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Mohd. Shaukat Hussain Khan Vs. State of Andhra Pradesh

and a half times family holding. Under sub-section (2) of Section 4 the kabiz-e-kadim shall be entitled to compensation from the Government as provided for under the Abolition Act in respect of Inam lands, in his possession in excess of the limit specified in sub-section (1) whether cultivated or not. Section 12 of the Abolition Act provides for determination of compensation payable to the inamdar and provides thus :"The compensation payable to the inamdar for the inams abolished under Section 3 shall be the aggregate of the sums specified below : -(i) in respect of inam lands registered in the name of the inamdar and kabiz-e-kadim under Sections 4 and 5, a sum equal to twenty times the difference between land revenue and judi or quit-rent;(ii) in respect of income accruing to the inamdar from the lands registered in the names of his permanent tenant, protected tenant and non-protected tenant a sum equal to sixty per cent of the premium charged as the case may be, under Sections 6, 7 and 8."13. Section 2 (1-b) of the Andhra Pradesh Land Revenue Act 8 of 1317 fasli defines land as including all kinds of benefits pertaining to land, or things attached to the earth, or permanently fastened to things attached to the earth and also includes shares in, or charges on, the revenue or rent which are or may be levied on villages, or other defined areas.14.A combined reading of the provisions of the Abolition Act with the Andhra Pradesh Land Revenue Act shows that the Legislature had by abolishing inams intended to abolish all rights vested in the inam lands which had been granted to the inamdar.The right to tap or derive benefit from trees standing on the lands is a right appurtenant to the lands because a thing attached to the land is itself a part of the land and is immovable property. Haque Malkana which is the right in trees is therefore a right appurtenant to the land so that when any inam land vests in the Government the right to tap tress standing on the land also vests in the Government. There cannot be any separation of these rights when the tree is still part of the land. There can be no doubt that no publication of the notification under sub-section (1) of Section 3 of the Abolition Act all inams were abolished and vested in the State. The inams which were so abolished and vested in the State include in it all rights, title and interest in the inams by virtue of Clause (b) of sub-section (2) of Section 3 of the Abolition Act. Such rights as are intended to be saved are those that are saved by the express provisions contained in the Abolition Act. It is, therefore, clear that all rights, title and interest vesting in the Inamdar would include the Abkari rights in the tress. This conclusion of ours is supported by the definition land in Section 2 (1-b) of the Andhra Pradesh Land Revenue Act which has to be imported into the definition of inam land and which includes any rights in or over such property or benefits accruing from the land or things attached to the land and will also include shares in the charges on the revenue or rent.15. This Court had in State of Bihar v, Rameshwar Pratap Narain Singh, (1962) 2 SCR 382 = (AIR 1961 SC 1649 ) while dealing with the validity of the Bihar Land Reforms Amendment Act of 1959 considered the question whether the right of a proprietor of an estate to hold a mela on his own land was a right in the estate, and held that "the right to hold a Mela has always been considered in this country to be an interest in land, an interest which the owner of the land can transfer to another along with the land or without the land. There can be no doubt therefore that the right of the proprietor of an estate to hold a Mela on his own land is right in the "estate being appurtenant to his ownership of the land." Under sub-section (1) of Section 3 of the Abolition Act vesting of the inams is notwithstanding any judgment, decree or order of a Civil, Revenue or Atiyat Court. In other words, notwithstanding anything in the Muntakhab all the inams to which the Abolition Act is made applicable shall be deemed to have been abolished and shall vest in the State with effect from the date of vesting.16. We have noticed already that the inam granted to the appellant under the Muntakhab is with "all sources of income" i.e. Ba-Hama-Abwab which rights are not granted independently of the Maktha or inam land but are granted as part of the inam land so that when inam land vests, the rights which the inamdar had in the land including Hama Abwab i.e. Abkari rights also vest in the State. On this conclusion it is clear the the Abkari rights being part of the inam and having vested in the State, the compensation that is payable under Section 12 of the Abolition Act is inclusive of the Abkari rights. As the abolition of inams is a legislation intended to give effect to agrarian reforms by making the land available to persons who have no lands, compensation provided for under S. 12 cannot be challenged. The scheme of compensation under the Abolition Act is that four and a half times the family holding is to be retained by the inamdar and in respect of the rest of it a patta is given to the tenants which even with respect to them, along with any lands they own and cultivate personally, be equal to four and a half times the family holding. If after providing for these two items there remains any balance left the Government is required to pay compensation whether to the inamdar or to the tenants who have excess of land in their possession.

0[ds]e entire case of the appellant, therefore, rests on two short submissions, namely, (1) that the striking down of Act 9 of 1967 by the High Court of Andhra Pradesh against which there has been no appeal to this Court and the withdrawal of writ petition No. 78 of 1969 filed in this Court would not receive the Abolition Act, and if they are revived, the abkari rights which are not a part of the inam rights are not touched by the provisions of the Act. Alternatively, even if the provisions of the revived Acts deal with such rights, though these rights are separate rights, compensation ought to have been provided for separately and since this has not been done the law is violative of Article 31 (2) of thethe first question Section 2(1) (c) of the Abolition Act defines inam as meaning land held under a gift or a grant made by the Nizam or by any Jagirdar, holder of a Samsthan or other competent grantor and continued or confirmed by virtue of a muntakhab or other title deed, with or without the condition of service and coupled with the remission of the whole or part of the land revenue thereon and entered as such in the village records and includes - (1) arasi makhta, arasi agrahar and sari inam; and (ii) lands held as inam by virtue of long possession and entered as inam in the village records. "Inamdar" under Section 2(1) (d) of the Abolition Act means a person holding an inam or a share therein, either for his own benefit or in trust and includes the successor-in-interest of an inamdar etc. Under sub-section (2) of Section 2 words and expressions used in this Act (Abolition Act 8 of 1955) but not defined therein shall have the meaning assigned to them in the Land Revenue Act, 1317, Fasli, the Hyderabad Tenancy and Agricultural Lands Act, 1950, and the Hyderabad Atiyat Enquiries Act, 1952 and the rules thereunder. The provisions whereunder the inam has been abolished in so far as they are relevant in this case, are sub-section (1) of Sections 3 which provides that notwithstanding anything to the contrary contained in any usge, settlement, contract, grant, sanad, order or other instrument, Act, regulation, rules or order having the force of law and notwithstanding any judgment, decree or order of a Civil, Revenue or Atiyat Court, and with effect from the date of vesting, all inams to which this Act is made applicable under sub-section (2) of Section 1 of this Act shall be deemed to have been abolished and shall vest in the State.Section 2 (1-b) of the Andhra Pradesh Land Revenue Act 8 of 1317 fasli defines land as including all kinds of benefits pertaining to land, or things attached to the earth, or permanently fastened to things attached to the earth and also includes shares in, or charges on, the revenue or rent which are or may be levied on villages, or other defined areas.14.A combined reading of the provisions of the Abolition Act with the Andhra Pradesh Land Revenue Act shows that the Legislature had by abolishing inams intended to abolish all rights vested in the inam lands which had been granted to the inamdar.The right to tap or derive benefit from trees standing on the lands is a right appurtenant to the lands because a thing attached to the land is itself a part of the land and is immovable property. Haque Malkana which is the right in trees is therefore a right appurtenant to the land so that when any inam land vests in the Government the right to tap tress standing on the land also vests in the Government. There cannot be any separation of these rights when the tree is still part of the land. There can be no doubt that no publication of the notification under sub-section (1) of Section 3 of the Abolition Act all