Mansoor vs Abdul Latiff Usman(1) is correct law that the right to redeem a mortgage given to a mortgagor under section 60 of the , is not extinguished by a contract of sale of the mortgaged property entered into by a mortga gee in exercise of the power of sale given to him under the mortgage deed. Until the. sale is completed by a registered instrument, the mortgagor can redeem the mortgage on payment of the requisite amount. The Madras decision reported in Meenakshi Velu & Ors. vs Kasturi Sakunthala & Ors.(2) on which counsel for the appellant relied is contrary to the view expressed in Ellappa Naiker and others vs Sivasubramania Maniagaran,(3) and the aforesaid Bombay decision. We are entirely in agreement with the Bombay decision. The Madras decision Meenakshi Velu & Ors. vs Kasturi Sakun thala & Ors. (2) which holds a contrary view on which coun sel for the appellant relied is wrong. For the foregoing reasons, the appeal is dismissed with costs to respondent no 1. P.H.P. Appeal dismissed. (1)I.L,R, (2) 1.1 .R, (1967) 3 Madras 161. (3) (1936) 71 Madras Iaw Journal 607.

In 1964, respondent No. 1 Society was registered as a Housing Society. The Society wanted 12 plots to be con structed for its 12 members. The Society, therefore, pur chased a plot of land. In 1966, the Society mortgaged the land and the incomplete structure in favour of respondent No. 2. In March, 1971, the Special Liquidator of the Socie ty was appointed under section 102 of the Maharashtra Co operative Societies Act, 1960. The mortgagee after demand ing the dues from the mortgagor advertised the public auc tion for the sale of the property. In the auction sale the appellant was declared as the highest bidder. The auction purchaser took the possession of the land and the incomplete structure. Society filed a dispute before the Officer on Special Duty under the Maharashtra Co operative Societies Act against the auction purchaser and the mortgagee praying for an injunction against the completion of the sale. The Society in the meanwhile paid the mortgage money to the mortgagee. The Officer on Special Duty delivered his judg ment in January 1975 and held that the Society was entitled to redeem the property because the conveyance was not com plete. The appellant filed an appeal before the Maharashtra State Co operative Appellate Court. In the appeal, plaint was allowed to be amended and a prayer for redemption was allowed to be introduced. The appellate Court held that there was no complete sale within the meaning of section 69(3) of the and the equity of redemption was, therefore, not lost and that the auction price was grossly inadequate and that the sale was not after a fair competition. One of the conditions of auction sale was that if the mortgagor deposited the mortgage money in court between the date of the sale and completion thereof and if as a result thereof the mortgagee was to reconvey the property to the mortgagor the auction purchaser Would be entitled to the refund of the amount paid without any inter est and/or cost. In an appeal by Special Leave the appellant contended: (1) When under section 69 of the a mortgagor confers on the mortgagee a power of sale through court or without intervention of court, the power of sale extends to the entire legal estate of the mortgagor. (2) When such a power is conferred it is agency coupled with interest under section 202 of the . If the power is acted upon revocation even on payment of mortgage money cannot nullify acts already done pursuant to the said powers. (3) Knocking down at an auction sale by the mortgagee pursuant. to the power of sale extinguishes the mortgagor 's right of redemption. (4) In a suit for specific performance by auction pur chaser, the purchaser will be entitled to specific perform ance because it is a sale by mortgagor. Dismissing the appeal, 342 HELD: (1) Under section 69(1)(c) a mortgagee has power to sell without intervention of the court where power is con ferred by the mortgage deed and the mortgaged property or any part thereof was on the date of the execution of the mortgage deed situated in certain big towns. [347D E] (2) In India the word "transfer" is defined with refer ence to the word ,"convey". The word "transfer" in English law in its narrower and more usual sense refers to the transfer of an estate in the,land. Section 205 of the Law of Property Act in England defines "conveyance as including mortgage, charge, lease, assent vesting declara tion, vesting instrument". The word "conveys" in section 5 of the and section 17 of the Indian Registration Act is that contract for sale in respect of immovable property of the value of more than Rs.100 without registration cannot extinguish the equity of redemption. In India it is only on execution of the conveyance and regis tration of transfer of the mortgagor 's interest by regis tered instrument that mortgagors right of redemption will be extinguished. The conferment of power to sell without intervention of the Court in a mortgage deed by itself will not derrive the mortgagor of his right to redemption. The extinction of the right of redemption has to be subsequent to the deed conferring such power. The right of redemp tion is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale. [348B, D E] Abraham Ezra Issac Mansoor vs Abdul Latif Usman I.L.R. 1944 Bombay 549, approved. Meenakshi Velu & Ors. vs Kasturi Sakunthala & Ors. I.L.R. , overruled. Ellappa Naiker and Ors. vs Sivasubramania Manisaran , approved. (3) Under the English doctrine, a contract of sale transfers an equitable estate to the purchaser. In India there is no equity or right in property accrued is favour of the purchaser by the contract between the mortgagee and the proposed purchaser. In India there is no distinction be tween legal and equitable estates. In India there can be but one owner i.e. legal owner. [347G H] Rani Chhotra Kumari vs Mohan Bikram (1931) 58 I.A. 279 and Rambaran Prasad vs Ram Mohit Hazra & Ors. (1967) I SCR 293, followed. (4) Under section 100(1)(i) of the Law of Property Act, 1925, if a mortgagee exercises power to sell the mortgaged proper ty by public auction or by private contract it is binding on the mortgagor before completion of the sale unless it is proved that the power was exercised in bad faith. The English decisions are based on the said provision of the English Law of Property ,Act and, therefore, they are not applicable to India. [346 B D] Waring (Lord) vs London and Manchester Assurance Co. (1935) Chancery 310 and Property & Bloodstock Ltd. vs Emer ton (1968) L.R. Chancery 94 distinguished.

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ivil Appeal No. 2111 of 1969. (Appeal by Special Leave from the Judgment and Order dated 26 9 1968 of the Madhya Pradesh High COurt in Civil Revision No. 711/66). V.S. Desai, P. C. Bhartari and D. N. Misra for the Appel lants. B.N. Lokur and Rameshwar Nath for the Respondents. 1018 The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave is directed against the judgment of the Madhya Pradesh High Court dated September 26, 1968 setting aside the appellate order or the Second Additional District Judge, Indore, dated Octo ber 29, 1966 and remitting the matter to the Municipal Commissioner for a fresh determination of the annual value of the building. The building in question is known as "Viram Lodge", on Ravindra Nath Tagore Marg, Indore. It belongs to the respondent and has been used by them as a hotel. The annual gross rental value of the building was determined at Rs. 6600/in 1956. It was revised by the Assessment Officer on June 3, 1965 and was raised to Rs. 43,405.20. The respondents filed objections to the valuation, but the Municipal Commissioner fixed the annual value at Rs. 43,405.20. He held that, in view of the "non obstante" clause in section 138(b) of the Madhya Pradesh Municipal Corporation Act, 1956, hereinafter referred to as the Act, there was no justification for the .argument that the rental value of the premises could not be fixed at a rate higher than the standard rent under section 7 of the Madhya Pradesh Accommodation Control Act, 1961. An appeal was taken to the Second Additional District Judge, but without suc cess. The respondents then filed an application for revi sion, which was allowed by the impugned judgment of the High Court dated September 26, 1968. This is how the present appeal has arisen at the instance of the Municipal Corporation and its officers. Section 138 of the Act prescribes the mode for determin ing the annual value of any land or building for purposes of assessing it to property tax. Clause (a) of the section deals with the annual value of land, and it is not the case of the parties that it has any bearing on the controversy. Clause (b) prescribes the mode of determining the annual value of a building and reads as follows, "(b) the annual value of any building shall notwithstanding anything contained in any other law for the time being in force be deemed to be the gross annual rent at which such building, together with its appurtenances and any furniture that may be let for use or enjoyment therewith might reasonably at the time of assessment be expected to be let from year to year, less an allowance of ten per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent. " There are two explanations to the clause. It is nobody 's case that they have any bearing on the short point in con troversy before us. Clause (c) of the section prescribes that if the gross annual rent of a building cannot be deter mined under clause (b), the annual value of the building shall be determined according to that clause. If is 1019 not in controversy before us that the Viram Lodge was never let on rent, and is being run as a hotel by its owners, the present respondents, so that the .question of fixing its standard rent under section 7 of the Madhya Pradesh Accommodation Control Act, 1961, has not arisen. It has argued that, even so, the reasonable rent contemplated by section 138(b) of the Act cannot exceed the standard rent to be fixed under the aforesaid section 7. It has thus been 'urged that it was incumbent for the Municipal Commissioner to determine the annual value of the building on the same basis on which its standard rent was required to be fixed under section 7. Reliance in this connection has been placed on the deci sions of this Court in The Car oration of Calcutta vs Smt. Padma Debi and others,(1) Corporation of Calcutta vs Life Insurance Corporation of India(2) Guntur Municipal Council vs Guntur Town Rate Payers 'Assiciation(3) New Delhi Munici pal Committee vs M.N. Soi and another.(4) As has been stated, clause (b) of section 138 of the Act provides that the annual value of any. building shall "notwithstanding anything contained in any other law for the time being in force" be deemed to be the gross annual rent for which the building might "reasonably at the time of the assessment be expected to be let from year to year. " While therefore the requirement of the law is that the reasonable letting value should determine the annual value of the building, it has also been specifically provided that this would be so "notwithstanding anything contained in any other law for the time being in force". It appears to us that it .would be a proper interpretation of the provisions of clause (b) of section 138 of the Act to hold that in a case where the standard rent of a building has been fixed under section 7 of the Madhya Pradesh Accommodation Control Act, and there is nothing to show that there has been fraud or collusion, that would be its reasonable letting value, hit, where this is not so, and the building has never been let out and is being used in a manner where the question of fixing its standard rent does not arise, it would be permis sible to fix its reasonable rent without regard to the provisions of the Madhya Pradesh Accommodation Control Act, 1961. This view will, in our opinion, give proper effect to the non obstante clause in clause (b with due regard to its Other provision that the letting value should be "rea sonable". We have gone through the decision in Padma Debi 's case (supra). There the premises were on rent and section 127(a) of Calcutta Municipal Corporation Act, 1923, did not con tain a non obstante clause. That the section provided, inter alia, was that the annual value shall be deemed to be the gross annual rent at which the land or building might at the time of assessment "reasonably be expected to let from year to year." This Court examined the significance of the word "reasonable" and held that it would be incongruous to . (1) ; (2) [1971] 1 .C.R. 248. (3) ; (4) ; 15 1338SC1/76 1020 consider fixation of rent beyond the limits fixed by penal legislation as reasonable. That view was taken with refer ence to the provisions of the Rent Control Act which pena lised the taking of a higher rent, and also ' made it irrecoverable. While, therefore, we are in agreement with the view taken in Padma Debi 's case (supra) that it would not be reasonable to consider fixation of rent beyond the limits fixed by the Rent Control Act as reasonable, it would not be a proper interpretation of section 138(b) of 'the Act to ignore the significance of its non obstante clause altogether. That is why we have taken the view that it would be a fair and reasonable interpretation of section 138(b) to hold that as no standard rent has been fixed so far in respect of the Viram Lodge, the Municipal Commis sioner was justified in adopting another suitable criterion for determining the annual value of the building. There is in fact nothing in the Act to. make it obligatory for the Commissioner to follow the provisions of the Madhya Pradesh Accommodation Control Act in spite of the non obstante clause and to limit the annual value to any standard rent that the building might fetch under that Act. We have also gone through Corporation of Calcutta vs Life Insurance,Corporation of India (supra). That was also a case where the premises had been let out on rent. The standard rent had also been fixed, and that was why Padma Debi 's case (supra) was held to be applicable. So also, Guntur Municipal Council vs Guntur Town Rate Payers ' Association (supra) was a case where the premises.were on rent and there also Padma Debi 's case was held to be applicable even though the standard rent had not been fixed, because it was held that there was nothing to prevent the authorities concerned from ascertaining the fair rent by keeping in view the principles which had been laid down for its determination under the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. Section 82(2) of the Madras District Municipalities Act, which governed that case, did not contain a non obstante clause. Much the same was the position in M.N. Soi 's case which related to a house in New Delhi, of which rate had to be assessed under the provisions of the Punjab Municipal Act, 1911. The High Court did not properly appreciate the differ ence between the wordings of section 127 of the Calcutta Municipal Corporation Act, 1923, and section 138(c) of the Act, and committed an error in thinking that this was virtu ally similar to Padma Debi 's case. We find that the High Court has taken the view that a full hearing was not given to the respondents at the time of fixing the annual value of the Viram Lodge and that the valuation was based on "no principle". Here again, the High Court was clearly in error because we find from the judgment of the Second Additional District Judge, dated October 29, 1966, that the counsel for the respondents 1021 was given "ample opportunity" by the Municipal Commissioner to represent his case before him. He has also stated that the Assessment Officer paid due regard to all the relevant circumstances which had a bearing on the determination of the reasonable letting value of the building. Counsel for the respondents has in fact not found it worth his while to argue either that such a hearing was not given, or that all the relevant factors were not taken into consideration in determining the annual letting value of the premises. In the result, the appeal is allowed and the impugned judgment of the High Court dated September 26, 1968, is Set aside. The appellants will however pay the costs of the respondents as stipulated in the order of this Court grant ing the special leave. P.H.P. Appeal al lowed.

The respondents are the owner of a building known as Viram Lodge. They run a hotel in the said building. The annual gross rental value of the. building was determined at Rs. 6,600/ in 1956. It was revised to Rs. 43,405/ by the Assessment Officer in 1965. Section 138(b) of the Madhya Pradesh Municipal Corporation Act, 1956, provides that notwithstanding anything contained in any ,other law for the time being in force, the annual value of any building shall be deemed to be the gross annual rent at which such building might be reasonably at the time of assessment be expected to let from year to year at the time of the less an allowance of 10 per cent for repairs etc. The respondent challenged the valuation on the ground that the rental value of the premises could not be fixed at a rate higher than the stand ard rent under section 7 of the Madhya Pradesh Accommoda tion Control Act, 1961. The Municipal Commissioner negatived the respondents ' contention. An appeal filed by the respondents to the Additional District Judge also failed. The High Court however allowed the Revision filed by the respondents. Allowing the appeal by Special Leave held: 1. In the. present case the building in ques tion was never let on rent and is being used by the owners as a hotel. [1019 A] 2. On a proper construction of section 138(b) where the standard rent of a building has been fixed under section 7 of the Accommodation Control Act, and there is nothing to show that there has been fraud or collusion that would be its reasonable letting value but where the building has never been let out the question of fixation standard rent does not arise. In that case it would be permissible to fix its reasonable rent without regard to the provi sions of Madhya Pradesh Accommodation Control Act. This view gives proper effect to the nonobstante clause in section 138(b). [1019 D F] The Corporation of Calcutta vs Smt. Padma Debi and others ; , Corporation of Calcutta vs Life Insurance Corporation of India , Guntur Municipal Council vs Guntur Town Rate Payers ' Association ; and New Delhi Municipal Committee vs M.N. Soi and another ; , distinguished.

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Appeal No. 155 of 1971. (Appeal by Special Leave from the Judgment and Order dated 24 3 1975 of the Andhra Pradesh High Court in Appeal No. 19/72). B.V. Subrahmanyam and A. Subba Rao, for the Appellant. A. K. Sen, K.R. Chaudhary, Miss Nihar Saha and Mrs. Veena Devi Khanna, for the ReSpondent. The Judgment of the Court was delivered by BEG, J. This is a defendant 's appeal by special leave against the judgment of the High Court of Andhra Pradesh decreeing, with costs, the claim of the plaintiffs respond ents, the Andhra Pradesh State Electricity Board and the Andhra Pradesh State Government for Rs. 3,34,443.77 as arrears of electricity charges said to be due from the Vijayawada Municipal Council in respect of amounts which were shown in its books as payable to it by consumers of electricity. The plaintiff 's claim flowed from the terms of the Andhra Pradesh (Andhra Area) Electricity Supply Undertaking (Acquisition) Act 15 of 1954 (hereinafter refered to as 'the Act '), the provisions of which were applied to the electric ity undertaking of the appellant Municipal Council with effect from 22nd December, 1961,. by the Government of Andhra Pradesh. The rights of the State were transferred to the Andhra Pradesh Electricity Board the co plaintiff re spondent. The amounts claimed were shewn in the books of the Council 's electricity undertaking on the date of its acquisition as due to it from direct consumers of electric ity to whom it used to sell electricity supplied to it in bulk. The "Electricity undertaking" was taken over by the Government by an order under Section 4 (1 ) of the Act. This section provided: "4. Power of Government to take over any undertaking : (1 ) The Government may, in respect of any undertaking not taken over by them before the commencement of this Act, by order in writing, declare that it shall vest in them on the 848 date specified therein, such date not being earlier than four months from the date of the declaration :" The Municipal Council was the licensee from whom the "undertaking", as a commercial concern, was taken over. A licensee is de fined by section 2(j) to mean: " . a person licensed under part II of the Electricity Act to supply electricity energy, or a person who has obtained sanction under section 28 of that Act to engage in the business of supplying electricity and in relation to an undertaking taken over.or an undertaking which has vested in the Government under section 4 the person, who was the licen see at the time the undertaking was taken over or vested in the Government, as the case may be, and includes the successorin interest of any such person;" The State Electricity Board stepped into the shoes of the licensee on behalf of the State, to discharge all the existing obligations of the licensee, arising out of past transactions, and, for this reason, became entitled to the benefits of all contracts, whether they had accrued in the past or were to arise in future, which existed at the time of the taking over of the undertaking. The effect of the "taking over" of an undertaking and the vesting the rights and liabilities of the former licensee in the State, by operation of law, was indicated by sections 5 and 6 of the Act. Section 5 provided for compensation to be paid on one of three alternative bases specified in this provision. The licensee could opt for one of the three bases. The provisions of section 6(2) of the Act give the consequences of vesting. Section 6(2) of the Act enacts: "6(2) (a) If compensation is payable in respect of an undertaking under Basic C, only the property, rights liabilities and obliga tions specified herein shall vest or be deemed to have vested in the Government on the vest ing date : (i) all the fixed assets of the licensee and all the documents relating to the under taking; (ii) all the rights, liabilities and obligations of the licensee under hire pur chase agreements, if any, for the supply of materials or equipment made bonafide before the vesting date; (iii) all the rights, liabilities and obligations of the licensee under any other contract entered into bona fide before the vesting date, not being a contract relating to the borrowing or lending for money. (b) All the assets specified in clause (a) (i) shall vest or shall be deemed to have vested in the Government free from any debts, mortgages or similar obligations of the licen see or attaching to the undertaking. 849 Provided that such debts, mortgages or obligations shall attach or shall be deemed to have attached to the. compensation. payable under this Act for the assets". A glance at clause (2) (a) (iii) of section 6 indicates that it clearly provides for the vesting of "all the rights liabilities and obligations of the licensee" under contracts entered into "before the date of vesting". Therefore, we find no merit in the objection, on behalf of the Municipal Council, that past dues of consumers of electricity, shown in the books of Vijayawada Municipal Council, could not vest in the State Government, in a case in which basis C is applicable for compensation. The compensation provided by Section 5(3)(vi) applicable to basis 'C ' takes in "the book value of all intangible assets to the extent such value has not been written off in the books of the licensee". The result ' is that "the aggregate value" of all items speci fied in section 5(3), including items falling under sub clause (vi), became payable as compensation to the licensee on principle 's specified in the Act. The learned Counsel for the appellant has placed a great deal of reliance on the provi sions of Section 10(2)(b) (iii), which are applicable to cases of compensation payable on basis 'C '. Section 10 gives a list of deduc tions from compensation. One of the items of this ,deduction is found in section 10(2)(b)(iii) which lays down: "all sums paid by consumers by way of security deposit and arrears of interest due thereon on the vesting date, in so far as they have not been paid over by the licensee to the Government, less the amounts which according to the books of the licensee are due from the consumers to the licensee for energy supplied by him before that date;" The provision set out above is sought to be made the corner stone of the arguments of the learned Counsel for the Appel lant Municipal Council, although this very provision was held by the High Court to be decisive against the appel lant 's case that the amounts shown as due from the consumers of the licensee for energy supplied before the vesting date were claims for amounts which the Vijayawada Municipal Council was entitled to appropriate as they must be deemed to be exempted from the effects of vesting of rights and obligations of the undertaking in the State. It is true, as the learned Counsel for the Municipal Council points out, that only those rights and liabilities and obligations which are specified in section 6(2) (a) are to vest in the State Government. But, the contention based on alleged non specification of the claims of the licensee against direct consumers to whom it used to supply electric ity over looks, the sweep of section 6(2) (a) (iii), already indicated above, which will cover all rights and liabilities under contracts entered into bona fide before the date of vesting. It is not possible to assert that the rights of the Municipal Council to realise arrears of dues from the consumers will not be transferred to the State Government when they are covered by the specific language of section 6(2) (a) (iii). The 850 explicitly wide language used dispenses with the need to specify by enumerating all items which are covered by it. That is the very object of such language. We have also indicated how section 5(3)(vi), meant for application to basis 'C ', mentions all intangible rights shewn in the books of the licensee. This also supports the interpretation we place on section 6(2)(a)(iii) and on the wide ambit of the specification here which must, obviously, not conflict with section 5(3)(vi). We are, therefore, completely unimpressed by arguments based on supposed non specification of the claims of the former licensee under taking against consumers to whom it had supplied electricity in the past and against which it had claims which vested, from the specified date, in the State Government. Learned Counsel 's argument, on the meaning of Section 10(b) (iii), is really meant to reinforce the argument indicated above, based on alleged non specification of the claims of the Municipal Council as a licensee for supplying electrici ty to consumers. If the meaning of relevant provisions of section 5 and 6 is clear, we do not think that any assist ance could be derived ' by the appellant Municipal Council from the provisions of section 10(2)(b)(iii) unless these clearly conflicted with the other provisions. If, however, two interpretations were possible of these provisions, we should, we think, prefer the one which is in harmony with the clear meanings of the terms of section 5(3), read with section 6(2) (a) of the Act as indicated above. This is the salutary rule of construction resting upon the doctrine that a statute, like any other document, must be read as a whole to extract its meaning and intendment correctly. Learned Counsel for the appellant submits that the exclu sion by section 10(2)(b)(iii) of the amounts which, accord ing to the books of the licensee, "are due from the consum ers to the licensee for energy supplied by him before that date" (i.e. the date of vesting), from the ambit of deduc tions from compensation, necessarily implies that these amounts can be appropriated by the appellant Municipality. 'We are, quite unable to see how this inference follows from an exclusion from items of deduction from compensation. A deduction from an item of compensation may, if there was nothing else to furnish a clue as to its meaning, imply that it was not being compensated for because the party whose rights were acquired was retaining the item. But, an exclusion from an item of deduction from compensation itself could, according to its natural meaning, only indicate that this was being done because this was an item which is cov ered by the compensation provided for and to be paid. A close examination of section 10(2)(b)(iii) wilt show that it is meant for security deposits and arrears of inter est due on them which are generally held in trust by the licensee so as to be ultimately returned to the consumers, if the dues of the consumers have been met without resorting to the amounts deposited. They are used for a deduction of dues where these have not been paid; We know that these deposits are required so as to cover claims from defaulting consu 851 mers in order to avoid the trouble of litigating to enforce them. If these deposits have not been made over by the licensee to the Government, they will be claimable by the depositors from the licensee. Hence, it seems fair to deduct them from any item of compensation as these deposits are not meant to be kept by the licensee. They do not constitute profits of the business or price for anything supplied or payment for services rendered or an asset out of which liabilities of the licensee may be met. If, howev er, there are any amounts shewn in the books o[ the licensee as due from the consumers of energy supplied before the date of vesting, they would become realisable by the Govt. Hence, the amounts for which deductions from items of compensation will have to be made is reduced by the amounts which are due from consumers to the licensee for energy supplied by the licensee before the date of vesting as they become the claims realisable by the successor in interest of the licensee. Therefore, the High Court 's interpretation was, obviously, correct. This provision supports the case of the respondents rather than that of the former licensee Municipal body. It is very difficult to see how it supports the appellant 's case. It appears that no question was raised before 'the High Court as to the nature of the obligation incurred by the Municipal Council to pay the amount claimed apart from its right to appropriate the amount itself as part of the assets which had, it was asserted, not vested in the State Govern ment. An attempt was, however, made before us to confuse it with the payment made by the Municipal Council itself to the Government for the bulk supply of electricity used, inter alia, for street lighting and other purposes by the Council itself. But, no question was raised in the plead ings to indicate that the plaintiff 's claim included these past dues. We do find that the licensee had set up certain reasons for its inability to realise certain amounts from the consumers. We do not know what all these reasons precisely were or whether the licensee, was really unable to realise them for any of these reasons. But, ground No. 1 of the special leave petition shows that the Municipal Council had Rs. 9 lakhs with it in deposit for the recovery of the claims not realised from which it proposed to deduct the amounts claimable towards dues and to. appropriate them itself. The ground runs as follows: "In the instant; case the learned trial judge found that there was a deposit of 3 lakhs of rupees with the Vijayawada Municipal ity and the Vijayawada Municipality by virtue of section 10(2)(b)(iii) is certainly entitled to adjust and by virtue of section 10(2)(b)(iii) of the Act 15 of 1964, the Government can deduct that security from out of compensation less the amount due to the licensee from its consumers upto the vesting date. " We may also mention that it was not argued on behalf of the Municipal Council that what was vested in the Government was only the right to realise the claims itself and not an amount of money which the Municipal Council had actually realised or could have realised if 852 it took steps to make realisations. On the other hand, ground No. 1 of the grounds of appeal quoted above, shows that the case of the Municipal Council was simply that it is 'entitled to deduct amounts claimed from whatever may be the amounts in deposit be cause. the claims against the consumers had vested in the Municipal Council and not in the Government. We think that legal questions of interpretation of the Act, to which the learned Counsel for the parties rightly con fined their arguments, apart from some at tempts to raise questions outside the plead ings which could not succeed, were rightly answered by the High Court when it held that the relevant provisions, if correctly inter preted, meant that the claims for dues on electricity supplied at enhanced rates, the validity of which had been unsuccessfully challenged by some consumers in certain other proceedings initiated before filing of the suit now before us, had vested in the State Government. Consequently, we affirm the judgment and decree of the High Court and dismiss this appeal with costs. V.P.S. Appeal dismissed.

Section 4 of the Andhra Pradesh (Andhra Area Electricity Supply Undertaking (Acquisition) Act, 1954, empowered the Government to declare that an electricity undertaking of the licensee Municipal Council shall vest in Government on a specified date. Section 5 provides for compensation to be paid on one of three alternative bases, A, B or C set out in the Act. Where compensation is on the basis 'C ',, it in cludes under section 5(3)(vi) the book value of all intangible assets to the extent such value has not been written off in the books of the licensee; and section 6(2)(a) mentions the items that would vest in the State Government. Section 6(2)(a)(iii) relates to all the rights, liabilities and obligations of the licensee under any other contract entered into bona fide, not being a contract relating to the borrowing or lending for money. Section 10(2) (b)(iii) lays down that the Government may deduct from the compensation all sums paid by consumers by way of security deposit and arrears of interest due thereon on the vesting date, in so far as they have not been paid over by the licensee to the Government, less the amounts which according to the books of the licensee are due from the consumers to the licensee for energy supplied to such consumers before that date. In the present case, the State Government made a decla ration regarding the vesting of the Electricity Undertaking of the appellant in the State Government, and transferred its rights to the respondent Electricity Board. Certain amounts were shown in the books of the appellant as due to it from consumers. The respondent claimed those amounts and flied a suit against the appellant for their recovery. The trial court dismissed the suit, but the High Court allowed the appeal. In appeal to this Court, it was contended that past dues from the consumers would not vest in the respondent as they were not specifically mentioned in section 6(2)(a); and that under section 10(2)(b)(iii) the appellant was entitled to deduct and appropriate the amounts due from consumers for supply of electricity from their security deposits. Dismissing the appeal to this Court, HELD: (1) The explicitly wide language used in section 6(2)(a)(iii) dispenses with the need to specify all items which are covered by it; and, arrears of dues from consumers are covered by the wide language of the clause. [850 A] (2)(a) Section 10(2)(b)(iii) is meant for security deposits and arrears of interest due on them which are generally held in trust by the licensee so as to be ulti mately returned to the consumers,. if the dues of the con sumers have been met without resorting to the amounts depos ited. They are used for a deduction of dues from deposits where these have not been paid. If these deposits have not been made over by the licensee to the Government, they will be claimable by the depositors, and, therefore, they are deducted from the compensation. If however, there are any amounts due shown in the books of the licensee as duo from the consumers of energy they would become realisable by the Government under section 6(2)(a)(iii). It is for this reason that the deduction of security 847 deposit from compensation is reduced by the amounts which are due from consumers to the Undertaking for energy sup plied by the Undertaking before the date of vesting as they become the claims realisable by the successor in interest of the Undertaking. An exclusion from an item of deduction from compensation could only indicate that this was being done because this was an item which is covered by the compensation provided for and to be paid. [850 A] (b) In .the present case, the only contention of the appellant was that the right to appropriate the amount of dues did not vest in the respondent but that the amount had vested in the appellant. It was not argued on behalf of the appellant that what was vested in the Government was only the right to realise the dues from the consumers and not to recover from the appellant the amount which the appellant had actually realised or could have realised. (3) The High Court 's interpretation of section 10(2)(b)(iii) must be accepted as a correct interpretation because it is in harmony with the meaning of the terms of section 5(3)(vi) read with section 6(2)(a) of the Act. [851C]

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Appeal No. 1528 of 1971. (Appeal by Special Leave from the Judgment and Order dated 23 11 1970 of the Madras High Court in Tax case No. 398/7C (Revision No. 260/70) S.T. Desai and T.A. Ramachandran, for the ,Appellant. V.P. Raman, .Addl. Solicitor General for India. A.V. Rangan and Miss A. Subhashini, for the Respondent. The, Judgment of the Court was delivered by KHANNA, J. This appeal by special leave is against the judgment of the Madras High Court Whereby. the High Court dismissed the petition flied by the appellant under section 38 of the Tamil Nadu General Sales Tax Act, 1959 (hereinaf ter referred to as the State Act). The matter relates to the assessment year 1960 61. The appellant firm is a dealer in cotton yarn. The appellant bought yarn from local dealers and manufacturers and, in turn, sold that yarn by way of inter State sale. Sales tax under the State Act on the yarn purchased by the appellant had been paid by those manufacturers and dealers. The inter State sales of yarn made by the appellant were as sessed to tax under the (hereinafter referred to as the Central Act) in the hands of the appel lant. The appellant claimed refund of the tax amounting to Rs. 16,769.96 paid under the State Act in respect of the yarn sold by it in the course of inter State trade in ac cordance with section 15(b) of the Central Act and the proviso to section 4 of the State Act read with rule 23 of the Tamil Nadu General Sales Tax Rules, as these provisions stood at the relevant time. The Additional Commercial Taxation Officer admitted the claim of the appellant for refund of the tax only in respect of the sum of Rs. 5,562.59 and rejected the claim in respect of the balance On appeal the Additional Appellate Assistant Commissioner allowed refund of a further sum of Rs. 3,204.73 and rejected the claim regarding the balance of Rs. 8,002.64. On second appeal the 952 Appellate Tribunal relying upon the decision of the Madras High Court in M.A. Khader & Co. vs Deputy Commercial Taxa tion Officer(1), rejected the claim of the appellant for the balance of Rs. 8,002.64. At the instance of the State representative, the Tribunal further held that the appellant was not entitled to get refund of the amount of Rs. 5,562.59 and Rs. 3,240.73 in respect of which relief had been granted by the Appellate Assistant Commissioner. The appellant thereafter preferred revision petition to the Madras High Court under section 38 of the State Act. The High Court dismissed the said petition after observing that the princi ple laid down in the case of M.A. Khader & Co. (supra) would apply to the facts of this case. The appellant hereafter came up in appeal to this Court by special leave. Before dealing with the point of controversy, it may be apposite to refer to the material provisions of law, 'as they stood at the relevant time. A number of goods have been declared under section 14 of the Central Act to be of special importance. in inter State trade or commerce. Cotton yarn is one of those goods. Section 15 of the cen tral Act at the relevant time read as under: "15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely : (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed two per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage; (b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State. " Section 4 of the State Act reads as under: "4. Tax in respect of declared goods. Notwithstanding anything contained in section 3, the tax under this Act shall be payable by a dealer on the sale or purchase inside the State of declared goods at the rate and only at the point specified against each in .the Second Schedule on the turnover in such goods in each year, whatever be the quantum of turnover in that year: Provided that where a tax has been levied under this section in respect of the sale or purchase of declared goods and such goods are sold in the course of inter State trade (1) 25 section T.c. 104. 953 or commerce the tax so levied shall be refund ed to such person in such manner and subject to such conditions as may be prescribed. " According to the Second Schedule to the Stale Act, the tax on cotton yarn but excluding cotton yarn waste shall be one per cent at the point of the first sale in the State. Clauses (1) to (3) of rule 23 of the Madras General Sales Tax Rules, 1959 read as under: "23. (1) The tax levied under section 4 in respect of the sale or purchase inside the State of any goods specified therein shall, if such goods are sold in the course of inter State trade or commerce, be refunded in the manner and subject to the conditions pre scribed in this rule to the dealer who has made the inter State sale and has paid the tax under the , in respect of such sale. (2) Every ;such dealer who claims a refund under this rule shall within the time allowed in sub rule (3) submit to the assess ing authority a statement in Form A 4. (3) The statement referred to in sub rule (4) shall be submitted to the assessing authority not later than three months. from the date on which the dealer paid the Central sales tax due on the transaction in respect of which he claims refund of the State sales tax: Provided that the assessing authority may condone delays up to a period of fourteen days in the submission of the statement, if he is satisfied that the dealer had sufficient cause for not submitting the statement within the said period. " In appeal before us, Mr. Desai on behalf of the appel lant has assailed the judgment of the High Court and has urged that in accordance with clause (b) of section 15 of the Central Act, the proviso to section 4 of the State Act and rule 23 of the Madras General Sales Tax Rules, the sales tax under the State Act in respect of yarn which was the subject matter of inter State sale, should have been paid to the appellant. The High Court, according to the learned counsel, was in error in holding to the contrary. As against that learned Additional Solicitor General has can vassed for the correctness of the view taken by the High Court. There is in our opinion considerable force in the contention advanced by Mr. Desai. Section 15 of the Central Act, as it existed at the relevant time, contemplates that every State law in so far as it imposes or authorises the imposition of tax on sale or purchase of declared goods, would be subject to the re striction and condition that the tax payable under that law in respect of any sale of purchase of such goods inside the State shall not exceed two per cent of the sale or purchase price thereof and such tax shall not be levied at more than one stage. 954 Clause (b) of that section has a direct bearing, and accord ing to that clause, where tax has been levied under the State law in respect of sale or purchase of declared goods which are subsequently sold in the course of inter State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be prescribed in any law in force in that State. Section 4 of the State Act has been cnacted in conformity with section 15 of the Central Act. The proviso to that section deals with the refund of the sales tax levied under the State Act in respect of declared goods when such goods arc sold in the course of inter State trade or commerce. According to that proviso, where a tax has been levied under section 4 in respect of the sale or purchase of declared goods and such goods are sold in the course of inter State trade or commerce, the amount of tax shall bc re funded to such person in such manner and subject to such conditions as may be prescribed. In pursuance of this provi so, the State Government has framed rule 23 of the Madras General Sales Tax Rules, 1959. According to clause (1) of that rule, the refund of the sales tax has to be made to the dealer who makes the inter State sale and who has paid the sales tax under the Central Act in respect of such sale. Clause (3) of the rule provides that statement shall be submitted to the assessing authority by the aforesaid dealt not later than three months from the date on which the dealer pays the tax under the Central Act. It may be stated that the Madras General Sales Tax Rules, 1959 had to be placed on the table of both the Houses of the State, legislature under sub section (5) of section 53 of the State Act. In the face of clause (b) of section 15 of the Central Act, the proviso to section 4 of the State Act and rule 23 of the Madras General Sales Tax Rules, we have no doubt in our mind that it is the appellant who is entitled to get the refund of the sales tax levied under the State, Act in respect of the goods in question because it was the appel lant who sold the goods in the course of inter State trade and paid the sales tax under the Central Act on that ac count. The High Court in turning down the claim of the appellant relied upon its earlier decision in the case of M. A. Khader & Co. (supra). Perusal of the facts of that case would show that the assessee therein sought a writ of certi orari to quash the assessment made under the Central Act in respect of transactions which were admittedly interState sales. The question of asking for the refund of the sales tax paid under the State Act did not arise directly in that case. There were no doubt some observations in the course of that judgment, according to which refund of the sales tax can be claimed only by the person who himself has earlier paid that tax, and not by a person who has not himself paid such tax. So far as those observations are concerned, we are of the opinion that the emphasis in the word "re funded" as used in clause (b) of section 15 of the Central Act and the proviso to section 4 of the State Act is on repayment of the amount. A word can have many meanings. To find out the exact connotation of a word in a statute, we must look to the context in which it is used. The context would quite often provide the .key to meaning of the word and the sense it should carry. Its setting would give colour to it and provide cue to the intention of the legislature 955 in using it. A word, as said by Holmes, is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used. The context in which the word "refunded" is used shows that such repayment need not be to the person who initially paid the tax. It is indeed for the State legislature to specify the person to whom such amount is to be repaid either in the statute enacted by it or to make a provision for that pur pose in the rules. The State legislature has made it Clear in the proviso to section 4 of the statute that provision in this respect would be made in the rules. The rules which have been framed leave no doubt that the amount has to be paid to the dealer who sells the goods in the course of inter State trade and who has paid the tax under the Central Act in respect of such sale. There is also no anomaly in paying the amount of the sales tax under the State 'Act to a dealer who sells de clared goods in the course of inter State trade, even though he did not himself pay the tax under the State Act in re spect of those goods. The reason for that is that the price charged from such dealer by the person from whom he pur chases the goods would normally take into account the sales tax paid by the seller. Assuming that there was some ambiguity in the languages of clause (b) of section 15, as it existed at the relevant time, the matter is made clear by the amendment made in the Central Act by the Central Sales Tax (Amendment) Act, 1972 (Act No. 61 of 1972). As a result of the amendment, clause (b) of section 15 of the Central Act reads as under: "(b) Where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter State trade or commerce, the tax levied under such law shall be reimbursed to the person making such sale in the course of inter State trade or commerce in such manner and subject to such conditions as may be provided in any law in force in that State." The amended provision makes it plain beyond any pale of controversy that the tax levied under the State Act in respect of declared goods has to be reimbursed to the person making sale of those goods in the course of inter State trade or commerce in such manner and subject to such condi tions as may be provided in the law in force in that State. According to the notes explaining the different clauses appended to the statement of objects and reasons of the Bill which emerged as the amending Act, the amendment made in clause (b) makes it Clear that local sales tax would be reimbursed to the person making the sale in the course of inter State trade and commerce. The amendment made in clause (b) can thus be taken to be an exposition by the legislature itself of its intent contained in the earlier provision. We are not impressed by the argument of the learned Additional Solicitor General 11 13 3 85CI/76 956 that the amendment made in clause (b) was intended to mark a departure from the position in law as it existed before the amendment. The fact that the amendment of clause (b) of section 15 was not like some other provisions given retro spective effect, would not materially affect the position. As already mentioned above, the legislature as a result of the amendment, Clarified what was implicit in the provisions as they existed earlier. An amendment which, is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provision, even though such amendment is not given retrospective effect. We may refer in this context to observations on page 147 of Craies on Statute Law (Sixth Ed.) which read as under: " . in Cape Brandy Syndicate vs I.R.C.(1) Lord Sterndale M.R. said: 'I think it is clearly established in Att. Gen. vs Clarkson, supra, that subsequent legislation may be looked at in order to see the proper construction to be put upon an earlier Act where that earlier Act is ambiguous. I quite agree that subsequent legislation if it pro ceeded on an erroneous construction of previ ous legislation cannot alter that previous legislation; but if there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier '. " Looking to all the facts, we are of the view that the appel lant firm is entitled to be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter State trade provided the appellant has paid the sales tax under the Central Act in respect of those sales. We accordingly accept the appeal, set aside the judgment of the High Court and order that the appellant firm be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter State trade provided the appellant has paid the sales tax under the Central Act in respect of those sales. The appellant shall be entitled to recover its costs both in this Court as well as in the High Court from the respondent. P.B.R. Appeal al lowed. (1) at P. 156.

Section 15(a) of the as it existed at the rele ant time enacted that tax in respect of any sale or purchase of declared goods inside the State shall not be levied at more than one stage. According to cl. (b) if these goods were subsequently sold, in the course of inter state trade, the tax to levied shall be refunded to such person as prescribed in the State law. The proviso to section 4 of the Tamil Nadu General Sales Tax Act and r. 23 of the Rules provide for the refund of the sales tax in the type of cases mentioned in section 15(b). The appellant bought cotton yarn from local dealers and sold it by way of inter_state sale. It paid the State sales tax and claimed refund under section 15 (b)of the Central Act. It succeeded in part at each of the different stages; but on second appeal for the balance, the Appellate Tribunal re jected the appellant 's claim and held that it was not enti tled to any refund including the relief granted by the Appellate Assistant Commissioner. The High Court rejected its revision petition. Allowing the appeal, HELD: (1) The appellant firm is entitled to be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter State trade provided the appellant has paid the sales tax tinder the central Act in respect of those sales. [956 E] (2) The proviso to section 4 of the State Act read with the rules leaves no doubt that the amount has to be paid to the dealer who sells the goods in the course of inter State trade and who has paid the tax under the Central Act in respect of such sale. [955 B] (3)(a) There is no anomaly in paying the amount of the sales tax under the State Act to a dealer who sells declared goods in the course of inter State trade even though he did not himself pay the tax under the State Act in respect of those goods. The reason for that is the price charged from such dealer by the person from whom he purchased the goods would normally take into account the sales tax paid by the seller. [955 C] (b) The case of M. A. Khader & Co. vs Deputy Commer cial Taxation officer 25 S.T.C. 104 followed by the High Court is distinguishable on facts. The question of asking for refund of the sales tax paid under the State Act did not arise directly in that case. The emphasis in the word 'refunded ' as used in section 15(b) of the Central Act and the proviso to section 4 of the State Act. on repayment of the amount. [954 G] (4) (a) A word can have many meanings. To find out the exact connotaon of a word in a statute, one should look to the context in which it is used. The context would quite often provide the key to meaning of the word and the sense it should carry. Its setting would give. colour to it and provide due to the intention of the legislature in using it. In the instant case the context in which the word "refund ed" is used shows that such repayment need not be to the person who initially paid the tax. [954 H] 951 (b) The amended provision makes it plain beyond doubt that the tax levied under the State Act in respect of declared goods has to be reimbursed to the person making sale of those goods in the course of inter State trade or commerce in such manner and subject to such conditions as may be provided in the law in force in that State. Accord ing to the notes on clauses appended to the statement of objects and reasons of the Bill the amendment made in cl. (b) makes it clear that local sales tax would be reimbursed to the person making the sale in the course of inter State trade and commerce. The amendment made in cl. (b) can thus be taken to be an exposition by the legislature itself of its intent contained in the earlier provision. [955 G] (c) The fact that the amendment of cl. (b) of section 15 was not like some other provisions given retrospective effect, would not materially affect the position. The legislature as a result of the amendment clarified what was implicit in the provisions as they existed earlier. An amendment which is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provi sion even though such amendment is not given retrospective effect. [956 B]

3623.txt

Civil Appeal No. 1763 of 1968. (From the Judgment and Decree dated the 28th July, 1964 of the Kerala High Court in Appeal Suit No. 843 of 1960). T.C. Raghavan, Sardar Bahadur Saharya and V.B. Saharya, for the appellant. T.S. Krishnamoorthy Iyer and M.R. Pillai,. for Respondent No. 1. T.S. Krishnamoorthy, P.K. Pillai and N. Sudhakaran, for Respondent No. 2. 638 The Judgment of the Court was delivered by BEG, J. This is a defendent 's appeal by Certificate granted by the Kerala High Court under Article 133(1)(a) of the Constitution as a matter of course before its amendment because the High Court had modified a decree in a partition suit and the subject matter satisfied the requirements of the unamended Article 133. The parties to the partition suit are descendants of Narayana Prabhu (hereinafter referred to as 'Narayana '). Krishna, the plaintiff (now dead) was the 3rd son of Nara yana. The defendant appellant, Venkateswara, was the eldest of the four sons of Narayana. The partition suit related to 72 items mentioned in schedule 'A ' to the plaint claimed by the plaintiff to be joint family property. It appears that there was no dispute with regard to certain items, but, the defendant appellant claimed other items as his exclusive property on the ground that they had been purchased from his personal income. due to his own enter prise and exertions and ability in carrying on business. The Trial Court had accepted the case of the defendant appellant that all items, except No. 35 and a part of item No. 52 which belonged, to the 3rd defendant, were the self acquired properties of the defendant appellant. The High Court re versed this finding on the ground that there was "little reliable: evidence on record as to. the exact source of the. fund with which the first defendant started the trade". The High Court rejected the submission of the defendant appel lant that, when the Tobacco business under consideration was started, Narayana being the Karta of the family, the fact that the eldest son, Venkateswara, the defendant appel lant, was carrying on the business, raised a presumption that it was the separate or self acquired business of Venka teswara. The High Court relying on certain documentary evidence, including the letter heads showing the business as that of "P. N. Venkateswara Prabhu & Brothers" held that the business was joint family business. The partition suit was filed originally in another Court but was sent to the Court of the Second Additional Sub Judge of Alleppey in 1957, and the preliminary decree was passed on 5th August, 1960. The High Court allowed the appeal, modifying the decree to the extent that 3/4th share of items 4 to 72 of the schedule, except item 35 and part of 52 standing in the name of the 3rd defendant, were held to, be partible properties as part of Joint family business, but it excluded assets which came into. existence after the filing of the. partition suit which operated as a clear unequivocal expression of intention to separate. It also, left the extent of mesne profits of landed properties to be decided in proceedings for the passing of the final decree. It appeals that the defendant appellant had also filed a money suit in the Court of the Munsif only against defendant No. 3, one of the four brother 's, but all of them were impleaded in the partition suit. The money suit was, howev er, transferred to the file of the Additional Sub Judge and tried together with the partition suit and was also de creed by the Additional Sub Judge of Alleppey on the same date as the partition suit. The plaintiff respondent had appealed against both the decrees in the High Court. The two appeals were heard and decided together by the High Court. The High Court, after pro 639 nouncing judgment in the partition suit, proceeded to give judgment, under a new heading and number of the appeal in the money suit. It said, in this separate judgment: "The suit that gave rise to. this appeal has been instituted by the respondent against the appellant for money due on 14 10 1123 on account of tobacco delivered to the latter 's shop. The defence was that the trades run by both the brothers were parts of the joint family trade, and not separate to foster such a claim by the respondent on the appellant. The court below, having found in the other suit the shops run by the parties to belong to the concerned individuals, has decreed the suit. As we have reversed that finding in A.S. No. 843 of 1960 and found the shop stand ing in the name of each brother to be a branch of the joint family trade. in tobacco and directed ascertainment of the assets and liabilities of the entire trade to be settled as on 2 3 1124, the date of that partition suit, this suit has to be dismissed". The judgments were, therefore, two. separate ones given in one continuation but under ' separate headings. Separate decrees were prepared in each appeal relating to a separate case. As the defendant appellant did not seek leave to file any appeal against the High Court 's judgment and decree in the money suit and there is no appeal before us against the decree in the money suit, a preliminary objection is taken on the ground that the defendant 's appeal now before us is barred by res judicata. Learned Counsel for the defendant appellant urges that the two suits were different in nature and were filed in different Courts originally so that the Court trying the partition suit and the Court in which the money suit was triable were not Courts of coordinate jurisdiction. It was also. objected that the partition suit was earlier and the money suit having been filed sixteen days later could not be deemed to be a suit decided earlier. Furthermore, it was pointed out that the judgment was common. It was also urged that. all the four brothers were parties to the parti tion suit but the money suit was only between two brothers. It is true that the appeals against both the decrees of the Trial Court were heard together in the High Court, and, although, the appeal in the money suit is decided under a separate. heading and the short judgment in it appears to be practically consequential on the judgment in the partition suit, yet, the judgments in the two appeals decide a common issue and resulted in two decrees. It is urged that, whereas the defendant appellant had. filed an appeal on the strength of a certificate granted to him as a matter of right, following upon the modification of the decree of the Trial Court by the High Court, the defend ant appellant had no such right of appeal in this Court. Hence, it was submitted that neither in law nor in equity could the. defendant appellant be. barred from putting forward his objections to the decree in the partition suit. 640 Certain decisions were relied upon by learned Counsel for, the defendant appellant Venkateswara in support of the contention that the plea of res Judicata is not available as a preliminary objection to the respondent to the hearing of the appeal before us in the circumstances of this case. We proceed to consider these cases. Narhari & Ors. vs Shankar & Ors. ,(1) is no doubt the judgment of the Supreme Court of India, although it was, if one may so put it, "the Hyderabad Wing" of it in a transi tional period when a learned Judge of this Court, Mr. Jus tice Mehr Chand Mahajan, presided over a bench of which the other two Members were formerly Members of His Exalted Highness the Nizam 's Judicial Committee. Technically, however, it was this Court 's judgment. In that case, Naik, J. had followed a decision of the Judicial Committee of the Hyderabad State and held that, when there was only one suit and the appeals had been disposed of by the same judgment, it was not necessary to file two separate appeals. It elaborated the ratio of the decision as follows (at p. 757 758): "It is now well settled that where there has been one trial, one finding, and one decision, there need not be two appeals even though two decrees may have been drawn up. As has been observed by Tek Chand J. in his learned judgment in Mst. Lachmi vs Mst. Bhuli (AIR mentioned above, the determining factor is not the decree but the matter in controversy. As he puts it later in his judgment, the estoppel is not created by the decree but it can only be created by the judgment. The question of resjudicata arises only when there are two suits. Even when there are two suits, it has been held that a decision given simultaneously cannot be a decision in the former suit. When there is only one suit, the question of res Judicata does not arise at all and in the present case, both the decrees are in the same case and based on the same judgment, and the matter decided concerns the entire suit. As such, there is no question of the application of the principle of res judicata. The same judgment cannot remain effective just because it was appealed against with a different number or a copy of it was attached to a different appeal. The two decrees in substance are one". It seems to us that to be fair to confine the ratio deci dendi of the Hyderabad case to cases where there is only one suit. In the case now before us, not only were the decrees different but the suits were different. The mere fact that the judgments in the two suits were given togeth er or in continuation did not matter. In fact, even in form. the judgment in the appeal relating to the money suit was separate from the rest of the judgment. And, in any case, there were two separate decrees. (1) ; 641 We think that Section 11 Civil Procedure Code enables the party to raise the statutory plea of res judicata if the conditions given therein are fulfilled. The principle embodied in the statute is not so much the principle of "estoppel by record", which the British Courts apply, as one of public policy, based on two maxims derived from Roman jurisprudence: firstly, interest reipublicoe ut sit finis litium it concerns the State that there be an end to law suits; and, secondly, "nemo debet bis vexari pro una et eadem cause" no man should be vexed twice over for the same cause. Sir Lawrence Jenkings pointed out, in Sheoparsan Singh vs Ramnandan Prasad Singh(1), that the rule of res judicata "while rounded on ancient precedent, is dictated by a wisdom which is for all time". Litigation which has no end or finality defeats its very object. This object is decision of disputes or an end to each litigation. But, if there is no finality to it, the dispute cannot be said to be really decided at all. It is the duty of the State to see that disputes brought before its judicial organs by citizens are decided finally as early as possible. Hence, Section 11 of our Civil Procedure Code contains in statutory form, with illuminating explanations, a very salutary principle of public policy. An "estoppel", even if it be "by record", rests on somewhat different grounds. Even such an estoppel savours of an equity or justice created by actions of par ties the results of which have become recorded formally behind which they are not allowed to go. Reliance was also placed on Govind Bin Lakshmanshet Anjorlekar vs Dhondba 'Ra 'V Bin Ganba ' Ra 'F 'Ta 'Mbye(2), on behalf of the appellant. Here, it was held that decisions in previous suits of the nature of small cause suits in which there was no right of second appeal could not oper ate as res judicata in suits before Courts in which ques tions were elaborately litigated and decided in cases which could go to the High Court in second appeal. We were also referred to a Full Bench decision of the Madras High Court in Avanasi Gounden & Ors. vs Nachamal(3), where it was similarly held that: "A decision in a previous suit of a small cause nature, in which no second appeal is allowed by law, is no bar to a subsequent suit, in the same Court, which, not being of a small cause nature, is open to second appeal". We have to remember that Small Cause juris diction is a limited one exercisable only in specified matters. Decisions given beyond Jurisdiction to try an issue cannot operate as res ]udicata. Our attention was drawn to explanation II of section 11, on behalf of the respondents. It reads: "Explanation II. For the purposes of this Section, the competence of a Court shall be determined irrespective of any provision as to a right of appeal from the decision of such Court". (1) A.I.R. 1961 P.C. 78=43 I.A. 91. (2) I.L.R. Vol. XV Bombay 104. (3) I.L.R. 29 Madras 195. 642 It seems to us that section 11 itself refers to. a Court which actually tries the, two suits. We think that, in the circumstances of the case before us, the incompetence of the Court, in which the money suit was initially filed, to try the partition suit did not matter when the actual hearing of both the cases took place in the same Court. That Court was, obviously, competent to try both the suits. After the money suit had been transferred from the Court of the Munsif, the Second Additional Sub Judge actually tried and decided both of them. This was enough to make the differ ence in the jurisdictions of the Courts, in which the suits were initially filed, quite immaterial. Similarly, the High Court was competent to hear appeals from judgments in both. It heard and decided the two appeals together. So far as the question of appeal to this Court is con cerned, it is true that no appeal lay as a matter of right against the judgment in the appeal in the money suit, but, we think that the learned counsel for the respondents is correct in submitting that the question Whether there is a bar of res judicata does not depend on the existence of a right of appeal of the same nature against each of the two decisions but on the question whether the same issue, under the circumstances given in section 11, has been heard and finally decided. That was certainly purported to be done by the High Court in both the appeals before it subject, of course, to the rights of parties to appeal. The mere fact that the defendant appellant could come up to this Court in appeal as of right by means of a certificate of fitness of the case under the unamended Article 133(1)(c) in the parti tion suit, could not take away the finality of the decision so far as the High Court had determined the money suit and no attempt of any sort was made to question the correctness or finality of that decision even by means of an application for Special Leave to appeal. Learned counsel for the respondents appears to us to have rightly relied upon Bhugwanbutti Chowdhrani vs A.H. Forbes(1), where it was held that "in order to make a matter res judicata it is not necessary that the two suits must be open to appeal in the same way". He also relied on Lonan kutty vs Thomman & Anr.(2), a recent decision of three Judges of this Court, where Chandrachud, J., observed (at p. 1650): "Respondents did not file any further appeal against the decree passed by the Dis trict Court in the appeals arising out of their suit. They filed a second appeal in the High Court only as against the decree passed by the District Court in A.S. 66 of 1958 which arose out of the decree passed by the trial ' Court in the appellant 's suit. Thus, the decision of the District Court rendered in the appeal arising out of the respondent 's suit became final and conclusive". It was also observed there: "The decision of the District Court was given in an appeal arising out of a suit which, though instituted subse (1) I.L.R. (2) ; Supp. S.C.R. 74. 643 quently, stood finally decided before the High Court disposed of the second appeal. The decision was, therefore, one in a 'former suit ' within the meaning of section 11, Explanation I, Civil Procedure Code". The expression "former suit" according to explanation I of section 11, Civil Procedure Code, makes it clear that, if a decision is given before the institution of the pro ceeding which is sought to be barred by res judicata, and that decision is allowed to become final by operation of law, a bar of res judicata would emerge. This as learned counsel for the respondents rightly submits, follows from the decision of this Court in Lonankutty 's case (supra). The only other point which we need consider is whether the fact that the money suit was only between the defendant appellant and one of his brothers, who was also a respondent in the partition suit, makes any difference to the applicability of the principle of res judicata in this case. Learned Counsel for the appellant submits that the defendant appellant could not come within the ambit of Explanation VI of section 11, Civil Procedure Code which provides as follows: "Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigat ing". On the other hand, learned counsel for the respondent sub mits that the case of the respondents fully covered by this explanation and relies on Kumaravelu Chettiar & Ors. T.P. Ramaswamy Ayyar & Ors. C) where it was held: "Explanation 6 is not confined to cases covered by O. 1, R. 8 but extends to include any litigation in which apart from the Rule altogether, parties are entitled to represent interested persons other than themselves". We think that the submission made by the learned counsel for the respondents is sound. In a partition suit each party claiming that the property is joint, asserts a right and litigates under a title which is common to others who make identical claims. If that very issue is litigated in another suit and decided we do not see why the others making the same claim cannot be held to be claiming a right "in common for themselves and others". Each of them can be deemed, by reason of Explanation VI, to represent all those the nature of whose claims and interests are common or identical. If we were to hold otherwise, it would neces sarily mean that there would be two inconsistent decrees. One of the tests in deciding whether the doctrine of res judicata applies to a particular case or not is to determine whether two inconsistent decrees will come into existence if it is not applied. We think this will be the case here. (1) A.I.R. 1933 P.C. 183. 7 112SCI/77 644 We need not deal with other cases of this Court cited, including Sheodan Singh vs Smt. Daryao Kunwar(1), which supports the respondents ' submissions, and Raj Lakshmi Bai & Ors. vs Banamali Sen & Ors.( ), which is not directly ap plicable inasmuch as that was a case in which the general principles of res judicata, and not section 11 Civil Proce dure Code, were applied. The preliminary objection in the case before us is fully supported, for the reasons given above, by section 11, Civil Procedure Code read in the light of the Explanation mentioned above. Consequently, the preliminary objection must prevail. Learned counsel for the appellant, conscious of the difficulties in his way, filed after the hearing of the appeal was begun before us, an application for condonation of delay in applying for leave to appeal against the judg ment of the High Court in the money suit. He submits that, in view of the uncertain position in law, we should try to extend equities as much as possible in his client 's favour. On the other hand, learned counsel for the respond ents points out that the objection based on the bar of res judicata was taken as long ago as 1968 by the respondents. It seems to us that the delay in waking up to the existence of the bar on the part of the appellant is much too long to be condoned. Moreover, we also find that the judgment of the High Court, based on the admissions of the appellant, does not disclose any error of law so as to deserve grant of special leave to appeal. Indeed, in so far as we could express any opinion at all upon the merits of the judgment of the High Court, based as it is upon documents containing admissions of the defendant appellant, it seems to us that the appellant would have a very uphill task indeed in argu ing his appeal even in the partition suit. We may mention here that the partition suit was instituted as long ago as 1947 and was only given a new number in 1957. If there is a case in which the principle that litigation should have an end ought to be applied, it is this on the face of facts of the case apparent to us. We, therefore, reject the Civil Miscellaneous Petition No. 8585 of 1976, the application for condonation of delay in the filing the Special Leave Peti tion. We dismiss the Civil Miscellaneous Petition No. 8586 of 1976 as well as the over delayed special leave petition No. 2816 of 1976. The result is that this appeal must be and is hereby dismissed, but, in the circumstances of the case, the par ties will bear their own costs. P.B.R. Appeal dismissed.

