Prompt:
minal Appeals Nos.
91 to 93 of 1954.
Appeals by Special Leave granted by Supreme Court on the 18th January, 1954 from the Judgment and Order dated the 18th June, 1953 of the High Court of Judicature at Hyderabad in Confirmation Case No. 376/6 of 1952 53 and Criminal Appeals Nos.394/6, 395/6 and 392/6 of 1952 53 arising out of the Judgment and Order dated the 2nd June, 1952 of the Court of the Sessions Judge at Bidar in Sessions Case No. 9/8 of 1951 52.
J. B. Dadachanji and Rajinder Narain, for the appellant.
(In Criminal Appeal No. 91 of 1954).
N. C. Chakravarty, for the appellants.
(In Criminal Appeals Nos. 92 and 93 of 1954).
P. A. Mehta and P. G. Gokhale, for the respondent.
December 3.
The Judgment of the Court was delivered by BOSE J.
Five persons including the three appellants, were prosecuted for the murder of one Ram chander Shelke.
Each was convicted and each was 1085 sentenced to death under section 302 of the Indian Penal Code.
The appeals and the confirmation proceedings in the High Court were heard by M. section Ali Khan and V. R. Deshpande, JJ.
They differed.
The former considered that the convictions should be maintained but was of opinion that the sentence in each case should be commuted to imprisonment for life.
The latter favoured an acquittal in all five cases.
The matter was accordingly referred to a third Judge, P. J. Reddy, J. He agreed with the first about the convictions and adjudged all five to be guilty under section 302.
On the question of sentence he considered that the death sentences on the three appellants, Pandurang, Tukia and Bhilia, should be maintained and that those of the other two should be commuted to transportation for life.
It seems that the opinion of the third Judge was accepted as the decision of the Court and so the sentences suggested by him were maintained as well as the convictions.
All five convicts then applied to the High Court for leave to appeal.
The petition was heard by Ali Khan and Reddy, JJ.
and they made the following order: "The circumstances of the crime in this case were such that a brutal murder had been committed and sentence of death was the only one legally possible for the Sessions Judge to have passed and it was confirmed by the High Court".
Leave to appeal was refused.
Pandurang, Tukia and Bhilia, who were sentenced to death, applied here for special leave to appeal.
Their petition was granted.
The other two have not appealed.
The prosecution case is this.
On 7 12 1950, about 3 o 'clock in the afternoon,, Ramchander Shelke (the deceased) went to his field known as "Bhavara" with his wife 's sister Rasika Bai (P.W.1) and his servant Subhana Rao (P.W.7).
Rasika Bai started to pick chillies in the field while Ramehander went to another field "Vaniya che seth" which is about a furlong away.
We gather that this field is near a river called 1086 Papana.
Anyway, Rasika Bai heard shouts from that direction, so she ran to the river bank with Subhana and they both say that they saw all five accused attacking Ramchander with axes and sticks.
Two other persons, Laxman (P.W.6) and Elba (P.W.5), who were in the neighbourhood, also heard the cries and ran to the spot.
They also say they witnessed the assault and name all five accused.
The former has a field near by and was working in it; the latter was a passer by.
Rasika Bai shouted out to the assailants not to beat Ramchander but they threatened her and then ran away.
Ramehander died on the spot almost immediately.
There are four eye witnesses, and the main question we have to consider is whether they can be believed.
Ordinarily, we would not have enquired into questions of fact but as three persons have been sentenced to death on the opinion of the third Judge, despite the opinion of one that the death sentence should not be imposed and of the other that the appellants are not guilty and so should be acquitted, we have deemed it advisable to examine the evidence.
Two of the eye witnesses were considered unreliable by Reddy, J. in the High Court, so we will omit them from consideration and concentrate on the other two, Rasika Bai (P.W.1) and Subhana (P.W.7).
Both give substantially the same version of what they saw of the assault.
They heard Ramehander 's cries from the direction of the river bank and rushed there.
They say they saw all five accused striking him, the three appellants Pandurang, Tukia and Bhilia with axes, the other two, who have not appealed, with sticks.
It is said that there is some discrepancy between Rasika Bai 's statement in the Sessions Court and in the Committal Court about the order in which the blows were given and their number.
Ali Khan, J. and Reddy, J. considered this unimportant and so do we.
The important thing is that both witnesses are agreed on the following points (1) that Tukia struck Ramchander on his cheek; 1087 Rasika Bai adds that he also struck him on the head; (2) that Pandurang hit him on the head; (3) that after these blows Ramchander fell down and then Bhilia hit him on the neck.
Subhana does not say that the other two struck any particular blow.
Rasika says that one of them, Nilia, hit Ramchander on the thigh with his stick and assigns no particular blow to the other.
Rasika Bai 's version is that on seeing the assault she called out to the accused not to hit but they " raised their axes and sticks" and threatened her, and then ran away.
Subbana merely says that they ran away.
After this all the accused absconded.
They were arrested on different dates and were committed to trial separately.
The dates of arrest and committal respectively in the case of each are as follows: Bhilia 9 1 1951 and 14 6 1951 Tukia 13 10 1951 and 10 1 1952 Pandurang 31 8 1951 and 10 1 1952 Tukaram 13 4 1951 and 29 9 1951 Nilia 13 10 1951 and 10 1 1952 The main attack on this evidence was directed to the fact that neither the accused nor the eye witnesses are named in the First Information Report.
According to the prosecution, the report was made in the following circumstances.
Rasika and Subbana say that after the assault they went back to the village and told Rasika 's sister Narsabai, P.W. 2 (the deceased 's widow) what they had seen.
Narsabai says that they disclosed the names of the assailants at that time.
From here we go to the Police Patel who lives in a neighbouring village one mile away.
He is Mahadappa (P.W. 9).
He says that he was standing outside his house in his own village when the sun was setting and saw Krishnabai, the mother in law of the deceased, crying as she passed by outside his house.
He asked her what was wrong and she told him that her sonin law had been killed.
On hearing this he wrote out 1088 a report, exhibit No. 4, and sent it to the Police Station at Udgir which is about six miles from the scene of the murder.
The First Information Report was recorded on the basis of this report at 10 o 'clock the next morning.
Now nobody tells us who carried the report to the Police Station.
It is written on a printed form and is signed by the Police Patel.
Opposite the column headed "Name and address of the complainant or informant" is entered "Tukaram s/o Panda Sheolka".
The Sub Inspector, who wrote out the first information report on the basis of this report, entered the following in it: "I am to submit that today a report dated 7 12 1950 from the Police Patel, Neemgaon village, has been received stating that (1) Tukaram, s/o Panda Sheolka, r/o Neemgaon village, came and stated that on 7 12 1950 Ramchander, s/o Govind Reddy was murdered, etc".
The Police Patel tells us that this Tukaram is a cousin of the deceased.
He also says that "Tukaram, whose name is entered in column No. 2, is not the informant but is the complainant in this case.
Tukaram had not given any written complaint to me.
He had not given oral information to me.
When I saw Krishnabai weeping and going, I did not know where Tukaram was.
I do not know whether Tukaram was present in the village on that day or not".
This does shroud the matter in mystery but the fact that the report was made is, we think, beyond dispute, also that it was made about 10 o 'clock the following morning.
It is to be noted that the SubInspector does not say that Tukaram brought the report to him but that exhibit 4 (the report received from the Police Patel) states that Tukaram gave the Police Patel the information.
In that he is not right (though the mistake is natural enough), because exhibit 4 merely places Tukaram 's name opposite the printed column headed "complainant or informant".
That leaves the matter equivocal but in view of what the Police Patel tells us, we think that he did mean to convey that 1089 Tukaram was the complainant, probably because he did not want to enter a woman 's name and so picked on the nearest male relative.
We see no reason to doubt his statement.
He says he did not know any names at that time; and that is evident from the report.
But what the learned counsel for the appellants says is that he saw Narsabai on the evening of the murder and as she did not give him any names it is evident that no one knew who the assailants were and that therefore the accusation made against the accused was a subsequent concoction and that it was for that reason that they waited till the next morning before reporting the matter to the police.
The Police Patel Mahadappa admits that he went to the scene of the occurrence the same night and that he stayed there the whole night.
He also admits that he saw Narsabai there but says he did not speak to her.
We have no doubt that he learned the names of the assailants when he went there but this was after he had sent his report.
There is some mystery about the report.
It did not reach the Police Station till 10 A.M. the next day though it was written about sunset the evening before, but as we do not know who took it and why he delayed it is idle to speculate.
