Prompt:
(C) No. 677 of 1988.
(Under Article 32 of the Constitution of India).
P.N. Duda, N. Safaya, P.K. Choudhary and Ms. Rekha Pandey for the Petitioners.
Kapil Sibal, Additional Solicitor General, Ms. A. Subha shini and K. Swamy for the Respondents.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
In this petition under Article 32 of the Constitution, the petitioners have questioned the con stitutional validity of Section 5 of the (12 of 1919) (hereinafter called 'the Act ').
The grounds on which the vires of the provisions is attacked are that the section gives an unguided, unchanelised and arbitrary power to the State Government to include any substance as poison for the purpose of restriction to be imposed on the posses sion for sale and sale of the same.
It was further contended that the restriction imposed on possession for sale and sale were not reasonable restrictions.
The petitioner 's have also taken the plea that though the Act is a Central enactment it is possible of unjust and unjustified discriminatory appli cation as it is left to each State Government to determine what substance they would include as poison and regulated and the decision in one State to include the substance as poison is not automatically made applicable to the other States.
The object of the enactment is to regulate the posses sion for sale and the sale, whether wholesale or retail of poisons and the importation of the same.
In other words, it is intended to control over the traffic in poisons.
Though the original enactment, the Poisons Act, 1904 was restrict ed, it was applicable to white arsenic, the expanded its provisions and enabled State Government to declare any substance as poison for the purposes of the Act by a notification under the Act or the rules made under the Act.
In exercise of this power by the Notification No. F. 10/44/72 fin.
(G) dated 7.8.1973 the Lt. Governor of Delhi amended the Delhi Poisons Rules, 1926 (hereinafter called the Rules) by including to the list of substances included in the Rules as "Poisons" "the substance commonly known 222 as 'thinner ' containing spirit and other soluble material such as shellac in which the percentage of such soluble material does not exceed 30%" as poison and consequential amendment of rules 12 and 13 of the Rules.
It was the con tention of the petitioners before the authorities that their "unit is manufacturing only those thinners which contain only liquid substance, like as ecotone, ethyl acetate SDS etc.
and not all solubles.
" According to them, therefore, the substance manufactured by them would not come within the amended Rules.
Though in the beginning the petitioners were contending that in substance manufactured by them did not come within Rule 2(x)(2) and there were some correspondence in this regard, when the competent authority held that the substance manufactured by the petitioners would come within the definition of 'thinner ' as contained in Rule 2(x)(2) of the Rules, the petitioners did not question the finding on any material.
Before us also they had not placed any materi al to show that the finding was wrong or that the substance would not come within Rule 2(x)(2).
In fact the learned counsel argued the petition on the basis that the petition ers are a manufacturer of 'thinner ' within Rule 2(x)(2) which has been declared as poison for purposes of the Act.
Originally the Act contained a schedule in which the list of substances declared as poisons were listed.
Later when Delhi Poisons Rules, 1926 were made in exercise of the powers under the Act those list of substances were included in the list enumerated in Rule 2 thereof.
Rule 2 was amended as already stated including 'thinner ' of the description mentioned therein as poison.
Section 5 of the Act the con stitutional validity of which is questioned reads as fol lows: "5.
Presumption as to specified poisons: Any substance specified as a poison in a rule made or notification issued under this Act shall be deemed to be a poison for the purpose of this Act.
" It was a law in force in the territory of India before the commencement of the Constitution and as such continued in force.
The Act is intended to regulate the importation, possession and sale of poisons.
Some substances were includ ed in the Rules made in 1926 as poisons and that is not in dispute.
Section 5 of the Act deals with presumption and states that any substance specified as a poison in a Rule or noti fication issued under the Act shall be deemed to be a 'po ison ' for purposes of the Act.
Rules of 1926 were made in exercise of the rule making power under Section 3 of the Act.
223 That Section enables the State Government to make Rules generally to carry out the purposes and objects of the Act.
Rules were amended in 1973 and duly notified as required by the Act.
Section 2(3) of the , 1/1904 defined poison as: "Any substance which were applied to the body internally or externally, or in any way intro duced into the system, is capable, without acting mechanically, but by its own inherent qualities,.
or destroying life? When this Act 1/1904 was repealed and re enacted as Poison Act 12 of 1919 the definition was omitted and speci fied substances were included in the schedule with a power vested in the State Government to amend the same by Rules including other substances to the list of poisons.
It is not all poisonous substances that are brought within the regula tion under the Act.
It is those substances which the Govern ment consider its possession for sale or sale to be regulat ed in the interest of health and safety of the society.
This limitation is inherent in the scheme of the Act itself.
Of course no comprehensive definition can be given to the word poison.
Under this term would fall anything calcu lated to destroy life.
Substances harmless in themselves might become poison by the time or manner of their adminis tration.
Nothing is a poison unless regard be had to its administration.
A substance may be a deadly poison or a valuable medicine according to how and how much is taken.
If the resultant effect of administering into the system pro duces a violent, morbid or fatal changes or which destroys living tissues, the substance can be safely called poison.
Section 4 of the Act impliedly sets out certain guidelines when the State can notify a substance as poison.
It states that the State Government may by rule regulate the posses sion of any specified poison in any local area in which the use of such poison for the purpose of committing murder or mischief by poisoning cattle appears to it to be of such frequent occurrence as to render restriction on the posses sion thereof desirable.
Any substance which is used for purposes mentioned therein can definitely be declared as poison.
That is what the Government have done in this case.
It has become a notorious fact, which we can even take judicial notice of, that the substance known as 'thinner ' as it is or mixing with some other substances are taken as intoxicating spirits endangering the life.
In many cases deaths have also occurred due to drinking such substance.
If the Government thought in the circumstances that the posses sion or sale of the same is to be regulated it could not be said that they have no power to regulate.
Section 2 224 also enables the Government by Rule to regulate the posses sion for sale and the sale of the specified poison.
It is in exercise of this power Rule 13 was amended by substituting the old Rule by the following Rule: "13 (1) All poisons kept for sale by any licence holder under these rules (except those kept by a chemist, druggist or compounder for the purchase of dispensing or compounding in compliance with the prescription of medical or veterinary practitioner) shall be kept in a box, almirah, room or building (according to the quantity maintained), which shall be secured by lock and key and in which no sub stance shall be placed other than poisons, possessed in accordance with a licence granted under the Act, and each poison shall .be kept within such box, almirah, room or building in a separate closed receptacle of glass, metal or earthenware.
Every such box, almirah, room or building and every receptacle shall be marked with the word 'poison ' in red charac ters both English and vernacular and in the case of receptacles containing separate 'poison ' with the name of such 'poison '.
Provided that above rule shall not apply to 'poison ' mentioned in Clause (x) of Rule 2.
(ii) All 'poisons ' mentioned in clause (x) of rule 2 shall be kept in a room or building (according to quantity maintained) which shall be secured by lock and key in a separate receptacle of glass, metal and earthenware etc.
Every such room building and every such receptacle shall be marked with the word 'poison ' in red character both English and vernacular, with the name of the 'poison '.
" We are not impressed with the argument that any require ment in this Rule is unreasonable or offends the petition ers ' right to carry on any trade or business.
The nature of trade in poison is such that nobody can be considered to have an absolute right to carry on the same.
It is a busi ness which can be termed even as inherently dangerous to health and safety of society in view of the rampant misuse and sale to the poor, weak and helpless as an intoxicant.
A law in such circumstance can regulate the trade.
This posi tion is well settled and it would be pedantic to cite all the authorities of this Court on this point.
It is also not necessary that the same substance should be declared as poison for the entire country.
The notification and its application to any area would depend on the necessity 225 to declare the substance as poison on the particular facts and situation prevailing in that area and the need to regu late the possession and sale in that area.
No question of discrimination can arise in such circumstances.
We are of opinion that the provisions of neither Section 2 nor 5 nor the impugned notification are hit by any consti tutional limitation.
The writ petition accordingly fails and it is dismissed.
Rule nisi is discharged.
No order as to costs.