Explanation II to section 11 C.P.C. provides that for the purposes of the section, the competence of a Court shall be determined irrespective of any provision as to a right of appeal from the decision of such Court. Explanation VI provides that where persons litigate bona fide in respect of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section be deemed to claim under the per sons so litigating. The respondents and the appellant were brothers. The respondents filed a suit for partition of the family proper ties in the Court of Additional Sub Judge of competent jurisdiction. The appellant on the other hand filed a money suit against one of the brothers in the Court of a Munsiff in which he impleaded his other brothers. Ultimately, the money suit was transferred to the Court of the Additional Sub Judge, where the partition suit was Rending and both the suits were tried together. In appeal, the High Court heard and decided both the appeals together and pronounced sepa rate judgments in continuation but under separate headings and a separate decree was prepared in each appeal. The appellant filed an appeal in this Court under article 133(1)(a) of the Constitution before its amendment, as a matter of right, against the judgment of the High Court in the parti tion suit. A preliminary objection was taken by the respondents in this Court that the appeal was barred by res judicata in that the appellant did not file an appeal against the judgment and decree in the money suit. The appellant on the other hand contended that neither in law nor in equity was he barred by res judicata because he filed the appeal in the partition suit as a matter of right, which was not available to him in the money suit. Dismissing the appeal, HELD: The preliminary objection is supported by section 11 of the Code of Civil Procedure read in the light of Explana tions II and VI. [644 B] 1(a) Section 11 enables a party to raise the statutory plea of res Judicata if the conditions given therein are fulfilled. Section 11 contains, in statutory form, with explanations, a very salutary principle of public policy. [641 C D] In the instant case, the incompetence of the Court, in which the money suit was initially filed, to try the parti tion suit did not matter when the actual hearing of both the cases took place in the same Court. That Court was compe tent to try both the suits. After the money suit had been transferred, the second Additional Sub Judge actually tried and decided both of them. That was enough to make the difference in the jurisdiction of the Court in which the suits were initially filed, quite immaterial. Similarly the High Court was competent to hear the appeals from judgments in both cases. It heard and decided the appeals together. [642 A C] Narhari & Ors. vs Shankar & Ors. ; distin guished. Lortankutty vs Thomman & Anr., ; Supp. S.C.R. 74 followed. 637 Sheoparsan Singh vs Ramnandan Prasad Singh, .AIR 1916 PC 78=43 I.A. 91, Govind Bin Lakshmanshet Anjorlekar vs Dhondba 'Ea ' V Bin Ganba ' RA '17 ' 'V ' Ta ' Mbve, ILR Vol. XV Bombay 104 and Avanasi Gounden & Ors. vs Nachammal, ILR 29 Madras 195 referred to. Bhugwanbutti Chowdhrani vs A.H. Forbes ILR ap proved. (b) The expression "former suit" in Explanation I of section 11 makes it clear that, if a decision is given before the institution of the proceeding which is sought to be barred by res judicata, and that decision is allowed to become final or becomes final by operation of law, a bar of res judicata would emerge. [643 B] (c) One of the tests in deciding whether the doctrine of res judicata applies to a particular case or not is to determine whether two inconsistent decrees will conap into existence if it is not applied. In a partition suit each party claiming that the property is joint asserts a right and litigates under a title which is common to others who make identical claims. If that very issue is litigated in another suit and decided, there is no reason why others making the same claim cannot be held to be claiming the right in common for themselves and others. Each of them can be deemed, by reason of Explanation VI, to represent all those the nature of whose claims and interests are common or identical. To hold otherwise would mean that there would be two inconsistent decrees. [643 G H] In the instant case, the fact that the other suit was a money suit between the appellant and one of his brothers, who was also the respondent in the partition suit, does not make any difference to the applicability of the principle of res judicata. [643 C] Kumaravelu Chettiar & Ors. T.P. Ramaswamy Ayyar & Ors, A/R followed. Sheodhan Singh vs Smt. Daryao Kunwar, [1966] 3 S.C R. 300 and Bai Lakshmi Rani & Ors. vs Banamali Sen & Ors., ; referred to. The question whether there is a bar of res judicata does not depend on the existence of a right of appeal of the same nature against each of the two decisions, but on the question whether the same ' issue, under the circumstances given in section 11, has been heard and finally decided. [642 C D] In the instant case, the High Court heard and finally decided both the appeals before it. The mere fact that the appellant could come up to this Court in appeal as of right by means of a certificate of fitness under the unaa mended article 133(1)(c) in the partition suit, could not take away the finality of the decision so far as the High Court had determined the money suit and no attempt was made to question the correctness or finality of that decision even by means of an application for special leave. [642 D E] 3. The appellant 's application for condonation of delay in applying for leave to appeal against the High Court 's judgment in the money suit must be dismissed. His delay in waking up to the existence of the bar of res judicata is much too long to be condoned. The judgment of the High Court based on the admissions of the appelant, does not disclose any error of law so as to deserve the grant of special leave to appeal. The partition suit was instituted as long ago as 1947. If there is a case in which the prin ciple that litigation should have an end ought 'to be applied, it is this. [644 C F]

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Appeal No. 721 of 1976. (Appeal by Special Leave from the Judgment and Order dated the 27th April 1976 of the Patna High Court in Appeal from Appellate Decree No. 6 of 1974). Harbans Singh Marwah, for the appellant. K.K. Sinha, S.K. Sinha and Devi Prasad, for respondents. The Judgment of the Court was delivered by GOSWAMI, J. This appeal by special leave is directed against the judgment of the Patna High Court in a second appeal arising out of suit for eviction of the tenant. Two rooms being shop Nos. 17 and 18 of Modi Building in Commissioner 's Compound, Ranchi, were let out by the plaintiff (respondents herein) on a monthly rental to the. defendant (appellant herein). We will describe them as the plaintiff and the defendant. It is common ground that fair rent of Rs. 50/ per month (including water tax) was deter mined for the two, shops by an order of the Rent Control ler under section 5 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (briefly the Act) on May 30, 1953. Later on, certain furniture, such as ' five almirahs and six racks, were also let out by the plaintiff to the defendant on a monthly rental of Rs. 28/ . A suit was instituted by the plaintiff on April 18, 1966, praying for eviction of the defendant on the ground of non payment of rent of the said two shops and furniture for three months from July to September 1965. 986 The Munsiff, Ranehi, dismissed the suit holding that failure to remit rent for furniture along with rent for the two shops did not amount to default under section 11(1)(d) of the Act. The Munsiff also held that there was no valid service of notice under section 106 of the Transfer of Property Act. On appeal the Second Additional Subordinate Judge, Ranchi, reversed the judgment of the trial court and de creed the suit for eviction upholding the ground of default. The Subordinate Judge held that the plaintiff was entitled to realise rent at the rate of Rs. 78/ per month which included the rent for furniture and hence remittance by the defendant of Rs. 50/ per month was not a valid dis charge of his rental liability and he was a faulter within the meaning of section 11(1)(d) if the Act. The Subordinate Judge also held that there was no proper service of the notice of eviction. We are not concerned in this appeal with the question of service of notice. Since the Subordinate Judge was the final court of facts, it will be appropriate to note the following findings material for our purpose: (1) "I, therefore, decide that the plain tiff was entitled to realise Rs. 50/ as monthly rent. (2) In view of the evidence of the parties and Ext. 2 I hold that plaintiff had supplied the furniture detailed in Schedule B of the plaint and rent fixed for the same had been Rs. 28/ per month. (3) The subsequent supply of furniture and that of sufficient value must be construed as a quite independent contract unconnected with the original tenancy . ". The defendant 's second appeal to the High Court failed. 'The High Court agreed with the first appellate court that the rent for furniture was also lawfully payable under section 11(1)(d) and hence the ground of default of payment of Rs. 78/ per month from July to September 1965 was avail able to the plaintiff. The High Court also gave an additional reason for sus taining the eviction decree. There was an order by the Subordinate Judge, in the course of the appeal, under sec tion 11A of the Act directing the defendant to deposit the rent of the premises at the rate of Rs. 50/per month in terms of that Section. It appears there was some controver sy before the Subordinate Judge as to whether this order under section 11A was complied with or not by the defendant. The Subordinate Judge, however, repelled the contention of the plaintiff to strike out the defence of the defendant on the ground of non compliance with the court 's order under section 11A in the following terms: "It was argued on behalf of the appel lant (plaintiff) that the defendant had not deposited subsequent rent in spite of direc tion by the court and so this court had to 987 strike out the defence against ejectment. The defendant had filed the documents to show subsequent deposit in regular way. So this plea of plaintiff fails". A second attempt, and this time successfully, was made in the High Court by the plaintiff to. press the ground under section 11A of the Act to strike out the defendant 's de fence against ejectment. It is clear from the judgment of the High Court that there was no material, without further enquiry, to reach a conclusion contrary to that of the first appellate court with regard to non compliance with section 11A of the Act. The High Court, therefore, allowed parties to produce some documentary evidence and relying upon the same held as follows: "Learned Advocate appearing for the appellant (defendant) contended that inasmuch as the delay in depositing the money in the Bank occasioned on account of the default of the officers of the court, no penalty should be imposed on the appellant (defendant). Learned Advocate, however, failed to produce any material to. show as to what detracted the appellant (defendant) to deposit the money himself on 15 3 1974 on the passing of the. challan and what caused the 7handing over the money to. the Nazir". In a matter where the first appellate court came to a posi tive finding in favour of the defendant with regard to the non compliance with its order under section 11A, we do not consider that the High Court was right in adopting the course. it did in a rather unsatisfactory manner to reach a contrary conclusion, for the first time, on a vital and clinching fact about handing over the amount of rent to the Nazir in absence of the latter 's oral testimony. There is no denial even in the written information furnished by the Nazir that the rent was handed over to him on March 14, 1974. The matter would have been different if the High Court, in the interest of justice, had called for addition al evidence under order 41, rule 28, Civil Procedure Code, so that the parties would have proper and adequate opportu nity to establish their respective versions including the procedure of the particular court regarding acceptance of deposit in a given situation. It is true that the High Court could itself permit documentary evidence to be produced before it under order 41, rule 27, but, as we have seen, this course has resulted in great prejudice to the defend ant. Even the counsel were unable to inform us about the procedure of depositing the money in compliance with the order under section 11A in the court of the Subordinate Judge even after entertaining of additional evidence before the High Court. In view of the fact that the first appellate court held the deposit of the amount sufficient ' under the law being within the statutory period Laid down under section 11A, we are most reluctant to prefer the contrary conclusion of the High Court on the materials produced before it. This is particularly so since the High Court itself appears to have accepted the position that the amount was handed over to the Nazir on March 14, 1974, in ' the extract from the judgment quoted 15 206SCI/77 988 above. The only objection of the. High Court was that the defendant instead of handing over the amount to. the Nazir should have "himself ' deposited the amount on March 15, 1974. Since the money was deposited by the Nazir on May 28, 1974, in absence of a proper enquiry into the matter of delay of deposit at the hands of the Nazir and the reasons for it, the High Court was not right, in second appeal, to penalise the defendant by striking out his defence against ejectment. The second ground relied upon by the High Court for decreeing the plaintiffs eviction suit, therefore, fails. Further section 11 describes the circumstances under which eviction of tenants can take place. Under that section a tenant shall not be liable to eviction except in execution of a decree passed by the court on one or more of the grounds specified therein. Section 11A which was inserted by amendment by Bihar Act 16 of 1955 reads as follows: "Deposit of rent by tenants in suits for ejectment. If in a suit for recovery of possession of any building the tenant contests the suit, as regards claim for ejectment, the landlord may make an application at any stage of the suit for order on the ten, ant to deposit month by month rent at a rate at which it was last paid and also the arrears of rent, if any; and the Court, after giving an oppor tunity to the parties to be heard, may make an order for deposit of rent at such rate as may he determined month by month and the arrears of rent, if any and on failure of the tenant to deposit the arrears of rent within fifteen days of the date of the order or the. rent at such rate for any month by the fifteenth day of the next following month, the Court shall order the defence against ejectment to be struck out and the tenant to be placed in the same position as if he had not defended the claim to ejectment. The landlord may also apply for permission to withdraw the deposited rent without prejudice to his right to claim decree for ejectment and the court may permit him to do so. The Court may further order recovery of cost of suit and such other com pensation as may be determined by it from the tenant". It is submitted by the defendant that an order under section 11A can be passed only by the trial court. We are, however, unable to accept this position, since appeal is a continuation of the suit. The advantage which is given to the landlord under section 11A for the purpose of realisa tion of the arrears of rent pendente lite which is in the nature of lawful enforcement of the conditions of tenancy, can be secured by the landlord at any stage of the litiga tion, whether in the trial court or in appeals. The penalty of striking out defence for non compliance of an order under section 11A has to he kept distinct from the grounds of eviction permitted under section 11 of the Act. The only ground that remains for consideration is wheth er the defendant defaulted m the payment of rent from July to September, 1965. If it were merely a finding of fact by the first appellate court 989 there would be nothing wrong for the High Court to dismiss the second appeal. The question, however, assumes a legal complexion even on the findings of facts of the first appel late court. The first appellate court found that rent for the premises was Rs. 50/. per month and there was no default of that rent at any time. The first appellate court found that the rent of Rs. 28/ per month for the furniture was a subject matter of "subsequent supply" and "a quite independ ent contract 'unconnected with the original tenancy". It, however, found that since the same was not paid by the defendant during the months in question along with the rental of Rs. 50J per month for the premises, the defendant was a defaulter within the meaning of section 11 (1)(d) of the Act. The High Court has accepted this legal conclusion of the Subordinate Judge. We are, however, unable to accept the above legal position of the defendant 's default in this case on the finding of facts set out above. Rent has been always Rs. 50/ per month for the premises after the same was fixed by the Rent Controller under section 5 of the Act as far back as 1953. The parties having been already before the Rent Controller for fixation of fair rent of the premises, the plaintiff could not alter that fixed rent without order of the Rent Controller. Section 4 of the Act provides that "notwith standing anything contained in any agreement or law to the contrary, it shall not be lawful for any landlord to. in crease, or claim 'any increase in, the rent which is payable for the time being, 'in respect of any building except in accordance with the provisions of this Act". The two shops, which are building for the purpose of section 2(an) of the Act, were rented out as an unfurnished building. This amount of rent of Rs.50/ was determined by the Rent Con troller as fair rent under section 5 of the Act. It is the default in the payment of this rent fixed by the Rent Con troller which will furnish a ground for eviction under section 11(1)(d) of the Act. Default of the furniture rent agreed by the defendant subsequent to the lease cannot be brought within the mis chief of section 11(1)(d) to entitle the landlord to a decree for eviction. On the findings of the first appellate court the furniture rent remains di vorced from the rent of the building under the original demise. Even if the furniture be returned, the lease for the building in this case will not be affected. The plaintiff submits that since the definition of build ing includes furniture the rent becomes consolidated 'and the defendant was liable to pay the total amount of Rs. 78/ and any default for two months to pay the consolidated rent will attract sections 11(1)(d) of the Act. The plaintiff further submits that since the furniture rent is the rent agreed between the parties there was no occasion nor legal requirement to approach the Rent Controller for redetermina tion of the rent under section 7 of the Act. We are unable to accept the above submission. Any alteration of the lair rent fixed by the Rent Controller either by improvement of the building or by addition of furniture to the building will have receive the imprimatur of the Rent Controller. Section 7, inter alia, 990 provides that if, at. any time after the fair rent of a building has been determined, it appears to the Rent Con troller that subsequent to such determination some addition or improvement has been made to the building at the land lord 's expense, the Controller may redetermine the .fair rent of the building. There is no legal impediment if the parties, landlord and tenant, approach the Controller and by consent obtain an order from the Controller fixing the revised rent which is admissible under the Act. Any other course is bound to lead to mal practices and unholy devices deterimental to the interests of the tenants. No enhance ment of fair rent fixed by the Rent Controller is legally permissible except in accordance with the provisions of the Act. Default of payment of any rent, in excess of the fair rent fixed, if without recourse to the procedure under the Act, will not entail a ground for eviction under section 11(1)(d) of the article The High Court, and earlier the Addi tional Subordinate Judge, therefore, committed an error of law in accepting the ground of default under section 11 (1) (d) on a wrong appreciation of the legal position on the facts found by the first appellate court. There was, there fore, no basis for granting decree for eviction under sec tion 11(1)(d) of the Act. In the result the judgment of the High Court is set aside and the judgment and the decree of the Munsiff dis missing the suit stand restored. The appeal is allowed with costs. P.B.R. Appeal allowed.

Section 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act. 1947 provides that a tenant shall not be liable to eviction except in execution of a decree passed by the Court on one or more of the grounds specified there in. Under section 11A, if in a suit for recovery of possession of any building the tenant contests the suit, the Court may make an order for deposit of rent and arrears, if any, and on failure to deposit the arrears within fifteen days of the date of the order, the Court shall order the defence against ejectment to be struck out. The plaintiff (respondent) let out two rooms of his premises to the defendant (appellant) at a rent fixed by the Rent Controller under section 5 of the Act. Sometime later, the plaintiff let out some furniture to the defendant at a mutually agreed rent. The plaintiff 's suit for eviction of the defendant on the ground of non payment of rent for three months was dismissed by the trial Court holding that failure to pay the rent of furniture along with the rent of the premises did not amount to a default under section 11(1)(d) of the Act. On appeal, the Subordinate Judge held that non payment of rent of furniture along with the rent of the premises was a default within the meaning of section 11(1)(d). The High Court upheld the decision of the Subordinate Judge. On the question of deposit of rent under section 11A, the Subor dinate Judge held that the defendant had filed documents to show subsequent deposit in a regular way. On the other hand, the High Court came to the conclusion that the defend ant failed to produce any material to show as to what de terred him from "depositing the money himself on the passing of the challan and what caused the handing over of the money to the Nazir. " On this ground, it allowed the plaintiff 's suit. Allowing the appeal, HELD: The High Court and the Subordinate Judge committed an error of law in accepting the ground of default under section 11(1)(d) on a wrong appreciation of the legal position on the facts found by the first appellate Court. There was, therefore, no basis for granting a decree for eviction under section 11(1)(d) of the Act. [990C] 1. (a) It is the default in the payment of rent fixed by the Rent Controller which will furnish a ground for eviction under section 11(1)(d). Section 4 of the Act provides that notwithstanding anything contained in any agreement or law to the contrary, it shall not be lawful for any landlord to increase, or claim any increase in, the rent which is pay able for the time being, in respect of any building except in accordance with the provisions of the Act. [989E F] In the instant case, the Rent Controller having fixed the rent of the premises, the plaintiff could not alter that rent without an order of the Rent Controller. Default of the payment of furniture rent agreed to by the defendant subse quent to the lease of the premises could not be brought within the mischief of section 11 (1) (d) to entitle the landlord to a decree for eviction. The furniture rent remains di vorced from the rent of the building under the original demise. [989D &P] (b) Any alteration of the fair rent fixed by the Rent Controller will have to receive the imprimatur of the Rent Controller under section 7. There is no legal impediment if the parties approach the Controller and by consent obtain an order from the Controller fixing the revised rent admissible under the Act. No 985 enhancement of fair rent is legally permissible except in accordance with the provisions of the Act. Default of payment of any rent in excess of the fair rent fixed, if without recourse to the Procedure under the Act, will not entail a ground for eviction under section 11(1)(d) of the Act. [990A B] The penalty of striking out the defence for non compli ance of an order under s.11A is district from the grounds of eviction permitted under section 11. [988H] 2. The contention of the defendant that an order under s.11A could be passed only by the trial Court is without force because an appeal is a continuation of the suit. The advantage given to the landlord under section 11A for the purpose of realisation of the arrears of rent pendente lite can be secured by him at any stage of the litigation, whether in the trial Court or in appeal. [988G] 3. Where the first appellate court came to a positive finding of fact in favour of the defendant, the High, Court was wrong in adopting a different course to reach a contrary conclusion for the first time on a vital fact. The matter would have been different if the High Court had called for additional evidence under 0.41, r. 28, C.P.C. But the course adopted by the High Court has resulted in great prejudice to the defendant. [987E F] In the instant case the High Court itself had accepted that the amount of rent was handed over to the Nazir but the objection was that the defendant, instead of handing over the amount to the Nazir, should have himself deposited it. In the absence of a proper enquiry into the matter of delay of deposit by the Nazir the High Court was not right in second appeal to penalise the defendant by striking out his defence against ejectment. [988B]

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APPEAL NO. 691 of 1976. (From the Judgment & Order dated the 16th December 1975 of the Gujarat High Court in Special Civil Appln. No. 572 of 1975). G.L. Sanghi and Girish Chandra, for the Appellants. 480 V.M. Tarkunde, K.L. Hathi and Mrs. P.C. Kapur, for respondent No. 1. The Judgment of the Court was delivered by GOSWAMI, J. This appeal on certificate is from the judgment of the High Court of Gujarat. The appellants 1 and 2 are respectively the Union of India and the Regional Provident Fund Commissioner. Dhrangadhra Chemical Works Kamdar Sangh (hereinafter to be described as the union) is the first respondent. The second respondent is Dhrangadhra Chemical Works (hereinafter to be described as the employer). With respect to the dearness allowance (D.A.) of the workers under the employer there was a reference No. 70/70 before the Industrial Tribunal at Ahmedabad. The parties arrived at a settlement of the said industrial dispute and an award was passed in terms of the settlement. According to the award the employer was to pay D.A. to its employees at the rate of the quarterly average cost of living index as settled by the Simla Bureau, popularly known as "All India Consumers Price Index" for the relevant quarter. Thus for the 'months of January, February and March, 1974, the rate of D.A. was on the basis of the average cost of living index for the months of July, August and September 1973 as pub lished by the said Bureau and this was to follow for every quarter. It is the accepted position that for the months of April, May and June 1974 the D.A. worked out at Rs. 78/ per month, but for the quarter. commencing on 1st July, 1974, and ending on 30th September, 1974, it worked out at Rs. 88.50 per month. In other words, it was an agreed position between the union and the employer that the rate of D.A. payable to all the workers from 1st July, 1974, was at the rate of Rs. 88.50 per month. With effect from 6th July, 1974, The Additional Emolu ments (Compulsory Deposit) Ordinance 1974 came into force. This Ordinance was replaced by The . (Act No. 37 of 1974) (briefly the Act) and the Act is deemed to have come into force on the 6th day of July 1974. We have already made a detailed reference to the aim and object of the Act and also dealt with the material provi sions thereof in dealing with a similar question in Civil Appeal No. 690 of 1976 in which we have delivered our judg ment to day(1). It is, therefore, not necessary to repeat those observations here. The short question that arises in this particular appeal turns on the Explanation I to section 2(b) of the Act. We will, therefore, read that provision: "2(b) 'additional dearness allowance ' means such dearness allowance as may be sanc tioned from time to time, after the appointed day, over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect. (1) [1977] 2 S.C.R.472. 481 Explanation I. Where payment of dearness allowance is linked to a cost of living index or any other factor, any automatic payment, after the appointed day, of dearness allowance in consequence of any rise in such cost of living index or in consequence of any change in such other factor shall, notwithstanding the provisions of this clause, be deemed to be the additional dearness allowance. " It is clear under section 2(b) that additional D.A. has to be sanctioned after the appointed day. "Sanctioned" is the heart of the definition clause. Since additional D.A. is defined to mean such D.A. as may be sanctioned from time to time after the appointed day, Explanation I 'to the definition is inserted to. deal with a situation to avoid any controversy about the sanction while there is an auto matic rise in D.A. linked to a cost of living index. Where D.A. is linked to a cost of living index any automatic payment, after the appointed day, of D.A. in consequence of any rise in such cost of living index shall be deemed to be the additional D.A. In the absence of Explanation I there would have been scope for controversy whether additional D.A. which is paid automatically with the rise in the cost of living index, as agreed upon, can be said to be D.A. sanctioned from time to time. Such a controversy is set at rest by insertion of Explanation I which is a deeming clause. The question that arises for consideration in this appeal is whether the rise in the cost of living index has also got to be after the appointed day. The union contends that the D.A. of Rs. 88.50 which is payable from 1st of July, 1974, for the quarter 1st July, 1974 to 30th Septem ber, 1974 is an pursuance of the rise of cost of living index between January to March 1974 which is prior to the appointed day, namely, 6th July, 1974. It is, therefore, submitted that no additional D.A. is deductible under the Act. The High Court has accepted the contention of the union and allowed the application under Article 226 of the. Con stitution granting a Mandamus restraining the employer from deducting additional D.A. from the emoluments of the em ployees. The High Court also granted certificate to appeal to this Court. it is common knowledge that when D.A. is linked to a cost of living index, actual determination of the D.A. takes place after the index is published and known. The index, therefore, is always of a past period by the yardstick of which D.A. is adjusted. This being the concept about link age of D.A. to cost of living index, Explanation I makes it clear that when payment of D.A. is linked to a cost of living index any automatic payment after the appointed day of D.A. in consequence of any rise in the cost of living index shall. notwithstanding the provisions of this clause, be deemed to be the additional D.A. The non obstante clause in the Explanation takes note of the definition clause where sanction after the appointed day has been mentioned. Explanation I therefore, plays its role, not withstanding whatever is stated in section 2(b), the definition clause. We do not find anything in Explana tion I to warrant the conclusion that rise of the cost of living index should be after the appointed day. What is to be after the appointed day is "any automatic payment of D.A. in consequence of any 482 rise . "and not that any rise in the cost of living index should be after the appointed day. We are, therefore, unable to agree with the High Court that the rise of cost of living index also should be after the appointed day. It is sufficient for the purpose of Explanation I if payment of D.A., in consequence of rise of cost of living index, takes place after the appointed day on account of rise in the cost of living index even prior to the appointed day. The nexus for the purpose of Explana tion I is with the payment after the appointed day and not with the rise in the cost of living index. The specified percentage of additional D.A. which is 50% of the rise, being the difference, between Rs. 78/ and Rs. 88.50 is, therefore, deductible under section 6(2)(b) of the Act and the High Court was not correct in holding to the contrary. The appeal is allowed and the judgment of the High Court is set aside. There will be, however, no order as to costs. P.B.R. Appeal allowed.

Section 2(b) of the defines additional dearness allowance to mean such dearness allowance as may be sanctioned from time to time after the appointed day over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect. Expla nation I to the clause states that where payment of dearness allowance is linked to the cost of living Index any auto matic payment after the appointed day of dearness allowance in consequence of any rise in such cost of living index or in consequence of any change in such other factor shall, notwithstanding the provisions of this clause, be deemed to be the additional dearness allowance. Dearness allowance was paid to the employees of the respondent at the rate of quarterly average cost of living index for the relevant quarter. The rate of dearness allow ance for one quarter e.g. the first quarter of 1974 was paid on. the basis of the average cost of living index for the months of July September, 1973. For the quarter July September, 1974 there was a rise in the cost of living index and consequently there was a rise in the dearness allowance payable to the employees. In a writ petition under article 226 of the Constitution the employees contended that the increased dearness allowance payable for the quar ter July September, 1974 was as a result of rise in the cost of living index between January March, 1974 which was before the appointed day in July 6, 1974 and, therefore, no additional dearness allowance was deductible under the Act. The High Court granted the writ. Allowing the appeal, HELD: The High Court was wrong in its view that the rise of cost of living index should be after the appointed day. The nexus, for the purpose of the explanation, is with the payment after the appointed day and not with the rise in the cost of living index. There is nothing in the Explanation to warrant the conclusion that rise in the cost of living index should be after the appointed day. What is to be after the appointed day is any automatic payment of dearness allowance in consequence of any rise in such cost of living index and not that any rise in the cost of living index should be after the appointed day. [482B: 481H] When D.A. is linked to the cost of living index, actual determination of the D.A. takes place after the index is published and known. The index, therefore, is always of a past period by the yard stick of which D.A. is adjusted. This being the concept about linkage of D.A. to cost of living index. Explanation I makes it clear that when pay ment of D.A. is linked to cost of living index any automatic payment after the appointed day of D.A. in consequence 'of any rise in the cost of living index shall, notwithstanding the provisions of this clause, be deemed to be the addition al D.A. [481G]

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ivil Appeal No. 1739 of 1973. Appeal by Special Leave from, the Judgment and Order dated 22.10.1973 of the Jammu and Kashmir High Court in Letters Patent Appeal No. 9/72) F.S. Nariman, O.C. Mathur, P.N. Tiwari and D.N. Mishra, for the appellants. Dushiant Kumar Rampal respondent. (in person) The Judgment of the Court was delivered by BHAGWATI, J. , We pronounced our order on this appeal on 17th December, 1976 and we now proceed to give our reasons. We may point out that the respondent was not represented by a lawyer and he argued case in person and though he is a lay man, not well versed in the science of law and in the art and skill of advocacy, we must admit that he argued his case with conspicuous ability. Prior to 5th September, 1969 there was only one Univer sity for the entire territory of the State of Jammu & Kash mir, namely, the University of Jammu & Kashmir. It was constituted under the Jammu & Kashmir University Act, 1965 (hereinafter referred to as the Act of 1965) and, as provid ed in section 20, its central authorities included the Senate and the Central Council. The Central Council was the executive body of the University and it had the power inter alia to appoint teachers and to define their duties. The respondent was appointed as a lecturer in English by the Central Council on 25th April, 1966 and after his period of probation was over he was confirmed as lecturer with effect from 29th April, 1967. The conditions of service of the respondent, like those of other confirmed teachers, were regulated by the Statutes made by the Senate from time to time under the provisions of Act of 196.5. Statute 2 provided that every salaried teacher of the University shall have to execute a written contract with the UniverSity and the conditions of service of teachers appointed by the University shall be those embodied in the agreement of service annexed to the Statutes and every teacher shall execute such agreement before he enters upon his duties or as soon as possible thereafter. It appears that though Statute 2 required an agreement of service to be executed by a teacher, no such agreement of service was executed by the respondent on his appointment as 47 lecturer. But it was common ground between the parties that the conditions of service of the respondent were governed by the provision set out in the form of agreement of service annexed to the Statutes. Clause (6) of this agreement and this clause admittedly governed the respondent stipulated that in all matters, the teacher would "abide by the Stat utes and Regulations from time to time in force in the University, and in particular, by those determining his/ her grade, increment, conditions of service, rules of superannu ation and provident fund rules, provided that no change in the Statutes and Regulations in this regard shall be deemed to have adversely affected the teacher. " The respondent was thus clearly bound by any changes which might be made in the Statutes from time to time and no change made in the Stat utes was to be regarded as having adversely affected the respondent and he could not complain against it. The case of the respondent was that he satisfactorily carried on his duties as lecturer and earned his increments from year to year. On 5th September, 1969 the Governor of Jammu & Kashmir promulgated Ordinance No. 10 of 1969 establishing in place of the University of Jammu & Kashmir, two separate univer sities, namely, the University of Kashmir for the Kashmir division and the University of Jammu for the Jammu division of the State. This Ordinance was replaced by the Jammu & Kashmir University Act, 1969 (hereinafter referred to as the Act of 1969) which came into force on 30th October, 1969. The:Act of 1969 made a slight departure from the earlier Act in the constitution of the various authorities of each University, Section 20 of the Act of 1969 provided that the authorities of each university shall include the University Council and the Syndicate. The University Coun cil was constituted supreme authority of the university while the Syndicate was entrusted with the chief executive authority. Whereas under the earlier Act, the power to appoint all teachers of the University was entrusted to the Central Council. there was bifurcation of this power between the University Council and the Syndicate under the Act of 1969. The University Council was given the power to appoint teachers of the status of a reader and above white the power to appoint teachers below the status of a reader was en trusted to the Syndicate. The Syndicate was thus the au thority under the Act of 1969 vested with the power to appoint and that power would also carry with it the power to dismiss teachers below the status of a reader. Since the University of Jammu & Kashmir came to an end on the repeal of the Act of 1965 and two new universities, one of Kashmir and the other of Jammu, were established, some provision had to be made in the Act of 1969 for continuance of the Stat utes and Regulations so that there might be no hiatus or break causing dislocation in the functioning of the two new universities. Section 51 of the Act of 1969. therefore. provided that all Statutes and Regulations made under the Act of 1965 and in force immediately before the commencement of the Act of 1969 shall so far as may be consistent with the provisions of the latter Act, continue to be in force in each University and section 48. sub sec. (2) gave power to the special officer to "examine the Statutes and Regulations continued under section 51 of this Act and propose such modifica 48 tions, alterations and additions therein as may be necessary to bring such Statutes and Regulations in conformity with the provisions of this Act" and provided that the modifica tions, alterations and additions proposed by the Special officer shall, if approved by the Vice Chancellor, be deemed to have been made by the competent authority under the Act of 1969 and shall continue in force until altered or superseded by the authority constituted under the Act of 1969. There was also the problem of ensuring continuance of service of the existing employees of the University of Jammu & Kashmir and their allocation between the two succeeding universities and this problem was solved by the enactment of section 52 in the Act of 1969. That section, in so far as material, provided as follows: "52. Continuance of service of the existing employees and their allocation Notwithstanding anything contained in this Act or any Statute or Regulation made thereunder or in any other law for the time being in force. (1) all employees of the University of Jammu and Kashmir constituted under the Jammu and Kashmir University Act, 1965 (other than those serving on contract. or on deputation 'in the University or those serving m the Publication Bureau of the University) who immediately before the commencement of this Act, were holding or discharging the duties of any post of office in connection with the affairs of the said University shall, subject to the provisions of sub section (2), continue in service on the same terms and conditions as regulated their service before such commencement; (2) the Chancellor may in consultation with the pro Chancellor by order allocate the employees of the University of Jammu & Kashmir (other than those serving on contract or deputation in the University or those serving in the Publication Bureau of the University) between the University of Kashmir and the University of Jammu constituted under this Act in such manner as he may consider necessary and every such allocation shall be deemed to b e an appointment, transfer or promotion as the case may be,to the post or office by the competent authority under this Act: Provided that in making such allocations the conditions of service of employment of such employees shall not be varied to their disad vantage; (3) x x x x x (4) all persons who immediately before the commencement of this Act were holding or discharging the duties of any post or office in connection with the affairs of the Univer sity of Jammu and Kashmir, on 49 contract basis or by virtue of their deputa tion to such posts or offices from other services in the State. unless otherwise or dered by the Chancellor after consulting the Pro Chancellor, shall cease to hold such posts or to discharge such duties after 60 days from the commencement of this Act and all such contracts with or deputations to he University of Jammu & Kashmir shall stand terminated with effect from the expiry of the said period of 60 days. " Since most of the teachers had entered into an agreement of service with the University of Jammu & Kashmir as provided in Statute 2 and the rest were also treated as having en tered into such agreement of service by reason of the com pulsive force of Statute 2 though in fact such agreement of service had not been executed by them, perhaps due to inad vertence, the Chancellor took the view that all of them held their posts on contract basis and hence, proceeding on the assumption that sub sec. (4) of section 52 was attracted in their case, he made an order dated 24th December, 1969 ' directing that the appointments of the teachers set out in Schedule (1 ), which also included the respondent, shall continue on the respective posts mentioned In that schedule on the terms and conditions embodied in Schedule II with effect from 9th January, 1970. Schedule II contained the terms and conditions on which teachers mentioned in Schedule I were continued in service of the University of Jammu and clause 9(ii) of that Schedule read as follows: "The Vice Chancellor may when he deems it necessary suspend the teacher on grounds of misconduct, insubordination, inefficiency or unsatisfactory performance of duty, when he suspends the teacher he shall report it to the university Council/Syndicate at the next meeting. " The respondent and some other teachers were of the view that the terms and conditions set out in Schedule II effected a change in their conditions of service to their prejudice and hence they made a representation to the Chancellor and other authorities of the University of Jammu. It does not appear from the record as to what happened to this representation but presumably it was rejected. Now we come to the events which formed the immediate cause for the predicament of the respondent. It appears that certain complaints were received by the Vice Chancel lor against the conduct of the respondent and the Vice Chancellor took the view that these complaints were of a serious character and needed to be enquired into and pending such enquiry, it was not desirable that the respondent should be allowed to continue to work as a lecturer. The ViceChancellor accordingly passed an order dated 21st May, 1970 directing that the respondent be placed under suspen sion with immediate effect. This order was purported to be passed by the Vice Chancellor in exercise of the powers vested in him under clause 9(ii) of Schedule II of the Order dated 24th December, 1969 and section 13 (4) of the Act of 1969. It may be convenient at this stage, before we proceed 50 further, to refer to section 13(4), since considerable argument before us turned upon it Section 13 deals with the powers and duties of the Vice Chancellor and sub section (4) of that section reads as follows: "(4) The Vice Chancellor may take action as he deems necessary in any emergency which, in his opinion, calls for immediate action. He shall in such a ease and as soon as may be thereafter, report his action to the officer, authority or other body of the Uni versity concerned who or which would ordinari ly have dealt with the matter. " Sub section (6) of section 13 is also material and it is in the following terms: "(6 ) The Vice Chancellor shall give effect to the orders of the University Council and the Syndicate of the University concerned regarding the appointment, dismissal and suspension of persons in the employment of the University and shall exercise general control over the affairs of the University. He shall be responsible for the discipline of the University in accordance with this Act, Stat utes and Regulations. " The Vice Chancellor, immediately after passing the Order of suspension, placed it before the Syndicate at its next meeting held on 24th June, 1970. The respondent had also in the meantime submitted his representation against the Order of suspension and this representation also came up before this meeting of the Syndicate. The Syndicate considered the Order of suspension made by the ViceChancellor as also the representation submitted by the respondent and passed a resolution rejecting the representation of the respondent recording the action taken by the Vice Chancellor and di recting that articles of charge be framed and communicated to the respondent and he may be required to submit his explanation in writing and a committee consisting of the Vice Chancellor and three other persons be appointed to investigate the matter and submit its finding to the Syndicate. The Registrar of the University thereafter passed ,an order dated 6th June, 1970 declaring that, during the period of suspension, the respondent would not be enti tled to get full salary but he would be paid only subsist ence allowance at an amount equal to half pay and half dearness allowance in accordance with the usual practice followed by the University. It may be pointed out that with effect from 21st May, 1971, that is after the expiry of a period of one year from the date of suspension, the subsist ence allowance payable ' to the respondent was raised to 75% of the pay and dearness allowance. A charge sheet contain ing twelve charges was then given to the respondent and he was required to submit his explanation. The respondent gave his explanation to the charges leveled against him and while doing so, he also objected to the constitution of the Committee which was appointed to enquire into the charges. In consequence of his objection, the constitution of the committee was changed and the Vice Chancellor was kept out of it. The enquiry by the Committee 51 commenced on 12th March, 19:71 and it went on for some time, but before it could be completed, the respondent filed a writ petition in the High Court of Jammu & Kashmir challeng ing the validity of the Order dated 24th December, 1969, the Order dated 6th June, 1970 in regard to payment of subsist ence allowance and also impugning the legality of the enquiry proceedings. There were various grounds taken by the respondent in the writ petition but it is not necessary to refer to them in detail having regard to the course which the appeal has taken before us. The writ petition was heard by a Single Judge of the High Court and by a judgment dated 28th April, 1972 the learned Judge dismissed the writ petition. The respondent there upon preferred a Letters Patent appeal in the High Court. During the pendency of the appeal, the departmental enquiry which was started against the respondent. was completed and the committee made a report absolving the respondent of all the charges except charges Nos. 1 and 12 of which the respondent was found guilty. The syndicate, after considering the report of the committee, resolved to issue a notice to the respondent to show cause why "the punishment for termination of his services from the University be not imposed on him" on the ground of charges Nos. 1 and 12. Pursuant to this resolu tion, a show cause notice was issued to the respondent which led to the filing of a petition by the respondent in the Letters Patent appeal for taking notice of these subse quent events. The respondent in this petition challenged the report of the committee as also the resolution of the Syndicate on various grounds which are no longer material. The University filed its reply to the petition denying the allegations made against the committee and disputing the grounds on which the validity of the enquiry was challenged on behalf of the respondent. The Letters Patent appeal thereafter came to be heard by a Division Bench of the High Court and the Division Bench, by a judgment dated 22nd October, 1973, took the view that the Order dated 24th December, 1969 was violative of section 52, sub section (1) of the Act of 1969 and the Order of suspension dated 21st May, 1970 was "defective for want of jurisdiction and other legal infirmities" and these two orders were accordingly quashed and set aside by the Division Bench. The Division Bench also held that "as a necessary corollary to our find ings on the two impugned orders and also in consequence of our observations on the legal aspect of the show cause notice issued to the appellant to terminate his service, the same also deserves to be quashed." The Division Bench accordingly allowed the appeal, set aside the judgment of the learned Single Judge and issued a writ of certiorari quashing the Order dated 24th December, 1969 and the Order of suspension dated 21st May, 1970 as also the show cause notice issued to the respondent and directed the reinstate ment of the respondent. The University and the Vice Chan cellor thereupon preferred the present appeal with special leave obtained from this Court. The appeal was heard by this Court for some time on the points which were decided against the University and the Vice Chancellor and certain further points were also raised by the respondent in support of the order made by the Division Bench of the High Court. 52 But it is not necessary to examine the arguments advanced on behalf of the parties on these various points, since before the hearing of the appeal could be concluded, a partial settlement was arrived at between the University and the Vice Chancellor on the one hand and the respondent on the other. It was agreed between the parties as a result of this settlement that the University should drop the disci plinary proceedings action against the respondent and that the respondent should be allowed to join service within fourteen days from the date of the order to be made by this Court and upon his joining, his pay should be fixed as lecturer taking in view the increments which he would have earned but for the suspension. It was also declared in the settlement that there shall be no stigma whatsoever attached to the respondent and so far as the personal allegations made by him against the University authorities we;re con cerned, they would stand withdrawn by him. The settlement also provided that the respondent should be given benefit of continuity of service and if the validity of the Order of suspension was ultimately upheld by this Court and it was held that the respondent was not legally entitled to any thing more than the subsistence allowance actually paid to him, the matter would be left to the Chancellor to determine in his sole and. absolute discretion as to whether any additional amount at all, and if so, what amount, may be paid to the respondent for the period of suspension ex gratia without any liability on the part of the University. The Chancellor was authorised to determine this matter in consultation with the Pro Chancellor or in such other manner as he thought proper and he could do so, even without giving any opportunity to either party to make his or their submis sions in the matter. Having regard to this settlement, the only two questions which remained to be resolved by this Court were, first, whether the Order of suspension was valid, and secondly, if the Order of suspension was valid, whether the respondent was entitled to anything more than the subsistence allowance actually paid to him. These two questions we shall now proceed to decide. The first question is whether the Order of suspension made by the Vice Chancellor was a valid Order or it suffered from any legal infirmities. The respondent assailed the validity of the order of suspension on the ground that it was made in purported exercise of the power conferred under clause (9) (ii) of Schedule II to the Order dated 24th December, 1969, but this Order w. as itself void and inoper ative as it was in conflict with the provisions of section 52, subsection (1) of the Act of 1969. The argument of the respondent was that immediately before the commencement of the Act of 1969, he did not hold or discharge the duties of any post or office in connection with the affairs of the University on contract basis, nor was he on deputation from any other service of the State of Jammu & Kashmir and he was, therefore, not covered by section 52, sub sections (4) under which the Order dated 24th December, 1969 was purported to be made, but his case was governed by section 52, subsection (1) which ensured him continuity in service on the same terms and conditions as before and hence the order dated 24th December, 1969 altering his terms and conditions as set out in 53 Schedule II was invalid. This argument would have required us to consider whether the employment or the respondent under the University of Jammu & Kashmir immediately prior to the commencement of the Act or 1967 was on contract basis, because the provision in regard to deputation being inapplicable, it is only if the employment of the respondent was on contract basis that the Order dated 24th December, 1969 could be justified under section 52, sub section (4). But we shall, for the purpose of the present appeal, proceed on the assumption that the case of the respondent was gov erned by subsection (1) and not sub section (4) of section 52 and the order dated 24th December, 1969 in so far as it determined any different terms and conditions for the re spondent was not valid, since we find that, in the view which is being taken by us, it is not necessary to examine this question. Undoubtedly, the effect of tins assumption would be to put clause (9) (ii) of Schedule II to the order dated 24th December, 1969 out of the way of the respondent and it would not be available to the University and the Vice Chancellor m support of the Order of suspension. But even so, we think the Vice Chancellor had power to make the Order of suspension and he was within his authority in doing so. We have already pointed out that by reason of Statute 2 read with clause (6) of the Form of Agreement annexed to the Statutes made under the Act of 1965, the respondent was bound by any changes which might be made in the Statutes from time to time and no change made in the Statutes was to be regarded as having adversely affected the respondent. Now, the Statutes made under the Act of 196.5 continued to be applicable to the University by reason of section 51, but section 48, sub section (2) provided for making of modifica tions, alterations and additions in the Statutes with a view to bringing them in conformity with the provisions of the Act of 1969. The Special Officer accordingly proposed certain modifications in the Statutes which were found necessary to bring the Statutes in conformity with the provisions of the Act of 1969 and. these modifications were approved by the Chancellor by an Order dated 24th December, 1969 and by reason of section 48, sub section (2) they were deemed to have been made by the competent authority under the Act of 1969. This Order dated 24th December, 1969 substituted Chapter iV in the Statutes by a new Chapter and Statute 24(ii) in the newly substituted Chapter made the same provision as clause (9)(ii) of .Schedule II to the Order made under sub section (4) of section 52. Now, obvi ously, if Statute 24(ii) were a valid provision, the Vice Chancellor would have power to suspend a teacher "on the ground of misconduct, insubordination, inefficiency or unsatisfactory performance of duty" and the Order of suspen sion made against the respondent would be within the au thority of the ViceChancellor. The respondent, there fore, assailed the validity of Statute 24(ii) on the ground that it was not necessary for the purpose of bringing the Statutes m conformity with the provisions of the Act of 1969 and was hence not within the terms of section 48, subsection (2). Turning to the language of section 48, sub section (2) it is clear that the power conferred on the Vice Chancellor under 54 that provision to approve modifications in the ' Statutes is a power which can be exercised only where the modifications are necessary for bringing the Statutes in conformity with the provisions of the Act of '1969, and if it is found that any modifications purported to be approved by the Chancel lor are plainly unnecessary from the point of view of bring ing the Statutes in conformity with the provisions of the Act of 1969 ', it would be outside the power of the Chancel lor to approve them. The Chancellor cannot say that it is for him to decide in his subjective opinion whether the modifications proposed to be made are necessary for bringing the Statutes in conformity with the Act of 1969 and that his subjective opinion is immune from scrutiny in a court of law. Of course, if the view taken by the Chancellor is a reasonably possible view, the Court would not interfere with the Order made by him approving the modifications, but if what has been done by him is plainly and egregiously wrong, the Court would certainly interfere on the ground that the order made by the Chancellor is beyond the power conferred on him by section 48, sub section(2). The question which, therefore, arises for consideration is whet.her Statute 24(ii,) could reasonably be said to be necessary for bring ing the Statutes in conformity with the provisions of the Act of 1969. We may first refer to section 13, sub section (4) of the Act of 1969 which confers power on the Vice Chancellor to take such action as he deems necessary in any emergency which in his opinion calls for immediate action. A similar provision was also made in section 13, sub section (4) of the Act of 1965. But the Act of 1969 introduced a new provision in sub section (6) of section 13 to the effect that the Vice Chancellor shall be responsible for the disci pline of the University in accordance with the Act, Statutes and Regulations. The Vice Chancellor was, thus, entrusted under sub section (6) of section 13 with the task of main taining discipline in the University and the entrustment of this task carried with it by necessary implication power to. take whatever action was necessary for the purpose of main taining discipline, provided of course such action was in accordance with the Act of 1969 ' and the Statutes and Regu lations. Since sub section (6) of section 13 was a new provision enacted in the Act of 1969, it was necessary to make Statutes for the purpose of enabling the Vice Chancel lor to effectively discharge the responsibility of maintain ing the discipline of the University and for that purpose, vesting power in the Vice Chancellor to suspend a teacher pending departmental enquiry against him. It was with this object of bringing the Statutes in confirmity with sub section (6) of section 13 that Statute 24(ii) was added by way of modification in the Statutes by the Order dated 24th December, 1969. We may concede straight away .that if there was anything in the Act of 1969 which was inconsistent with the conferment of power of interim suspension on the Vice Chancellor, Statute 24(ii) could not be approved by the Chancellor, because no Statute can be made is in conflict with any provision of the Act. But we do not find anything in the Act of 1969 which militates against vesting of power in the ViceChancellor to order interim suspension of a teacher and hence Statute 24(ii) must be held to be a Stat ute validly approved by the Chancellor 55 within his authority under section 48, sub section (2). The view taken by the Chancellor that Statute 24(ii) was neces sary for bringing the Statutes in conformity with sub sec tion (6) of 'section 13 can not in any event be said to be so plainly erroneous that the Court would strike down Stat ute 24(ii) as invalid. Now, if Statute 24(ii) is valid, there can be no doubt that the respondent would be bound by it and in that event, the order of suspension made by the ViceChancellor would be clearly within the power conferred on him by that Statute. It is true that the Order of sus pension did not recite StatUte 24(ii) as the source of power under which it was made, but it is now well settled, as a result of several decisions of this Court, that when an authority makes an order which is otherwise within .its competence, it cannot fail merely because it purports to be made under a wrong provision of law, if it can be shown to be within its powers under any other provision a wrong label cannot vitiate an order which is otherwise within the power of the authority to make, Vide Hukamchand Mills Ltd. vs State of Madhya Pradesh(1) and P. Balakotaiah vs Union of India.(2) We may also point out that the Order of suspension was, in any event, justified by the provision in section 13, sub section (4). The Order of suspension, in fact, recited that it was made in exercise of the power conferred under section 13, sub section (4). Sub section (4) of section 13 is general in terms and provides that the ViceChancellor shall be entitled to. take such action as he deems necessary in any emergency which in his opinion calls for. immediate action. It does not talk specifically of an order of interim suspension of a teacher but the width and amplitude of the language of the provision would clearly include action by way of interim suspension of a teacher, ' when there is in the opinion of the Vice Chancellor an emergency calling for immediate action. The respondent contended that the power to order interim suspension is a quasi judicial power and it would not be comprehended within the language of sub section (4) of section 13. But this contention is clearly falla cious and the premise on which it is based is unsound. It is not correct to say that an order of interim suspension is a quasi judicial order and in any event, the language of sub section (4 ) of section 13 is sufficiently wide and comprehensive to take within its scope and ambit every kind of action which may be considered necessary by the ViceChancellor in an emergency and there is no reason why such action should not include making of an order of interim suspension. The Vice Chancellor, therefore, clearly had power under section 13, sub section (4) to make an order of interim suspension if he thought it necessary to make such an order in an emergent situation which in his opinion called for immediate action. The respondent sought to contend that at the date when the order of suspension was passed, there was no emergency which called for immediate action on the part of the Vice,Chancellor and, therefore, the foundation for taking action under section 13, sub section (4) was wanting and the order of suspension could not be justified under that provision. (1) ; (2) ; 5 240SCI/77 56 But this contention cannot be entertained by us since it has not been taken as a ground of challenge in the writ peti tion. Whether or not there was 'an emergency requiring immediate action on the part of the Vice Chancellor .is entirely a question of fact and if the respondent wanted to contest the validity of the exercise of power by the Vice Chancellor under section 13, sub section (4) in making the order of suspension, he should have pleaded in the writ petition that the order of suspension was outside the power conferred under section 13, sub section (4) as there was no emergency. The respondent was aware from the recital con tained in the order of suspension that it was made by the Vice Chancellor in exercise of the power conferred under section 13, sub section (4) and, therefore, if the respond ent wanted to challenge the exercise of this power on. the ground that there was no emergency justifying its exercise, he should have made an averment to that effect in the writ petition. If such averment had been made in the writ peti tion, the University and the Vice Chancellor would have had an opportunity of meeting it in the affidavit in reply filed by them, but no such averment having been made in the writ petition, the University and the Vice Chancellor were not called upon to meet it. Hence, we cannot permit the re spondent to challenge the validity of the order of suspen sion on the ground that there was no emergency attracting the applicability of section 13, sub section (4). The order of suspension made by the Vice Chancellor was plainly and indubitably an order which the Vice Chancellor had power to make under section 13, sub section (4). It may be noted that immediately after making the order of suspension the ViceChancellor placed it before the Syndicate at its next meeting as required by the second part of section 13, sub section (4) and the Syndicate approved of the action taken by the Vice Chancellor by rejecting the representation of the respondent and recording the fact of the making of the order of suspension. We may also refer to one other contention urged on behalf of the respondent and that was that by reason of section 52, sub section (1) the respondent was entitled to continue in service of the University on the same terms and conditions as regulated his service before the commencement of the Act of 1969 and in view of the provide to sub section (2) of section 52 the conditions of service of the respondent could not be varied to his disadvantage and, therefore, neither Statute 24(ii) nor section 13, sub section (4) could operate to confer on the Vice Chancellor power to make the order of suspension which he did not possess under the old terms and conditions. This contention, plausible though it may seem, is, in our opinion, not well founded. Section 52, sub section (1) undoubtedly continued the service of a teacher on the same terms and conditions as regulated his service before the commencement of the Act of 1969 and that was subject to the provisions of sub section (2) of section ,52, but this subjection to the provisions of sub section (2) did not import the requirement set out in the second proviso that the conditions of service of a teacher shall not be varied to his disadvantage. The words "subject to the provi sions of sub section (2)" employed in subsection (1) of section 52 were intended merely 'to clarify that a 57 teacher shall continue in service on the same terms and conditions but subject to any allocation which may be made by the Vice Chancellor under sub section (2) of section 52. Nothing in sub section (1) should be construed as in any way derogating from the power of the Vice Chancellor to make an allocation of the teacher under section 52, sub section (2). The proviso to sub section (2)imposed a limi tation on the power of the Chancellor to make an allocation by providing that in making such allocation the conditions of service of the employee shall not be varied to his disad vantage and it could not be construed. as a substantive provision adding a requirement in sub section (1 ) that even though the terms and conditions of service may permit alter ation to the disadvantage of an employee, such alteration shall be inhibited. We must, therefore, consider the impact of sub section (1) of section 52 unaffected by the provision to sub section (2). Now, it is obvious that even if the respondent was entitled to continue in service on the same terms and conditions as before by reason of sub section (1) of section 52, these very terms and conditions provided that he would be bound by any changes which might be made in the Statutes from time to time Vide Statute 2 read with clause (6) of the Form of the Agreement annexed to the Statutes made under the Act of 1965. If, therefore, any changes were made in the terms and conditions of service of the respondent by Statutes validly made under, the Act of 1969, the respondent could not complain of any infraction of the provision of sub section (1) of section 52. Statute 24(ii) was, as already pointed out above, a Statute validly made under section 48, sub section (2) and hence the Vice Chan cellor was entitled to make the order of suspension against the respondent in exercise of the power conferred by that Statute. Section 13, sub section (4) of the Act of 1969 could also be availed of by the Vice Chancellor for sustain ing the order of suspension, since it conferred the same power on the Vice Chancellor as section 13, sub section (4) of the Act of 1965 and exercise of the power conferred by it as against the respondent did not involve any violation of sub section ( 1 ) of section 52. We are, therefore, of the view that the order of suspension was a valid order made by the Vice Chancellor in exercise of the power conferred upon him under Statute 24(ii) as also section 13, sub section (4) of the Act of 1969. Now, if the order of suspension was a valid order, it suspended the contract between the respondent and the Uni versity and neither the respondent was bound to perform his duties under the contract nor was the University bound to pay any salary to him. The respondent was entitled to receive from the University only such subsistence allowance as might be payables under the rules and regulations govern ing his terms and conditions of service. The legal position in regard to the right of a master to suspend his servant is now well settled as a result of several decisions of this Court. The law on the subject was succinctly stated the following words by Hegde,J. in V P Gindroniya vs State Madhya Pradesh (1): (1) [1970] 3 S.C.R. 448. 58 "The general principle is that an em ployer can suspend an employee of his pending an enquiry into his misconduct and the only question that can arise in such a suspension will relate to the payment of his wages during the period of such suspension. It is now well settled that the power to suspend, in the sense of a right to forbid a employee to work, is not an implied term in an ordinary contract between master and servant, and that such a power can only be the creature either of a statute governing the contract, or of an express term in the contract itself. Ordi narily, therefore, the absence of such a power either as an express term in the contract or in the rules framed under some Statute would mean that an employer would have no power to suspend an employee of his and even if he does so in the sense that he forbid the employee to work, he will have to pay the employee 's wages during the period of suspension. Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder the order of suspension has the effect of temporarily sus pending the relationship of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay. It is equally well settled that an order of interim suspension can be passed against the employee while an enquiry is pending into his conduct even though there is no such term in the contract of employment or in the rules, but in such a case the employee would be entitled to his remuneration for the period of suspension if there is no statute or rule under which, it could be withheld. The distinction between suspending the contract of a service of a servant and suspending him from performing the duties of his office on the basis that the contract is subsisting is important, The suspension in the latter case is always an implied term in every contract of service. When an employee is suspended in this sense, it means that the employer merely issues a direction to him that he should not do the service required of him during a par ticular period. In other words, the employer is regarded as issuing an order to the employee which because the contract is sub sisting, the employee must obey. " It will, therefore, be seen that where there is power con ferred on the employer either by express term in contract or by the rules governing the terms and conditions of service to suspend an employee, the order of suspension has the effect of temporarily suspending the relation of master and servant with the consequence that .the employee is not bound to render service and the employer is not bound to pay. In such a case the employee would not be entitled to receive any payment at all from the employer unless the contract of employment or the rules governing the terms and conditions of service provide for payment of some subsistance allow ance. Here, as we have held, 59 the Vice Chancellor had the power to suspend the respondent under Statute 24(ii,) or in any event under section 13, sub section (4) and hence the respondent could not claim payment of his salary during the period of suspension. The only ' payment which the respondent could claim to receive from the University was subsistence allowance. if the rules governing the terms and conditions of his service made such a provision. The University stated that it had adopted as a matter of practice the rules relating to Civil Servants of the State of Jammu & Kashmir for the purpose of payment of subsistence allowance to its employees and in fact the University Council at its meeting held on 22nd February, 1971 formally accorded approval to this practice. The respondent was, therefore, clearly not entitled to receive from the University anything more than the subsistence allowance actually paid to him, which, we are told, was paid on the same basis as that prevailing under the rules relat ing to Civil Servants of the State of Jammu & Kashmir. These were the reasons for which we made our order dated 17th December, 1976 upholding the validity of the order of suspension dated 21st May, 1970 and holding that the respondent was not entitled to anything more than the subsistence allowance paid to him during the period of sus pension under the order of the Registrars dated 6th June, 1970.

The Jammu and Kashmir University, which was a university constituted under the Jammu and Kashmir University Act, 1965, was bifurcated into two universities one for Jammu area and the other for Kashmir area by an act called the Jammu and Kashmir Universities Act, 1969. Statute 2 made under the 1965 Act required every teacher to sign the pre scribed agreement of service with the University. Clause (6) of the agreement stipulated that in all matters the teacher would abide by the statutes and regulations in force in the university from time to time. The proviso to this clause provided that no change in the statutes and regula tions in this regard shall be deemed to have adversely affected the teacher. Section 51 of the 1969 Act provides for continuing in force the statutes and regulations made under the 1965 Act; but section 48(2) empowered a special officer to propose modifi cations necessary to bring the statutes made under the 1965Act in conformity with the provisions of the 1969 Act and if such modifications were approved by the Chancellor they were deemed to have been made by the competent author ity under the 1969 Act. Section 52(1) of the 1969 Act provides that all employees of the university employed under the 1965 Act shall continue in service on the same terms and conditions as regulated their service before the commence ment of the 1969 Act. Sub section (2) empowers the Chancel lor to allocate employees of the university (other than those serving on contract) between the two new universities and the allocation so made was deemed to be an appointment to the post under the 1969 Act. The proviso to this sub section provides that in making such allocations the condi tions of service of employment of such employees shall not be: varied to their disadvantage. Sub section (4) provides that all persons who were employed under the former univer sity on contract shall cease to hold such posts after 60 days from the commencement of the 1969 Act and all such contracts with the former university shall stand terminated on the expiry of 60 days. Section 13(4) of the 1969 Act empowers the Vice Chancel lor to take such action as he deems necessary in any emer gency which calls for immediate action. Section 13(6) provides that the Vice Chancellor shall be responsible for the discipline of the University. Section 14(3) of the 1969 Act contained an identical provision as that contained in section, 13(4) of the 1965 Act. To bring the statutes under the 1965 Act in conformity with the provisions of the 1969 Act modifications proposed by the special officer under section 48(2) of the 1969 Act were approved by the Chancellor by his order dated December 24, 1969. This order substituted Chapter IV in the statutes by a new chapter. Acting under section 52(4), the Chancellor made an order on December 24 1969 directing that certain teachers shall continue on the respective posts in the new Universities on the terms and conditions embodied in Schedule II to the order. Clause 9(ii) of the Schedule empowered the Vice Chancellor to suspend a teacher on grounds. among others of misconduct. The respondent, a teacher appointed under the. 1965 Act, was transferred to the Jammu area by the Chancellor 's order dated December 24, 1969. In exercise of the power under el. 9(ii) of Schedule II of the Chancellor 's order 44 and section 13(4) of the 1969 Act, the Vice Chancellor, by an order dated May 21, 1970, suspended the respondent from service. By another order dated June 6, 1970 the respondent was allowed a subsistence allowance amounting to half his pay and half D.A. which was later raised to 75% of his pay and allowances. The respondent 's writ petition under article 226 of the Constitution challenging the suspension order of May 21, 1970, as well as the order dated June 6, 1970 was dismissed by a single Judge of the High Court. On appeal the Division Bench struck down the order of suspension as violative of section 52(1) of the 1969 Act. In appeal it was contended by the respondent that (1) since his case was governed by section 52(1) the order of Decem ber 24, 1969 made under section 52(4) was invalid because the terms and conditions set out in Schedule H to the order altered his conditions of service; (2) statute 24(ii) was invalid because it was not within the terms of section 48(2) and the statute was not necessary for bringing the statutes in conformity with the provisions of the 1969 Act; (3) the power to order interim suspension was a quasi judicial power and it would not be comprehended within the language of section 13(4) and (4) section 52(1) entitled him to continue in service on the same terms and conditions as before and under section 52(2) his conditions of service could not be varied to his disadvantage; therefore neither statute 24(ii) nor section 13(4) could confer power on the Vice Chancellor to suspend him which power the Vice Chancellor did not have under the earlier Act. Allowing the appeal, HELD: The Vice Chancellor had the power to make the order of suspension and he was within his authority in doing so. By reason of statute 2 read with el. (6) of the form of agreement the respondent was bound by any changes made, in the statutes from time to time and no change made in the statutes was to be regarded as having adversely affected him. Statutes made under the 1965 Act continued to be applicable by reason of section 51. To bring the statutes in conformity with the provisions of the 1969 Act, modifica tions proposed by the special officer were approved by the Chancellor by his order dated December 24, 1969 and by reason of section 48(2) they were deemed to have been made by the competent authority under the 1969 Act. This order substi tuted Chapter IV in the Statutes by a new Chapter and stat ute 24(ii) made the same provision as el. 9(ii) of Schedule II to the order made under section 52(4). If statute 24(ii) were a valid provision, the Vice Chancellor would have power to suspend a teacher and the order of suspension against the respondent would be within the authority of the Vice Chancellor. [53D E] Statute 24(ii) iS a statute validly approved by the Chancellor under section 48(2). [54H] 2(a) Section 13(6) has entrusted the Vice Chancellor with the task of maintaining discipline in the university and the entrustment of this task carried with it, by neces sary implication, the Vower to take whatever action was necessary for maintaining the discipline. Since section 13(6) was a new provision, it was necessary to make statutes for enabling the Vice Chancellor to discharge the responsibili ty of maintaining the discipline and for that purpose, vesting power in him to suspend a teacher pending departmen tal enquiry against him. It was with this object of bring ing the statutes in conformity with section 13(6) that statute 24(ii) was added by way of modification in the statutes by the order of December 24, 1969. Moreover, there is nothing in the 1969 Act which militates against vesting power in the Vice Chancellor to order interim suspension of a teacher. The ChancellOr 's view that statute 24(ii) was necessary to bring it in conformity with section 13(6) cannot be said to be erroneous. [54F G] (b) If statute 24(ii) is valid, the respondent would be bound by it and in that event the order of suspension made by the Vice Chancellor would be within the power conferred on him by that statute. [55B] (c) Though the order of suspension did not recite stat ute 24(ii) it is wellsettled that when an authority makes an order which is otherwise within its competence, it cannot fail merely because it purports to be made under a wrong 45 provision of law, if it can be shown to be within its power under any other provision; a wrong label cannot vitiate an order which is otherwise within the power of the authority to make it. [55B C] P.Balakotaiah vs Union of India, ; fol lowed. 3(a) It is not correct to say that an order of interim suspension was a quasijudicial order and in any event the language of section 13(4) is sufficiently wide and comprehensive to take within its scope and ambit every kind of action considered necessary by the Vice Chancellor in an emergency. The order of suspension. made by the Vice Chancellor was plainly an order which he had the power to make under section 13(4). [55F] (b) Section 13(4) does not talk specifically of an order of interim suspension of a teacher but the width and ampli tude of the language of the provision would clearly include action by way of interim suspension of a teacher, when there is in the opinion of the Vice Chancellor, an emergency calling for immediate action. [55E] (c) The respondent 's contention that there was no emer gency which called for immediate action on the part of the Vice Chancellor and, therefore, the order of suspension could not be justified, cannot be entertained by this Court because no such averment had been made in the writ petition. [55H] 4(a) The respondent could not complain of any infraction of the provisions of section 52(1). Since statute 24(ii) was a statute validly made the Vice Chancellor was entitled to make the order of suspension. The Vice Chancellor could also avail of section 13(4) for sustaining the order of suspen sion since it conferred the same power on him as section 13(4) of the 1965 Act and exercise of the power conferred by it as against the respondent did not involve any violation of the provisions of section 52(1). [57D E] (b) Section 52(1) continued the service of a teacher on the same terms and conditions as regulated his service before the commencement of the 1969Act and that was subject to the provisions of section 52(2). But this subjection to the provisions of sub section (2) did not import the requirement set out in the proviso that the conditions of service of a teacher shall not be varied to his disadvantage. The words "subject to the provisions of sub section (2)" in section 52(1) were intended merely to clarify that a teacher shall contin ue in service on the same terms and conditions but subject to any allocation which may be made by the Chancellor under section 52(2). Nothing in sub section (1) should be construed as in any way derogating from the power of the Chancellor to make an allocation of the teacher under section 52(2). The proviso imposed a limitation on the power of the Chancellor to make an allocation by providing that in making such allocation the conditions of service of the employee shall not be varied to his disadvantage and it could not be construed as a substantive provision adding a requirement in sub s.(1) that even though the terms and conditions of service may permit alteration to the disadvantage of an employee, such alteration shall be inhibited. [56H; 57A] (c) Even if the respondent was entitled to continue in service on the same terms and conditions as before by reason of section 52(1) these very terms and conditions provided that he would be bound by any changes which might be made in the statutes from time to time. If, therefore, any changes were made in the terms and conditions of service of the respondent by statutes validity made under the 1969 Act the respondent could not complain of any infraction of the provisions of section 52(1). [57C D] 5(a) The order of suspension suspended the contract between the respondent and the university and neither the respondent was bound to perform his duties under the contract nor was the university bound to pay any salary to him. The respond ent was entitled to receive only such subsistence allowances as might be payable under the rules and regulations govern ing his terms and conditions of service. [57G] (b) Where there is power in the employer either by an express term in the contract or by the rules governing the terms and conditions of service to 46 suspend an employee, the order of suspension has the effect of temporarily suspending the relation of master and servant with the consequence that the employee is not bound to render service and the employer is not bound to pay. In such a case the employee would not be entitled to receive any payment at all from the employer unless the contract of employment or the rules governing the terms and conditions of service provide for payment of some subsistence allow ance. [58H] In the instant case the Vice Chancellor had the power to suspend the respondent under statute 24(ii) and the respond ent could not claim payment of his salary during the period of suspension. P. Gindroniya vs State of Madhya Pradesh, [1970] 3 SCR 448 followed.