What is certain is that there was no point in sending off a report without names the next morning if the idea of delay was to concoct a story and implicate innocent persons.
They would either have hit on the names by then or would have waited a little longer until they made up their minds about the story they intended to tell.
The haphazard way in which the report was written and dispatched indicates rustic simplicity rather than clever and well planned deceit.
It has to be remembered that the deceased left no male relatives except this cousin Tukaram, about whom the Police Patel speaks, and his father Pandu, and though cause for enmity between Ramchander and three of the appellants is disclosed, there is nothing to connect this Tukaram or his father Pandu with the quarrel; and no one suggests that anybody else bore them a grudge.
We think it unlikely that these three women, Rasikabai, Narsa 1090 bai and Krishnabai, would have been capable of concocting this elaborate story and of influencing the Police Patel to stay his hand till they bad thought of a suitable tale and found likely victims for their plot.
Moreover, the whole village probably turned out as soon as the news spread; in any case the witnesses are agreed that there was a large crowd there.
We think it would have been easy to find many persons to say that though they asked Rasikabai and Subhana and Narsabai and others present to tell them what had happened, nobody could because no one knew.
It would be ridiculous to suppose that the whole village bore the accused a grudge and joined in an elaborate conspiracy against them.
In the circumstances, we think Mahadappa told the truth.
The absence of the names in the report is therefore not of much consequence in this case especially as the names were disclosed in full at the time of the inquest.
All the witnesses who speak about this are agreed on that point.
Once that hurdle is surmounted, there is very little else to criticise in the evidence of Rasikabai and Subhana, bar unimportant discrepancies and the fact that they have made a few small and unimportant contradictions between their testimony in court and some of their numerous earlier statements.
There were three sets of committal proceedings, and of course the usual questioning by the police and then the proceedings in the Sessions Court, so it is not surpris ing, that these simple rustics should get confused and not remember in minute detail exactly what they had said from stage to stage.
But the major part of their story hangs together remarkably well despite the many attempts to trip them in cross examination in the various courts.
As Reddy, J. has dealt with these discrepancies in detail, we need not go over it all again.
The injuries shown in the Inquest Report and the postmortem report do not tally.
It is questionable how far an inquest report is admissible except under section 145 of the Indian Evidence Act but we do not regard the difference as of value so far as the appel 1091 lants are concerned; at best it could only have helped Tukaram and Nilia who have not appealed.
The Inquest Report shows eight injuries.
The first four are incised wounds and tally with the evidence given by the witnesses.
The remaiding four are described as "blue and black marks".
The postmortem mentions the first four but not the others.
The doctor was recalled by the High Court and be gives some sort of explanation about postmortem stains on the body which we do not think is satisfactory, but the utmost this shows is that no stick blows were found on the body and that we are prepared to accept.
On a careful consideration of the evidence we think Rasika and Subhana are telling the truth and that they can be relied on.
We will not rely on the other two witnesses.
We are prepared to disregard the evidence of Rasika and Subhana in so far as they say that Tukaram and Nilia also beat Ramchander because the medical evidence does not disclose any injuries which could have been caused by a stick or sticks.
As a matter of fact Subhana does not ascribe any particular blow either to Tukaram or to Nilia though he does describe in detail what the other three did.
All be says about Tukaram and Nilia is that"The accused present were striking Ramchander; Pandurang, Bhilia and Tukia were holding axes.
Tukaram and Nilia had sticks in their bands".
This sort of omnibus accusation is not of much value, and Rasikabai is not much better though she does say that Nilia bit Ramchander on the thigh.
Except for this, all she says is that "We saw the accused present striking Ramchander Shelke".
We think Rasika and Subhana are telling the truth when they say that these two accused were also there but we think that because of that they think they must have joined in the attack and so have added that detail to their story.
It is also possible that Nilia did hit out at Ramchander but that the blow did not land on his body.
In any case, they only 140 1092 had sticks in their hands which have not even been conceded the dignity of lathis.
So the part they played was negligible.
We have looked into their cases to this extent so that we can set them on one side in determining who was responsible for the remaining injuries and also because the part they played will be necessary in determining the extent of the common object or intention, if any.
The medical evidence shows that the injury that caused death was the one on the neck.
All the eyewitnesses are agreed that Bhilia was responsible for that.
We refer to the other eye witnesses here to show that there is no discrepancy on this point, but we only rely on Rasikabai and Subhana for determining the fact Bhilia was directly charged with the murder and the injury on the throat is ascribed to him in the charge.
His conviction cannot therefore be assailed on any of the technical points which arise in the case of the other two.
We uphold his conviction under section 302 of the Indian Penal Code.
The injury on the throat having been accounted for, we are left with three.
They are (1) an incised wound on the scalp above the left ear, (2)an incised wound on the scalp, central part,and (3)a lacerated wound on the left side of the face which crushed the upper and lower jaws including the lips and teeth.
The doctor says that (1) and (2) could not have caused death but that the third could.
Rasikabai and Subhana are agreed that the only person who struck on the cheek is Tukia.
Rasikabai adds that he also hit Ramchander on the bead.
That means that Tukia and Pandurang caused the two non fatal injuries on the head, one each, and that Tukia alone caused the fatal one on the cheek.
Tukia 's conviction under section 302 of the Indian Penal Code was therefore jusified.
In Pandurang 's case we are left with the difficult question about section 34 of the Indian Penal Code.
1093 But before we deal with that, we will set section 149 of the Indian Penal Code aside.
There is no charge under section 149 and, as Lord Sumner points out in Barendra Kumar Ghosh vs King Emperor(1), section 149, unlike section 34, creates a specific offence and deals with the punishment of that offence alone.
We would accordingly require strong reasons for using section 149 when it is not charged even if it be possible to convict under that section in the absence of a specific charge, a point we do not decide here.
But that apart, there is, in our opinion, no evidence here which would justify the conclusion of a common object even if one had been charged.
There is some vague evidence to the effect that there had once been a dacoity at Ramchander 's house and that he suspected "the "accused" and reported them to the police who arrested them, but nothing came of it and they were later released.
This is put forward as one of the grounds of enmity and to show why all five joined in the attack.
But in the absence of anything specific we are not prepared to act on such a vague allegation especially about the persons who are said to have been wrongfully blamed.
What, however, is more specific is this: Ramchander bought a field called Hatkerni at Neemgaon from one Shivamma Patelni about a year before the murder.
Narsabai tells us that the three accused Nilia, Bhilia and Tukia, all of whom are Lambadas used to live in that field.
When Ramchander bought it he turned them out and she says that gave them cause for enmity against him.
Now even if it be accepted that this evidence is indicative of prior concert, it only embraces the three Lambadas, Nilia, Bhilia and Tukia.
Pandurang, who is a Hatkar, is not included.
As this is the only evidence indicating a common purpose, and as we know nothing about what preceded the assault (for the witnesses arrived after it bad started), we cannot gatber any common object from the fact that Pandu rang, though armed with an axe, only inflicted a light blow on the scalp which did not break any of the (1) (1924) L.R 52 I.A. 40, 52, 1094 fragile bones in that region and from the fact that two others who were lightly armed with what have been called "sticks" inflicted no injuries at all.
Section 149 is therefore out of the question.
Turning now to section 34, that was not charged in Pandurang 's case but we need not consider whether such an omission is fatal because even if it had been charged there is no evidence from which a common intention embracing him can legitimately be deduced.
As we have just said, the witnesses arrived at a time when the beating was already in progress.
They knew nothing about what went before.
We are not satisfied that Tukaram is proved to have done anything except be present, and even if it be accepted that Nilia aimed a blow, at Ramchander 's thigh be was so half hearted about it that it did not even hit him; and in Pandurang 's case, though armed with a lethal weapon, he did no more than inflict a comparatively light head injury.
It is true they all ran away when the eye witnesses arrived and later absconded, but there is nothing to indicate that they ran away together as a body, or that they met afterwards.
Rasikabai says that the "accused" raised their axes and sticks and threatened her when she called out to them, but that again is an all embracing statement which we are not prepared to take literally in the absence of further particulars.
People do not ordinarily act in unison like a Greek chorus and, quite apart from dishonesty, this is a favourite device with witnesses who are either not mentally alert or are mentally lazy and are given to loose thinking.
They are often apt to say "all" even when they only saw "some" because they are too lazy, mentally, to differentiate.
Unless therefore a witness particularises when there are a number of accused it is ordinarily unsafe to accept omnibus inclusions like this at their face value.
We are unable to deduce any prior arrangement to murder from these facts.