Response:
The Lt. Governor of Delhi amended the Delhi Poisons Rules, 1926 by the Notification No. F.10/44/72 fin.
(G) dated 7.8.1973 by including to the list of substances in cluded in the Rules as "Poisons", the substance commonly known as "thinner" containing spirit and other soluble material.
The petitioners in this petition under Article 32 of the Constitution questioned the constitutional validity of Section 5 of the on the grounds that the section gives an arbitrary power to the State Government to include any substance as poison for the purpose of restric tion to be imposed on the possession for sale and sale of the same; that the restriction imposed on possession for sale and sale were not reasonable restrictions; that though the Act was a Central enactment, it was possible of unjust and unjustified discriminatory application as it was left to each State Government to determine what substance they would include as poison, and that the substance, 'thinner ', manu factured by the petitioners would not come within the amend ed Rules.
Dismissing the petition, this Court, HELD: 1.
The object of the enactment is to regulate the possession for sale and the sale, whether wholesale or retail of poisons and the importation of the same.
In other words, it is intended to control over the traffic in poi sons.
The enabled State Government to declare any substance as poison for the purposes of the Act by a notification under the Act or the rules made under the Act.
[221 G] 3.
It is not all poisonous substances that are brought within the regulation under the Act.
It is those substances which the Government consider its possession for sale or sale to be regulated in the interest of health and safety of the society.
This limitation is inherent in the scheme of the Act itself.
[223 C D] 4.
No comprehensive definition can be given to the word, "poison".
Under this term would fall anything calculated to destroy life.
Substances harmless in themselves might become poison by the time or manner of their administration.
Noth ing is a poison unless regard be had to its administration.
A substance may be a deadly poison or a valuable medicine according to how and how much is taken.
If the resultant effect of administering into the system produces a violent, morbid or fatal changes or which destroys living tissues, the substance can be safely called poison.
Any substance which is used for purposes mentioned therein section 4 can definitely be declared as poison.
[223 D F] 5.
It has become a notorious fact that the substance known as 'thinner ' as it is or mixing with some other sub stances are taken as intoxicating spirits endangering the life.
In many cases deaths have also occurred due to, drink ing such substance.
If the Government thought in the circum stances that the possession or sale of the same is to be regulated it could not be said that they have no power to regulate.
Section 2 also enables the Government to regulate the possession for sale and the sale of the specified poi son.
[223 G H; 224 A] 6.
The nature of trade in poison is such that nobody can be considered to have an absolute right to carry on the same.
It is a business which can be termed even as inherent ly dangerous to health and safety of society in view of the rampant misuse and sale to the poor, weak and helpless as an intoxicant.
A law in such circumstance can regulate the trade.
It is also not necessary that the same substance should be declared as poison for the entire country.
The notification and its application to any area would depend on the necessity to declare the substance as poison on the particular facts and situation prevailing in that area and the need to 221 regulate the possession and sale in that area.
No question of discrimination can arise in such circumstances.
[224 G H; 225 A]


Prompt:
Appeal No. 4366 of 1991.
From the Judgment and Order dated 16.5.1988 of the Punjab & Haryana High Court in Regular Second Appeal No. 3648 of 1987.
R.K.Kapoor and Anis Ahmed Khan for the Appellant.
S.N.Mishra, L.K. Gupta, D.K. Yadav and D.K.Garg for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Delay condoned.
Special leave granted.
The constitutional validity of section 15(1)(a) of the Punjab Preemption Act, 1913 was challenged on the ground that it offended the fundamental right guaranteed by Article 19(1)(f) m Ram Sarup vs Munshi & Ors., A Constitution Bench of this Court upheld the validity holding that there was no infringement of Article 19(1)(1 ') of the Constitution.
Thereafter, a host of writ petitions 122 were filed in this Court under Article 32 of the Constitu tion challenging the constitutional validity of section 15 on the ground that it infringed Articles 14 and 15 of the Constitution.
It may be mentioned that the mother State, the State of Punjab, had repealed the Act in 1973 but it contin ued to be in force in the State of Haryana which prior to 1966 was a part of the State of Punjab.
Section 15 of the 1913 Act, as it originally stood, underwent substantial changes in 1960 and as amended read as under: "15.
Persons in whom right of pre emption vests in respect of sales of agricultural land and village immovable property (1) The right of pre emption in respect of agricultural land and village immovable property shall vest (a) where the sale is by a sole onwer First, in the son or daughter or son 's son or daughter 's son of the vendor; Secondly, in the brother or brother 's son of the vendor; Thirdly, in the father 's brother or father 's brother 's son of the vendor; Fourthly, in the tenant who holds under tenan cy of the vendor the land or properly sold or a part thereof Co) where the sale is of a share out of joint land or property and is not made by all the co sharers jointly First, in the sons or daughters or son 's son or daughter 's sons of the vendor or vendors; Secondly, in the brothers or brother 's sons of the vendor or vendors; Thirdly, in the father 's brother or father 's brother 's sons of the vendor or vendors; Fourthly, in the other co sharers; Fifthly, in the tenants who hold under tenancy of the vendor or vendors the land or property sold or a part thereof; (c) where the sale is of land or property owned jointly and is made by all the co shar ers jointly 123 First, in the sons or daughters or sons ' sons or daughters ' sons of the vendors; Secondly in the brothers or brother 's sons of the vendors; Thirdly, in the father 's brothers or father 's brother 's sons of the vendors Fourthly, in the tenants, who hold under tenancy of the vendors or any one of them the land or properly sold or a part thereof.
(2) Notwithstanding anything con tained in sub section (1): (a ') where the sale is by a female of land or property to which she has succeeded through her father or brother or the sale in respect of such land or property is by the son or daughter of such female after inheritance, the right of pre emption shall vest: (i) if the sale is by such female, in her brother or brother 's son; (ii) if the sale is by the son or daughter of such female, in the mother 's brothers or the mother 's brother 's sons of the vendor or vendors; (b) where the sale is by a female of land or property to which she has succeeded through her husband, or through her son in case the son has inherited the land or property sold from his lather, the right of pre emption shall vest First, in the son or daughter of such husband of the female: Secondly, in the husband 's brother or hus band 's brother 's son of such female." This Court in Atam Prakash vs State of Haryana & Ors, ; ; held that the right of pre emption given to co sharers as well as to a tenant can be justified as they constitute a class by themselves.
This Court, therefore, upheld the constitutional validity of clause 'fourthly of section 15(1)(a) clauses 'fourthly ' and 'fifthly ' of section 15(1)(b) and clause fourthly of section 15(1)(c) as valid and not infringing Articles 14 or 15 of the Constitution This Court, however, did not find any justification for the classification contained m section 15 which conferred a right of pre emption on the kinsfolk.
The right of preemption based on consanguinity was held to be a relic of the feudal past totally inconsistent with the constitutional philosophy and scheme.
It also found the list of kinsfolk entitled to pre emption as intrinsically defec tive and Self contradictory.
Finding no reasonable classifi cation it struck down 124 clauses 'first ', 'secondly ' and 'thirdly ' of section 15(1)(a), clauses 'first ', 'secondly ', and 'thirdly ' of section 15(1)(b) and clause 'first ', 'secondly ', and 'third ly ' of section 15(1)(c) and the entire section 15(2) as ultra vires the Constitution.
The right of pre emption in regard to a co sharer was upheld on the consideration that if an outsider is introduced as a co sharer in a property it will make common management extremely difficult and destroy the benefits of ownership in common.
The right of pre emp tion vested in a tenant was sustained on the ground that 1 and reform legislations in regard to the tiller of the soil to obtain proprietary right in the soil with a view to ensuring his continuance in possession of the land and consequently of his livelihood without threat or disturbance from the superior proprietor.
The right of pre emption granted to a tenant was taken as another instance of a legislation aimed at protecting the tenant 's interest in the land.
Holding that the co sharers and the tenants constitut ed a distinct class by themselves, the right of pre emption conferred on them was upheld as reasonable and in public interest.