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il Appeal No. 1919 of 1968. Appeal by Special Leave from the Judgment and Order dated 15 12 1967 of the Mysore High Court in Writ Petition No. 1579 of 1966. Shyamla (Mrs.) Pappu and E.K. Joseph for the Appellants R.B. Datar for Respondent No. 1. N. Nettar for Respondent No. 2. The Mysore State Road Transport Corporation is the appellant by special leave before us. The first respondent, a conductor in the Mysore Government Road Trans port Department, had petitioned in the High Court under Article 226 against the appellant and the State of Mysore and asked it to quash an order of his dismissal, passed on 25 1 1961, in disciplinary proceedings taken against him at a time when he was a servant of the Mysore Government Road Transport Department. The Government Department was abol ished on 1 8 1961. But, before this event happened, the Mysore Government had sent notices to its employees on 23 6 61 proposing to transfer all those persons who were actually in its service on the date of issue of 927 these notices and had accepted offers of appointment as employees of the Corporation. The first respondent, having been already dismissed for misconduct on 25 1 1961, was not the recipient of one of these notices to exercise an option. In his writ petition, questioning the order of his dismissal, the first respondent had also asked for a decla ration that he had continued in service since the date of his suspension and commencement of disciplinary proceedings. The High Court of Mysore merely quashed the dismissal order of 25 1 1961 and the order of suspension dated 23 7 1960. It did not grant the declaratory relief asked for. It observed: "It is further ordered that this is without prejudice to the holding of fresh enquiry if they consider the same necessary". This order could not possibly amount to a declaration that the first respondent had con tinued in the service of either the Mysore Government or had become the servant of the appellant Corporation, a separate legal entity which came into existence by means of a Notifi cation under section 3 of the Road Transport .Corporations Act, 1950 (hereinafter referred to as 'the Act '). As a separate legal entity, the Corporation could not be said to have stepped automatically into the shoes of the Mysore Road Transport Department. No. provision of the Act or rules made thereunder has been shown to us which could have that effect. The first respondent, however, relied upon a Notification under section 34 of the Act which contains, inter alia, clause 3 which preserves: "(3). All rights and liabilities which have accrued or are incurred or which may accrue or may be incurred under any contract made by the State Government or by any Officer of the Road. Transport Department, excepting the Bangalore Transport Service Division prior to the First August 1961, which would have been the rights and liabili ties of the Corporation. " He also cites another Notification which reads as follows : "1. The employees of the Mysore Govern ment Road Transport Department who have opted to serve under the Corporation in pursuance of the Notices issued to them by the Government shall be employed by the Corporation subject to such regulations as may be made by it under section 45(2)(c) of the Road Transport Corpo rations Act, 1950 and also subject to the following conditions, namely : (a) The transfer of the service of the employees of the Mysore Government Road Trans port Department to the Corporation shall not amount to interruption of service and shall not entail any loss of seniority previously held by such employees. (b) The terms and conditions of service applicable to such transferred employees including those relating to 928 Provident Fund, Gratuity and other benefits shall not in any way be less favourable than those applicable to them immediately before the transfer. (c) Benefits regarding leave and other conditions of service available to such trans ferred employees immediately before the transfer shall be continued. (d) In the event of retrenchment of such transferred employees, in determining the retrenchment compensation, if any, length of service rendered by such transferred employees before the transfer shall also be considered. (e) Changes in the conditions of service of the transferred employees shall not be effected to their disadvantage without the prior approval of the Government. In respect of all disciplinary proceed ings or appeals arising therefrom pending immediately before 1st August, 1961, the Corporation or such Officer or Officers as may be designated by it shall be the disciplinary authority competent to pass appropriate orders in accordance with the relevant rules ap plicable to them before the transfer. " It is clear that the last mentioned notification could apply only to those persons who, on 1 8 1961, had already exercised an option to serve under the Corporation in pursu ance of notices issued to them. It makes no provision for persons to whom, for any conceivable reason, no notice had been issued. Neither the Act nor the two notifications section 34(1) of the Act mentioned above contained any provisions which could entitle an employee of the Mysore Government Road Transport Department to get a notice automatically. It appears that the notices were issued only in exercise of the executive power of the Government. Clause (7) of one of the two notifications of 1 8 1961 laid down: "(7) The members of the staff of the Mysore Government Road Transport Department, excepting those who are serving in connection with the affairs of the Bangalore Transport Service Division, who have opted to serve under the Corporation with effect from 1st August, 1961, in response to the notice issued to them by Government shall be employed by the Corporation subject to such regulations as may be made by it under section 45(ii)(c) of the Road Transport Corporations Act and subject to such assurances as have been given to them by Government in their notice No. HD 8 TRC 60 dated 23rd June 1961. " This provision also relates to persons who had already exercised options under notices issued to them already. It may be that there was a lacuna in the rules or in the Act so that cases like those of the first respondent were not provided for at all in the Act or in the rules. 929 Learned counsel for the first respondent relied strongly on section 34 of the Act which lays down as follows : "34(1). The State Government may, after consultation with a Corporation established by such Government, give to the Corporation general instructions to be followed by the Corporation, and such instructions may include directions relating to the recruitment, condi tions of service and training of its employ ees, wages to be paid to the employees, re serves to be maintained by it and disposal of its profits or stocks. (2) In the exercise of its powers and performance of its duties under this Act, the Corporation shall not depart from any general instructions issued under sub section ( '1) except with the previous permission of the State Government. " This section enables only general directions to be given. When the first respondent applied in the High Court for another writ or direction under Art 226 in 1966, the High Court seems to us to have over stepped the limits of mere interpretation of application of the law and to have in dulged in what is nothing short of legislation. The High Court directed the State Government to serve a notice call ing upon the first respondent to exercise his option on the question whether he wanted to become an employee of the Mysore State Road Transport Corporation in the same way in which other employees of the Transport Department of that State had been asked to exercise their options. The High Court observed : "It is clear that the State Government were under a duty to make available to him that option when the order by which he was illegally dismissed was set aside. Government are therefore, in our opinion, right in making available to the petitioner that option at least now. We, therefore, issue a direction that that option will be made available to the petitioner within fifteen days from this date". We also find that, after proceedings under the Contempt of Courts Act against the Government of Mysore, the petitioner had been paid his salary between 25 1 61, the date of a dismissal which was declared to be illegal by the High Court, and 1 8 61, when the Mysore Government Road Transport Department was abolished and its place taken by the State Road Transport Corporation. The State Government owed no duty to the first respond ent to pay him after its transport department was wound up. No term of any contract was placed before the Court to show what duty the Government could have to employ the first respondent after its transport department was wound up or to direct the Corporation to do so. We do not know what option the State Government has given to. the first respondent after the writ petition was filed. If it had already given any option to him, there was no point in directing it to give another option. In order to compel the Corporation to do anything, as already indicated, only a general direction section 34 of the Act, set out above, could be given by the Government. There neither could be a 930 specific direction with regard to a particular case nor was any specific direction given by the Government for any such case. The High Court could not take upon itself the power to fill any gap in the provision of the Act, even if we were to assume that there was one here, and compel the Government to perform a function which the Government was under any kind of obligation to do. The High Court could not give a spe cific direction to make provision to meet what it thought was required in a particular or individual case if such a case fell outside the provisions made by the Act and the rules. We can find no justification at all for such assump tion of powers by the High Court. Mrs. Shyamla Pappu learned counsel for the appellant has sought support from a judgment of this Court in Mysore State Road Transport Corporation vs Krishna Rao & Anr.(1), where this Court held as follows : It is quite clear the employees of the Bangalore Road Transport Service of the Government did not either under a statutory provision, as in Jestamani Gulabrai Dholakia vs The Scindia Steam Navigation Co. ; , or automatically, become the employ ees of the Corporation. The Corporation was directed to take over only those of the em ployees who opted for its service and to give to them the same terms and conditions as were enjoyed by them while in the service of the Mysore Government. Thus, the condition prece dent of an employee of the Road Transport Service of the Government of Mysore being transferred and regarded as the employee of the Corporation as from October 1, 1951, was the giving of the option to him and his exercise thereof. There is no dispute that Respondent 1 was not given the notice of option, presumably because, rightly or wrongly, he was not re garded as having been in the service of the Government 's Road Transport Service immediate ly before the Corporation came into being. It cannot also be disputed that he never asked for a notice of option on the ground that he continued to be in that service. That he did not in fact exercise the option is an accepted fact. That being so, it cannot be said that under the said notification the Corporation was required to have him as its employee or that his service was transferred to the Corpo ration thereunder, the condition precedent to such employment or transfer not having been complied with." This Court also held there: In our view, the Labour Court could not, on the position stated above, treat him as the Corporation 's employee and on that footing grant him the relief which it did. Once it is found that he did not become the Corpora tion 's (1) C.A. No. 1720 of 1967 given on 6 8 1969. 931 employee, the Corporation could not be held liable to pay him the wages for the period from March 6, 1960, to April 19, 1962. " The case cited by Mrs. Pappu arose out of a claim under section 33(c)(2) of the , but the views .expressed there accord with ours. We re spectfully adopt the same reasoning. Indeed, in the case now before us, the Corporation 's legal position rests on a stronger footing than it did in the case cited above inasmuch as the declaratory relief asked for by the first respondent against the Corporation had not been granted. That relief would, therefore, be deemed to have been refused. The first respondent did not himself go up in appeal against that decision. He cannot claim such a relief in the subsequent writ petition now before us. The facts set out above show that there were ample grounds for discriminating between a person against whom an order of dismissal had been passed, so that he was no longer serving in the transport department, and others who were not in the same position but were actually in the service of the transport department of the. Government. It may be that the effect of the High Court 's order, setting aside the dismiss al, .was that the stigma .of dismissal was removed from the record of the first respondent. Nevertheless, as no order granting a declaratory relief he had asked for was given to the first respondent, he could not be deemed to be a servant even of the State Government after the department in which he was working was wound up. The most he could say was that he was not dismissed. The winding up of the department would, on the facts stated above, operate as the discharge of the respondent who could, if so advised, seek whatever other means of redress he may still have under the law. Consequently, we allow this appeal, set aside the judgment and order of the High Court. The parties will bear their own costs. S.R. Appeal alllowed.

Respondent 1, a conductor of the Mysore Government Road Transport Department was dismissed. for misconduct on 25 1 1961. The legality of the said dismissal order was questioned in the High Court under article 226 with a further prayer to declare that he had continued in service since the date of his suspension and commencement of disciplinary proceedings. The High Court allowed the writ petition on 11 9 1964 and quashed the dismissal order with an observa tion viz. "It is further ordered that this is without preju dice to the holding of fresh enquiry if they consider the same necessary". On 1 8 1961. the Road Transport Corpora tion was constituted and the Government Road Transport Department was abolished. Such of the employees who had exercised their option as per the notice dated 23 6 1961, were taken over by the appellant corporation. The re spondent No. 1 was not given the option as he was dismissed by that date. On a complaint under the. Contempt of Courts Act against respondent 2 and the appellant, that there was disobedience to the order of the High Court dated 12 9 1964, the respondent 1 was paid ,,he salary by the State Govern ment for the period 25 1 1961 to 31 7 1971. Since he was not paid back salary and allowances and also the salary due from 1 8 1961, the respondent filed a writ petition No. 1579/66 which was again allowed. On a concession made by the counsel for the State Government that the State Govern ment was willing to make available to the petitioner an option to become an employee of the appellant corporation, the High Court held: "Notice shall be in the same form in which it was served on other employees and with a month 's time to exercise his option. If he exercises his option to become an employee of the corporation the petitioner will have all. the benefits. such as continuity in service, seniority, the benefit of the old conditions of service applicable in Mysore Government Road Transport Department. The petitioner will also be entitled to the salary for the period ' between August 1, 1961 and the date of his appoint ment as an employee of the corporation". On appeal by special leave by the corporation, the Court, HELD: (1) The order of the High Court dated 11 9 1964 could not possibly amount to a declaration that the first respondent had continued in the service of either the Mysore Government or had become the servant of the appellant corpo ration, a separate legal entity which came into existence by means of a Notification under section 3 of the Road Transport Corporation Act, 1950. As a separate legal entity the corpo ration could not be said to have stepped automatically into the shoes of the Mysore Road Transport Department, there being no provision of the Act or Rules made thereunder to that effect. [927 A D] (2) The declaratory relief asked for not having been granted, that relief would be deemed to have been refused. Failure to go in appeal against that decision operates as a bar for claiming such a relief in the subsequent writ petition. [931 B] (3) The effect of the High Courts ' order setting aside the dismissal was that the stigma of dismissal was removed from the record of the first respondent. The winding of the department on the facts of the case, operates as the discharge of the respondent. The respondent cannot be deemed to be the corporation 's employee inasmuch as he has not exercised any option nor did be ask for a notice of option in the original writ petition filed by him. [931 D E] 926 Mysore State Road Transport Corporation vs A. Krishna Rao & Anr., C.A. No. 1720 of 1967 S.C. decided on 6 8 1969, followed. (4) Neither the Act nor the two notifications under section 34(1) of the Act contain any provision. which could entitle an employee of the Mysore Government Road Transport Depart ment to get a notice automatically. The notifications could apply only to those persons who, on 1 8 1961 had already exercised an option to serve under the corporation in pursu ance of notice issued to them. It makes no provision for persons to whom for any considerable reason, no notice has been issued. [928 D F] (5) When the first respondent applied in the High Court for another writ or direction under article 226 in 1966, the High Court over stepped the limits of mere interpretation or application of the law and indulged in what is nothing short of legislation by directing the State Government to serve a notice calling upon the first respondent to exercise his option on the question whether he wanted to become an employee of the Mysore State Road Transport Corporation in the same way in which other employees of the Transport Department had been asked to exercise their option. [929 C E] (6) The State Government owed no duty to the first respondent to pay him after transport department was wound up in the absence of any contract 10 show what duty the Government could have to employ the first respondent after its transport department was wound up or to direct the corporation to do so. [929 G H] (7) In order to compel the corporation to do anything only a general direction u/s 34 of the Act could be given by the Government. There neither could be a special direction with regard to a particular case nor was any special direction given by the Government for any such case. The High Court could not take upon itself the power to fill any gap in the provision of the. Act, even if there be one, and compel the Government to perform a function which the Gov ernment was not under any kind of obligation to discharge. The High Court could not give a specific direction to make a provision to meet what it thought was required in a particular or individual case if such a case fell outside the provisions made by the Act and the rules. There is no justification at for such assumption of powers by the High Court. [929 H, 930 A B]

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ivil Appeal No. 432 of 1976. (Appeal by Special Leave from the Judgment and Order dated the 4 10 1974 of the Rajasthan High Court in D. B, Civil Special Appeal No. 134 of 1973). L. M. Singhvi, K.B. Rohtagi, section K. Dhingra, Vijay, K. Jain and M.M. Kashyap, for the appellant. Mrs. Shyamla Papu, R.N. Sachthey and Girish Chandra, for respondents. The Judgment of the Court was delivered by RAY, C.J. In this matter leave was granted on 30 March, 1972. Leave was confined to the question whether Union of India is a necessary party. Leave was granted because it was contended that there were decisions to support the appellant 's contention, that the Union of India is not a necessary party. We gave leave to settle this question. 410 The appellant applied under Article 226 in the High Court of Rajasthan. The appellant was an employee of the Northern Railway. He was removed from service with effect from, 2 January 1969. His appeal against the order of removal was rejected by the General Manager. The appellant felt aggrieved and filed the application under Article 226. The trial court rejected the application on the ground that the Union of India was not impleaded. On appeal the Division Bench affirmed the decision of the trial court and held after referring to two decisions of this Court that the Union of India is a necessary party. Counsel for the appellant contended that the General Manager is the authority to hear these matters regarding the removal, and, therefore, that is the appropriate party. Reliance was placed in support of the contention on the decision Hari Vishnu Karnath vs Ahmad Syed Isak & Ors.(1). That was a case relating to an Election Petition. The contention was advanced that the Union of India was a necessary party because the Election Commission is required to transmit copies of order of the Tribunal to the Speaker of the House and to publish the same in the Gazette. The Nagpur High Court rejected the contention that the Union was a necessary party on that ground. This decision can by no stretch of imagination be of any aid to the appellant in the present case. Counsel for the appellant relied on the decision of the Punjab High Court in Observer Publications Pvt. Ltd. vs Railway Board, Ministry of Railways, Government of India, New Delhi(2). The petitioner in that case made an applica tion under Article 226 to question the validity of the ban imposed by the Railway Board on the news weekly "Indian Observer". At page 421 of the report the question of compe tency of the petition was discussed. The High Court said that it was accepted by both parties that the Railway Board was acting under a "notification issued in this behalf ' and the Railway Board .was thus invested with all the powers of the Central Government. The High Court held that it was not necessary in that situation for the petitioner in that case to implead the Union Government and it could not be contend ed that the petition should fail on that ground. There is no discussion on the question now canvassed here. This decision is also of no aid to the appellant for the reasons indicated now. It cannot be disputed that the appellant was a servant of the Union. It is equally indisputable that any order of removal is removal from service of the Union. The appellant challenged that order. Any order which can be passed by any Court would have to be enforced against the Union. The General Manager or any other authority acting in the Railway administration is as much a servant of the Union as the appellant was in the present case. (1) A.I.R. 1954 Nag. (2) 411 The Union of India represents the Railway administra tion. The Union carries administration through different servants. These servants all represent the Union in regard to activities whether in the matter of appointment or in the matter of removal. It cannot be denied that any order which will be passed on an application under Article 226 which will have the effect of setting aside the removal will fasten liability on the Union of India, and not on any servant of the Union. Therefore, from all points of view, the Union of India was rightly held by the High Court to be a necessary party. The petition was rightly rejected by the High Court. The appeal fails and is dismissed. Parties will pay and bear their own costs. P.H.P. Appeal dis missed.

The appellant, an employee of the Northern Railway was removed from service. His appeal against the order of removal was rejected by the General Manager. The appellant feeling aggrieved filed a writ petition under article 226. in the writ petition, the General Manager was joined as a respondent but the Union of India was not impleaded. On appeal, the Division Bench confirmed the decision of the single Judge. The counsel for the appellant contended that the General Manager is the authority to hear the matters regarding the removal and, therefore, he is the proper authority. Dismissing the appeal by Special Leave, HELD: The appellant was servant of the Union. The order of removal is removal from the service of the Union. Any order of a court would have to be enforced against the Union. The General Manager or any other authority acting in the Railway AdminiStration is as much a servant of the Union as the appellant was in the present case. The Union of India represents the Railway Administration. The Union carries administration through different servants. Any order setting aside the removal would fasten liability on the Union of India and not on any servant of the Union. There fore, the Union of India is a necessary party. [410G H, 411A B] Hari Vishnu Kamnath vs Ahmad Syed Isak & Ors., A.I.R. 1954 Nagpur 166 and Observer Publications P. Ltd. vs Railway Board, Ministry of Railways, Govt. of India, New Delhi , distinguished.

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: Criminal Appeal No. 310 & 363 of 1976. (From the Judgments and Orders dated the 1st September, 1975 of the Bombay High Court in Criminal Appln. No. 20/75) and Criminal Appeals Nos. : 348 349, 350, 195 201, 170 176, & Crl. 181 182 of 1976. (Appeals by Special Leave Petitions from the Judgments and Orders dated the 14th/18th July, 1975, 9th July, 1975, 3rd April, 1976, 13th March, 1976, and 19th March, 1975, of the Bombay High Court in Criminal Appln. Nos. 794, 784/75, 833 839/76 and 614620/76 and 385 386/76 respectively and Criminal Appeal No. 397 of 1976. (Appeals by Special Leave from the Judgments and Orders dated the 23rd March, 1976 and 6th April, 1976 of the Karna taka High Court in Writ Petitions Nos. 1454 and 2096/76 respectively) and Criminal Appeal No. 397 of 1976. (From the Judgment and Order dated the 3rd September, 1975 of the Bombay High Court in Criminal Application No. 792/75) and CIVIL APPELLATE JURISDICTION: Civil Appeal No. 573 of 1976. (Appeal by Special Leave from the Judgment and Order dated the 26th March, 1976 of the Bombay High Court in Criminal Appln. No. 31 of 1976) and Special Leave Petitions (Civil) Nos. 2443 2444, 2864, 3061 of 1976. (From the Judgments & orders dated 8 4 76, 7 4 76, 12 4 76 & 8 4 76 of the Karnataka High Court in W.P. Nos. 2918/76, 6693/75, 1977, 2012 & 1295/76) and Dy. 3002 & 3003 0f 1976. (From the Judgments and Orders dated the 8 4 1976 of the Karnataka High Court in Writ Petitions Nos. 2355 and 1968 of 1976 respectively) and Civil Appeals Nos. 1365 1367 of 1976. (From the Judgment and Order dated the 23 3 1976 of the Karnataka High Court in Writ Petitions Nos. 2293, 2477 and 2503/76 respectively) and 723 Civil Appeal No. 434 of 1976. (From the Judgment and Order dated the 1 4 1976 of the Karnataka High Court in IA No. IV in Writ Petition No. 4177 of 1970). Narayan Nettar for the appellants in Crl. A. 210 and CAs Nos. 1365 1367/76 and Crl. A. 192 and for Petitioners in SLPs (Civil) Nos. 2443, 2444, 2864, 2865 and 3061/76 and R. 3 in CA 434/76. V.P. Raman, Addl. (In Crl. A 310, 348, 397, 195 and 181/76), M/s. R.N. Sachthey and M.N. Shroff with him for the Appellant in Crl. A. 310, 348, 397, 349, 350, 363, 170 176, 181,182 add 195 201 and C.A. 573/76 and 434/76 and for R. 3 in Crl. A. 310 and 348 and RR 2 and 4 in Crl. A. 350/76. Jail Petitioners for the Petitioners in Petn. Under Dy. No. 3002 3003/76. H.M. Seervai (In Crl. A. Nos. 310, 340, 349, 363 and CA 573/ 76), Ashok H. Desai, A.J. Rane. (In CA 573/76), L R. Gagrat and B.R. Agarwala for RR. 1 and 2 in Crl. A. 310, 363 and 397 and R. 1 in Crl. 348 349 and RR in CA 573/76. A.K. Sen, R.H. Dhebar and B.V. Desai for R. 1 in Crl. A. No. 350/76. V.M. Tarkunde, Ashok H. Desai and V.N. Ganpule for RR in Crl. A. 170 to 176, 181, 182, 195 201/76. H.M. Seervai, Dr. N. M. Ghatate, section Balakrishnan, section section Khanduja, (Miss) Rani Jethamalani and Altar Ahmed for R. 1 in CA 434/76. The Judgment of A.N. Ray C.J. and Jaswant Singh, J. was delivered by Jaswant Singh J., Beg, J. gave a separate opinion. JASWANT SINGH J. These appeals, some of which have been preferred by certificates granted under Articles 133 and 134(1)(e) of the Constitution and Others by Special leave granted by this Court under Article 136 of the Constitution, and which are directed against various final and interim judgments and orders of the High Courts of Bombay and Karna taka passed in writ petitions filed under Articles 226 and 227 of the Constitution by or on behalf of certain persons who are detained under orders of the appropriate authorities made under section 3 of the (Act No. 52 of 1974) (hereinafter referred to as 'the Act ') complaining of certain constraints imposed on them under orders made under section 5 of the Act and claiming facilities in excess of those provided in the said orders, shall be disposed 0f by this judgment. A gist of the orders appealed against 12 112SCI/77. 724 and particulars of the petitions in which they have been passed given in the sub joined table for facility of refer ence : FIRST BATCH OF APPEALS 1.Sr. No. 2.No. of appeal 3. Date of the order appealed against 4. No. of the application in which the order appealed against has been passed 5. Name of the High Court which passed the order 6. Name of the detenu in whose favour or against whom the order against has been passed. substance of the order appealed against Sr. No. 1 2. 310/1976 3. 1 9 1975 4. Application No. 20/1975 5. Bombay 6. Krishna Budha Gawda 7. Clauses 9(iii) 10, 12(i)and (xi), 19, 20, 21, 23, 24 and 31 of the Conservation of Foreign Exchange and Prevention of Smugling Activities (Maharashtra Conditions of Deten tion) Order, 1974 struck down and directions issued requiring the detaining authority to keep the detenu under detention as a 'civil prisoner ' within the terms of and in all respects in conformity with the provi sions of the and further directing the detaining authority to,permit the detenu to maintain himself by receiving such funds not exceeding the sum of Rs. 200/ per month us he may desire to have lot that purpose from any of his rela tives or friends, and to purchase or receive from private sources at proper hours food. clothing, bedding, and other necessaries, including toilet requisites, toilet soap. cigarettes and tobacco, subject to examina tion gild to such rules, if any, as may be approved by the Inspector General , as also to permit the detenu to meet persons with whom he may desire to communicate at proper times anti tinder proper restrictions. No. 2. A. No. 3. do Sr. No. 3 2. A. No. 397/1976 3. 3 9 1975 4. Application No. 792/1975 5. Bombay ram Kewalji 6. Ghamandi Gowani 7. [Nil] SECOND BATCH OF APPEALS Sr. No.1. A. No.348/1976 3. Interim order dated 14 7 1975 4. Application No. 794/1975 5. Bombay 6. Ramlal Narang 7. Directions issued to the detaining authority to permit the detenu (1) to have his food from out side at his own expense, subject to routine check: (2) to have one interview with his legal advisers for two hours in the presences 725 of a Customs Officer, but not within Iris hearing; (3) to have one interview per month with ally Of tile Family members, which should be in accordance with and subject to subclauses (iii), (vi), (vii) and (ix)of clause 12 of the Conservation of Foreign Exchange and Prevention of Smug gling Activities (Maharashtra Conditions of Detention) Order, 1974. No 348/1976 3. Interim order dated 14 7 1975 4. Application No. 794/1975 5. Bombay 6. Yusuf Abdulla Patel 7. Directions issued to the detaining authority (1) to permit the detenu to have his food from outside at his own expense subject to routine check,(2) to have the detenu exam ined at least once a week by Doctors at St. George 's Hospital and to permit the detenu 's doctor being present at such examination. (3) to permit the detenu to take specially prescribed medicines at his own cost.(4) not to remove the detenu to another jail from the Arthur Road Prison, Bombay, without giving at least 24 hours notice in writing (excluding Sundays and other holidays) to his Attorneys, (5) to permit the detenu to have one interview with his legal advis ers for two hours in the presence of a Customs Officer but not within his hear ing and (6) to permit the detenu to have interview with relatives as per clause 12(ii) of Maharashtra Conditions of Detention Order, 1974. THIRD BATCH OF APPEALS Sr. No .1 2. 195 201/1976 3. 3 4 1976 4. Applications 833 839/1976 5. Bombay 6. Ratan Singh Gokaldas Rajda & others 7. Directions issued to the detaining au thority to have the detenus taken under custody to the site of the meeting of the Bombay Municipal Corporation and enable them to exercise their votes at the mayoral election.if and when it takes place. No. 2 2. Nos. 170 176/1976 3. 13 3 1975 4. Applications 614 620/1975 5. Bombay 6. Ahilya Pandurang Rangankar and others 7. While rejecting the application for release on parole directions issued the detaining in authority to have the detenus taken under custody to vote at the election of statutory Com mittees to be held on 15 3 1976 at 3 P.M. at the Bombay Municipal Corporation Bom bay. 726 Sr. No. 3 2. 181 182/1976 3. 19 3 1976 4. Applications Nos. 385 386/1976 5. Bombay 6. Ganesh Prabhakar Pradhan and others 7. Directions issued to the detaining author ity to have the the detenus taken under custo dy to the Maharashtra Legislative Council Hall for the limited purpose of enabling them to exercise their right to the statutory Committ ess on 30 3 1976. No. 4 2. Crl As. 1365 67/1976 3. 23 3 1976 4. W. Ps. 2293, 2477, 2503/1976 5. Karnataka 6. C.R. satish and Others 7. Directions issued to the detaining authority to have the detenus taken not later than 11 A.M. on 24 3 1976 under police escort to the place where the election of the President of the Town Municipal Council, Chikmaglur was to be held and after they exercised their right to vote to have them brought back under police escort to the jails in which they were then detained. No. 5 2. C.A. Nos. 434/1976 3. 1 4 1976 4. I.A. No. IV W.P. No. 4177/1976 5. Karnataka 6. L.K. Advani 7. Directions issued to the detaining authority to have the detenu taken under police escort to New Delhi so as to enable him to be in Rajya Sabha on 3 4 1976 before 10.45 A.M. and to allow him to take oath of affirma tion and thereafter to take his seat in Rajya Sabha and to have him brought back under police escort to the Central Jail Banglore on 3 4 1976 or on 4 4 1976 whichever date is convenient to the detaining authority. FOURTH BATCH OF APPEALS Sr. No. 1 2. A. No. 192/1976 3. 23 3 1976 4. W.P. Nos 1454/1973 5. Karnataka 6. Gurunath Kulkarni 7. Directions issued to the detaining authority (1) to have the detenu taken under police escort on or before 3 4 1976 to the shops in Bellary to enable them to purchase stationary required for the examination and to the college where detenu had 10 get the admission ticket to the examination. (2) to have the detenu taken on each day of the examination under police escort from the jail at Bellary to the Examination centre and to see that he reached such centre at least 20 minutes before the commencement of the examination and was brought back after the day 's examination was over from such centre to the jail under police escort. Directions also issued to the jail authorities to ascertain well in advance the programme of the examination which the detenu had to take. 727 Sr. No. 2 2. A. No. 210/1976 3. 6 4 1976 4. W.P. No. 2096/1976 5. Karnataka 6.K.T. Shivanna 7. Directions issued to the detaining authority to release the detenu on parole on the afternoon of 10 4 1976. The detaining authority also directed to arrange to have the detenu either taken under police escort to his home at Novavirakare, Tiprut Talu, starting from Bangalore on the afternoon of 10 4 1976 and to have him brought back under police escort from his home to the Central Jail, Bangalore, starting from Honavinskere on the afternoon of 12 4 1976 OR release the detenu at the gate of the Central jail Bangalore on his executing a self bound for Rs. 6,000/ undertaking to surrender himself to the jail authorities on 12 4 1976 not later than 6 P.M. and not take part in political activ ities or other activities detrimental to the security of the State during the period he remained on parole. The police, however given the liberty to keep a watch around the detenu 's house and to follow his movements outside his house during the period he continued on parole. No. 3 2. S.L.P.(Civil) No. 2443/1976 3. 8 4 1976 4. W.P. No.2918/1972 5. Karnataka 6. K.A.Nagaraj 7. Directions issued to the detaining authority (1) to release the detenu on pa role, (2) to have the detenu taken on the evening of 9 4 1976 under police escort to his houses and brought back to the Central Jail, Bangalore. under police escort on the evening of 10 4 1976; and (3) again have the detenu taken on the evening 01 14 4 1976 under police escort to his house and brought back under police escort to the Central Jail, Bangalore, on the evening of 15 4 1976. The police, however, given tile liberty to keep a watch around the house of the detenu and to follow his movements during the period he remained on parole. No. 4 2. S.L.P.(Civil) No. 2444/1976 3. 8 4 1976 4. W.P. No.6693/1975 5. Karnataka 6. P.B.Satyanarayana Rao 7. Directions issued to the detaining authority to release the detenu on parole on 14 4 1976 and to have him taken under police escort to his home and brought back under police escort to the jail On the afternoon of 16 4 1976. The police, howev er, given the liberty to keep a watch around the house of the detenu and to watch his movement outside his house during his release on parole. 728 Sr. No. 5 2. S.L.P.(Civil) No. 2864/1976 3. 7 4 1976 4. W.P. No. 1977/1976 5. Karnataka 6. M.Sanjeev Gatti 7. Directions issued to the detaining author ity either (i) to arrange the detenu taken under police escort to his native place. Bangalore, starting from Bangalore on 8 4 1976 and brought back under police escort to the Central Jail Bangalore on 14 4 1976. and (ii) to release the detenu at the gate of the Central Jail. Bangalore. on the morning of 8 4 1976 his executing a sell bond of Rs. 5,000/ undertaking to surrender himself to the jail authorities not later than 5 P.M. on 15 4 1976 and not to take part in any political activity or other activity detrimental to the security of the State. The police, however, given the liberty to keep a watch around the house houses in which the detenu stayed and to follow his movements outside the house or houses during the period he remained on parole. No. 6 2. S.L.P. (Civil) No. 2865/1976 3. 8 4 1976 4. W.P. No. 2012/1976 5. Karnataka 6. V.S. Acharya 7. Directions issued to the detaining authority either to arrange to have the detenu taken under police escort from Central Jail. Bangalore, to Udupi starting from Bangalore on the morning of 13 4 1976 and to have him brought back under police escort from Udupi starting there from on the morning of 21 4 1976 or release the detenu at the gate of the Central Jail, Bangalore, on his execut ing a self bond lot Rs. 5,000/ undertaking not to take part in any political activity or in any activity detrimental to the security of the State during the period he remained on parole as to surrender him self to the Jail authorities not later than 6 P.M. on 21 4 1976. The police however, given the liberty to keep a watch over the detenu and to follow him movements during the period he remained on parole. No. 7 2. S.L.P. (Civil) No. 3061/1976 3. 8 4 1976 4. W.P. No. 1295/1976 5.Karnataka 6. C.V.Shankar Rao Jadhav 7. Directions issued to the detaining authority either (1) to arrange to have the detenu taken too his home at Nandya under police escort starting from Bangalore on the evening of 10 4 1976 and to have him brought back under police escort to the Central Jail Bengal starting from Nandya on the morning 13 4 1977. 729 or (2) to release him at the gate of the Central Jail, Bangalore on the evening of 10 4 1976 on his executing a self bond for Rs. 5,000/ undertaking to surrender himself to the Jail authorities not later than 4 P.M. on 12 4 1976 and not to take part in any political activity or other activity detrimental to the security of the State during the period of his release on parole. The police, however, given the liberty to keep a watch around the detenu 's house and to follow his movements outside his house during the period of his release on parole. FIFTH BATCH OF APPEALS Sr. No. 1 2. No. 3002/1976 3. 8 4 1976 4. W.P. No. 2355/1976 5. Karnataka 6. D.J. Shivaram 7. Prayer of the detenu allow him to be released on parole to enable him to take the final LL.B. examination rejected in view of the orders made by this Court i.e. the Su preme Court in High Court W.P. No. 1454/1976 Sr. No. 2. 2. No.3003/1976 3. 8 4 1976 4. W.P. No. 1968/1976 5. Karnataka 6. Hanumant Gururao Inamdar 7. Prayer of the detenu to allow him to be released on parole to enable him to take the Second Year LL.B. examination rejected in view of the orders made by this Court on in High Court W.P. No. 1454/1976. SIXTH BATCH OF APPEALS Sr. No.1 2. C.A. No. 349/1976 3. 18 7 1975 4. Application No.794/1975 5. Bombay 6. Ramlal Narang 7. Directions issued to the detaining authority not to remove the detenu till further order to another jail outside the State without giving at least 3 hours notice in writing (excluding Sunday and holidays to the detenu attorneys. No. 2. 2. C.A. No. 573/1976 3. 20 3 1976 4. Application No. 31/1976 5. Bombay 6. Prabhudas Tribhovandas 7. Directions issued to the detaining authority to detain the detenu in such prison where the detenu would have the bene fit of the Company of other women detenus as also other facilities under the rules. Clauses 9(iii), 10, 12(ii) & (xi), 19, 20, 21, 23, 24 & 31 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities (Maharashtra Conditions of Detention) Order, 1974 (hereinafter referred to as "the Maharashtra Conditions of Detention Order, 1974") which have been struck down by the High Court of Bombay read as under : "9. . . . . 730 (iii) Security prisoners shall not be allowed to supplement their diet even at their own expense. Any security prisoner who wishes to supplement his diet on medical grounds. may apply to the Commissioner or the Superintend ent, as the case may be. The Commissioner or the Superintendent shah get him examined by a Medical Officer attached to the place of detention who may order such modification of, or addition to, his diet, as he may consider necessary on medical grounds. Supply of funds : (i) A security prison er may, with the previous sanction of the detaining authority, receive from a specified relative or friend at intervals of not less than a month, funds not exceeding Rs. 30/ per month and may spend these funds or a similar sum from his own private funds on such objects and in such manner as may be permissi ble under the rules, in case in which for want of funds any security prisoners are compelled to do without small amenities which their fellow prisoners enjoy, such amenities may, if considered absolutely necessary by the Commis sioner or the Superintendent be supplied to them at Government costs. (ii) All funds so received shall be kept by the Commissioner or the Superintendent and spent by him on behalf of the security prison ers concerned. (iii) Amounts in excess of those pre scribed in subclause (i) may be received by the Commissioner or the Superintendent on behalf of security prisoners, but they shall not be spent in any month beyond the limits laid down in the said sub clause. 12. . . (ii) The number of interviews which a security prisoner may be permitted to have shall not ordinarily exceed one per month. (xi) In addition to the interviews permis sible under the preceding provisions of this clause, a security prisoner may with the permission of the detaining authority, be granted not more than two special interviews, for the settlement of his business or profes sional affairs, such interviews shall ordi narily take place within a period not exceed ing two months from the date of detention of the security prisoner. concerned and shall be conducted in accordance with the provisions of this clause as regards place, duration and conditions of the interview, and the proceed ings shall be strictly confined to the objects for which the interview is granted. Medical attendance : (i) The Superin tendent of the Hospital or the Civil Surgeon, as the case may be, shall depute a medical officer to visit each security prisoner de tained 731 in a police lock up and report of his physical condition. The said Medical Officer shall visit the prisoner at least once a week and more often if the Superintendent of the Hospi tal or the Civil Surgeon or the Commissioner as the ease may be thinks fit, and submit the report on his condition to the Commissioner or the detaining authority, after the first day of each month and at any other time he considers necessary. (ii) Security prisoner detained in a jail or sub jail shall in the event of illness, be treated in the same way as convicted criminal prisoner or treated under the rules made under the . 20. Toilet : (i) Every security prisoner shall be supplied with neam or babul stick at Government expense. (ii) Every security prisoner shall be supplied with one cake of jail made toilet soap per month for bathing at Government expense. The weight of such cake shall be 113 grams approximately and if jail made soap is not available in any medium quality, toilet soap manufactured in India: and available locally shall be supplied. Service of barbers etc. : (i) A securi ty prisoner shall not be permitted to have shaving equipment of his own. (ii) Every security prisoner shall be allowed to have the services of the jail barber once a week. Smoking and tobacco: Except cigarettes or bidies and chewing tobacco, which are available at the jail canteen, no other facil ities to smoke or chew tobacco shall be per mitted. Games : Security prisoners shall not be pertained to play indoor games like cards or to play chess, draughts and carrom. Power to withhold any concessions or facilities: The State Government may, by general or special order, withhold any of the concessions or facilities provided by or under any of the provisions of this order in respect of any security prisoner or class of security prisoner, and for such period or periods, as the State Government may, from time to time specify. Appearing on behalf of the Union of India and the States of Maharashtra and Karnataka, the learned Additional Solicitor General has, while very fairly stating that though the appropriate Government may have no objection to the issue of special orders permitting the detenus to receive or purchase toilet requisites, toilet soap and to consult private doctors in case of genuine necessity if an applica tion is made to it in that behalf, submitted that the right of any person to 732 move any court for the enforcement of the rights conferred by Article 21 (which is the sole repository of the right to life and personal liberty) and Articles 14, 19 and 22 of the Constitution having been suspended by virtue of the Presidential Orders dated June 27, 1975 and January 8. 1976 issued under clause (1) of Article 359 of the Constitution (which are absolute in terms) for the period during which , the proclamation of emergency made on June 25, 1975 under clause (1) of Article 352 of the Constitution is in force, no person has a locus standi to move any application under Article 226 or Article 227 of the Constitution for issue of a writ, order or direction to enforce any right to personal liberty. He has further urged that since it is for the appropriate Government to specify the place of a detenu 's detention and to lay down by means of a general or special order the conditions as to his maintenance, interviews or communications with others with a view to prevent his con tact with the outside world and sincewhat was sought to be enforced in the instant cases by means of the applications filed by or on behalf of the detenus under Article 226 and 227 of the Constitution in the aforesaid High Courts was nothing but various facts of personal liberty under Articles 19, 21 and 22 of the Constitution, the applications were not maintainable and the High Courts were not competent to deal with them and to either strike down the aforesaid clauses of the Maharashtra Conditions of Detention Order, 1974 or to issue the aforesaid directions to the detain ing authorities. Mr. Seervai Mr. Ashok Sen, Mr. Desai and Mr. Dattar, learned counsel for the detenus have, on the other hand, emphasized: (1) that preventive detention does not stand on the samefooting as punitive detention and while it cannot be gainsaid that persons who can be prosecuted and punished for offences against the law can also be preventively detained they cannot be punitively treated; (2) that considerations relevant for applica tions seeking relief of release by habeas corpus are not relevant to cases in, which conditions of detention fall for considera tion; (3) that the principle of legality and the doctrine of ultra vires are not abrogated even during the times of emergency and the exercise of power under section 5 of the Act must have a reasonable nexus with the purpose for which the power is conferred; (4) that if according to the majority judgment in Additional District Magistrate, Jabalpur vs Shiva Kant Shukla(1) even habeas corpus could issue in cases where the order is not duly authenticated then the conditions of detention can certainly be scrutinized and relief can be granted if those conditions are found to be illegal or ultra vires; (1) ; A.I.R. 1976 S,C. 1207.=[1976] Supp. S,C.R. 172. 733 (5) that the aforesaid clauses of the Maha rashtra Conditions of Detention Order, 1974, being ultra vires and violative of the princi ples of reasonableness and legality have rightly have been struck down by the High Court of Bombay: (6) that a curtain cannot be drawn round the detenu ,red while he can be cut off from undesirable contacts, he cannot be cut off from unobjectionable contacts; (7) that if the place of detention mentioned in a detention order is a prison, then the detenu would be governed by the but not if the detenu is lodged elsewhere; (8) that the detenus ' grievances are not 'echoes ' of Article of the Constitution but are the echoes of the 'totality ' law; (9) that it is not right to say that what is not contained in Article 19 of the Constitu tion is contained in Article 21 of the Consti tution as this submission ignores Articles 15, 25 and 26 of the Constitution which are ap plicable even to non citizens. The learned Additional Solicitor General has, in his rejoinder, contended that while total release is of course different from regulating conditions of detention, the former not being available by virtue of the Presidential Orders dated 27th June, 1975 and January 8, 1976 issued under Article 359 (1) of the Constitution which are uncondi tional even conditions of detention cannot be enforced by moving a court during the period of emergency and that the contention based upon the principles of legality and reason ables and doctrine of ultra vires is misconceived. The Additional Solicitor General has further submitted that legality has to be understood as meaning the authority of law and it so understood, a person detained in accordance with the conditions framed under section 5 of the Act cannot complain that the conditions are illegal or ultra vires, broader challenges based on fundamental rights not being available; that the principle of reasonableness and the doctrine of ultra vires have no bearing on subordinate legislation framed under emergency laws; that the court cannot grant relief on vague and indeterminate philosophical theories like the totality of law; that as the line of demarcation between preventive and punitive detention which is easily perceivable at the stage of detention becomes progressively elusive and hazy when one comes to conditions of detention. there is little scope for generalisation; that curtain has to be drawn round a detenu to ensure effective ness of detention which cannot be sacrificed in the interest of security of the State; that the observations made by the majority in Shivakant Shukla 's case (supra) regarding the area of judicial interference which are sought to be relied upon on behalf of the detenus relate to the obvious eases where the Executive itself could not and would not seek to defend a detention order and can be of no assistance in the present cases where the detenus seek to 734 enforce a right to do something or to get something which is not con t:erred on and given to them by law; that any right to personal liberty or any facet or aspect thereof has to be found in some constitutional provision to be enforced in normal times and ex hypothesi to become unenforceable during an emergency and reference to Articles 15, 25 and 26 of the Constitution completely ignores the fact that these rights postulate a free citizen and cannot be enforced independent ly of Article 21 or Article 19 of the Constitution and in any case, the rights claimed in the present cases have no relation to those Articles. Without prejudice to the aforementioned contentions advanced by him the learned Additional Solicitor General has further submitted that it is only where there are specific provisions in the rules framed trader section 5 of the ' Act that those provisions being conditions of detention can be enforced when still available to an individual detenu that the provisions of Maharashtra Conditions of Detention Order, 1974 have to be examined and scrutinized to see if the facilities claimed by the detenus are excluded by impli cation, e.g. where a provision for a particular number of interviews is made, it necessarily implies a prohibition against having more interviews; that the question whether a particular act which is not specifically prohibited should be permitted or not has to be decided by keeping in view the effectiveness of detention; that allowing a detenu to go and vote at a corporate election or to take part in legislative proceedings is destructive of the purpose of detention and in any event approach must be made to the Executive to exercise its rights of parole or relaxation which is implic it in sections 12 and 5 of the Act as for instance if the release is necessitated by exigencies like performance of obsequieal ceremonies or sharadh of a kith and kin, but an order directing the detenu to be taken under police guard to the place where obsequies of a dead relation are to be performed cannot be made by a court as it tantamounts to onforcing his personal liberty; that while Iramane consider ations are generally borne in mind by the authorities having the custody of the detenus and appropriate Government, they cannot furnish reliable basis for judicial relief; that the aforesaid directions of the Bombay High Court equating detenus with 'civil prisoners ' amenable to the , does not only amount to a substitution or re enactment of section 5 of the Act i.e. of the but is also opposed to the definition of the 'prisoner ' as contained in the Bombay Jail Manual which has not been amended so as to include persons directed to be detained under any Central or other Act providing for detention; that the mere fact that a person is detained for purposes of administrative convenience in a jail does not mean that he is a civil prisoner or that the applies to him; and that the necessity of having provisions in the condi tions of detention orders enabling a detenu to consult pri vate doctors in the presence of the official doctors in case of genuine necessity or to supplement his diet on medical grounds or to indulge in harmless pastimes like chess or carrom or to appear in examinations are matters for which the appropriate Government should be approached. 735 We have given our anxious consideration to the submis sion made by counsel for the parties. In our judgment, the vital question of fundamental importance that requires to be determined at the threshold in the instant cases is whether in view of the orders dated June 27, 1975 and Janu ary 8, 1976 issued by the President under clause (1) Article 359 of the Constitution, the aforesaid petitions under Articles 226 and 227 of the Constitution were maintainable. For a proper determination of the question, it is necessary to advert to the provisions of Articles 352, 353, 358 and 359 contained in Part XVIII of the Constitution called the Emergency Provisions, as well as to the Presiden tial Orders dated November 3, 1962, December 3, 1971, Novem ber 16, 1974, June 25, 1975, June 27, 1975 and January 8, 1976. The aforesaid Articles of the Constitution are in these terms : "Article 352. (1) If the President is satisfied that a grave emergency exists where by the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal dis turbance, he may, by Proclamation make a declaration to that effect. (2) A Proclamation issued under clause (1) (a) may be revoked by subsequent Proclamation; (b) shall be laid before each House of Parlia ment; (c) shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolu tions of both Houses of Parliament; Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in sub clause (c), and if a resolution approving the Procla mation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to oper ate at the expiration of thirty days from the date on which the House of the People first sits after its reconstruction unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of People. (3) A Proclamation of Emergency declaring that the security of India or of any part of the territory thereof is threatened by war or by external aggression or by internal disturb ance may be made before the actual occurrence of war or of any such aggression or disturb ance if the President is satisfied that there is imminent danger thereof. 736 ** (4) The power conferred on the President by this article shall include the power to issue different proclamations on different grounds, being war or external aggression or internal disturbance or imminent danger of war or external aggression or internal disturbance whether or not there is a Proclamation already issued by the President under clause (1), and such Proclamation is in operation. (5) Notwithstanding anything in this Constitu tion, (a) the satisfaction of the President men tioned in clause (1) and clause (3) shall be final and conclusive and shall not be ques tioned in any court on any ground; (b) subject to the provisions of clause (2), neither the Supreme Court nor any other court shall have jurisdiction to entertain any question, on any ground, regarding the validi ty of (i) a declaration made by Proclamation by the President to the effect stated in clause (1); or (ii) the continued operation of such Proclama tion." "Article 353. While a Proclamation of Emer gency is in operation then (a) notwithstanding anything in this Con stitution, the executive power of the Union shall extend to the giving of directions to any State as to the manner in which the executive power there of is to be exercised; (b) the power of Parliament to make laws with respect to any matter shall include power to make laws conferring powers and imposing duties, or authorising the Conferring of powers and the imposition of duties, upon the Union or officers and authorities of the Union as respects that matter, notwithstanding ' that it is one which is not enumerated in the Union List." "Article 358. While a Proclamation of Emer gency is in operation, nothing in Article 19 shall restrict the power of the State as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to. the extent of the incompeten cy, cease to have effect as soon as the Proc lamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect." ** Inserted retrospectively by section 5 of the Constitution (Thirty eighth Amendment) Act, 1975. 737 "Article 359. (1) Where a Proclamation of Emergency is in operation, the President may by order declare that the fight to move any court for the enforcement of such of the rights conferred by Part III as may be men tioned in the order and all proceedings pending in any court for the enforcement of the rights so mentioned shall remain suspended for the period during which the Proclamation is in force or for such shorter period as may be specified in the order. **(1A) While an order made under clause (1) mentioning any of the rights conferred by Part III is in operation, nothing in that Part conferring those rights shall restrict the power of the State us defined in the said Part to make any law or to take any execu tive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the order aforesaid ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect. (2) An order made as aforesaid may extend to the whole or any part of the territory of India. (3) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament. " It is hardly necessary to emphasize that the provisions of the Articles reproduced above arc designed to arm the State with special powers to meet extraordinary situations created in times of grave national emergencies due to war, external aggression and internal disturbance when the secu rity of the State nay the very existence of the nation is threatened necessitating the subordination of individual rights to the paramount consideration of the welfare of the State, and to give effect to the well recognized principle to which particular attention was called by E.C.S. Wade and Godfrey Phillips by inserting the following passage in their Constitutional Law, 8th Edition, Chapter 48, pp. 717, 718: "It has always been recognized that times of grave national emergency demand the grant of special powers to the Executive. At such times arbitrary arrest and imprisonment may be legalised by Act of Parliament. " It is, however, necessary to state that there is an appreciable difference between Articles 358 and 359(1) of the Constitution. Whereas simultaneously with the declara tion of emergency under Article 352, Article 358 by its own force removes the restrictions on the power of the Legislature to make laws inconsistent with Article 19 of the Constitution as also on the power of the Executive to take ** Inserted retrospectively by section 7 of the Constitu tion (Thirty eighth Amendment) Act, 1975. 738 actions which may be repugnant to Article 19 of the Consti tution so long as the proclamation of emergency continues to operate but does not suspend any fundamental right which was available to a citizen under Article 19 of the Constitution prior to the promulgation of emergency, Article 359(1) empowers the President to suspend the right of an individual to move any court for enforcement of such of the rights conferred by Part III of the Constitution as may be speci fied by him (the President) in his order. In other words, while Article 358 proporio vigore suspends the fundamental rights guaranteed by Article 19 of the Constitution thus enabling the State during the period the proclamation of emergency is in operation to make laws in violation of Article 19 of the Constitution and to take Executive action under those laws despite the fact that those laws constitute an infringement of the rights conferred by Arti cle 19, Article 359(1) of the Constitution does not sus pend any fundamental right of its own force but authorises the President to deprive an individual of his right to approach any Court for enforcement of any or all of the rights conferred by Part III of the Constitution. In Mohd. Yaqub etc. vs The State of Jammu & Kashmir(1), a Constitu tion Bench of this Court consisting of seven Judges inter alia pointed out that there is a distinction between Arti cles 358 and 359(1) of the Constitution. Whereas Article 358 by its own force suspends the fundamental rights guaran teed by Article 19, Article 359(1) of the Constitution has the effect of suspending the enforcement of specified funda mental rights so. that these concept cannot be used to test the legality of an Executive action. Reference in this connection may also usefully be made to a passage in Shivakant Shukla 's case (supra) where my. Lord the Chief Justice who headed the majority opinion while pointing out the difference between Articles 358 and 359 of the Constitution observed : "The vital distinction between Article 358 and Article 359 is that article 358 suspends the rights only under Article 19 to the extent that the legislature can make laws contraven ing Article 19 during the operation of a Proclamation of Emergency and the Executive can take action which the Executive is competent to take under such laws. Article 358 does not suspend any fundamental fight. While a Proclamation of Emergency is in operation the Presidential Order under Article 359(1) can suspend the enforcement of any or all fundamental rights. Article 359(1) also sus pends any pending proceedings for the enforce ment of such fundamental right or rights, The purpose and object of Article 359(1) is that the enforcement of any fundamental right mentioned in the Presidential Order is barred or it remains suspended during the emergency. Another important distinction between the two Articles is that Article 358 provides for indemnity whereas Article 359(1) does not, Article 359(1A) is on the same lines as Arti cle 358 but Article 359(1A) now includes all fundamental rights which may be mentioned in a Presidential Order and is, therefore, much wider than Article 358 which includes Article 19 only. (1) ; 739 A person can enforce a fundamental right both in the case of law being made in viola tion of that right and also if the Executive acts in non compliance with valid laws or acts without the authority of law. It cannot be said that the scope of Article 359(1) is only to restrict the application of the Article to the Legislative field and not to the acts of the Executive. The reason is that any enforce ment of the fundamental rights mentioned in the Presidential Order is barred and any challenge either to law or to any act of the Executive on the ground that it is not in compliance with the valid law or without authority of law will amount 'to enforcement of fundamental rights and will, therefore, be within the mischief of the Presidential Order. The effect of the Presidential Order suspend ing the enforcement of fundamental right amounts to bar the locus standi of any person to move the court on the ground of violation of a fundamental right. " Thus the foregoing discussion makes two things perfectly clear(1) that Article 359(1) (which makes no distinction between the threat to the security of India by war or external aggression or internal disturbance) is wider in scope than Article 358 and (2) that it is not open to any one either to challenge the validity of any law or any Executive action on the ground of violation of a fundamen tal right specified in the Presidential Order promulgated under Article 359(1). of the Constitution. It would be apposite at this stage to mention that in England in Liver sidge vs Anderson(1) and Greene vs Secretary of State for Home Affairs(2) and in India in Sree Mohan Chowdhury vs The Chief Commissioner, Union Territory of Tripura(3) and Makhan Singh vs State of Punjab(4) the right of any person to challenge any executive action taken during emergency on the ground that it was arbitrary or unlawful has been negatived. In the Liversidge 's case (supra) the following memorable observations made by the House of Lords in the King vs Halliday, Ex parte zadig(5) were referred to and relied upon : "However precious the personal liberty of the subject may be, there is something for which it may well be, to some extent, sacrificed by legal enactment namely, national success in the war or escape from national plunder or enslavement. Liberty is itself the gift of the law and may by the law be forfeit ed or abridged." Having noticed the amplitude of the provisions incorpo rated in our Constitution by its rounding fathers in rela tion to the threat posed by three types of grave emergencies on the basis of the experience gained . in England and United States of America and their effect, let us now turn to the various Presidential Orders and notice their effect. (1) ; (2) (3) ; = ; (4) [1964] 4 S.C.R. 797 = A.I.R. 1964 S.C. 381. (5) ; 13 112 SCI/77. 740 Presidential Order dated November 3, 1962 issued under clause (1) of Article 359 of the Constitution after the proclamation of emergency made on October 26, 1962 under clause (1) of Article 352 of the Constitution consequent on the invasion of India by China on September 8, 1962 ran as follows : "New Delhi, the 3rd November, 1962 G.S.R. 1464 In exercise of the powers Con ferred by clause (1) of Article 359 of the Constitution, the President hereby declares that the right of any person to move any court for the enforcement of the rights conferred by Article 21 and Article 22 of the Constitution shall remain suspended for the period during which the Proclamation of Emergency issued under clause (1) of Article 352 thereof on the 26th October, 1962 is in force, if such person has been deprived of any such rights under the Defence of India Ordinance, 1962 (4 of 1962) or any rule or order made thereunder. " Be it noted that addition of Article 14 was made in the above Presidential Order of November 3, 1962 by the Presi dential Order dated November 11, 1962 and the aforesaid emergency declared on October 26, 1962 was revoked vide Presidential Order dated January 10, 1968 issued under Article 352(2)(a) of the Constitution. Proclamation of emergency issued by the President of India under Article 352(1) of the Constitution on December 3, 1971, consequent upon the Pakistani aggression reads as under : "In exercise of the powers conferred by clause (1) of Article 352 of the Constitution, I, V.V. Giri, President of India, by this. Proclamation declare that a grave emergency exists whereby the security of India is threatened by .external aggression. " Presidential Order dated November 16, 1974 issued under clause (1) of Article 359 of the Constitution is in these terms : "In exercise of the powers conferred by clause (1) of Article 359 of the Constitution, the President hereby declares that : (a) the right to move any court with respect to orders of detention which have already been made or which may hereafter be made under section 3 (1)(c) of the as amended by Ordinance II of 1974 for the enforcement of the rights conferred by Article 14, Article 21 and clauses (4), (5), (6) and (7) of Article 22 of the Constitution, and (b) all proceedings pending in any court for the enforcement of any of the aforesaid rights with respect to orders of detention made under the said section 3(1)(e) shall remain suspended for a period of six months from the 741 date of issue of this order or the period during which the Proclamation of Emergency issued under clause (1) of Article 352 of the Constitution the 3rd December, 1971, is in force, whichever period expires earlier. (2) This order shall extend to the whole of the territory of India. " On June 20, 1975, the President of India amended the above order by substituting "twelve months" for "six months" in the order. Proclamation of Emergency issued by the President of India on June 25, 1975 is to the following effect : "PROCLAMATION OF EMERGENCY. In exercise of the powers conferred by clause (1 ) of Article 352 of the Constitution, I, Fakhruddin Ali Ahmed, President of India, by this Proclamation declare that a grave emer gency exists whereby the security of India is threatended by internal disturbances. New Delhi Sd/F.A. Ahmed the 25th June, 1975 President. " Presidential Order dated June 27, 1975 promulgated under clause (1) of Article 359 of the Constitution runs thus : "In exercise of the power conferred by clause (1) of Article 359 of the Constitution, the President hereby declares that the right of any person (including a foreigner) to move any court for the enforcement of the rights con ferred by Article 14, Article 21 and Article 22 of the Constitution and all proceedings pending in any court for the enforcement of the above mentioned rights shall remain sus pended for the period during which the Procla mations of Emergency made under clause (1) of Article 352 of the Constitution on the 3rd December, 1971 and on the 25th June, 1975 are both in force. This order shall extend to. the whole of the territory of India except the State of Jammu and Kashmir. This order shall be in addition to and not in derogation of any order made before the date of this order under clause (1) of 'Article 359 of the Constitution." On June 29, 1975, another. order was issued by the President whereby the words "except the State of Jammu and Kashmir" in the order dated June 27, 1975 were omitted. On September 25, 1975, another Presidential Order was issued as a result of which the last paragraph in the Presidential Order dated June 27, 1975 was omitted. On January 8, 1976, the President issued yet another order under Article 359(1) of the Constitution declaring that the right to move 742 any court for the enforcement of the rights conferred by Article 19 and the proceedings pending in any court for the enforcement of those rights shall remain suspended during the operation of the proclamations of emergency dated Decem ber 3, 1971 and June 25, 1975. The difference between the Presidential Order dated June 27, 1975 which was supplemented by the Presidential Order dated January 8, 1976 and the earlier Presidential Orders barring the right of a person to move any court for enforce ment of certain fundamental rights conferred by Part III of the Constitution may now be noticed. While the Presidential Order dated June 27, 1975, which, as already stated, was supplemented by the Presidential Order dated January 8, 1976 was absolute and unconditional in terms, the earlier Presi dential Orders alluded to above were conditional and limited in scope. Apart from the fact that the Presidential Order dated November 3, 1962 did not make any mention of the pending proceedings, it was, as pointed out by this Court in State of Maharashtra vs Prabhakar Pandurang Sanzgiri(1) Dr. Ram Manohar Lohia vs State of Bihar(2) Makhan Singh vs State of Punjab (supra) and by the majority in .A.D.M. Jabalpur vs Shivakant Shukla (supra), hedged by a condition inasmuch as it declared that the right of any person to move any court for the enforcement of rights conferred by Articles 21 and 22 of the Constitution shall remain suspended for the period during which the proclamation of emergency issued under clause (1) of Article 352 thereof on October 26, 1962 is in force if such a person has been deprived of any such rights under the Defence of India Ordinance, 1962 (4 of 1962) (which was later on replaced by the Defence of India Act, 1962) or any rule or order made thereunder. " Accordingly, if a person was deprived of his personal liberty not under the Defence of India Act or any rule or order made there under but in contravention thereof, his locus standi to move any court for the enforcement of his rights conferred by Articles 21 and 22 of the Constitution was not barred. More or less, similar was the pattern and effect of the Presidential Order dated November 16, 1974. The position with respect to the Presidential Orders dated June 27, 1975 and January 8, 1976 is, however, quite different. These orders are not circumscribed by any limitation and their applicability is not made dependent upon the fulfilment of any condition 'precedent. They impose a total or blanket ban on the enforcement inter alia of the fundamental rights conferred by Articles 19, 21 and 22 of the Constitu tion which comprise all varieties or aspects of freedom of person compendiously described as personal liberty. (See/1. K. Gopalan vs The State of Madras(1), Kharak Singh vs State of U.P.(2) and A.D.M. Jabalpur vs Shivakant Shukla (supra). Thus there is no room for doubt that the Presidential Orders dated June 27, 1975, and January 8, 1976, unconditionally suspend the enforceability of the right conferred upon any person including a foreigner to move any court for the enforcement of the rights enshrined in Articles 14, 19, 21 and 22 of the Constitution. (1) ; = A.I.R. 1966 S.C. 1924. (2) [1966]1 S.C.R. 709 = A.I.R. 1966 S.C. 540. (3) ; = ; (4) [1964] 1 S.C.R, 332 = ; 743 The main contention advanced on behalf of the detenus that the Presidential Orders dated June 27, 1975 and January 18, 1976 do not bar the Court from examining the legality or vires or reasonableness of the Maharashtra Conditions of Detention Order, 1974 and that what is sought by means of the aforesaid petitions filed by or on their behalf is not the enforcement of the right to personal liberty conferred by Articles 14, 19, 21 and 22 of the Constitution but a redress of the complaint against illegality or ultra vires or unreasonableness of the Maharashtra Conditions of Detention Order, 1974 which imposes unwarranted constraints on them and does not provide them with facilities to which even the ordinary prisoners are entitled is totally mis conceived. It overlooks the well recognized canon of construction that the doctrines of legality and vires which are sacrosanct in times of peace have no relevance in regard to a legislative or an executive measure taken in times of emergency in the interest of the security of the State. It also ignores the well settled position that in times of, emergency when the security of the State is of utmost importance, the subordinate legislation has to be benevo lently construed and the strict yardstick of reasonableness cannot be appropriately applied. It also ignores the stark reality that the Presidential Orders dated June 27, 1975 and January 8, 1976 impose blanket bans on any and every judi cial enquiry or investigation into the validity of an order depriving a person of his personal liberty no matter whether it stems from the initial order directing his detention or from an order laying down the conditions of his detention. It has to be borne in mind that the rule of law during the emergency is no other than what is contained in Chapter XVIII of the Constitution which is the positive and tran scendental law. The following observations made by my Lord the Chief Justice in this connection in A.D.M. Jabalpur V. Shivakant Shukla 's case (supra) are worth perusing : "The Constitution is the mandate. The Constitution is the rule of law . . The rule of law is not a mere catchword or incan tation. The rule of law is not a law of nature consistent and invariable at all times and in all circumstances. The suspension of right to enforce fundamental right has the effect that the emergency provisions in Part XVIII are by themselves the rule of law during times of emergency. There cannot be :any rule of law other than the constitu tional rule of law. There cannot be any pre Constitution or post Constitution Rule of Law which can run counter to the rule of law embodied in the Constitution, nor can there be any invocation to any rule of law to nullify the constitutional provisions during the times of emergency. " Again as observed by my learned brother Beg, J. in A.D. M. Jabalpur vs Shivakant Shukla 's case (supra) "the only Rule of Law which can be recognised by Courts of our country is what is deducible from our Constitution itself. The Constitution is, for us, the embodiment of the highest "positive law" as well as the reflection of all the rules of natural or ethical or common law lying behind it which can 744 be recognised by Courts. It seems to me to be legally quite impossible to successfully appeal to some spirit of the Constitution or to any law anterior to or supposed to lie behind the Constitution to frustrate the objects of the express provisions of the Constitution. I am not aware of any Rule of law or reason which could enable us to do that. What we are asked to do seems nothing short of building some imaginary parts of a Constitution, supposed to lie behind our existing Constitution, which could take the place of those parts of our Constitution whose enforcement is sus pended and then to enforce the substitutes. Even in emer gencies, the power of the courts to test the legality of some executive act is not curtailed during the period the proclamation of emergency is in operation. Courts will apply the test of legality 'if the person aggrieved brings the action in the competent court '. But, if the locus standi of the person to move the court is gone and the competence of the court to enquire into the grievance is also impaired by inability to peruse the grounds of execu tive action of their relationship with the power to act, it is no use appealing to this Particular concept of the Rule of Law. It is just inapplicable to the situation which arises here. Such a situation is governed by the Emergency provisions of the Constitution. There provisions contain the Rule of Law for such situations in our country . . If the meaning of the emergency provisions in our Con stitution and the provisions of the Act is clearly that what lies in the executive fled, as indicated above, should not be subjected to judicial scrutiny or judged by judicial standards of correctness, I am unable to see how the courts can arrogate unto themselves a power of judicial superintendence which they do not, under the law during the emergency, possess. " The observations made by my learned brother Chandrachud, in A.D.M. Jabalpur vs Shivakant Shukla 's case (supra) are also apposite and may be conveniently referred to at this stage : "The rule of law during an emergency, is as one finds it in the provisions contained in Chapter XVIII of the Constitution. There cannot be a brooding and omnipotent rule of law drowning in its effervescence the emergen cy provisions of the Constitution. " The following observations made by my learned brother Bhagwati, J. in A.D.M. Jabal pur vs Shivakant Shukla 's case (supra) will also repay perusal : "In the ultimate analysis, the protection of personal liberty and the supremacy of law which sustains it must be governed by the Constitution itself. The Constitution is the paramount and supreme law of the land and if it says that even if a person is detained otherwise than in accordance with the law, he shah not be entitled to enforce his right of personal liberty, whilst a Presidential Order under Article 359, clause (1) specifying Article 21 is in force, the Court has to give effect to it as the plain and emphatic command of the Constitution. " 745 The observations made by this Court in Dhirubha Devisingh Gohil vs State of Bombay(1) and reiterated in A.D.M. Jabalpur vs Shivakant Shukla (supra) that if any pre Constitution right has been elevated as a fundamental right by its incorporation in Part III, the pre existing right and the fundamental right are to be considered as having been grouped together as fundamental rights conferred by the Constitution cannot also be ignored. The conclusion, therefore, seems to us to be irresisti ble that as Articles 19, 21 and 22 of the Constitution which, according to the decisions of this Court in 4. K. Gopalan vs State of Madras (supra), Kharak Singh vs State of U.P. (supra) and A.D.M. Jabalpur vs Shivakant Shukla .(supra) cover and form the source of all the varie ties or aspects of the rights that go to constitute what is compendiously described as personal liberty are suspended during the operation of the proclamation of emergency and the and the orders made or passed thereunder are not open to challenge on the ground of their being inconsistent with or repugnant to Articles 14, 19, 21 and 22 of the Constitution in view of the aforesaid Presi dential Orders dated June 27, 1975 and January 8, 1976 which totally take away the locus standi of the detenus to move any court for the enforcement of the aforesaid fundamental rights and the petitions out of which the present appeals have arisen did not seek to enforce the orders laying down the conditions of detention but on the contrary challenged them and covertly sought to enforce the very rights which are suspended, they were clearly untenable and it was not open to the High Court of Bombay to strike down the afore said clauses of the Maharashtra Conditions of Detention Order, 1974 ignoring the weighty observations made by this Court in the State of Bombay vs Virkumar Gulabchand Shah(2) to the effect that measures which often have to be enacted hastily to meet a grave pressing national emergency in which the very existence of the State is at stake should be con strued more liberally in favour of the State than peace time legislation. Now if no person has a locus standi to move any court to challenge the conditions of detention embodied in the Maharashtra Conditions of Detention Order, 1974, or other such orders or rules, the position whereof is the same as that of the .Punjab Communist Detenus Rules, 1950, which, as held by a Constitution Bench of this Court in Maqbool Hus sain vs The State of Bombay(3) constitute a body of. self ' contained rules prescribing the conditions of the detenus ' maintenance, discipline etc. , we cannot understand how the High Courts of BOmbay and Karnataka could issue the afore said directions 'disregarding the provisions of the Act particularly sections 5 and 12(6) thereof which are mandato ry in character and the aforesaid orders which in any case appear to have been issued in the interest of the effective detention of the detenus. (1) ; = ; (2) ; at 884 (3) ; 746 The avowed object of the Act as manifest from its preamble being the conservation and augmentation of foreign exchange and the prevention of smuggling activities of considerable magnitude secretly organised and carried on which have a baneful effect on the national economy and gravely undermine the security of the State, it is essential that the contact of the detenus with the outside world should be reduced to the minimum. It is, therefore, for the State Governments who are in full possession of all material facts including the peculiar problems posed by foreign exchange and smuggling and not for the Courts who have neither the necessary knowledge of the facts nor the legal competence to regulate conditions of detention of persons including their maintenance, interviews or communi cations with others. The High Court also seem to have ignored the observa tions made by this Court in State of Maharashtra vs Prabha kar Pandurang Sanzgiri & Anr. (supra) and in A.D.M. Jabalpur vs Shivakant shukla (supra) to the effect that when a person is detained, he loses his freedom. He is no longer a free man and, therefore, he can exercise, only such privi leges as are conferred on him by the order of detention or by the rules governing his detention. We would also like to reiterate here the observations made by a Constitution Bench of this Court in Maqbool Hussain vs The State Bombay (Supra) that the mere fact that a detenu is confined in a prison for the sake of administrative conven ience does not entitled him to be treated as a civil prison er or to be governed by the provisions of the . The view of the High Court of Bombay to the contrary cannot, therefore, be sustained. It has also been contended by Mr. Seervai that in asking for their temporary removal from their places of detention to their homes to perform funeral ceremonies or to appear at any examination or to be taken to a doctor of their choice for social medical attention, the detenus are not enforcing their rights to freedom. The contention is not sound. Any relief that may be asked for through the aid of court for giving facilities to a detenu to be taken from his place of detention to his home or to an examination hall or for special medical treatment under a doctor of his choice or for any other facility would be enforcing fundamental rights through the aid of Court. The Presidential Proclamation is a complete answer against the enforcement of such reliefs through the aid of Court. The detenus may approach the competent administrative authorities for special medical attention or for facilities for performance of funeral ceremonies of their kith and kin or for facilities to appear at the examination or any other facility of similar nature. It is open to the administra tive authorities to take such action as they may be advised under the relevant provisions of the Act. But if the authorities do not give any relief it was said by counsel for the detenus then the detenus could come to the court. This contention is also unsound and unacceptable because that would also be enforcing fundamental rights through the aid and process of court which is not permissible so long as the aforesaid Proclamation is in force. 747 We are therefore clearly of opinion that the aforesaid writ petitions were not maintainable and the High Court of Bombay and Karnataka were clearly in error in passing the impugned directions which are not warranted by any relevant law including the law relating to preventive detention of the kind with which we are concerned in the present cases. The detenus or their relations may if so advised, approach the appropriate Governments. or other competent administrative authorities invoking their powers under section 5 read with section 12 of the Act or other relevant provisions thereof. In the result, appeals diarised as Nos. 3002 and 3003 of 1976 fail and are hereby dismissed while the rest of the appeals are allowed and the orders and directions forming the subject matter thereof are quashed. The special leave petitions are disposed of as infructuous as in view of our Judgment High Court Orders cannot stand. Since during the course of arguments, it was pointed out to us that the conditions of detention laid down by some State Government differ in certain particulars, we may, in conclusion, observe that the appropriate Governments would do well to take necessary steps to bring about uniformity therein. To eliminate the chances of hardship, the appro priate Governments may as well issue standing orders to meet special contingencies which necessitate expert medical aid being provided to the detenus for the maintenance of their health or their being removed temporarily from their places of detention on humanitarian grounds to enable them to perform the obsequies of their kith and kin or for appearing in some examination without detriment to the security of the State. No order as to costs. BEG, J. The circumstances in which the appeals now before us by special leave arose have been dealt with in extenso by my learned brother Jaswant Singh with whose judgment and proposed orders I entirely concur. I would, however, like to add some reasons of my own also to indicate why submissions made on behalf of the respondents, on the strength of certain observations found in the judgments, including mine, in Additional District Magistrate, Jabalpur vs Shivakant Shukla(1), decided by a Constitution Bench of this Court, cannot be accepted by us. I will also express my opinion, very briefly and broadly on some other conten tions advanced by learned counsel for the respondents as issues relating to personal liberty, which have been matters of very special and anxious concern to this Court, arise here. I think this Court has made it amply clear in Shukla 's case (supra) that the Constitution embodies, for all Courts in this country, the highest norms of law. It is the touch stone by which the validity of all action, whether executive, legislative, or judicial is to be judged. That is why, this Court has, on several occasions, spoken of "the supremacy of the Constitution" explained by me in Shukla 's case (supra) also as follows: (1) ; , 1283=[1976] Supp. S.C.R. 172. 748 "The position in this country is clearly one in which the fundamental law found in the Constitution is paramount. The Constitution provides the test for the validity of all other laws. It seeks to determine the spheres of executive and legislative and judicial powers with meticulous care and precision. The judicial function, though wider in range, when interpreting or applying other articles of the Constitution, particularly Articles 14 and 19, the enforcement of which is also suspended during the current Emergency, is especially constricted by the elaborate provi sions of Articles 21 and 22, which deal with personal liberty and preventive deten tion. The 'wider the sweep of the provisions of Articles 21 and 22, the more drastic must be the effect of suspending their enforcement. After all, suspension does not and cannot mean retention under a disguise". It seems to me that the majority view in Shukla 's Case (supra) was that there is no pre existing natural or funda mental or common law which, in so far as the rights covered by Part III of our Constitution, together with implications of such rights, are involved, is not embodied in the Consti tution itself. Furthermore, this Court held there, after considering all the relevant case law on the subject, from the case of 4. K. Gopalan vs State of Madras(1), through Kharak Singh vs State of U.P.(2), I. C. Golaknath vs State of Punjab(3), His Holiness Kesavananda Bharati Sripadagala varu vs State of Kerala(4), to Haradhan Saha vs The State 0f West Bengal & Ors. (5), that the sweep of Articles 19 and 21 is wide enough to include every aspect of personal free dom. This Court recalled that, in Kharak Singh 's case, a Constitution Bench of this Court had held that the concept of personal liberty, embodied in Article 21, is a compendi ous one and "includes all varieties of rights tO exercise of personal freedom, other than those dealt with separately by Article 19, which could fall under a broad concept of free dom of person". "It was held to include freedom from surveillance, from physical torture, and from all kinds of harassment of the person which may .interfere with his liberty". I summarised my conclusions on this sub ject in Shukla 's case (supra) as follows: "For the reasons indicated above, I hold as follows: Firstly, fundamental rights are basic aspects of rights selected from what may previously have been natural or common law rights. These basic aspects of rights are elevated to a new level of importance by the Constitution. Any (1) ; (2) [1964] (1) S.C.R. 332. (3) ; (4) [1973] Supp. S.C.R. I (5) ; 1974 S.C. 2154. 749 other co extensive rights, outside the Con stitution, are necessarily excluded by their recognition as or merger with fundamental rights. Secondly, the object of making certain general aspects of rights fundamental is to guarantee them against illegal, invasions of these rights by executive, legislative, or judicial organs of the State. This necessari ly means that these safeguards can also, be legally removed under appropriate constitu tional or statutory provisions, although their suspension does not, by itself, take away the illegalities or their legal consequences. Thirdly, Article 21 of the Constitution has to be interpreted comprehensively enough to include, together with Article 19, practi cally all aspects of personal freedom. It embraces both procedural and substantive rights. Article 22 merely makes it clear that deprivations of liberty by means of laws regulating preventive detention would be included in "procedure established by law" and indicates what that procedure should be. In that sense, it could be viewed as, substan tially, an elaboration Of what is found in Article 21, although it also goes beyond it inasmuch as it imposes limits on ordinary legislative power. Fourthly, taken by itself, Article 21 of the Constitution is primarily a protection against illegal deprivations by the executive action of the State 's agents or officials, although, read with other Articles, it could operate also as a protection against unjusti fiable legislative action purporting to authorise deprivations of personal freedom. Fifthly, the most important object of making certain basic rights fundamental by the Constitution is to make them enforceable against the State and its agencies through the Courts. Sixthly, if the protection of enforceabil ity is validly suspended for the duration of an Emergency, declared under Constitutional provisions, the Courts will have nothing before them to enforce so as to be able to afford any relief to a person who comes with a grievance before them". I may mention, at the risk of repetition, that I had explained in Shukla 's case (supra) that it is not the funda mental rights which are suspended by the Presidential Order under Article 359 of the Constitution but "the right to move any Court for the enforcement of such right by Part III as may be mentioned in the order" which is suspended for the duration of the Emergency. Speaking for myself, I was of opinion that what is very obviously and clearly affected is the enforceability of fundamental rights during such an Emergency. This means that it is really the jurisdiction of Courts, to the extent to which a petitioner seeks to enforce a fundamental right mentioned 750 in the Presidential Order, which is suspended or is in abeyance. I said there (at p. 1302) (paragraph 346): "The result is that I think that there can be no doubt whatsoever that the Presidential Order of 27th June, 1975, was a part of an unmistakably expressed intention to suspend the ordinary processes of law in those cases where persons complain of infringement of their fundamental ' rights by the executive authorities of the State". It is these processes of law, whether statutory or outside. any statute (even assuming, for the sake of argument, that there could be any such non statutory rights) which Arti cle 21 expressly protects. Therefore, I am totally unable to understand how, without ignoring what our Constitution enjoins, a Court could do what is Constitutionally prohib ited i.e. to enforce a statutory or non statutory supposed protection. Shukla 's case (supra) and other connected cases related to the enforcement of the right to personal liberty by obtaining an order of release of detenus after issuing writs of Habeas Corpus. Article 223 of the Constitution, no doubt, gives power not only to issue specified writs but enables High Courts to issue orders and directions for "any other purpose". It seems to me that this "other purpose" has to be similar to those for which one of the specified writs could issue except to the extent that each specified writ may have special features or incidents attached to it. Now, the writ of Habeas Corpus, as is well known, is wider in scope than enforcement of fundamental rights which are available against the State only and its officers and agents. Therefore, I had said in Shukla 's case (p. 1300): "The remedy by way of a writ habeas corpus is more general. It lies even against illegal detentions by private persons although not under Article 32 which is confined to en forcement of fundamental rights [vide: Smt. Viday Verma vs Dr. Shiv Narain Verma, (1955)C2 SCR 983=AIR The Attorney General also concedes that judicial proceedings for trial of accused persons would fail outside the interdict of the Presidential Order under Article 359(1). Therefore, it is unnecessary to consider hypothetical cases of illegal convictions where remedies under the ordinary law are not suspended". As already indicated above, fundamental rights are conferred and guaranteed by the Constitution so that citi zens, and, in the cases of Articles 14 and 21, even non citizens, may get relief against the State and its agencies. The suspension of enforcement of fundamental rights, which are rights enforceable against the State only, does not, as I pointed out, in Shukla 's case, debar enforcement of some right to personal freedom against a private individual by means of a writ of habeas corpus directed to him to produce a person illegally detained. But, so far as mere direc tions or orders for "any other purpose" are concerned, the jurisdiction of High Courts does not 751 extend to making orders against private individuals. There fore, the distinction which 1 drew in Shukla 's case (supra), between a detention by an officer of the State, vasted with the power to detain and purporting to act under some law which authorises him to pass a detention order, and a detention by a private individual, has no real bearing on the cases now before us. I had certainly expressed the view in Shukla 's case that, if a detention by a person or authority is not in exercise or purported exercise of a power to detain, which is not vested in all officers of State, under statutes providing for it, the action of an officer of the State, on the facts of a particular case, may be, prima facie. indistinguisha ble from a detention by a private person and may not be protected at all by the Presidential Order which only covers purported actions of the State and its Officers empowered to detain. That was, as I pointed out there, was a purely hypothetical situation not presented in any of the cases before us on that occasion. If the officer concerned is duly empowered and has passed a detention order, that order is certainly not capable of being questioned, under Article 226, either on the ground of alleged ultra vires or mala fides. All inquiry into the conditions of exercise of such power is barred under Constitutional provisions during the emergency. That was the very clearly expressed majori ty view in Shukla 's case (supra). In all the cases now before us, the application consid ered by the High Court was for grant of a direction or order against the State or its Officers, acting in the performance of their purported duties. The remedy sought against them was clearly covered by the Presidential inhibition which operates, under the Constitution, which is supreme, against the High Courts. Hence, whatever may be the grievances of the detenus, with regard to the place of their confinement, the supply of information to them, their desire to get treatment by their own private doctors or to obtain some special or additional food required by them from their own homes, or to leave the place of their confinement temporari ly to go to some other place to perform some religious ceremony or other obligation, for which they had erroneous ly sought permission and directions of the Court subject to any conditions, such as that the detenus could be accompa nied by the police or remain in the custody of the police during the period, are not matter which the High Court had any jurisdiction to consider at all. It was, therefore, quite futile to invite our attention to the allegations of petitioners about supposed conditions of their detention. Indeed, on the face of it, the nature of the claims made was such that they are essentially matters fit to be left to the discretion and good sense of the State authorities and officers. It is not possible to believe, on bare allega tions of the kind we have before us, that the State authori ties or officers will be vindictive or malicious or unrea sonable in attending to the essential needs of detenus. ' These are not matters which the High Court could consider, in petitions under Article 226 of the Constitution, whatever be the allegations made on behalf of detenus so as to induce the High Court to interfere. The High Courts can only do so under Article 226 of the 752 Constitution if they have authority or power to do it under the Constitution. Devoid of that power, the directions, which may be given by a High Court after such enquiries as it makes, would be useless as they will not be capable of enforcement at all during the Emergency under the law as we find it in our Constitution. It will be noticed that, in most of the cases before, us, the demands made by the detenus have become infructous either because they have been promptly met by the State concerned under orders of a High Court, without any attempt by the State to do anything more than to question the juris diction, quite properly, of the High Court to give such directions, or because the time to which it related has expired so that there has remained nothing more than a question of law or principle for us to be called upon to determine. I cannot help observing, having regard to some of the allegations made, that they could not be at all easily accepted by any reasonable person and may have been proved to be totally unfounded if they had been actually investi gated and tried. If the State Governments promptly met, as they seem to have done, all reasonable requests, either before or after the orders of the High Court, without questioning anything other than the power of the High Court to give the directions given it could not be readily in ferred that all the allegations are either correct or that the Governments concerned are taking any unreasonable stands. Indeed, we have been requested by the Solicitor General to indicate the lines on which requests by detenus, of the kind we now find in the cases before us should be dealt with. These are matters entirely outside the scope of our judicial functions. We cannot suggest what a comprehen sive set of rules on such subjects should be. All that we need say on such a subject is that the attitude on behalf of the State has been very reasonable and proper in this Court. And, we have no doubt that any attempt to formulate uniform rules on such matters by authorities concerned and empow ered to do so will also disclose the same reasonableness. Speaking for myself, I am inclined to suspect that a number of allegations made on behalf of the detenus have the oblique motive of partisan villification or political propa ganda for which Courts are not proper places. I would not like to make any further comments on this aspect. I would next like to make a few observations about the contention most vehemently pressed for acceptance by us by Mr. Seervai appearing on behalf of the respondents. It was that we should adjudicate upon the validity of the rules regulating conditions of detention which are being applied to the detenus. The rules and the enactments under which they have been made have been considered in the judgment of my learned brother Jaswant Singh. I do not propose to. cover the same ground afresh. I .am in complete agreement with all that my learned brother has said. I would, howev er, like to add some observations on the main ground upon which the validity of the rules is assailed. It was urged before us that rules regulating conditions of their deten tion cannot be either so made or 753 administered as to amount to punitive detention of the detenus. Reliance was placed on Haradhan Saha 's case (supra), where a Constitution Bench of this Court said (at p. 2100): "The power of preventive detention is qualitatively different from punitive deten tion. The power of preventive detention is a precautionary power exercised in reasonable anticipation. It may or may not relate to an offence. It is not a parallel proceeding. It does not overlap with prosecution even if it relies on certain facts for which prosecution may be launched or may have been launched. An order of preventive detention may be made with or without prosecution and in anticipation or after discharge or even acquittal. The pendency of prosecution is no bar to an order of preventive detention. An order of preven tive detention is also not a bar to prosecution". In Haradhan Saha 's case, this Court was concerned with indicating how preventive detention and punitive detention belong to two very different and distinct categories or could be separately classified from the point of view of article 14 of the Constitution. Their objects and social purposes may be very different in hue and quality. The procedures applicable in cases of the two types are certain ly radically different. The authorities entrusted with the power of ordering punitive and preventive detentions also act on very different principles and for very different reasons. The Constitutional justification for preventive detention was considered by this Court at some length in Shukla 's case (supra). Although preventive detention, which is constitutionally sanctioned in this country, and punitive detention may be qualitatively different and be regulated by entirely different procedures and may have very different immediate objectives, yet, if we closely examine the total effects and ultimate social purposes of detention, whether preventive or punitive, it seems to me, speaking entirely for myself, that the theoretical distinctions become less obvious. It seems to me that the broad purpose of all action which results in the detention of a person by the State or its officers must necessarily be a deprivation which could, if their effects on the detenu alone were to be considered, be not incorrectly described as "punitive". Again, "preventive" detention, like "punitive" detention, may have some therapeutic or reformative purposes behind them for the detaining authorities viewing the matters from administrative or psychological points of view necessitating some action in national interest. Some jurist, who under takes a study of the subject, may discover certain broad similarities of social purposes, side by side with the distinctions already pointed out by this Court. In Shukla 's case I indicated that the exercise of power of preventive detention during an Emergency may be viewed as a purely administrative. to use the term employed by Sir William Hordsworth. even "political" action lying in an area which is completely protected from judicial scrutiny. As we indicated in Shukla 's case, high 754 authority can be cited for such a proposition [see Liver sidge 's(1) case, and Rex vs zadiq(2)]. The result seems to me to be that the principle that the doctrine of State necessity is not available to a State against its own citizens becomes inapplicable during an Emergency, at least as a result of the suspension of enforceability of the rights of citizens under Articles 19 and 21 ,of the Consti tution. This seems to me to flow directly from the implica tions of the maxim "Salus Populi Est Supreme Lax" (regard for public welfare is. the highest law) applied by us in Shukla 's case (supra) and by English Courts in Liver sidge 's case (supra) and Zadig 's .case (supra). .This, however, does not mean that the persons detained are with out any remedy as was pointed out in Shukla 's case. The result only ' is that the remedy for all their, grievances lies, in times of Emergency, with the executive and adminis trative authorities of the State where they can take all their complaints. Here, we have to be content .with de claring the legal position that the High Courts, acting under article 226, have not been given the power to interfere in any matter involving the assertion or enforcement of a right to personal freedom by the detenus during an Emergen cy, when exercise of such power of High Courts is suspend ed. We are not concerned in these cases with other kinds of claims which may arise before the ordinary criminal or civil courts for wrongs done by officers acting maliciously in purported exercise of their powers. We are only concerned here with the powers of High Courts under article 226 of the Constitution. I have no doubt whatsoever, that if the object of a proceeding is to enforce the fundamental right to personal freedom, a High Court 's jurisdiction under article 226 is barred during an Emergency even if it involves adjudication on the question of vires of a rule made under enactments authorising preventive detention. I find it impossible to invalidate a rule either intended for or used for regulating the conditions of detention of a person detained under one of the Acts authorising preventive detention, on the ground that the rule could only be used for persons in "punitive" detention. The attack on the validity of such a rule cannot succeed on the ground that the object of the rule should be shown to be preventive and not punitive. I fail to find a reasonably practical method of distinguishing a rule which could be used for those in preventive detention under an Act authorising it from another rule which could only apply to persons in punitive detention undergoing sentences of imprisonment. These are really administrative matters with which High Courts can have no concern for the reasons given above and also in Shukla 's case (supra). Learned counsel for the detenus appear to me to be resurrecting the ghost of a "Natural law" which we thought we had laid to rest in Shukla 's case (supra). As certain arguments based on what looks like "National Law" have been advanced again before us, I may cite an instructive passage from Judge Cordozo 's "Nature Of the Judicial Process". He said: (1) ; (2) ; 755 "The law of nature is no longer conceived of as some thing static and eternal. It does not override human or positive law. It is the stuff out of which human or posi tive law is to be woven, when other sources fail. The modern philosophy of law comes in contact with the natural law philosophy in that the one as well as the other seeks to be the science of the just. But the modern philosophy of law departs essentially from the natural law philosophy in that the latter seeks a just, natural law outside of posi tive law, while the new philosophy of law desires to deduce and fix the element of the just in and out of the positive law out of what it is and of what it is becoming. 'the natural law school seeks an absolute ideal law, 'natural law '. . . by the side of which positive law has only secondary importance. The modern philosophy of law recog nizes that there is only one law, the positive law, but it seeks its ideal side, and its enduring idea. " I respectfully agree with this statement of the rela tionship between natural law and positive law today, in the application of law by courts governed by and subject to the limitations of a written Constitution such as ours. Let us, however, assume, in order to test the correctness of the proposition, that a rule of natural law, having as much force and validity as a rule of positive law embodied in a statute, has been infringed. Let us go a little further, and even assume that a rule embodied in a statute has been violated by an authority functioning under the Constitu tion in either framing or administering a rule. Can Courts, exercising powers under Article 226, declare that rule or purported action of an executive authority dealing with a detenu under the rule, or in exercise of its discre tion, to be ultra vires ? We are all aware of the dictum of Justice Holmes that "law is not logic". Nevertheless, I do not think that the Courts have the power to persue a logic of their own to overcome what the letter of the Constitution clearly prohibits. The precedents we have discussed at length in Shukla 's case indicate the declarations of law, that Articles 19 and 21 embrace every aspect of an alleged infringement of the right to personal freedom by a State authority or officer purporting to act under a law, by which we are bound, Even if the action violates a protection conferred by Article 21 upon citizens as well as non citi zens in ordinary times, yet, the result of the suspension of the protection given by Article 21 must necessarily be that the protection cannot be enforced during an Emergency. If that be the effect of the Presidential declaration under Article 359, as we declared it to be after a very anxious consideration in Shukla 's case we cannot go behind this declaration of law and the express letter of the law as embodied in our Constitution, and enforce what may be cov ered by the right to personal freedom in ordinary times whether it parades under the guise of natural law or statu tory law or Constitutional, law. This consequence seems to me to flow logically and naturally and necessarily from the whole trend of reasoning and, in any ease, from the actual declaration of law and the conclusion recorded by us in Shukla 's ease. I would, therefore, consider any 14 112SCI/77. 756 stray sentences or expressions of opinion, in our judg ments in Shukla 's case, which may, torn out of their con text, give a contrary impression, to be mere obiter dicta. For the reasons given above, as well as those given by my learned brother Jaswant Singh, I concur with the orders proposed by my learned brother.