Now in the case of section 34 we think it is well established that a common intention presupposes prior concert.
It requires a pre arranged plan because before a man can be vicariously convicted for the 1095 criminal act of another, the act must have been done in furtherance of the common intention of them all: Mahbub Shah vs King Emperor(1).
Accordingly there must have been a prior meeting of minds.
Several persons can simultaneously attack a man and each can have the same intention, namely the intention to kill, and each can individually inflict a separate fatal blow and yet none would have the common intention required by the section because there was no prior meeting of minds to form a pre arranged plan.
In a case like that, each would be individually liable for whatever injury he caused but none could be vicariously convicted for the act of any of the others; and if the prosecution cannot prove that his separate blow was a fatal one he cannot be convicted of the murder however clearly an intention to kill could be proved in his case: Barendra Kumar Ghosh vs King Emperor(2) and Mahbub Shah vs King Emperor(1).
As their Lordships say in the latter case, "the partition which divides their bounds is often very thin: nevertheless, the distinction is real and substantial, and if overlooked will result in miscarriage of justice".
The plan need not be elaborate, nor is a long interval of time required.
It could arise and be formed suddenly, as for example, when one man calls on bystanders to help him kill a given individual and they, either by their words or their acts, indicate their assent to him and join him in the assault.
There is then the necessary meeting of the minds.
There is a pre arranged plan however hastily formed and rudely conceived.
But pre arrangement there must be and premeditated concert.
It is not enough, as in the latter Privy Council case, to have the same intention independently of each other, e.g., the intention to rescue another and, if necessary, to kill those who oppose.
In the present case, there is no evidence of any prior meeting.
We know nothing of what they said or did before the attack not even immediately before.
Pandurang is not even of the same caste as the others, (1) [1945] L.R. 72 I.A. 148, 153, 154.
(2) [19241 L.R. 52 I.A. 40, 49.
1096 Bhilia, Tukia and Nilia are Lambadas, Pandurang is a Hatkar and Tukaram a Maratha.
It is true prior concert and arrangement can, and indeed often must, be determined from subsequent conduct as, for example, by a systematic plan of campaign unfolding itself during the course of the action Which could only be referable to prior concert and pre arrangement, or a running away together in a body or a meeting together subsequently.
But, to quote the Privy Council again, "the inference of common intention should never be reached unless it is a necessary inference deducible from the circumstances of the case".
But to say this is no more than to reproduce the ordinary rule about circumstantial evidence, for there is no special rule of evidence for this class of case.
At bottom, it is a question of fact in every case and however similar the circumstances, facts in one case cannot be used as a precedent to determine the conclusion on the facts in another.
All that is necessary is either to have direct proof of prior concert, or proof of circumstances which necessarily lead to that inference, or, as we prefer to put it in the time honoured way, "the incriminating facts must be incompatible with the innocence of the accused and incapable of explanation on any other reasonable hypothesis".
(Sarkar 's Evidence, 8th edition, page 30).
The learned counsel for the State relied on Mamand vs Emperor(1) because in that case the accused all ran away and their Lordships took that into consideration to establish a common intention.
But there was much more than that.
There was evidence of enmity on the part of the accused who only joined in the attack but had no hand in the killing, and none on the part of the two who did the actual murder.
There was evidence that all three lived together and that one was a younger brother and the other a tenant of the appellant in question.
There was evidence that they all ran away together: not simply that they ran away at the same moment of time when discovered, but that they ran away together.
As we have said, each case must rest on its own facts and the mere (1) A.I.R 1946 P C 45.
1097 similarity of the facts in one case cannot be used to determine a conclusion of fact in another.
In the present case, we are of opinion that the facts disclosed do not warrant an inference of common intention in Pandurang 's case.
Therefore, even if that had been charged, no conviction could have followed on that basis.
Pandurang is accordingly only liable for what he actually did.
In our opinion, his act falls under section 326 of the Indian Penal Code.
A blow on the head with an axe which penetrates half an inch into the head is, in our opinion, likely to endanger life.
We therefore set aside his conviction under section 302 of the Indian Penal Code and convict him instead under section 326.
We are of opinion that in his case a sentence of imprisonment for a term of ten years will suffice.
We accordingly set aside the sentence of death and alter it to one of ten years ' rigorous imprisonment.
That leaves the question of sentence in the case of Bhilia and Tukia.
It was argued that no sentence of death can be passed unless two Judges concur because of section 377 of the Code of Criminal Procedure, and it was argued that section 378 of the Code does not abrogate or modify that provision.
We do not intend to examine that here because we are of opinion that the sentence should be reduced to transportation in these two cases mainly because of the difference of opinion in the High Court, not only on the question of guilt, but also on that of sentence.
In saying this we do not intend to fetter the discretion of Judges in this matter, for a question of sentence is, and must always remain, a matter of discretion, unless the law directs otherwise.
But when appellate Judges, who agree on the question of guilt, differ on that of sentence, it is usual not to impose the death penalty unless there are compelling reasons.
We see no reason to depart from this practice in this case and so reduce the sentences of death in the case of Bhilia and Tukia to transportation for life because of the difference of opinion in the High Court.

Response:
It is well settled that common intention in section 34 of tile Indian Penal Code presupposes prior concert.
It requires a prearranged plan because before a man can be vicariously convicted for the criminal act of another, the act must have boon done in furtherance of the common intention of them all.
Accordingly there must have been a prior meeting of minds.
Several persons can simultaneously attack a man and each can have the same intention, namely the intention to kill, and each can individually inflict a separate fatal blow and yet none would have the common intention required by the section because there was no prior meeting of minds to form a pre arranged plan.
In a case like that, each would be individually liable for whatever injury he caused but none could be vicariously convicted for the act of any of the others; and if the prosecution cannot prove that his separate blow was a fatal one he cannot be convicted of the murder however clearly an intention to kill could be proved in his case.
Care must be taken not to confuse same or similar intention with common intention; the partition which divides their bounds is often very thin, nevertheless the distinction is real and substantial, and if overlooked will result in miscarriage of justice.
The plan need not be elaborate, nor is a long interval of time required.
It could arise and be formed suddenly, But there must 139 1084 be pre arrangement and premeditated concert.
It is not enough, to have the same intention independently of each other.
The inference of common intention should never be reached unless it is a necessary inference deducible from the circumstances of the case.
It is a question of fact in every case and however similar the circumstances, facts in one case cannot be used as a precedent to determine the conclusion on the facts in another.
All that is necessary is either to have direct proof of prior concert, or proof of circumstances which necessarily lead to that inference, or, in other words, the incriminating facts must be incompatible with the innocence of the accused and incapable of ex planation on any other reasonable hypothesis.
When appellate judges, who agree on the question of guilt differ on that of sentence, it is usual not to impose the death penalty unless there are compelling reasons.
Barendra Kumar Ghosh vs King Emperor ([1924] L.R. 52 I.A. 40), Mahbub Shalt vs King Emperor ([1945] L.P. 72 I.A. 148) and Mamand vs Emperor (A.I.R. , referred to.


Prompt:
Tax Reference Cases Nos. 3 to 5 of 1975 Tax Reference under Section 257 of the Income tax Act, 1961 made by the Income tax Appellate Tribunal, Cuttack Bench, Cuttack P.A. Francis, Champat Rai and Miss A. Subhashini for the Appellant.
C.S.S. Rao for the Respondent.
The Judgment of the Court was delivered by 308 PATHAK, J.
: These references under s.27(1) of the have been made by the Income Tax Appellate tribunal, Cuttack Bench at the instance of the Commissioner of Wealth Tax, Orissa for the opinion of this Court on the following question of law: "Whether on the facts and in the circumstances of the case, the Wealth Tax Officer was in law justified in including in the net wealth of the assessee interest due on accrual basis (though not realised) on the outstandings of the money lending business, the accounts of the assessee being maintained on cash basis ?" The respondent assessee was assessed to wealth tax for the assessment years 1965 66, 1966 67 and 1967 68 (the respective valuation dates being March 31, 1965, March 31, 1966 and March 31, 1967), in the status of a 'Hindu Undivided Family.
In each of the assessments, the Wealth Tax Officer included a sum of Rs. 1,50,000 estimated as the accrued interest on the assessee 's money lending investments.
The assessee appealed to the Appellate Assistant Commissioner and urged that as it maintained its books of account in accordance with the cash system of accounting the accrued interest on the money lending investments could not be included in the wealth tax assessments.
The contention found favour with the Appellate Assistant Commissioner, and accordingly he deleted the additions of Rs. 1,50,000 representing accrued interest.