In taking this view strong reliance was placed on the ratio of the decision of this court in Bhau Ram vs
B. Baijnath Singh, ; wherein the vires of a provision of the Rewa State Pre emption Act which conferred a right of pre emption based on vicinage and the right of preemption conferred on co sharers and the Punjab Pre emption Act, 1913 were challenged on the ground of infraction of Article 19(1) (f) of the Constitu tion.
In that case it was held that a right of pre emption by vicinage offended Article 19(1) (f) of the Constitution but a similar right conferred on co sharers was intra vires Article 19(1)(1) of the Constitution.
In that case also this Court held that the right of pre emption vested in co shar ers was a reasonable restriction on the right to hold, acquire or dispose of property conferred by Article 19(1)(1) of the Constitution.
In Atam Prakash s case, this Court, therefore, held that what was said about the right of pre emption granted to co sharers in relation to Article 19(1)(1) of the Constitution applied with equal force to justify the classification in relation to Articles 14 and 15 of the Constitution.
After the surgery, section 15 underwent at the hands of this Court removing the offending pans in Atarn Prakash 's case, what survives of section 15 is that in the case of sale of agricultural land and village immovable property by a sole owner, the tenant alone can exercise the right of pre emption.
Where the sale is of a share out of joint land or property, and is, not made by all the co sharers jointly, only the other co sharers and the tenants can exercise the right of pre emption.
Where the sale is of a land or proper ty owned jointly and is made by all the co sharers jointly, the right to pre empt survives to the tenants only.
Since in the present case, we are concerned with sale by a single co sharer and not 125 by all the co sharers jointly, the remaining part of section 15(1)(b), with which we are concerned, reads as under: "15(b).
Persons in whom right of pre emption vests in respect of sales of agricultural land and village immovable property (1) The right of pre emption in respect of agricultural land and village immovable property shall vest Co) where the sale is of a share out of joint land or property and is not made by all the co sharers jointly XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Fourthly, in the other co sharers; Fifthly, in the tenants who hold under tenancy of the vendor or vendors the land or property sold or a part thereof." Counsel for the appellant submitted that since the suit land belonged to more than one co sharer and had not been sold jointly by all the co sharers, he, as a co sharer, was entitled to claim the right of pre emption under clause 'fourthly ' of section 15(1)(b).
A similar question came up before this Court in Jagdish & Ors.
vs Nathi Mal Kejriwal & 0rs.
; , ; wherein a two judge Bench of this Court negatived the contention in the follow ing words: "In order to understand the meaning of the words 'other co sharers ' in Section 15(1)(b) we have to read the Act as it stood before the decision in Atam Prakash 's case ; (supra).
It is seen that the expression 'other co sharers ' in clause 'Fourthly ' of Section 15(1)(b) of the Act refers to only those co sharers who do not fail under clause 'First ' or 'Secondly ' or 'Thirdly ' of Section 15(1)(b) of the Act.
Since the petitioners admittedly fall either under clause 'First ' or under clause 'Secondly ' of Section 15(1)(b) of the Act they are clearly outside the scope of clause 'Fourthly '.
Therefore, the petition ers cannot claim the right of pre emption under clause 'Fourthly ' We do not, therefore, find any substance in this contention. " In the present case also the appellant seeks to exercise the right of pre emption as a co sharer i.e. father 's broth er 's son of the vendors.
His contention is that he falls within the expression other co sharers ' in clause 'Fourthly ' of section 15(1)(b) and is, therefore, entitled to exercisee the right of pre emption conferred on him by that provision.
The courts below 126 have negatived this contention solely on the ground that it cannot stand after the pronouncement of this Court in the case of Jagdish (supra).
Counsel for the appellant, however, contended that the interpretation placed by the two judge Bench on the expression 'other co sharers ' in section 15(1)(b) requires reconsideration as it leads to certain anomalous situation e.g. a sister who is a co sharer can claim pre emption while her brother cannot or a daughter 's daughter of the vendor can claim pre emption but not the son.
The history of the Punjab Pre emption law may be kept in mind to understand the purport of clause 'Fourthly ' of section 15(1)(b) of the Act.
Under the Punjab Pre emption Act, 1905, the corresponding provision, section 12, con ferred a right of pre emption, in the case of a sale of a share of such land or properly held jointly, firstly, in the lineal discendents of the vendor in male line in order of succession; secondly, in the co sharers, if any, who are agnates, in order of succession; thirdly, in the persons described in sub clause (a) i.e. in persons who but for such sale would be entitled to inherit the properly in the event of his or their decease, in order of succession and fourth ly, in the co sharers jointly or severally.
It will be noticed that priority for the exercise of the right owes statutorily fixed and even in the case of those falling within the same class, the exercise of right was regulated by the use of the expression, 'in order of succession '.
The 1905 Act was repealed and replaced by the 1913 Act.
Accord ing to section 15 of this Act before its amendment in1960, in the case of sale of a share out of joint land or proper ty, the right of preemption was conferred firstly on the lineal descendents of the vendor in order of succession; secondly, in the co sharers, if any, who are agnates, in order of succession; thirdly in persons not included under firstly or secondly above, in order of succession, who but for such sale would be entitled, on death of the vendor, to inherit the land or property sold and fourthly, in the co sharers.
Section 15 after its amendment in 1960 provided that where the sale is of a share out of the joint land or property and is not by all the co sharers jointly, the right of pre emption was vested, first, in the sons or daughters or son 's son or daughter 's sons of the vendor or vendors; Secondly, in the brothers or brother 's sons of the vendor or vendors; Thirdly, in the father 's brother or father 's broth er 's sons of the vendor or vendors Fourthly, in the other co sharers and Fifthly n the tenants.
Read in the context, it becomes clear that the legislature desired to confer the right of pre emption on specified family members of the vendor or vendors in the first three clauses of section 15(1)(b) and with a view to covering all the remaining co sharers not specifically mentioned the preceding clauses it used the expression 'other co sharers ' in the fourth clause which was meant to serve as a residuary clause to ensure 127 that, no co sharer is left out.
Since this Court found certain intrinsic contradictions in the list of relatives covered by the first three clauses, it saw no justification for the classification contained in the said provision conferring a right based on consanguinity and, therefore, struck down those clauses:as discriminatory and violative of Articles 14 and 15 of the Constitution.
At the same time it upheld the right conferred on co sharers for reasons stated earlier.
Thus the purport of Atam Prakash 's case (supra) was that while co sharers were entitled to pre empt, the confer ment of that right on certain kinsfolk based on the rule of consanguinity being a relic of the feudal past could not be tolerated.
This Court never intended to exclude any speci fied co owners from the scope of clause fourthly of section 15(1)(b) of the Act.
Once conferment of the right of pre emption in favour of co sharers was considered to be a reasonable restriction on the right to hold, acquire and dispose of property under Article 19(1) (f), the same re striction was held to be valid when tested on the touchstone of Articles 14 or 15 of the Constitution.
We find it diffi cult to hold that the purport of the of Court 's decision in Attam Prakash 's case was to deny the right of pre emption to those relative or relatives of the vendor or vendors who were specified in the erstwhile first three clauses of section 15(1)(b) even if they happen to be co sharers.
The expression 'other co sharers ' was used in the fourth clause of the said provision to ensure that no co sharer was left out or omitted and not to deny the right to kinstolk coshar ers covered by the preceding clauses.
If the preceding clauses were not erased from the statute book as unconstitu tional the kinsfolk would have exercised the right in the order of preference, for which no justification was found.
The relations in the first three clauses of section 15(1)(b) may or may not be co sharers, The use of the expression 'other ' in clause fourthly conveys the possibility of their being co sharer also.
What this Court disapproved as offen sive to Articles 14 and 15 is the classification based on consanguinity and not on co ownership.
The right of pre emption to co sharers is held to be intra vires the Consti tution Therefore, it is difficult to hold that this Court intended to deny the right of pre emption of those kinsfolk even if they happened to be co sharers.
That would clearly be discriminatory.
With respect, therefore, we find it difficult to approve of the interpretation placed on clause `fourthly '; of section 15(1)Co) of the Act by this Court in Jagdish 's case.