The Conservation of Foreign Exchange and Prevention of Smuggling Activities (Maharashtra Conditions of Detention) Order, 1974 provides that security prisoners shall not be allowed to supplement their diet even at their own expense, restricts the security prisoner from receiving funds from relatives and friends; restricts the number of meetings with relatives and friends and medical attention is allowed only through the Medical Officer of the prison in the same way as a convicted criminal and so on. Writ Petitions field by the detenus under articles 226, and 227 of the Constitution, two High Courts .have struck down the Order as ultra vires. On appeal it was contended by the State that the right of a person to move. any Court for the enforcement of the rights conferred by articles 14, 19, 21 and 22 of the Constitu tion having been suspended by the Presidential Orders of June 27, 1975 and January 8, 1976 issued under article 359(1) for the period during which the Proclamation of Emergency was inforce, no person had locus Mandi to move an appli cation under article 226 for the 'issue of a writ to enforce any right to personal liberty. Allowing the appeals, (per Ray, C.J. and Jaswant Singh, J.) HELD: The Writ Petitions were not maintainable and the High Courts were clearly in error in passing the impugned directions which were not warranted by any relevant law including the law relating to preventive detention. [732 D] 1. It is well settled by the decisions of this Court that if a person was deprived of his personal liberty not under the 'Defence of India Act, 1962 or any rule or order made thereunder but in contravention thereof, his locus standi to move any court for the enforcement of the rights conferred by articles 21 and 22 was not barred. On the other hand since the Presidential Orders dated June 27, 1975 and January 8, 1976 were not circumscribed by any limitation, their applicability was not made dependent upon the fulfil ment of any conditions precedent. They imposed a total or blanket ban on the enforcement of the fundamental rights conferred by articles 19, 21 and 22. There is,therefore, no room for doubt that these Presidential Orders unconditional ly suspended the enforceability of the right conferred upon any person, including a foreigner, to move any Court for the enforcement of the rights conferred by articles 14, 19, 21 and 22 of the Constitution. [742 E, G H] Additional District Magistrate, Jabalpur vs Shiva Kant Shukla , Makhan Singh vs State of Punjab , State of Maharashtra vs Prabhakar Pandurang Sanz giri [1966] 1 S.C.R. 702 A.I.R. 1966 S.C. 424, Dr. Ram Manohar Lohia vs State of Bihar 1966 S.C. 740, A.K. Gopalan vs The State of Madras and Kharak Singh vs State of U.P. [1964] 1 S.C.R. 332 A.I.R. 1963 S.C. 1295, followed, 720 2. When a person has no locus standi to move any Court to challenge his order of detention, the High Court could not issue directions disregarding the provisions of the Act, which is a self contained code, and particularly sections 5 and 12(6) which are mandatory. [745 F H] Maqbool Hussain vs The State of Bombay ; , followed. As Articles 19, 21 and 22 of the Constitution have been suspended during the operation of the Proclamation of Emergency, the Conservation of Foreign Exchange and Preven tion of Smuggling Activities Act and the orders made or passed thereunder were not open to challenge on the ground of their being inconsistent with or repugnant to articles 14, 19, 21 and 22 of the Constitution in view of the Presiden tial Orders, dated June 27, 1975 and January 8, 1976. [742 G H] In the instant case the detenus covertly sought to enforce the vary rights which were suspended. It was not open to the High Courts to strike down the impugned clauses of the Maharashtra Conditions of Detention Order 1974. The avowed object of the Act, as mainrest from its preamble, being the conservation and augmentation of foreign exchange and the prevention of smuggling activities secretly organised and carried on, it is essential that contact 0f the detenus with the outside world should be reduced to the minimum. It is for the State Governments who are in full possession of all material facts and not for the Courts who have neither the necessary knowledge of the facts nor the. legal competence, to regulate conditions of detention Of persons, including their maintenance, interviews or communi cations with others. [746 A C] 5. When a person is detailed, he can exercise only such privileges as are conferred on him by the order of detention or by the rules governing his detention. State of Maharashtra vs Prabhakar Pandurang Sanzgiri [1966] I SCR 702AIR 1966 S.C. 424 referred to. The mere fact that a detenu is confined in a prison for the sake of administrative convenience does not entitle him to be treated as a civil prisoner or to be governed by the provisions of the Prisons Act. The view of the High Courts to the contrary cannot be sustained. [746 D E] Maqbool Hussatn vs The State of Bombay ; , followed. The contention that the Presidential Orders did not bar the Court from examining the vires of the detention orders because what was sought to be enforced was not a right of personal liberty but a redress against unreasona bleness of the order was misconceived. The Presidential Orders imposed a blanket ban on every judicial enquiry into the validity of an order depriving a person of his personal liberty irrespective of whether it stems from the initial order directing his detention or from an order laying down the conditions in his detention. [743 A E] Additional District Magistrate, .Jabalpur vs Shiva Kant Shukla followed. (Per Beg. J.) Concurring. 721 The High Courts, acting under article 226 have not been given the power to interfere in any matter involving the assertion or enforcement of a right to personal freedom by the detenus during an Emergency, when exercise of such power by the High Courts is suspended. In times of Emergency the remedy for all the grievances of the detenus lies with the executive and administrative authorities of the State. [754 B C] 1. Shukla 's case held that 'it was not the fundamental rights which were suspended by the Presidential Order under article 359 but the right to move any Court for the enforcement of such right conferred by Part III as may be mentioned in the Order which is suspended for the duration of_the Emer gency. This mean that it is the 'jurisdiction of Courts, to the extent to which a petitioner seeks to enforce the funda mental rights mentioned in the Presidential Order, which is suspended. [749 G H] Additional District Magistrate, Jabalpur vs Shivakant Shukla AIR 1976 SC 1283, applied. A.K. Gopalan vs State of Madras, ; , Kharak Singh vs State of U.P., [1964] 1 SCR 332, 1. C. Golakanath vs State of Punjab ; His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala, [1973] Supp. SCR 1 and Haradhan Saha vs The State of West Bengal & Ors., [1975] (1) SCR 778 AIR 1974 SCR 154 referred to. The term "any other purpose" in article 226 means pur poses similar to those for which one of the specified writs would issue subject to certain exceptions The writ of habeas corpus is wider in scope than the enfrocement of fundamen tal rights which are available against the State only and its officers and agents. But so far as mere directions or orders for any other purpose are concerned, the jurisdiction of High Courts does not extend to making orders against private individuals. On the other hand, if an officer is duly empowered and has passed a detention order, that order is not capable of being questioned under article 226. All enquiry into the conditions of exercise of such. power is barred under the constitutional provisions during the emer gency. [750 D E, H, 751 A, C D] 3. In the instant case the remedy sought was clearly covered by the Presidential inhibition which operates against the High Courts. The claims made by the detenus were not matters which the High Court could consider in petition under article 226 of the Constitution. [751 E F] 4. If the object of a proceeding is to enforce the fundamental right, to personal freedom, a High Court 's jurisdiction under article 226 is barred during an Emergency even if it involved adjudication on the question of vires of a rule made under enactments authorising preventive deten tion. It is impossible to invalidate a rule either intended for or used for regulating the conditions of detention of a person detained under one of the Acts authorising preven tive detention on the ground that the rule could only be used for persons in punitive detention. The attack on the validity of such a rule cannot succeed on the ground that the object of the rule should be shown to be preventive and not punitive. [754 E F] 5. Shukla 's case indicates that articles 19 and 21 embrace every aspect of an alleged infringement of the right of personal freedom by a State authority or officer purporting to act under a law. Even if the action violates, a protec tion conferred by article 21 upon citizens as well as non citizens in ordinary times, the result of the suspension, of the protection given by article 21 must necessarily be that the protection cannot be enforced during an Emergency. If that be the effect of the Presidential declaration under article 359, the Court cannot go behind this declaration of law and the express letter of the law as embodied in the Constitu tion and enforce what may be covered by the right to person al freedom in ordinary times whether it parades under the guise of natural law or statutory law or constitutional law. [755 F H] 722

3716.txt

Appeal No. 1117(NCM) of 1976. (From the Judgment dated the 25.7.1975 of the Monopolies & Restrictive Trade Practices Commissioner New Delhi in R.T.P.E. No. 1 of 1974) N.A. Palkhivala, F.S. Nariman, Ashok H. Desai, Ravinder Narain, B. Dadachanji, O.C. Mathur, section Swarup, Talat Ansari, Shri Narain, John and D.N. Mishra, for the Appellant. Lal Narain Sinha, Mrs. Shayamla Pappu, G.A. Shah, R.N. Sachthey, Girish Chandra and B.B. Sawhney, for the Respond ent. R. Narain, J B. Dadachanji, O.C. Mathur, section Swarup, Talat Ansari, Interveners for M/s. Hindust*an Livers Ltd., Ashok Leyland Ltd. Escorts Ltd. K. J. John, for M/s. Hindustan Livers Ltd. Anil B. Divan, R. Narain, LB. Dadachani, O.C. Mathur, section Swarup, Talat Ansari, section Narain, Interveners for CIBA Geigy of India Ltd. Ashok, M. Desai R. Narain J. B. Dadachanji, O.C. Mathur, Talat Ansari, section Swarup & D.N. Mishra, Interveners for Batliboi & Co. (P) Ltd. The Judgment of the Court was delivered by RAY, C.J. This appeal is under Section 55 of the Monop olies and RestrictiveTrade Practices Act, 1969 (referred to as the Act) against 688 the judgment and order of the Monopolies and Restrictive Trade Practices Commission (referred to as the Commission) dated 25 July, 1975. The principal question for consideration in this appeal is whether the agreement between the appellant referred to as Telco and its dealers allocating territories to its deal ers within which only the dealers can sell bus and truck chassis referred to as the vehicles produced by the company constitute a "restrictive trade practice". Section 2(o) of the Act defines "restrictive trade prac tice" to be a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular (i) which tends to obstruct the flow of capital or resources into the stream of produc tion or (ii) which tends to bring about manipulation of prices, or conditions or delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions. Section 33 of the Act provides that any agreement relat ing to a restrictive trade practice falling within one or more of the categories (a) to (1) specified in sub 2section(1) thereof shall be subject to registration. Section 37 of the Act provides that the Commission may enquire into any restrictive trade practice, whether the agreement, if any, relating thereto has been registered under Section 35 or not which may come before its enquiry, and if, after such enquiry it is of opinion that the prac tice is prejudicial to the public interest the Commission may, by order direct that (a) the practice shall be discon tinued or shall not be repeated; (b) the agreement relating thereto shall be void in respect of such restrictive trade practice or shall stand modified in respect thereof in such manner as may be specified in the order. Section 38 of the Act provides that a restrictive trade practice shall be deemed to be prejudicial to the public interest unless the Commission is satisfied of any one or more circumstances mentioned in that section. The circum stances mentioned inter alia are these. The restriction is reasonably necessary having regard to the character of the goods to which it applies to protect the public against injury in connection with the consumption, or installation or use of these goods. The removal of the restriction would deny to the public. as purchasers, consumers or users of any goods, other specific and substantial benefits or advantages enjoyed or likely to be enjoyed by them as such, whether by virtue of the restriction itself or of any arrangements for operations resulting therefrom. The restriction is reasona bly necessary to counteract measure taken by any one person not party to the agreement with a view to preventing or restricting competition in or in relation to the trade or business in which the persons thereto are engaged. The restriction is reasonably required for purposes in connec tion with the maintenance of any other restriction accepted by the parties whether under the same 'agreement or ' 689 under any other agreement between them, being a restriction which is found by the Commission not to be contrary to the public interest upon other grounds other than specified in this paragraph. The restriction does not directly or indirectly restrict or discourage competition to any materi al degree in any relevant trade or industry and is not likely to do so. The Commission is also to be satisfied that the restriction is reasonable having regard to the balance between the circumstances and any detriment to the public or to persons not parties to the agreement being purchas ers, consumers or users of goods produced or sold by such parties or persons engaged or seeking to become engaged in the trade or business of selling such goods or of producing or selling similar goods resulting or likely to result from the operations of restriction. The expressions purchasers, consumers and users include persons purchasing, consuming or using for the purpose or in course of trade or business or for public purposes. Section 38 of the Act is described in the phraseology of restrictive trade practices as providing "gateways" to trade. The essence of the section is that when it is found by the Commission that such restrictions are necessary or justified in the circumstances mentioned in the section restrictions are permitted. Again the balancing clause after clause (h) in section 38 of the Act, indicates when the restriction is not unreasonable having regard to the balance between the circumstances mentioned in the section and detriment to the public resulting from the operation of the restriction. Telco is a public limited company and is a leading manufacturer of heavy and medium commercial vehicles. The capital investment required for a new factory in this trade is of a high order. At present there are only four princi pal manufacturers of commercial vehicles. These are The Hindustan Motors Ltd., Premier Automobiles Ltd. and Ashok Leyland Ltd. and Telco. The supply of commercial vehicles is said to be below the demand. The scarcity of supply is particularly accentu ated in the case of Telco 's vehicles as they are in great demand all over the country and abroad. The export of Telco was over 80% of the total exports of commercial vehicles from the country during the year 1974 75. The marked consumer preference for Telco 's vehicles has been maintained because of the high quality if its products and also because of elaborate and comprehensive net work of after sales service provided by Telco 's dealers. Telco has of its own initiative introduced. certain procedures for a fair and wide geographical distribution of its vehicles which seek to ensure that the new vehicles are supplied not only to the urban areas of the country where there is a high demand ' but also to the remote areas such as Tripura, Naga land, Himachal Pradesh etc. Telco has notified to its dealers the maximum price for each model of vehicle which they could charge to consumers. In May, 1972 Telco intro duced a procedure to regulate the booking of 690 orders by its dealers and effecting the delivery of vehicles against such orders with a view to ensuring distribution of its vehicles in the chronological order in which orders had been registered with the dealers. When Telco sells vehicles it has the responsibility of providing facilities for servicing and repairing the vehi cles marketed by it. It is essential that in the interest of the consumers such facilities are widely distributed throughout the country. Even in remote areas where the demand of new vehicles is less, it is necessary to provide facilities for after sales service in order to enable the owners of the vehicles to keep them in operation. These facilities are provided by Telco through all India net work of 68 dealers, 69 service centres of sub dealers and 13 zonal offices of Telco. Each dealer has to maintain premises for a show room and ' a service station and to keep special tools as welt as a comprehensive range of spare parts supplied by Telco. Further a dealer has also to employ technically qualified personnel some of whom have been trained by Telco in its Apprentice School at Jamshedpur. In addition Telco maintains its own staff of trained engineers and mobile vans in each of its zonal offices. The Registrar, Restrictive Trade Agreements made an application under Section 10(a) (iii) of this Act before the Commission for enquiry under Section 37 of the Act into restrictive trade practices alleged therein. The allega tions in the petition were these. Clauses (1) and (3) of the agreement between Telco and its dealers provide for territo rial restriction or allocation of area or market and clauses 6 and 13 provide for resale price maintenance and clause 14 provides for exclusive dealership. The Registrar submitted that Clauses 1, 3, 6 and 14 show that the company is in dulging in restrictive trade practices inter alia relating to allotment of territories/areas among its dealers and exclusive dealings and Telco is not willing to abandon the restrictive trade practices. It is significant to notice that no 'particulars of such alleged restrictive trade practices were set out in the application. Clauses 1, 3, 6 and 14 in so far as they are appropriate to the present appeal are as follows : "1. (a) The Dealer agrees to buy from the Regional Sales Office of the Company regularly from time to time on principal to principal basis all such new Tata diesel truck and bus chassis with or without cab and/or body (hereinafter referred to as "the said vehi cles", for resale within the territory de scribed hereunder (hereinafter called "the said territory") in accordence with the provisions of this. Agreement. (b) This Agreement shall not preclude the Company from entering into or continuing any dealership agreement or agreements with any other person or persons within the said terri tory for sale of the said vehicles and resale by 691 that person thereof in the said territory, this Agreement with the Dealer does not con stitute him a selling agent of the Company in the said territory, much less a sole selling agent. The Dealer shah not, either directly or indirectly and. either alone or in conjunction with others, promote the sale of or sell any of the said vehicles to any person or party outside the said territory, nor shall ' he sell the same to any person within the said terri tory if the said vehicles are intended to be used outside the said territory. (a) The Dealer shaH, at his own expense, maintain within the said territory such organ isation for the sale of the said vehicles as may, in the opinion of the Company which shall be binding, be deemed to be necessary to adequately cover the said territory and ensure the best possible results. Except with the written permission of the Company first obtained, the Dealer shall not during the pendency of this Agreement either directly or indirectly engage in or promote the sale of or use, handle or sell any truck or bus chassis, which is not manufactured or supplied by the Company. " Telco denied that any of the alleged clauses amounted to restrictive trade practices. Telco submitted as follows: First, though alleged clauses imposed restrictions on the dealers these did not amount to restrictive trade prac tices within the meaning of the Act. Second, Clauses 1 and 3 which deal with certain defined territories allocated to the dealers are intended to avoid unequal and unfair distribution of the vehicles among the customers. Third, any restriction as to maximunm price at which goods can be resold to the Telco 's dealers particularly when Clause 6 (1) (ii) specifies what is implicit therein, namely, that the dealer may sell below the maximum price fixed by Telco cannot possibly amount to restrictive trade practice. Fourth, Clause 14 which prohibits a distributor from dealing in products of other manufacturers would normally not be restrictive trade practice unless there are special circumstances which exist and indicate that the agreement has the effect of preventing, distorting or restricting competition. Telco finally submits that none of the restrictions imposed in Clauses 1,3,6, and 14 are unreasonable having regard to the balance between the circumstances set out in section 38 of the Act and any alleged detriment to the customers of Telco and or the competitors of Telco allegedly resulting or likely to result from the operation of these restrictions. 10 112SC1/77 692 The Commission held that the moment an agreement con tained a trade practice falling within any of the clauses in Section 33(1) of the Act, the trade practice must be regard ed as a restrictive trade practice. The Commission held that all the clauses alleged in the petition of the Regis trar amounted to restrictive trade practices. The Commis sion further said that in regard to Clauses 6 and 13 in the light of the assurance given by Telco that in its future price lists it would specifically state that the dealer is free to charge on the resale of Telco 's vehicles, prices lower than the maximum prices fixed by Telco, no order was required to be passed regarding the alleged practice of maintenance of minimum resale prices. The Commission further held that although the contractu al term that the dealers, could deal only in Telco 's vehi cles was a restrictive trade practice, it was not against public interest as it fell within subclauses (a), (b) and. (h) and the balancing clause of Section 38(1) of the Act. The Commisssion however held that the practice of allo cation of territories to Telco 's dealers was not justified. In the result the Commission declared that Clauses 1 and 3 of the Agreements in so far as they related to allocation of any territory or area or market to any of the dealers for the distribution of the vehicles constituted restrictive trade practice and, therefore, void and restrained Telco from continuing or repeating the practice. Before the Commission Telco contended that the applica tion of the Registrar was not in accordance with Regulation 55 of the Monopolies and Restrictive Trade Practices .Com mission Regulations, 1974, referred to as Regulations. Under the Regulations an application under section 10(a)(iii) of the Act must contain facts which, in the Registrar 's opinion, constitute a restrictive trade practice and, if it is in relation to any agreement, set out, such portions of the agreement as may be necessary to bring out the facts complained of. It has to be stated that in the present case Telco is right in contending that beyond making mere references to clauses of the agreement and bald allegations that the clauses constitute restrictive trade practice, no facts or features are set out in the petition to show or establish as to how the alleged clauses consti tute restrictive trade practice in the context of facts. The Solicitor General contended as follows. First, the definition of restrictive trade practice includes all trade practices permissible or forbidden provided they restrict competition or even tend to restrict competition. The instances set forth in the definition of restrictive trade practice emphasize the factors which go to establish a restrictive trade practice. Clauses (i) and (ii) in Section 2(0) of the Act afford graver instances of restrictive trade practice. Second, Section 33 of the Act requires an agreement falling within the Clauses thereof to be registered. In short an agreement which amounts to a restrictive trade practice will be first registered and then 693 an enquiry will be made under Chapter VI of the Act as to whether the restrictive trade practice is prejudicial to the public interest. Irrespective of the injurious or beneficial consequence of a trade practice which restricts or may restrict competition, it may fall within the defini tion. Injurious or beneficial result of the restriction is relevant only for purposes of Sections 37 and 38 of the Act. Section 33 of the Act states that any agreement relat ing to a restrictive trade practice falling within one or more of the categories mentioned therein shall be subject to registration in accordance with the provisions of Chapter V of the Act. Clauses (a) and (d) in subsection (1 ) of Section 33 are relevant in the present case. These are, inter alia, (a) any agreement which restricts or is likely to restrict by any method the persons or clauses of persons to whom goods are sold or from whom goods 'are bought and (d) any agreement to purchase or sell goods or to tender for the sale or purchase of goods only at prices or on terms or conditions agreed upon between the sellers or purchasers. The definition of restrictive trade practice is an exhaustive and not an inclusive one. The decision whether trade practice is restrictive or not has to be arrived at by applying the rule of reason and not on that doctrine that any restriction as to area or price will per se be a re strictive trade practice. Every trade agreement restrains or binds persons or places or prices. The question is whether the restraint is such as regulates and thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine this question three matters are to be considered. First, what facts are peculiar to the business to which the restraint is applied. Second, what was the condition before and after the re straint is imposed. Third ' what is the nature of the re straint and what is its actual and! probable effect. Section 33(1) of the Act deals with registration of certain types of restrictive trade practices which have the subject matter described in categories mentioned in clauses (a) to (1) of Section 33(1) of the Act. An agreement will be registrable, when it will have both the effect of re stricting competition within the meaning of Section 2(0) of the Act and also deal with the subject matter described in Clauses, (a) to (1) of sub section (1) of Section 33 of the Act. 'Clauses (a) to (1) aforesaid describe some species of agreement which require registration. if they .are within the genus of restrictive trade practice defined in Section 2(0) of the Act. A practice which is not restrictive under section 2 (0) of the Act cannot be restrictive trade prac tice only because 0f Clauses (a) to (1) of sub section (1) of Section 33 of the Act. Section 33 does not provide statutory illustrations to Section 2(0) of the Act but only enumerates some types of trade practices which. if they are restrictive within Section 2(0) of the Act require registra tion. Section 33 fixes categories of restrictive trade prac tices. Section 33 states that any agreement relating to a restrictive trade practice falling within one or more of the categories mentioned therein shall 694 be subject to registration. Therefore, before an agreement becomes registrable it has to be a restrictive trade prac tice in accordance with the definition of Section 2(0) of the Act. At the threshold it has to be found out whether an agreement constitutes a restrictive trade practice. In Section 33 it is stated, for example, that any agreement which restricts, or is likely to restrict, by any method the persons or clauses of persons to whom goods are sold or from whom goods are bought is one of the categories of a regis trable restrictive trade practice. In the present case it has to be found out first whether the agreement of exclusive dealership between Telco and the dealers containing the restriction on the dealer not to sell the commercial vehi cles of Telco in other territories falls within the vice: of a restrictive trade practice. Under the Act, action can be taken against a restric tive. trade practice. Therefore, when the authorities under the Act want to challenge any agreement or any prac tice as a restrictive trade, practice, it has t0 be estab lished that it is a restrictive trade practice within the definition of the Act. If it is found to. be a restrictive trade practice, the next stage is to register agreements relating to a restrictive trade practice. Section 33 states that any agreement relating to a restrictive trade practice failing within one or more of the categories mentioned. therein shall be subject to registration. The authorities have to examine the agreement and find out whether it fails within the vice of a restrictive trade practice before the authorities can ask that the agreement be registered under Chapter V of the Act. It is only after an agreement has been registered that there is an enquiry under Chapter VI of the Act. This enquiry under Section 37 0f the Act is to find out whether a restrictive trade practice is prejudicial to the public interest. Section 38 of the Act lays down the circumstances under which a restrictive trade practice is presumed to be in the public interest and not to be deemed to be prejudi cial to the public interest. In the present case the question is whether the dealer ship agreement between Telco and the dealers whereby the dealers are not permitted to sell the commercial vehicles outside their zones amounts to a restrictive trade practice. The questions posed are: Does it prevent distort or restrict competition in any manner; Does it affect the flow of sup plies in the market relating to goods or service in such manner as to impose on the consumers unjustified costs or restrictions. The evidence about the features of the trade is this. The medium, and heavy vehicles in the trade are restricted to those licensed by Government for manufacture in the country. The capital investment required for a new factory is of a very high order, namely, almost Rs. 100 crores. At present the only manufacturers of commercial vehicles are Telco which produces Tats Vehicles, Hindustan Motors Ltd., which produces Hindustan Vehicles, Premier Automobiles, which produces Premier Vehicles and Ashok Leyland Ltd., which produces Leyland vehicles. The supply of commercial vehicles is far below 695 the requirement of the industry. The gap between the demand and the supply is increasing with the passage of time as the trade is developing at a faster pace than the growth in the number of vehicles produced. The Government of India esti mated during the year 1974 75 the production of 56,300 ' medium and heavy vehicles. The production, however, is now likely to be of the order of 35,000. The Fifth Five Year Plan for the production is said to be increased to 80,1.0,0. It is said that against this target the installation capaci ty today is 46,300 vehicles. Even if the expansion pro gramme is fully implemented the installed capacity by the end of the Fifth Five Year Plan will be only 66,975 vehicles per year. The scarcity which is a feature of this trade is accen tuated in the case of Telco 's vehicles because they are in great demand all over the country and even in the export market. ]n 1974. it is said that Telco exported vehicles amounting to 86% of the total export from the country. The export earnings are said to be Rs. 7.29 crores for 1101 vehicles. At the time of arguments it was suggested that Telco exports now vehicles worth Rs. 10 crores. The clauses relating to territorial restriction in the present case do not constitute restrictive trade practice for the following reasons: The domestic market in India is spread over this vast sub continent with very divers conditions of roads, popula tion and demand. It is essential for the community, the consumer and the manufacturer to have an equitable geograph ical distribution of his vehicles. Vehicles may be required for operation in any part of India and public interest requires that the channels of communication should be open throughout the country. These vehicles should ply even in the remotest areas like Ladakh, Nagaland, etc. A user of Telco vehicles expects to get all over the country the service of a high standard enjoined by Telco upon its dealers. Telco on its part also needs a country wide network of dealers so that sales take place and the dealers can maintain the service stations, spare part stocks and workshops with the requisite equipment, machinery and trained personnel all over the country. This also enables the consumers to rely on Telco 's vehicles since they in turn can expect services, repairs and spare parts all over India. Telco has thus to ensure an all India network of dealers, including those which will serve remote areas. It is evidence that commercial vehicles is a highly complex mechanical product. When Telco sells a vehicle it also. has a responsibility that the vehicle is kept running and maintained in the optimum condition Telco must preserve its reputation and ensure that the vehicles are only sold by dealers who have the requisite facilities and organisation to give the proper after sales service. Unlike most consum er products, a commercial vehicle involves a continuous relationship between a dealer and a consumer. The consumer looks to the dealer, for keeping the vehicle running and for all attendent facilities like 696 service stations, workshops and spare parts. Reliability and repair of a vehicle, which represents a substantial invest ment for the consumer, is vital also to the public as a whole and there must be constantly available throughout the country a network of dealers with adequate repair and main tenance service. Even before the delivery of a commercial vehicle to the consumer, there is a meticulous pre delivery inspection and service by the dealer. After delivery, Telco gives three free services. Telco also gives a war ranty for a period of six months from the date of registra tion or 12 months from the date of delivery of vehicle from the factory or for a period in which the vehicle has run for a distance of 32,0.00 kilometers, whichever expires earlier. There are outstanding distinctions between a car dealer and a commercial vehicle dealer. The peculiar characteris tics of dealers ' in commercial vehicles are these:The pur chase of a car in India rarely represents the substantial or the bulk of the investment of a purchaser. The purchase of a commercial vehicle, however, represents the substantial and often the only capital investment of the owner. A chassis manufactured by Telco is sold to the customer at almost a lakh of rupees and the body costs him about Rs. 15,000/ for a truck and about Rs. 40,000/ for a bus. Over 80% of per sons owning trucks are individual owners having not more than two trucks and mostly only one truck. The vehicle is normally constantly on the road and is put to the maximum possible use with often more than one driver plying it. Thus a vehicle plies on an average over a lakh of kilometers per year. The heavy investment also makes it necessary that a vehicle should be constantly on the move. The owner can ill afford to waste time and requires easily accessible and prompt Service Stations, Workshops and stocks of spares. The purchaser regards the .truck as a life time investment. The purchaser looks to the dealer for prompt after sales service and repairs. Since 80% of truck operators are individual operators and often have scant mechanical knowl edge, they have to depend upon the dealer for keeping the truck moving with the necessary trained personnel, work shop, service stations and stocks of spares. As a result of these characteristics, the relationship between a dealer and the truck purchaser is much more constant than with the car purchaser. The standard of service he expects is more vigorous and prompt. Vehicles of Telco are in keen demand, both because of their quality as also because of the assurance of efficient after sales service, by the network of Telco dealers. These requirements cannot be met unless there is a network of dealers with specific territories. It is essential from the angle of the consumer, Telco and the public that there should be widest and equitable geographical distribution of the vehicles of Telco. Public interest itself requires that the vehicles should not be concentrated in metro centres or urban areas where there is a high demand for them, to the determent of the remote, areas or sami urban areas. The consumer also plies trucks all over the country and expects that where ever he goes, whether to Kerala or Assam, there should be a dealer, a service station, a workshop, trained personnel and spare parts which can attend to Telco trucks. 697 Urban area centres like Bombay, Delhi and Calcutta, have a very large demand as compared to the rest of the country. But at the same time Telco. has to ensure sales in places like Kashmir, Nagaland. and Tripura, where the demand is much less. In fact, in some of these areas, there are no alternative means of communication and transport like rail ways and the life of the community is largely dependent upon road transport. Even where the demand is less, there has to be a dealer with the necessary facilities and organisation for after sales service Telco appoints dealers. for different territories in India. The geographical network is natural to the industry itself. The purchaser will purchase and get his vehicle serviced in his own territory. The purchaser looks to a dealer in his own territory with whom he has relationship and who will give him credit facilities, who will render after sales service and from whom he can purchase spares, who will handle warranty claims and with 'whOm he can have constant relationship for purchases in future. Unless a 'dealer is assured of customers in his own area and zones; he will not have the necessary incentive to maintain the optimum level of service stations, workshops and spare part stocks, nor can the dealer plan his resources including technical personnel, capital equipment and financial resources for his future commitment. Telco regards after sales service of crucial importance to serve its consumers. It is natural and cheaper for a purchaser to buy and service his vehicles in his own terri tory. After sales service of Telco is fairly elaborate and complex and it is because of the standard of this service that Telco has been 'able to maintain the reputation. Each, dealer is required to provide one premises for show room, service station, workshop, spare parts, shop, canteen and also (a) rest house for drivers; (b) equipment and machinery for maintenance and repairs; (c) set or sets of special tools specially designed for carrying out repairs to Telco 's vehicle; (d) Technical personnel including person nel trained by the appellant at its factory in Jamshedpur and. (e) adequate stock of spare parts to meet the potential demand in the territory. Telco has set up 13 zonal offices throughout India at New Delhi, Kanpur, Ahmedabad, Indore, Bombay, Bangalore, Madras, Vijyawada, Bhubaneshwar, Jamshedpur, Gauhati, Jul lunder and Jaipur. If the territorial restriction is re moved, there will be a tendency for persons to book orders in areas thus starving the consumers of that area of their equitable share and disrupting the flow of vehicles in both areas. This will create pockets of artificial scarcity and dislocate the network. If the dealer is not assured of a steady demand in his territory, he may have no incentive or may not find it economic to organise proper after sales service. This would also result in dealers diverting their supplies to metro centres starving the semi urban and rural areas. Network of dealers and service stations has a direct relation with the territorial assurances given to each dealer. It is as a result of such assurances that a dealer is able to maintain the whole chain of dealership network, service stations, stocks of spare parts, trained per 698 sonnel, equipment, special tool kits and given the optimum service as laid down by Telco to its vehicles. Some of the dealers have even maintained mobile service vans. The dealer has to invest a large amount in providing all these facilities. The dealer is familiar with his territory and in view of the potential sales, takes steps to improve his organisation. If these clauses are omitted, the dealer would not make investment and would neglect the service facilities to the detriment of the consumer. In the light of scarcity in the supply of vehicle 's and the need to distribute Vehicles to all the dealers in India, Telco makes equitable distribution of its products by taking into account these factors: (a) Population of commercial vehicles in the dealer 's territory; (b) Orders from customers pending with the dealer; (c) Preference for Tata diesel vehicles as against other makes in the territory of the dealer (d) Past sales performance of the dealer; (e) Effective after sales service provided by the dealers; (f) Special requirements of the territory during the erection of Government Projects such as steel plants, construction of dams etc. ; (g) Emergency requirements of the territory on account of drought, flood relief etc; (h) Government recom mendations for meeting certain specific requirements; (i) Dependence of the particular territory on road transport and (j) Requirements of State Government and nationalised trans port undertakings which are procured through dealers. The demand for the vehicles has always exceeded the supply making it imperative for Telco to ensure equitable distribution of the vehicles to the various parts of the country. There are many commercial agreements under which the territories are divided among distributors and 'such agreements do not constitute restrictive trade practice, where the whole object is to ensure fair, efficient and even distribution particularly of a commodity which is in short supply and in great demand. If these were not done and it was permitted for one dealer to encroach on the territory of another this would affect the flow of vehicles into the market leaving some territories unsupplied. In order to prevent this undesirable position that dealers were appointed for different territories and care was taken consistently to see that all parts of the country are treat ed equally and fairly. The exclusive dealings do not impede competition but promote it. Such dealings lead to specialisation and im provement in after sales service. The exclusive dealership agreements do not restrict distribution in any area or prevent competition. The customer has the choice of buying any make he likes. The advantage of exclusive dealership is that a dealer specialises in his own type of vehicle with all the attending advantages of trained personnel, special service stations, workshops and spare parts. Each set of special tools costs approximately Rs. 55,000. The set is suitable for servicing one vehicle at a time. Some dealers like the United Motors Pvt. Ltd., Bombay have four sets at Colaba, Wadi Bunder, Jogeshwari and Chembur. The invest ment of United Motors is approximately Rs. 24 lakhs. It is estimated that one service station with special tools of Telco and workshop equipment will cost as much as Rupees five lakhs. 699 It is by specialising in each make of vehicle and pro viding the best possible service that the competition between the various makes is enhanced. It is practically not possible for the same dealer to have parallel lines of service stations, workshops, spare parts, trained personnel for different makes. It is also not practical for the dealer to maintain different and competitive standards laid down by different companies which may differ from manufac turer to manufacturer. If a dealer has more than one fran chise, the competition between the various makes will be reduced. It will be difficult for the manufacturer to make the dealer responsible for his make and concentrate on it. There may be conflicts between his responsibility for after sales service. Telco commenced appointing dealers in 1954. At that time 25 or 26 dealer 's were appointed. The number increased to 68. There are also sub dealers. Each dealer is required to make a security deposit varying from Rs. 1 lakh to Rs. 6 lakhs. Telco pays interest ,on deposits and security depos its. A dealer has to invest a minimum of Rs. 5 lakhs in his establishment. The range of investment would vary from Rs. 5 lakhs to Rs. 50 lakhs depending upon the largeness of the place. Dealer Apprentices are trained by Telco in its factory at Jamshedpur. Telco also trains Trade Apprentices. The dealer also pays the apprentice stipend. If territorial restrictions are removed, there will be unequal distribu tion of vehicles in various territories. While there 'will be shortage in some territories, there will be larger sup plies in others. Vehicles are supplied by Telco according to territorial requirements. Various factors are taken into consideration in assessing the requirements of territo ries. By making it 's dealers exclusive to Telco, there cannot be said to be any prevention, distortion or restriction of competition in the territory in which a dealer operates, either between manufacturers of the same type of vehicles or between dealers in these vehicle. Any manufacturer of vehicles such as those of Telco may manufacture and sell its vehicles in a territory in which Telco 's dealers operate. Any other manufacturer of vehicles 'similar to those of Talco is also free to appoint dealers of its choice in the same territory covered by Telco 's dealers. The channels for outlet for vehicles have not been blocked by the fact that the dealers appointed by Telco are exclusive to Telco nor it can be said that Telco has by its exclusive arrange ment with its dealers affected the flow of supplies of vehicles into the market. If Telco Sold themselves in each territory it could not be said that Telco was pursuing any restrictive trade practice. Would the position change if Telco asked their dealers not to sell Telco bus chassis outside the dealer 's territory? Just as Telco could not complete with itself similarly dealers would not compete with one another. The competition would be between Telco products and the products of the other manufacturers Premier, Hindustan and Leyland. 'Restrictive trade practice is based on reason embodied in Section 2(0) of the Act. When trucks are in short supply and dealers are 700 restrained from selling at above the maximum price they cannot sell below the maximum price and compete with one another. Dealers of the same manufacturer do not compete with one another in every case irrespective of the market conditions or the character of the product sold. Competition between dealers appointed by the same manu facturer can be reduced when there is a practical possibili ty. of such competition as for example, When the goods are in abundance. When there is an acute scarcity of goods and there is no possibility of dealers selling the product at less than the permissible price, it would be irrational to talk of territorial limits restricting competition. Restric tion on competition postulates the existence or the possi bility of competition. On the facts proved in the present case the only competition possible is between the ,dealers and the manufacturer 'section The territorial restriction pro motes competition between the four manufacturers in every part of India while it has no effect of any theoretical competition between the dealers because such competition between dealers does not and cannot exist. The question of competition cannot be considered in vacuo or in a doctrinaire spirit. The concept of competi tion is to be understood in a commercial sense. Territorial restriction will promote competition whereas the removal of territorial restriction would reduce competition. As a result of territorial restriction there is in each part of India open competition among the four manufacturers. If the territorial restriction is removed there will be pockets without any competition in certain parts of India. If the dealer in Kashmir is allowed to sell anywhere in India wealthy cities like Delhi, Bombay, Calcutta will buy up trucks allocated for Kashmir and the buyer in Kashmir will not be able to get the trucks. The other three manufactur ers whose trucks are not in equal demand will have Kashmir as an open field to them without competition by Telco. Therefore, competition will be reduced in Kashmir by the successful competitor being put out of the field. The real reason for exclusive dealership is that instead of diminishing competition between four manufacturers each dealer tries to do his best for his own trucks, bus and thus reduce keen competition among the four manufacturers. If one dealer deals in trucks of one or more manufacturers one cannot be expected to compete with itself it is, therefore, clear that exclusive dealership promotes instead of re tarding competition. Clauses 1 and 3 are in the interest of the consumer and ensure equal distribution as far as possible of the goods at a fair price. These provisions do not tend to obstruct the flow of capital or resources into the stream of production or to bring about manipulation of prices or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions. 701 In the present case the restriction imposed by Telco on dealers not to sell bus and chassis outside their territo ries does not restrict competition for the foregoing rea sons. The other term of exclusive dealership in clauses 6 and 14 of the agreement between Telco and the dealers that the dealer will not sell commercial vehicles of other manufac turers, does not amount to a restriction in competition because other manufacturers can appoint other persons to deal in their commercial vehicles. It is also in public interest to see that vehicles of other manufacturers are sold in the same territory by other dealers. Therefore, there will be competition between the manufacturers of different commercial vehicles and as far as exclusive dealership of Telco commercial vehicles is concerned, it will be in public interest ' and not be a restriction in competition. The two terms of restriction on dealers, namely, 'sale being confined within the territory and the other being confined to dealing in only Telco vehicles are not prejudi cial to public interest. The Commission found that exclu sive nature of dealership of being confined to Telco vehi cles is not prejudicial to public interest. The territorial restriction is also. in public interest and the Commission was in error in thinking that it is not so. For the foregoing reasons the appeal is accepted. The decision of the Commission is set aside. We hold that the agreement in the present case is not within the vice of restrictive trade practice and is, therefore, not registra ble. We make it clear that in a given case sale of commodi ties being confined to a territory may amount to a restric tive trade practice. In the special features and facts and circumstances of the exclusive dealership agreement between Telco and the dealers the territorial restriction imposed on the sellers not to sell vehicles outside their territories is not a restrictive trade practice. Parties will pay and bear their own costs. P.B.R. Appeal allowed.