inams were abolished and vested in the State. The inams which were so abolished and vested in the State include in it all rights, title and interest in the inams by virtue of Clause (b) of sub-section (2) of Section 3 of the Abolition Act. Such rights as are intended to be saved are those that are saved by the express provisions contained in the Abolition Act. It is, therefore, clear that all rights, title and interest vesting in the Inamdar would include the Abkari rights in the tress. This conclusion of ours is supported by the definition land in Section 2 (1-b) of the Andhra Pradesh Land Revenue Act which has to be imported into the definition of inam land and which includes any rights in or over such property or benefits accruing from the land or things attached to the land and will also include shares in the charges on the revenue or rent.We have noticed already that the inam granted to the appellant under the Muntakhab is with "all sources of income" i.e. Ba-Hama-Abwab which rights are not granted independently of the Maktha or inam land but are granted as part of the inam land so that when inam land vests, the rights which the inamdar had in the land including Hama Abwab i.e. Abkari rights also vest in the State. On this conclusion it is clear the the Abkari rights being part of the inam and having vested in the State, the compensation that is payable under Section 12 of the Abolition Act is inclusive of the Abkari rights. As the abolition of inams is a legislation intended to give effect to agrarian reforms by making the land available to persons who have no lands, compensation provided for under S. 12 cannot be challenged. The scheme of compensation under the Abolition Act is that four and a half times the family holding is to be retained by the inamdar and in respect of the rest of it a patta is given to the tenants which even with respect to them, along with any lands they own and cultivate personally, be equal to four and a half times the family holding. If after providing for these two items there remains any balance left the Government is required to pay compensation whether to the inamdar or to the tenants who have excess of land in theirthese submissions, as has been noticed already, were rejected by both the Courts. It may however be mentioned that when the appeal against the judgment of the High Court of Andhra Pradesh was pending in this Court, the Andhra Pradesh Legislature passed the Andhra Pradesh (Telangana Area) Abolition of Inams Act 9 of 1967 repealing the earlier Abolition Act 8 of 1955 as amended by Act 10 of 1956 and vesting all the inams in the Government from July 20, 1955. A writ petition (W. P. No. 78 of 1969) was filed in this Court challenging the validity of Act 9 of 1967. During the pendency of these proceedings in this Court, several writ petitions were also filed in the High Court of Andhra Pradesh challenging the validity of Act 9 of 1967. That Court by its judgment dated March 31, 1970 held all the provisions of Act 9 of 1967 to be invalid and accordingly struck down the entire Act. The state however did not appeal against the said judgment. It may also be mentioned that the State of Andhra Pradesh published a notification on October 20, 1973 under Section 1(3)(b) of the Abolition Act by which all the provisions of that Act and in particular the sections relating to compensation, namely, Sections 12, 13, 14 and 16 were enforced from November 1, 1973. It is stated before us that in view of this position, the appellant withdrew his writ petition No. 78 of 1969 which was dismissed as infructuous so that the present appeal is the only one that has now to bethe first contention it may be observed that this Court in B. Shankara Rao Badami v. State of Mysore, (1969) 3 SCR 1 = (AIR 1969 SC 453 ) pointed out that where the petitioners villages were vested in the State of Mysore under section 1(4) of the Mysore under Section 1(4) ofthe Mysore (Personal and Miscellaneous) Inams Abolition Act, 1954, and it was contended that the compensation provided by the Mysore Act was not the market value of the property at the time of acquisition there was a violation of Article 31 (2) and secondly the Mysore Act was beyond the legislative competence of the Mysore Legislature under Entry 36 of List II and Entry 42 of List III to the Seventh Schedule as the Entries stood before the Seventh Amendment of the Constitution, because (i) the existence of public purpose and the obligation to pay compensation are necessary concomitants of compulsory acquisition of property, and so, the term acquisition must be construed as importing by necessary implication the two conditions of public purpose and payment of adequate compensation, and (ii) the words subject to the provisions of Entry 42, List III in Entry 36 of List II reinforce the argument that a law with respect to acquisition of property made under Entry 36 should be exercised subject to therestriction as to public purpose and payment of compensation both of which are referred to in Entry 42, List III, it was held by this Court that the legislation was undertaken as part of agrarian reform which the Mysore State Legislature proposed to bring about in the State. Therefore, the impugned Mysore Act was a law providing for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of such rights as contemplated by Article 31A and hence, the impugned Act was protected from attack in any Court on the ground that it contravened Art. 31(2). Secondly, it was also held that the entries in the Lists of the Seventh Schedule were designated to define and delimit the respective areas of legislative competence of the Union and State Legislatures and the principle of the maxim expressum facit cessere tacitum makes it inappropriate to treat the obligation to pay compensation as implict in Entry 33 of List I or Entry 36 of List II when it is separately and expressly provided for in Article 31(2). Thirdly, the words subject to the provisions of Entry 42 of List III mean no more than that any law made under Entry 36 by a State Legislature can be displaced or overriden, by the Union Legislature making a law under Entry 42 of List III. If the restrictive condition as to public purpose and payment of compensation are to be derived from those words, their absence in Entry 33 of List I leads to the unreasonable inference that Parliament can make law authorising acquisition of property without a public purpose and without a provision for compensation. The true inference is that the power to make a law, belonging both to Parliament and State Legislatures, can be exercised subject to the two restrictions not by reason of anything contained in the legislative entries but by reason of the positive provisions in Article 31(2). But as legislation falling within Article 31A cannot be called in question in a court forwith those provisions in Article 31(2) such legislation cannot be struck down as unconstitutional and void. In view of this decision, the question of lack of legislative competence was not pressed.On the main question whetherthe impugned Acts were revived by reason of the High Court of Andhra Pradesh striking down Act 9 of 1967, a perusal of that judgment would show that the Division Bench considered the question and held that as the inam lands had already vested in the Government on July 20, 1955, there was no need to abolish inams which already stood abolished long before the date when the impugned Act, namely, Act 9 of 1967, wasenacted. The right to patta having been acquired, the only purpose behind the impugned Act 9 of 1967 was to deprive the inamdars of their compensation, and to deny the payment of compensation to the inamders and others who were entitled to the same under the repealed Act. After stating thus, the Division Bench further observedresult of the above said analysis is that on the date when the impugned Act was made, there was neither any estate which could be abolished nor there was any necessity to effect any agrarian reform in so far as inams were concerned had already been done under the Act repealed (sic). If the Government did not choose to implement the Act for nine months and then preferred to postpone the payment of compensation or grant of patta that would hardly alter the position. The effect of the impugned Act in pith and substance is really not agrarian reform but to destroy the rights of the inamdars and others who were assured compensation under the repealed Act. Thus the Act although pretends to enact a law relating to agrarian reform in spirit and in effect it is a device to deprive the inamdars and other persons of their acquired rights under the repealedstriking down of Act 9 of 1967 must be construed in the light of the reasoning given by the learned Judges of the Division Bench of the Andhra Pradesh High Court that the Abolition Act 8 of 1955 and the Amendment Act 10 of 1956 had already achieved the result which Act 9 of 1967 was intended to achieve, and once the inams had already vested in the Government, compensation had to be paid in accordance with the terms of those laws and cannot again beby vesting the inams which had already vested as if they had not already vested in the Government. This postulates the existence of the Acts impugned before us as a ground for striking down Act 9 of 