In doing so the Appellate Assistant Commissioner followed "Commissioner of Wealth tax Bihar and Orissa vs Vysyaraju Badreenarayana Moorthy Raju (Orissa)(1), The Wealth Tax Officer appealed to the Appellate Tribunal and contended that accrued interest was liable to be included in the wealth tax assessments of the assessee.
The Wealth Tax Officer sought support from a judgment of the Andhra Pradesh High Court in Vedreva Venkappa Rao vs Commissioner of Wealth tax(2) A.P.
The Appellate Tribunal observed that the judgment of the Orissa High Court was binding on it, and accordingly by a consolidated order dated April 3, 1972, it dismissed the appeals.
The Commissioner of Wealth Tax applied under sub section
(1) of section 27 of the Wealth (1) (2) 309 Tax Act for a reference of the cases to this Court in view of the conflict of opinion between the Orissa High Court and the Andhra Pradesh High Court, and so these references have been made.
The question can be disposed of shortly.
Under section 3 of the Wealth Tax Act, wealth tax is charged for every assessment year in respect of the net wealth of the assessee on the corresponding valuation date.
The expression "net wealth" is defined by cl.
(m) of s.2 of the Act as "the amount by which the aggregate value . .
Of all the assets, wherever located, belonging to the assessee on the valuation date. is in excess of the aggregate value of all the debts owed by the assessee on the valuation date. " According to the scheme of the Wealth Tax Act, the net wealth of an assessee has to be determined as it obtains on a particular date.
That is the "valuation date".
Clause (q) of s 2 defines the expression "valuation date" as follows: ; "(q) Valuation date, in relation to any year for which an assessment is to be made under this Act, means the last day of the previous year as defined in (Section 3) of the Income Tax Act, if an assessment were to be made under that Act for that year; Provided that (i) Where in the case of an assessee there are different previous years under the Income Tax Act for different sources of income, the valuation date for the purposes of this Act shall be the last day of the last of the previous years aforesaid, (ii) in the case of a person who is not an assessee within the meaning of the Income Tax Act, the valuation date for the purposes of this Act shall be the 31st day of March immediately preceding the assessment (z year; (iii)where an assessment is made in pursuance of section 19A, the valuation date shall be the same valuation date as would have been adopted in respect of the net wealth of the deceased if he were alive.
" 310 The computation of the net wealth of an assessee calls for a determination of his assets and debts as on the valuation date.
The definition embodied in the substantive part of cl.
(q) of s.2 indicates that broadly Parliament has fixed upon the last day of the "previous year", as defined under the Income Tax Act, as the valuation date.
The figure of net wealth of the assessee at the end of the "previous year" takes into account the financial activities of the assessee during that "previous year".
His financial activities during that period determine how his net wealth on a particular valuation date differs from his net wealth on the immediately preceding valuation date.
There is an obvious advantage in adopting as the valuation date the last day of a period which is also the relevant period under the Income Tax Act.
The reasons for defining the valuation date in terms of the last day of the income tax "previous year" stop there.
The system of accounting, mercantile or cash or hybrid, is of no relevance for the purpose of determining the assets of the assessee.
That appears plainly from the definition or "net wealth" which speaks of "the aggregate value. of all the assets" belonging to the assessee on the valuation date.
All the assets of the assessee, bar those expressly excepted by the statute, are to be taken into account, and it is immaterial whether the assessee employs one system of accounting or another.
There is clear indication that the assets to be considered are not circumscribed by any consideration of the particular system of accounting adopted by the assessee.
The assets are not confined to cash.
Where the asset is an asset other than cash, its value is determined pursuant to sub section
(I) of s.7 as the estimated price, which, in the opinion of the Wealth Tax Officer, the asset would fetch if sold in the open market on the valuation date.
In other words, it would be the estimated open market value of the rights in the property which constitute the asset.
When we speak of the value of a property, on a legal plane we refer to the value of the rights in that property.
It is apparent that what accrues as a right also falls to be included within the assets of an assessee under the Wealth Tax Act.
That being so, the conclusion is inescapable that even though the accounts of the assessee are maintained on cash basis interest due on accrual basis, though not realised, on the outstandings of the money lending business are liable to be included in the net wealth of the assessee.
In this view of the matter, we approve of the opinion expressed by the Andhra Pradesh High Court in Vedrevu Venkappa Rao (supra) 311 and in Commissioner of Wealth Tax, A.P. I vs Pachigolla Narasimha Rao(1) and the Calcutta High Court in Dipti Kumar Basu vs Commissioner of Wealth Tax, West Bengal(2) and hold that the view taken by the Orissa High Court in Commissioner of Wealth tax vs Vysyaraju Badreenarayana Moorthy Raju (Orissa) (supra) and by the Karnataka High Court in A. T. Mirji vs Commissioner of Wealth Tax, Karnataka(3) cannot be accepted.
In the result, the question is answered in the affirmative, in favour of the Revenue and against the assessee.
There is no order as to costs.

Response:
The respondent assessee was assessed to wealth tax for the assessment years 1965 66, 1966 67 and 1967 68, in the status of a Hindu Undivided Family '.
In each of the assessment years, the Wealth Tax Officer included a sum of Rs. 1.5 lakhs estimated as the accrued interest on the assessee 's money lending investments.
The assessee appealed to the Appellate Assistant Commissioner, con tending that as the books of account were maintained in accordance with the cash system of accounting, the accrued interest on the money lending investment could not be included in the Wealth Tax assessments, the Appellate Assistant Commissioner following the decision of the Orissa High Court in Commissioner of Wealth tax Bihar and Orissa vs Vysyaraju Badreenarayana Moorthy Raju (Orissa) (1971)79 ITR 330 deleted the additions representing accrued interest.
The Wealth Tax Officer, appealed to the Appellate Tribunal and con tended that the accrued interest was liable to be included in the Wealth Tax assessment of the assessee, relying on the judgment of the Andhra Pradesh High Court in Vedrevu Venkappa Rao vs Commissioner of Wealth Tax A.P.
The Appellate Tribunal dismissed the appeal, as it was bound by the decision of the Orissa High Court.
The Commissioner of Wealth Tax applied under Section 27(1) of the Wealth Tax Act, 1957 for a reference to the Supreme Court in view of the conflict of opinions between the Orissa High Court and the Andhra Pradesh High Court and the question: "Whether the Wealth Tax Officer was justified in including in the net wealth of the assessee, interest due on accrual basis (though not realised) on the outstandings 307 of the assessee 's money lending business, the accounts being maintained on cash," was referred to this Court.
^ HELD: 1.
Even though the accounts of the assessee are maintained on cash basis interest due on accrual basis, though not realised, on the out standings of the money, lending business is liable to be included in the net wealth of the assessee.
[310G] 2.
The value of a property refers to the value of the rights in that property.
What accrues as a right also falls to be included within the assets of an assessee under the Wealth Tax Act 1957.
[310F] 2.1.
The system of accounting, mercantile or cash or hybrid, is of no relevance for the purpose of determining the assets of the assessee.
That appears plainly from the definition of "net wealth" which speaks of "the aggregate value. of all the assets" belonging to the assessee on the valuation date.
All the assets of the assessee, bar those expressly excepted by the statute, are to be taken into account, and it is immaterial whether the assessee employs one system of accounting or another.
[310 C D] 3.
The assets are not confined to cash.
Where the asset is an asset other than cash, its value is determined pursuant to sub section (I) of section 7 as the estimated price, which, in the opinion of the Wealth Tax Officer, the asset would fetch if sold in the open market on the valuation date.
It would be the estimated open market value of the rights in the property which constitute the asset.
[310E F] Vedrevu Venkappa Rao vs Commissioner of Wealth tax A.P. , Commissioner of Wealth, Tax.
A.P_I. vs Pachigolla Narasimha Rao, and Dipta Kumar Basu vs Commissioner oz Wealth Tax, West Bengal, , approved.
Commissioner of Wealth tax Bihar and Orissa vs Vysyaraju Badreenarayana MoorthY Raju (Orissa) and A.T. Mirji vs Commissioner of Wealth Tax, Karnataka, Over ruled.


Prompt:
Civil Appeal Nos.3677 3680 of 1986 Etc.
From the Judgment and Order dated 10.3.1986 of the Karnataka High Court in W.P. Nos.
4053 to 4056 of 1985.