Section 2(o) of the Restrictive Trade Practices Act, 1969 defines "restrictive trade practice" to be a trade practice which tends to bring about manipulation of prices or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or re strictions. Section 33 provides that any agreement relating to a restrictive trade practice falling within one or more of the categories (a) to (I) specified in sub s.(1) thereof shall be registered. Section 37 enacts that the Monopo lies and Restrictive Trade Practices Commission may inquire into any restrictive trade practice, whether the agreement relating thereto had been registered under section 35 or not. Under section 38 when the Commission finds that such re strictions are necessary or justified, in the circumstances mentioned in the section, it may permit such restrictions. The appellant is a manufacturer of heavy and medium commercial vehicles. The appellant enters into an agreement with dealers in regard to sale of its vehicles. Clause 1 (a) of the agreement provides that a dealer shall buy from the Regional Sales Office of the company a new Tata diesel truck for resale within the territory described in accord ance with the provisions of the agreement. Clause (b) provides that the agreement shall not preclude the company from entering into any dealership agreement with any other person or persons within the said territory. Clause 3 prohibits the dealer from selling the vehicles either di rectly or indirectly to any person outside the territory. Clause 6(a) provides that the dealer shall maintain an organisation for the sale of the vehicles in accordance with the directions of the appellant. Clause 14 prohibits the dealer from handling or selling vehicles manufactured or supplied by any other company. In a petition under section 10(a)(iii) of the Act, the Regis trar of the Restrictive Trade Practices alleged that cls. (1) and (3) of the agreement between the appellant and its dealers provided for territorial restrictions or allocation of areas or market, cl. (6) provided for resale price main tenance, cl. 14 provided for exclusive dealership and all these clauses of the agreement showed that the appellant was indulging in restrictive ' trade practices relating to allo cation of territories or areas among its dealers and that the appellant was not willing to abandon the restrictive trade practices. The Commission held inter alia. that cls. (1) and (3) of the agreement. constituted restrictive trade practices and, therefore, void. It was contended on behalf of the respondent that irrespec tive of the injurious or beneficial consequences of a trade practice which may restrict competition, an agreement may fall within the definition of that term in section 2(0) of the Act. An injurious or beneficial result Of the restriction is relevant only for purposes of section 37 and section 38 and not for the purposes of section 33. Allowing the appeal, HELD: The agreement in the present case was not within the vice of restrictive trade practice and was not registra ble. 686 (1) An agreement will be registrable when it will have both the effect of restricting competition within the meaning of section 2(0) and also deal with the subject matter described in sections 33(1)(a) to (I). A practice which is not restrictive under section 2(0) of the Act cannot be a restrictive 'trade practice only because of cls. (a) to (1) of section 33(1). Section 33 does not provide statutory illustrations to section 2(0) of the Act but only enumerates some types of trade practices which, if they are restrictive within section 2(0), require registration. [693 F G] (2) The definition of restrictive trade practice is an exhaustive and not an inclusive one. The decision whether a trade practice is restrictive or not has to be arrived at by applying the rule of reason and not on doctrine that any restriction as to area or price will per se be a restrictive trade practice. The question in each case is whether the restraint is such as regulates and thereby promotes competi tion or whether it is such may suppress or even destroy competition. To determine this question three matters are to be considered, namely, (1) what facts are peculiar to the business to which the restraint is applied, (2) what was the condition before and after the restraint was imposed, and (3) what was the nature of the restraint and what was its actual and probable effect. [693 D F] (3) When the authorities under the Act want to challenge any agreement or any practice as a restrictive trade prac tice, it has to be established that it is a restrictive trade practice within the definition of section 2(0). If it is found that it is a restrictive trade practice, it has to be registered under s 33. It is only after an agreement had been registered that there is an enquiry under Chapter VI of the Act. This enquiry under section 37 is to find out whether a restrictive trade 'practice is prejudicial to the public interest. [692 H, 693 A] (4) The two terms of restriction on dealers, namely, one confining sales within the territory and .t_he other confin ing dealers to dealing in only the appellant 's vehicles are not prejudicial to public interest. The territorial re striction is also in public interest and the Commission was in error in thinking that it was not so. [701 C D] In the instant case, the supply of commercial vehicles is far below the demand and the gap between supply and demand is growing. The vehicles of the appellant were in great demand not only in the country but outside the country as well. Clauses relating to territorial restric tion do not constitute 'restrictive trade practice because the domestic market is spread all over the country, to meet the needs of the users of vehicles the appellant has a countrywide network of dealers who maintain service sta tions, workshops, requisite equipment, machinery and trained personnel. The appellant ensures that the vehicles are only sold by dealers who have the requisite facilities and organisation to give after sales service. The appellant gives a warranty in respect of the vehicles. A geographical network is natural to the industry which the appellant has set up. The appellant has zonal offices throughout the country. If the territorial restriction is removed, there will be a tendency for person to book orders in all areas thus starving the consumers of a particular area of their equitable share and disrupting the flow of vehicles in both areas. If the dealer is not assumed of a steady demand in his territory he may have no incentive or may not find it economic to organise proper after sales service. Some of the dealers have even maintained mobile service vans. [694 H, 695 A] The exclusive dealings of the appellant do not impede competition but promote it. Such dealings lead to special isation and improvement in after salesservice. The exclu sive dealership agreements do not restrict distribution in any area or prevent competition. By making its dealers exclusive, it cannot be said that there is prevention, distortion or restriction of competition in the territory in which the dealer operates. Any manufacturer of vehicles similar to those of the appellant is also free to appoint dealers of its choice in the Same territory covered by the appellant 's dealers. The channels for outlet for vehicles have not been blocked. [699 F G] 687 When there is acute scarcity of the goods and there is no possibility of dealers selling the product at less than the permissible price, it would be irrational to talk of territorial limits restricting competition. Territorial restriction promotes competition between the different manufacturers in every part of India. [700 B C] Clauses (1) and (3) are in the interest of the consumer and ensure an equal distribution as far as possible of the goods at a fair price. Clauses (6) and (14) do not amount to a restriction in competition because other manufacturers could appoint other persons to deal in their commercial vehicles. It is also in public interest to see that vehi cles of other manufacturers are sold in the same territory by other dealers. [701 B C]

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Appeal No. 1827 of 1970. (From the Judgment and Decree dated 28 4 1970 of the Madhya Pradesh High Court (Gwalior Bench) in First Appeal No. 133 of 1968). S.N. Andley and Uma Dutta, for the appellants Ram Panjwani and H.S. Harihar, for the respondents. The Judgment of the Court was delivered by KHANNA, J. This is an appeal on certificate by Prithvi Raj Taneja (now deceased and represented by his legal repre sentatives) against the judgment of the Madhya Pradesh High Court whereby the High Court partially accepted the appeal filed by the appellant regarding the quantum of compensa tion for the acquisition of land. A plot of land measuring 27 bighas and 17 biswas situated in Ashok Nagar, district Guna, belonging to the appellant was acquired for the construction o,f a police station and residential quarters for policemen. A bigha, it is stated, is equivalent to 2,500 square yards. The land sought to be acquired measured 68,658 square yards. Notification under section 4 of the Land Acquisition Act for the acquisition of the land was issued on April 7, 1961. The Land Acquisition Officer as per award dated June 13, 1961 awarded compensation for the land at the rate of Rs. 100 per bigha. In addition to that, he awarded a sum of Rs. 1,175 for large trees and Rs. 1,380 for small trees standing on the land. The appellant was also awarded Rs. 1,000 as compensation for a well which had been sunk in the. land, and Rs. 800 for a house standing on the land In all, the appellant was awarded a sum of Rs. 7,616. including solatium at the rate. of fifteen per cent by the Land Acqui sition Officer. The appellant wanted compensation for the land at the rate of Rs. 10 per square yard. He accordingly had the matter referred to the District Judge. Learned Additional District Judge determined the market value of the land in question to be Rs. 900 per bigha. Regarding the well, the Additional District Judge awarded compensation of Rs. 3,000 as against the amount of Rs. 1,000 which had been awarded by the Land Acquisition Officer. In other respects, the award of the Land Acquisition Officer was upheld. Computing solatium at the rate of 10 per cent, the. total amount awarded by District Judge to the appellant was Rs. 32,285 besides interest at the rate of six per cent per annum. The appellant not being satisfied with the award of the Additional District Judge took the matter in appeal to the High Court. The High Court awarded compensation to the appellant at the rate of Re. 1. per square yard for the land in question. The High Court also awarded Rs. 2,500 for the loss of earnings to the appellant. The rate of solatium for compulsory acquisition was increased by the High Court from ten per cent to, fifteen per cent. In all, the appel lant was held entitled to a compensation of Rs. 88,381 besides interest at the rate of six per cent per annum. The appellant thereupon obtained a certificate of fit ness for appeal to this Court under article 133(1)(a) of the Constitution, as it stood at that time. In appeal before us, Mr. Andley on behalf of the appel lant has argued that more than half of the land in dispute is within. the municipal limits of Ashok Nagar Municipality, while the remaining land was also likely to be included within those limits shortly. It is further stated that the land in question abutts Ashok Nagar Isagarh Road and is situated near the tehsil building and the. railway station. Learned counsel has also referred to the fact that small plots of land adjoining the land in dispute were sold at rates of Rs. 9 and Rs. 8 per square yard during the years 1958 to 1960. In this respect, we find that the High Court has considered most of the above circumstances and has come to the conclusion that Re. 1 per square yard represents fair market value of the land in dispute. The High Court has also referred to the special circumstances under which the small plots were sold and their price was fixed. We agree with the High Court that the price 635 paid for small plots of land cannot provide a safe criterion for determining the amount of compensation for a vast area of land. We may in this context refer to a recent judgment in the case of Smt. Padma Uppal etc. vs State of Punjab & Ors. C) wherein this Court observed that it is well settled that in determining compensation the value fetched for small plots of land cannot be applied to the lands covering a very large area and that the large area of land cannot possibly fetch a price at the same rate at which small plots are sold. Section 23 of the Land Acquisition Act provides that in mining the amount of compensation to, be awarded for the land acquired under the Act, the Court shall take into. account inter alia the market value of the land at the date of the publication of the notification under section 4 of the Act. The market value means the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when laid out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired. In considering market value the disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. There is an element of guess work inherent in most cases involving determination of the market value of the acquired land. But this in the very nature of things cannot be helped. The essential thing is to keep in view the relevant factors prescribed by the Act. If the judgment of the High Court reveals that it has taken into consideration the relevant factors, the assessment of the market value of the acquired land should not be dis turbed (see Thakur Kanta Prasad Singh (dead) by L. rs. vs State of Bihar(2). After having been taken through the material on the record, we find no infirmity in the judgment of the High Court as might induce us to disturb its find ing. The appeal consequently fails and is dismissed but in the circumstances without costs. Appeal dismissed.

The appellant 's land was acquired and compensation was awarded to him by the Land Acquisition Officer. Demanding a higher amount, the appellant had the matter referred to the District Judge who increased the award, but still discon tented, the appellant went in appeal. The High Court also increased the compensation but could not satisfy the appel lant who thereupon obtained leave to appeal to the Supreme Court, contending that small plots of land adjoining his large area were sold at much higher rates. Dismissing the appeal, the Court, HELD: 1. The price ' paid for small plots of laud cannot provide a safe criterion for determining the amount of compensation for a vast area of land. The large area of land cannot possibly fetch a price at the same rate at which small plots are sold. [635 A B] Smt. Padma Uppal etc. vs State of Punjab & Ors. ; , applied. The essential thing is to keen in view the relevant factors prescribed by the Act. If the judgment of the High Court reveals that it has taken into consideration the relevant factors, the assessment of the market value of the acquired land should not be disturbed. [635 D E] Thakur Kanta Prasad Singh (dead) by L. Rs vs State of Bihar ; , applied.

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Appeal No. 183 of 1952. Appeal by special leave from the Judgment and Decree dated the 16th day of February 1950 of the Madras High Court in Second Appeal No. 1826 of 1945 from Original Decree dated the 16th March, 1945, of the Court of District Judge, East Godavari at Rajahmundry in A.S. No. 32 of 1943 arising out of the Decree dated the 31st October, 1942, of the Court of Sub Judge, Rajahmundry in Suit No. 17 of 1940 and O.S. No. 39 of 1939. B. Somayya (K. R. Chaudhury and Naunit Lal, with him) for the appellant. K. section Krishnaswamy Aiyangar, (K. R. Krishnaswamy, with him) for respondents Nos. I to 4. 1955. November 4. The Judgment of the Court was delivered by VENKATARAMA AYYAR J. This is an appeal by special leave against the judgment of the Madras High Court in a second appeal which reversed the concurrent judgments of the courts below, and granted a decree 941 in favour of the respondents for partition and possession of 126 acres 33 cents out of a parcel of land of the extent of 503 acres 18 cents in the village of Kalavacherla and of 10 acres 12 cents out of a parcel of land of the extent of 40 acres 47 cents in the village of Nandarada, with mesne profits, past and future. All these lands measuring 543 acres 65 cents were purchased by five co sharers on 5 6 1888 under two sale deeds, Exhibits P and P 1. One of these shares of the extent of about 218 acres was, at the material dates, held in common by two brothers, Rangaraju and Kumara, the former owning 136 acres 45 cents and the latter 81 acres 45 cents. On 19 8 1908 Kumara executed a simple mortgage, Exhibit Q, over 81 acres 45 cents belonging to him for Rs. 1,000 in favour of Nallapparaju, who with his undivided brother, Achutaramaraju, held a share in the two parcels of land aforesaid in Kalavacherla and Nandarada. On 19 7 1909 both Rangaraju and Kumara executed a mortgage, Exhibit A, for Rs. 2,000 over all the 218 acres belonging to them in favour of Achutaramaraju. On 4 6 1910 Kumara again created a mortgage over 81 acres 45 cents belonging to him, Exhibit Q 1 for Rs. 2,500 in favour of Achutaramaraju. On 14 12 1911 Achutaramaraju executed a mortgage for Rs. 14,000 in favour of one Merla Agastayya, Exhibit C, over the properties which he held in full ownership as co sharer, and also the mortgage right which he held over the properties belonging to Rangaraju and Kumara under the three mortgage deeds, Exhibits Q, A and Q 1. On 29 8 1920 Kumara sold the 81 acres 45 cents belonging to him and comprised in the mortgages aforesaid to Achutaramaraju for Rs. 11,000 as per Exhibit G, and thereby the two deeds, Exhibits Q and Q 1 became completely discharged and Exhibit A to the extent of the half share of Kumara. The position then was that Achutaramaraju became the owner of 81 acres 45 cents out of the properties mortgaged under Exhibit A, and continued to be a simple mortgagee as regards the rest of them to the extent of half the amount due therein. By virtue of section 70 of the Transfer of 942 Property Act, the sale under Exhibit G would enure for the benefit of the mortgagee, Merla Agastayya, being an accession to the interest of his mortgagor. On 20 1 1924 the representatives of Merla Agastayya assigned their interests in the mortgage, Exhibit C, to the present appellant, who instituted O.S. No. 25 of 1927 on the file of the court of the Subordinate Judge of Kakinada to recover the amount due thereon by sale of the hypotheca. Achutaramaraju, the mortgagor, and the members of his family were defendants I to 4 in that suit. Kumara was impleaded as the 14th defendant and Rangaraju and his son as defendants 15 and 16. In the plaint, it was alleged that the properties comprised in the mortgage deed, Exhibit C, consisted of the properties belonging to the mortgagors in full ownership as co sharers and also of the mortgage right under Exhibits Q, A and Q 1. Then there was an allegation that defendants I to 4 had themselves purchased the mortgaged properties "towards discharge of the first defendant 's mortgage debts". As a statement of fact, this was not accurate, because the purchase by Achutaramaraju was only of 81 acres 45 cents belonging to Kumara and the re maining properties continued to be held by Rangaraju, and Achutaramaraju was only a mortgagee thereof under Exhibit A. There were the further allegations that defendants 14 to 16 were impleaded as parties because they were in possession of the properties, and that they were the predecessors in title in respect of the properties which were mortgaged under Exhibits Q, A and Q 1. Then there was the general prayer for the sale of the properties. The mortgagors, defendants 1 to 4, entered into a compromise with the plaintiff, while defendants 14 to 16 remained expert. On 31 1 1931 the suit was decreed in terms of the compromise as against defendants I to 4 and ex parte as against defendants 14 to 16, and a final decree was passed on 6 11 1932. On 23 8 1934 the decree holder filed E.P. No. 99 of 1934 praying for the sale of the hypotheca including the properties mentioned in Exhibit A. Defendants 15 and 16 then intervened, and filed an objection to 943 their being sold on the ground that the mortgage had been discharged in 1923, and that the exparte decree against them had been obtained fraudulently. This application was rejected by the Subordinate Judge on 26 8 1935, and an appeal against this order to the High Court, Madras was also dismissed on 1 9 1938. Meanwhile, 163 acres 18 cents out of the properties mortgaged under Exhibit A, of which 81 acres 86 1/2 cents belonged to Rangaraju, were brought to sale on the 14th and 15th April 1936, and purchased by the decree holder himself. The sale was confirmed on 26 6 1936, and possession taken on 15 12 1936. But before possession was taken, on 14 12 1936 Rangaraju and his sons instituted O.S. No. 268 of 1936 in the District Munsif 's court, Rajahmundry for a declaration that the decree in O.S. No. 25 of 1927 had been obtained fraudulently, and that the decree holder was not entitled to execute the decree as against their pro perties. An objection was taken to the jurisdiction of the court of the District Munsif to try this suit, and eventually, the plaint was returned to be presented to the proper court. Thereupon, they instituted on 7 8 1939 the present suit, O.S. No. 39 of 1939 on the file of the District Court, East Godavari for a declaration that the decree in 0. section No. 25 of 1927 was obtained by suppressing service of summons, and was therefore void and could not affect their title to 136 acres 45 cents which were mortgaged under Exhibit A. The suit was transferred to the court of the Subordinate Judge of Rajahmundry, and was numbered as O.S. No. 79 of 1946. In his written statement, the appellant denied that the decree in O.S. No. 25 of 1927 was obtained fraudulently, and contended that the present suit was barred by limitation. He also pleaded that as he had purchased the properties in execution of the decree and obtained possession thereof, the suit which was one for a bare declaration that the decree was void and inexecutable was not maintainable. It must be mentioned that while 81 acres 86 1/3 cents of land belonging to Rangaraju and his sons had been sold on the 14th and 15th April 1936, their remaining properties of the 944 extent of 54 acres 58 1/2 cents were sold after the insti tution of O.S. No. 268 of 1936 in the court of the District Munsif, Rajahmundry. In view of the objections aforesaid, the plaintiffs amended the plaint by adding a prayer that 136 acres 45 cents out of the total of 543 acres 65 cents in schedule A and belonging to them might be partitioned and put in their separate possession. The Subordinate Judge of Rajahmundry dismissed the suit on the ground that no fraud had been established, and that the suit was barred by limitation in so far as it sought to set aside the decree on the ground of fraud. The plaintiffs appealed against this judgment to the District Court of East Godavari, which by its judgment dated 16th March 1945 affirmed the decree of the Subordinate Judge. The plaintiffs then preferred Second Appeal No. 1826 in the High Court, Madras. There, for the first time the contention was pressed that the decree in O.S. No. 25 of 1927 on its true construction directed a sale only of the mortgage rights which Achutaramaraju had over the A schedule properties, and that the sale of the properties themselves in execution of that decree was in excess of what the decree bad directed., and was therefore void, and that the plaintiffs were accordingly entitled to recover possession of those properties ignoring the sale. Satyanarayana Rao, J. who heard the appeal, construed the plaint as sufficiently raising this question and issue (2) (b) as covering this contention, and accordingly directed the District Judge to return a finding on the question as to whether the sale of the properties was warranted by the terms of the decree. The District Judge of East Godavari to whom this issue was referred, held that the decree directed the sale of only the mortgage rights of Achutaramaraju under Exhibit A. and that the sale of the properties themselves was not in accordance with the decree. But he further held that this was an objection relating to the execution of the decree which could be agitated only before the executing court, and that a separate suit with reference to that matter was barred under section 47, Civil 945 Procedure Code. On this finding, the second appeal came up for final disposal before Satyanarayana Rao, J. who agreed with the District Judge that the sale of the properties was not authorised by the decree, and was therefore void. But he declined to entertain the objection that the suit was barred by section 47, Civil Procedure Code, on the ground that it had not been taken in the written statement, and was a new contention preferred for the first time at the stage of second appeal. In the result,, he granted a decree for partition and delivery of 136 acres 45 cents out of the properties mentioned in schedule A to the plaintiffs, and mesne profits, past and future. Against this judgment, the defendant prefers the present appeal, and insists that the suit is liable to be dismissed as barred by section 47, Civil Procedure Code. On behalf of the appellant, it was contended by Mr. Somayya that the question whether having regard to section 47 the suit was maintainable was argued before the learned Judge before he called for a finding, and that it ought to have been therefore considered on the merits, and that, in any event, as it was a pure question of law and went to the root of the matter, it ought to have been entertained. On behalf of the respondents, Mr. Krishnaswami Iyengar vehemently contends that as the objection to the maintainability of the suit based on section 47 was not taken in the written statement, the learned Judge had a discretion whether he should permit the point to be raised for the first time in second appeal or not, and that we should not interfere with the exercise of that discretion in special appeal. The basis on which the suit has now been decreed is that the decree in 0. section No. 25 of 1927 properly construed directed only a sale of mortgage rights under Exhibit A and not of the properties, but it must be conceded that this point does not distinctly emerge on the face of the plaint. It is true that there are allegations therein which might be read as comprehending that question, but they are vague and elusive, and what is more, this contention was not argued either in the court of the 946 Subordinate Judge of Rajahmundry or in the District Court of East Godavari, and it is only in second appeal that the question appears to have been first thought of in this form. Though we are not prepared to say that the allegations in the plaint are not. sufficient to cover this point, we are of the opinion that they are so obscure that it is possible that the appellant might have missed their true import, and omitted to plead in answer thereto that the suit was barred by section 47. Apart from this, it is to be noted that this point does not involve any fresh investigation of facts. Indeed, when the matter was before the District Judge in pursuance of the order of the High Court calling for a finding, counsel on both sides understood it as involving a decision on this point as well, and the argument proceeded on the footing that it was a pure question of law involving no further enquiry on facts. We have therefore permitted the appellant to raise this contention. Mr. Somayya for the appellant does not challenge the finding of the District Court confirmed by the High Court that the decree directed only the sale of the mortgage rights of Achutaramaraju under Exhibit A, but he contends that the sale in execution of that decree of not merely the mortgage rights under Exhibit A but of the properties themselves was excessive execution against which the judgment debtor was entitled to obtain relief by application to the execution court, and that a separate suit with reference thereto would be barred under section 47, Civil Procedure Code. It is well settled that when a sale in execution of a decree is impugned on the ground that it is not warranted by the terms thereof, that question could be agitated, when it arises between parties to the decree, only by an application under section 47, Civil Procedure Code and not in a separate suit. In J. Marret vs Md. K. Shirazi & Sons(1) the facts were that an order was made by the execution court directing, contrary to the terms of the decree, payment of a certain fund to the decree holder. A separate suit (1) A.I.R. 1930 P.C. 86. 947 having been instituted by the judgment debtor for recovery of the amount on the ground that the payment was not in accordance with the decree, it was held by the Privy Council that the action was barred under section 47. A case directly in point is Venkatachalapathy Aiyen vs Perumal Aiyen(1). There, the suit was to enforce a mortgage which related both to properties held in ownership by the mortgagor and mortgage rights held by him. In execution of the decree passed therein, the properties themselves and not merely the mortgage rights were sold. The judgment debtor then sued for a declaration that what was sold was only the mortgage right and to recover possession of the properties. It was held that such a suit was barred under section 47. Vide also the decisions in Biru Mahata vs Shyama Charan Khawas(2), Abdul Karim vs Islamunnissa Bibi(3) and Lakshmi narayan vs Laduram(4). The position is, in our opinion, too well settled to be open to argument, and it must accordingly be held that the present suit is barred under section 47, Civil Procedure Code. That, however, does not conclude the matter. Section 47, clause (2) enacts that "the Court may, subject to any objection as to limitation or jurisdiction, treat a proceeding under this section as a suit or a suit as a proceeding. . . Under this provision, this Court has the power to treat the plaint presented on 7 8 1939 as an application under section 47 provided that on that date an application for the relief claimed was not barred by limitation, and provided further that the court in which it was filed was competent to execute the decree. On the question of limitation, the relevant dates are the 14th and 15th, April 1936, when 81 acres 861 cents belonging to the plaintiffs were sold, and 15th December 1936 when possession was taken thereof through court. As regards the remaining properties, the exact date on which they were, sold does not appear on the record, but it is sufficient for the present purpose that it was subsequent to the institution of O.S. No. 268 of 1936 on 2,0.4 (1) (2) Cal. (3) All. 339. (4) [1931] A.I.R. 1932 Bom. 120 948 the file of the District Munsif 's court, Rajahmundry, which was on 14 12 1936. Now, the point for determination is whether the plaint was barred by limitation either under article 165 or article 166 of the Indian Limitation Act, if it is treated as an execution application presented. on 7 8 1939, or whether it was in time under article 181. Under article 165, an application by a person dispossessed of immovable properties and disputing the right of the decree holder or purchaser at an execution,sale to be put in possession must be filed within 30 days of dispossession. If this is the article applicable to the present proceedings, then it must be held that the plaint treated as an execution application was filed out of time. In Vachali Rohini vs Kombi Aliassab(1), a Full Bench of the Madras High Court has held, dissenting from the view previously ex pressed in Ratnam Aiyar vs Krishna Doss Vital DSS(2) and following Abdul Karim vs Mt. Is amunnissa Bibi (3), that this article applies only to applications for being restored to possession by persons other than judgment debtors, as under Order XXI, rule 100, Civil Procedure Code and that applications by judgmentdebtors claiming relief on the ground that their properties had been erroneously taken in execution of the decree are not governed by it. This view was approved and followed in Rasul vs Amina (4) and Bahir Das vs Girish Chandra(1). We are of the opinion that the law has been correctly laid down in the above decisions, and that in accordance therewith, the present proceedings are not barred by article 165. Coming next to article 166, an application by a judgment debtor to set aside a sale in execution of a decree has, under that article, to be filed within 30 days of the sale. If the present proceedings are governed by this article, there can be no question that they are barred by limitation. But then, there is abundant authority that article 166 applies only when the sale is one which has under the law to be 2,0.4 (1) Mad. (2) Mad. (3) All. 339 (4) Bom. (5) [1922) A.I.R. 1923 Cal. 949 set aside as for example, under Order XXI, rules 8990 and 91, but that it has no application when the sale is inoperative and void. In Seshagiri Rao vs Srinivasa Rao(1), the appellant was a party to the suit, but the decree had exonerated him from liability. In execution of the decree, his three fourths ' share in the properties was sold on 26 1 1910 and purchased by the decree holder and possession delivered to him on 16 12 1910. The appellant then filed a suit on 25 7 1911 to set aside the sale on the ground that it was in contravention of the decree and therefore void. An objection having been taken by the defendant that the suit was barred under section 47, the court, while upholding the same, held that the plaint could be treated as an application under that section if it was in time as an execution application, and the question arose for decision whether the application was governed by article 166 or article 181 of the Indian Limitation Act. It was held that as the sale was a nullity, it had not to be set aside under the law, and therefore the article applicable was article 181 and not article 166. This statement of the law was ap proved by a Full Bench of the Madras High Court in Rajagopalier vs Ramanujachariar. A similar decision was given in, Manmothanath Ghose vs Lachmi Devi(1), wherein it was observed by Page, J. that the sale being void need not have been set aside at all, and the order to be passed was "in substance merely a declaration that the sale was null and of no effect". The question whether an application by a judgmentdebtor for setting aside a sale on the ground that there was excessive execution and that the sale of his properties was in consequence void was governed by article 166 or article 181 came up directly for consideration in Nirode Kali Roy vs Harendra Nath(1). In holding that the application was governed by article 181, B. K. Mukherjea, J., (as he then was) observed that "article 166 must be confined to cases where the sale is voidable only and not void when the execution sale is a nullity, if a party files an application under (1) Mad. 813. (2) [ Mad. 288. (3) Cal 96. (4) I.L.R. , 950 section 47 to have it pronounced a nullity or for setting it aside for safety 's sake to avoid future difficulties, the proper article would be article 181 and not article 166 of the Indian Limitation Act". The decisions in Seshagiri Rao vs Srinivasa Rao(1) and Rajagopalier vs Ramanujachariar(2) were again followed in Ma We Gyan vs Maung Than Byu(3), wherein it was held that if the execution sale was void, it was not necessary for the applicant to have it set aside, and that even if there was such a prayer, that would not affect the real nature of the application which was really "for an order directing the respondent to deliver property on the ground that there was no valid sale". We are in agreement with these decisions, and hold that when a sale in execution is inoperative and void, an application by a judgment debtor to have it declared void and for appropriate reliefs is governed by article 181 and not article 166. On the findings of the courts below that the decree in O.S. No. 25 of 1927 properly construed authorised only the sale of the mortgage rights of Achutaramaraju under Exhibit A and not the lands which were the subject matter of that mortgage, the respondents were entitled to apply to the court for delivery of possession of the properties wrongly sold through process of court and delivered to the appellant, and such an application would be governed by article 181. Then, there is the further question whether applying article 181, the plaint presented on 7 8 1939 was within time under that article. As already stated, 81 acres 581 cents were sold on the 14th and 15th April 1936. If the starting point of limitation is the date of sale, then the application must be held to be barred, unless the period during which the suit was pending in the court of the District Munsif, Rajahmundry, is deducted under section 14 of the Indian Limitation Act. But if limitation is to be reckoned from the date of dispossession, then the application would clearly be in time. Under article 166, an application to set aside a sale must be presented within 30 days thereof. (1) Mad. 313. (2) (1923] I.L.R. 47 Mad. (3) A.I.R. 1937 Rang. 951 But if the sale in question was void, and for that reason article 166 becomes inapplicable, then the date of the sale must vanish as the starting point of limitation, as it has no existence in law. It is not until the purchaser acting under colour of sale interferes with his possession that the person whose properties have been sold is really aggrieved, and what gives him right to apply under article 181 is such interference or dispossession and not the sale. As observed in Ma We Gyan vs Maung Than Byu(1), such an application is really one for an order for redelivery of the properties wrongly taken possession of by the purchaser. If that is the correct position, the right to apply arises by reason of dispossession and not of sale, and the starting point for limitation would be the date of dispossession. It was so held in Chengalraya vs Kollapuri(2). There, the properties of a party to the suit who had been exonerated by the decree were sold in execution of that decree on 8 1 1918 and purchased by the decree holder. It was found that lie took actual possession of the properties in 1919. On 23 11 1921 the representatives in interest of the exonerated defendant commenced proceedings to recover possession ,of the properties from the decree holder purchaser on the ground that the sale under which he claimed was void. It was held that the proper article of limitation applicable was article 181, and that time commenced to run under that article from the date not of sale but of actual dispossession, and that the proceedings were accordingly in time. We agree with this decision, and hold that an application by a party to the suit to recover possession of properties which had been taken delivery of under a void execution sale would be in time under article 181, if it was filed within three years of his dispossession. Therefore, there is no legal impediment to the plaint filed on 7 8 1939 being treated as an application under section 47, on the ground that it is barred by limitation. The next question for consideration is whether the present suit was filed in a court which had jurisdiction to execute the decree in O. section No. 25 of 1927. (1) A.I.R. 1937 Rang. (2) A.I.R. 1930 mad. 12. 952 That was a decree passed by the Subordinate Judge of Kakinada, whereas the present suit was filed in the District Court, East Godavari to which the court of the Subordinate Judge of Kakinada is subordinate. Section 38, Civil Procedure Code provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution. The District Court of East Godavari is neither the court which passed the decree in O.S. No. 25 of 1927 nor the court to which it had been sent for execution. But it is common ground that when the present suit was instituted in the District Court, East Godavari, it had jurisdiction over the properties, which are the subject matter of this suit. It is true that by itself this is not sufficient to make the District Court of East Godavari the court which passed the decree for purpose of section 38, because under section 37, it is only when the court which passed the decree has ceased to have jurisdiction to execute it that the court which has jurisdiction over the subject matter when the execution application is presented can be considered as the court which passed the decree. And it is settled law that the court which actually passed the decree does not lose its jurisdiction to execute it, by reason of the subject matter thereof being transferred subsequently to the jurisdiction of another court. Vide Seeni Nadan vs Muthuswamy Pillai(1) Masrab Khan vs Debnath Mali(1) and Jagannath vs Ichharam(3). But does it follow from this that the District Court, East Godavari has no jurisdiction to entertain the execution application in respect of the decree in O.S. No. 25 of 1927 passed by the court of the Subordinate Judge, Kakinada? There is a long course of decisions in the High Court of Calcutta that when jurisdiction over the subjectmatter of a decree is transferred to another court, that court is also competent to entertain an application for execution of the decree. Vide Latchman vs Madan Mohun (4), Jahar vs Kamini Devi(1) and Udit Narayan vs Mathura Prasad(6). But in Ramier vs 2,0.3 (1) Mad. 821. F.B. (2) I.L.R. (3) A.1 R. (4) Cal. (5) (6) Cal. 974. 953 Muthukrishna Ayyar(1), a Full Bench of the Madras High Court has taken a different view, and held that in the absence of an order of transfer by the court which passed the decree, that court alone can entertain an application for execution and not the court to whose jurisdiction the subject matter has been transferred. This view is supported by the decision in Masrab Khan vs Debnath Mali(1). It is not necessary in this case to decide which of these two views is correct, because even assuming that the opinion expressed in Ramier vs Muthukrishna Ayyar(1) is correct, the present case is governed by the principle laid down in Balakrishnayya vs Linga Rao(1). It was held therein that the court to whose jurisdiction the subject matter of the decree is transferred acquires inherent jurisdiction over the same by reason of such transfer, and that if it entertains an execution appli cation with reference thereto, it would at the worst be an irregular assumption of jurisdiction and not a total absence of it, and if objection to it is not taken at the earliest opportunity, it must be deemed to have been waived, and cannot be raised at any later stage of the proceedings. That precisely is the position here. We have held that the allegations in the plaint do raise the question of excessive execution, and it was therefore open to the appellant to have raised the plea that the suit was barred by section 47, and then, there could have been no question of waiver. We have, it is true, permitted the appellant to raise the contention that the present suit is barred by section 47, and one of the reasons therefor is that the allegations in the plaint are so vague that the appellant might have missed their true import. But that is not a sufficient ground for relieving him from the consequence which must follow on his failure to raise the objection in his written statement. We agree with the decision in Balakrishnayya vs Linga Rao(,), and hold that the objection to the District Court enter taining an application to execute the decree in 0. section No. 25 of 1927 is one that could be waived and not (1) Mad. 801. (2) I.L.R. (3) I.L.R. 954 having been taken in the written statement is not now available to the appellant. There is thus no legal bar to our treating the plaint presented by the respondents on 7 8 1939 as an execution application under section 47, and in the interests of justice, we direct it to be so treated. But this should be on terms. We cannot ignore the fact that it is the gross negligence of the respondents at all stages that has been responsible for all the troubles. They did not appear in the suit, and put forward their rights under Exhibit A. They intervened at the stage of execution, but their complaint was mainly that the ex parte decree had been obtained by fraud, a plea which has now been negatived. Even in this suit. they did not press the plea on which they have succeeded until they came to the High Court. Under the circumstances, we think it just that they should be dep rived of all claims for mesne profits down to this date. In the result, treating the plaint as I an execution application, we direct that the properties mentioned in schedule A to the plaint be partitioned and the respondents put in possession of 126 acres 33 cents in Kalavacherla village and of 10 acres 12 cents in Nandarada village in proceedings to be taken in execution of this order. The respondents will be entitled to their share of the net income attributable to 136 acres 45 cents aforesaid from this date down to the date on which they are put in separate possession thereof. Subject to the modification of the decree of the court below as stated above, this appeal will stand dismissed. The parties will, however, bear their own costs throughout.

The appellant was the assignee of a mortgage dated 14 12 1911, executed by A, which comprised. lands belonging to the mortgagor and also a mortgage executed by the respondents in his favour on 19 7 1909. The appellant instituted a suit in the court of the Subordinate Judge of Kakinada, for the recovery of the amount due on the mortgage, dated 14 12 1911, and prayed for sale of the hypotheca. The respondents were impleaded as defendants but did not appear. The suit was decreed ex parte, and in execution of the decree, the properties of the respondents, mortgaged to A on 19 7 1909, were brought to sale, and purchased by the decree holder. The respondents then instituted the present suit in the District Court of East Godavari which then bad jurisdiction over the properties in suit, for a declaration that the decree obtained by the appellant was fraudulent and inoperative and could not affect their title. The plaint was later on amended and a prayer added that the properties might be partitioned and the respondents put in separate possession of their share. The trial Judge dismissed the suit and the District Court in appeal affirmed his decision. Before the High Court in second appeal it was contended for the first time that the decree in question did not direct a sale of the mortgaged properties but a sale of the mort gagee 's rights under the mortgage deed dated 19 7 1909 and as such the sale of the properties was void. The High Court having called for a finding from the District Court as to what was sold, it was 939 found by that Court that the decree bad really directed a sale of the mortgagee 's rights and not of the properties mortgaged and that there was excessive execution. It was, however, of opinion that the point should have been taken before the executing court and the suit in so far as it claimed relief on the basis of excessive execution was barred under section 47 of the Code of Civil Procedure. The High Court declined to entertain the objection that the suit was barred under section 47 as it had not been taken in the written statement and was raised for the first time in second appeal, and decreed the respondent 's suit. It was contended for the appellant that the High Court should have entertained the objection and held that the suit was so barred. Held, that the appellant should be permitted to raise the contention. The point relating to excessive execution had never been specifically raised except before the High Court and the allegations in the plaint were vague and obscure. It is a pure question of law which requires no further investigation of facts and was understood and debated as such by the parties before the District Court. That it was well settled that the question whether an execution sale was in excess of the decree and, therefore, not warranted by it could be raised as between the parties only by an application under section 47 of the Code before the executing court and not by a separate suit. J. Marret vs Md. K. Shirazi & Sons (A.I.R. 1930 P. C. 86), Venkatachalapathy Aiyen vs Perumal Aiyen ([1912] M.W.N. 44), Biru Mohata vs Shyania Charan Khowas ([1895] I.L.R. , Abdul Karim vs Islamunnissa Bibi ([1916] I.L.R. 38 All. 339) and Lakshminarayan vs Laduram ([1931] A.I.R. , approved. That the court, however, had the power to treat the plaint in the suit as an application under section 47 subject to any objection as to limitation or jurisdiction. That the application was not barred under article 165 as it ap plied only to applications for restoration to possession by persons other than judgment debtors and bad no application to the present case. Vachali Bohini vs Kombi Aliassan '([1919] I.L.R. 42 Mad. 753), Batnam Aiyar vs Krishna Doss Vital Doss ([1897] I.L.R. , Basul vs Amina ([1922] I.L.R. and Bahir Das vs Girish Chandra ([1922] A.I.R. 1923 Cal. 287), approved. Nor could article 166 apply since it had application only where the sale was voidable and not void and had to be set aside. That the article applicable to a case of a void sale such as the present was article 181 of the Indian Limitation Act. Seshagiri Rao vs Srinivasa Rao ([1919] I. , Bajagopalier vs Bamanujachariar ([1923] I.L.R. 47 Mad. 288), Manmothanoth Ghose vs Lachmi Devi ([1927] I.L.R. 55 Cal. 96), Nirode Kali Boy vs Harendra Nath (I.L.R. [1938] 1 Cal. 280), and 119 940 Md We Gyan vs Maung Than Byu (A.I.R. 1937 Rang. 126), ap proved. That the starting point of limitation for an application under article 181 would be the date of dispossession by the purchaser and not the date of the void sale which had no existence in law and the plaint in the present suit, treated as an application, having been filed ,within 3 years of such dispossession was in time. Chengalraya vs Kollapuri (A.I.R. , approved. That the District Court of East Godavari to whose jurisdiction the properties had been transferred before the present suit was instituted had by reason of such transfer acquired an inherent jurisdiction over them and if it entertained an application for execution with reference to them such action was no more than an irregular assumption of jurisdiction and no objection to jurisdiction having been taken by the appellant at the earliest opportunity he must be deemed to have waived it and, consequently, there was no legal bar to treating the plaint as an execution application under section 47 of the Code. Balakrishnayya vs Linga Bao, (I.L.R. , applied. Case law discussed.

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Civil Appeal Nos. 145 146/ 1972. (Appeals by Special Leave from the Judgment and Order dated 9 12 1970 of the Mysore High Court in Writ Petitions Nos. 2042 and 2065/70). Narayan Nettar, for the appellant. R.M. Mehta, for the respondent. The Judgment of the Court was delivered by KHANNA, J. These two appeals by special leave are against the common judgment of the Mysore High Court whereby the High Court in two petitions under article 226 of the Constitution of India quashed two orders made by the Deputy Commissioner of Commercial Taxes appellant under section 21 of the Mysore Sales Tax Act, 1957 (hereinafter referred to as the Act). The respondent is an excise contractor. He was as sessed under the Act for the assessment years 1959 60 and 1960 61 as per orders dated March 21, 1963 made by the Commercial Tax Officer Raichur. Under those orders the taxable turnover of the respondent for the two years in question was determined after deducting the shop rent and the tree tax. For the assessment year 1959 60, a sum of Rs. 2,10,542 was deducted and the net taxable turnover was determined to be Rs. 25,989. For the year 1960 61 a sum of Rs. 3,98,350 was deducted and the net taxable turnover was determined to be Rs. 26,657. The Commercial Tax Officer initiated proceedings under section 12A of the Act in respect of the aforesaid years because he was of the view that some items of turnover had escaped assessment. As per orders dated June 8, 1966 he made assessment by including in the turnover of the respond ent certain amounts which had escaped assessment under the original assessment orders dated March 21, 1963. The deduc tion in respect of shop rent and tree tax was, however, allowed to the respondent in orders dated June 8, 1966 as it had been allowed in initial orders dated March 21, 1963. On June 28, 1967 the appellant, i.e., the Deputy Commis sioner of Commercial Taxes, made two orders revising the orders dated June 8, 1966. In the said orders the appel lant disallowed the deduction which had been allowed to the respondent in respect of the shop rent. The appellant in those orders referred to the decision of this Court in Shinde Brother etc. vs Deputy Commissioner Raichur(1) and held that the amount of shop rent being not excise duty should not be deducted in computing the turnover of the respondent for the two years in question. The taxable turn over of the respondent for the two years in question was accordingly enhanced. (1) 595 The respondent made two applications for rectification of the orders of the appellant dated June 28, 1967. It was urged on behalf of the respondent that the revision of assessments was barred by limitation under section 21(3) of the Act and as such there was a mistake apparent on the record. The appellant rejected those applications. The respondent then preferred two appeals to the Sales Tax Appellate Tribunal. The Tribunal too rejected those ap peals on the ground that they were not maintainable. The respondent thereafter filed two petitions in the High Court under article 226 for the issuance of writs in the nature of certiorari for quashing the orders dated June 28, 1967. The High Court, as already mentioned, allowed both the peti tions and quashed orders dated June 28, 1967. In the opinion of the High Court, orders dated June 28, 1967 made by the appellant were without jurisdiction since they had been made beyond the period of four years from the date of the assessment orders dated March 21, 1963. Mr. Narayan Nettar, learned counsel for the appellant has contended in appeal before us that the period of four years mentioned in section 21 (3) of the Act should be computed from the orders dated June 8, 1966 made under section 12A of the Act and not from the initial orders of assessment dated March 21, 1963. The above stand has been controverted by Mr. Mehta, who argued the case amicus curiae as no one appeared on behalf of the respondent. After giving the matter our consideration, we are of the view that the contention advanced on behalf of the appel lant is well founded. Before, however, dealing with the matter, we consider it appropriate to reproduce the relevant provisions of the Act. Section 12A of the Act relates to assessement of escaped turnover. Sub section (1) of that section at the relevant time read as under: "(1) Where for any reason the whole or any part of the turnover of a dealer has escaped assessment to tax or licence fee or has been assessed at a lower rate than the rate at which it is assessable, the assessing authority may, subject to the provisions of sub section (2), at any time within a period of five years from the expiry of the year to which the tax or licence fee relates, assess to the best of its judgment, the tax or li cence fee payable on the turnover referred to after issuing a notice to the dealer and after making such enquiry as it considers necessary. " Section 21 of the Act deals, inter alia, with revisional powers of the Deputy Commis sioner. Sub section (2) and (3) of that section read as under: "(2) The Deputy Commissioner may of his own motion call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by a Commercial Tax Officer subordinate to him and against which no appeal has been preferred to him under section 20, for the purpose of satisfying himself as to the legality or propriety of such order or as to the regularity of such proceeding and pass such order with respect thereto as he thinks fit. 4 112SCI/76 596 (3) In relation to an order of assessment passed under this Act, the power under sub sections (1) and (2) shall be exercisable only within a period of four years from the date on which the order was passed. " The short question which arises for determination in these appeals is that in the event of an order having been made under section 12A of the Act, what is the starting point for computing the period of four years, mentioned in section 21 (3), for the exercise of the powers under section 21(2). Is it the initial assessment order or is it the order made under section 12A ? In the context of the present case, the question to be answered is as to whether the period of four years is to be calculated from March 21, 1963 when the initial assessment orders were made, or from June 8, 1966 when the orders under section 12A of the Act were made. So far as this question is concerned, we are of the opinion that the period of four years should be calcu lated from June 8, 1966, i.e., the date on which orders under section 12A of the Act were made. The reason for that is that once an assessment is reopened, the initial order for assessment ceases to be operative. The effect of reopening the assessment is to vacate or set aside the initial order for assessment and to substitute in its place the order made on reassessment. The initial order for reassessment cannot be said to survive, even partially, although the justification for reassessment arises because of turnover escaping assessment in a limited field or only with respect to a part of the matter covered by the initial assessment order. The result of reopening the assessment is that a fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of the turnover escaping assessment. As it is we find that in the present case the assessment orders made under section 12A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier. In the circumstances, the only orders which could be the subject matter of revision by the appellant were the orders made under section 12A of the Act and not the initial assessment orders. In the case of V. Jagannathan Rao & ors. vs Commission er of Income tax and Exrcess Profits Tax, Andhra Pradesh (1) this Court dealt with section 34 of the Indian Income tax Act, 1922 which relates to reassessment in the case of income escaping assessment. It was held by this Court that once assessment is reopened the previous under assessment is set aside and the whole proceedings star afresh. Ramaswami J. speaking for the Court observed: "Section 34 in terms states that once the Income tax Officer decides to reopen the assessment he could do so within the period prescribed by serving on the person liable to pay tax a notice containing all or any of the requirements which may be included in a notice under section 22(2) and may proceed to assess or reassess such income, profits or gains. It is, therefore, manifest that once assess ment is (1) ITR 373. 597 reopened by issuing a notice under sub section (2) of section 22 the previous under assess ment is set aside and the whole assessment proceedings start afresh. When once valid proceedings are started under section 34(1)(b) the Incometax Officer had not only the juris diction but it was his duty to levy tax on the entire income that had escaped assessment during that year. " In the case of Commissioner of Sales Tax, Madhya Pradesh vs H.M. Esufali H.M. Abdulali(1) this Court dealt with reassessment made under section 19 of the Madhya Pradesh General Sales Tax Act, 1958. It was held that when reas sessment is made, the former assessment is completely reo pened and in its place fresh assessment is made. Hegde J. speaking for the Court observed: "What is true of the assessment must also be true of reassessment because reas sessment is nothing but a fresh assessment. When reassessment is made under section 19, the former assessment is completely reopened and in its place fresh assessment is made. While reassessing a dealer, the assessing authority does not merely assess him on the escaped turnover but it assesses him on his total estimated turnover. While making assessment under section 119, if the assessing authority has no power to make best judgment assessment, all that the assessee need do to escape reassessment is to refuse to file a return or refuse to produce his account books. If contention taken on behalf of the assessee is correct, the assessee can escape his li ability to be reassessed by adopting an obstructive attitude. It is difficult to conceive that such could be the position in law." In International Cotton Corpn. (P) Ltd. vs Commercial Tax Officer, HubIi & Ors. (2) this Court held that once can assessment order had been rectified and it was sought to make a further rectification of that order, the period of limitation for making such further rectification would commence not from the date of the original assessment order but from the date of the earlier rectification order. Alagi riswami J. speaking for the Court in this context observed: "The other attack that the rectification order is beyond the point of time provided in Rule 38 of the Mysore Sales Tax Rules is also without substance. What was sought to be rectified was the assessment order rectified as a consequence of this Court 's decision in Yaddalam 's case. After such rectification the original assessment order was no longer in force and that was not the order sought to be rectified. It is admitted that all the rectification orders would be within time calculated from the original rectification order. Rule 38 itself speaks of 'any order ' and there is no doubt that the rectified order is also 'any order ' which can be rectified under Rule 38." ; I.T.R. 271. (2) [1975] 2 S.C.R. 345. 598 Although the above case related to an order which had been subsequently rectified, the principle laid down therein would, in our opinion, be also applicable in cases where reassessment is made on the ground that certain amounts of turnover had escaped assessment. Before we conclude, we may observe that according to section 33B of the Indian Income tax Act, 1922 the Commis sioner cannot revise an order of reassessment made under the provisions of section 34 of the Act. Likewise, sub section (2) of section 263 of the Incometax Act, 1961 expressly prohibits the revision by the Commissioner of Income tax of an order of reassessment made under section 147 of Act. No such prohibition in the provisions of the Act with that Act. Nosuch prohibition brought to our notice. which we are concerned has, however, been brought to our notice. We would, therefore, accept the appeals, set aside the judgment of the High Court and dismiss the petitions under article 226 filed by the respondent. Looking to all the facts, we leave the parties to bear their own costs in this Court as well as in the High Court.

In respect of the assessment years 1959 60 and 1960 61, fresh assessments were made under section 12A of the Mysore General Sales Tax Act 1957 by the , Commercial Tax Offi cer. By his order dated June 8, 1966, certain amounts which had escaped assessment under the original assessment orders dated March 21, 1963 were included in the turnover of the respondent, but the deductions in respect of shop rent and tree tax were, however, allowed as in the initial orders. The appellant, in exercise of the powers under section 21(2) of the Act, by his orders dated June 28, 1967 revised the orders dated June 8, 1966 disallowing the deductions in respect of the shop rent, following the decision of this Court in Shinde Brother etc. vs Deputy Commissioner Raichur Two rectification applications and the two appeals therefrom on the ground that the revisions of assessment were barred by limitation under section 21(3) of the Act and, as such, there was a mistake apparent on the record were rejected as not maintainable. However, the writ petitions filed were allowed by the High Court holding that the orders dated June 28, 1967 were without jurisdic tion since they had been made beyond the period of four years from the date of the initial assessment orders dated March 21, 1963. On appeals by special leave to this Court, HELD: The contention advanced on behalf of the appel lants that the period of four years mentioned in section 21(3) of the Act should be computed from the orders dated June 8, 1966 made under S 12A of the Act and not from the ini tial orders of assessment dated March 21, 1963 is well founded. [595 C D] Once an assessment is reopened the initial order for as sessment ceases to be operative. The effect of reopening the assessment is to vacate or set aside the initial order for assessment and to substitute in its place the order made on reassessment. The initial order for reassessment cannot be said to survive even partially although the justification for dessessment arises because of turnover escaping assess ment in a limited field or only with respect to a part of the matter covered by the initial assessment order. The result of reopening the assessment is that a fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of the turnover escaping assessment. [596 D E] In the present case the assessment orders made under section 12A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier and the only orders which could be the subject matter of revision by the appellant were the orders made under section 12A of the Act and not the initial assessment orders. [596 E F] J. Jaganmohan Rao & Ors. vs Commissioner of Income tax and Excess Profits Tax, Andhra Pradesh [1970] 1 S.C.R. 726=75 ITR 373; Commissioner of Sales Tax, Madhya Pradesh vs H.M. Esufali H.M. Abdulali ITR 271, followed. International Cotton Corporation (P) Ltd. vs Commercial Tax Officer, HubIi & Ors. [1975] 2 S.C.R. 345, applied.

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ition No. 156 of 1972. (Under article 32 of the Constitution of India). S.S. Javali, A. K. Srivastava and B.P. Singh, for the petitioner. G.L. Sanghi, S.P. Mital and Girish Chandra, for respond ents Nos. land3. B. Datta, for respondent No. 194. The Judgment of the Court was delivered by BEG, C.J. This is a petition under Article 32 of the Constitution praying for a writ of certiorari, or a writ of Mandamus or, any other appropriate, writ, order or direction for the enforcement of the fundamental rights of the peti tioners under Article 14 and 16 of the Constitution. The petitioners have been working as Upper Division Clerks and pray for the quashing of a list, issued with Office Memoran dum dated 7.2.1972, for making promotions to the next grade of Assistants on which the names of respondents 4 to 203 appear but not those of the petitioners. They claim that the principles of seniority, contained in the Ministry of Home Affairs O.M. dated 22.6.1949, as interpreted by this Court in UNION OF INDIA vs M. RAVI VERMA & ORS. ETC.(1) had not been applied to them. The contention seems to be that the last mentioned decision contained an invariable mechani cal rule of seniority applicable to all classes of services so that nothing beyond length of service in a particular grade could determine seniority. It was alleged that the impugned list was formulated in an arbitrary fashion. Hence, the petitioners complain of violation of Articles 14 and 16 of the Constitution. In paragraph 6 of the petition it was stated that even persons appointed nine or ten years after the petitioners had been promoted as long ago as 1969 to the grade of As sistants to which the petitioners put forward their own claims. It was also stated that a large number of persons have superseded the petitioners but a few names only have been mentioned from amongst them. The whole case of the petitioners thus rests on the submission that nothing beyond length of service must determine the place on the list for promotion to the grade of Assistants. The petitioners allege a common cause of action inasmuch as the impugned list of 17.2.1972 affects all of them. They claim that all of them should have been governed by the principles contained in (1) ; 666 the Memorandum of 22.6.1949. This Memorandum (Annexure 'C ' to the petition) shows that it was only directory laying down a general rule of seniority which was presumably sub ject to other exceptional factors which could also be taken into account. Hence, an alleged violation of the rule of seniority according to length of service was not decisive even according to this Memorandum. The counter affidavit filed by Shri P.L. Gupta, Deputy Secretary to the Government of India, gives the long history of a scheme which culminated in the promulgation of the statutory rules framed under Article 309 of the Constitu tion of India called the Central Secretariat Clerical Serv ice Rules, 1962 by the President of India. It shows that the scheme of 1949 was given a final shape by the Cabinet in 1954. and became effective from 1.5.1954. Under the scheme, as finally framed, it was provided that those offi cers who were otherwise eligible for confirmation in the. services at the initial constitution, should also pass a typewriting test to be held by the Union Public Service Comntission within a period of two years from 1 5 1956. It appears that the confirmation of the initial constitution of the service was delayed until 1958. Some of the rather ambitious assertions of the petition ers suggest that their case is that they had been appointed to an Upper Division grade on a regular basis so that their seniority must date back to their date of promotion. This suggestion was controverted by the respondents who alleged that the petitioners had been only allowed to continue provisionally on a temporary basis in the grade of Upper Division of Clerks. It was stated, in the counter affida vit, that as typing test had to be passed within two years of 1st of May 1958, those who did not come within this class came in the, class of the petitioners who, were serving on an ad hoc or temporary basis. Hence, it was submitted that those who had passed the typewriting test within two years of the fixed date belong to another cate gory altogether. The respondents,. therefore, submit that there has been no contravention of Articles 14 and 15. Serious grounds of objection to the petitioner 's case are three fold: firstly, that there was a reasonable crite rion for the difference made between the cases of the peti tioners and those placed on the impugned list of 7.2.1972 who are above the petitioners because they have passed the prescribed typing test so that Articles 14 and 16 of the Constitution could not be said to have been violated in this case whatever else may have been infringed; secondly, that the petitioners, not having assailed the order of confirma tion of the scheme on 1.5.1958. prescribing a reasonable ground for distinction between the class of cases in which typing test had been passed, to which the contesting re spondents in the impugned list belong and the class of the petitioners, which had not passed this test, the petition ers ' could not challenge the impugned scheme of 1972 at all; thirdly, a member of persons had been promoted and put above the petitioners since 1962, acting under the scheme providing the typing test, so that there was inordinate delay in filing the petition under Article 32 of the Consti tution on 24.4.1972. 667 In their Writ Petition the petitioners have no doubt challenged the validity of rule 17 of the Central Secretariat Clerical Service rules for inconsistency with the Memoranda of 22.6.1949 and 22.12.1959 and alleged that this also constitutes a violation of Articles 14 and 16 of the Constitution. This rule was among rules notified on 28 9 1962. It lays down as follows : "17. Seniority(1) The relative seniority of members of Service appointed to any Grade before the appointed day shall be regulated by their relative seniority as determined before that day. Provided that if the seniority of any such officer had not been specifically deter mined before the appointed day it shall be as determined by the Department of Personnel in the Cabinet Secretariat. MHA No. 6/2/67 CS II dated 20.12.67. Provided further that the seniorty of an officer referred to in the proviso to clause (a) of rule 2 shall be determined by the Department of Personnel in the Cabinet Secre tariat by taking into account the continuous length of regular service rendered before the appointment day by such officer in the grade of lower Division or in any higher grade in the offices of the Central Government. (2) All permanent officers included in the initial constitution of a Grade under rule 7 shall rank senior to all persons substan tively appointed to that Grade with effect from a date after the appointed day, and all temporary officers included in the initial constitution of a Grade under that rule shall rank senior to all temporary officers appoint ed to that Grade after the appointed day. (3) Except as provided in sub rules (4) and (5), the seniority of persons appointed to the two grades of the service after the ap pointed day shall be determined in the follow ing manner, namely : 1. UPPER DIVISION GRADE (i) Permanent Officers. The seniority inter se of officers substantively appointed to the Grade after the appointed day shall be regulated by the order in which they are so appointed to the Grade. (ii) Temporary Officers. The seniority inter se of temporary officers appointed to the Grade after the appointed day shall be regulated as follows, namely: (a) Persons included in the Select List for a Grade shall rank senior en bloc to those not included in the Select list. 668 (b) The seniority inter se of person includ ed in the Select List shall be in the order in which their names are included in the Select List. (c) The seniority inter se of persons not included in the Select List shall be regulated by the order in which they are approved for long term appointment to the Grade. Rule 7 provides as follows "7. Initial Constitution of each cadre. The permanent and temporary officers of each Grade in each cadre on the appointed day shall be as determined by the Deptt. of Personnel in the Cabinet Secretariat. " We find that, acting under Rule 7 set out above, the Government of India had issued an order on 12 11 1962 allot ting permanent and temporary officers of the Upper Division grade to the Central Secretariat Clerical Service. Apparently, that allotment also determined the order of seniority. In other words, the rule relating to the passing of a typing test had been followed for a long period and had actually been given effect to under the statutory rules in promotions made and lists drawn up. This explains the petitioners ' challenge to the validity of Rule 17. We are unable to see how a rule prescribing a typing test is unconnected with the duties of Clerks who desire a promotion to the next grade. We do not find that a dis crimination made on such a ground could violate Articles 14 or 16 of the Constitution whatever also it may be said to violate. It is not necessary for us to hold that a violation of a statutory or other kind of rule in a particu lar case cannot amount to a violation of Articles 14 and 16 of the Constitution. There may also be cases in which a rule made is ultra vires for mreasonableness or on any other ground and should not be deemed to exist. In such a case, if the rule is enforced, it may, on the facts of the partic ular case, amount to a violation of Articles 14 and 16 of the Constitution also. The case before us does not appear to be such a case at all. It seems to be covered by what this Court said in P.C. Sethi & Ors. vs Union of India & Ors. , (1) with regard to the Office Memorandum of 22.6.1949 (at pp. 207 208): " . the Office Memorandum of June 22, 1949, is no bar to the Government in making separate provisions for the mode of constitution and future maintenance of the service of Assistants. There is, therefore, no obligation under the aforesaid Office Memorandum on the part of the Government to enforce a rule of bald length of continuous service irrespective of other considerations than the service was sought to be reorga nised and reinforced. As noticed earlier the service had to be reconstituted and the tempo rary Assis (1) 669 tanks properly observed keeping in view the question of quality and efficiency as well as at the same where regard being had to accom modate as large number as possible to gradual absorption. In doing so we are unable to hold that the Government has violated the provi sions of articles 14 or 16 of the Constitu tion. The Classification under the instruc tion for the constitution of regular temporary establishment in the manner done cannot be characterised as unreasonable in view of the object for which these had to be introduced in reconstituting the service to ensure security of temporary employees assistant with effi ciency in the Service. There is no discrimi nation whatsoever amongst the equals as such nor any arbitrary exercise of power by the Government. " This Court has also explained in Joginder Nath & Ors. vs Union of India & Ors.(1) and Amrit Lal Berry vs Collector of Central Excise, New 'Delhi & Ors.(2) the principles on which this Court will interfere under Article 32 of the Constitution for an alleged violation of Articles 14 and 16 of the Constitution. It is also explained, there how delay in invoking the jurisdiction of the Court, which may create equitable rights of others, may give rational grounds for discrimination so that it would cease to be a case of any violation of Articles 14 and 16 at all. We think that the principles laid down in the cases mentioned above apply here. Consequently, we dismiss this Writ Petition, but, in the circumstances of the case, the parties will bear their own costs. S.R Petition dismissed.