1967, so that when the High Court says that the latter Act 9 of 1967 is void it could not have intended to say that even the Acts now impugned before us did not revive. What the Court implied by declaring Act 9 of 1967 void is that it as non est and that no such law could be passed in respect of a subject matter which has already vested in the Government; see Deep Chand v. State of Uttar Pradesh 1959 Supp (2) SCC 8 = (AIR 1959 SC 648 ). If so Act 8 of 1955 as amended by Act 10 of 1956 have been held to be in force and that compensation was to be paid in accordancethat case the Ministry of Home Affairs by a resolution in 1950 had declared reservation in favour of scheduled castes and tribes and had made a rule in 1952 for carry forward, whereby the unfilled reserved vacancies of a particular year would be carried forward for one year only. In 1955 the above rule was substituted by another rule providing that the unfilled reserved vacancies of a particular year would be carried forward for two years. The Court held that when the 1952 carry forward rule was substituted by another rule in 1955, the former rule ceased to exist when 1955 rule was declared unconstitutional in T. Devadasan v. Union of India, AIR 1964 SC 179 as such there was no carry forward rule in existence in 1960. In these circumstances the question that was considered was whether the carry forward rule of 1952 could still be said to exist. This court took the view that the carry forward rule of 1952 having been substituted by the carry forward rule of 1955, the former rule clearly ceased to exist because its place was taken by the carry forward rule of 1955. Thus by promulgating the new carry forward rule of 1955, the Government of India itself cancelled the carry forward rule of 1952. Therefore, when this Court struck down the carry forward rule as modified in 1955 that did not mean that the carry forward rule of 1952 which had already ceased to exist, because the Government of India cancelled it and had substituted a modified rule in 1955 in its place, could revive.In the case before us it has attempted to do something which the Legislature could not do namely to abolish inams which did not exist and which had already vested in the Government and which the Legislature could not abolish again. In these circumstances, the repeal of an enactment, which had already been given effect was a device for depriving the inamdars whose rights had been abolished, of their right of compensation, and was accordingly struck down as stillborn, null and void, as such unconstitutional from its inception and cannot have the effect as if it had repealed the previous Acts. On this analysis the provisions of Act 8 of 1955 as amended by Act 10 of 1956 could not be held to have been repealed at all, and therefore they are ine first question Section 2(1) (c) of the Abolition Act defines inam as meaning land held under a gift or a grant made by the Nizam or by any Jagirdar, holder of a Samsthan or other competent grantor and continued or confirmed by virtue of a muntakhab or other title deed, with or without the condition of service and coupled with the remission of the whole or part of the land revenue thereon and entered as such in the village records and includes(1) arasi makhta, arasi agrahar and sari inam; and (ii) lands held as inam by virtue of long possession and entered as inam in the village records. "Inamdar" under Section 2(1) (d) of the Abolition Act means a person holding an inam or a share therein, either for his own benefit or in trust and includes theof an inamdar etc. Under(2) of Section 2 words and expressions used in this Act (Abolition Act 8 of 1955) but not defined therein shall have the meaning assigned to them in the Land Revenue Act, 1317, Fasli, the Hyderabad Tenancy and Agricultural Lands Act, 1950, and the Hyderabad Atiyat Enquiries Act, 1952 and the rules thereunder. The provisions whereunder the inam has been abolished in so far as they are relevant in this case, are(1) of Sections 3 which provides that notwithstanding anything to the contrary contained in any usge, settlement, contract, grant, sanad, order or other instrument, Act, regulation, rules or order having the force of law and notwithstanding any judgment, decree or order of a Civil, Revenue or Atiyat Court, and with effect from the date of vesting, all inams to which this Act is made applicable under(2) of Section 1 of this Act shall be deemed to have been abolished and shall vest in thecombined reading of the provisions of the Abolition Act with the Andhra Pradesh Land Revenue Act shows that the Legislature had by abolishing inams intended to abolish all rights vested in the inam lands which had been granted to the inamdar.The right to tap or derive benefit from trees standing on the lands is a right appurtenant to the lands because a thing attached to the land is itself a part of the land and is immovable property. Haque Malkana which is the right in trees is therefore a right appurtenant to the land so that when any inam land vests in the Government the right to tap tress standing on the land also vests in the Government. There cannot be any separation of these rights when the tree is still part of the land. There can be no doubt that no publication of the notification under(1) of Section 3 of the Abolition Act all inams were abolished and vested in the State. The inams which were so abolished and vested in the State include in it all rights, title and interest in the inams by virtue of Clause (b) of(2) of Section 3 of the Abolition Act. Such rights as are intended to be saved are those that are saved by the express provisions contained in the Abolition Act. It is, therefore, clear that all rights, title and interest vesting in the Inamdar would include the Abkari rights in the tress. This conclusion of ours is supported by the definition land in Section 2of the Andhra Pradesh Land Revenue Act which has to be imported into the definition of inam land and which includes any rights in or over such property or benefits accruing from the land or things attached to the land and will also include shares in the charges on the revenue or rent.This Court had in State of Bihar v, Rameshwar Pratap Narain Singh, (1962) 2 SCR 382 = (AIR 1961 SC 1649 ) while dealing with the validity of the Bihar Land Reforms Amendment Act of 1959 considered the question whether the right of a proprietor of an estate to hold a mela on his own land was a right in the estate, and held that "the right to hold a Mela has always been considered in this country to be an interest in land, an interest which the owner of the land can transfer to another along with the land or without the land. There can be no doubt therefore that the right of the proprietor of an estate to hold a Mela on his own land is right in the "estate being appurtenant to his ownership of the land." Under(1) of Section 3 of the Abolition Act vesting of the inams is notwithstanding any judgment, decree or order of a Civil, Revenue or Atiyat Court. In other words, notwithstanding anything in the Muntakhab all the inams to which the Abolition Act is made applicable shall be deemed to have been abolished and shall vest in the State with effect from the date of vesting.16.We have noticed already that the inam granted to the appellant under the Muntakhab is with "all sources of income" i.e.which rights are not granted independently of the Maktha or inam land but are granted as part of the inam land so that when inam land vests, the rights which the inamdar had in the land including Hama Abwab i.e. Abkari rights also vest in the State. On this conclusion it is clear the the Abkari rights being part of the inam and having vested in the State, the compensation that is payable under Section 12 of the Abolition Act is inclusive of the Abkari rights. As the abolition of inams is a legislation intended to give effect to agrarian reforms by making the land available to persons who have no lands, compensation provided for under S. 12 cannot be challenged. The scheme of compensation under the Abolition Act is that four and a half times the family holding is to be retained by the inamdar and in respect of the rest of it a patta is given to the tenants which even with respect to them, along with any lands they own and cultivate personally, be equal to four and a half times the family holding. If after providing for these two items there remains any balance left the Government is required to pay compensation whether to the inamdar or to the tenants who have excess of land in their