Shanti Bhushan, Dr. Y.S. Chitale, H.B. Datar, K.R. Nagaraja, 1011 R.S. Hegde, R.B. Datar, S.S. Jawali, B.P. Singh, N.D.B. Raju, R.P., Wadhwani, Aruneshwar Gupta, Swaraj Kaushal, KMM Khan, S.R. Setia, A.T.M. Sampath and C.S. Vaidyanathan for the appearing parties.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Special leave granted in all the cases.
These appeals raise common questions of law and may therefore, be disposed of by a common judgment.
In exercise of its powers under section 63(7) of the , the Central Government specified 50 as the number of 'All India Tourist Vehicle Permits ' which may be granted by the Karnataka State Transport Authority.
By section 24 of Amending Act 47 of 1978, a proviso to section 63(7) was introduced.
We are concerned in these appeals with the vires and interpretation of this proviso.
By the time the proviso came into force, 36 permits had been granted by the Karnataka State Transport Authority and 14 remained to be granted.
There were as many as 495 applications for the grant of these 14 permits.
By an order dated February 1, 1984, the Supreme Court directed the Karnataka State Transport Authority to dispose of these applications.
The State Transport Authority, by its proceedings dated April 30, 1984, granted 11 out of the 14 permits to the Karnataka State Tourism Development Corporation, one permit to the Indian Tourism Development Corporation and two permits to the Karnataka State Road Transport Corporation.
A number of appeals were preferred to the Karnataka State Transport Appellate Tribunal.
The Tribunal by its order dated February 28, 1985 set aside the grant of the two permits in favour of the Karnataka State Road Transport Corporation, set aside the grant of three out of eleven permits to the Karnataka State Tourism Development Corporation and instead granted three permits to private operators and increased the number of permits granted to the Indian Tourism Development Corporation from one to three.
The Tribunal took the view that having regard to the rule of preference enunciated by the proviso to section 63(7), the applications from the 'non preferred ' category had to be excluded as the number of applications from the applicants who were required to be given preference exceeded the number of permits to be granted.
It was on that ground that the grant of two permits to the Karnataka State Road Transport Corporation was set aside, though the Appellate Tribunal had no doubt regarding the resources and ability of that corporation to operate the tourist services.
It was on that ground again, it was so stated by the Tribunal, that some of the appellants 1012 before the Tribunal had to be denied the grant of permits though otherwise they would have been entitled to the grant of permits having regard to their expertise, experience and resources.
The Tribunal rejected their appeals regretfully.
A large number of applicants filed writ petitions in the High Court.
The writ petitions were rejected by the High Court on the ground that the preference contemplated by the proviso to section 63(7) contemplated exclusion of the 'non preferred ' class if sufficient number of applicants from the preferred classes were available.
The decision of this Court in Sher Singh vs Union of India, ; was distinguished on the ground that in that case the court interpreted the word 'preference ' occurring in section 47(1 H) in the back ground of the provisions of Chapters IV and IV A of the Act, under the former of which the State Transport Undertaking would have preference whereas under the latter the State Transport Undertaking would have a monopoly.
The Karnataka State Road Transport Corporation, the Karnataka State Tourism Development Corporation and some other private operators have filed these appeals by special leave of this Court under article 136 of the Constitution.
Shri Shanti Bhushan, learned counsel for the Karnataka State Road Transport Corporation, Dr. Chitley, learned counsel for some of the private operators, Shri Datar, learned counsel for the Karnataka State Tourism Development Corporation, Shri Sampat and Shri Javali, learned counsel for other private operators submitted that the State Transport Appellate Tribunal and the High Court were wrong in distinguishing the decision of this court in Sher Singh 's case and that the true position was that on a correct interpretation of the proviso to sec.
63(7), the preference became operative only if other things were equal.
It was also urged that the fourth sub clause of the proviso offended article 14 and had to be struck down.
Shri C.S. Vaidyanathan, learned counsel for some of the preferred private operators urged that the view taken by the High Court and the State Transport Appellate Tribunal was correct and that the fourth sub clause of the proviso to section 63(7) did not offend article 14 of the Constitution.
We may now glance at some of the relevant provisions of the . section 2(33) defines a "transport vehicle" as meaning a "public service vehicle or a goods vehicle".
A "public service vehicle" is defined in section 2(25) as "any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage, and stage carriage".
A "motor car" is defined in section 2(16) as "any motor vehicle other than a transport vehicle, 1013 omni bus, road roller, tractor, motor cycle or invalid carriage".
A "contract carriage" is defined as, broadly, a motor vehicle which carries a passenger or passengers for hire or reward under a contract. "Tourist vehicle" is defined by section 2(29 A) as "a contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as the State Government may, by notification in the Official Gazette, specify in this behalf".
"Stage carriage" is defined by section 2(29) as "a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey." Chapter IV, sections 42 to 68, deals with "Control of Transport vehicles".
Section 42 prescribes permits for the use of a transport vehicle in any public place.
Sections 46, 47 and 48 deal with the grant of stage carriage permits.
Section 47(1) prescribes the matters to be taken into consideration in granting stage carriage permits and the first consideration, naturally, is "the interest of the public generally.
" The proviso to section 47(1) prescribes that, other things being equal, a registered cooperative society and a person possessing a licence for driving transport vehicles shall be given preference over individual owners in granting stage carriage permits.
Section 47(1 A) enables the State Government to reserve a certain percentage of stage carriage permits for the Scheduled Castes and Scheduled Tribes.
Section 47(1 C) enables the State Government to reserve a certain percentage of stage carriage permits to persons belonging to economically weaker sections of the community.
Section 47(1 H) prescribes that notwithstanding anything contained in the section, an application for stage carriage permit from a State Transport undertaking for operating in any inter State route shall be given preference overall other applications, provided, of course, the authority is satisfied that the State Transport Undertaking would be able to operate in the inter State route without detriment to its responsibility for providing efficient and adequate road transport services in any notified area or notified route.
Sections 49, 50, 51 deal with the grant of contract carriage permits.
Section 52 and 53 deal with private carrier 's permit and sections 54, 55 and 56 deal with public carrier 's permit.
Section 57 deals, generally with the procedure to be followed in applying for and granting permits.
Section 63(1) stipulates, broadly, that a permit granted by the Regional Transport Authority of any one region shall not be valid in any other region, unless the permit has been countersigned by the Regional Transport Authority of that other region, and a permit granted in any one State shall not be valid in any other State unless countersigned by the State Transport Authority of 1014 that other State or by the Regional Transport Authority concerned.
Section 63(7) is the provision with whose interpretation and vires we are primarily concerned in this case.
It is as follows: "(7) Notwithstanding anything contained in sub section(1) but subject to any rules that may be made under this Act, any State Transport Authority may, for the purpose of promoting tourism, grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that State, specify in this behalf, and the provisions of Sections 49, 50, 51, 57, 58, 59, 59 A, 60, 61 and 64 shall, as far as may be, apply in relation to such permits: Provided that preference shall be given to applications for permits from (i) the India Tourism Development Corporation; (ii) a State Tourism Development Corporation; (iii) a State Tourist Department; (iv) such operators of tourist cars, or such travel agents, as may be approved in this behalf by the Ministry of the Central Government dealing in tourism.
" Section 68 enables the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV.
Chapter IV A relates to "special provisions relating to State Transport Under takings.
" Sections 68 C, 68 D and 68 E provide for the preparation and publication of schemes of road transport service to be provided by State Transport Undertakings, the procedure to be followed, etc.
Section 68 F(1) prescribes that where, in pursuance of an approved scheme, a State Transport Undertaking applies for a stage carriage permit, a contract carriage permit or a public carrier 's permit in respect of a notified area or notified route, such permit shall be granted to the State Transport Undertaking by the State Transport Authority in a case where the said area or route lies in more than one region and the Regional Transport Authority in any other case.
This is to be so notwithstanding anything to the contrary contained in Chapter IV.
1015 The general scheme of the Act in the matter of grant of permits for stage carriages and contract carriages appears to be that except in the case of a notified route or notified area, where under section 68 F(1) the permit has to be necessarily granted to the State Transport Undertaking, in all other cases, the claims of all eligible applicants must be considered on merits, applying the rules of preference wherever the claims are approximately equal.
Except in the case of a notified route or notified area, the application of no applicant may be altogether excluded from consideration on the sole ground that another applicant is entitled to preference under one or the other provisions of the statute.
The proviso to section 47(1) for example, provides that other conditions being equal, an application for a stage carriage permit from a cooperative society or a person holding a valid licence for driving transport vehicles shall as far as may be, be given preference over applications from individual owners.