Under the scheme which culminated in the promulgation of the Central Secretariat Clerical Service Rules, 1962 (effective from 1 5 1954), it was provided that those offi cers who were otherwise eligible for confirmation in the services at the initial constitution should also pass a typewriting test to be held by the Union Public Service Commission within a period of two years from 1 5 1956. The names of the petitioners who had not passed the typewriting test did not figure in the gradation list dated 7 2 1972 prepared for making promotions to the next grade of Assist ants. The petitioners challenged the orders on several grounds, namely, (i) The principle of seniority contained in the Ministry of Home Affairs ' O.M. dated 22 6 1949 as inter preted by this Court in ; had not been ap plied to them; (ii) The impugned list was formulated in an arbitrary fashion; (iii) Their seniority must date back to their dates of promotion as Upper Division Clerks; and (iv) Rule 17 of Central Secretariat Clerical Service Rules, 1962 being inconsistent with O.M. dated 22 6 1949 and 22 2 1959 violates Articles 14 and 16 of the Constitution. The re spondent raised three objections to the petitioners ' case in their returns, namely, (i) There was a reasonable criterion for the difference made between the case of the petitioners and those placed on the impugned list of 7 2 1972 who are above the petitioners because they have passed the pre scribed typewriting test so that Articles 14 and 16 of the Constitution could not be said to have been violated in this case whateverelse may have been infringed; (ii) The peti tioners not having assailed the order of confirmation of the scheme on 1 5 1958 prescribing a reasonable ground for distinction between the class of cases in which typewriting tests have been passed to which the contesting respond ents in the impugned list below and the class of the peti tioners which had not passed the test. the petitioners could not challenge the impugned scheme of 1972 at all; (iii) A number of persons have been promoted and put above the petitioners since 1962 acting under the scheme providing the typewriting test so that there was inordinate delay in filing the petition under article 32 of the Constitution. Dismissing the petition, the Court, HELD: (1) The alleged violation of the rule of seniority according to length of service was not decisive even ac cording to the Ministry of Home Affairs O.M. dated 22 6 1949. This memorandum shows that it was only directory laying down a general rule of seniority which was presumably subject to other exceptional factors which could also be taken into account. [666 A] P.C. Sethi & Ors. vs Union of India & Ors. [1975] 3 S.C.R. 21, followed. (2) A rule prescribing a typing test cannot be said to be unconnected with the duties of clerks who desire a promo tion to the next grade. A discrimination made on such a ground could not violate Articles 14 and 16 of the Constitu tion whateverelse it may be said to violate. [668 E] (3) A violation of statutory or other kind of rule in a particular case cannot amount to a violation of Articles 14 and 16 of the Constitution. There may also be cases in which a rule made is ultra vires for unreasonableness or 665 an any other ground and should not be deemed to exist. In such_ a case, if the rule is enforced it may on the facts of the particular case amount to a violation of Articles 14 and 16 of the Constitution also. The petitioners case is not such a case at all. [668 E F] (4) The principles laid down by this Court in Joginder Nath and Ors. vs Union of India & Ors. and in Amrit Lal Berry vs Collector of Central Excise ; , apply to the petitioners case regarding laches on their part. [669 C El

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ivil Appeals Nos. 1895 1896 1907 of 1974. (From the Judgment and Decree dated the 14 10 1974 of the Madras High Court in Election Petitions Nos. 1 and 2 of 1974). R. N. Choudhary and Mrs. V.D. Khanna, for the appellant in CAs 1896/74. Y.S. Chitley, T.N.S. Srinivasavaradacharya & G. Ramas wamy, C. Lakshminarain, S.R.L. Narain and Vineet Kumar, for the appellant in CA 1907/74. T.N.C. Srinivasavaradacharya, S.C. Lakshminarain, S.R.L.Narayan, M.S. Narasimahan, for respondent No. 10 in CA 1895, Resp. No. 6 in CA 1896 and respondent No. 7 in CA 1907. A. V. Rangam and Miss A. Subshashini, for respondent No. 1 in all the appeals and for respondent No. 2 in 1907. J. M. Khanna, for respondent No. 8 in CAs. 1895 1896. The Judgment of the Court was delivered by SARKARIA, J. The basic facts giving rise to these appeals being common, the same will be disposed of under one judgment. Notice calling for nominations to be filed before 3 P.M. 11 3 1974, for filling six vacancies to the Rajya Sabha from the State of Tamil Nadu in the biennial elections was issued on March 4, 1974, Eleven candidates filed their nominations. On scrutiny which was held on March 12, 1974. all those nominations were found to be valid. On 541 14 3 1974, which was the last date fixed for withdrawal, three candidates withdrew their nominations leaving eight in the field. The poll was held on 21 3 1974. Counting of votes took place on the same date. The result was published, according to which, the contesting candidates secured the votes noted against their names as follows: 1. Shri Khadar Sha . 3500 2. Shri Khaja Mohideen . 3700 3. Shri V. Subrahmanyam . 300 4. Shri C.D. Natarajan . 3500 5. Shri R. Mohanarangam . Nil 6 .Shri section Ranaganathan . 4100 7. G. Lakshmanan . 3600 8. D.C. John @ Valampuri John . 3700 The requisite quota to secure the election of a candidate was fixed at 22,400/(6+1) +1 =3201 and candidates mentioned at serial Nos. 1, 2, 4, 6, 7 and 8 were declared elected. Two Election Petitions were filed by the unsuccessful candidates. Election Petition 1 of 1974 was filed by Shri R. Mohan Rangam and Election Petition 2 of 1974 by Shri V. Subrahmanyam. The petitioners prayed that the election of Shri D.C. John be declared void and set aside under section 100 of the Representation of the People Act, 1951. Each of the petitioners claimed that in the event of Shri John 's elec tion being set aside, he be declared elected under section 101 of the Act. In addition to the Returning Officer, the Elec toral Registration Officer and the Chief Election Commis sioner, all the seven contestants were impleaded as respond ents. The election of Shri John was assailed on the ground that on March 9, 1974, the date of the scrutiny of his nomination, he was less than 30 years ' of age and as such, did not possess the qualification as to age laid down in Article 84(b) of.the Constitution. On these premises it was pleaded that the nomination of Shri John was improperly accepted and in consequence thereof, the result of the election has been materially affected. A recriminatory petition No. 1/74 under section 97 read with section 83 of the Act was also filed by Shri V. Subrahmanyam petitioner in E.P. 2/ 74, opposing Mohana Rangam 's relief for declaration under section 101. The recriminator alleged that since the petitioner in E.P. 1/74 had not secured any vote, he. in the event of the election of Shri John being set aside, was entitled to be declared elected in the place of Shri John. The learned trial Judge of the High Court tried all the three petitions together and decided them by a common judg ment. 8 502SCI/77 542 The trial Court held that on the date of the scrutiny of his nomination, Shri John being less than 30 years of age, was not qualified under article 84(b) of the Constitution, to contest the election to the Rajya Sabha. On this short ground his election was set aside and the Election Petitions were accepted pro tanto. The trial Court, however,declined to grant the further declaration under section 101 in favour of either of the election petitioners. Aggrieved by that judgment, Shri John, has filed in this Court Civil Appeals 1895 1896 of 1974, and Shri V. Subrah manyam Civil Appeal 1907 of 1974. The first question that fails to be determined in these appeals is: Whether Shri John Was born on May 14, 1946, as has been found by the Court below, or on May 14, 1943 as contended by him ? Mr. Chowdhary appearing for the appellant (Shri John) contends that the burden of proving that Shri John, was at the material date below 30 years of age was on the elec tion petitioner and that the latter had failed to discharge such burden. Further grievance of Shri Chowdhary is that the High Court had wrongly rejected the oral and docu mentary evidence produced by Shri John. We find these contentions wholly devoid of merit. While it is true that the onus of proving that on the date fixed for the scrutiny of nominations, Shri John was less than 30 yea.rs of age, was on the election petitioners, they had amply discharged this onus by bringing on record overwhelming documentary evidence of a cogent and convinc ing character. This documentary evidence includes no less than a dozen previous admissions and declarations made by Shri John himself about his age, between March 1964 and July 1973. These documents containing such declarations consti tuting Shri John 's admissions are: (i) exhibit P.7 Application for Pre University Examination. (ii) exhibit P 9 Application for B.A. Examination. (iii) exhibit P l4 Application for appearing in University Examination. (iv) exhibit P l5 Application for the first B.G.L. Examination. (v) exhibit P l7 Application for admission to B.G.L. Examina tion. (vi) exhibit P l8 Application for second B.G.L. Examination April 1972. (vii) exhibit P 19 Application for second BGL Examination, Octo ber 1972. (viii) exhibit P 21 Application for admission into Law Col lege. (iv) exhibit 22 Application for B.L. Degree Examination. 543 (x) Ex. P 23(a), (b) & (c) Applications dated 23 71973 for enrolment as Advocate submitted to the Bar Council. (xi) Ex. P 27 Voters Card containing declaration of his age as 28 years signed by Shri John. (xii) exhibit P 87 a Book written by Shri John, containing a passage on its page 18 suggesting the inference that Shri John was born in 1946. All these documents aforesaid contain admissions made by Shri John that he was born in 1946. In several of these documents he declared 14 5 1946 as his date of birth. It is well settled that a party 's admission as defined in Sees. 17 to 20, fulfilling the requirements of Sec. 21, Evidence Act, is substantive evidence proprio vigore. An admission, if clearly and unequivocally made, is the best evidence against the party making it and though not conclu sive, shifts the onus on to the maker on the principle that "what a party himself admits to be true may reasonably be presumed to be so" and until the presumption was rebutted the fact admitted must be taken to be established. The above principle will apply with greater force in the instant case. Here, there are a number of clear admissions in prior declarations precisely and deliberately made in solemn documents by Shri John. These admissions were made ante litem motam during the decade preceding the election in question. These admissions were entitled to great weight. They had shifted the burden on the appellant (Shri John) to show that they were incorrect. The appellant had miserably failed to show that these admissions were incor rect. Apart from the evidence of these prior admissions the election petitioners had brought other documentary evidence, also, pointing to the conclusion that Shri John was born on 14 5 1946 and not 14 5 1943. This evidence consisted of 1. (a) Exhibit P 1 an entry in the records of St. Xavier 's College School, wherein the date of Shri John 's birth is recorded as 14 5 1946; (b) exhibit P.3 which purports to have been signed by the guardian of Shri John, declar ing his age as 14 5 1946; (c) Ex. P 2, the E.Ss. L.C. signed by Rama Prabhu, the Secretary to the Commission for Government Examinations. This Certificate was issued under the authority of law. exhibit P 4 Secondary School Leaving Certifi cate wherein Shri John 's date of birth is entered as 14 5 1946. 544 3. exhibit P 50, copy of the Fort St. George Gazette, dated 19 2 1964 showing Shri John 's date of birth as 14 5 1946. (a)Ex. P 5 the transfer certificate issued by the St. Xavier 's High School. (b) exhibit P 10 transfer certificate issued by the Principal of the College. (c) exhibit P 13 entry in the admission register of the College for joining the first year B.G.L. (d) exhibit P 16 entry in the admission regis ter of the College, for admission to second year B.G.L. Class. (e) exhibit P 10 entry in admission register of the College, 5. Bar Council Records relating to exhibit 'P 23. 6. Marriage Register, exhibit P 29, containing in the column captioned "Age" as against the name of Shri John, the entry "26 years" and the date of his baptism as 19 10 1946. Ex.P.30, Periodical report from the Church es regarding marriages solemnised therein, required under the , showing that Shri John 's marriage was solemnised in St. Francis Xavier 's Church ' Madras, on 6 4 1972 by Fr. G.K. Swami, and that on the date of this marriage he was 26 years of age. Exhibits P11, P 11(a), P 12 and P l2(a) records T.E.L.C. Kabis High School showing Shri John 's date of birth as 14 6 1946. 9. Ex.p 28 Book Varalatril Kalaignar Writ ten by Shri John containing biographical sketch. Therein, his date of birth is men tioned as 14 10 1946. The petitioner had also examined witnesses who testi fied with regard to these documents and the facts appear ing therein. The learned trial Judge has carefully dis cussed and evaluated this documentary and oral evidence. No material error or illegality on the part of the learned Judge in appreciating this evidence has been pointed out. The learned Judge found that the entries, Ex.P.29, in the Marriage Register are of great evidentiary value. Mr. Chaudhury assails this finding. According to him, no legal provision or rule of practice requires that the date of Baptism should be entered in such Register. Secondly, it is urged that the date of baptism given therein is 19 10 1946, which stands falsified by the evidence of Rev. Fr. Rosario, the Parish Priest who had baptised Shri John about 7 days after his birth in 1943. It is further argued that the best evidence as to Shri John 's date of birth could be that of the entry in the Public Birth Register maintained under authority of law and that the election petitioner on whom the onus lay, did not produce that evidence. 545 We find no substance in these contentions. In the witness box both Shri John (RW. 1 ) and his eider brother (RW 3 )admitted their respective signatures on this entry (Ex.P. 29) in the Marriage Register. They however, con tended that the information about the date of baptism was not supplied by them to the Priest who solemnised the mar riage and made this entry. The eider brother (RW. 3) howev er, admitted that they had signed the Register, notwith standing the fact that the age of Shri John was mentioned therein as 26 years. Both the brothers however, admitted that Shri John 's marriage was solemnised in St. Francis Xavier Church on 6 4 1972. In view of the admissions of RWs 1 and 3, the High Court was right in holding that Ex.P.29 stood proved, and the entries therein were entitled to great weight. As regards the Birth Register of 1946, the election petitioner made repeated attempts to get the same summoned and produced in Court. The process issued by the Court was returned with the report that the Register of 1946 was untraceable. Thereafter, a direction was issued by the Court to trace and produce it. A search for this record was made by the record remained untraceable. The Election Petitioner contended before the High Court that Shri John had by the exercise of his influence, prevented the produc tion of this record. The High Court found this charge to be incorrect. Nevertheless, it held that the Public Birth Register of 1946 had been lost long ago. This being the case, the non production of the Birth Register of 1946, must be held to be a neutral circumstance. The discrepancy pointed out by Shri Choudhury as to the date of the baptism of Shri John, takes us to the evidence produced by him. Shri John brought on the record three documents, R1, R2 and R4. R 1 is an extract from the Bap tism Register kept by the Ovari Tuticorin Diocese. The document R 1 according to the High Court was induct ed in a questionable manner, without even an application for it. This was issued by the Parish Priest, Peter Royan (RW 5), and purports to be a copy of an entry in the Baptism Register, which according to the admission wrung out from RW 5, had itself been re written and copied from the original. The Parish Priest conceded that he had burnt the original because it was in a very bad condition. The High Court found and we think rightly that this explanation of non production of the original was thoroughly unsatisfactory, and unbecoming of any Christian, more so, one connected with Church affairs, that by this 'unholy act ' of burning the register which was a violation of. Canon 777, Paragraph 676, the witness (RW 5) had done great disservice to Christianity and greater disservice to the cause of truth". Since R 1 was only a copy of a copy (R 4), the prepara tion of which was itself suspect and the explanation about the non production of the original was palpably unbelieva ble, these documents were rightly ruled out of evidence. R.W. 2, Rev. Fr. Rosario stated that he positively remembered that in the year 1943 when he was the Parish Priest, he had baptised Shri John. The witness was an old man. He had no Baptism Regis 546 ter or any other contemporaneous record to refresh his memory with regard to an event which took place more than a quarter of a century back. He was deposing to a fact in issue merely from memory. Human memory being fallible, it was hazardous to accept his ipse dixit. The oral evidence of the witness could not be preferred to the entry in the Marriage Register, exhibit P 29, showing that Shri John on the date of his marriage, which took place in 1972, was 26 year old and had been baptised in 1946. It is true that there is a slight discrepancy between the date of his baptism as entered in the Marriage Register and the date of his birth as admitted by him in the various applications he submitted for admission to various classes in College or for enrolment as an Advocate. But there is no discrepancy with regard to the year of birth as well as baptism being 1946. In exhibit P. 29, the date of his baptism is entered as 19 10 1946. The biodata appearing in the book exhibit P.28, which, according to the publisher, RW 4, was entered by him on the basis of information derived from Shri John, gives his date of birth as 14 10 1946, while all the numerous public records, the declarations constituting the prior admissions of Shri John, produced in evidence by the Election Petitioner, consistent ly show Shri John 's date of birth as 24 5 1946. We have been taken through the oral evidence rendered by Shri John (RW 1) and his eider brother (RW 3). Their inter ested testimony makes interesting reading. Shri John was asked in cross examination to state how he came to contest the Rajya Sabha elections ? He replied that, as usual, in his village Ovari, he was having a dis cussion with the members of his community to settle a dispute between owners of catamaran and mechanised boats. A suggestion was made to him that he should contest an elec tion to Parliament as a representative of the fishermen community. Shri John told them that ". an election to the Council of States is fast approaching and the only thing is I cannot enter the Rajya Sabha, because I have not complet ed the age of 30 years." Shri John was further questioned by the Counsel: "Then what happened ?" He replied: "My eldest brother was one among those who were assembled there. He told me along with another elderly gentleman, whose name I am not able to recollect now: "What non sense are you talking? You have compleated 30 years positively." Moreover they told me in adition : We have to refer to the Registers kept in the Church ' ". With this idea put into his head, the witness next morning along with his brother visited the village Church and met Rev. Fr. Peter (R.W. 5) and asked for the Baptism Register relating to the witness. Rev. Fr. Peter took out the Register, exhibit R 4, and turned .the leaves, and to the surprise of the witness, he saw his date of birth noted therein as 14 5 1943. Thereafter, Shri John approached the Chief 547 Electoral Officer, Madras, and made an application (Ex.P.23) on 26 2 1974 for correction and change of the date of his birth, as noted in the Electoral Roll, from '14 5 1946 ' to '14 5 1943 '. His application was allowed and the entry in the Electoral Roll as to age wag amended accordingly on the 6th or 7th March 1974. On further cross examination, Shri John frankly conceded that before seeing the Baptism Register in the second week of February 1974, he had all along been under the genuine impression that he was born on 14 5 1946. It was only on seeing the Register that he came to believe that he was born in 1943. It is to be remembered that this Baptism Register (R. 4) is the same, which was found by the High Court to be a suspicious record, prepared in suspicious circumstances, wholly unworthy of reliance. 3, the eider brother of Shri John also stated that when the elders of the village asked him to contest the election, he replied that he had not attained the proper age, i.e. "31 years" which was necessary to contest the election. Immediately, the witness intervened: "What non sense you are talking ? You have attained the proper age . you must go and refer in the Church". About their going to Priest Rev. Fr. Peter Royan at the village Church and scrutinising the Baptism Register his version is more or less the same as of RW 1. This witness, as already noticed, admitted that at the time of his broth er, Shri John 's marriage, he had also signed the entry, exhibit P 29, in the Marriage Register on 6 4 1972. He further conceded that in this entry exhibit P 29, the age of the bride groom, Shri John, was mentioned as 26 years. He further conceded that in exhibit P. 29, the date of Shri John 's baptism is noted as 19 10 1946. But the witness, wanted the Court to have it believed that he had signed this entry without looking into it. This version was too incredible to be swallowed without demur. The conclusion was inescapable that on 6 4 1972, Shri J.D. Mohan, RW 3, the eldest brother of Shri John, whose parents were dead, knew that the particulars of this entry. showing his age to be 26 years on 6 4 1972, and the date of his baptism in 1946, were true. That is why he and his brother John, without raising any objection, affixed their signatures thereto in token of its correctness. We need not dilate on the question of Shri John 's age further. All aspects of this issue have been discussed threadbare by the High Court. Suffice it to say, that from the evidence on record it stood clearly established that on the date of the scrutiny of the nominations, Shri John was less than 30 years of are and in view of Article 84(b) of the Constitution he was not competent to contest the elec tion for the Rajya Sabha. His nomination was therefore improperly accepted by the Returning Officer, and this improper acceptance has, in so far as it concerned the returned candidate, Shri John, materially affected the result of the election. Shri John 's election was thus rightly set aside by the High Court. Now we come to the second question, whether Shri V. Subramanyan, appellant in C.A. 1907 of 1974, is entitled to be declared elected in lieu of Shri John whose election has been set aside ? 548 Shri Ramaswami, learned Counsel for this appellant, has advanced alternative arguments. It is submitted that since Shri Mohana Rangam did not secure any vote at all, he had ceased to be a continuing candidate and stood ' automatically excluded, leaving only Shri Subramanyam, sole continuing candidate in the field. It is emphasised that Shri Rangam has not filed any recriminatory petition. In this situa tion, it is maintained, Shri Subramanyam would be deemed to have been elected, although he had secured only 300 votes. Reference in this connection has been made to Rule 81(2) of the Conduct of Election Rules, 1961. The alternative argument of Shri Ramaswami is that since Shri John was not a qualified candidate, the votes cast in his favour have to be treated as thrown away, and even if both Shri Mohan Rangam and Shri Subramanyam are assumed to be continuing_ candidates, the surplus votes cast in favour of the five successful candidates had to be trans ferred and redistributed in favour of these continuing candidates. It is urged that for this purpose the Court should send for and scrutinise the ballot papers for further counting. Shri Ramaswami further pointed out that the observations of this Court in Viswanatha Reddy vs Konap pa Rudrappa Nadganda(1) to the effect, that the votes cast in favour of the disqualified candidate are to be treated as thrown away, are equally applicable to the elections for filling vacant seats in the Council of States, notwithstand ing the fact that these elections are held according to the system of proportional representation with a single trans ferable vote whereunder there is no question of obtaining majority of valid votes, but only the required quota. In support of his contentions Shri Ramaswami has copi ously referred to the treatise, the Single Transferable Vote by K.V. Krishnaswamy Aiyar published in 1946, and the rele vant provisions of the Conduct of Election Rules, 1961 (for short, referred to as the Election Rules). The provisions material for our purpose are contained.in Part VII of the Election Rules. Shri K.V. Krishnaswamy Aiyar m his book,The Single Transferable Vote (1946 Edn.) page 23, sums up the general principles of this mode of election, thus: "The single vote is transferable from one nominee to another and that takes place in two contingencies where there would otherwise be a wastage of votes. They are: (1 ) when a candidate obtains more than what is required for his success and therefore has an unnecessary surplus; (2) When a candidate polls so few votes that he has absolutely no chance and therefore the votes nominating him are liable to be wasted." Relevant Rules in Part VII of the Election Rules are modulated on the principles enunciated by Shri Aiyar in the aforesaid book. The (1) A.I.R. 1969 S.C. 604. 549 material provisions are contained in Rule 2(1)(c), 67, 70, 71, 73 to 81 and 85. Under the scheme and system envisaged by these Election Rules, each elector has only one vote, irrespective of the number of seats to be filled. But that single vote is transferable from one candidate to another. The ballot paper bears the names of the candidates, and the elector marks on it his preferences for the candidates by denoting it with the figures 1, 2, 3, 4 and so on against the names chosen by him and this denotation is understood to be alter native in the order indicated (vide Aiyar 's The Single Transferable Vote), The figure 1 set by the elector opposite the name of a candidate means "first preference"; the figure 2 set opposite the name of a candidate, the "second prefer ence", and so on [Rule 71(ii)]. The minimum number of valid votes requisite to secure the return of a candidate at the election is called the quota. At an election where only one seat is to be filled, every ballot paper is deemed to be of the value of 1 at each count, and the quota is determined by adding the values credit to all the candi dates, and dividing the total by 2, and adding 1 to the quotient, ignoring the remainder, if any, and the resulting number is the quota, vide, Rule 75 (1 ). At an election where more than one seat is to be filled, every ballot paper is deemed of the value of 100 and the quota is determined by adding the values credited to all the candidates, and divid ing the total by a number which exceeds by 1 the number of vacancies to be filled, and adding 1 to the quotient ignor ing the remainder, if any, and the resulting number is the quota (Rule 76). The computation in the preliminary process is as under: The returning officer first deals with the covers containing the postal ballot papers, and then opens the ballot boxes, counts the ballot papers and sorts out and rejects the ballot papers found invalid. A ballot paper is deemed invalid on which (a) the figure 1 is not marked; or (b) the figure 1 is set opposite the name of more than one candidate or is so placed as to render it doubtful to which candidate it is intended to apply; or (c) the figure 1 and some other figures are set opposite the name of the same candi date; or (d) there is any mark or writing by which the elector can be identified (Rule 73). After rejecting the invalid papers, the returning officer (a) arranges the remaining ballot papers in parcels accord ing to the first preference recorded for each candidate; (b) counts and records the number of papers in each parcel and the total number; and (c) credits to each candidate the value of the papers in his parcel. He then determines the quota in accordance with Rule 75(1), or Rule 76, if the election is to fill one seat or more than one seat, as the case may be. 550 If (at any election held for filling more than one seat) at the end of any count or at the end of the transfer of any parcel or sub parcel of an excluded candidate the value of ballot papers credited to a candidate is equal to, or great er than the quota, that candidate shall be declared elected (Rule 78). if at the end of any count the value of the ballot papers credited to a candidate is greater than the quota, the surplus is transferred in accordance with the provisions of Rule 79, to the continuing candidates indicat ed in the ballot papers of that candidate as being next in order of the electors ' preference [Sub Rule (1 ) of Rule79] "Surplus" means the number by which the value of the votes original and transferred, of any candidate exceed the quota [Sub rule (6) of Rule 71]. "Continuing candidate" means any candidate not elected and not excluded from the poll at any given time [Sub rule (1 ) of Rule 71]. If more than one candidate have a surplus, the largest surplus is dealt with first and the others in order of magnitude, but every sur plus arising on the first count is dealt with before those arising on the second count and so on. Where there are more surpluses than one to distribute and two or more surpluses are equal, regard shall be had to the original votes of each candidate and the candidate for whom most original votes are recorded shall have his surplus first distributed; and if the values of their original votes are equal,. the returning officer decides by lot which candidate shall have his sur plus first distributed. [Sub rules (2) & (3) of Rule 78]. "Original Vote", in relation to any candidate, means a vote derived from a ballot paper on which a first preference is recorded, for such candidate. If the surplus of any candidate to be transferred arises from original votes only, the returning officer shall exam ine all the papers in the parcel belonging to that candi date, divide the unexhausted papers into sub parcels accord ing to the next preferences recorded thereon and make a separate sub parcel of the exhausted papers [Clause (a) of sub rule (4) of Rule 78]. "Exhausted paper" means a ballot paper on which no further preference is recorded for a continuing candidate, provided that a paper shall be deemed to have become exhausted whenever (a) the names of two or more candidates, whether continuing or not, are marked with the same figure and are next in order of preference; or (b) the name of the candidate next in order of preference, whether continuing or not, is marked by a figure not falling consecutively after some other figure on the ballot paper or by two or more figures [Sub Rule (3) of Rule 71]. The Returning Officer has to ascertain the value of the papers in each sub parcel and of all the unexhausted papers. If the value of the unexhausted papers is equal or less than the surplus, he shall transfer all the unexhausted papers at the value at which they were received by the candidate whose surplus is being transferred. If the value of the unex hausted paVers is greater than the surplus, he shall trans fer the sub parcels of unexhausted papers and the value at which each paper shall be transferred shall be ascertained by dividing the surplus by the total number of unexhausted Papers [Sub Rule (4) of Rule 78]. Sub Rule (5) indicates the procedure where the surplus of any candidate to be transferred arises from transferred as well as orginal votes; All papers in the parcel or sub parcel of an elected candidate not tansferred under this rule have to set apart as finally dealt with [Sub Rule (7) of Rule 78]. 551 Rule 80 speaks of exclusion of candidates lowest on the poll. It reads: "80. Exclusion of candidates lowest on the poll. (1) If after all surpluses have been transferred as hereinbefore provided, the number of candidates elected is less than the required number,, the returning officer shall exclude from the poll the candidate lowest on the poll and shall distribute his unexhausted papers among the continuing candi dates according to the next preferences re corded thereon; and any exhausted papers shall be set apart as finally dealt with. (2) The papers containing original votes of an excluded candidate shall first be trans ferred, the transfer value of each paper being one hundred. (3 ) The papers containing transferred votes of an excluded candidate shall then be transferred in the order of the transfers in which, and at the value at which, he obtained them. (4) Each of such transfers shall be deemed to be a separate transfer but not a separate count. (5) If, as a result of the transfer of papers, the value of votes obtained by a candidate is equal to or greater than the quota, the count then proceeding shall be completed but no further papers shall be transferred to him. (6) The process directed by this rule shall be repeated on the successive exclusion one after another of the candidates lowest on the poll until such vacancy is filled either by the election of a candidate with the quota or as hereinafter provided. (7) If at any time it becomes necessary to exclude a candidate and two or more candi dates have the same value of votes and are the lowest on the poll, regard shall be had to the original votes of each candidate and the candidate for whom fewest original votes are recorded shall be excluded; and if the values of their original votes are equal the candi date with the smallest value at the earliest count at which these candidates had unequal values shall be excluded. (8) If two or more candidates are lowest on the poll and each has the same value of votes at all counts the returning officer shall decide by lot which candidate shall be excluded. " Rule 81 deals with the filling of the last vacancies. It may also be extracted in full because a good deal of argument is founded on it. It provides: "81. Filling the last vacancies. (1) When at the end of any count the number of continuing candidates is reduced to the number of vacancies remaining unfilled, the continu ing candidates shall be declared elected. 552 (2) When at the end of any count only one vacancy remains unfilled and the value of the papers of some one candidate exceeds the total value of the papers of all the other continuing candidates together with any sur plus not transferred, that candidate shall be declared elected. (3 ) When at the end of any count only one vacancy remains unfilled and there are only two continuing candidates and each of them has the same value of votes and no sur plus remains capable of transfer, the return ing officer shall decide by lot which of them shall be excluded; and after excluding him in the manner aforesaid, declare the other candi date. to be elected. " The stage is now set for dealing with the contentions canvassed before us. The first question that falls to be considered is: Whether Shri Mohana Rangam, on account of his failure to secure any vote in the first count is to be treated as excluded from the poll ? In other words, had he ceased to be a 'continuing candidate ' within the contempla tion of the Election Rules ? We have already referred to the definition of 'Continuing Candidate ' in Rule 71(1). The definition has two elements which must be satisfied before a candidate can be said to be a continuing candidate. He should be a "candidate not elected" and further. he must not have been excluded from the poll at any given time. Shri Mohann Rangam fulfils both these conditions. Shri Ramaswami however,, contended that this definition is to be interpreted and applied in the light of what has been said in Rules 74 and 81. The argument is that an essential pre requisite to the continuance of a candidate is the allotment of a "basket" or "parcel" under Rule 74, and only such candidate is entitled to the allotment of a 'ba sket ' who at the end of the count, gets some vote to his credit and opens his account. Since Shri Rangam proceeds the argument did not get any vote whatever, he stood auto matically excluded and no question of allotting any "parcel" to him arose. The contention must be repelled. There is nothing in Rule 74 or any other Rule which, at an election to fill more than one seat, requires or empowers the returning officer to exclude a candidate from the poll merely on the ground that in the counting of the first preferences, he has not secured any valid vote. SubRule (3) of Rule 75, to which reference was made at one stage, has no application to the instant case. That sub rule which requires the returning officer to exclude from the poll a candidate whose score is the lowest governs the counting of votes where only one seat is to be filled and at the end of any count, no candidate can be declared elected. Such is not the case before us. Rule 80 also can have no application because it comes into operation at a stage "after all sur pluses have been transferred". That stage never arrived in the instant case because in the first counting itself, all the six seats were filled up, six candidates 553 (including Shri John) having secured the requisite quota of first preference votes. Nor did the stage for applying Rule 81 arise, because at the end of the first count, no vacancy remained unfilled. We therefore, repel the contention of the learned coun sel and hold that Shri Mohana Rangam did not get automati cally excluded. Both he and Shri Subramanyan were 'contin uing candidates '. Shri Subramanyan could not be declared elected as he had not obtained the required quota of 3,201 votes. This takes us to the next question. Should all the votes that had polled in favour of the candidate (Shri John) who has been found by the Court to be statutorily disquali fied for election,, be regarded as thrown away, and in consequence, the appellant, Shri Subramanyan, who secured 300 votes as against none obtained by Shri Mohana Rangam, be declared elected ? Again, the answer to this question, in our opinion, must be in tire negative. It is nobody 's case that the electors who voted for Shri John, had at the time of election, knowl edge or notice of the statutory disqualification of this candidate. On the contrary, they must have been under the impression that Shri John was a candidate whose nomination had been validly accepted by the returning officer. Had the electors notice of Shri John 's disqualification, how many of them would have voted for him and how many for the other continuing candidates, including Sarv Shri Subramanyan and Mohan Rangam, and in what preferential order, remains a question in the realm of speculation and unpredictability. In the view we take, we are fortified by the observa tions in this Court 's decision in R.M. Seshadri vs G.V. Pai (1). In that case, the election of R.M. Seshadri to the Madras Legislative Council was set aside on the ground that he was guilty of the corrupt practice of hiring or procuring motor vehicles to carry voters. The total votes polled were 12,153. Since the voting was by a single transferable vote, three out of the five candidates were eliminated at different counts with the result that their votes were transferred to the second candidate named in the ballot. At the final count Seshadri received 5643 votes and his nearest rival, G.V. Pal received 5388 votes. The number of the voters who were carried in the hired or procured vehicles could not be ascertained. Before this Court, it was contended that the election of Seshadri having been set aside, G.V. Pai who had polled the next highest number of votes should be declared elected. Hidayatullah C.J. speaking for the Court, rejected this contention with these observations: "This (question) will depend on our reaching the conclusion that but for the fact that voters were brought through this cor rupt practiee to the polling booths, the result of the election had been materially affected In a single transferable vote, it is very difficult to say how the voting would have gone; , , at page 701 554 because if all the votes which Seshadri had got, had gone to one of the other candidates who got eliminated at the earlier counts, those candidates would have won. We cannot order a recount because those voters were not free from complicity. It would 'be speculating to decide how many of the voters were brought to the polling booths in car. We think that we are not in a position to declare Vasanta Pai as elected, because that would be merely a guess or surmise as to the nature of the voting which would have taken place if this corrupt practice had not been perpetrated. " The position in the instant case is no better. It is extremely difficult, if not impossible, to predicate what the voting pattern would have been if the electors knew at the time of election, that Shri John was not qualified to contest the election. In any case, Shri Subramanyan. was neither the sole continuing candidate, nor had he secured the requisite quota of votes. He cannot therefore, be declared elected. The dictum of this Court in Viswanatha vs Konappa (supra) does not advance the case of the appellant, Shri Subramanyan. In that case, the election in question was not held according to the system of a single transferable vote. There were only two candidates, in the field for a single seat, and one of them was under a statutory disqualifica tion, Shah J. (as he then was) speaking for the Court, held that the votes cast in favour of the disqualified candidate may be regarded as thrown away, even if the voters who had voted for him were unaware of the disqualification, and the candidate securing the next highest number of votes was declared elected. The learned Judge was however careful enough to add: "This is not to say that where there are more than two candidates in the field for a single seat, and one alone is disquali fied, on proof of disqualification all the votes cast in his favour will be discard ed and the candidate securing the next highest number of votes will be declared elected. In such a case, question of notice to the voters may assume, significance, for the voters may not, if aware of the disqualification, have voted for the disqualified candidate" The ratio decidendi of Viswanatha vs Konappa is applicable only where (a) there are two contesting candidates and one of them is disqualified,. (b) and the election is on the basis of single non transferable vote. Both these condi tions do not exist in the present case. As already dis cussed, Shri Subramanyan appellant was not the sole surviv ing continuing candidate left in the field, after exclusion of the disqualified candidate, Shri John. The election in question was not held by mode of single transferable vote according to which a simple majority of votes secured en sures the success of a candidate, but by proportional repre sentation with single transferable vote, under which system the success of a candidate normally depends on his securing the requisite quota. 555 However, the principle underlying the obiter in Viswanatha vs Konappa, which we have extracted, is. applica ble to the instant case because here, after the exclusion of the disqualified candidate, two continuing candidates were left in the field.

In the biennial elections of 1974 for filling six vacancies to the Rajya Sabha from the State of Tamil Nadu, there were eight contestants, including both the appellants and one R. Mohanarangam, the petitioner in Election Petition No. 1 of 1974. The requisite quota to secure the election of a candidate was fixed at (22400 +1)/6+1 +1 =3201 and the appellant John secured 3700 votes. While the appellant Subrahmanyam secured 300 votes, Mohanarangam failed to secure any. The rest of them secured more than the quota, thus leaving "surplus votes" for transfer within the mean ing of Rule 71 (6) of the Conduct of Election Rules. In the election petitions filed by Mohanarangam and Subrahmanyam, the election of Sri John was assailed on the ground that on March 12, 1974, the date of the scrutiny of the nominations, he was less than 30 years of age and as such he did not possess the qualifications as to age laid down under article 84(b) of the Constitution that the improper acceptance of John 's nomination has materially affected the election. The petitioners prayed that the election of Sri John be declared void and set aside under section 100 of the Representation of Peoples Act, 1951. Each of the petition ers claimed that in the event of Sri John 's election being set aside, he be declared elected under section 101 of the Act. A recrimination petition No. 1/74 under section 97 read with section 83 of the Representation of Peoples Act was also filed by the appellant Subramanyam, opposing Mohanarangam 's relief for the declaration under section 101 of the Act, alleging that since the petitioner Mohanarangam in E.P. 1/74 had not secured any vote, he, in the event of the election of Sri John being set aside, was not entitled to be declared elect ed in the place of John. The trial Judge of the High Court held that on the date of the scrutiny of nominations Sri John being.less than 30 years of age was not qualified under article 84(b) of the Constitution to contest the election to,the Rajya Sabha and accepting the election petition pro tanto set aside John s election. The trial Judge, however, declined t.o grant further declaration under section 101 in favour of either of the election petitioner. Dismissing the appeals, the Court, HELD: (1) From the evidence on record it stood clearly established that on the date of the scrutiny of nominations Sri John was less than 30 years of age 539 and in view of article 84(b) of the Constitution he was not competent to contest the election for the Rajya Sabha. His nomination was, therefore, improperly accepted by the Re turning Officer, and this improper acceptance has, in so far as ' it concerned the returned candidate, Sri John materially affected the result of the election. [547 F G] (2) The onus of proving that on the date fixed for the scrutiny of nominations, a contestant was less than 30 years of age was on the election petitioners. In the instant case, the petitioners had amply discharged this onus by bringing on record over whelming documentary evidence of a cogent and convincing character. This documentary evidence includes no less than a dozen previous admissions and declarations made between March 1964 and July 1973 by Sri John himself about his age, to the effect that he was born in 1946 and that his date of birth was 14.5.1946. Apart from the evidence of these prior admissions the election petitioners had brought other documentary evidence viz., the school record purport edly signed by John 's guardian, Secondary School Leaving Certificate 'and various other documents of the educational institutions, Marriage Register Bar Council Record and Church records etc. pointing to the conclusion that Sri John was born on 14.5.1946 and not on 14 5 1943. [542 D H, 543 A B F] (3) It is well settled that a party 's admission as de fined in sections 17 to 20 fulfilling the requirements of section 21, Evidence Act is substantive evidence proprio vigore. An admission, if clearly and unequivocally made is the best evidence against the party making it and though not conclusive, shifts the onus on to the maker on the principle that "what a party himself admits to be true may reasonably be presumed to be so" and until the presump tion was rebutted the fact admitted must be taken to be established. In the instant case, there are a number of clear admissions in prior declarations precisely and delib erately made in solemn documents by Shri John. These admis sions were made ante litem motam during the decade preceding the election in question. These admissions were entitled to great weight. They had shifted the burden on the appellant (Shri John) to show that they were incorrect. The appel lant had miserably failed to show that these admissions were incorrect. [543 C E] (4) Under Rule 71(1) of the Conduct of Election Rules, 1961, "Continuing candidate" means any candidate not elected and not excluded from the poll at any given time. Two elements must, therefore, be satisfied before a candidate can be said to be a Continuing candidate. He should be a "candidate not elected" and further he must not be excluded from the poll at any given time. In the instant case Sri Mohanarangam fulfils both these conditions. [550 B, 552 C] (5) The contention that an essential prerequisite to the continuance of a candidate is the allotment of a "bas ket" or "parcel" under Rule 74 and only such candidate is entitled to the allotment of a basket who at the end of the count gets some vote to his credit and opens his account, and since Mohanarangam did not get any vote whatever he stood automatically excluded is not correct. There is nothing in Rule 74 or any other Rule which, at an election to fill more than one seat, requires or empowers the Return ing Officer to exclude a candidate from the poll merely on the ground that in the counting of the first preferences, he has not received any valid vote. [552 E H] (6) Sub Rule (3) of Rule 75 which requires the Return ing Officer to exclude from the poll a candidate. whose score is the lowest governs the counting of votes where only one seat is to be filled and at the end of any count, no candidate can be declared elected. Sub Rule (3) of Rule 75 has no application to the instant case. [552 G] (7) Rule 80 can have n6 application because, it comes into operation at a stage "after all surpluses have been trans ferred. That stage never arrived in the instant case because in the first counting. itself all the six seats were filled up six candidates (including Shri John) having received the requisite quota of first preference votes. Nor did the stage for applying Rule 81 arise, because at the end of the first count, no vacancy remained untitled. In the instant case, shri Mohanarangam did not get automatically excluded. Both he and Sri Subrahmanyam were continuing candidates. Sri Subrahmanyam could not be declared elected as he had not obtained the required quota of 3201 votes. [522 H; 553 A] 540 (8) The ratio decidendi of Viswanatha vs Konappa is applica ble only where, (a) there are two contesting candidates and one of them is disqualified (b) and the election is on the basis of single non transferable vote. In the instant case the election in question was not held by mode of single non transferable vote according to which a simple majority of votes secured ensures the success candidate, but by proportional representation with single transferable yore under which system the success of a candidate normally depends on his securing the requisite quota. Shri Subrah manyam was not the sole surviving continuing candidate left in the field, after exclusion of the disqualified candi date, Shri John. [554 G H, 555 A] Wiswanatha vs Konappa AIR 1969 S.C. 604, distinguished. All the votes that had polled in favour of Shri John who has been found by the court to be statutorily disqualified for election cannot be regarded as thrown away and in conse quence, the appellant Shri Subrahmanyam who secure 300 votes as against none obtained by Shri Mohanarangam cannot be declared elected. Shri Subrahmanyam was neither the sole continuing candidate not had be secured the requisite quota of votes. It is nobody 's case that the electors who voted for Shri John had at the time of election knowledge or notice of the statutory disqualification of this candidate. On the contrary, they must have been under the impression that Shri John was a candidate whose nomination had been validly accepted by the Returning Officer. Had the electors notice of Shri John 's disqualification, how many of them would have voted for him and how many for the other continu ing candidates including Sarvashri Subrahmanyam and Mohana rangam and in what preferential order, remains a question in the realm of speculation and unpredictability. [553 B E] R.M. Seshadri vs G.V. Pai ; @ p. 701, fol lowed.

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vil Appeal No. 2176 of 1968. Appeal from the Judgment and Decree dated the 18 8 1965 of the Mysore High Court in M.F.A. No. 341 of 1964. S.T. Desai, K.N. Bhat and R.B. Datar for the Appellants. Narayan Nettar for Respondent. The Judgment of the Court was delivered by GUPTA, J. The only question disputed in this appeal is whether a temple, known as Varadaraj Venkataramana Temple at Gutput in Mangalore Taluk, in Karnataka, is a public temple or a temple belonging to Goud Saraswat Brahmin Community of Gurpur. This is an ancient temple founded about 400 years ago. In a proceeding under section 57 of the Madras Hindu Reli gious and Charitable Endowments Act, 1951 (hereinafter referred to as the Act), the Deputy Commissioner by his order dated January 17, 1961 held that the temple was a public temple and the Commissioner on appeal affirmed the order of the Deputy Commissioner on June 12, 1961. Thereaf ter the appellants who are the trustees of the temple insti tuted a suit, O.S. No. 106 of 1961, in the court of the Subordinate Judge, South Kanara, for a declaration that the temple was a private temple and not a temple as defined in section 6(17) of the Act or, in the alternative, for a declaration that it was a denominational or sectional temple belonging to the Goud Saraswat Brahmin community of Gurpur. There was also a prayer for cancellation or modification of the order of Commissioner dated June 12, 1961 affirming that of the Deputy Commissioner that this was a public temple. The Subordinate Judge held on the evidence that this was a denominational or sectional temple belonging to the Goud Saraswat Brahmin community of Gurpur and not a private temple. He further held that there was no evidence before the Deputy Commissioner justifying his order which was affirmed by the Commissioner that it was a public temple. He observed that "it is incorrect to draw an inference of dedication to the public merely from the fact of user by the public". Accordingly, he allowed the alternative declaration asked for by the plaintiffs and modified the order of June 12, 1961 made by the Commissioner affirming the order of the Deputy Commissioner dated January 17, 1961. From the deci sion of the trial court, the respondents preferred an appeal to the High Court. The appellants before us also filed a cross objection contending that the Subordinate Judge should have held that the temple was a private temple and not a denominational or sectional temple. The High Court found that this was a temple as defined in section 6(17) of the Act. On the evidence also the High Court took a different view from the trial court and held that the temple was a place of religious worship dedicated to and used as of right by the general Hindu community and was thus a public temple. On this 634 view the High Court allowed the appeal and dismissed the cross objection. The appeal before us is by the plaintiffs on certificate granted by the Karnataka High Court. The Subordinate Judge held on the evidence that the temple was founded by 37 Goud Saraswat Brahmin families of Gurpur, that the trustees managing the temple belonged always to the members of the said community, that the landed properties owned by the temple had all been endowed by members of this community, and that there was no reliable evidence of endowment of any immovable property by any person outside the community. The Subordinate Judge on considering the evidence of defendants ' witness Nos. 2 to 4, on whom the defendants relied to prove that the temple was dedicated to the general Hindu community, found that none of them claimed a right of worship in the temple and the 'sevas ' offered by them were voluntary and the income from such sevas was also small. He further found that it was only the members of the Goud Saraswat Brahmin community who were allowed to participate in the more important ceremo nies. It was observed that the fact that Hindus other than those belonging to the Goud Saraswat Brahmin community were not prevented from worshipping in the temple did not "de prive the temple of its sectional character", that it was "incorrect to draw an inference of dedication to the public merely from the fact of the user by the public". Thus the decision of the Subordinate Judge was that the temple was not a public temple because it was not dedicated to the general Hindu community but for the benefit of Goud Saraswat Brahmin community of Gurpur. The High Court held that the definition of temple in section 6(17) of the Act covers the temple in question. The definition is as follows: ""temple" means a place by whatever designation known, used as a place of public religious worship, and dedicated to, or for the benefit of or used as of right by, the Hindu community or any section thereof, as a place of public religious worship;" Even on the findings recorded by the Subordinate Judge, this would be a temple dedicated to or for the benefit of a section of the Hindu community and as such covered by the definition. The High Court reversed the decision of the Subordinate Judge and held that "facts of the present case lend support to the conclusion that the temple must have been dedicated for the benefit of and used by the Hindu community and is being used by them, as of right, as a place of public religious worship". The facts that weighed with the High Court were that Hindus generally came to worship in the temple and were not turned away and that when the deity is taken out in procession, members o.f the Hindu community other than Goud Saraswat Brahmins also offer "araties". The claim made by some of the witnesses for the defendants that they used to consult the oracle in the temple also seemed to the High Court a significant circumstance. But the High Court appears to have overlooked that these witnesses admit ted that "before consulting the oracle, 635 the manager must be told of it and it is he, who could consult on their behalf". The High Court has recorded a finding that "numerous endowments" have been made by Hindus not belonging to Goud Saraswat Brahmin community. This is not however supported by the evidence in the case. Another circumstance which impressed the High Court was the recital in an award (Ext. A 13) which was made part of the decree (Ext. A 3) in a previous proceeding between the members of Goud Saraswat Brahmin community themselves, that the trus tees of the temple should place the accounts of income and expenditure before the "general body". This "general body" according to the High Court implied, the Hindu community generally. In the context of the award (Ext. A 13) it is however clear that the 'general body ' mentioned therein could only refer to the members of the Goud Saras wat Brahmin community because the proceeding concluded by the decree was confined to the members of the community. The law is now well settled that "the mere fact of the public having been freely admitted to the temple cannot mean that courts should readily infer therefrom dedication to the public. The value of such public user as evidence of dedi cation depends on the circumstances which give strength to the inference that the user was as of right". (see Bihar State Board. Religious Trust, Patna vs Mahant Sri Biseshwar Das(1). We find that the circumstances disclosed in evi dence in this case do not support the inference that Hindus generally used the temple as a place of worship as of right. The appeal is accordingly allowed. The Judgment of the High Court is set aside and that of the trial court re stored. In the circumstances of the case we make no order as to costs. S.R. Appeal allowed. (1) (689). 502SCI/77 2500 23 11 77 GIPF.

section 6(17) of the Madras Hindu Religious and Charitable Endowments Act, 1951 defines a temple as "temple" means a place by whatever designation known, used as a place of public religious worship, and dedication to, or for the benefit of or used as of right by, the Hindu Community or any section thereof, as a place of public religious worship. The Deputy Commissioner, in a proceeding u/s 57 of Madras Hindu Religious and Charitable Endowments Act, 1951 and the Commissioner on appeal held that an ancient temple founded about 400 years ago known as Varadaraj Venkataraman Temple at Gurpur in Mangalore Taluk in Karnataka as a 'Public Temple '. But in the suit No. DS. 106/1961 instituted by the appellant trustees of the temple for a declaration that the temple was a private temple and not a temple as defined in section 6(17) or in the alternative that it was a denominational or sectional temple belonging to the Goud Saraswat Brahmin Community of Gurpur, the Subordinate judge South Kanara, held on the evidence that this was a denominational or sectional temple belonging to the Goud Saraswat Community and allowed the alternative declaration. The High Court on appeal found that this was a temple as defined in section 6(17) of the Act and taking a different view of the evidence held that the temple was a place of religious worship dedicated to and used as of right by the general Hindu Community and was thus a public temple. On appeal by certificate the Court, HELD: (1) It is now well settled that "the mere fact of the public having been freely admitted to the temple cannot mean that Courts should readily infer therefrom dedication to the public. The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right." [635 B C] Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das, (689) referred to. (2) In the instant case the circumstances disclosed in evidence do not support the inference that Hindus generally used the temple as a place of worship as of right. The evidence is to the effect (i) that the temple was founded by 37 Goud Saraswat Brahmin families of Gurpur, (ii) that the trustee managing the temple belonged always to the members of said community, (iii) that the lended properties owned by the temple had all been endowed by members of the Community, (iv) that none of the witnesses claimed a right of ownership in the temple and the small sevas were voluntary, (v) that it was the members of the Goud Saraswat Brahmin Community who were allowed to participate in the more important cere monies. [634 B D; 635D] (3) The High Court 's finding that "numerous endowment" have been made by Hindus not belonging to Goud Saraswat Brahmin Community, is not subpotted by the evidence in the case. In the context of the Award (Ext. A 13) the term general body mentioned therein could only refer to the members 633 of the Goud Saraswat Brahmin Community and not to the Hindu Community generally, because the proceeding concluded by the decree was confined to the members of the Community. [635 A B]

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Civil Appeal No. 974 of 1975. (Appeal by Special Leave from the Judgment and Order dated 25 6 1975 of the Gujarat High Court in Spl. Civil Appln. No. 1223/74). D.V. Patel and S.S. Khanduja, for the Appellant. 885 U.R. Lalit, P.H. Parekh and Miss Manju jatley, for Respondent No. 1. M.N. Shroff, for Respondent No. 2. The Judgment of the Court was delivered by GUPTA, J. The appellant was elected a councillor of Anjar municipality in Kutch District sometime in 1972, and later, President of the municipality. On June 30, 1973, after he had been elected President, the appellant applied to the chief officer of the municipality for allotting to him a 'plot of land admeasuring 18 feet x 16 feet situate in the town of Anjar. In his application the appellant stated that he wanted the plot for running a flour mill temporarily until he got a suitable plot from the Govern ment. By his order dated July 5, 1973 the chief officer granted the request permitting the appellant to hold the land on payment of rent on condition, inter alia, that the land should be vacated whenever 'the municipality so or dered. The first respondent who is a resident of Anjar applied to the Collector of Kutch under section 38 of the Gujarat Municipalities Act, 1963 (referred to as the Act hereinafter) for declaring that appellant 's office has "become vacant" as he has disabled himself from continuing as a councillor by taking lease of the land from the munici pality. The Collector having heard the parties held that the appellant had got the land by misusing his position as President of the municipality incurring thereby the disqual ification referred to in section 38(1)(b)(i) of the Act which disabled him from continuing to be a councillor and declared that his office had become vacant. The appellant before us preferred an appeal under section 38(4) of the Act to the State Government against the Collector 's order. The State Government allowed the appeal and dismissed the application of the first respondent. It was held that the land was allotted to the appellant in accordance with the by laws of the municipality and that there was no evidence of the appellant exerting any influence on the chief offi cer. The first respondent challenged the order of the State Government by filing a writ petition in the Gujarat High Court. The learned Judge of the High Court who heard the petition allowed the same, quashed the order of the State Government, and restored the order made by the Collector. This appeal by special leave is directed against the judg ment of the High Court allowing the writ petition. The appeal turns on section 38(1)(b)(i) of the Act which reads as follows: "38. Disablilties from continuing as a councillor. (1) If any councillor during the term for which he has been elected or nomi nated (a) x x x (b) acts as a councillor in any matter (i) in which he has directly or indirectly, by himself or his partner, any such share or interest as is de:scribed in clause (i), (ii), (iii), (v) or (vii) of sub section 886 (3) of section 11, whatever may be the value of such share or interest, or . . . . . he shall subject to the provisions of sub section (2) be disabled from continuing to be a councillor and 'his office shall become vacant. " The provisions of sub section (2) are not relevant for the present purpose. Section 11 of the Act enumerates, inter alia, the "gener al disqualifications for becoming a council lor" and specifies the cases to be treated as exceptions. Section 11(2)(c) disqualifies a person from being a councillor "who, save as hereinafter provided, has directly, or indi rectly, by himself or his partner any share or interest in any work done by order of a munic ipality or in any contract or employment with or under or on behalf of a municipality '. Sub section 3(A)(i) of section 11 which con tains an exception to this rule provides: "(3) A person shall not be deemed to have incurred disqualification (A) under clause (c) of sub section (2) by reason of his (i) having any share or interest in any lease, sale or purchase ;of any immovable property or in any agreement for the same." Thus a person is disqualified from becoming a councillor if he. has a direct or indirect interest in any contract with the municipality, but having any share or interest in any lease of immovable property or in any agreement for the same is not a disqualification. Section 38(1)(b) (1),quoted above however provides that if any councillor during the term for which he has been elected "acts as a councillor" in acquiring a direct or indirect share or interest in any lease, he shall be disabled from continuing to be a council lor. We have noted earlier that section 11(3)(A)(i) is an exception to. the general disquali fication under section 11(2) (c), section 38(1) (b) (i) appears to be an exception to that exception. This means that though having an inter est in any lease from municipality is not a disqualification for becoming or continuing as a councillor, if the council lor "acts as a councillor" in getting such lease from the municipality, he shall be 'disabled from continuing to be a councillor. The president of the municipality being a council, lot, this provision also applies to him. The ques tion therefore is whether the appellant in this case acted as a councillor in the matter of allotment of the land to him. Section 275 of the Act authorises the municipality to make bylaws not inconsistent with the Act. The Anjar municipality has framed by laws regulating the conditions on which permission may be given for the temporary occupa tion of public streets or land. An English translation of by law 4 of these by laws which are in Gujarati reads: "Permission will be given for the, use of public road or land within the municipal limits but not of private land for temporary period for the matters mentioned in Schedule 1 hereto on advance payment of fee as stated in the Schedule. 887 Any person who intends to occupy such land shall have to make a written application to the chief officer. But to give such permis sion or not shall be within the absolute discretion of the chief officer. " Schedule 1 mentioned here prescribes the fees payable by the applicant on such permission being granted. The chief officer in this case permitted the appellant to occupy the land in question in exercise of the power given to him by this by law. The High Court found that the appellant acted as a councillor and President of the municipality in having the plot allotted to him mainly upon the provisions of sections 49 and 45 of the Act. Section 49 defines the power and duties of the chief officer. Sub section (1)(a) of 'sec tion 49 which is relevant in this context is as follows: "49. Power and duties of chief officer. (1) The chief officer shall (a) subject to the general control of the president watch over the financial and executive administration of the municipality and perform all the duties and exercise all the powers specifically imposed or conferred upon him by, or delegated to him under, this Act. " Section 45 enumerates the functions of the President; one of the functions is to exercise supervision and control over the acts and proceedings of all officers and servants of the municipality in matters of executive administration. The High Court after referring to these provisions observed that the chief officer being under the general control of the president in all matters of executive ,administration, must have felt himself bound to grant the appellant s applica tion. The High Court referred to an earlier application for the plot made by one Karan Kanji which the chief officer had rejected. There is also a finding that by law 4 did not permit the use of the plot for the purpose for which the appellant had applied and that the chief officer went out of his way to help his president. The High Court concluded that if the appellant had not been a councillor of the municipality and its president, his application would have met with the same fate as Karan Kanji 'section The legality of the chief officer 's order is not however an issue in this case, and the question whether or not the intended use of the plot by the appellant was beyond the scope of by law 4 need not detain us. According to the High Court it was only because the appellant held the office of president 'of the municipality that the chief officer allowed his application. This may or may not be true, but it is not a matter relevant to the real question that arises for consideration in this case. Section 38(1)(b)(i) disables a councillor from continuing as such if he "acts as a councillor" in the matter of allotment of any land to himself, there is no bar in the Act to a coun cillor getting a lease of the land from the municipality as would appear from section 11(3)(A)(i). It is only in a case where he acts as a councillor in getting the lease that he is disqualified. There is nothing in the record of this case to show that the appellant had acted as a councillor to have the plot allotted to him 888 self. 'Even if the chief officer was influenced by the fact that the applicant before him was president of the munici pality, that would not attract section 38(1)(b)(i). It is true that section 45 confers a general power of supervision and control on the president over the acts of all officers of the municipality and section 49, which enumerates the power and duties of chief officer, also makes him subject to the general control of the president in the discharge of these powers. But the general power of supervision con ferred on the president does not, in our opinion,imply that in every case where he applies for a lease, which he is entitled to do as section 11(3)(A) (i) indicates, he should be deemed to have "acted" within the meaning of section 38(1)(b), otherwise, the president of a municipality under this Act, by virtue of his office would be disentitled altogether from applying for permission to use any land of the municipality. If this were the correct position then there was no point in limiting the disqualification contemplated in section 38(1) (b) (i) to cases where the councillor acts as a councillor. The words "acts as a councillor" cannot be treated as redundant. In our view the councillor acts as a councillor within the 'meaning of section 38(1)(b) when he performs any of the functions which under the Act he is required to perform. An allegation of misuse of his position against a councillor would not at tract the disability under section 38(1) (b)(i) unless it was shown furher that he has acted as a councillor in the matter. In view of the clear provision of section 38(1)(b)(i) we do not find it possible to support the im pugned judgment. The appeal is therefore allowed and the judgment of the High Court reversing the decision of the State Government is set aside. In the circumstances of the case we make no order as to costs. P.B.R. Appeal allowed.