### Instruction: Evaluate the case proceeding to forecast the court's decision (1 for yes, 0 for no), and elucidate the reasoning behind this prediction with important textual evidence from the case. ### Input: and a half times family holding. Under sub-section (2) of Section 4 the kabiz-e-kadim shall be entitled to compensation from the Government as provided for under the Abolition Act in respect of Inam lands, in his possession in excess of the limit specified in sub-section (1) whether cultivated or not. Section 12 of the Abolition Act provides for determination of compensation payable to the inamdar and provides thus :"The compensation payable to the inamdar for the inams abolished under Section 3 shall be the aggregate of the sums specified below : -(i) in respect of inam lands registered in the name of the inamdar and kabiz-e-kadim under Sections 4 and 5, a sum equal to twenty times the difference between land revenue and judi or quit-rent;(ii) in respect of income accruing to the inamdar from the lands registered in the names of his permanent tenant, protected tenant and non-protected tenant a sum equal to sixty per cent of the premium charged as the case may be, under Sections 6, 7 and 8."13. Section 2 (1-b) of the Andhra Pradesh Land Revenue Act 8 of 1317 fasli defines land as including all kinds of benefits pertaining to land, or things attached to the earth, or permanently fastened to things attached to the earth and also includes shares in, or charges on, the revenue or rent which are or may be levied on villages, or other defined areas.14.A combined reading of the provisions of the Abolition Act with the Andhra Pradesh Land Revenue Act shows that the Legislature had by abolishing inams intended to abolish all rights vested in the inam lands which had been granted to the inamdar.The right to tap or derive benefit from trees standing on the lands is a right appurtenant to the lands because a thing attached to the land is itself a part of the land and is immovable property. Haque Malkana which is the right in trees is therefore a right appurtenant to the land so that when any inam land vests in the Government the right to tap tress standing on the land also vests in the Government. There cannot be any separation of these rights when the tree is still part of the land. There can be no doubt that no publication of the notification under sub-section (1) of Section 3 of the Abolition Act all inams were abolished and vested in the State. The inams which were so abolished and vested in the State include in it all rights, title and interest in the inams by virtue of Clause (b) of sub-section (2) of Section 3 of the Abolition Act. Such rights as are intended to be saved are those that are saved by the express provisions contained in the Abolition Act. It is, therefore, clear that all rights, title and interest vesting in the Inamdar would include the Abkari rights in the tress. This conclusion of ours is supported by the definition land in Section 2 (1-b) of the Andhra Pradesh Land Revenue Act which has to be imported into the definition of inam land and which includes any rights in or over such property or benefits accruing from the land or things attached to the land and will also include shares in the charges on the revenue or rent.15. This Court had in State of Bihar v, Rameshwar Pratap Narain Singh, (1962) 2 SCR 382 = (AIR 1961 SC 1649 ) while dealing with the validity of the Bihar Land Reforms Amendment Act of 1959 considered the question whether the right of a proprietor of an estate to hold a mela on his own land was a right in the estate, and held that "the right to hold a Mela has always been considered in this country to be an interest in land, an interest which the owner of the land can transfer to another along with the land or without the land. There can be no doubt therefore that the right of the proprietor of an estate to hold a Mela on his own land is right in the "estate being appurtenant to his ownership of the land." Under sub-section (1) of Section 3 of the Abolition Act vesting of the inams is notwithstanding any judgment, decree or order of a Civil, Revenue or Atiyat Court. In other words, notwithstanding anything in the Muntakhab all the inams to which the Abolition Act is made applicable shall be deemed to have been abolished and shall vest in the State with effect from the date of vesting.16. We have noticed already that the inam granted to the appellant under the Muntakhab is with "all sources of income" i.e. Ba-Hama-Abwab which rights are not granted independently of the Maktha or inam land but are granted as part of the inam land so that when inam land vests, the rights which the inamdar had in the land including Hama Abwab i.e. Abkari rights also vest in the State. On this conclusion it is clear the the Abkari rights being part of the inam and having vested in the State, the compensation that is payable under Section 12 of the Abolition Act is inclusive of the Abkari rights. As the abolition of inams is a legislation intended to give effect to agrarian reforms by making the land available to persons who have no lands, compensation provided for under S. 12 cannot be challenged. The scheme of compensation under the Abolition Act is that four and a half times the family holding is to be retained by the inamdar and in respect of the rest of it a patta is given to the tenants which even with respect to them, along with any lands they own and cultivate personally, be equal to four and a half times the family holding. If after providing for these two items there remains any balance left the Government is required to pay compensation whether to the inamdar or to the tenants who have excess of land in their possession. ### Response: 0 ### Explanation: deed, with or without the condition of service and coupled with the remission of the whole or part of the land revenue thereon and entered as such in the village records and includes(1) arasi makhta, arasi agrahar and sari inam; and (ii) lands held as inam by virtue of long possession and entered as inam in the village records. "Inamdar" under Section 2(1) (d) of the Abolition Act means a person holding an inam or a share therein, either for his own benefit or in trust and includes theof an inamdar etc. Under(2) of Section 2 words and expressions used in this Act (Abolition Act 8 of 1955) but not defined therein shall have the meaning assigned to them in the Land Revenue Act, 1317, Fasli, the Hyderabad Tenancy and Agricultural Lands Act, 1950, and the Hyderabad Atiyat Enquiries Act, 1952 and the rules thereunder. The provisions whereunder the inam has been abolished in so far as they are relevant in this case, are(1) of Sections 3 which provides that notwithstanding anything to the contrary contained in any usge, settlement, contract, grant, sanad, order or other instrument, Act, regulation, rules or order having the force of law and notwithstanding any judgment, decree or order of a Civil, Revenue or Atiyat Court, and with effect from the date of vesting, all inams to which this Act is made applicable under(2) of Section 1 of this Act shall be deemed to have been abolished and shall vest in thecombined reading of the provisions of the Abolition Act with the Andhra Pradesh Land Revenue Act shows that the Legislature had by abolishing inams intended to abolish all rights vested in the inam lands which had been granted to the inamdar.The right to tap or derive benefit from trees standing on the lands is a right appurtenant to the lands because a thing attached to the land is itself a part of the land and is immovable property. Haque Malkana which is the right in trees is therefore a right appurtenant to the land so that when any inam land vests in the Government the right to tap tress standing on the land also vests in the Government. There cannot be any separation of these rights when the tree is still part of the land. There can be no doubt that no publication of the notification under(1) of Section 3 of the Abolition Act all inams were abolished and vested in the State. The inams which were so abolished and vested in the State include in it all rights, title and interest in the inams by virtue of Clause (b) of(2) of Section 3 of the Abolition Act. Such rights as are intended to be saved are those that are saved by the express provisions contained in the Abolition Act. It is, therefore, clear that all rights, title and interest vesting in the Inamdar would include the Abkari rights in the tress. This conclusion of ours is supported by the definition land in Section 2of the Andhra Pradesh Land Revenue Act which has to be imported into the definition of inam land and which includes any rights in or over such property or benefits accruing from the land or things attached to the land and will also include shares in the charges on the revenue or rent.This Court had in State of Bihar v, Rameshwar Pratap Narain Singh, (1962) 2 SCR 382 = (AIR 1961 SC 1649 ) while dealing with the validity of the Bihar Land Reforms Amendment Act of 1959 considered the question whether the right of a proprietor of an estate to hold a mela on his own land was a right in the estate, and held that "the right to hold a Mela has always been considered in this country to be an interest in land, an interest which the owner of the land can transfer to another along with the land or without the land. There can be no doubt therefore that the right of the proprietor of an estate to hold a Mela on his own land is right in the "estate being appurtenant to his ownership of the land." Under(1) of Section 3 of the Abolition Act vesting of the inams is notwithstanding any judgment, decree or order of a Civil, Revenue or Atiyat Court. In other words, notwithstanding anything in the Muntakhab all the inams to which the Abolition Act is made applicable shall be deemed to have been abolished and shall vest in the State with effect from the date of vesting.16.We have noticed already that the inam granted to the appellant under the Muntakhab is with "all sources of income" i.e.which rights are not granted independently of the Maktha or inam land but are granted as part of the inam land so that when inam land vests, the rights which the inamdar had in the land including Hama Abwab i.e. Abkari rights also vest in the State. On this conclusion it is clear the the Abkari rights being part of the inam and having vested in the State, the compensation that is payable under Section 12 of the Abolition Act is inclusive of the Abkari rights. As the abolition of inams is a legislation intended to give effect to agrarian reforms by making the land available to persons who have no lands, compensation provided for under S. 12 cannot be challenged. The scheme of compensation under the Abolition Act is that four and a half times the family holding is to be retained by the inamdar and in respect of the rest of it a patta is given to the tenants which even with respect to them, along with any lands they own and cultivate personally, be equal to four and a half times the family holding. If after providing for these two items there remains any balance left the Government is required to pay compensation whether to the inamdar or to the tenants who have excess of land in their

M/s. Vrajlal Manilal & Company & Others Vs. State of Madhya Pradesh & Others