There is no problem here since the proviso itself says that the rules of preference will apply only if other conditions are equal.
Section 47(1 H) also enunciates a rules of preference and says that an application for stage carriage permit from State Transport Undertaking for operating in any inter State route shall be given preference overall other applications.
While it is true that section 47(1 H) does not expressly refer to "other things being equal", it appears to be implicit in the provision that other things are equal.
The rule is a rule of preference and not a rule of exclusion.
Section 47(1 H) does not say, for example, like section 68 F(1) that the permit shall be granted to the State Transport Undertaking.
That is how section 47(1 H) was interpreted in Sher Singh 's case.
Desai, J., speaking for the court observed: "However, when an application for a permit is made under Chapter IV, the Undertaking has to compete with private operators who may as well make an application for permit.
When the Undertaking applies for permit under Chapter IV, it must satisfy the Regional Transport Authority that it is better suited than the private operator to render transport facility to the travelling public.
47(1 H) however, provides that in the case of inter State route, the Undertaking will have preference in the matter of stage carriage permit.
Does preference of this nature deny equality guaranteed by article 14? The expression 'preference ' amongst others means prior right, advantage, precedence etc.
But how would it be possible to give precedence to one over the other.
It signifies that other things being equal, 1016 one will have preference over the others.
When an application for a stage carriage permit is being processed as required by sec.
47, the application of the Undertaking for an inter State route shall be examined as application of any other private operator.
Their merits and demerits must be ascertained keeping in view the requirements of (a) to (f) of section 47(1) and after comparing the merits and demerits of both, not with the yard stick of mathematical accuracy, but other things being equal, the application of the Undertaking will have preference over others.
Qualitative and quantitative comparison on broad features of passenger transport facility such as fleet, facilities to travelling public and other relevant consideration may be undertaken and after balancing these factors other things being equal, the application of the Undertaking shall be given preference over other applicants.
There is no question of eliminating private operators merely because the Undertaking applies for a stage carriage permit under Chapter IV.
That situation is catered to under Chapter IV A.
In an application under Chapter IV, Corporation has to enter the arena like any other applicant, face the competition and come up to the level of other private operators intending to obtain stage carriage permits and then in respect of the route in question claim preference.
Would this statutory provision violate equality guaranteed by article 14? The answer is obviously in the negative." . . . . . . . . . . . . . . . . . ". . . let it be made clear that while considering the application for stage carriage permit under section 47, the private operator has an equal chance to get a permit even on inter State route if it shows that the Undertaking is either unable to provide efficient and economical service or that the private operator is better equipped to render the same.
Preference in this context would mean that other things generally appearing to be qualitatively and quantitatively equal though not with mathematical accuracy, statutory provision will tilt the balance in favour of the Undertaking.
" What has been said by the Court with reference to the preference 1017 provided for in section 47(1 H) applies with equal force to the preference provided for by the proviso to section 63(7).
In the judgment under appeal, the High Court attempted to distinguish the decision of this Court in Sher Singh 's case on the ground that any other interpretation would have wiped out the difference between Chapter IV and Chapter IV A.
We do not think the High Court was right in distinguishing the case in that fashion.
The reference to Chapter IV A there was for the purpose of contrasting the exclusion contemplated by section 68.F(1) with the preference to be given under section 47 (1 H) and so to interpret the word 'preference ' occurring in section 47(1 H).
We have no hesitation in saying that all that has been said about 'preference ' in Sher Singh 's case in relation to section 47(1 H) applies mutatis mutandis to the preference contemplated by the proviso to section 63(7).
Since the State Transport Appellate Tribunal and the High Court have failed to consider the merits of the claims of the Karnataka State Road Transport Corporation and the private operators who did not get a certificate of approval from the Central Government, because of the rule of preference contained in proviso to section 63(7), the proper course for us is to set aside the orders of the State Transport Appellate Tribunal and the High Court and to direct the State Transport Appellate Tribunal to re hear the appeals and dispose them of in accordance with law, after considering the claims of the eligible applicants in the manner indicated in Sher Singh 's case and now.
A question was raised before us about the vires of the fourth clause of the proviso to section 63(7).
Clauses (i) to (iii) of the proviso providing for preference to be given to applications for permits from the Indian Tourism Development Corporation, the State Tourism Development Corporation and the State Tourist Department were not questioned, but the preference provided for by clause (iv) and to be given to "such operators of tourist cars, or such travel agents, as may be approved in this behalf by the Ministry dealing in tourism" was questioned as an infringement of article 14 of the Constitution.
We find it difficult to sustain this clause and uphold its validity.
The very idea that a Tribunal created by a statute for the purpose of considering rival claims and granting permits on merits should be compelled to give peference to persons securing the approval of the executive Government, appears to us to be arbitrary and unreasonable.
To the extent that it goes, the clause pre empts the decision of the designated tribunal by executive discretion.
It was said that the clause contained sufficient guidelines for the exercise of discretion in granting approval by the Central Government.
It was said that the object of the proviso to section 1018 63(7) was very obviously the promotion of tourism and the approval of the Central Government would be given to those operators of tourist cars and travel agents who may be expected to serve that purpose.
It is difficult to agree with these submissions.
In the first place, clause (d), it is seen, provides for a preference, not to operators of tourist vehicles but to operators of tourist cars and travel agents.
Though the permits to be granted are for tourist vehicles, the preference is confined to operators of tourist cars and travel agents.
One may understand a preference granted to operators of tourist vehicles but it is difficult to understand why preference should be given to operators of tourist cars in the matter of granting permits for tourist vehicles which may well be omnibuses required to travel long distances.
Surely it cannot be said that experience of running a tourist taxi is a better qualification than running a tourist bus when the question of granting permits for tourist vehicles arises.
The High Court of Karnataka tided over the difficulty by interpreting the expression "tourist cars" as meaning "tourist vehicles".
It is difficult to agree with the interpretation of the Karnataka High Court having regard to the definitions of "Transport Vehicle" and "motor car" contained in section 2(29 A) and section 2(16) respectively.
While a tourist vehicle may include a motor car, a motor car, by definition, excludes an omnibus.
In the second place, we have no indication as to the manner in which the approval of the Central Government is to be sought and granted and the considerations which are expected to weigh with the Central Government.
Shri C.S. Vaidyanathan, learned counsel for the 'Preferred ' Operators has placed before us 'a Scheme for granting approval to tourist transport operators in India. ' The scheme makes no reference to the proviso to sec.
63(7) of the .
On the other hand, it mentions that approval carries with it certain privileges, such as, allotment of ex STC vehicles and that it is, therefore, necessary that the department is able to exercise some control on the functioning of these operators.
The terms and conditions to be fulfilled are that 'the party must have been in the car hire business for a period of 2 years with the help of cars of indigenous make or cars obtained from elsewhere and should have sufficient contacts with travel agencies hoteliers/airlines, etc.
and should be financially sound or that they should be owning and operating five vehicles as tourist taxies of either indigenous make or acquired from elsewhere regardless of the period in the car hire business or that they should be ex Defence Service personnel, who satisfy certain prescribed conditions.
It is seen that the scheme excludes omnibus operators and requires applicants to have 1019 either two years ' experience in the car hire business with contacts in the tourist business or to own five tourist taxies.
There are no guidelines as to how the discretion to grant approval is to be exercised once the minimum conditions are fulfilled.
The matter appears to be left to the total discretion of the Central Government, virtually as we said, pre empting the decision of the statutory tribunal.
We think that clause (iv) of the proviso to section 63(7) is unconstitutional and we so declare it.
In the result we set aside the orders of the State Transport Appellate Tribunal and the High Court and direct the State Transport Appellate Tribunal to hear the appeals in the light of what we have said.
P.S.S. Appeals allowed.

Response:
Sub section (7) of section 63 of the empowers the State Transport Authority, for the purpose of promoting tourism, to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may in respect of that State specify in this behalf.
A proviso to that sub section, introduced by section 24 of the Amending Act of 1978 laid down that preference shall be given to applications for permits from (i) the India Tourism Development Corporation; (iii) a State Tourism Development Corporation; (iii) a State Tourist Department, and (iv) operators of tourist cars, or travel agents, approved in this behalf by the Central Government.
There were as many as 495 applications before the Karnataka State Transport Authority for the grant of 14 All India Tourist Vehicle permits.
By its proceedings dated April 30, 1984, the Authority granted 11 permits to the Karnataka State Tourism Development Corporation, one to the Indian Tourism Development Corporation and two to the Karnataka State Road Transport Corporation.