We think on a proper construction of that clause after the preceding clauses were held to be unconsti tutional the word 'other ' preceding.
the word 'co sharer ' is rendered redundant.
We, therefore, do not approve the ratio of Jagdish 's case and overrule the same.
In the result the appeal succeeds, '[he decision of all the three courts below dismissing the appellant 's suit is set aside and the suit is decreed.
128 We direct that on the appellant plaintiff depositing the entire amount of sale price together with the amount needed for the stamp duty for the execution of the conveyance in his favour within three months from today, the purchaser respondent No. 1 shah within one month of such deposit execute a conveyance of the land, i.e. his share therein derived from his vendors, in favour of the appellant and shall deliver possession thereof to the appellant.
If the respondent No. 1 fails to do so, the Court shall appoint a Commissioner who shall execute the conveyance on behalf of the respondent No. 1 and the Court shall put the appellant in possession of the suit land.
There will be no order as to costs throughout.
V.P.R. Appeal allowed.

Response:
The appellant seeking to exercise the right of pre emption as a co sharer, i.e. father 's brother 's son of the vendors, contended that he fell within the expression 'other co sharers ' in clause 'Fourthly ' of section 15(1)(b) of the Punjab pre emption Act, 1913 and was, therefore, entitled to exercise the right of pre emption.
The courts below negatived his contention following the decision of this Court in Jagdish & Ors.
vs Nathi Mal Kej riwal & Ors.
; , In this appeal filed by special leave, the appellant submitted that since the suit land belonged to more than one co sharer and had not been sold jointly by all the co shar ers, he, as a co sharer, as entitled to claim the right of pre emption under clause 'fourthly 'of section 15(1)(b) and that in Jagdish 's case, the interpretation placed on the expression 'other co shar ers ' in section 15(1)(b) required reconsideration.
Allowing the appeal, this Court, HELD: 1.
According to section 15 of the Act before its amendment in 1960, in the case of sale of share out of joint land or property, the right of pre emption was conferred firstly on the lineal descendants of the vendor in order of succession; secondly, in the co sharers, if any, who are agnates, in order of succession; thirdly, in persons not included under firstly or secondly above, in order of suc cession, who but for such sale would be entitled, on death of the 120 vendor, to inherit the land or property sold and fourthly, in the cosharers.
[126 E F] 2.
Section 15 after its amendment in 1960 provided that where the sale is of a share out of the joint land or property and is not by all the co sharers jointly, the right of pre emption was vested, first, in the sons or daughters or son 's son or daughter 's sons of the vendor or vendors; Secondly, in the brothers or brother 's sons of the vendor or vendors; Thirdly, in the father 's brother or father 's broth er 's sons of the vendor or vendors; Fourthly, in the other cosharers and Fifthly, in the tenants.
[126 F G] 3.
The legislature desired to confer the right of pre emption on specified family members of the vendor or vendors in the first three clauses of section 15(1)(b) and with a view to covering all the remaining co sharers not specifi cally mentioned in the preceding clauses it used the expres sion 'other co sharers ' in the fourth clause which was meant to serve as a residuary clause to ensure that no cosharer is left out.
[126 G 127 A] 4.
The expression 'other co sharers ' was used in the fourth clause of the said provision to ensure that no co sharer was left out or omitted and not to deny the right to kinsfolk co sharers covered by the preceding clauses.
If the preceding clauses were not erased from the statute book as unconstitutional the kinsfolk would have exercised the right in the order of preference, for which no justification was found.
The relations in the first three clauses of section 15(1)(b) may or may not be co sharers.
The use of the ex pression 'other ' in clause fourthly conveys the possibility of their being cosharer also.
[127 D F] 5.
The purport of Atam Prakash 's case was that while cosharers were entitled to pre empt, the conferment of that right on certain kinsfolk based on the rule of consanguinity being a relic of the feudal past could not be tolerated.
This Court never intended to exclude any specified co owners from the scope of clause fourthly of section 15(1)(b) of the Act.
Once conferment of the right of preemption in favour of co sharers was considered to be a reasonable restriction on the right to hold, acquire and dispose of property under Article 19(1)(f), the same restriction was held to be valid when tested on the touchstone of Articles 14 or 15 of the Constitution.
[127 B D] 121 6.
What this Court disapproved as offensive to Articles 14 and 15 is the classification based on consanguinity and not on co ownership.
The right of pre emption to co sharers is held to be intra vires the Constitution.
Therefore, it is difficult to hold that this Court intended to deny the right of pre emption of those kinsfolk even if they happened to be co sharers, That would clearly be discriminatory.
[127 F G] 7.
The interpretation placed on clause 'fourthly ' of section 15(1)(b) of the Act by this court in Jagdish 's case was not correct on a proper construction of that clause after the preceding clause were held to be unconstitutional, the word 'other ' preceding the word 'co sharer ' is rendered redundant.
[127 G] Ram Sarup vs Munshi & Ors., ; = ; ; Atam Prakash vs State of Haryana & Ors., ; = ; ; Bhau Ram vs
B. Baijnath Singh, = ; , referred to.
Jagdish & Ors.
vs Nathi Mal Kejriwal & Ors., ; , over ruled.


Prompt:
ivil Appeals Nos. 259 and 260 of 1958.
Appeals by special leave from the judgment and orders dated August 5, 1955, of the former Travancore Cochin High Court in Income tax Reference Appeals Nos. 6 of 1953 and 21 of 1954.
K.N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the appellant.
G. B. Pai and Sardar Bahadur, for the respondent in C. A. No. 259 of 1959.
A. V. Viswanatha Sastri and Naunit Lal, for the respondents in C. A. No. 260 of 1958.
February 23.
The Judgment of the Court was delivered by KAPUR, J.
These two appeals by special leave raise a common question of law, and that is, whether business losses incurred in the erstwhile State of Cochin could, under the Income tax Act of Travancore, be set off against the business profits made in the erstwhile State of Travancore.
In Appeal No. 260/ 58 a further question arose whether in the case of 259 that assessee the year ending June 30, 1949, was the previous year for the assessment year 1950 51 with the result that it should be assessed under the Indian Income tax Act of 1922.
But this question was not answered by the High Court which confined itself to answering the first question which was common to both the appeals.
The appellant before us in both the appeals is the Commissioner of Income tax and the respondents are the two assessees, in one case a Bank and the other a private limited company.
The main argument has been confined to the question of applicability of section 32(1) and the first proviso to that section of the Travancore Income tax Act (hereinafter called the Travancore Act).
In C. A. No. 259/58 the assessee is a public limited company incorporated in the State of Cochin with branches in that State as well as in what was British India and in Travancore State.
It filed its incometax return showing an income of Rs. 11,872 for the assessment year 1948 49, its accounting year being the previous calendar year.
The Income tax Officer determined its assessable income to be Rs. 90,947 representing only the profit it made in Travancore State and under section 32(1) proviso (1) of the Travancore Act he refused a deduction of Rs. 79,275 shown as loss from branches situate outside the State of Travancore, in British India and other Indian States.
The assessee 's appeal to the Income tax Commissioner was unsuccessful but the Appellate Tribunal held that the banking business of the assessee being one and indivisible for the purpose of determining the amount assessable to income tax it was entitled to deduct the losses incurred outside Travancore State from the profits accruing and arising in that State.
At the instance of the Commissioner of Income tax the following question was referred to the High Court of Travancore Cochin: Is the aforesaid sum of Rs. 79,275 a loss of the assessee arising outside the Travancore State for purpose of the first proviso to section 32(1) of the Travancore Income tax Act ? " This question was slightly modified by the High Court 260 which after referring to several decided cases answered the question in favour of the assessee.
In C. A. 260/58 the assessee is a private limited company with its registered office in the former Cochin State.
It was carrying on business at its head office in Cochin State and it also carried on business in Travancore State.
The assessment was made under the Travancore Act and relates to the previous year ending June 30, 1949, the assessment year being 1950 51.
The assesse made a profit in Travancore State and incurred a loss in the State of Cochin and sought to deduct this loss from the profit of Travancore State thus showing a net profit of Rs. 2,643.