are sold to merchants would create difficulties in effectively implementing the intended monopoly in their trade or that such free movement would make checking of illegitimate transactions in the leaves difficult. But then it is difficult to conceive of a monopoly in this particular commodity, as in others without any likely loopholes whatsoever. Can the State, therefore, to plug all such loopholes pass a measure which, according to the appellants, imposes unreasonable restrictions which results in stultifying their business? There is a strong school of thought which believes that monistic tendencies in economics spell stagnation and their pluralism is as much desirable in economics as in politics and other fields of life. That may or may not be correct but take the present case as an illustration. According to the appellants, they manufacture as many as 1 1/2 crores of bidis a day. They have established a net-work of branches in several areas of the State. Whenever they purchase the leaves they have to be moved to their warehouses outside and from there to their branches and then to the sattedars who undertake to have bidis rolled through mazdoors to whom they in turn distribute tabacco and these leaves supplied to them by the appellants. Even according to the Divisions Forest Officer there were as many as 6 or 7 thousand sattedars in Saugor district alone with whom manufacturers of bidis had contracts as mentioned above. The number of mazdoors whom these sattedars employ for rolling bidis would certainly be considerable. We were told that practically every household in villages scattered from one another engages itself in bidi-rolling labour. It is also conceivable that in some of the households, not only the adults but the minors also would be engaged in this work. If the movement of leaves from stage to stage were to be so regulated as to require permits at each stage it is not difficult to imagine that considerable inconvenience to all engaged in the business of manufacturing bidis would inevitably ensue. The correspondence on record shows that at one time even the Divisional Forest Officer was of the view that if would be impossible for the staff under him to cope with the work of issuing permits at each stage of the movement of the leaves and therefore permitted the branch managers of the appellants to issue permits when leaves were moved from their branches to sattedars. That relaxation was, however, cancelled as in his view the branch managers began to move the leaves in bulk contrary to his intention in granting that relaxation.12. In spite however, of the inconvenience which such a system might result in, there can at the same time be little doubt, and even Mr. Sen agreed, that some kind of check on movement is necessary, for, without it the monopoly created by the Act wold not effectively function. In our view a permit system which regulates the movement of leaves purchased by a manufacturer of bidis from the unit where they are purchased to his warehouse, then to the branches and to the sattedars cannot upto that stage be regarded as unreasonable in the light of the object of the Act, the economic conditions prevailing in the State and the mischief which it seeks to cure. At the same time to expect the manufacturer to get permits issued to his sattedars for distribution by them to the innumerable mazdoors of comparatively small quantities of these leaves would be not only unreasonable but frustrating. The various checks imposed under the rules on the manufacturer by way of his having to maintain stock registers, submit periodical returns, the right of inspection of the authorities etc. are sufficient to reasonably check transactions contrary to the Act. But, considering the extraordinary inconvenience which would be caused to the manufacturer and balancing that with the mischief feared by the State, we think that when Section 5 was enacted the legislature could not have intended that the manufacturer should also obtain permits in respect of the leaves distributed to the vast number of mazdoors for rolling the bidis by the satedars who are themselves considerable in number. Though, therefore, Section 5 is couched in apparently wide language, the very object of the Act, as disclosed in its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at first reading of the section appear.13.In our view reading Section 5 (2), along with R. 9 of the said rules, what they are intended to require is that a manufacturer must have a permit to move the leaves purchased by him from the unit or units where he has purchased them to his warehouse outside and from there to his branches and also when he transports them to his sattedars. But, no such permit was intended to be necessary when the leaves are distributed for the manufacture of bidis by these sattedars to the mazdoors whom he employs. A construction so limited in its sweep is commendable as it is consistent with the object of the Act and is also in harmony with Cls. (5) and (6) of the Art. 19 and Cl. (b) of Art. 304.Regarding the ban against movement of old leaves contained in the order dated June 4, 1965, there can be no difficulty as it is conceded that old leaves in the context mean those which were in stock when these rules came into force and not the balance of leaves left unconsumed from year to year.So construed, the restrictions against free transport cannot be held to be unreasonable and the validity of Section 5 and rule 9 as also the order of June 4, 1965, except to the extent of its requiring a permit for distribution to the mazdoors, cannot be successfully challenged. So far as the order dated October 12, 1965 is concerned, it was a mere cancellation of a concession and such cancellation cannot be challenged as a restriction, much less as an unreasonable restriction.

0[ds]7. These elaborate provisions in conjunction with the provisions of Section 5 indicate the extreme jealosy of the draftsman not to leave any loopholes in the net-work of control enabling anyone to possess these leaves by illegitimate acquisition or their being smuggled out in violation of these provisions from out of the units where they are grown of from the place where they are warehoused after their purchase. It is clear from Section (2) (b), the rules and the said forms that the intention underlying them all is to prohibit, except under permit, the movement of leaves from the units where they are purchased to any place outside either for storing them or for their consumption in the manufacture of bidis or for exporting them outside the State. The elaborate treatment and the clarity of the language of these previsions make the argument, that they were intended to restrict only the movement from the purchasing unit to the place of storage and that the leaves would be free for subsequent movement, impossible. The first limb of Mr. Sens argument consequently cannot beour opinion, the said expression should be construed to mean the law relating to the monopoly in its absolutely essential features. If a law is passed creating a State monopoly, the Court should enquire what are the provisions of the said law which are basically and essentially necessary for creating the State monopoly. It is only those essential and basic provisions which are protected by the latter part of Article 19 (6). If there are other provisions made by the Act which are subsidiary, incidental or helpful to the operation of the monopoly, they do not fall under the said part and their validity must be judged under the first part of Article 19 (6). In other words, the effect of the amendment made in Article 19 (6) is to protect the law relating to the creation of monopoly and that means that it is only the provisions of the law which are integrally and essentially connected with the creation of the monopoly that are protected. The rest of the provisions which may be incidental do not fall under the latter part of Art. 19 (6) and would inevitably have to satisfy the test of the first part of Article 19 (6)."In that case