1009 On appeals being preferred, the Karnataka State Transport Appellate Tribunal, by its order dated February 28, 1985 set aside the grant of two permits in favour of the Karnataka State Road Transport Corporation, three out of eleven permits to the Karnataka State Tourism Development Corporation, and instead granted three permits to private operators and increased the number of permits granted to the Indian Tourism Development Corporation from one to three, on the premises that in view of the rule of preference enunciated by the proviso to section 63(7) the applications from the non preferred category had to be excluded as the number of applications from the applicants who were required to be given preference exceeded the number of permits to be granted.
Though some of the appellants before the Tribunal had better expertise, experience and resources they did not succeed.
The High Court rejected the writ petitions on the ground that the rule of preference contained in the proviso to section 63(7) contemplated exclusion of the 'non preferred ' class, if sufficient number of applicants from the preferred classes were available.
In these appeals by special leave, it was contended for the appellants that on a correct interpretation of the proviso to section 63(7) the preference became operative only if other things were equal.
It was also urged that the fourth sub clause of the proviso offended article 14 of the Constitution, and had to be struck down.
Allowing the appeals, the Court, ^ HELD: 1.1 The rule contained in the proviso to section 63(7) of the is a rule of preference and not a rule of exclusion, for it does not say that the permit shall be granted to the categories of operators specified therein.
The claims of eligible applicants must be considered on merits, applying the rule of preference whenever the claims are approximately equal.
The application of an applicant is not to be altogether excluded from consideration on the sole ground that another applicant is entitled to preference.
Though the proviso does not expressly refer to other things being equal, the principle is very much implicit in it.
[1015B E] 1.2 What has been said by this Court in Sher Singh vs Union of India; , , about preference in relation to section 47(1 H) applies mutatis mutandis to the preference contemplated by the proviso to section 63(7) in the instant case.
[1017C] 1010 2.1 Clause (iv) of the proviso to section 63(7) is arbitrary, unreasonable and unconstitutional.
There is no indication in it as to the manner in which the approval of the Central Government is to be sought and granted and the considerations which are expected to weigh with the Central Government.
It compels a tribunal, created by a statute for the purpose of considering rival claims and granting permits on merits, to give preference to persons securing the approval of the Executive Government.
To the extent the clause goes, it pre empts the decision of the designated tribunal by executive discretion.
[1017E G] 2.2 The clause provides for a preference not to operators of tourist vehicles but to operators of tourist cars and travel agents, though the permits to be granted are for tourist vehicles.
It is difficult to understand why preference should be given to operators of tourist cars in the matter of granting permits for tourist vehicles which may well be omnibuses required to travel long distances.
[1018B C] 2.3 The experience of running a tourist taxi cannot be said to be a better qualification than running a tourist bus when the question is of granting permits for tourist vehicles.
[1018C D] 3.
Having regard to the definitions of 'tourist vehicle ' and 'motor car ' contained in section 2(29 A) and section 2(16) respectively of the Act, the expression 'tourist cars ' cannot be said to mean 'tourist vehicles '.
While a tourist vehicle may include a motor car, a motor car, by definition, excludes an omnibus.
[1018D E] In the instant case, the State Transport Appellate Tribunal and the High Court have failed to consider the merits of the claims of the Karnataka State Road Transport Corporation and the private operators who did not get a certificate of approval from the Central Government, because of the rule of preference contained in proviso to section 63(7).
Their orders are, therefore, set aside.
The State Transport Appellate Tribunal is directed to re hear the appeals and dispose them of in accordance with law.
[1017C E]


Prompt:
N: Criminal Appeal No. 317 of 1986 From the Judgment and order dated 27.2.1986 of the Patna High Court in C.W.J.C. No. 33 of 1986.
With W.P. (Criminal)No. 316 of 1986.
R.K. Garg and Miss Rani Jethmalani for the Appellant/ Petitioner. D. Goburdhan for the Respondents.
907 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Criminal Appeal No. 317 of 1986 arises out of the judgment and order of the High Court of Patna and the Writ Petition No. 316 is in respect of the same detenu.
Both these challenge the order of detention dated 2nd January, 1986 passed by the respondent no.1.
The District Magistrate Dhanbad in respect of the petitioner under section 3(2) of the , hereinafter called the 'Act ' on the ground that the petitioner 's activities were prejudicial to the maintenance of public order.
Several criminal cases had been filed against the petitioner between 3rd January, 1983 to 18th February, 1985.
On or about 2nd January, 1985 the order of detention was passed on an incident relating to the exchange of fire between two rival groups.
The order states the grounds as follows: 1.
On 24.12.1985, between 10 and 10.30.
A.M. the subject alongwith Ramashish Bangali, Gulam, Rambriksha armed with Rifle, gun etc.
came in Car No. BHG 9372 on Katras Coal Dump and started indiscriminate firing to kill Birendra Pratap Singh a rival of his calendestine business of coal to establish his criminal superiority in full view of the shopkeepers customers and passers by of the area.
Birendra Pratap Singh and his associates who were there also returned the firing in same manner.
As a result of this firing one innocent namely Brahamdeo Mishra was killed.
The exchange of indiscriminate firing in the main market area of Katras created great panic and alarm in the area.
The normal tempo of life was completely disturbed.
The people started running helter and skelter for their lives.
Shopkeepers put down their shutters.
Doors and windows were closed.
The vehicular traffic came to halt.
This refers to Katras P.S. Case No. 331/85 dated 24.12.85 u/s 149/307/32 IPC/27 Arms Act.
Besides the aforesaid ground the following cases are also referred hereunder as background to show the criminality of the subject.
KATRAS P.S. CASE No. 5/83 dated 3.1.83 u/s 147, 341/353/307 I.P.C.
In this case subject and his associates tried to set free 908 the trucks and driver from the police custody by force and when he failed in his attempt he threatened the police officer and CISF Personnel to do away with their lives, C.S.No. 5/83 has already been submitted in this case.
Katras P.S. Case No. 303/83 u/s 147/148/452/323 IPC.
In this case subject and his associates went to the tailoring shop of Saukat Ansari and asked him to keep his cloths ready by 9.10.83 and on his refusal, he assaulted him in presence of customers and others C.S.No.
196/83 has already been submitted in this case.
Jogta P.S. Case No. 22/84 dated 11.3.84 u/s 147/148, 307/326/353/333/324/325 I.P.C./27 Arms Act.
In this case subject and his associates opened fire on police party who went to apprehend Raghunath Singh absconder under NSA.
As a result of this indiscriminate firing by him and his associates one Police officer namely Shri R.K. Verma, received serious head injury and is still incapable to work.
Charge sheet No. 25/84 has already been submitted in this case.
Jogta P.S. Case No. 9/85 dated 18.2.85 u/s 369, 307/323/ 324/ 176/34 I.P.C./27 Arms Act.
In this case Sisir Rajan Das, who was coming in a religious procession on the eve of Shivratri and was dancing in the role of Shiva was compelled by his associates to dance before the marriage party of subject 's sister.
Sri Sisir Rajan Das, however, acceded to their request and started dancing.
When he was dancing some of the members opened fire on him as a result of which he fell down.
The subject and his associates however put his body in his car and fled away.
Neither Shri Das nor his body could be traced out till date.
909 Charge sheet No. 20/85 has already been submitted in this case.
(Emphasis supplied) 5.
Jogta P.S. Case No. 68/85 dated 1.12.85 u/s 341/34 IPC.
In this case subject threatened Sri Krishana Ballav Sahay, General Secretary, Colliery Shramik Sangh, Sijua, to do away with his life if he takes out any procession or oppose him.
It is the case of the detenu that the order of detention was made on one incident relating to exchange of fire between two rival groups.
A criminal case had been registered in relation to the said incident pursuant to which the petitioner was already in custody.
The order of detention though dated 2nd January, 1986 was served on or about 11th January, 1986.
It is the case of the appellant/petitioner that the detenu was not served with all the documents referred to and/or relied on.
The detenu was served with order of approval of the said order of detention by the Government of Bihar.
The petitioner/appellant made representation on 22nd January, 1986 and the petitioner/ appellant was informed that the said representation was rejected.
Thereafter the petitioner 's appellant 's matter was referred to the Advisory Board.
The petitioner/appellant states that he desired that he should be heard in person by the Advisory Board.
The petitioner/appellant submits that he was produced before the Advisory Board but he was not given any hearing.
By letter dated 22nd February, 1986 the petitioner/appellant was informed that the Advisory Board had confirmed the order of detention.