This was not allowed by the Income tax Officer and on appeal this order was confirmed by the Appellate Assistant Commissioner.
The Appellate Tribunal also did not accept the submissions of the assessee and upheld the order of assessment.
On an application of the assessee the following question was referred to the High Court of Travancore Cochin: " Whether on the facts and in the circumstances of the case the loss of Rs. 27,709 arising in Cochin State could be set off against the profit of Rs. 38,998 arising in Travancore State ? " and was answered in favour of the assessee.
The Commissioner has come up in appeal pursuant to special leave against both these judgments.
It may be stated that the relevant sections of the Travancore Act which govern the two appeals are identically worded with those of the Indian Incometax Act of 1922 (to be called the Indian Act).
The corresponding sections are as follows: Headings Sections in Section in Travancore Act.
Indian Act.
Application of the Act 4 4 Head of income charge able to income tax 9 6 Business 13 10 Exemptions of a gene ral nature 18 14 Set off of loss in com puting aggregate in come 32 24 261 It is only necessary to set out section 32(1) of the Travancore Act and the proviso which correspond to section 24(1) and proviso (i) of the Indian Act and which are necessary for the decision of the appeals before us: S.32(1) " Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in Section 9 (Section 6) he shall be entitled to have the amount of loss set off against this income, profits or gains under any other head in that year: Provided that where the loss sustained is a loss of profits or gains which would but for the loss have accrued or arisen within British India or in an Indian State and would under the provisions of clause (e) of sub section (2) of Section 18 (Section 14(2)(c) ), have been exempted from tax, such loss shall not be set off except against profits or gains accruing or arising within British India or in an Indian State and exempt from tax under the said provisions ".
(Sections in brackets are the corresponding sections of the Indian Act).
So the only difference between the two sections is that in the proviso to section 24(1) of the Indian Act instead of the words "an Indian State" the words "British India or in an Indian State " have to be substituted.
The question for decision is as to how this proviso is to be construed.
Ordinarily the effect of an excepting or a qualifying proviso is to carve something out of the preceding enactment or to qualify something enacted therein which but for the proviso would be in it and such a proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and properly construed without attributing to it that effect.
Corporation of the City of Toronto vs Attorney General for Canada (1).
But it has been held that a section framed as a proviso to a preceding section may sometimes contain matter which is in substance a fresh enactment adding and not merely qualifying that which goes before.
Rhondda Urban Council vs Taff Vale Railway (2).
It was argued on behalf of the Revenue that this (1) , 37.
(2) , 258.
262 proviso falls in the second category and takes the present cases out of section 32(1) of the Travancore Act and imposes a liability to tax on the profits or gains arising in that State, disallowing a deduction of the losses in British India and in States other than Travancore State against profits made in Travancore State: Rhondda Urban Council vs Taff Vale Railway (1) and Harrison vs Ward (2).
It may be mentioned that in the majority of cases decided in India the proviso to section 24(1) of the Indian Act has been construed in a manner contrary to the submissions made on behalf of the Revenue.
In order to determine the true meaning of the words of the proviso it is necessary and convenient to refer to the scheme of the Indian Act which is admitted by the parties to be same as that of the Travancore Act.
From 1922 to 1939 in order to be taxable income, profits and gains had to be received or had to accrue in British India.
In 1939 the idea of 'total world income ' was introduced and the definition of 'total income ' was modified by the Indian Income tax (Amendment) Act (VII of 1939) which also made consequential changes in other sections of the Indian Act.
Under section 2(15) of the Act total income ' was defined to mean the total amount of income, profits and gains computed in the manner laid down in that Act.
The 'total world income ' was defined as including all income, profits and gains wherever accruing or arising except income to which the Act did not apply.
Section 3 provided for the charge of income tax in respect of the total income of the previous year.
Under section 4 the total income of any previous year of any person who was resident included all income, profits and gains from whatever source derived but (i) it must accrue or arise to him during the year in British India or (ii) accrue or arise to him without British India during such year.
The third clause is not necessary for this appeal.
Section 4(3) provided what income, profits or gains were not to be included in the total income of the person receiving them.
Both under the Indian Act and under the Travancore Act (1) , 258.
(2) [1922] 1 Ch 517.
263 there were six heads of income chargeable to income tax.
In the Indian Act they were set out in section 6 as follows: section 6 " Save as otherwise provided by this Act the following heads of income, profits and gains shall be chargeable to income tax in the manner hereinafter appearing, namely: (iv) Profits and gains of business, profession or vocation.
Then followed sections 7 to 12B laying down the method of computation of the income arising from each head.
In 1941 during the war an exemption was given for the purpose of taxability to any income, profits or gains which accrued or arose within what was then called Indian States but which were not received or brought into British India.
This was done by section 8 of the Indian Income tax (Amendment) Act, 1941 (XXIII of 1941) by which another clause (c) was added to section 14(2) which was as follows: " The tax shall not be payable by an assessee: (c)in respect of any income, profits or gains accruing or arising to him within (an Indian State) unless such income, profits or gains are received or deemed to be received in or are brought into the Indian State in the previous year by or on behalf of the assessee or are assessable under section 12B or section 42".
Thus income, profits or gains arising under any of the heads under section 6 became exempted in circumstances above mentioned but the effect of this exemption was not to exclude such income of an assessee for all purposes as was the case under section 4(3).
Such sums were to be taken,into account for the purpose of determining the rate under section 16 of the Indian Act.
A further consequential change was made in, section 24(1) by 264 the addition of the first proviso and a similar addition was made in the Travancore Act to section 32(1) which has already been quoted and it is this proviso which is the subject matter of controversy between the parties.
A review of the various sections and enactments shows that during 1922 1939 the tax was leviable on income, profits and gains arising or accruing to an assessee in British India.
In 1939 the total income became taxable subject to exclusions in sub section 3 of section 4 and the chargeability of the 'total income ' was laid down in section 3.
In 1941 income, profits or gains which a resident made in an Indian State and in the case of Travancore State income, profits or gains which a resident made in British India or other Indian States were exempted from payment of income tax unless received or brought into the respective territories, but this income, profits or gains had to be included for the purpose of calculating the rate.
Now we come to section 24(1).
This section was introduced in 1922 before which under the Indian Act of 1918 a loss under one head of income could not be set off against income under another head, the taxability of income arising from each head being separate.
By the addition of this section the loss under one head of profits or gains was allowed to be set off against income, profits and gains under any other bead in any assessment year.
There was also a provision in section 24(2) for carrying over the loss after such set off had been effected.
Section 24(1) became the subject matter of controversy in the courts.
The Privy Council in Arunachalam Chettiar vs Commissioner of Income tax(1) held that this section was meant for a set off of profits arising under different heads and not where profits and losses had to be adjusted if they arose under the same head.
Sir George Rankin said at p. 241 " In their Lordships ' opinion, whether a firm is registered or unregistered, partnership does not obstruct or defeat the right of a partner to an adjustment on account of his share of loss in the firm, whether the set off be against other profits under the same (1) (1936) L.R. 63 I.A. 233 265 head of income within the meaning of section 6 of the Act or under a different head (in which case only need recourse be had to section 24, sub section 1) ".
Thus the Privy Council emphasised that the object of section 24(1) was to allow a set off of profits against losses arising under different heads and Only in such cases could recourse be had to section 24(1).
In cases where profits and losses arose under the same head they had to be adjusted against each other.
This Court in Anglo French Textiles Co. Ltd. vs Commissioner of Incometax, Madras (1) again emphasised that distinction in the following words: " Next, a, set off under section 24(1) can only be claimed when the loss arises under one head and the profits against which it is sought to be set off arises under a different head.
When the two arise under the same head, of course the loss can be deducted but that is done under section 10 and not under section 24(1) (Per Bose, J.) Indeed it is not disputed that when profit and loss arose under the same head in any place which was not an Indian State recourse had to be had to the provisions of sections 7 to 12B and not to any other section.