Sections 3 and 4 of the Orissa Act were challenged on the ground that the monopolistic rights to purchase kendu leaves under Section 3 and the right to fix purchase price of these leaves conferred by the two sections impinged upon the right of the petitioners there under Art. 19 (1) (f) and (g) and that the restrictions imposed by them were unreasonable and were not saved either under Clause (5) or Clause (6) of Article 19. The Court held that whereas the exclusive right of purchase conferred by Section 3 was an essential part of the trade monopoly which could validity be created under the latter part of Clause (6) and was therefore beyond the challenge of reasonableness of restrictions which it imposed, the exclusive right to fix the prices conferred by Section 4 was not, though it may be that such a power was necessary to effectually enforce the trade monopoly under Section 3. Therefore, though the latter did not have to pass the test of reasonableness, the former had to under Clause (5) and the first part of Clause (6), as it imposed a restriction not only on the right under Clause (g) but also under Cl. (f). However, on examining the right of the State to fix the prices, the Court came to the conclusion that the restriction imposed by Section 4 on the growers of Kendu leaves was not only in their own interest but also reasonable and rejected the challenges of unconstitutionality of both section 3 and 4. As already stated, the challenge to Section 3, which provided the exclusive right to purchase and transport was confined only to the exclusive right of the State to purchase kendu leaves. No question was raised regarding the exclusive right of transport under Section 3 which prohibited others, save the State it authorised officers and agents, from transporting the leaves from one place to another, and therefore, the Court did not express any opinion as regards that part of Section 3. That question, therefore, is not concluded by that decision and is open for determination.The long title of the Act recites that the Act was enacted for regulating "the trade in tendu leaves" by creating a State monopoly in such trade. Trade in tendu leaves would consist of dealing in those leaves, i.e., their purchase and sale. Transport of the leaves once purchased or sold would not prima facie be an organic or integral part of dealing in those leaves. It is something extraneous to dealing in those leaves, something which takes place after the purchase or the sale thereof is completed and property in them has passed from the dealer to the purchaser and therefore does not from part of the trade in that commodity. That being so that restrictions on their transport contained in Section 5 cannot be held to be the integral part of the trade monopoly but as ancillary or incidental thereto, made for its effective enforcement. If that be so, it affects the rights of the purchaser under Art. 19 (1) (f) to hold and to dispose of the goods he has acquired, a right which is not correlated, as the right under Clause (g) is, which the monopoly which the section seeks to create. It follows, therefore, that such a provision would have to pass the test of reasonableness under Cl. (5) and the first part of Clause (6) of Article 19. That would also be the position in respect of Article 304 (b). But since the requirement of these provisions is the same the yardstick of reasonableness would be common to all these cases. It is well recognised that when an enactment is found to infringe any of the fundamental rights guaranteed under Article 19 (1), it must be held to be invalid unless those who support it can bring it under the protective provisions of Clause (5) or Clause (6) of that Article. To do so, the burden is on those who seek that protection and not on the citizen to show that the restrictive enactment is invalid.[cf. Saghir Ahmad v. State of U. P., 1955-1 SCR 707=(AIR 1954 SC 728 ) and Khyerbari Tea Co. Ltd. v. State of Assam 1964-5 SCR 975 at p. 1003 = (AIR 1964 SC 925 at pp. 938 939)].In spite however, of the inconvenience which such a system might result in, there can at the same time be little doubt, and even Mr. Sen agreed, that some kind of check on movement is necessary, for, without it the monopoly created by the Act wold not effectively function. In our view a permit system which regulates the movement of leaves purchased by a manufacturer of bidis from the unit where they are purchased to his warehouse, then to the branches and to the sattedars cannot upto that stage be regarded as unreasonable in the light of the object of the Act, the economic conditions prevailing in the State and the mischief which it seeks to cure. At the same time to expect the manufacturer to get permits issued to his sattedars for distribution by them to the innumerable mazdoors of comparatively small quantities of these leaves would be not only unreasonable but frustrating. The various checks imposed under the rules on the manufacturer by way of his having to maintain stock registers, submit periodical returns, the right of inspection of the authorities etc. are sufficient to reasonably check transactions contrary to the Act. But, considering the extraordinary inconvenience which would be caused to the manufacturer and balancing that with the mischief feared by the State, we think that when Section 5 was enacted the legislature could not have intended that the manufacturer should also obtain permits in respect of the leaves distributed to the vast number of mazdoors for rolling the bidis by the satedars who are themselves considerable in number. Though, therefore, Section 5 is couched in apparently wide language, the very object of the Act, as disclosed in its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at first reading of the section appear.13.In our view reading Section 5 (2), along with R. 9 of the said rules, what they are intended to require is that a manufacturer must have a permit to move the leaves purchased by him from the unit or units where he has purchased them to his warehouse outside and from there to his branches and also when he transports them to his sattedars. But, no such permit was intended to be necessary when the leaves are distributed for the manufacture of bidis by these sattedars to the mazdoors whom he employs. A construction so limited in its sweep is commendable as it is consistent with the object of the Act and is also in harmony with Cls. (5) and (6) of the Art. 19 and Cl. (b) of Art. 304.Regarding the ban against movement of old leaves contained in the order dated June 4, 1965, there can be no difficulty as it is conceded that old leaves in the context mean those which were in stock when these rules came into force and not the balance of leaves left unconsumed from year to year.So construed, the restrictions against free transport cannot be held to be unreasonable and the validity of Section 5 and rule 9 as also the order of June 4, 1965, except to the extent of its requiring a permit for distribution to the mazdoors, cannot be successfully challenged. So far as the order dated October 12, 1965 is concerned, it was a mere cancellation of a concession and such cancellation cannot be challenged as a restriction, much less as an unreasonable restriction.These elaborate provisions in conjunction with the provisions of Section 5 indicate the extreme jealosy of the draftsman not to leave any loopholes in theupheld.8. Such a construction, however, raises the question as to the constitutional sustainability of Section 5 and Rule 9 which are the provisions seriously challenged beforemay be recalled that in the Orissa case the Court declined to treat Section 4 of that Act which conferred the exclusive right to fix the prices on the State as an integral and organic part of the trade monopoly in Kendu leaves but treated it only as effectively abetting its implementation. Can an embargo on transport by anyone, save those mentioned in Clauses (a), (b) and (c) of S. 5 (1) and the manufactures of bidis and exporters of these leaves under the permit be regarded as an integral and organic part of the trade monopoly in them i.e., a monopoly in purchasing and selling them in such area or areas to which the Act is supplied? It may be as stated in the Statesthat the trade monopoly can be effectively implemented only if the movement of the leaves is checked and regulated by confining the right of free movement to the State and its agents and under permits to the manufacturers of bidis and the exporters and that if free movement were allowed there would be loopholes which would suffer illegitimate acquisitions and sales in leaves smuggled through the areas where they grow raising also difficulties in checking the stocks legitimately purchased from Government. If a person were to purchase a quantity of leaves and is allowed to move it freely from the unit where it is purchased to his warehouse outside that unit and from there to other points, it might be easy for such a purchaser to effect illegitimate sales and purchases and yet show at the same time the correct stock when checked by the authorities. It may also be that without the restrictions of movement it would become difficult, if not impossible, to identify the stock of a manufacturer or an exporter when checked in his warehouse as the one