The petitioner/ appellant thereafter filed a writ petition in the High Court of Patna which was dismissed without any speaking order.
The grounds of challenge are all stated in the writ petition as well as special leave petition.
The petitioner/ appellant was in detention when the petitioner/appellant was served with the order of detention.
There were criminal cases against the petitioner.
There was a murder case in respect of Crime No. 331 of 1985.
In the said case investigation was in progress and the defence of the petitioner in the murder case was that he was falsely implicated and was not at all concerned with the murder.
When the order was passed, the petitioner had not surrendered but when the order was served, the petitioner had already surrendered in respect of the criminal charge against him.
At the relevant time the petitioner was undertrial in the said criminal case.
910 It is the contention of the petitioner/appellant that the order of preventive detention could only be justified against a person in detention if the detaining authority was satisfied that his release from detention was imminent and the order of detention was necessary for putting him back in jail.
The service of order of detention on the petitioner while he was in jail was futile and useless since such an order had no application under section 3(2) of the Act.
In the affidavit of the District Magistrate, the detaining authority, it has been stated that the activities of the petitioner 's brother and the petitioner have disturbed the normal tempo of life in Katras and Jogta Police Stations in Dhanbad area.
The series of offences against the detenu and the manner of their perpetuation, which have been noted before, indicate a calculated move to create panic and fear in the mind of the people.
It further appears from the affidavit f f the District Magistrate filed before the High Court of Patna that the petitioner was absconding from the very day of the issuance of the detention order.
There is a statement in the order as follows D "Subject is already in jail.
He is likely to be enlarged on bail.
Hence detention order served in jail.
" According to the District Magistrate when police pressure to apprehend him became heavy, the detenu opted to surrender before the Sub Divisional Judicial Magistrate on 10th January, 1986 in substantive case to frustrate the service of the detention order.
It has been further stated that the service of the detention order had been properly made.
Grounds were all indicated.
All the documents which formed the basis of detention were supplied to the detenu.
His representation, was duly considered and rejected.
The grounds stated that there was indiscriminate firing on 24th December, 1985 on Katras Coal Dump and the petitioner started indiscriminate firing to kill Birendra Pratap Singh a rival of his calendestine business of coal to establish the criminal superiority in full view of the shopkeepers, customers and passers by of the area.
The acts alleged created a terror and not only law and order problem but problem of public order.
In those circumstances it appears that the grounds for forming the satisfaction for the need for the detention were there, and there was rational nexus between the object of the order as contemplated by the Act and the materials on record.
The principles applicable in these types of preventive detention cases have been discussed in the decisions of Suraj Pal Sahu vs State of Maharasthra & Ors., W.P. (crl) No. 2 96/86 with SLP (crl) No. 1265/86 dt.
25.9.86 and Raj Kumar Singh vs The State of Bihar & Ors.
Crl A. 353/86 with W.P. (crl) 27/86 dt.
26.9.86.
Judged on the basis of 911 the said principles there is no ground for interference with the order of detention as passed.
It, however, appears that after the order of detention was passed and before the actual service of the order of detention, the petitioner was taken into custody.
From the affidavit of the District Magistrate it does not appear that either the prospect of immediate release of the detenu or other factors which can justify the detention of a person in detention were properly considered in the light of the principles noted in the aforesaid decision and especially in the decisions, in Rameshwar Shaw vs District Magistrate, Burdwan & Anr., ; and Ramesh Yadav vs District Magistrate Etah and others, though there was a statement to the effect that the petitioner was in jail and was likely to be enlarged on bail.
But on what consideration that opinion was expressed is not indicated especially in view of the fact that the detenu was detained in a murder charge in the background of the facts mentioned before.
His application for bail could have been opposed on cogent materials before the Court of Justice.
In this case there were grounds for the passing of the detention order but after that the detenu has surrendered for whatever reasons, therefore the order of detention though justified when it was passed but at the time of the service of the order there was no proper consideration of the fact that the detenu was in custody of that there was any real danger of his release.
Nor does it appear that before the service there was consideration of this aspect properly.
In the facts and circumstances of this case, therefore, the continued detention of the detenu under the Act is not justified.
It is well settled in our Constitutional framework that the power of directing preventive detention given to the appropriate authorities must be exercised in exceptional cases as contemplated by the various provisions of the different statutes dealing with preventive detention and should be used with great deal of circumspection.
There must be awareness of the facts necessitating preventive custody of a person for social defence.
If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised.
In the instant case when the actual order of detention was served upon the detenu, the detenu was in jail.
There is no indication that this factor or the question that the said detenu might be released or that there was such a possibility of his release, was taken into consideration by the detaining authority properly and seriously before the service of the order.
A bald statement is merely an ipso dixit 912 of the officer.
If there were cogent materials for thinking that the detenu might be released then these should have been made apparent.
Eternal vigilance on the part of the authority charged with both law and order and public order is the price which the democracy in this country extracts from the public officials in order to protect the fundamental freedoms of our citizens.
In the affidavits on behalf of the detaining authority though there are indications that transfer of the detenu from one prison to another was considered but the need to serve the detention order while he was in custody was not properly considered by the detaining authority in the light of the relevant factors.
At least the records of the case do not indicate that.
If that is the position, then however disreputable the antecedents of a person might have been without consideration of all the aforesaid relevant factors, the detenu could not have been put into preventive custody.
Therefore, though the order of preventive detention when it was passed was not invalid and on relevant considerations, the service of the order was not on proper consideration.
It may be mentioned that in the petition it is nowhere stated that the detenu has since been released or that the prospect of his imminent release was properly and with seriousness considered by the detaining authority.
The order of detention, therefore, is set aside.
The writ petition and the appeal are allowed to the extent indicated above.
This, how ever, will not affect detenu 's detention under the criminal cases.
If, however, the detenu is released on bail in the aforesaid criminal cases, the matter of service of the detention order under the Act on the aforesaid materials may be reconsidered by the appropriate authority in accordance with the law.
There is no statement in the petition that the detenu is on bail.
There will, therefore, be no orders for release of the detenu.
M.L.A. Petition and Appeal allowed.

Response:
The respondent passed an order of detention in respect of the appellant under section 3(2) of the , on the ground that the appellant 's activities were prejudicial to the maintenance of public order.
Several criminal cases were pending against the appellant when the aforesaid order was passed.
The appellant had already surrendered in respect of a criminal charge against him before the order was served.
He filed a writ petition in the High Court challenging the detention order, but it was dismissed without any speaking order.
Aggrieved by the order of the High Court, the appellant filed the present criminal appeal by special leave as also a writ petition challenging the aforesaid order of detention on the ground that the order of preventive detention could only be justified against a person in detention if the detaining authority was satisfied that his release from detention was imminent and the order of detention was necessary for putting him back in jail.
The service of order of detention on the appellant/ petitioner while he was in jail was futile and useless since such an order had no application under section 3(2) of the Act.
Allowing the writ petition and the appeal in part, ^ HELD: 1.
The continued detention of the detenu under the Act is not justified.
The order of detention therefore is set aside.
However, this will not affect detenu 's detention under the criminal cases.
If however, the detenu is released on bail in the criminal cases already pending against him, the matter of service of the detention order under the Act may be reconsidered by the appropriate authority in accordance with law.
[912 E F] 906 2.
In our constitutional framework, the power of directing preventive detention given to the appropriate authorities must be exercised in exceptional cases as contemplated by the various provisions of the different statutes dealing with preventive detention and should be used with great deal of circumspection.
There must be awareness of the facts necessitating preventive custody of a person for social defence.
If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised.
[911 F G] In the instant case, when the actual order of detention was served upon the detenu the detenu was in jail.
There is no indication that this factor or the question that the said detenu might be released or that there was such a possibility of his release was taken into consideration by the detaining authority properly and seriously before the service of the order.
If there were cogent materials for thinking that the detenu might be released, then these should have been made apparent.
In the affidavits on behalf of the detaining authority though there are indications that transfer of detenu from one prison to another was considered but the need to serve the detention order while he was in custody was not properly considered by the detaining authority in the light of relevant factors.
If that is the position then however disreputable the antecedents of a person might have been, without consideration of all the aforesaid relevant factors, the detenu could not have been put into preventive custody.
Therefore, though the order of preventive detention when it was passed was not invalid, and on relevant considerations the service of the order was not on proper consideration.
The order of detention is, therefore set aside.
[911 G H; 912 A D] Rameshwar Shaw vs District Magistrate, Burdwan & Anr., ; and Ramesh Yadav vs District Magistrate Etc.
and others, , relied upon.