But it was contended on behalf of the Revenue that the first proviso to section 24(1) of the Indian Act not only affected the generality of the main enactment but also introduced an addendum that where the profits of the business arose in what was British India in the case of the Indian Act or what was Travancore State in the case of the Travancore Act and the losses under the head business were sustained in an Indian State or in the latter case in any other Indian State or British India, these losses could not by virtue of the proviso be deducted from profits made in British India or Travancore State as the case may be.
They could only be adjusted against profits arising in an Indian State or in the case of Travancore State in British India or another Indian State.
Thus the proviso, it was contended, was a modification of the method of computation under section 10(2) of the Indian Act for (1)[1953] S.C.R. 448, 453.
34 266 determining profits and gains of the business of any resident.
We should be averse to lend any countenance to such a mode of construing a proviso unless the language used expressly or by necessary intendment leads to that conclusion.
The proper function of a proviso is that it qualifies the generality of the main enactment, by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main enactment.
Ordinarily it is foreign to the proper function of a proviso to read it as providing something by way of an addendum or dealing with a subject which is foreign to the main enactment.
" It is a fundamental rule of construction that a proviso must be considered with relation to the principal matter to which it stands as proviso ".
Therefore it is to be construed harmoniously with the main enactment (Per Das, C. J.) in Abdul Jabar Butt vs State of Jammu & Kashmir (1).
Bhagwati, J., in Ram Narain Sons Ltd. vs Assistant Commissioner of Sales Tax (2) said: " It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision.
It carves out an exception to the main provision to which it has been enacted as a proviso and to no other ".
Lord Macmillan in Madras & Southern Mahratta Railway Co. vs Bezwada Municipality (3) laid down the sphere of a proviso as follows : " The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case.
Where, as in the present case, the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication what clearly falls within its express terms ".
The territory of a proviso therefore is to carve out an (1) ; 59 (2) ; , 493.
(3) (1944) L.R. 71 I.A. 113, 122.
267 exception to the main enactment and exclude something which otherwise would have been within the section.
It has to operate in the same field and if the language of the main enactment is clear it cannot be used for the purpose of interpreting the main enactment or to exclude by implication what the enactment clearly says unless the words of the proviso are such that that is its necessary effect.
(Vide also Corporation of The City of Toronto vs Attorney General for Canada) (1).
In the proviso in dispute there are no positive words which would support an interpretation in favour of the disintegration of the head " business " and compel the application of the proviso to the same head, specially keeping in view the object of the main section, i.e. section 24(1) which was to set off loss of profits or gains under one head against income, profits or gains under any other head.
It was then submitted that in the proviso the words used were " where the loss sustained is a loss of profits or gains " and therefore it necessarily applied to the head " business " in the two respective territories.
But in the main enactment itself, i. e., section 24(1) of the Indian Act the words used are " a loss of profits or gains ".
The mere fact that the word " income " is not used does not justify the construction.
that the intention of the Legislature was to restrict the set off of profits and losses arising in Indian States only to business or to modify the mode of computation under section 10 of the Indian Act.
That the use of these words does not circumscribe the proviso to business alone is shown by the difference in the language of the proviso to sub_s.
(2) of section 24 of the Indian Act: section 24 (2). . . . . . . . . " provided that (a) where the loss sustained is a loss of profits and gains of a business or vocation to which the first proviso to sub section (1) is applicable, and the profits and gains of that business, profession or vocation are, under the provisions of clause (c) of sub section (2) of section 14, exempt from tax, such loss shall not be set (1)[1946] A.C. 32, 37.
268 off except against profits and gains accruing or arising in (an Indian State) from the same business, profession or vocation and exempt from tax under the said provisions ".
That proviso shows that where the Legislature wanted to restrict the losses and profits or gains to business alone they specifically said so.
It is significant that in sections 2(13) and (5) of the Indian Act of 1918 corresponding to sections 2(15) and 6 of the Indian Act of 1922 the word used was" income " which in the latter Act was expanded into " income, profits and gains ".
The Privy Council said in the Commissioner of Income tax, vs Shaw Wallace and Co. (1) that ,the object of the Indian Act is to tax " income " a term which it does not define.
It is expanded no doubt into " income, profits and gains " but the expansion is more a matter of words than of substance ".
It was also so said in Commissioner of Income tax, Bengal vs Mercantile Bank of India Ltd. (2).
See also London County Council vs Attorney General (3).
Thus the mere use of the words loss of profits or gains to be, set off against profits and gains would not be sufficient to restrict the scope of the proviso to the profits and losses arising under the head business in the two territories, i. e., British India and the Indian States.
On behalf of the Revenue an alternate argument was raised for which support was sought from two decisions of the Allahabad High Court in In Re: Mishrimal Gulabchand (4) and Raghunath Parshad vs Commissioner of Income tax (5).
There it was held that section 10 of the Indian Act had to be read with section 14(2) (e) and if profits could not be added for the purposes of total income ' losses sustained also could not be deducted.
Counsel for the Revenue did not go to this extent that because profits were exempted losses could not be deducted; his argument was that because before 1939 income was not chargeable unless it was received or accrued in British India therefore business in section 10 could only mean business in British India.
But this (1)(1932) L. R. 59 I. A. 206, 212.
(3)[1901] A.C. 26.
(2)(1936) L.R. 63 I.A. 457.
(4)[1950] (5) 269 argument does not take note of the definition of total income total world income ' and chargeability of total income under section 3 or the provisions of section 4 where in the case of a resident 'total income ' includes income, profits and gains accruing within or without I British India.
Therefore to say that business in section 10 means business in British India or business the profits or gains of which are taxable in British India is to ignore the definitions and sections 3, 4 and 6.
Section 10 of the Indian Act does not distinguish between business in British India and business in an Indian State or so divide business.
But then it was said that as the profits or gains of business in an Indian State were exempted from payment of tax in British India business in section 10 must mean business in British India.
That would be straining the language of section 10 and would necessitate addition of words in section 10 which are not there in the section.
In the course of argument a number of cases of the, various High Courts were cited and criticised.
We find it unnecessary to refer to them because we have indicated above what is the correct sphere of a proviso and what proviso (i) to section 24(1) means.
In our view the question referred to the High Court which is common to the two appeals was rightly answered in favour of the assessee.
As to the second question in Civil Appeal No. 260 of 1958 we do not propose to say anything.
It will be open to the assessee in that appeal to take such steps in regard to that question as it may be advised.
In the result the appeals fail and are dismissed with costs.
Appeals dismissed.

Response:
Section 32(1) of the Travancore Income tax Act, which corresponds to section 24(1) of the Indian Income tax Act, 1922, provided : " Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in Section 9 [section 6 of the Indian Act he shall be entitled to have the amount of loss set off against this income, profits or gains under any other head in that year : Provided that where the loss sustained is a loss of profits or gains which would but for the loss have accrued or arisen within British India or in an Indian State and would under the provisions of clause (c) of sub section (2) of Section 18 corresponding to section 14 Of the Indian Act] have been exempted from tax, such loss shall not be set off except against profits or gains accruing or arising within British India or in an Indian State and exempt from tax under the said provisions ".
The assessees were companies having their head offices in the erstwhile State of Cochin with branches in the erstwhile State of Travancore and in other places outside the latter State.
They made profits in Travancore State but incurred losses in Cochin State and other places, and for the purposes of assessment to income tax they sought to deduct this loss from the profits made in Travancore State.
The Income tax Officer acting under the provisions of the Travancore Income tax Act, determined the assessable income representing only the profits made in Travancore State and under section 32(1), first proviso of the Travancore Income tax Act which corresponds to the first proviso to section 24(1) of the Indian Income tax Act, 1922 refused to allow a deduction of the losses incurred.
The assessees claimed that the business 257 which they were carrying on was one and indivisible for the purpose of determining the amount assessable to income tax and that they were entitled to a deduction of the losses incurred outside Travancore State.