which he had purchased from Government. All this may be true, but is the prohibition or regulation of transport and integral or essential part of the monopoly without which the monopoly which the Act seeks to create cannot come into being?10.The long title of the Act recites that the Act was enacted for regulating "the trade in tendu leaves" by creating a State monopoly in such trade. Trade in tendu leaves would consist of dealing in those leaves, i.e., their purchase and sale. Transport of the leaves once purchased or sold would not prima facie be an organic or integral part of dealing in those leaves. It is something extraneous to dealing in those leaves, something which takes place after the purchase or the sale thereof is completed and property in them has passed from the dealer to the purchaser and therefore does not from part of the trade in that commodity. That being so that restrictions on their transport contained in Section 5 cannot be held to be the integral part of the trade monopoly but as ancillary or incidental thereto, made for its effective enforcement. If that be so, it affects the rights of the purchaser under Art. 19 (1) (f) to hold and to dispose of the goods he has acquired, a right which is not correlated, as the right under Clause (g) is, which the monopoly which the section seeks to create. It follows, therefore, that such a provision would have to pass the test of reasonableness under Cl. (5) and the first part of Clause (6) of Article 19. That would also be the position in respect of Article 304 (b). But since the requirement of these provisions is the same the yardstick of reasonableness would be common to all these cases. It is well recognised that when an enactment is found to infringe any of the fundamental rights guaranteed under Article 19 (1), it must be held to be invalid unless those who support it can bring it under the protective provisions of Clause (5) or Clause (6) of that Article. To do so, the burden is on those who seek that protection and not on the citizen to show that the restrictive enactment is invalid.[cf. Saghir Ahmad v. State of U. P.,SCR 707=(AIR 1954 SC 728 ) and Khyerbari Tea Co. Ltd. v. State of AssamSCR 975 at p. 1003 = (AIR 1964 SC 925 at pp. 938 939)].t leads us to the next question as to the scope of the embargo on movement imposed by Section 5.If read literarily,(1) places a total ban on any and every person against transporting the leaves, except those only mentioned in Clauses (a), (b) and (c) therein.(3) also if read literarily, would mean that an exception is made only in the case of (a) a grower who an move his leaves freely but within the unit where they have grown, and (b) and purchaser who has purchased the leaves from manufacturing bidis within the State or for their export outside the State, but under a permit and in accordance with its terms and conditions. Section 5 read thus, therefore, would mean that except for these two categories of persons, no one can apply for a permit to move the leaves from one place to another as if the legislative intended that the leaves must remain where they are when purchased. Does it mean that a person who purchases these leaves for purpose other than manufacture of bidis or export cannot move them even from the unit where he has purpose to his place of residence or business? That would appear to be so because the provisions for a permit apply only to the manufacturer of bidis and the exporter and no other purchaser. That manifestly could not have been the intention of the legislature, for, the leaves being perishable, they are liable to get destroyed if their movement is totally forbidden.Quite apart from this consideration, a mere literary or mechanical construction wold not be appropriate where imported questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards thereunder are concerned. In cases of such a king, two rules of construction have to be kept in mind : (1) that courts generally lean towards the constitutionality of a legislative measure impugned before them upon the presumption that a legislature would not deliberately flout a constitutional safeguard or right, and (2) that while construing such an enactment the court must examine the object and the purpose of the impugned Act, the mischief it seeks to prevent and ascertain from such factors its true scope and meaning.The object of the Act clearly was to regulate trade in tendu leaves in the public interest and for that end to create a State monopoly so that the purchasers of these leaves may not exploit the need and the poverty of small growers and pay the least possible price. The legislature thought the it was in the public interests to entrust the entire trade to the State who would fix reasonable prices in consultation with an advisory committee and make at the same time compulsory for the State to purchase the entire stock which the growers would offer for sale at those prices. Considering the object of the Act, it cannot be conceived that upon the assumption that such a monopoly was in the public interest the exclusive right of the State to purchase and sell these leaves is unreasonable. But the question as regards their transport is far from easy of solution. It may be that free movement of leaves even after they are sold to merchants would create difficulties in effectively implementing the intended monopoly in their trade or that such free movement would make checking of illegitimate transactions in the leaves difficult. But then it is difficult to conceive of a monopoly in this particular commodity, as in others without any likely loopholes whatsoever. Can the State, therefore, to plug all such loopholes pass a measure which, according to the appellants, imposes unreasonable restrictions which results in stultifying their business? There is a strong school of thought which believes that monistic tendencies in economics spell stagnation and their pluralism is as much desirable in economics as in politics and other fields of life. That may or may not be correct but take the present case as an illustration. According to the appellants, they manufacture as many as 1 1/2 crores of bidis a day. They have established aof branches in several areas of the State. Whenever they purchase the leaves they have to be moved to their warehouses outside and from there to their branches and then to the sattedars who undertake to have bidis rolled through mazdoors to whom they in turn distribute tabacco and these leaves supplied to them by the appellants. Even according to the Divisions Forest Officer there were as many as 6 or 7 thousand sattedars in Saugor district alone with whom manufacturers of bidis had contracts as mentioned above. The number of mazdoors whom these sattedars employ for rolling bidis would certainly be considerable. We were told that practically every household in villages scattered from one another engages itself inlabour. It is also conceivable that in some of the households, not only the adults but the minors also would be engaged in this work. If the movement of leaves from stage to stage were to be so regulated as to require permits at each stage it is not difficult to imagine that considerable inconvenience to all engaged in the business of manufacturing bidis would inevitably ensue. The correspondence on record shows that at one time even the Divisional Forest Officer was of the view that if would be impossible for the staff under him to cope with the work of issuing permits at each stage of the movement of the leaves and therefore permitted the branch managers of the appellants to issue permits when leaves were moved from their branches to sattedars. That relaxation was, however, cancelled as in his view the branch managers began to move the leaves in bulk contrary to his intention in granting thatour view a permit system which regulates the movement of leaves purchased by a manufacturer of bidis from the unit where they are purchased to his warehouse, then to the branches and to the sattedars cannot upto that stage be regarded as unreasonable in the light of the object of the Act, the economic conditions prevailing in the State and the mischief which it seeks to cure. At the same time to expect the manufacturer to get permits issued to his sattedars for distribution by them to the innumerable mazdoors of comparatively small quantities of these leaves would be not only unreasonable but frustrating. The various checks imposed under the rules on the manufacturer by way of his having to maintain stock registers, submit periodical returns, the right of inspection of the authorities etc. are sufficient to reasonably check transactions contrary to the Act. But, considering the extraordinary inconvenience which would be caused to the manufacturer and balancing that with the mischief feared by the State, we think that when Section 5 was enacted the legislature could not have intended that the manufacturer should also obtain permits in respect of the leaves distributed to the vast number of mazdoors for rolling the bidis by the satedars who are themselves considerable in number. Though, therefore, Section 5 is couched in apparently wide language, the very object of the Act, as disclosed in its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at first reading of the section appear.