Under section 38(1)(b)(i) of the Gujarat Municipalities Act, 1963, if a councillor. during the term for which he has been elected or nominated, acts as a councillor in any matter in which he has directly or indirectly any share or interest, he shall, subject to the provisions of sub section 2, be disabled from continuing to be a councillor and his office shall become vacant. While functioning as President of a municipality the appellant obtained a plot of land within the municipality for running a mill. The Chief Officer who was the authority to grant such permission permitted the appellant to hold the plot on certain conditions. The High Court in writ petition by the respondent held that the appellant was disqualified from continuing President of the municipality. Allowing the appeal to this Court, HELD: (1) Section 38(1)(b)(i) disables a councillor from continuing as such if he, "acts as a councillor" in the matter of allotment of any land to himself; there is no bar in the Act to a councillor getting a lease of the land from the municipality as would appear from section 11(3)(A)(i). It is only in a case where he acts as a councillor in getting the lease that he is disqualified. There is nothing on the record to show that the appellant had acted as a councillor to have the plot allotted to himself. [887 H] (2) Whether or not the Chief Officer was influenced by the fact that the applicant before him was President of the municipality, was not relevant to the question whether section 38(1)(b)(i) was attracted. [888 A] (3) The general power of supervision conferred on the Presi dent does not imply that in every case where he applied for a lease, which he is entitled to do as section 11(3)(A)(i) indi cates, he should be deemed to have 'acted ' within the mean ing of section 38(1)(b)(i); otherwise the President of a munici pality under the Act, by virtue of his office would be disentitled altogether from applying for permission to use any land of the municipality. If this were the correct position then there was no point in limiting the disqualifi cation contemplated in section 38(1)(b)(i) to cases where the councillor acts as a councillor. The words 'acts as a councillor ' cannot be treated as redundant. The councillor acts as a councillor within the meaning of section 38(1)(b)(i) when he performs any of the functions, which, under the Act, he is required to perform. An allegation of misuse of his position against a councillor would not attract the disabil ity unders. 38(1)(b)(i) unless it was shown further that he has acted as a councillor in the matter. [888 B D]

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Appeal No. 950 of 1972. (From the Judgment and Order dated the 5 7 1971 of the Calcutta High Court in Appeal No. 130/71). N.R. Khaitan, A.T. Patra and Praveen Kumar, for the appel lant. 126 Lal Narain Sinha, Sol. General, S.N. Prasad and Girish Chandra not present for respondents. The Judgment of the Court was delivered by BHAGWATI, J. The appellant ,owns a jute mill situate at Rajgunj, Railway Station Andul, District Howrah in the State of West Bengal and among other jute products, it manufac tures jute carpet backing cloth at its jute nUll. The appellant exported diverse quantities of jutecarpet backing cloth manufactured by it to various countries during the period 13th July 1966 to 30th November 1966. There was a Tax Credit certificate Scheme framed by the Central Gov ernment under Section 280 ZE read with Section 200 ZC of the Income 'tax Act 1962. The Scheme was called the Tax Credit Certificate (Exports) Scheme 1965. The Scheme pro vided for grant of Tax Credit Certificate in respect of certain categories of goods or merchandise specified in column 2 which were exported to destinations specified in column 4 and the dates of export of which fell after 28th February 1965, for an amount calculated at the rates speci fied in column 3 of the Table attached to the Scheme. Jute carpet backing cloth was covered by Item 1 in column 2 of the Table which specified "goods made of jute not otherwise specified". If the Scheme had remained unamended, the appellant would have been entitled to tax credit certifi cates in respect of the exports made by it of jute carpet backing material, but a notification was issued by the Central Government on 6th June, 1966 in exercise of the powers conferred by Section 280 ZE read with Section 200 ZC, whereby paragraph 3 of the Scheme which .provided for grant of tax credit certificates was amended by re numbering that paragraph as sub paragraph (1) and adding a sub paragraph (2) to the following g effect: "No certificate shall be granted under sub paragraph (1) in respect of any sale proceeds referred to in that sub paragraph or part of such sale proceeds, received after the 5th day of June 1966 in India in according with the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the rules made thereunder". This amendment had the effect of disentitling an ex porter to taxcredit certificate in respect of goods or merchandise exported by him in all cases where sale proceeds or part thereof were received in India after 5th June, 1966. The necessity for making this amendment in the Scheme arose on account of devaluation of the Indian rupee which was made by the Central Government, as it was felt that in view of the devaluation it was not necessary to give any further incentive for export. But it was 'soon realised that this amendment of the Scheme might work hardship in those cases where goods or ' merchandise were exported before 5th June 1966 on the faith of the Scheme but for some reason or the other, the sale proceeds were not received until after that date and, therefore, a second notification dated 8th Au gust, 1966 was issued by the Central Government further. amending the scheme in exercise of the powers conferred under Section 280 ZE read with Section 280 ZC by deleting sub paragraph (2) and instead, adding a proviso which pro vided for grant of tax credit certify 127 cate in respect of goods or merchandise exported on or before 5th June 1966 even if the said proceeds were re ceived after that date and declared that in ease of goods exported after 5th June 1966 the ' rate specified in column 3 of the Table shall be deemed to be nil and no certificate shall be granted in respect of such goods or merchandise. The exports of jute carpet backing cloth made by the appel lant were admittedly after 5th June, 1966 and hence both the notifications adversely affected the appellant by disentitling it to tax credit certificates in respect of these exports. The appellant, therefore, filed a Writ Petition in the High Court of Calcutta for a writ of manda mus for quashing and setting aside both the Notifications and directing the Central Government to consider the appli cation of the appellant for tax credit certificates in respect of the exports without taking into account the two Notifications. Though there were several grounds on which the validity of these two Notifications was challenged in the Writ Petition before the High Court, only one ground was pressed before us on behalf of the appellant and we shall, therefore, refer only to that ground. That ground was that both the Notifications were outside the power conferred on the Central Government under Seetion 260 ZE read with Section 280 ZC, since the Central Government had no power under these Sections to make a scheme providing that no tax credit certificate shaft be granted in case of any goods or merchandise at all. This ground found favour with the single Judge of the High Court but on appeal under clause 15 of the Letters Patent, a Division Bench of the High Court took a different view and negatived the chal lenge. Since the writ petition was dismissed by the Division Bench, the appellant preferred the present appeal after obtaining a certificate of fitness from the High Court. The Indian Income Tax Act 1922 as originally enacted, did not contain the fasciculus of Sections under Chapter XXII providing for grant of tax credit certificates. This Chapter comprising Sections 280 ZC and 280 ZE was inserted by the Finance Act 1965 with effect from lst April 1965 with a view to providing incentive for export purpose of which Section 280 ZC and 280 ZE are material, reads as follows : "280 ZC. (1) Subject to the provisions of this Section, a person who exports any goods or merchandise out of India after the 28th day of February. 1965 and receives the sale proceeds thereon in India in according with the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the rules made there under shall be granted a tax credit certifi cate for an amount calculated at a rate not exceeding fifteen per cent, on the amount of such sale proceeds. (2) The goods or merchandise in respect of which a tax credit certificate shall be granted under sub section (1) (including the destination of their export) and the rate at which the amount of such certificate shall be calculated shall be such as ,may be specified in the Scheme: Provided that different rates may be specified in respect of different goods or merchandise. 128 (3) In specifying the goods or merchan dise (including the destination of their export) and the rates, the Central Government shall have regard to the following factors, namely: (a) the cost of manufacture or production of such goods or merchandise and prices of similar goods in the foreign markets;. (b) the need to develop foreign markets for such goods or merchandise; (c) the need to earn foreign exchange; (d) any other relevant factor". Section 280 ZE conferred power on the Central Government to frame one or more scheme or schemes to be called tax credit Certificate scheme or schemes in the following words: "(1) The Central Government shaH, by notification in the Official Gazette, frame one or more scheme or schemes to be called tax credit certificate scheme or schemes in rela tion to tax credit certificates to be grant ed under this Chapter. (2) A scheme framed under sub section (1) may provide for : (a) the form and manner in which, and the authority to which, applications for the grant of tax credit certificates shall be made; (b) the form in which, and the intervals at which and the authority by which, such cer tificates shall be issued; (c) the verification of any information or particulars furnished, or contained in any application made, by or on behalf of any person entitled to tax credit certificates; (d) the determination of the rights and obligations of a person to whom such certifi cate has been granted and the circumstances in which any right in or title to the said certificate may be transferred to. or devolve on any other person by succession or otherwise; (e) the determination of the rights and obligation of persons who jointly subscribe to an eligible issue of capital; (f) the determination of the rights and obligation of persons who subscribe to an eligible Issue of capital, on behalf, or for the benefit, of any other person; 129 (g) the appointment of any officer. of Government or of the Reserve Bank of India to exercise any rights or perform any duties in connection with the grant of the said certifi cates; (h) the goods or merchandise and the rate or rates for the purposes of section 280 ZC and section 280 ZD and the destination of the export of such goods or merchandise for the purposes of section 280 ZC; (i) any other matter which may be neces sary or proper for the effective implementa tion of the provisions of this Chapter or the scheme. (3)The Central Government may, by noti fication in the Official Gazette, and to, amend, vary or rescind any scheme made under this section". It was in exercise of the power conferred on the Central Government under Section, 280 ZE read with section 280 ZC that the Central Government made the Tax Credit Certificate (Exports) Scheme, 1965. The first Notification dated 6th June 1966 amended paragraph 3 of the Scheme by providing that no tax credit certificate shall be granted in respect of exports where the sale proceeds were received after 5th June, 1966. This provision was. relaxed by ' the second Notification dated 8th August 1966 by providing that in case of exports made on or before 5th June 1966 tax credit cer tificate shall be granted according to the provisions of the Scheme even if the Sale proceeds were received after that date, but in respect of exports made after 5th June, 1966, the rate specified in column 3 of Table A shall be nil and no tax credit certificate shall be granted in respect of such exports. The argument urged on behalf of the appellant was that it was not competent to the Central Government to provide in the Scheme framed under Section 280 ZE read with Section 280 ZC that no tax credit certificate shah be granted in respect of exports of any goods or merchandise. The only power, which, according to the appellant, the Central Government had under these two. Sections, was to frame a scheme speci fying some goods or merchandise the export of which would entitle an exporter to tax credit certificate. The appel lant conceded that the Central Government was. not bound to specify any particular category of goods or merchandise in the Scheme framed by it but the limited contention was that some goods or merchandise must be specified in the Scheme and since in the present case the Scheme as amended provid ed that tax credit certificates shall not be granted in respect of exports of any goods or merchandise, the two Notifications making this amendment in the Scheme were ultra vires the power of the Central Government under Sections 280 ZE and 280 ZC. This contention, though it found favour with the single Judge of the Calcutta High Court who heard the Writ Petition in the first 130 instance, is in our opinion wholly without force and cannot be sustained. A mere look at the scheme of the provisions of Section 280 ZC and 280 ZE is sufficient to expose the invalidity of this contention. Sub section (1) of Section 280 ZC undoubtedly provides that a person who exports any goods or merchandise out of India after 28th February 1965 and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act, 1947 and the rules made thereunder, shall be granted a tax credit certificate for an amount calculated at a rate not exceeding 15 per cent of the amount of such sale proceeds. But this fight conferred on an exporter is subject to the other provisions of Section ZC and these other provisions include sub sections (2) & (3). Sub sec tion (2) provides in so many terms that the goods or merch andise in respect of which a tax credit certificate shall be granted under sub section (1) and the rate at which the amount of such certificate shall be calculated, shall be such as may be specified in the Scheme. It is, thus, left to the Scheme to be framed by the Central Government to specify the goods or merchandise in respect of which an exporter, shall be entitled to tax credit certificate as also the rate at which the amount of such certificate shall be calculated. It is. not in respect of every category of goods or merchandise that an exporter can claim to be enti tled to tax credit certificate but it is only in ' respect of such goods or merchandise as are specified in the Scheme. The policy and the principle which would guide the Central Government in selecting the goods or merchandise for this purpose are set out in sub section (3) which provides that in specifying the goods or merchandise as also the rates, the Central Government shall have regard to the various factors set out in that sub section. These are the factors which would influence the choice of the Central Government in selecting the goods or merchandise for the purpose of grant of tax credit certificate and also in determining the rates at which tax credit certificate should be given. Sec tion 280 ZE, sub section (1) confers power on the Central Government to frame one or more Schemes in relation to tax credit certificate to be granted under Section 280 ZC and under sub section (2), such scheme or schemes may provide inter alia for the goods or merchandise and the rate or rates for the purposes of Section 280 ZC. We fail to see how any obligation can be spelt out from these provisions re quiring the Central Government to frame a scheme specifying the goods or merchandise in respecter of which tax credit certificate shall be granted. It would indeed be absurd to suggest that the Central Government is under an obligation to make a scheme and the requirement of the statute would be satisfied so long as the Central requirement specifies some goods or merchandise in the Scheme. There is no reason why the Central Government should not be entitled to say that having regard to the factors set out in sub section (3) of section 280 ZC it does not think it desirable that tax credit certificate should be granted in respect of any goods or merchandise for the time being Sub section (3) of Section 280 ZC confers power on the Central Government in so many terms to rescind a Scheme made by it ,and that also supports the view that the Central Government may keeping in view the factors set out in sub section (3) of Section 280 ZC, 131 decline to make a scheme or provide in the scheme that there shall be no goods or merchandise in respect of which tax credit certificate shall be granted. In the circumstances we think that the Division Bench of the High Court was right in holding that the Central Government was entitled to issue the two impugned Notifications directing that no tax credit certificates shall be granted in respect of goods or merchandise exported on or after 5th June, 1966. We accordingly dismiss the appeal with costs. S.R. Appeal dismissed.

The jute carpet backing cloth manufactured by the appel lant in its jute mills and exported was covered by Item 1 in column 2 which specified "goods made of jute not other wise specified" of the Table appended to the Tax Credit Certificate (Exports) Scheme, 1965. The notification issued by the Central Government in exercise of the powers vested under section 280ZE read with section 280ZC, dated 6 6 1966 and 8 8 1966, provided that no tax credit certificate shall be issued in respect of any goods exported after 5 6 1966. The appellant, who exported diverse quantities of jute carpet backing cloth manufactured by it to various countries during the period 13 7 1966 and 30 11 1966, filed a writ petition in the Calcutta High Court for a writ of mandamus for quash ing and setting aside both the Notifications and directing the Central Government to consider the application of the applicant for tax credit certificate in respect of the exports without taking into account the two Notifications. The ground of challenge was that the two Notifications were outside the powers conferred on the Central Government u/s 280ZE read with section 280 ZC, since the Central ' Government had no power under those sections to make a scheme providing that no tax credit certificate shall be granted in case of any goods or merchandise at all. The single Judge granted mandamus, but the Division Bench on appeal took a different view and negatived the challenge. Dismissing the appeal by certificate the Court, HELD: (i) The Division Bench of the High Court was right in holding that the Central Government was entitled to issue the two Notifications directing that no tax credit certifi cates shall be granted in respect of goods or merchan dise exported on or after 5 6 1966. [131 A B] (ii) No obligation can be spelt out from Ss. 280 ZC and 280 ZE requiring the Central Government to frame a scheme specifying the goods or merchandise in respect of which tax credit certificate shall be granted. The Central Government was entitled to say that having regard to the factors set out in subsection (3) of section 280 ZC, it does not think it desirable that tax credit certificate should be granted in respect of any goods or merchandise for the time being. [130 F H]

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Civil Appeal No. 2150 of 1968. (Appeal by Special Leave from the Judgment and Order dated 5.9.1968 of the Punjab & Haryana High Court in L.P.A. No. 458/68). V.C. Mahajan, Hardev Singh and R.S. Sodhi, for the appel lant. O.P. Sharma, for the respondents 1 and 2. K.R. Nagaraja and P.N. Puri, for respondent No. 3. The Judgment of the Court was delivered by BEG, C.J. This appeal under Article 136 of the Consti tution is directed against a very detailed Judgment of the Punjab & Haryana High Court on a Writ Petition No. 1875 of 1965 filed under Articles 226 and 227 of the Constitution, assailing an order of the Additional Director, Consolidation of Holdings, passed on 8 June, 1965. A perusal of that order, together with the earlier order of 4 May, 1965, and the application for restoration dated 15 May, 1965, filed by Gurdev Singh, respondent No. 3, shows: Gurdev Singh, who had 370 some complaint against the Consolidation Scheme, was not present so that his petition was ordered to be filed by the Additional Director, Consolidation on 4 May, 1965. Gurdev Singh, soon thereafter i.e. on 15 May, 1965, filed an appli cation for restoration supported by an affidavit, attribut ing his absence on 4 May, 1965, to his illness. The. order dated 8 June, 1965, of the Additional Director, shows that the applicant Gurdev Singh 's assertion that he could not attend due to illness, over which he had no control, was accepted by the Additional Director, who proceeded to exer cise his powers under section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (hereinafter referred to as the Act) and to set right the grievance of the applicant, Gurdev Singh, after going into all the relevant records. The learned Judge of the High Court, who heard the petition also went through the records very carefully, came to the conclusion that an assertion of rights by the petitioner/ appellant, a member of the Sanjam Group, merely because of some report contained in the "Fard Badar," could not take away the effect of entries in the revenue records. The learned Judge held that no injustice was caused to the petitioner/appellant also, there was no ground for interference under Article 226 of the Constitu tion. The learned counsel for the appellant has relied upon the case of Harbhajan Singh vs Karam Singh& Ors. reported in ; , where this Court held that the Addl. Director exercising the powers of the State Government has no jurisdiction under section 42 of the Act to review his previous order. Section 42 of the Act runs as follows: "The State Government may at any time for the purpose of satisfying itself as to the legality or propriety of any order passed, scheme prepared or confirmed or repartition made by any officer under this Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto. as it thinks fit: Provided that no order or scheme or repar tition shall be varied or reserved without giving the parties interested notice to appear and opportunity to. be heard except in case where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration. " The proviso to Section 42 lays down that notice to interested parties to appear and opportunity to be heard are conditions precedent to passing of an order under Section 42. The fact that the Additional Director was satisfied that the respondent, Gurdev Singh, did not have an opportu nity of being ,heard due to his illness, seems to us to amount to a finding that the proviso. could not be complied with so that the previous order could not be held to be an order duly passed under Section 42 of the Act. It could be ignored as "non est. " The view taken in Harbhajan Singh 's case (supra) would not apply to the 371 instant case although Section 42 of the Act does not contain a power of review. Orders which are 'non est ' can be ignored at any stage. On the facts and circumstances of this case, we think that this is not a fit case for interference under Article 136 of the Constitution. The appellant, if he has acquired any rights by reason of long possession, can assert them whenever any proceedings are taken before a competent au thority to dispossess him. What we have held here or whatever has been held by the High Court will not affect such other rights, if any, as the Appellant may have ac quired by reason of possession. We do not know and refrain from deciding who is actually in possession and for how long and in what capacity. This appeal is dismissed. Parties will bear their own costs. _ P.H.P. Appeal dismissed.

Gurdev Singh had certain complaints about the Consolida tion Scheme. He was not present when his application was being considered. Therefore, the application was dis missed by the Additional Director, Consolidation. Thereaf ter, Gurdev Singh respondent No. 3 filed an application for restoration supported by an affidavit attributing his ab sence to his illness. The Additional Director accepted the ground of respondent No. 3 about illness and granted necessary relief to him. The appellant filed a writ.peti tion in the High Court under Articles 226 and 227 of the Constitution. The High Court held that the assertion of rights by the appellant merely because of some report con tained in the "Fard Badar" could not take away the effect of the entries in the revenue records The High Court also held that no injustice was caused to the appellant and, there fore, there was no ground for interference under Article 226. In an appeal by Special Leave, the appellant contended that the Additional Director had no power to review his previous order. The power to review conferred by section 42 of the Act has to be exercised only after hearing the interested parties. Since respondent No. 3 was not given an opportunity of being heard on account of his illness, it shows that the order passed was non est and can be ignored at any stage. The court dismissed the appeal on the ground that this was not a fit case for interference under Article 136. the Court, however, observed that if the appellant has any right on account of long possession or otherwise he can assert them by adopting proper proceedings and that his rights would not be affected by whatever is stated m the Judgment of this Court as well as the High Court.

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No. 147 of 1972. (Appeal by Special Leave from the Judgment and Order dated 19.2.1971 of the Calcutta High Court in Income Tax Ref. No. 98/67) G.C. Sharma, D.N. Mukherjee, A. K. Ganguly and G.S. Chatterjee, for the appellants. B.B. Ahuja and R.N. Sachthey, for respondent. G.C. Sharma, D.K. Jain, Anup Sharma, S.P. Nayar and Miss K. Jaiswal for the Intervener. The Judgment of the Court was delivered by SARKARIA J. Whether any payment by a Company, not being a Company in which the public are subsantially interested within the meaning of section 23A, of any sum by way of advance or loan to a shareholder, not exceeding the accumulated profits possessed by the Company, is to be deemed as his dividend under Section 2(6A) (e) read with Section 12(lB) of the Income tax Act, 1922, even if that advance or loan is subsequently repaid in its entirely during the relevant previous year in which it was taken, is the only question that falls to be determined in this appeal by special leave. The assessment year is 1957 58, and the corresponding previous year is the calendar year 1956. The assessee is a shareholder and the Managing Director of M/s. Dolaguri Tea Co. (P) Ltd. The Company is admittedly one in which the public are not substantially interested within the meaning of section 23A of the Indian Income tax Act, 1922 (for short, the Act). At the commencement of the previous year, there was in the books of the Company a credit balance of Rs. 65,246/ in the assessee 's account, which had been brought ' forward from the earlier year. Between the 11th January and the 12th November, 1956, the assessee withdrew in cash from time to time from the Company, amounts, aggregating Rs. 4,97,442/ . The first two cash amounts of Rs. 3,50,000/ and Rs. 40,400/ , were taken by the assessee on 11.1.1966. Deducting therefrom the opening balance of Rs. 65,246/ and two more item, namely, Rs. 1,40,000/ being outstand ing dividends declared on 31.12.1955 of his major son, and transferred to his account, and a further dividend of Rs. 19,493/ credited to his account from Kathoni Tea Estate, there remained a sum of Rs. 2,72,703/ to the debit of the assessee 700 in the books of the Company as on the 12th November, 1956. On December 29, 1956, the assessee paid back to the Company a sum of Rs. 1,90,000/ . On December 31, 1956, his account was credited with another sum of Rs. 80,000/ in respect of the dividend due to him and his wife, and with a further sum of Rs. 29,326/ for hypotecation. In this manner before the end of the previous year, the assessee 's account was credited with an aggregated amount of Rs. 2,99,326/ which exceeded the debit balance of Rs. 2,72,70,3/ as on November 12, 1956. Thus at the end of the relevant previous year, no advance or loan was due to the Company by the assessee. The Income tax Officer found that the accumulated prof its of the Company as on January 1, 1956, amounted to Rs. 6,83,005. He, therefore, deducted the two aforesaid items of Rs. 1,40,000/ and Rs. 19,493/ , aggregating Rs. 1,59,493/ , from the amount paid in cash to the assessee and treated the balance of Rs. 2,72,703/ as the net 'dividend ' income in the hands of the assessee within the meaning of Section 2 (6A)(e). The/income tax Officer grossed up that amount under Section 16(2) and gave credit for tax in ac cordance with that Section to the assessee. The assessee 's appeal to the Appellate Assistant Commissioner having failed, he preferred a further appeal to the Income tax Appellate Tribunal. There was a divergence of opinion between the Members of the Tribunal. The Ac countant Member took the view that the moment a payment is made as envisaged in Section 2(6A)(c) it becomes clothed with the character of a dividend and has to be treated as such income of the assessee, and no subsequent action or repayment by the share holder can take it out of the mis chief of this provision. He therefore held that the sum of Rs. 2,72,703/ was taxable dividend under Section 2(6A)(e). The Judicial Member expressed a contrary opinion. In his view, the total income of the assessee during the rele vant previous year could be computed and assessed only at the end of that year; it could not be computed at interim periods during the previous year. "If it is found that although the shareholder had taken by way of advance or loan an amount from the Company during the course of a previous year but had returned the same to the Company before the close of that previous year, it can only be said while computing the shareholder 's total income at the end of that previous year that no advance or loan from the 23A Company of which he was a shareholder stood for his benefit at the time relevant for computation of his total income. The advances or loans taken during the interim periods of the previous year would just have to be ignored. " On these premises, the Judicial Member came to the conclusion that the sum of Rs. 2,72,703/ grossed up to Rs. 3,19,245/ , was not a dividend within the fiction under Section 2(6A) (e) of the Act. On account of this difference of opinion, the following question was referred to the President of the Tribunal: "Whether on the facts and in the circum stances of the case, the sum of Rs. 2,72,703/ net (Rs. 3,19,245/ gross) 701 is to be treated as dividend income in the hands of the assessee within the meaning of Section 2(6A) (e) ?" The President agreed with the Accountant Member and held that an "advance or loan received by the shareholder of a Private Company forthwith assumes the character of a divi dend and becomes his income by virtue of the fiction created by Section 2(6A) (e) and it ceases to be a liability for the purpose of taxation, although the assessee may, in fact or in law, remain liable to the Company to repay it. If the assessee repays the loan subsequently, such repayment would not liquidate or reduce the quantum of the income which had already accrued as such repayment is not be al lowed as a permissible deduction under Section 12(2). On these premises he answered the question in the affirma tive. In accordance with the majority opinion, the Tribunal dismissed the assessee 's appeal, but, at his instance, referred the same question for opinion to the High Court under Section 66(1) of the Act. The High Court held that the tax was attracted at the point of time when the said loan was borrowed by the share holder and it was immaterial whether the loan was repaid before the end of the accounting year or not. On this reasoning it answered the question in favour of the Revenue and against the assessee. Hence this appeal by the assessee. Before dealing with the contentions canvassed, it is necessary to have a look at the general scheme and the relevant provisions of the Act, Section 2 (6A)(e) of the Act reads as follows: (6A) "dividend" includes (a) to (d) . (e) any payment by a company, not being a company in which the public are substantially interested within the meaning of section 23A of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either case possesses accumulated profits; but "dividend" does not include (i) a distribution made in accordance with sub clause (c) or sub clause (d) in respect of any share issued for full cash consideration where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets; (ii) any advance or loan made to a share holder by a company in the ordinary course of its business where the lending of money is a substantial part of the business of the compa ny; 702 (iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of clause (e), to the extent to which it is so set off; Explanation. The expression "accumulated profits", wherever it occurs in this clause, shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day of March, 1948, and be fore the 1st day of April, 1956; Sub section (15) defines 'total income ' as meaning "total amount of income, profits and gains referred to in sub section (1 ) of Section 4 computed in the manner laid down in this Act." Section 3 is the charging section. Two of the princi ples deducible from the Section are: (1 ) That the tax is levied on the total income of the assessable entity; (2) That each previous year is a distinct unit of time for the purpose of assessment, and the profits made or liabilities or losses incurred before or after the relevant previous year are wholly immaterial in assessing the profits of that year unless there is a statu tory provision to the contrary. Section 4 (1 ) so far as it is material reads as follows: "Section 4(1): Subject to the provisions of this Act, the total ' income of any previous year of any person includes all income, prof its and gains from whatever source derived which (a) are received or are deemed to be re ceived in the taxable territories in such year by or on behalf of such person, or (b) if such person is resident in the taxa ble territories during such year, (i) accrue or arise or any deemed to accrue or arise to him in the taxable territories during such year, or (ii) accrue or arise to him without the taxable territories during such year, or (iii) . . (c) if such person is not resident in the taxable territories during such year, accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year: (emphasis supplied) "Provided that . . " The principles deducible from Sec. 4(1) are: (1 ) The charge is on accrual or receipt basis. Such receipt or accrual may be actual or statutory, i.e. the result of any statutory fiction created by the Act. 703 (2) If a particular amount of income is taxed under any of the clauses (a), (b) or (c) of the sub section the same amount cannot be taxed under any other clause either in the same year or in a different year. That is to say, income which is taxed on accrual under clause (b) (ii) cannot be taxed again on receipt under clause (a) or on remittance under clause (b)(iii) (see Kanga and Palkhiwa la, Vol. I, 1959 Edition, page 153). (3) The receipt spoken of in this clause is the first receipt after the accrual of the income See the decision of this Court in Keshav Mills vs Commissioner of Income tax(1)]. Sub section (1) of Sec. 4 also highlights the basic principle embodied in the charging section 3, that the accrual or receipt of income (actual or deemed) is taxed with regard to the relevant previous year. Section 12 deals with the residuary head: "Income from other sources". Its sub section (1A) says that: "Income from other sources shah include 'dividends '. Sub section (lB) in crucial. It provides: "Any payment by a company to a share holder by way of advance or loan which would have been treated as a dividend within the meaning of clause (e) of sub section (6A) of section 2 in any previous year relevant to any assessment year prior to the assessment year ending on the 31st day of March, 1956 had that clause been in force in that year, shall be treated as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of such previous year". Sub section (2), inter alia lays down that in computing any income by way of dividend, allowance shah be given for any reasonable sum paid by way of commission or remuneration to a banker or any other person realising such dividend on behalf of the assessee. It is to be noted that sub section (6A) of section 2 and subsections (1A) and (lB) u/s 12 were inserted in the Act by the Finance Act, 1955, with effect from the 1 st April, 1956. In the relevant assessment year, Section 16(2) of the Act was operative and ran as follows: "16(2) For the purpose of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or (1) 704 distributed to him, and shall be increased to such amount as would, if income tax (but not super tax) at the rate applicable to the total income of the company . . for the finan cial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed were deducted therefrom, be equal to the amount of the dividend. " Mr. G.C. Sharma, Counsel for the appellants contends that the scope of the fiction created by Sec. 2(6A)(e) should be confined to those advances and loans only, which are not repaid but remain subsisting at the end of the previous year in which they were taken. It is argued that the sole object of this provision is to curb the evil of distributing profits under the guise of loans or advances; that if an advance or loan is repaid in the same accounting year, it cannot be said that it was a device for distribu tion of profits. It is submitted that only in the case of an advance or loan which remains outstanding at the end of the accounting year, Sec. 2(6A) (e) raises an irrebutable presumption that it was a payment of dividend under the cloak of a loan. It is maintained that if this construc tion of Sec. 2(6A)(e) is not adopted, it will lead to ex tremely oppressive, unreasonable and anamolous results, including double taxation. To illustrate his point Counsel compares and contrasts the position of a shareholder who promptly, after a short period, repays the loan in the same year, with one who does not do so but allows it to remain outstanding and be carried over to the next year, and there after a dividend is declared. If the interpretation adopted by the High Court is correct says Mr. Sharma the share holder in the prior case who had promptly repaid the loan would not be entitled under sub clause (iii) of Clause (e) of section 2(6A) to set off any part of the subsequently declared dividend against the loan which he had repaid earlier, but will have to pay double tax on the same item, once on it as deemed dividend and then on it as declared dividend. His liability cannot be reduced to the extent of the dividend; because at the date on which the dividend was declared, no loan was outstanding against which. it could be set off. As against the former, the latter shareholder who makes full use of the loan and does not repay any part of the loan in the same year, but leaves it unpaid till a dividend is declared next year, will get relief by set off of the subse quently declared dividend, in whole or in part against the loan outstanding against him. Another example cited by Mr. Sharma is of a case where the accumulated profit, say is Rs. 9,000/ and the share holder takes an advance or loan of Rs. 3,000/ and he repays it after a week, and again gets the same amount (Rs. 3,000/ ) back as a loan, and again repays it after a week, and again retakes the same amount as loan all the three loans being taken and repaid, in the same year. If the unrestricted interpretation of the provision, sought by the Revenue were to be adopted, the same amount of loan in all the three transactions of loan would be subjected to triple taxation. Such an absurd and oppressive result, says the Counsel, would be against the intendment of the provi sion and inconsistent with the scheme of the Act which generally aims avoids double taxation. The upshot of the arguments of Mr. 705 Sharma is that under the Act, only that item or entity is taxable which is rationally capable of being considered as the income of the assessee; that an advance or loan which is genuine and not a subterfuge for payment of dividend and is not subsisting or outstanding at the end of the previous year on account of its repayment by the shareholder cannot reasonably be deemed to be his dividend income within the contemplation of section 2(6A)(e) read with section 12 of the Act. Mr. Sharma has taken us through various decisions having a bearing on the problem. The cases referred to, discussed or sought to be distinguished by him are: K.M.S. Lakshman Aiyar vs Assistant Income tax Officer,(1) Navnit Lal C. Javeri vs K.K. Sen, Appellate Assistant Commissioner, Income tax, Bombay;(2) Commissioner of Income tax, Madras vs K. Srini vasan; (3) Walchand & Co. Ltd. vs Commissioner of Income tax, Bombay;(4) Commissioner, Income tax Bombay vs R.K. Badiani. (5) Mr. Sharma also has referred to Sec. 108 of the Commonwealth income tax Act as in force in Australia, and submitted that since the substance of Sec. 2(6A)(e) and section 12(lB) has been borrowed from s.108 of the said Act and the object of these provisions in the two enactments is the same, it will not be illegitimate to determine and circum scribe the scope of the fiction created by the provision in question in the light of the principles indicated in Sec. 108 of the Commonwealth Act. On the other hand, Mr. Ahuja appearing for the Revenue, submits that sub clause (iii) which permits a set off against a loan deemed as dividend, does not apply in cases where the dividend is not declared in the same accounting year because to hold otherwise would be against the basic scheme ingrained in sections 3 and 4 of the Act, according to which the unit of time for the purpose of assessment is the previous year of the assessee. Mr. Ahuja further maintains that even if during the same accounting year after repayment of the loan, a dividend is declared, sub clause (iii) will apply, and the Income tax Officer will not be debarred from reducing, in an appropriate case, the amount treated by him as 'dividend ' under clause (e) of section 2(6A) to the extent of the subsequently declared dividend, on the principle of notional set off underlying sub clause (iii). The point sought to be made out is that since the treatment of the loan to the assessee shareholder as his dividend rests on a legal fiction, it will not be an illegitimate use of sub clause (iii) to allow a notional set off to meet such a situation. Thus construed, says the Counsel, there would be no anomaly. Mr. Ahuja further submitted that section 2(6A)(e) was enact ed to suppress the evil of receiving profits or dividends under the guise of loans by the shareholders of a controlled Company, as such a malpractice resulted in evasion of tax. This provision, it is urged should be construed in a manner which suppresses the mischief and advances the remedy. It is maintained that the language of the provisions in question (1) [1959] XL I.T.R.469 (Mad.) (2) [19651 1, SCR 909 56 I.T.R. 198. (3) (4) (5) 706 is plain and unambiguous and no question of seeking external aid for its interpretation arises; the Court must give effect to it regardless of the hardship, if any, resulting therefrom. The sum and substance of his arguments is, that since all the factual ingredients necessary for raising the fiction contemplated by section 2(6A) (e) and section 12(lB) have been found to exist by the Income tax authorities and the Tribu nal, the loan had to be treated as the assessee 's dividend income, the moment it was received, and the subsequent repayment of the loan could not neutralise or take it out of that category of 'income '. Counsel has drawn our attention to the observations of this Court in Navnit Lal C. Javeri vs K.K. Sen, Appellate Assistant Commissioner of Income tax (supra). He has further adopted the reasoning of the Bombay High Court in Walchand & Co. vs Commissioner of Income tax, Bombay (supra) Section 2(6A)(e) and section 12(lB) were inserted in the Act by. the Finance Act 1955 which came into operation on 1 4 1955. These provisions seem to have been adapted, and borrowed with alterations, from section 108 of the Commonwealth Income tax Assessment Act in force in Australia. Section 108 reads as follows: "Loans to shareholders, (1 ) If amounts are paid or assets distributed by a private company to any of its shareholders by way of advances or loans, or payments are made by the company on behalf of or for the individual benefit of, any of its shareholders, so much, if any, of the amount or value of those ad vances, loans or payments, as, in the opinion of the Commissioner, represents distributions of income shall, for the proposes of this Act other than the purposes of Division 11A of Part III and Division 4 of Part VI be deemed to be dividends paid by the company on the last day of the year of income of the company in which the payment or distribution is made. (2) Where the amount or value of an advance, loan or payment is deemed, under the last preceding sub section, to be a dividend paid by a company to a shareholder, and the company subsequently sets off the whole or a part of a dividend distributed by it in satis faction in whole or in part of that advance, loan or payment, that dividend shall, to the extent to which it is so set off, be deemed, not to be a dividend for any purpose of this Act. " It will be seen that under section 108( 1 ) formation of "the opinion of the Commissioner" is the sine qua non for bring ing this provision into provision into operation. It has been held be the Australian Board of Review that the mere fact that a shareholder in a private Company has become indebted to it, does not justify the formation of the opin ion by the Commissioner such as is indicated in sub section (1) of section 108. "There must be something that goes beyond a mere debt automatically arising upon a taking of accounts and which points to a subterfuge whereby a payment which, upon examination, is found to relate to the income of the Company and to represent the distribution thereof, is made to appear to be a loan or advance" (I.C.T.B.R. (N.S.) Case No.80.) 707 It is noteworthy that at least in one material aspect the Indian law is different from that under section 108(1) of the Commonwealth Act as explained and interpreted by the Board in the case mentioned above. Under section 108, the raising of the fiction is dependent upon a positive finding recorded by the Commissioner of Income tax that the payment represents distribution of the Company 'section income. But section 2 (6A) (e) and section 12 of the Act do not leave this question to the adjudica tion of the income tax authorities. Parliament has itself, in the exercise of its legislative judgment, raised a con clusive presumption, that in all cases where loans are advanced to a shareholder in a Private Ltd. Company ' having accumulated profits, the advances should be deemed to be the dividend income of the shareholder. It is this presumption juris et de jure which is the foundation of the statutory fiction incorporated in section 2(6A)(e). Thus section 108 of the Commonwealth Act appears to be more reasonable and less harsh than its Indian counterpart. From the above discussion it emerges clear that the fiction created 2(6A) (e) read with section 12(lB) of the Act is inexora bly attracted as soon as all the conditions necessary for its application exist in a case. In Navnit Lags case (supra), this Court, after an analysis of these provisions, listed these conditions, as follows: ". the combined effect of these two provisions is that three kinds of payments made to the. shareholder of a company to which the said provisions apply, are treated as taxable dividend to the extent of the accumu lated profits held by the :company. These three kinds of payments are: (1 ) payments made to the shareholder by way of advance or loan, (2) payments made on his behalf and (3) payments made for his individual benefit. There are five conditions which must be satis fied before section 12(lB) can be invoked against a shareholder. The first condition is that the company in question must be one in which the public are not 'substantially interested within the meaning of section 23A as it stood in the year in which the loan was advanced. The second condition is that the borrower must be a shareholder at the date 'when the loan was advanced; it is immaterial what the extent of his shareholding is. The third condition is that the loan advanced to a shareholder by such a company can be deemed to be dividend only to the extent to which it is shown that the company possessed accumulated profit at the date of the loan. This is an important limit prescribed by the relevant section. The fourth condition is that the loan must not have been advanced by ' the company in the ordinary course of its busi ness. In other word 's, this provision would not apply to cases where the company which advances a loan to its shareholder earnes on the business of money lending itself; and the last condition is that the loan must have remained outstanding at the commencement of the shareholders previous year in relation to the assessment year 1955 56." (emphasis supplied) The first four conditions factually exist in the instant case. The last condition is not applicable because it was a transitory provision 6 707 SCI 77 708 applicable to the assessment year 1955 56 only, while we are concerned with the assessment year 1957 58 and the previous year is the calendar year 1956. There is no dispute that the company is a controlled (Private Ltd.) company in which the public are not substantially interested within the meaning of section 23A. Further the assessee is admittedly a shareholder and Managing Director of that Company. It is also beyond controversy that at all material times, the company possessed "accumulated profits" in excess of the amount which the assessee shareholder was paid during the previous year. The Income tax Officer found that on January 1, 1956, the accumulated profits of the Company amounted to Rs. 6,83,005/ while from, 11.1.1956 to 12.11.1956, the assessee received in cash from time to time from the Company payments aggregating Rs. 4,97,449/ . After deducting the opening credit balance and some other items credited to his account, the Income tax Officer found that in the previous year the assessee share holder had received a net payment of Rs. 2,72,703/ by way of loan or advance from the Compa ny. The Company 's ' business is not money lending and it could not be said that the loans had been advanced by the company in the ordinary course of its business. Thus all the factual conditions for raising statutory fiction created by ss.2(6A)(e) and 12(IB) appeared to have been satisfied in the instant case. Mr. Sharma, however, contends that in order to attract the statutory fiction one other essential condition is, that the loan or advance must be outstanding at the end of the previous year, and if the loan had ceased to exist owing to repayment or otherwise before the end of the year as in the present case the fiction cannot be invoked. In this connec tion, Counsel has again referred to the last limb of section 108 (1) of the Commonwealth Income tax Act, according to which, the payment to a shareholder by way of advance or loan is to be treated as a dividend paid by the Company on the last day of the year of income of the Company in which the payment is made. It is urged that the principle in the last limb of sub section (1) of section 108 of the Commonwealth Act should also be read into. the Indian statute, It is maintained that the omission of such words from sections 2(6A) (e) and 12(lB) does not show that the intendment of the Indian Legislature was different. According to the Counsel what is implicit in section 108(1) of the Commonwealth Act, is implicit in sections 2(6A)(e) and 12(1B) and the general scheme of the Act which re quires that the assessment is to be made on the basis of total income of the whole previous year. Such a view concludes Mr. Sharma, would also be in consonance with reason and justice. We have given anxious thought to the persuasive argu ments of Mr. Sharma. His arguments, if accepted, will certainly soften the rigour of this extremely drastic provi sion and bring it more in conformity with logic and equity. But the language of sections 2(6A) (e) and 12(1B) is clear and unambiguous. There is no scope for importing into the statute words which are not there. Such importation would be, not to construe, but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. 709 To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicase vs I.R.C.(1) at p. 71, that "in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is No. presumption as to a tax. nothing is to be read in, nothing is to be implied. One can only look fairly at the language used". Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however great the hardship may appear to. the judicial mind to be. In our opinion, the Indian Legislature has deliberately omitted to use in sections 2(6A)(e) and 12(lB) words analogous to those in the last limb of sub section (1) of section 108 of the Commonwealth Act. When Sections 2(6A) (e) and 12(lB) were inserted by the Finance Act, 1955, Parliament must have been aware of the provision contained in section 108 of the Common wealth Act. In spite of such awareness, Parliament has not thought it fit to borrow whole hog what is said in section 108 (1 ) of the Commonwealth Act. So far as the last limb of section 108(1) is concerned, our Parliament imported only a very restricted version and incorporated the same as the 'fifth condition ' in sub section (lB) of section 12 to the effect, that the "payment deemed as dividend shall be treat ed as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956 if such loan or advance remains outstanding on the last day of such previous year". The word "such" pre fixed to the "previous year" shows that the application of this clause is confined to the assessment year ending on 31 3 1956. In the instant case we are not concerned with the assessment year ending on 31 3 56. This highlights the fact that the Legislature has deliberately not made the subsist ence of the loan or advance, or its being outstanding on the last date of the previous year relevant to the assessment year, a prerequisite for raising the statutory fiction. In other words, even if the loan or advance ceases to be outstanding at the end of the previous year, it can still be deemed as a 'dividend ' if the other four conditions factual ly exist, to the extent of the accumulated profits possessed by the Company. At the commencement of this judgment we have noticed some general principles, one of which is, that the previous year is the unit of time on which the assessment is based (section 3). As the taxability of an income is related to its receipt or accrual in the previous year, the moment a dividend is received whether it is actual dividend declared by the company or is a deemed dividend, income taxable under the residuary head, "income from other sources", arises. The charge being on accrual or receipt the statutory fiction created by section 2(6A)(e) and s.12(IB) would come into opera tion at the time of the payment by way of advance or loan, provided the other conditions are satisfied. (1) (1921)1,K.B. 64 atp. 710 We do not propose to examine the soundness or otherwise of the illustrations given by Mr. Sharma since they are founded on assumed facts which do not exist in the present case. For the foregoing reasons we would answer the question posed in favour of the Revenue and dismiss this appeal with costs. P.B.R. Appeal dismissed.

Under section 2(6A)(e).of the Indian Income tax Act, 1922, the term dividend includes any payment by a company not being a company in which the public are substantially interested within the meaning of section 23A of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder to the extent to which the company in either case possesses accumulated profits. According to section 12(1A) of the Act, income from other sources includes dividends. Sub section (lB) of section 12 provides any payment by a company to a shareholder by way of advance or loan which would have been treated as dividend within the meaning of section 2(6A)(e) in any previous year relevant to any assess ment year prior to the assessment year ending on the 31st day of March, 1956 had that clause been in force in that year, shall be treated as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of such previous year. The provisions of section 2(6A)(e) and section 12(lB) had been borrowed and adopted with certain alterations from section 108(2) of the Commonwealth Income Tax Assessment Act of Australia the last limb of which provided that payment to a shareholder by way of advance or loan was to be treated as dividend paid by the company on the last day of the year of income of the company in which payment was made. The appellant assessee was a shareholder and Managing Director of a Private Ltd. Company. In the calendar year 1956 (assessment year 195758), the assessee withdrew in cash from the company a sum of Rs. 4.97 lakhs, which was less than the accumulated profits of the company. Before the end of the year, the assessee repaid the whole amount. Deduct ing a sum of Rs. 1.59 lakhs which was credited to the asses see 's account by way of dividend in the company 's books, the Income tax Officer treated the balance of Rs. 2.72 lakhs as dividend income in the ,assessee 's hands and grossed up the amount under section 16(2). appeal, the Accountant Member of the Appellate Tribunal held that any payment made as envisaged in section 2(6A)(e) became dividend and must be treated as the assessee 's income and no subsequent repayment could take it out of the mischief of the provision. The Judicial Member on the other band held that since total income of the asses see during the relevant previous year could be computed and assessed only at the end of that year any advance or loan taken during the interim periods of the previous year would have to. be ignored. On reference the President agreed with the Accountant Member. The High Court answered the reference in favour of the Revenue. 698 were taken and (ii) the last limb of section 108(1) of the Aus tralian Act should be read into the Indian Act because what was explicit in. section 108(1) of the Australian Act is implicit in section 2(6A),(e) and section 12(lB) of the Indian Act. Dismissing the appeal, HELD: The fiction created by section 2(6A)(e) read with section 12(lB) of the Act is attracted as soon as all the conditions necessary for its application exist in a case. [707 C] 1. In Navnit Lal C. Javeri vs K.K. Sen, Appellate Assist ant Commissioner Income tax ; , this Court held that the combined effect of these two provisions is that three kinds of payments made to a shareholder of a company are treated as taxable dividend to the extent of the accumulated profits held by the company, namely, payments made to the shareholder by way of advance or loan, pay ments made on his behalf and payments made for his individu al benefit. The five conditions to be satisfied are: (i) The company must be one in which the public are not substan tially interested within the meaning of section 23A; (ii) The borrower must be a shareholder at the date when the loan was advanced; (iii) The loan advanced can be deemed to be divi dend only to the extent of the accumulated profit on the date of the loan; (iv) The loan must not have been advanced by the company is the ordinary course of its business and (v) The loan must have remained outstanding at the com mencement of the shareholder 's previous year in relation to the assessment year 1955 56. [707 D G] In the instant case the company was a controlled company within the meaning of section 23A; the assessee was its share holder; the company possessed "accumulated profits" in excess of the amount paid to the assessee during the previ ous years; and the company 's business was not money lending. The last condition was not applicable because it was a transitory provision applicable to the assessment year 1955 56 only while the assessment year in this case was 1957 58. [708 A] 2. (a) The language of sections 2(6A)(e) and 12(lB) is clear and unambiguous. There is no scope for importing into the statute words which are not there. Such importation would be not to construe it but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. [708 H] (b) No justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute has been made out. (c) The Indian Legislature has deliberately omitted to use in sections 2(6A)(e) and 12(lB) words analogous to those in the last limb of section 108(1) of the Australian Act. When sections 2(6A)(e) and 12(lB) were inserted by Finance Act, 1955, Parliament must have been aware of the provision contained in section 108 of the Australian Act. In spite of such aware ness, Parliament has not thought it fit to borrow the whole hog what is said in section 108(1) no far as the last limb of that section is concerned. Our Parliament imported only a very restricted version, and incorporated the same as the 5th condition in section 12(lB) to the effect, that the payment deemed as dividend shall be treated as dividend received by him in the previous year relevant to the assessment year ending on the 31st March, 1956 if such loan or advance remained outstanding on the last day of such previous year The word "such" prefixed to the previous year shows that the application of this clause is confined to the assessment year ending on 31st March, 1956. [709 C D] In the instant case the assessment year did not end on 31st March, 1956 which showed that the Legislature has deliberately not made the subsistence of the loan or advance or its being outstanding on the last date of the previous year relevant to the assessment year, a prerequisite for raising the statutory fiction. In other words, even if the loan or advance ceased to, be 699 outstanding at the end of the previous year, it could still be deemed as dividend if the other four conditions factually existed to the extent of the accumulated profits possessed by the company. [709 E F] (d) Under section 3 which is the charging section, the previ ous year is the unit of time on which the assessment is based. As the taxability of income is related to its re ceipt or accrual in the previous year, the moment dividend is received whether, actual or deemed, income taxable under the residuary head, "income from other sources", arises. The charge being on accrual or receipt, the statutory fic tion created by sections 2(6A)(e) and section 12(lB) would come into operation at the time of payment by way of advance or loan provided the other conditions are satisfied. [709 G H]

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VIL Appeal Nos. 1923 1924 of 1972. (From the Judgment and Decree dated 25 10 1957 of the Madhya Pradesh High Court in First Appeal No. 138/52) A.K. Sen, B.P. Maheshwari and Suresh Sethi, for the appellant in C.A. No. 1923/72 and respondent in CA No. 1924/72. D.N. Mukherjee, for the respondent in CA No. 1923/72 and for appellant in CA 1924/72. CHANDRACHUD, J. These are cross appeals arising out of a judgment rendered by the Madhya Pradesh High Court in First Appeal No. 138 of 1952 modifying the decree passed by the First Additional District Judge, Jabalpur in Civil Suit No. 6 B of 1949. It would be convenient to refer to the parties as plaintiffs and defendants, plaintiffs being the Bata Shoe Co. Ltd. and the defendants being the Corporation for the City of Jabalpur. Plaintiffs are a limited company having their registered office at Calcutta. At the relevant time they had their factories at Batanagar in West Bengal, Batapur in West Punjab, Palsia Digha in Bihar and Faridabad near Delhi. The sale 's organisation of the plaintiffs is situated at Cal cutta, and that organisation sells manufactured articles through the Company 's retail shops situated in different parts of India and Pakistan. Three such retail shops were situated at Jabalpur. In respect of the articles which were imported by the retail shops at Jabalpur within the limits of the then Jabalpur Municipal Committee between April 1, 1943 and March 31, 1945 the plaintiffs had paid to the Municipal Committee a sum of Rs. 16,528 odd as control duty. This duty was assessed by the Muncipal Committee on an amount which was 40% less than the retail price of the goods which were brought within the municipal limits. In the year 194.6 47 the Municipal Committee decided to reopen and revise. the assessment by 185 charging the octroi duty on an amount which was only 6 1/4% less than the retail price of the goods. The Municipal Committee further decided to levy double the duty by way of penalty for the aforesaid period on the ground that the plaintiffs bad intentionally evaded the payment of the duty payable on the goods. Plaintiffs preferred an appeal against the decision of the Municipal Committee to the Sub Divisional Officer, Jabalpur who by an order dated July 14, 1948 modified the decision of the Municipal Committee by permitting them to charge the octroi duty on an amount which was less by 12 1 2 % than the retail price of the goods. The Sub Divisional Officer however upheld the assessment of double duty. The revision application preferred by the plaintiffs to the Board of Revenue was rejected on October 4, 1948 on the ground that it was not maintainable. In conformity with the appellate order, but under protest, plaintiffs paid to the Municipal Committee a sum of Rs. 21,071 1 3 on August 6, 1948. Defendants demanded a further sum of Rs, 10,604 2 6 alleging that they had over looked asking for it through mistake. Plaintiffs paid that amount too on September 22, 1948 under protest. On June 20, 1949 they filed a suit against the Municipal Committee for recovery of the total amount of Rs. 31,675 3 9 with interest at 6% per annum on the ground that the defendants were not entitled to recover the amount by way of octroi duty and penalty. During the pendency of the suit the Municipal Committee was succeeded by the Corporation for the City of Jabalpur who were substituted as defendants to the suit. The Trial Court decreed the suit to the extent of Rs. 32,629 7 0 calculating the interest at 4%, holding that the defendants could not charge octroi duty on an amount arrived at by anything less than 40% from the retail sale price, that the recovery of octroi duty by deducting a sum of 12 1/2% only from the retail price was illegal and that the defendants were not justified in recovering double duty by way of penalty since the plaintiffs had not intentional ly evaded the payment of proper duty. Defendants had raised contentions both as regards the jurisdiction of the Civil Court to entertain the suit and as regards limitation but the Trial Court rejected those contentions and held that it had jurisdiction to entertain the Suit and that it was not barred by limitation. In appeal the High Court held that the defendants were entitled to revise and reopen the assessment and that the re assessment. of octroi duty which was ultimately fixed in appeal by the Sub Divisional Officer could not be ques tioned by the plaintiffs in the Civil Court. On the ques tion of limitation the High Court held that applying the special period of limitation provided in section 48 of the Cen tral Provinces and Berar Municipalities Act, 1922 the suit was within limitation as regards the payment made by the plaintiffs on September 22, 1948 but that it was barred by limitation as regards the payment made on August 6, 1948. The suit in regard to the amount paid to the Municipal Committee in September 1948 was held to be within limitation on account 186 of the intervening summer vacation during which the Courts were closed. According to the High Court the exaction of the double duty being beyond the ' powers of the defendants, the special period of limitation was not attracted and the plaintiffs were therefore entitled to recover the sum paid by way of double duty. In the result the High Court passed a decree in the sum of Rs. 24,103 13 3 which, according to it, represented the double duty wrongly recovered by the defendants from the plaintiffs. The High Court has granted to both the parties a certificate to file an appeal to this Court under article 133(1 ) of the Constitution and both par ties being partly aggrieved by the decree of the High Court have filed cross appeals. The first question for consideration is whether the civil court has jurisdiction to entertain the suit brought by the plaintiffs. It is undisputed that the Municipal Committee had the power under section 65(1)(e) of the Act of 1922 to impose octroi tax on the goods brought within the Munici pal limits for sale, consumption or use therein. Under rule 6(b) framed by the Provincial Government in exercise of the powers conferred by sections 71, 76 and 85 of that Act, octroi duty was payable on the "current price of articles" which is equivalent to the cost price of the articles to the importer plus the cost of carriage and not the price prevailing in the local market. Prior to 1940, plaintiffs used to submit to the defendants an invoice relating to the imported goods wherein the cost price used to be shown by deducting from the retail price the aggregate amount of expenses amounting to 40%. Defendants later disputed the deduction claimed by the plaintiffs and informed the latter by a letter of May 7, 1940 that octroi duty was leviable on the cost price of the goods as shown in the invoice plus the freight charges. Plaintiffs accepted that view and started showing in the invoices the cost price of the articles and the freight charges. Defendants used to assess octroi duty on those invoices until the dispute giving rise to the present suit arose during the year 1946 47, when the basis for charging the duty was fixed at 61/4% less than the retail price of the goods and the assessments already made were reopened with a view to revising them. Section 83(1) of the Act of 1922 provides for appeal against the assessment or levy of any tax under the Act to the Deputy Commissioner or to such other officer as may be empowered by the Provincial Government in that behalf. Section 84(3) of the Act which bears directly on the question of jurisdiction reads thus: "84(3) No objection shall be taken to any valuation, assessment or levy nor shah the liability of any person to. be assessed or taxed be questioned, in any other manner or by any other authority than is provided in this Act. " It is plain from this sub section that any valuation, as sessment or levy and the liablity of any person to be as sessed or taxed can be questioned only in the manner pre scribed by the Act and by the authority mentioned in the Act and in no other manner or by any other authority. Since the sub section expressly prohibits a challenge to a valuation, assessment or levy "in any other manner . than is provided in this 187 Act" and since the Act has devised its own special machin ery for inquiring into and adjudicating upon such chal lenges, the common remedy of a suit stands necessarily excluded and cannot be availed of by a person aggrieved by an order of assessment to octroi duty. Similarly, the sub section excludes expressly the power of "any other authority than is provided in this Act" to entertain an objection to any valuation, assessment or levy of octroi. This part of the provision is in the nature of ouster of the jurisdiction of Civil Courts, at least by necessary impli cation, to entertain an objection to any valuation,,assess ment or levy. This is the evident intendment, meaning and implication of the provision. In Wolverhmpton New Waterworks Company vs Hawkesford(1) willes J. referred to various classes of cases in which the jurisdiction of ordinary courts is excluded; the third class of such cases being "where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. " The view of Willes J., that with respect to that class of cases the party must adopt the form of remedy given by the statute and no other, was accepted by the Privy Council in Secretary of State vs Mask & Company(2) and by the House of Lords in Neville vs London " 'Express" Newspaper, Limited(3). In Mask & Company 's( '2) case the Privy Council was dealing with the provisions of the Sea Customs Act, 1876 section 186 whereof gave a right of appeal to the person aggrieved by any decision or order passed by the Customs Officers under that Act. Section 191 further gave the aggrieved person a right to make an application to the Local Government for revision of the appellate decision or order. The last paragraph of section 188 provided: "Every order passed in appeal under this section shall, subject to the power of revision conferred by section .191, be. final". The.re was no express exclusion of the civil courts ' Juris diction to entertain a suit challenging an order passed by a Customs Officer but the Judicial Committee, while recognis ing that the exclusion of the jurisdiction of civil courts was not to be readily inferred and that such exclusion must either be explicitly expressed or clearly implied, observed that looking at the last paragraph of section 188 of the Sea Customs Act it was difficult to conceive what further chal lenge of the order was intended to be excluded other than a challenge in the Civil Courts. If a provision merely giving finality to an order could be construed as ousting the civil Court 's jurisdiction, section 84(3) of the Act, which is far more expressive, can legitimately be construed to have the same effect. It excludes in terms a challenge to the various things therein mentioned, in any other manner or by any other authority than is provided in the Act. But counsel for the plaintiffs contends that section 84(3) cannot oust the civil Court 's jurisdiction to entertain the present suit because the defendant have no power at all either under the Act or under the (1) ; (2) 67 I.A. 222. (3) 88 Rules framed thereunder to reopen or revise an assessment to octroi duty. An assessment once made is final subject to the remedies which the Act provides to the aggrieved party and since, according to the counsel, the reopening of assessment is wholly without jurisdiction the suit to chal lenge it is competent. The argument, in other words, is that section 84(3) may bar a suit to challenge an act which is within the purview of the Act or the Rules but it cannot bar a suit to challenge an act which is outside the Act or the Rules and is therefore wholly lacking in jurisdiction. In support of the contention that the civil Court has jurisdiction to entertain the suit plaintiffs 'rely princi pally on the decisions of this Court in Bharat Kala Bhandar Ltd. vs Municipal Committee, Dhamangaon(1), B.M. Lakhani vs Malkapur Municipality() and Dhulabhai and others vs The State of Madhya Pradesh(3). The appellants in Bharat Kala Bhandar 's(1) case filed a suit for recovery of excise tax paid by them under section 66(1)(b) of the Central Provinces Municipalities Act, 1922 on the ground that after the coming into force of section 142A of the Government of India Act, 1935 till January 25, 1950 a tax in excess of Rs. 50/ per annum could not be imposed by the Municipal Commit tee and that after the coming into force of the, Constitu tion, imposition of tax in excess of Rs. 250/ per annum was tinconstitutional. The Trial Court decreed the suit but on appeal the High Court held that the suit was bad for non compliance with section 48 of the C.P. Act according to which a suit for anything done or purported to be done under the Act had to be instituted within six months from the date of the accrual of the cause of action. In answer the Municipal Committee contended that apart from the provisions of section 48, the suit was barred by section 84(3) under which no objection could be taken to any assessment in any other manner than is provided in the Act. That section is the very same provi sion under which the present suit, according to the defend ants, is said to be barred from the cognisance of the civil Courts. It was held by this Court by majority that since the Municipal Committee had no authority to levy a tax beyond what was permitted by section 142A of the Government of India Act or article 276 of the Constitution, the assessment proceedings were totally void insolaf as they purported to levy a tax in excess of the constitutionally permissible limits and therefore the suit was maintainable. The question involved in B.M. Lakhani vs Malkapur Munic ipality (supra) was similar, the contention being that the recoveries which were made in contravention of section 142 A of the Government of India Act, 1935 and article 276(2) of the Constitution were wholly without jurisdiction and therefore a suit for refund of tax recovered by the Municipality in violation of the constitutional provisions was maintainable. That contention was accepted by this Court which treated the matter as concluded by the decision in Bharat Kala Bhandar 's (supra) case. (1) ; (2) (3) ; 189 In Dhulabhai and others vs The State of Madhya Pradesh (supra) the position was similar to that in the two cases noticed above. Section 17 of the Madhya Bharat Sales Tax Act provided that no assessment made and no order passed under the Act or the Rules made thereunder shall be called in question in any Court. It was conceded by the State Government that the sales tax levied on the appellants was unconstitutional in view of article 301 of the Constitution but it was contended that the civil Court had no jurisdiction to entertain the appellants ' suit for refund of the tax in view of section 17 of the Act. After an examination of various decisions including those to which we have referred in this judgment Hidayatullah, J., who spoke for the Constitu tion Bench formulated seven propositions bearing on the construction of statutes which, expressly or by necessary implication, bar the jurisdiction of civil Courts. It is unnecessary to examine each One of those propositions for the short reason that as in the case of Bharat Kala Bhan dar and B.M. Lakhani, (supra) so in the case of Dhulabhai (supra) the recovery of sales tax was unconstitutional and the suit, for that reason, was held maintainable. Attention must, however, be drawn to propositions (1), (4) and (6). The 1st proposition states that where the statute gives a finality to the orders of the special tribunals the Civil Courts ' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. The 4th proposition is that when a provision is already declared unconstitutional or the con stitutionality of any provision is to be challenged, a suit is open. The 6th proposition which bears more appropriately on the instant case says that questions of the correctness of the assessment, apart from its constitutionality, are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry. The plaintiffs ' contention that the suit is not barred from the cognizance of the civil Court is effectively an swered by these propositions but even so, a discussion of the jurisdictional issue will not be complete without reference to a decision rendered by a seven Judge Bench of this Court in Kamla Mills Ltd. vs State of Bombay(1). The appellants therein were assessed to sales tax on sales which were treated by the Sales Tax authorities as 'inside sales ' but which according to the decision in Bengal Immunity Co. Ltd. vs State of Bihar(2) were 'outside sales ' and therefore non taxable under the Bombay Sales Tax Act, 1946. After the decision in Bengal Immunity(2) case which came on September 6, 1955 the appellants discovered that they were illegally subjected to sales tax and since the period prescribed by the Act for adopting the remedies thereunder had expired, the appellants flied a suit for recovery of the sales tax illegally collected from them in respect (1) [19661] S.C.R. (2) 190 of the outside sales. The State of Bombay contended that the suit was. barred by section 20 of the Act which provided, to the extent material, that no assessment made and no order passed under the Act or the Rules. shall be called into question in any civil Court. It was held by this. Court that section 20 protected all assessments made under the Act or the Rules made thereunder and that the protection was wide enough to cover assessments made by the appropriate author ities under the Act whether the assessments were made cor rectly or not. Observing that if the appropriate authority while exercising its jurisdiction and powers under the relevant provisions of the Act comes erroneously to the conclusion that a transaction which is an outside sale is not an ,outside sale and proceeds to levy sales tax on it its decision cannot be said to be without jurisdiction, the Court held that the suit was barred from the cognizance of the civil Court. In coming to this conclusion,the Court relied upon the decision in Firm and Illuri Subhaya Chetty & sons vs The state of Andhra Pradesh(1) which had taken the view, while interpreting a similar provision in section 18A of the Madras General Sales Tax. Act, that the expression "any assessment made under this Act" was wide enough to cover all assessments made by the appropriate authorities under the Act, whether the said assessments were made correctly or not. The decision in Bharat Kala Bhandar (supra) was brought to the notice of the Court in Kamla Mills (supra) case but that decision was distinguished on the ground that the provision which fell for construction therein was worded differently and as observed in Mask & Co. (supra) ' "deci sions on other statutory provisions are not of materrial assistance, except in so far as general principles of con struction are laid down". With great respect, the decision in Bharat Kala Bhandar (supra) is distinguishable for the weightier reason that the tax recovered in that case was unconstitutional and no provision of a statute could ' be construed as laying down that no Court shall have jurisdic tion to order a refund of a tax collected in violation of a constitutional provision. If there were a provision which so provided or which could be so construed, that provision would itself be unconstitutional. In Kamla Mills (supra) case it was observed that if a statute creates a special right or liability, pro vides for the determination of that right or liability by tribunals specially constituted in that behalf and lays down that all questions in regard to that right or liability shall exclusively determined by the tribunals so constitut ed, it becomes pertinent to enquire whether remedies nor mally associated with actions a civil Court are prescribed by the said statute or not. If the Court is satisfied that the Act provides no remedy for making a claim for the recov ery of an illegally collected tax the Court might hesitate to construe a provision giving finality to the orders passed by the tribunals specially created by the Act as creating an absolute bar to the suit and if such a construction was not reasonably possible, the Court would be called upon to examine the constitutionality of the provision excluding the civil Court 's jurisdiction in the light of articles 19 and 31 of the Constitution. According to the 1st proposition in Dhulabhai 's (supra) case, if the statute gives finality to the orders passed by the special (1) ; 191 tribunals created by it, the civil Courts jurisdiction would be excluded if the statute provides adequate remedies to do what the civil Courts are normally empowered to do in a suit. The 6th proposition in that case states that ques tions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authori ties are declared to be final or there is an express prohi bition in the particular Act. Further, that in either case the scheme of the particular Act must be examined because it is a relevant enquiry. These considerations make it neces sary to examine the relevant provisions of the Act of 1922 and the Rules framed thereunder with a view to seeing whether they provide adequate remedies to the aggrieved party to challenge a wrong or illegal exaction of octroi duty and whether correspondingly, the authorities specially created by the Act have the power to do what civil Courts are generally empowered to do. This inquiry is relevant even though section 84(3) of the Act does not merely say that orders passed by the special tribunals shall be final but provides that no objection shall be taken to any assessment, levy etc., in any other manner or by any other authority than is provided in the Act. Section 66(1)(b) of the C.P. and Berar Municipali ties Act, 1922 empowers the Municipal Committee to impose an octroi on animals or goods brought within the limits of the municipality for sale, consumption or use within those limits. Section 83(1) provides that an appeal against the assessment or levy of, or refusal to refund, any tax under the Act shall lie to the Deputy Commissioner or to such other officer as may be empowered by the Provincial Govern ment in that behalf Sub section 1 A of section 83 gives to the person aggrieved by the decision the appellate authority the right to apply to the State Government for revision of the decision on the ground (a) that the decision is contrary to law or is repugnant to any principle of assessment of a tax, or (b) that the appellate authority has exercised a jurisdiction not vested in it by law or has failed to exercise the jurisdiction vested in it by law. Section 83(2) empowers the appellate or revision authority to draw up a statement of the case and make a reference to the High Court for its decision if any. question as to the liability to assessment or as to the principle of assessment arises in the matter on which the authority entertains a reasonable doubt. Then comes section 84 which by sub section (1 ) provides for a limitation of 30 days for appeal and by sub section (3) lays down the injunction which is the bone of contentions in the instant case that no objection shall be taken to any valua tion, assessment or levy nor shall the liability of any person to be taxed or assessed be questioned in any other manner or by any other authority than to is provided in the Act. Section 71 of the Act empowers the Provincial Government make rules regulating the assessment of taxes and for preventing evasion of assessment. Section 76 which appears under the heading "Collection of taxes" empowers the government to make rules regulating the collection of taxes including the prevention of evasion of payment and payment of lump sums in composition. Section 85 confers similar empowerment to make rules regulating the refund of taxes. 192 In exercise of the powers conferred by section 71, 76 and 85 and in supersession of the earlier rules, the Provincial Government made rules "for the assessment, collection and refund of the octroi tax" which were gazetted on April 9, 1929 and were amended from time to time. Rule provides that articles subject to octroi duty are liable to duty as soon as they enter the octroi limits. Rule 6(b) which prescribes the mode of calculating octroi duty provides that the cur rent prices of articles liable to ad valorem duty shall be the cost price to the importer plus the cost of carriage and not the price prevailing in the local market. Rule 8 pre scribes the details of the procedure for assessing the octroi duty. The note to that rule says that the duty shall be assessed on invoice and not on V.P. covers, Bank re ceipts, letters and hundies. Rules 9(a) (b) (c), 10(b), 12, 13(a) and 13(b) provide for various matters relating to assessment and levy of octroi duty. Rule l4(b) 'provides that any person importing or bringing any dutiable articles within the octroi limits of the municipality "without paying the duty" or without giving declaration to the Octroi Mohar rir shall be liable to pay double the duty and shall in addition be liable to be prosecuted to evasion of duty. Rules 29 onwards deal with "Refund of Octroi". Rule 31 out of that collocation of rules prescribes how and when applications for. refunds may be made. These provisions show in the first place that the de fendants indubitably possess the right and the power to assess and recover octroi duty and double duty on goods which are brought within the municipal limits for sale, consumption or use therein. The circumstance that the defendants might have acted in excess of or irregularly in the exercise of that power cannot support the conclusion that the assessment or recovery of the tax is without jurisdiction. Applying the test in Kamla Mills (supra), if the appropriate authority while exercising its Jurisdic tion and powers under the relevant provisions of the Act, holds erroneously that an assessment already made can be corrected or that an assessee is liable to pay double duty when rule 14(b), in fact, does not justify such an imposi tion, it cannot be said that the decision of the authority is without jurisdiction. Questions of the correctness of the assessment apart from its constitutionality are, as held in DhulaBhai (supra), for the decision of the author ities set up by the Act and a civil suit cannot lie if the orders of those authorities are given finality. There is no constitutional prohibition to the assessment which is im peached in the instant case as there was in Bharat Kala Bhandar (supra), B.M. Lakhani (supra), and Dhulabhai (supra). The tax imposed in those cases being unconstitu tional, its levy, as said by Mudholkar J. who spoke for the majority in Bharat Kala Bhandar (supra), was "without a vestige or semblance of authority or even a shadow of right. " That is in regard to the power of the authority concerned to reassess and to levy double duty. Secondly, both the Act and the Rules contain provisions which we have noticed above, enabling the aggrieved party effectively to challenge an illegal assessment or levy of double duty. By reason of the existence and availability of those special remedies, the ordinary remedy by way of a suit would be excluded on a true interpretation of section 84(3) of the Act. 193 The argument that double duty was levied on the plaintiffs though justified by the terms of rule 14(b) goes to the correctness of the levy, not to the jurisdiction of the assessing authority. That rule ;authorizes the imposition of double duty if dutiable articles are imported (a) without paying the duty or (b) without giving declaration to the Octroi Moharrir. It may be that neither of these two eventualities occurred and therefore there was no justifica tion for imposing double duty. But the error could be corrected only in the manner provided in the Act and by the authority prescribed therein. The remedy by way of a suit is barred. Plaintiffs sought support to their contention as regards the maintainability of the suit for refund of double duty and revised duty, from certain observations contained in Firm Seth Radha Kishan vs Administrator, Municipal Commit tee, Ludhiana(1) to the effect that "a suit in a civil Court will always lie to question the order of a tribunal created by a statute, even if its order is, expressly or by neces sary implication, made final, if the said tribunal abuses its power or does not act under the Act but in violation of its provisions. " In the first place, the assessment in the instant case was made by the authority duly empowered to do so and secondly the authority was acting under the Act while revising the assessment and imposing double duty. It had the power to assess and levy double duty. If it exceeded that power it acted wrongly, .not without jurisdiction. In Firm Seth Radha Kishan (supra), the Municipal Committee being entitled to impose a certain rate of tax on common salt and higher rate in respect of salt of other kinds, imposed tax at the higher rate on "sambhar salt" which was a variety of common salt. Section 86 of the Punjab Municipal Act, 1911, provided that the liability of any person to be taxed cannot be questioned in any manner or by any authority other than that provided in the Act. That provision is identical with section 84(3) of the C.P. Municipalities Act, 1922, with which we are concerned in the instant case. Section 86(2) of the Punjab Act provided that no refund of any tax shall be claimed by any person otherwise than in accordance with the provisions of the Act and the Rules thereunder. It was held by this Court that the liability to pay terminal tax was created by the Act and since a remedy was given to the party aggrieved in the enforcement of that liability, the suit for refund was not maintainable by reason of section 86. The observations on which plaintiffs rely 'cannot, in the context, be taken to mean that the Act protects correct assessments only and that every incorrect or wrong order of assessment can be challenged by a suit though the statute gives it finality and provides full and effective remedies to challenge it. Except in matters of constitutionality and the like, a self contained Code must have priority over the common means of vindicating rights. We would like to add that if the observations on which plaintiffs rely are to be understood literally, they are contrary to the decision in Kamla Mills (supra) ,case where, speaking for a seven Judge Bench, Gajendragadkar C.J. ob served that if the appropriate authority while exercising its jurisdiction and powers under the relevant provisions of the Act comes to an erroneous conclusion, it cannot be said that the decision is without jurisdiction (p. 78). (1) [19641 2 S.C.R. 273, 284. 194 Plaintiff 's reliance on the 1st proposition in Dhuabhw s (supra) case is equally misconceived. The first two propo sitions formulated in that case contain a dichotomy. The l st proposition refers to cases where the statute merely gives finality to orders .of special tribunals. In such cases, according to that proposition, the civil Court 's jurisdiction would not be excluded if "the provisions of the particular Act arc not complied with". The instant case does not fall under the 1st. proposition because section 84(3) of the Act does not merely give finality to the orders passed by the, special tribunals. It provides, expressly, that such orders shall not be questioned in any other manner or by any other authority than is provided in the Act. The 2nd proposition deals in its first paragraph with cases where there is an express bar to the civil Courts ' jurisdic tion. The second paragraph of that proposition deals with cases where there is no express exclusion. The instant case falls under either one or the other paragraph of this proposition, which rendered it necessary to examine whether the Act creates special rights and liabilities, provides for their determination by laying down that such rights and liabilities shall be determined by the special tribunals constituted under it and whether remedies normally associat ed with actions in civil Courts are prescribed by the Act. Upon that examination we concluded that the suit is barred from the cognizance of the Civil Court. Not only that the Act of 1922 provides an effective remedy to an aggrieved party to challenge the assessment of octroi duty and to claim refund of duty illegally paid or recovered, but the plaintiffs in fact availed themselves of these remedies. In 1946 47 when the Municipal Committee reopened and revised the past assessments by charging octroi duty on an amount which was only 61/4% less than the retail price of the goods and when it levied double duty by way of penalty plaintiffs preferred an appeal against the decision of the Municipal Committee to the Sub Divisional Officer, Jabalpur, who by an order dated ' July 14, 1946 modified the decision of the Committee by asking them to charge octroi duty on an amount which was less by 121/2%instead of 61/4% than the retail price of the goods. Plaintiffs succeeded to an extent though the Sub Divisional Officer upheld the assessment of double duty. Having exhausted their remedies under the Act and having been benefited by the appellate decision, though partly, plaintiffs turned to the civil Court to claim the refund. That is impermissible in view of the provision contained in section 84(3) of the Act. In the result, Civil Appeal No. 1923 of 1972 filed by the plaintiffs fails and is dismissed. Civil Appeal No. 1924 of 1972 filed by the defendants succeeds and is allowed with the result that the plaintiffs ' suit will stand dis missed. Considering that the defendants revised the assess ment after a lapse of time parties will bear their costs throughout. P.B.R. C.A. 1923/72 dismissed. C.A. 1924/72 allowed.