The contention on behalf of the income tax authorities was (i) that under the first proviso to section 32(1) of the Travancore Income tax Act losses incurred in places out I side the State of Travancore cannot be set off against profits made in that State, (2) that though profits and losses in the State arising under the same head could be set off, the proviso, aforesaid, affected not only the generality of the main enactment but also introduced an addendum that where the profits of the business arose in the State and the losses under the head business were sustained outside that State, those losses could not by virtue of the proviso be deducted from profits made in the State,(3) that the proviso applied only to the bead " business in the two respective territories, as the words used therein are where the loss sustained is a loss of profits or gains " andthe word " income " is not mentioned therein, and (4) that the word " business " in section 13 of the Travancore Act corresponding to section 10 of the Indian Act, must mean business in Travancore State under section 13 Of that Act and " business in British India " under the Indian Act, because before 1939 income was not chargeable under the two Acts, unless it was received or accrued in Travancore State or British India, as the case may be, and profits and gains of business in territories outside Travancore or in an Indian State were exempted from payment of income tax in Travancore State or in British India, as the case may be.
Held:(i) Under section 24(1) of the Indian Income tax Act, 1922 Is.
32(1) of the Travancore Income tax Act] a set off can be claimed only when the loss arises under one head and the income, profits and gains against which it is sought to be set off arises under a different head.
In cases where profits and losses arise under the same head they have to be adjusted against each other under the provisions Of sections 7 to 12B of the Indian Act.
Arunachalam Chettiar vs Commissioner of Income tax, (1936) L.R. 63 I. A. 233 and Anglo French Textiles Co., Ltd. vs Commissioner of Income tax, Madras, , relied on.
(2)The territory of a proviso is to carve out an exception to the main enactment and exclude something which otherwise would have been within the section; it has to operate in the same field and if the language of the main enactment is clear it cannot be used for the purpose of interpreting the main enactment or to exclude by implication what the enactment clearly says unless the words of the proviso are such that that is its necessary effect.
Abdul jabar Butt vs State of Jammu and Kashmir, ; , Ram Narain Sons Ltd. vs Assistant Commissioner of Sales ' ; , Madras & (1944) L.R. 71 I.A. 113 33 258 and Corporation of the City of Toronto vs Attorney General for Of Canada, , relied on.
Consequently, section 24(1), first proviso, of the Indian Income tax Act, 1922 Is.
32(1), first proviso, of the Travancore Act] bars the right of set off only where a loss in the Indian States under one head is sought to be set off against profits in British India under any other head, and does not apply to profits and losses and computation thereof which fall under section 10 of the Indian Act, corresponding to section 13 of the Travancore Act.
(3)The mere fact that the word " income " is not used in the proviso does not justify the construction that the intention of the Legislature was to restrict the right to a set off of profits and losses arising in Indian States only to business or to modify the mode of computation under section 10 of the Indian Income tax Act.
(4)The word " business,, in section 10 of the Indian Income tax Act, 1922, is not confined to business in British India, in view of the definition of " total income " and " total world income " and chargeability of total income under section 3, Or the provisions Of section 4 where in the case of a resident " total income " includes income, profits and gains accruing within or without British India.


Prompt:
Appeal No. 1367 of 1980.
From the Judgment and Order dated 19.7.1979 of the Rajasthan High Court in D.B. Civil Writ Petition No. 769 of 1979.
Subhash Mallick and S.K. Jain for the Appellant.
B.D. Sharma for the Respondents.
The Judgment of the Court was delivered by YOGESHWAR DAYAL,J.
This is an appeal against the judgment of the Rajasthan High Court dated 19th July, 1979 passed in D.B. Civil Writ Petition No. 681 of 1978 (Raghubir Singh vs The Board of Revenue for Rajasthan and others) and D.B. Civil Writ Petition No. 769 of 1979 (Surendrapal Singh vs The Board of Revenue for Rajasthan and others).
These writ petitions were decided by the aforesaid common judgment.
The first writ petition was filed by the father Raghubir Singh whereas the second writ petition was filed by his minor son Surendrapal Singh through his next friend Shri Jagjit Singh, maternal grand father of the minor.
The relief claimed in both the petitions before the High Court was the same, namely for setting aside of the order dated 6th August, 1977 passed by the Board of Revenue for Rajasthan, Ajmer.
The facts of the case briefly are that proceedings under Chapter III B of the Rajasthan Tenancy Act (Act No. 3 of 1955) (hereinafter referred to as 'the Act of 1955) were commenced for determining the ceiling area for Raghubir Singh.
The Sub Divisional Officer, Hanumangarh, by his order dated 10th August, 1972, determined the ceiling area, but an appeal by Raghubir Singh, the Revenue Appellate Authority, set aside the order of the sub Divisional Officer on March 6, 1973 and remanded the case.
The matter was taken to the Board of Revenue for Rajasthan by a revision application and the Board by its order dated 14th April, 1975 directed that the ceiling area for Raghubir Singh may be determined according to the old law i.e. Act of 1955 and not according to the new law i.e. Rajasthan Imposition of Ceiling on Agricultural Holding Act, 1973 (hereinafter referred to as 'the Act of 1973).
In pursuance of the direction of the Board, the Sub Divisional Officer, Hanumangarh, by his order dated 5th May, 1976 held that Surendrapal Singh, (appellant herein) aged 12 years, was a minor son of Raghubir Singh and used to 725 study in Punjab and further held that the land in possession of Raghubir Singh was ancestral.
The Sub Divisional Officer, then came to the conclusion that the father and the son constitute two separate units and each one of them was entitled to get 62 Bighas and 8 Biswas.
It was thus held that Raghubir Singh and his son Surendrapal Singh are entitled to retain 124 Bighas and 16 Biswas only and the surplus land measuring, 4 Bighas and 6 Biswas may be resumed.
Aggrieved by the order of the Sub Divisional Officer, Raghubir Singh filed appeal before the Revenue Appellate Authority, Bikaner, who by his order dated 6th September, 1976 dismissed the same and upheld the order of the Sub Divisional Officer.
Dissatisfied with the order of the Revenue Appellate Authority, Raghubir Singh filed a revision application under Section 230 of the Act of 1955 before the Board of Revenue for Rajasthan.
On behalf of raghubir Singh it was urged before the Board that the petitioner was in possession of 112 Bighas only and not 129 Bighas and 3 Biswas as held by the lower courts.
He sought permission to adduce additional evidence in support of his contention.
The application for adducing additional evidence was disallowed.
However, the member of the Board came to the conclusion that Surendrapal Singh (appellant here in) was born to Raghubir Singh on 14th March, 1963 and was only 13 years of age when the ceiling proceedings were finalized by the Sub Divisional Officer on 5th May, 1976.
He further held that the provisions of the old ceiling law applied to the case but the Sub Divisional Officer had committed an error of law in determining the ceiling area under the new law i.e. the Act of 1973.
The Board went on to hold that there is no provision for separate units in Chapter III B of the Act of 1955.
In the ultimate analysis the Member of the Board found that there was a gross and patent illegality in the order of the Sub Divisional Officer and, consequently, set aside the order of the Sub Divisional Officer dated 5th May, 1976 as well as the order of the Appellate Authority dated 6th September, 1976 and remanded the case to the Sub Divisional Officer, Hanumangarh, for fresh determination of the calling area for Raghubir Singh.
Before the Division Bench of the High Court in the writ petitions it was urged on behalf of Raghubir Singh that no appeal having been filed by the State from the order the Sub Divisional Officer dated 5th May, 1976, the said order became final and the Board of Revenue had no jurisdiction to set aside that part of the Sub Divisional Officer 's order which had gone against the State and in his favour.
It was submitted that the power of general superintendence and control over all revenue courts vested in the Board could not be exercised to the detriment of the 726 writ petitioners much less by way of suo motu exercise of powers.
The High Court by the impugned judgment dated 19th July, 1979 upheld the order of the Board of Revenue for Rajasthan and dismissed the writ petitions.
Surendrapal Singh, the erstwhile minor son of Raghubir Singh has come up to this Court by way of special leave which was granted and hence the present appeal.
Mr. Subhagh Mal Jain learned senior counsel appearing on behalf of the appellant submitted that the State having not filed an appeal under section 225 of the Act of 1955 and or revision under Section 230 of the Act of 1955, the Board of the Revenue could not, while hearing the revision petition filed by Raghubir Singh, set aside the orders of Sub Divisional Officer and the revenue appellate authority under Section 221 of the Act of 1955.
Section 221 of the Act of 1955 provides as under: "221.Subordination of revenue courts.
The general superintendence and control over all revenue courts shall be vested in, an all such Courts shall be subordinate to the Board; and subject to such superintendence, control and subordination (a) x x x (omitted) (b) all Additional Collectors, Sub.
Divisional Officer, Assistant Collectors and Tehsildars in a district shall be subordinate to the Collector thereof, (c)all Assistant Collectors, Tehsildars and Naib Tehsildars in a sub division shall be subordinate to the Sub Divisional Officer thereof, and (d) All Additional Tehsildars and Naib Tehsildars in a tehsil shall be subordinate to the Tehsildar thereof.
" The contention of learned counsel for the appellant is that the section confers executive powers of superintendence and control on the Board and it does not vest any power of superintendence on the Board on judicial side.
For this purpose he relied or the decision of the Division Bench of the Rajasthan High Court reported as Karan Singh vs Board of Revenue, Rajasthan.
The Division 727 Bench in that case was concerned with the interpretation of Section 9 of the Land Revenue Act.
Section 9 whereof provides as under: "9 Subject to the other provisions of this Act, the general superintendence and control over all revenue courts and over all revenue officers shall be vested in, and all such Courts and Officers shall be subordinate to, the Board.
" In that case also the High Court took the view that it is not correct to say that Section 9 is limited to the executive control and superintendence of the Board over subordinate revenue courts and it does not apply to judicial proceedings.
The contention on behalf of the appellant to that effect was negatived but on merits the High Court held that it was not appropriate for the Board to exercise the powers conferred by Section 9 of the land Revenue Act in view of the fact that the Board had appellate jurisdiction and it could not, therefore, make use of its powers of superintendence and control and the order of the Board could not be held proper with reference to Section 9 of the Land Revenue Act.
This case has no application for interpretation of the present Section 221 of the Act of 1955.
Section 221 of the Act of 1955 is not subject to the other provisions of the Act.
It is clear from the language of Section 221 of the Act of 1955 that the Board of Revenue has general powers of superintendence and control over all revenue courts.
It is both administrative as well as judicial powers.
It is open to the Board to exercise its powers of superintendence on all its subordinate courts in order to regulate the functioning of ' the subordinate courts so as to keep them within their respective spheres of jurisdiction.
If the subordinate court disregards any specific provision of law and does something illegal it is open to the Board of Revenue to interfere and set the matter right.
A similar question arose before the Rajasthan High Court in Kana and others vs
Board of Revenue.
Rajasthan: ILR where the High Court had to construe the power of the Board of Revenue, Rajasthan, conferred on it by the Rajasthan Board of Revenue Ordinance (NO.XXII of 1949).
There also there was similar provision like Section 9 of the Land Revenue Act and it was held that Section 12 of the said Ordinance must be held to give powers to the Board to revise judicial orders also passed by courts in appropriate cases.
It was observed at page 63 of the report "of course, such powers would generally not be exercised where a party had remedy by way of appeal and revision, and did not avail of it.
At the same time, the power is there, and it may be exercised sparingly in extraordinary case,, where interest of justice requires that the Board should exercise the power".
Under Section 107 of the Government of India Act, 1955 there was provision of superintendence by High Court in these terms : 728 Each of the High Courts has superintendence over all the courts for the time being subject to its appellate jurisdiction.
" These words have been consistently interpreted to mean that the High Court had power in appropriate cases to interfere with the judicial orders of the courts.
Reference may in this connection be made to Parmessar Singh vs Kailaspati AIR 1916 Pat. 292 (F.B.).
In the Government of India Act of 1935, there was provision under Section 224 for superintendence by the High Courts ', but subsection(2) made it clear that this superintendence would not be construed as giving to the High Court any jurisdiction to question any judgment of any inferior court which was not otherwise subject to appeal or revision.
Section 221 of the Act of 1955 is similar to Section 107 of the Government of India Act, 1915 and there is no section like sub section (2) of Section 224 of the Government of India Act of 1935 in the Act of 1955.
Thus there is no restriction on the powers of the Board to set aside the order of the Sub Divisional Officer provided it comes to the conclusion that interest of justice requires exercise of such powers.
The Board noticed that there was no provision for separate unit in Chapter III B of tile Act of 1955 and the applicant Raghubir Singh and his son Surendrapal Singh constituted one unit and not two units and the case was remanded to Sub Divisional Officer, Hanumangarh, for de novo determination of the ceiling area for the appellant in law.
The High Court also did not go into the merits of the controversy nor we have thought it advisable to into it and it would be for the Sub Divisional Officer, Hanumangarh to decide it in the light of the observations of the Board.
It is clear from the judgment under appeal that the Board had by its order dated 14th April, 1975 directed that the ceiling, area may be determined according to old law i.e. Act of 1955 and it spite of it the Sub Divisional Officer committed the grave illegality on not merely ignoring the law but also ignoring the directions of the Board of Revenue itself.
The appeal consequently fails and is dismissed with costs.
U. R. Appeal dismissed.

Response:
Proceedings were commenced under Chapter III B of the Rajasthan Tenancy Act 1955 for determining the ceiling area for Raghubir Singh, the father of the appellant.
In a revision application in the first round of litigation.
The Board of Revenue directed that the ceiling area for Raghubir Singh may be determined according to the old law, i.e. Act of 1955, and not according to the Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973.
Thereafter, by his order dt.
5.5.76, the SDO held, inter alia, that tile father and the son, appellant, constituted two separate units and each of them was entitled to get 62 bighas and 8 biswas.
Aggrieved by the SDO 's order, Raghubir Singh filed an appeal before Revenue Appellate Authority, which was dismissed.
He then filed a revision application under S.230 of the Act of 1955 before the Board of Revenue for Rajasthan.
He urged that he was in possession of 112 bighas only and sought permission to adduce additional evidence, which was disallowed.
However, the Member of the Board held inter alia that the provisions of the old law applied to the case, but the SDO had committed an error of law in determining the ceiling area under the new Act of 1973.
The Board further held that there is no provision for separate units in Chapter III B of the Act of 1955, and remanded the case to the SDO, Hanumangarh, for fresh determination of the Ceiling area for Raghubir Singh.
Before the High Court, it was urged that the State having not appealed against the order of the SDO dated 5.5.76, it became final, and the Board of 723 Revenue had no jurisdiction to set aside that part of the SDO 's order which had gone against the State and in his favour.
It was submitted that the power of general superintendence and control over all revenue courts which vested in the Board could not be exercised to the detriment of the writ petitioners much less by way of suo motu exercise of powers.
The High Court dismissed the petitions.
Before this court it was submitted that the State not having filed an appeal, or a revision, the Board of Revenue could not, while hearing the revision petition of Raghubir Singh, set aside the orders of the SDO and Revenue Appellate Authority under S.221 of the Act of 1955.
Dismissing the appeal, this court, HELD:. .(1) S.221 is not subject to the other provisions of the Act.
It is clear from the language of Section 221 of the Act 1955 that the Board of Revenue has general powers of superintendence and control over all revenue courts.
It is both administrative as well as judicial powers.
It is open to the Board to exercise its powers of superintendence on all its subordinate courts in order to regulate the functioning of the subordinate courts so as to keep them within their respective spheres of jurisdiction.
If the subordinate court disregards any specific provision of law and does something illegal it is open to the Board of Revenue to interfere and set the matter right.
(727 E) Karan Singh vs Board of revenue, Rajasthan and Permessar Singh vs Kailaspati AIR 1916 Pat. 292 (FB), distinguished.
Kana vs Board of Revenue ILR , approved.
(2) There is no restriction on the powers of the Board to set aside the order of the SDO provided it comes to the conclusion that interest of justice requires exercise of such powers.
(728 D) (3) In not determining the ceiling area according to the Act of 1955, the SDO committed a grave illegality in not merely ignoring the law but also ignoring the directions of the Board of Revenue itself.
(728 F) 724