The Central Provinces and Berar Municipalities .Act, 1922, empowers a municipality to assess and recover octroi duty on goods brought within the municipal limits for sale. consumption and use therein. Under the Act an appeal against assessment or levy or refusal to refund any tax lies to a designated official. A person aggrieved by the decision of the appellate authority has a right to apply to the State Government for revision. The Act also provides for refer ence to the High Court on questions like liability to as sessment or principles of assessment and so on. Section 84 (3) lays down that "no objection shall be taken to any valuation. assessment or levy nor shall the liability of any person to be taxed or assessed be questioned in any other manner or by any other authority than is provided in the Act." Rule 14(b) of the Rules framed under the Act provides that any person importing or bringing any dutiable articles within the octroi limits of a municipality without paying the duty or without giving a declaration to the octroi Moharrir, shall be liable to pay double the duty and shall in addition be liable to be prosecuted for evasion of duty. The plaintiffs imported within the municipal limits for sale in their retail shops articles manufactured by them in their factories situated at different places in the country. They paid the octroi levied by the municipality at a certain rate. But Sometime later the municipality reopened and revised the assessment and charged octroi at a different rate. It also levied double the duty by way of penalty on the ground that the plaintiffs had intentionally evaded payment of duty on the goods. The appellate author ity modified the decision of the municipality but upheld the assessment of double duty. The plaintiffs ' revision appli cation was rejected by the Board of Revenue. The plaintiffs paid the duty and penalty under protest and filed a suit for recovery of the amount on the ground that the municipality was not entitled to recover the amount of octroi duty and penalty. Overruling the defendant munic ipality 's objection as regards the civil court 's jurisdic tion to entertain the suit the trial court decreed the suit. On appeal, the High Court held that the defendants were entitled to revise and reopen the assessment and that the reassessment of duty fixed in appeal by the appellate au thority could not be questioned by the plaintiffs in a civil court. In appeal it was contended in this Court by the plain tiffs that section 84(3) may bar a suit to challenge an act which was within the purview of the Act, but it could not bar a suit to challenge an act which was outside the Act or the Rules and since in this case the defendant had no power to revise or reopen the assessment. its action was wholly lacking in jurisdiction and so the suit was competent. Dismissing the appeal, HELD: Since section 84(3) expressly prohibits a challenge to valuation, assessment or levy "in any other manner . . than is provided in this Act" and since the Act has devised its own special machinery for inquiring into and adjudicating upon such challenges, the common remedy .of a suit stands necessarily cxcluded and cannot be availed of by a person aggrieved by an order 183 assessment to octroi duty. Similarly the sub section excludes expressly the power of "any other authority than is provided in this Act" to entertain an objection to any valuation, assessment or levy of octroi. This art of the provision is in the nature of ouster of jurisdiction of civil courts, at least by necessary implication, to enter tain an objection to any valuation, assessment or levy. [187 A] 1. Two of the propositions bearing on the construction of statutes which expressly or by necessary implication bar the jurisdiction of civil courts stated in Dhulabhai & Ors. vs The State of Madhya Pradesh ; and which are relevant for the purposes of this case are: (i) where the statute gives finality to the orders of special tribunals the civil court 's jurisdiction must be held to be excluded if there is an adequate remedy to do what the civil courts would normally do in a suit. Such provision, howev er, does not exclude cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure, (ii) questions of the correctness of the assessment, apart from its constitution ality, are for the decision of the authorities and a civil suit does not lie. if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act, In either case the scheme of the par ticular Act must be examined because it is a relevant en quiry. [189 D F] (a) In the instant case, the various provisions of the Act show in the first place that the municipality possesses the right and the power to assess and recover octroi duty and double duty on goods brought within the municipal limits for sale, consumption or use therein. The circumstance that the municility might have acted in excess of or irregularly in the exercise of that power could not support the conclusion that the assessment or recovery of the tax was without jurisdiction. If the appropriate authority, while exercis ing its jurisdiction and powers under the relevant provi sions of the. Act, holds erroneously that an assessment already made can be corrected or that an ,assessee is liable to, pay double duty, it cannot be said that the decision of the authority is without jurisdiction. [192 E F] (b) Both the Act and the Rules contain provisions ena bling the aggrieved party to challenge an illegal assessment or levy of double duty. By reason of the existence and availability of those special remedies, the ordinary remedy by way of a suit would be excluded on a true interpretation of section 84(3) of the Act. [193 H] (c) Levy of double duty, though not justified by the terms of r. 14(b) goes to the correctness of the levy and not to the jurisdiction of the assessing authority. Assuming that neither of the two eventualities mentioned in r. 14(b) occurred and, therefore, there was no justification for imposing double duty, the error could be corrected only in the manner provided in the Act and by the authority pre scribed therein. The remedy by way of a suit is barred. [193 A B] (d) The suit for refund of double duty or revised duty is not maintainable because in the first place the assess ment was made by the authority duly empowered to do so and secondly the authority was acting under the Act while revis ing the assessment and imposing double duty. It had the power to assess and levy double duty. If it exceeded that power it acted wrongly, but not without jurisdiction. [193 C D] (e) It is not correct to say that the Act protects correct assessments only and that every incorrect or wrong order of assessment can be challenged by a suit though the statute gives it finality and provides full and effective remedies to challenge it. Except in matters of constitu tionality and the like a selfcontained Code must have priority over the common means of vindicating rights. If the appropriate authority, while exercising its jurisdic tion anti power under the relevant provisions of the Act. comes to an erroneous conclusion it cannot be said that the decision is without jurisdiction. [193 F. G] Dhulabhai and Others vs The State of Madhya Pradesh ; Kamla Mills Ltd. vs State of Bombay ; applied. 13 240SCI/77 184 Bharat Kala Bhandar Ltd. vs Municipal Committee, Dha mangaon; , , B.M. Lahani vs Malkapur Munici pality, and Firm Seth Radka Kishan vs Administrator, Municipal Committee, Ludhiana [19541 2 SCR 273, 284 distinguished. Wolverhamton New Waterworks Company vs Hawkerford ; Secretary of State vs Mask & Company, 67 I.R. 222, Naville vs London "Express" Newspaper, Limited, , Bengal Immunity Co. Ltd. vs State of Bihar. and Firm and Illuri Subbaya Chetty & Sons. vs The State of Andhra Pradesh, ; referred to. (f) The instant case does not fall within the proposi tions in Dhulabhai 's case because section 84(3) not merely gives finality to the orders passed by the special tribunal but expressly provides that such orders shall not be questioned in any other manner or by any other authority than is pro vided in the Act. [194 B] (g) In the instant case, the plaintiffs availed them selves of the remedies provided under the Act and. succeeded to art extent. Having exhausted their remedies under the Act and having been benefited by the appellate decision, they turned to the civil court to claim refund. This is impermissible under section 84(3). [194 F G]

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Civil Appeal No. 309 of 1976. Appeal by Special Leave from the Judgment and Order dated the 22nd January, 1975 of the Bombay High Court in Appeal No. 106 of 1969 in Misc. Petition No. 320 of 1964. 7 502 SCI/77 526 I. N. Shroff and H.S. Parihar for the Appellants. M.N. Shroff for Respondents 1 and 2. V.P. Ram an, Addl. Genl, K.J. John and Shri Narain for Respondent No. 3. The Judgment of the Court was delivered by GUPTA, J. Ahmedabad Jupiter Spinning Weaving and Manu facturing Company Limited was the owner of 5900 Sq. yds of land forming part of its mill premises at Lower Parel in Bombay which was sought to be acquired by the Maharashtra Government for a municipal school. Notifications under sections 4 and 6 were issued on June 19, 1961 and May 29, 1964 respectively. The company filed a petition in the Bombay High Court challenging the validity of the notifica tions on several grounds. A single Judge of the High Court having dismissed the writ petition on August 11, 1969 the company preferred a. letters patent appeal. During the pendency of the appeal, the management of the company was taken over by the Central Government on October 8, 1972 under the Industries (Development and Regulation) Act, 1951. On September 21, 1974 an ordinance called the Sick Textile Undertakings (Nationalisation) Ordinance, 1974 was .promulgated by virtue of which the textile undertaking of the company the 'management of which had been taken over by the Central Government, vested absolutely in the Central Government with effect from the "appointed day", which was April 1, 1974, and immediately thereafter stood transferred and vested in the National Textile Corporation. The Ordi nance was later replaced by the Sick Textile Undertakings (Nationalisation) Act, 1974 (hereinafter referred to as Sick Textile Act). Sections 3 and 4 of the Act are as follows: Acquisition of rights of owners in respect of sick textile undertakings. (1 ) On the appointed day every sick textile taking and the right title and interest of the owner in relation to every such sick textile undertakings shall stand transferred to, and shall vest absolutely in, the Central Government. (2) Every sick textile undertaking which stands vested in the Central Government by virtue of sub Section (1 ) shall, immediately after it has so vested, stand transferred to, and vested in, the National Textile Corpora tion. General effect of vesting 4. (1 ) The sick textile undertaking referred to in section 2 shall be deemed to include all assets, rights, leaseholds, powers, authorities and privileges and all property, movable and immovable, including lands, buildings, workshops, stores, instru ments, machinery and equipment, cash balances, cash on hand, reserve funds, investments and book debts and all other rights and interests in, or arising out of, such property as were immediately before the appointed 527 day in the ownership, possession, power or control of the owner of the sick textile undertaking, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto and shall also be deemed to include the liabilities and obligations speci fied in sub section (2) of section 5. (2) All property as aforesaid which have vested in the Central Government under sub section (1) of section 3 shall, by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it, and any attachment, injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn. " The other sub sections of section 4 are not relevant for the present purpose. The National Textile Corporation applied to the High Court for being substituted in place of the original appel lant in the letters patent appeal which was pending and the application was allowed. The main contention on behalf of the substituted appellant in the High Court was that the two notifications under sections 4 and 6 of the Land Acqui sition Act must be held to have become ineffective in view of section 4(2) of the Sick Textile Act which provides that all property which vests in the Central Government under section 3(1) does so free from all "incumbrances affecting it. " The High. Court dismissed the appeal hold ing that the notifications under the Land Acquisition Act were not incumbrances within the meaning of section 4(2) of the Sick Textile Act. In the appeal before us filed with special leave obtained from this Court, the National Textile Corporation questions the correctness of the view taken by the High Court. Thus the only question for determination in the appeal is whether the notifications issued under the Land Acquisi tion Act are incumbrances within the meaning of the word as used in section 4(2} of the Sick Textile Act. Section 3 and the first two sub sections of section 4 of the Sick Textile Act are the only provisions relevant in this context. Section 3 provides that on the appointed day every sick textile undertaking shall vest absolutely in the Central Government, and then in the National Textile Corporation. Subsection (1 ) of section 4 states that the undertakings vesting in the Central Government under section 3 shall be deemed to include all assets, rights and interests in the ownership, possession or control of the owners of such undertakings immediately before the appointed day. Sub section (2) of section 4 provides that all property vesting in the Central Government under section 3 shall, "by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incum brances affecting it, and any attachment, injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been with drawn". Counsel for the appellant argues that sub section (2) of section 4 is intended to vest the sick textile undertakings in the Central Govern 528 ment free from all fetters, and the notifications issued under the Land Acquisition Act which had the effect of freezing the price of the land were fetters falling in the category of "other incumbrances" mentioned in section 4(2) of the Sick Textile Act. The term 'incumbrance ' has not been defined in the Act. In Wharton 's Law lexicon incum brance is described as being a claim, lien or liability, attached to property. This is the sense in which the term is ordinarily used. An incumbrance in this sense ' has to be a liability "attached to property", it must be a burden or liability that runs with the land, as the High Court has held. But a notification issued by the Government under the Land Acquisition Act is not a burden Or liability that is attached to the property. The sovereign right of the State to take proceedings for the acquisition of any land for public purpose is similar to its right to impose a tax on the land which is paramount to the ownership over the land and outside it". [see The Collector of Bombay vs Nusserwanji Rattanji Mistri & others ; (at 1323). Under sub section (2) of section 4 of the Sick Tex tile Act all property which have vested in the Central Government under section 3 (1) shall be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it, and any attachment, injunction or decree or order of any court restricting the use of such property shall be deemed to have been withdrawn. Counsel for the respondent. State of Maharashtra, submits that the term incumbrance should take colour from the dif ferent kinds of burden on the land specified in section 4(2) preceding the words all other incumbrances"it is argued that incumbrance in the context means ' Some burden or li ability that is attached to the property ,like mortgage, charge, lien That this is so would also appear from what follows the words "all other incumbrances affecting it". Having said that the vesting will be free from trust, obligation, mortgage, charge, lien and all other incum brances affecting it. sub section (2) goes on to add that "any attachment. injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn" upon vesting. If the appel lant 's construction of the provision were correct, and incumbrance meant any kind of fetter, any attachment, in junction or decree or order restricting the use of the property would be included in "all other incumbrances" and it would have been quite unnecessary to mention them sepa rately. This makes it clear that fetters on the property like attachment, injunction or decree or order of any court restricting the use of the property which are deemed to have been withdrawn upon the property vesting in the Central Government are not really incumbrances within the meaning of the word as used in sub section (2) of section 4. We therefore agree with the High Court that the notifica tions issued under sections 4 and 6 of the Land Acquisition Act are not incumbrances and cannot be held to have become inoperative on the land in question vesting in the Central Government. The appeal is dismissed but in the circumstances of the case without any order as to cost. P. B.R. Appeal dismissed.

The state Government issued two notifications under sections 4 and 6 of the Land Acquisition Act seeking to acquire certain land belonging to a textile mill. When the Letters Patent Appeal of the 'Textile mill was pending before the High Court the mill was taken over by the Central Government and later the appellant was substituted for the original appellant. By virtue of section 3 of the Sick Textile Undertakings (Nationalisation) Act, 1974 the management of every sick textile mill vested absolutely in the Central Government and later in the appellant. Section 4(2) of the Act provides that all property which vested in the Central Government shall, by force of such vesting, be freed and discharged from trust, obligation, mortgage, charge, lien and all other incumbrances affecting it and any attachment, injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been with drawn. The appellants ' contention that by reason of ss.4(2)the two notifications must be held to have become ineffective because the section provides that all property vested in the Central Government shall be free from all incumbrances affecting it was rejected by the High Court. Dismissing the appeal to this Court, HELD : The High Court was right in its view that the notifi cations issued under ss 4 and 6 of the Land Acquisition Act were not incumbrances and could not be held to have become inoperative on the land vesting in the Central Government. [528 B] 1.The term "incumbrance" has not been defined in the Act, The dictionary meaning given to incumbrance is a claim, lien or liability attached to property. An incum brance in this sense has to be a liability "attached to property". a burden or liability that runs with the land. The notifications issued under the Land Acquisition Act are not a burden or liability attached to the property.[528 B] 2. "Incumbrance" in the context of section 4(2) means some burden or liability attached to the property ,like mortgage, charge, lien etc. That this is so would appear from the words 'all other incumbrances affecting it". Having said that the vesting will be free from trust etc. , sub section (2) goes on to add that "any attachment. injunction or decree . shall be deemed to be withdrawn" upon vesting. If "incumbrance" meant any kind of fetter, any attachment, injunction or decree or order restricting use of the proper ty would be included in "all other incumbrances" and it would have been quite unnecessary to mention them separate ly. This means that fetters on the property like attach ment, injunction or decree or order of any court restricting the use of the property which are deemed to have been with drawn upon. the property vesting in the Central Government are not really incumbrances within the meaning of the word as used in s.4(2) [528 E G]

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No. 1547 of 1975. (Appeal by Special Leave from the Judgment and Order dated the 24 1 1974 of the Kerala High Court in O.P. No. 5566/72) Y.S. Chitale, A. section Nambiar, for the appellant. K, T. Harindranath, K.R. Nambiar, for respondents Nos. 1 3 and 4. T.S. Krishnamoorthy Iyer, N. Sudhakaran, for respond ents Nos. 5 & 6. The Judgment of the Court was delivered by KAILASAM, J. This appeal is by special leave granted by this Court against the judgment of the High Court of Kerala in O.P. No. 5566 of 1972 by respondents 4 to 8 and 13 before the High Court. The respondents herein filed the writ petition for the issue of the Writ of Certiorari calling for records relating to exhibit P 10, GO Rt. No. 3386/69/DD dated 23rd October, and exhibit P15 and quash the same and to issue a writ of mandamus directing the respondents 1 and 2 who are the State of Kerala represented by the Chief Secretary, Government of Kerala, and the Director of Panchayats to forbear the implementation of exhibit P12 and further direct them to implement exhibit P 8 grading 3 list or in the, alterna tive to issue a writ of mandamus directing the State of Kerala to consider and dispose of exhibit P13 and similar repre sentations by respondents 3 and 4 on merits. It was also prayed that a writ of certiorari quashing exhibit P17 in so far as it related to the petitioners and respondents 3 to 18 in the writ petition be issued and also to issue a writ of mandamus compelling the respondents 1 and 2, State of Kerala and the Director of Panchayats, to assign the writ petition ers the appropriate ranks in the cadre of Executive Officers in the Panchayat Services. The High Court allowed the writ petition and set aside the list exhibit P17, the order exhibit P12 and the order exhibit P15 dismissing the appeal petition exhibit P14and directed that a fresh list be prepared in accordance with the principles laid down in exhibit P16 in the light of the judgment of the High Court. Aggrieved by the decision of the High Court the appellants have preferred this appeal. The writ petition was contested by 18 respondents. Respondents 3 to 10 were Panchayat executive officers of the Malabar area functioning under the Madras Village Panchayat Act, 1951, on 31st December, 1961. Respondents 11 to 18 were Panchayat Officers functioning as such on 31st Decem ber, 1961 under the Travancore Cochin Panchayats Act, 1950. The Kerala Panchayats Act, of 1960 received the assent of the Governor on 8th December, 1960, and was pub lished in Kerala Gazette Extraordinary No. 119 dated 9th December, 1960. It is common ground that the respondents became Government servants on and from 1st January, 1962. 689 On 15th May, 1961, under exhibit P1 the Government passed an order that all Panchayat Officers/executive officers who continue to hold their appointments at the time when the Act came into force will De absorbed as Panchayat executive officers in the new Panchayats. The same order provided that the staff of the Malabar District Board shall be ab sorbed as Panchayat executive officers in suitable grades according to their qualifications, grades and suitability. In December, 1961, 17 Panchayat officers were to be appointed on a scale of pay higher than the scale applicable to the Panchayat executive officers. The Public Service Commission selected 17 Panchayat executive officers who were on the scale of pay Rs. 80 150 and drew up a list on 27th December, 1961. They were appointed as Panchayat Inspectors under exhibit P8 on 28th December, 1961. To fill up these vacancies 17 of the Panchayat executive officers who were in Grade H on the scale of pay Rs. 40 120, the respond ents 3 to 18 were appointed. The 5 appellants before us were appointed as executive officers on the grade I Rs. 80 250 as and from 1st January, 1962. The respondents who were the petitioners in the writ petition were integrated in the service. The Government passed orders laying down the principles of integration of the District Board employees and the Panchayat executive officers and Panchayat Officers. The impugned orders under the writ petition are exhibit P10, exhibit PI2 and exhibit P15. It is also prayed that exhibit P17 may be quashed. The Government in exhibit P10 came to the conclusion that the vacancies on the advice of the Public Service Commission and the appointment of those that had been advised on 28th December. 1961, arose only on the dates enumerated in the order exhibit P10 com mencing from 30th December, 1961, and ending with 2nd Janu ary, 1962 and that the appointment can only be on occurrence of the vacancies. We do not see on what basis exhibit P10 could be challenged. exhibit P10 refers to G.O. MS No. 93/62 dated 13th February, 1962. By the G.O. of 1962, 16 respond ents in the writ petition were promoted as executive offi cers Grade I on the advice of the Public Service Commission. The promotion of the respondents in the writ petition having been ordered as early as 13th February, 1962, without chal lenging that order a subsequent order which determined the date of their commencement service cannot be challenged. In fact, the respondents were appointed to the higher posts on 28th December, 1961, and they took charge on 30th December, 1961, 31st December, 1961, 1st January, 1962 and 2nd Janu ary, 1962. The respondents in this petition were integrated into the service only on 1st January, 1962. Their position in the service was to be determined by the Government later. If the respondents were aggrieved at the posting to the higher post of the present appellants and others they ought to have even challenged promotion which was made on 1st January, 1962. Not having questioned the legality of the promotion or the G.O. of 1962 it is 'too late for them to question the validity of the G.O. of 1969 filing a writ petition in the year 1972. Apart from this insurmountable objection even on merits the respondents have no claim. The Government passed exhibit R1 dated 31st January, 1965, laying down the principles of integration of the District 690 Board employees and the Panchayat executing officers and Panchayat Officers. It provided that the integration must be based on functional parity. exhibit P12 is a G.O. dated 5th May, 1970 The G.O. refers to the earlier G. O. dated 13th February, 1962, and 24th June, 1969, and states that the names of the 17 executive officers, the appellants and others, are given rank under executive officers Grade I as on 6th January, 1962. The gradation list is P 17 dated 22nd July, 1972. After referring to the earlier G. O. the Director of Panchayats approved a final gradation list of Executive Officers of Panchayats as on 6th January, 1962. The appellants are ranked as 58, 59, 60, 61, 62 etc. The respondents made representations against exhibit P12 but these representations were not accepted and a list exhibit P8 was drawn up. The respondents again objected to the list and subsequently exhibit P12 was prepared. Objections(P14) were raised to exhibit P12 but they were rejected by order exhibit P15 and final list exhibit P17 was published in accordance with the suggestions made in exhibit P12. The contention on behalf of the respondents is that the order under exhibit P12 is against the position taken by the Government in exhibit P10) and Pl0(a) and the Director had no authority to prepare a list in contravention of Exs. P10 and Pl0(a). exhibit P12 was challenged on the ground that it is not in accordance with exhibit P 16 which settled the principles to govern the integration. It was therefore submitted that exhibit P12 and P17 must be quashed. Strong reliance was placed on the order of the Government dated 15th May, 1961, which while it provided that Panchayat Officers Executive Officers who continue to hold their appointments at the time when the Act comes into force will be absorbed as Panchayat Executive Officers in the new Panchayats, secured the right of the staff of the District Board by providing that the staff of the Malabar District Board shall be absorbed as Panchayat Executive Officers in suitable Grades according to their qualifications, grades and suitability. On the basis of the principle of integration above cited it was submitted that if the vacancies in which the appellants and other Panchayat Executive Officers were absorbed arose after 1st January, 1962, the respondents would be entitled to be integrated along with the Panchayat Executive Officers and as they were drawing the same pay they ought to have been given an equal ranking. We have already pointed out that these appoint ments were made before 31st December, 1961, and as such the respondents cannot have any claim. The appointments of the appellants and other Panchayat Executive Officers were made before 31st December, 1961, and as the integration was to take effect from 1st January, 1962, they cannot have any grievance. Further, it will be seen from 6.0. MS.97/67/A & RDD dated 18th March, 1967, which refers to absorption of various categories of staff of the defunct Malabar District Board in the Department of Local Bodies, it is stated in Paragraph 3 that while 9 U.D. Clerks will be equated to the posts of Panchayat Executive Officers, 2nd Grade, 21 Lower Division Clerks and 8 Revenue Inspectors and 4 clerical attenders will be equated to the posts of the Panchayat Executive Officers 3rd grade. It is stated that respond ents 1 to 4 come under this category and are only 3rd Grade Executive Officers. It will thus be seen that the respond ents were not equated with the appellants and other Pan chayat Executive Officers when they were integrated from the District Board service. 691 The persons similarly situated as the respondents herein who were integrated from the District Board services filed writ petitions before the High Court impleading the present appellants challenging the gradation and failed in their attempt. The earliest petition is in O.P. No. 1431 of 19 '70. Justice Isaac who heard the petition observed that the petitioners came in the integrated service as 3rd Grade Executive Officers and were promoted to 2nd Grade with effect from 6th February, 1968, while respondents 3 to 10 (some of whom are appellants before us) have been promoted as early as 16th February, 1962, as 1st grade officers. The learned Judge further observed, "Even ignoring this, respondents 3 to 10 were I Grade Executive Officers from 16 2 1962, while the Petitioner has become even II Grade Executive Officer only with effect from 6 2 1966. " As the petitioner before the learned Judge was holding a post much inferior to the posts held by respond ents 3 to 10 from 1st February, 1962, onwards, he dismissed the petition being devoid of any merit on 24th May, 1972. Another writ petition No. O.P. No. 6423 filed by one of the persons integrated from the District Board Services, against the present appellants and others was also dismissed by Justice Isaac on 27th June, 1973. A writ appeal filed against the order of Justice Isaac in O.P. No 1431 of 1970 was summarily dismissed by the Bench of the Kerala High Court. While the earlier judgments were all decided against the respondents, the Kerala High Court in the judgment under appeal took a different view. The decision under appeal proceeds on the basis that a regrettable mistake crept into the judgment in O.P. No. 1431 of 1970 and the earlier deci sion proceeded on the basis that there was a III Grade mentioned in G.O. 814 dated 17th November, 1962. The High Court was of the view that there was a III Grade under the G.O. above referred to the earlier decision missed the fact that these Grades were not applicable on 1st January, 1962. Though G.O. 814 of 1962 was ,not placed before us we are not sure whether there was any mistake in the earlier judgment for the G.O. MS 97/67 dated 18th March, 1967, refers to persons being transferred from the Malabar District Board as Panchayat Executive Officers III Grade. Be that as it may we are satisfied that the respondents are not entitled to the reliefs prayed for by them in the writ petitions. As the appellants were promoted to a higher post before the respondents were integrated into the Government service on 1st January, 1962. Further throughout the appellants have been treated as occupying a higher post and respondents much lower post. Though the promotion of the appellants was before 1st January, 1962, and was confirmed by various orders of the Government the respondents herein did not choose to challenge the orders till the year, 1974. In the circumstances, we are satisfied that the order of the Kerala High Court has to be set aside and the appeal is allowed with costs. P.B.R. Appeal allowed.

On May 15, 1961 the State Government passed orders (exhibit PI) that all Panchayat Officers functioning under the Travancore Cochin Panchayats Act, 1950 and Panchayat Execu tive Officers functioning under the Madras Village Pan chayats Act, 1951 as on December 31, 1961 who continue to hold their appointments when the Kerala Panchayat Act, 1960 came into force would be absorbed as Panchayat Executive Officers under the new Panchayats. The order also provided that the staff of the Malabar District Board shall be ab sorbed as Panchayat Executive Officers in suitable grades. On the recommendation of the State Public Service Com mission the State Government appointed 17 Panchayat Officers in a higher grade by an order dated December 28, 1961 (exhibit P8) and the officer joined their posts between Decem ber 30, 1961 and January 2, 1962. To fill up the resulting vacancies 17 of this Panchayat Executive Officers who were in Grade II (respondents 3 to 18) were appointed. The appellants were appointed as Executive Officers on the Grade I, as and from January 1, 1962. The respondents ' representation to the Government that they should be appointed with effect from December 28, 1961, that is, the date on which the public Service Commission communi cated their appointment was rejected by the State Government (exhibit P10) on the ground that the vacancies arose only on the dates stated in that order commencing from December 30, 1961 and ending with January 2, 1962 and that the appointments can only be on the occurrence of the vacancies. In a petition under article 226 of the Constitution the High Court directed that fresh lists be prepared. Allowing the appeal, HELD: The respondents are not entitled to the reliefs prayed for by them in the writ petitions. [691 F] The appellants were promoted to a higher post before the respondents were integrated into the Government service.on January 1, 1962. Throughout, the appellants have been treated as occupying a higher post and respondents much lower post. Though the promotion of the appellants was before January 1, 1962 and was confirmed by various orders of the Government the respondents did not choose to chal lenge the orders till 1972. [689 G] There is no ground for challenging exhibit P10 order. It refers to the G.O. of February 13, 1962 by which 16 respond ents in the writ petition were promoted as Executive Offi cers Grade I on the advice of the State Public Service Commission. Their promotion having been ordered on February 13, 1962, without challenging that order a subsequent order which determined the date of their commencement of service cannot be challenged. [689 E F] There is no merit in the respondents ' contention that if the vacancies in which the appellants and other Panchayat Executive Officers were absorbed arose after January 1, 1962 the respondents would be entitled to be integrated along with the Panchayat Executive Officers and since they were drawing the same pay they ought to have been given an equal ranking. The appointments of the appellants and other Panchayat Executive Officers were made before December 31, 1961 and as the integration was to take effect from January 1 688 1962 they cannot have any grievance. Further, the respond ents were not equated with the appellants and other Pan chayat Executive Officers when they were integrated from the District Board Service. [690 F G]

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Civil Appeal Nos. 1546 1551 of 1971. (From 1he Judgment and Order dated 20 12 1968 of the Calcutta High Court in Appeals from Original Orders Nos. 556 559, 571 and 572 of 1967) 150 Lal Narain Sinha, Sol. General and G.S. Chatterice, for the appellants. Purushottam Chatterjee and Ratbin Des, for the respondents. The Judgment of the Court was delivered by BHAGWATI, J. The short question which arises for deter mination in these appeals is whether green ginger falls within the category of goods described as "vegetables, green or dried, commonly known as "sabji, tarkeri or ask" in Item (6) of Schedule I to the Bengal Finance (Sales Tax) Act, 1941. If it is covered by this description, it would be exempt from sales tax imposed under the provisions of that Act. The Sales Tax authorities held that green ginger is used to. add Havour and. taste to food and it is, therefore, not vegetable commonly known as sabji, tarkeri or ask". The orders of the Sales Tax authorities were challenged in a writ petition filed under article 226 of the Constitution and a Single Judge of the High Court who. heard the writ petition disagreed with the view taken by the Sales Tax authorities and held that green ginger is vegetable within the meaning of that expression as used in Item (6) of the First Schedule to the Act. This view of the learned Single ' Judge was affirmed by a Division Bench of the High Court on appeal under clause (15) of the Letters Patent. Hence the present appeal by the State with special leave obtained from this Court. The Bengal Finance (Sales Tax) Act, 1941 levies sales tax on the taxable turnover of a dealer computed in accord ance with the provisions of that Act. Section 6, sub sec tion (1) provides that no tax shall be payable under the Act on the sale of goods specified in the first column of Sched ule I, subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof and Item (6) of Schedule I specifies in the first column "vegetable, green or dried, commonly known as "Sabji, tar kari or ask" so that No. tax is payable on the sale of goods falling within this category, subject to the exception set out in the second column, namely, that they would be liable to bear tax "when sold in sealed containers. " It was common ground in the present case that green ginger was not sold by the assessee in sealed containers and the only question which, therefore, requires to be considered is whether green ginger can be regarded as vegetable commonly known as 'sabji, tarkari or sak '. Now, the word 'vegetable ' is not defined in the Act but it is well settled as a result of several decisions of this Court of which we may mention only two, namely, Ram avatar Budhaiprasad vs Assistant Sales Tax Officer, kola(1) and M/s Motipur Jamindary Co. Ltd. vs State of Bihar(2)) that this word, being a word of every day use, must be construed not in any technical sense, nor from any botanical point of view, but as understood in common par lance. The question which arose in Ramavatar 's case (supra) was whether betel leaves are "vegetables" (1) ; (2) ; 151 and this court held that they are not included within that term. This Court quoted with approval the following passage from the judgment of the High Court of Madhya Pradesh in Madhya Pradesh Pan Merchants ' Association, Santra Market, Nagput vs State of Madhya Pradesh(1): "In our opinion, the word "vegetables" cannot be given the comprehensive meaning the term bears in natural history and has not been given that meaning in taxing statutes before. The term "vegetables" is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table.", and observed that "the word 'vegetable ' in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table". This meaning of the word 'vegetable ' was reiterated by this Court in Motipur zamindary case (supra) where this Court was called upon to consider whether sugarcane can be regarded as vegetable and it was held by this Court that sugarcane cannot be said to fail within the definition of the word 'vegetable '. It is interesting to note that the same principle of construction in relation to words used in a taxing statute has also been adopted in English, Canadian and American courts. Pollock B. pointed out in Grenfell vs I.R.C.(2) that "if a statute contains language which is capable of being construed in a popular sense, such a statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning, of course, by the words "popular sense" that sense which people conversant with the subject matter with which the statute is dealing would attribute to it. '" So also the Supreme Court of Canada said in Planters Nut and Chocolate Co. Ltd. vs The King,(3) while interpret ing the words 'fruit ' and 'vegetable ' in the Excise Act: "They are ordinary words in every day use and are, there fore, to be construed according to their popular sense". The same rule was expressed in slightly different language by Story, J., in 200 Chests of Tea(4) where the learned Judge said that "the particular words used by the Legisla ture in the denomination of articles are to be understood according to the common commercial understanding of the terms used, and not in their scientific or technical sense, for the Legislature does "not suppose our merchants to be naturalists, or geologists, or botanists" ". It will, therefore, be seen that the word 'vegetable ' in Item (6) of Schedule I to the Act must be construed as understood in common parlance and it must be given its popular sense meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it" and so construed, it denotes those classes of vegetables which are grown in a kitchen garden or in a farm and are used for the table. Now, obviously green ginger is a vegetable (1) 7 S.T.C. 99 at 102. (2) at 248. (3) (4) (1824), 9 Wheaton (U.S.) 430 at 438. 11 240SCI/77 152 grown in a kitchen garden or in a farm and is used for the table. It may not be used as a principal item of the meal but it certainly forms part of the meal as a subsidiary item. It is an item which is ordinarily sold by a vegetable vendor and both the vegetable vendor who every day deals in vegetables and the housewife who. daily goes to the market to purchase vegetables would unhesitatingly re and green ginger as vegetable. The assessee in fact placed evidence before the Sales Tax authorities showing that the Railway authorities also treated green ginger as vegetable for the purpose of railway tariff and charged for the carriage of green ginger at the reduced rate applicable to vegetables and even the Corporation of Calcutta included green ginger in the category of vegetables in the market bulletin pub lished by it fortnightly showing the rates in the municipal market. There can, therefore, be little doubt that green ginger is generally regarded as included within the meaning of the word 'vegetable ' as understood in common parlance. That a part, we find that Item (6) speaks not simply of vegetables but "vegetables commonly known as sabji, tar kari or sak" and the Division Bench of the High Court held green ginger to fall within the meaning of the words "sabji, tarkari or sak". We should certainly be very slow to disturb a meaning placed on these words in Bengali language by two judges of the High Court who may reasonably be expected to be quite conversant with that language. We are accordingly of the view that green ginger is included within the meaning of the words "vegetables commonly known as sabji, tarkari or sak" in Item (6) of Schedule I and its sales must be held to be, exempt from tax under section 6 of the Act. The result is that the appeals fail and are dismissed with costs. Costs will be only m one set. S.R. Appeals dismissed.

Section 6(1) of the Bengal Finance (Sales Tax) Act 1941 exempts from tax liability "vegetables, green or dried commonly known as subji, tarkari or sak" when not sold in sealed containers. The Sales Tax Authorities levied sales tax on "green ginger" sold by the respondents, taking the view that inasmuch as green ginger is. used to add flavour and taste to food. it is not "vegetable commonly known as subji, tarkari or sak". A writ petition challenging the validity of the orders of assessment was allowed by the Calcutta High Court which held that green ginger is vegeta ble within the meaning of that expression as used in Item 6 of the First Schedule to the Bengal Finance (Sales Tax) Act, 1941. Dismissing the State appeals by Special Leave the Court, HELD: (1) Green ginger is included. within the meaning of the words "vegetables commonly known as subji, tarkari or sak" in Item 6 of Schedule I and its sales are exempt from tax under section 6 of the Bengal Finance (Sales Tax) Act, 1941. [152 D] (2) The word "vegetable" though not defined in the Act, being a word of every day use, must be construed not in any technical sense, nor from any botanical point of view but as understood m common parlance i.e. denoting class of vegeta bles which are grown in a kitchen garden or in a farm and are used for the table. The word "vegetable" in Item 6 of Schedule I to the Act, so construed, by giving its popular sense meaning, "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it" denotes those classes of vegetables which are grown in a kitchen garden or in a farm and are used for the table. Green ginger obviously is a vegetable grown in a kitchen garden or in a farm and it is used for the table. It may not be used as a principal item of the meal, but it certainly forms part of the meal as a subsidiary item. Green ginger is generally regarded as included within the meaning of the word "vegetable" as understood in common parlance. 1[150 F H, 151 G H, 152 A] Ramavatar Badhaiprasad vs Assistant Sales Tax Officer Akola, ; ; M/s. Motipur Zamindary Co. Ltd. vs State of Bihar ; , applied. Madhya Pradesh Pan Merchants ' Association, Santra Mar ket, Nagpur vs State of Madhya Pradesh 7 S.T. Cases 99 at 102, referred to. Grenfell vs I.R.C. at 248; Planters Nut and Chocolate Co. Ltd. vs The King ; 200 Chests of Tea (1824) 9 Wheaton (U.S.) 430, at 438 quoted with approval.

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: Criminal Appeal No. 277 of 1971. Appeal by Special Leave from the Judgment and Order dated the 23rd June, 1971 of the Calcutta High Court in Crl. A. No. 45 of 1964. P.K. Chatterjee and Rathin Das for the Appellants. D.N. Mukherjee and G.S. Chatterjee for Respondents. The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave is directed against the judgment of the Calcutta High Court dated June 23, 1971, upholding the conviction of the appellants for offences under sections 420 and 420/120B of the Penal Code but reducing their sentences. The charge related to cheat ing the passport issuing authority of the Hooghly 522 district by dishonestly inducing him to issue passports on the basis of false representations. This Court has limited the special leave to the question whether the passports were "property" within the meaning of section 420 of the Penal Code ? Speaking broadly, the allegation against the appellants was that there was a conspiracy between them as a result of which 1480 applications were filed for the issue of pass ports from July, 1956 to April, 1957, by Muslims and Chinese nationals. These applications were alleged to have been made by suppressing the real facts about the nationality and addresses of the applicants, and by making false repre sentations in several other respects. The prosecution alleged that hundreds of passports were thus issued and delivered to persons who were not entitled to them under the law. Some of the appellants were alleged to be directly concerned with those applications, and it was further alleged that the orders of the Passport Authority were obtained by dishonest inducement and false representation. A passport is a document which, by its nature and pur pose, is a political document for the benefit of its holder. It recognises him as a citizen of the country granting it and is in the nature of a request to the other country for his free passage there. Its importance was examined by this Court in Satwant Singh Sawhney vs D. Ramarathnam(1) with reference to the provisions of the Indian , (hereinafter referred to as the Act) and the Rules made thereunder which were in force at the time when the offences were said to have been committed in this case. After referring to sections 3 and 4 of the Act, and rules 4 and 5 of the Rules, this Court observed as follows, " . possession of passport, whatever may be its meaning or legal effect, is a necessary requisite for leaving India for travelling abroad. The argument that the Act .does not impose the taking of a passport as a condition of exit from India, therefore it does not interfere with the right of a person to leave India, if we may say so, is rather hypertechnical and ignores the reali ties of the situation. Apart from the fact that possession of passport is a necessary condition of travel in the international community, the prohibition against entry indirectly prevents the person from leaving India. The State in fact tells a person living in India 'you can leave India at your pleasure without a passport, but you would not be allowed by foreign countries to enter them without it and you cannot also come back to India without it. ' No person in India can possibly travel on those conditions. Indeed it is impossible for him to do so. That apart, even that theoretical possibility of exit is expressly restricted by executive instructions and by refusal of foreign ex change. " ' There can therefore be no doubt that a passport is a docu ment of importance for travel abroad and is of considerable value to its holder. (1) 523 The word "property" has been defined in the Century, Dictionary, which is an encyclopedic lexicon of the English language, as follows, "the right to the use or enjoyment or the beneficial fight of disposal of anything that can be the subject of ownership; owner ship; estate; especially, ownership of tangi ble things . .: anything that may be exclusively possessed and enjoyed; . . possessions. " As has been stated, a passport provides the several bene fits mentioned above. It is a tangible thing and is capable of ownership. There can therefore be no doubt that it is "property". It is property of the State so long as it is with the passport issuing authority and has not been issued to the person concerned and, after issue, it becomes the property of the person to whom it has.been granted. Our attention has not been invited to any case where the question now before us arose for consideration on an earlier occasion. But a somewhat similar question was considered by this Court in Abhayanand Mishra vs The State of Bihar (1). The appellant there applied to the Patna University for permission to appear at .the M.A. examination as a private candidate, representing that he was a graduate having ob tained the B.A. degree in 1951 and had been teaching in a school. On that basis, an admission card was despatched for him to the Headmaster of the school. It was however found that he was neither a graduate nor a teacher. He was prose cuted for the offence 'under section 420 read with section 511 of the Penal Code. He contended that his conviction was unsustainable because the admission card had no pecuniary value and was not property. This Court repelled the conten tion and held that although the admission card as such had no pecuniary value, it had immense value to the candidate appearing in the examination for he could not have appeared at the examination without it, and that it was therefore property within the meaning of section 415 of the Penal Code. While reaching that conclusion, this Court relied on Queen Empress vs Appasami (2) and Queen Empress vs Sashi Bhushan.(3) In Appasami 's case it was held that the ticket entitling the accused to enter the examination room was "property", and in Sashi Bhushan 's case it was held that the term "property" included a written certificate to the effect that the accused had attended a course of lectures and had paid up his fees. On a parity of reasoning, we have no doubt that looking to the importance and characteristics of a passport, the High Court rightly held that it was property within the meaning of sections 415 and 420 of the Penal Code. We may make a reference to Ishwarlal Girdharlal Parekh vs State of Maharashtra and others (4) also. There the question for consideration was whether an order of assess ment was "property" within the (1) ; (2) Mad. (3) All. (4) ; 524 meaning of section 420 I.P.C. The charge in that case was that the appellant dishonestly or fradulently induced the income tax authorities and obtainer an assessment order for less income tax than due. It was held that .the order of assessment received by an assessee was "property", since it was of great importance to the assessee, as con taining a computation, of his total assessable income and, as containtion or his tax liability. This Court also expressed the view that the word "property" did not necessarily expressed that the thing, of which delivery was dishonestly desired by the person who cheats, "must have a money value or a market value, in the hand of the person cheated". It was held that "even if the thing has no money value, in the hand of the person cheated, but becomes a thing of value, in the hand of the person, who may get possession of it as a result of the cheating practised by him, it would still fall within the connotation of the term 'property ' in section 420 I.P.C." This decision also lends support to the view we have taken for, as has been stated, a passport is a valuable document. Our attention has also been invited to In re Packiana than(1) and Local Government vs Gangaram.(2) The accused in Packianathan 's case was prosecuted for an offence under section 419 read with section 511 of the Penal Code. He was going to Ceylon, and he used the permit which stood in the name of one Kumarswami, while his own name was J. Packiana than. On seeing the permit the Health Officer issued a health certificate. It was held that the health certificate was "property" within the meaning of section 415 of the Penal Code and that if a person dishonestly and fraudulently induced the Health Officer to deliver it to him, he was guilty of an offence under section 419 I.P.C. Local Govern ment vs Gangaram was a case where the accused obtained a certificate from the Deputy Inspector of Schools by stating untruly that he had passed the examination. It was held that the certificate was 'property ' within the meaning of sections 415 and 420 I.P.C. and that the accused was guilty of an offence punishable under section 420 I.P.C. In taking that view the Nagpur High Court relied on Queen Empress vs Appasami (supra) and Queen Empress vs Sashi Bhushan (supra) on which reliance was placed by this Court in Abhayanand Mishra vs The State of Bihar (Supra) referred to above. So as passport was a tangible thing, and was a useful.document, and could be the subject of ownership or exclusive possession, it was "property" within the meaning of sections 415 and 420 I.P.C. There is therefore nothing wrong with the view which has been taken by the High Court and the appeal is hereby dismissed. The appellants who are on bail shall surrender to serve out the remaining sentence. P.H.P. Appeal dismissed. (1) A.I.R. 3920 Mad. 131 (1) (2) A.I.R. 1922 Nagpur 229.

The appellants were charged under section 420 read with section 120B of the Indian Penal Code on the ground that there was a conspiracy between them as a result of which hundreds of applications were filed for the issue of pass ports. The applications were made by suppressing the real facts about the .nationality and addresses of the applicants and by making false representations in several other re spects. The prosecution alleged that hundreds of passports were issued and delivered to persons who were not entitled to have them under the law. Special Leave was granted limited to the question whether the passports were property within the meaning of section 420 of the Indian Penal code. Dismissing the appeal, HELD: 1. A passport is a document which by its nature and purpose is a political document for the benefit Of its holder. It recognises him as a citizen of the country granting it and is in the nature of a request to the other country for his free passage there. [522 C] Satwant Singh Sawhney vs D. Ramarathnam refered to; Ahayanand Mishra vs The State of Bihar ; followed; Queen Empress vs Appasami Mad. 151 and Queen Empress vs Sashi Bhushan All. 210 approved; Ishwarlal Girdharilal Parekh vs State of Maharashtra and Other followed. In re Packianathan A.I.R. 1920 Mad. 131(1) and Local Government vs Ganga Ram A.I.R. 1922 Nagpur 229 approved. The word 'property ' is defined as the right to the use or enjoyment or the beneficial right of disposal of anything that can be the subject of ownership, specially ownership of tangible things. Passport is a tangible thing and is capa ble of ownership. It is the property of the State so long as it is with the passport issuing authority and has not been issued to the person concerned, and after issue it becomes the property of the person to whom it has been granted. Passport can be the subject of ownership or exclu sive possession and is therefore property within the meaning of sections 415 and 420 I.P.C. [523 A C, 524 G]

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Civil Appeal No. 1727 of 1972. (Appeal from the Judgment and order dt. 8.12.71 of the Delhi High Court in Income Tax Reference No. 30/67). T. A. Ramachandran for the appellant. B. B. Ahuja and Miss A. Subhashini for the respondent. The Judgment of the Court was delivered by PATHAK, J. This appeal by special leave is directed against the judgment of the High Court of Delhi disposing of a reference made to its by the Income Tax Appellate Tribunal on the following question: "Whether on the facts and in the circumstances of the case the sum of Rs. 24,252/ is an item taxable in the previous year under the Provisions of section 10(2) (vii), The appellant is a partnership firm carrying on business as forest contractors. The partners are Thakur Dan Singh and his son, Thakur Mohan Singh. The appeal relates to the assessment year 1958 59, for which the previous year is the financial year ending March 31, 1958. The business was originally carried on by a Hindu undivided family consisting of the aforesaid father and son. There was a total disruption of the family on March 22, 1956 and on the same day the separated members of the family constituted a partnership firm under the name and style of Messrs. D. section Bist & Sons. The business was taken over as a running concern by the firm. At the time when the business was owned by the family, it included three trucks. On account of depreciation allowed in earlier years the written down value of two trucks came to nil in the assessment year 1952 53. As regards the third truck, according to what is stated in the judgment of the High Court the written down value stood reduced to nil by the date of disruption of the Hindu undivided family. During the previous year ending March 31, 1958, relevant to the assessment year 1958 59, two trucks were sold for a total of Rs. 12,000/ while the third truck was sold for Rs. 12,252/ . During the assessment proceeding for the assessment year 1958 59, the Income Tax Officer held that the entire sum of Rs. 24,252/ , representing the sale proceeds of the three trucks, should be deemed to be 226 Profits of the previous year ending March 31, 1958 by virtue of the second proviso to section 10(2) (vii) of the Indian Income Tax Act, 1922, and he included that amount in the total income of the appellant. Before the Appellate Assistant Commissioner the appellant contended ' that as no depreciation was allowed to the appellant in respect of the three trucks no question arose of computing any profit in its hands, but the contention was rejected. The appellant was unsuccessful before the Income Tax Appellate Tribunal also. At the instance of the appellant, a reference was made to the High Court of Delhi. The High Court took the view that inasmuch as the partners of the appellant were the same individuals who were members of the Hindu undivided family and as the business was taken over as a running concern by the appellant from the family "there was merely a change in the style and nature of the Hindu undivided family on March 22, 1956". In the opinion of the High Court the original cost of the trucks to the appellant would be the same as it was to the Hindu undivided family and it rejected the contention that the original cost of the three trucks in the hands of the appellant must be taken as nil. In the result, the High Court affirmed ' that the sum of Rs. 24,252/ was taxable in the hands of the appellant by virtue of the second proviso to section 10(2) (vii). It appears from the judgment of the High Court that the written down value of the three trucks exhausted while they were still the assets of the Hindu undivided family business, the written down value of two trucks having been exhausted in the assessment year 1952 53 and that of the third truck having been exhausted in the assessment year 1956 57. Accordingly, when the business was taken over by the appellant the written down value of the three trucks was nil. In defining the expression "written down value" section 10(5) (b) declares that in the case of assets acquired before the previous year the written down value means ` the actual cost of the assessee less all depreciation actually allowed to him under the Act. " It is urged on behalf of the appellant that the actual cost to the appellant of the three trucks was nil inasmuch as the written down value had already been exhausted when the business was taken over by the appellant. It is urged that as no depreciation could possibly have been allowed to the appellant, no question arises of applying the second proviso to section 10(2) (vii). Now, in enacting the second proviso to section 10(2) (vii) the Legislature sought to recover back from the assessee the benefit allowed to him by way of depreciation allowance earlier, and it did so by imposing a balancing charge on the excess of the sale price over the written down value to the extent of the total depreciation allowance granted to the assessee in the past. In the present case, the appellant could not have been allowed any depre 227 ciation allowance for the reason that from the outset when the three trucks became its property, the written down value was nil. No question can arise of imposing balancing charge under the second proviso to section 10(2)(vii). It is contended by the Revenue that the business was taken over as a running concern by the appellant and" therefore, account should be taken of the depreciation allowed in the hands of the Hindu undivided family. In our opinion, it is immaterial that the business was taken over as a running concern. Where a business is taken over as a running concern by an assessee, the cost to it of the assets must ordinarily turn on the value of the assets as on the date of acquisition. There is no material before us evidencing an intention to the contrary. It cannot be disputed that the actual cost to the appellant of the three trucks must be regarded as nil, and that being so no depreciation can be said to have been ever actually allowed to the appellant. It is pointed out by the Revenue that the partners of the appellant are the same two individuals who constituted the Hindu undivided family, and reliance has been placed on the observation of the High Court that in the constitution of the firm "there was merely a change in the style and nature of the Hindu undivided family". Now we must remember that we are dealing with a case under the Income Tax Act. We are concerned with provisions for the computation of income of an assessee for the purpose of determining its income tax liability. It may be, as is quite often said, that a firm is merely a compendious description of the individuals who carry on the partnership business. But under the Income Tax Act, a firm is a distinct assessable entity. Section 3 of the Indian Income Tax Act, 1922 treats it as such, and the entire process of computation of the income of a firm proceeds on the basis that it is a distinct assessable entity. In that respect it is distinct even from its partners. Commissioner of Income Tax, West Bengal vs A. W. Figgies and Company and others(1) As an assessable entity it is also distinct from a Hindu undivided family, which in itself is regarded as a separate unit of assessment under Section 3. Raja Bejoy Singh Dudhuria vs Commissioner of Income Tax, Bengal(D). For the purposes of the question before us it recks little that the very individuals who constituted the Hindu undivided family now constitute the appellant firm. When depreciation allowance was allowed to the Hindu undivided family in its assessment proceedings, it was a step taken in determining the taxable income of the family. The depreciation allowed to the family (1) (2) 228 cannot be regarded as depreciation allowed to the appellant. We must ignore entirely the circumstance that depreciation has been allowed to the Hindu undivided family in the past. On these considerations it is not possible to say that the second proviso to section 10(2) (vii) is attracted. Accordingly, we hold that the sum of Rs. 24,252/ is not taxable in the hands of the appellant for the assessment year 1957 58 by virtue of the second proviso to section 10(2) (vii) of the Indian Income Tax Act, 1922" and we answer the question referred in favour of the appellant and against the Revenue. It was strenuously contended on behalf; of the Revenue that the sum of Rs. 24252/ should be considered as capital gains under section 12B of the Act, and that it could be brought to tax under that head. There was some debate before us whether that point can be regarded as an aspect of the question specifically referred by the Tribunal for the opinion of the High Court. We consider it unnecessary to enter into the matter, because it is open to the Tribunal to consider whether the assessment should be confirmed on any other ground, now that the case will be before it again for disposal conformably to this judgment. The appellant is entitled to its costs of this appeal. P.H.P. Appeal allowed. & Case remitted.

A Hindu Undivided Family consisting of Thakur Dan Singh and his son, Thakur Mohan Singh was carrying on business as forest contractors. There was a total disruption of the family in March, 1956. On that day, the written down value of three trucks owned by the Hindu Undivided Family was nil on account of depreciation allowance granted under the Income Tax Act, 1922. On the same day when the joint family was disrupted, Thakur Dan Singh and his son Thakur Mohan Singh constituted a partnership firm. The business of Hindu Undivided Family was taken over as a running concern by the firm. The firm sold the three trucks for Rs. 24,252/ . The Income Tax officer held that the entire sale proceeds should be deemed to be profits of the firm by virtue of the second proviso to section 10(2)(vii) of the Income Tax Act, 1922 and 1: he included that amount in the total income of the appellant. The decision of the Income Tax officer was confirmed by the Appellate Assistant Commissioner, the Income Tax Appellate Tribunal and the High Court. The High Court took the view that inasmuch as the partners of the appellants were the same individuals who were the members of the Hindu Undivided Family and as the business was taken over as a running concern by the appellants from the family, there was merely a change in the style and nature of the Hindu Undivided Family. According to the High Court, the original cost of the trucks to the appellant would be the same as it was to the Hindu Undivided Family. Allowing the appeal by the assessee, ^ HELD: The second proviso to section 10(2)(vii) seeks to recover back from the assessee the benefit allowed to him by way of depreciation allowance earlier. It does so by imposing a balancing charge on the excess of the sale price over the written down value to the extent of the total depreciation allowance granted to the assessee in the past. In the present case, the appellant could not have been allowed any depreciation allowance for the reason that from the outset when the three trucks became his property the written down value was nil. No question of imposing a balancing charge, therefore, can arise in this case. It is immaterial that the business was taken over as a running concern. It is also immaterial that the partners of the firm are the same as the members of the Hindu Undivided Family. Under s.2 of the Income Tax Act, a firm is a distinct assessable entity. [226G H, 227A, B C] 225 Commissioner of Income Tax, Bengal vs A. W. Figgics & Co. and Ors., S.C.I. Raja Bejoy Singh Dudhuria vs Commissioner of Income Tax, Bengal, ; relied upon. When depreciation allowance was allowed to the Hindu Undivided Family in its assessment proceedings, it was a step taken in determining the taxable Income of the family. The depreciation allowance allowed to the family cannot be regarded as depreciation allowed to the appellant firm. [227GH, 228A]

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