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: are sold to merchants would create difficulties in effectively implementing the intended monopoly in their trade or that such free movement would make checking of illegitimate transactions in the leaves difficult. But then it is difficult to conceive of a monopoly in this particular commodity, as in others without any likely loopholes whatsoever. Can the State, therefore, to plug all such loopholes pass a measure which, according to the appellants, imposes unreasonable restrictions which results in stultifying their business? There is a strong school of thought which believes that monistic tendencies in economics spell stagnation and their pluralism is as much desirable in economics as in politics and other fields of life. That may or may not be correct but take the present case as an illustration. According to the appellants, they manufacture as many as 1 1/2 crores of bidis a day. They have established a net-work of branches in several areas of the State. Whenever they purchase the leaves they have to be moved to their warehouses outside and from there to their branches and then to the sattedars who undertake to have bidis rolled through mazdoors to whom they in turn distribute tabacco and these leaves supplied to them by the appellants. Even according to the Divisions Forest Officer there were as many as 6 or 7 thousand sattedars in Saugor district alone with whom manufacturers of bidis had contracts as mentioned above. The number of mazdoors whom these sattedars employ for rolling bidis would certainly be considerable. We were told that practically every household in villages scattered from one another engages itself in bidi-rolling labour. It is also conceivable that in some of the households, not only the adults but the minors also would be engaged in this work. If the movement of leaves from stage to stage were to be so regulated as to require permits at each stage it is not difficult to imagine that considerable inconvenience to all engaged in the business of manufacturing bidis would inevitably ensue. The correspondence on record shows that at one time even the Divisional Forest Officer was of the view that if would be impossible for the staff under him to cope with the work of issuing permits at each stage of the movement of the leaves and therefore permitted the branch managers of the appellants to issue permits when leaves were moved from their branches to sattedars. That relaxation was, however, cancelled as in his view the branch managers began to move the leaves in bulk contrary to his intention in granting that relaxation.12. In spite however, of the inconvenience which such a system might result in, there can at the same time be little doubt, and even Mr. Sen agreed, that some kind of check on movement is necessary, for, without it the monopoly created by the Act wold not effectively function. In our view a permit system which regulates the movement of leaves purchased by a manufacturer of bidis from the unit where they are purchased to his warehouse, then to the branches and to the sattedars cannot upto that stage be regarded as unreasonable in the light of the object of the Act, the economic conditions prevailing in the State and the mischief which it seeks to cure. At the same time to expect the manufacturer to get permits issued to his sattedars for distribution by them to the innumerable mazdoors of comparatively small quantities of these leaves would be not only unreasonable but frustrating. The various checks imposed under the rules on the manufacturer by way of his having to maintain stock registers, submit periodical returns, the right of inspection of the authorities etc. are sufficient to reasonably check transactions contrary to the Act. But, considering the extraordinary inconvenience which would be caused to the manufacturer and balancing that with the mischief feared by the State, we think that when Section 5 was enacted the legislature could not have intended that the manufacturer should also obtain permits in respect of the leaves distributed to the vast number of mazdoors for rolling the bidis by the satedars who are themselves considerable in number. Though, therefore, Section 5 is couched in apparently wide language, the very object of the Act, as disclosed in its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at first reading of the section appear.13.In our view reading Section 5 (2), along with R. 9 of the said rules, what they are intended to require is that a manufacturer must have a permit to move the leaves purchased by him from the unit or units where he has purchased them to his warehouse outside and from there to his branches and also when he transports them to his sattedars. But, no such permit was intended to be necessary when the leaves are distributed for the manufacture of bidis by these sattedars to the mazdoors whom he employs. A construction so limited in its sweep is commendable as it is consistent with the object of the Act and is also in harmony with Cls. (5) and (6) of the Art. 19 and Cl. (b) of Art. 304.Regarding the ban against movement of old leaves contained in the order dated June 4, 1965, there can be no difficulty as it is conceded that old leaves in the context mean those which were in stock when these rules came into force and not the balance of leaves left unconsumed from year to year.So construed, the restrictions against free transport cannot be held to be unreasonable and the validity of Section 5 and rule 9 as also the order of June 4, 1965, except to the extent of its requiring a permit for distribution to the mazdoors, cannot be successfully challenged. So far as the order dated October 12, 1965 is concerned, it was a mere cancellation of a concession and such cancellation cannot be challenged as a restriction, much less as an unreasonable restriction. ### Response: 0 ### Explanation: manufacturer of bidis and the exporter and no other purchaser. That manifestly could not have been the intention of the legislature, for, the leaves being perishable, they are liable to get destroyed if their movement is totally forbidden.Quite apart from this consideration, a mere literary or mechanical construction wold not be appropriate where imported questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards thereunder are concerned. In cases of such a king, two rules of construction have to be kept in mind : (1) that courts generally lean towards the constitutionality of a legislative measure impugned before them upon the presumption that a legislature would not deliberately flout a constitutional safeguard or right, and (2) that while construing such an enactment the court must examine the object and the purpose of the impugned Act, the mischief it seeks to prevent and ascertain from such factors its true scope and meaning.The object of the Act clearly was to regulate trade in tendu leaves in the public interest and for that end to create a State monopoly so that the purchasers of these leaves may not exploit the need and the poverty of small growers and pay the least possible price. The legislature thought the it was in the public interests to entrust the entire trade to the State who would fix reasonable prices in consultation with an advisory committee and make at the same time compulsory for the State to purchase the entire stock which the growers would offer for sale at those prices. Considering the object of the Act, it cannot be conceived that upon the assumption that such a monopoly was in the public interest the exclusive right of the State to purchase and sell these leaves is unreasonable. But the question as regards their transport is far from easy of solution. It may be that free movement of leaves even after they are sold to merchants would create difficulties in effectively implementing the intended monopoly in their trade or that such free movement would make checking of illegitimate transactions in the leaves difficult. But then it is difficult to conceive of a monopoly in this particular commodity, as in others without any likely loopholes whatsoever. Can the State, therefore, to plug all such loopholes pass a measure which, according to the appellants, imposes unreasonable restrictions which results in stultifying their business? There is a strong school of thought which believes that monistic tendencies in economics spell stagnation and their pluralism is as much desirable in economics as in politics and other fields of life. That may or may not be correct but take the present case as an illustration. According to the appellants, they manufacture as many as 1 1/2 crores of bidis a day. They have established aof branches in several areas of the State. Whenever they purchase the leaves they have to be moved to their warehouses outside and from there to their branches and then to the sattedars who undertake to have bidis rolled through mazdoors to whom they in turn distribute tabacco and these leaves supplied to them by the appellants. Even according to the Divisions Forest Officer there were as many as 6 or 7 thousand sattedars in Saugor district alone with whom manufacturers of bidis had contracts as mentioned above. The number of mazdoors whom these sattedars employ for rolling bidis would certainly be considerable. We were told that practically every household in villages scattered from one another engages itself inlabour. It is also conceivable that in some of the households, not only the adults but the minors also would be engaged in this work. If the movement of leaves from stage to stage were to be so regulated as to require permits at each stage it is not difficult to imagine that considerable inconvenience to all engaged in the business of manufacturing bidis would inevitably ensue. The correspondence on record shows that at one time even the Divisional Forest Officer was of the view that if would be impossible for the staff under him to cope with the work of issuing permits at each stage of the movement of the leaves and therefore permitted the branch managers of the appellants to issue permits when leaves were moved from their branches to sattedars. That relaxation was, however, cancelled as in his view the branch managers began to move the leaves in bulk contrary to his intention in granting thatour view a permit system which regulates the movement of leaves purchased by a manufacturer of bidis from the unit where they are purchased to his warehouse, then to the branches and to the sattedars cannot upto that stage be regarded as unreasonable in the light of the object of the Act, the economic conditions prevailing in the State and the mischief which it seeks to cure. At the same time to expect the manufacturer to get permits issued to his sattedars for distribution by them to the innumerable mazdoors of comparatively small quantities of these leaves would be not only unreasonable but frustrating. The various checks imposed under the rules on the manufacturer by way of his having to maintain stock registers, submit periodical returns, the right of inspection of the authorities etc. are sufficient to reasonably check transactions contrary to the Act. But, considering the extraordinary inconvenience which would be caused to the manufacturer and balancing that with the mischief feared by the State, we think that when Section 5 was enacted the legislature could not have intended that the manufacturer should also obtain permits in respect of the leaves distributed to the vast number of mazdoors for rolling the bidis by the satedars who are themselves considerable in number. Though, therefore, Section 5 is couched in apparently wide language, the very object of the Act, as disclosed in its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at first reading of the section appear.

Haryana Land Reclamation and Development Corporation Limited Vs. State of Haryana & Another

S. RATNAVEL PANDIAN, J. Special leave granted 2. The question for consideration in this appeal is whether the order of discharge passed by the Chief Judicial Magistrate, Sonepat is or is not an "interlocutory order" within the meaning of Section 397(2) of the Code of Criminal Procedure (Hereinafter referred to as the Code). The appellant which is a State Government undertaking registered under the Companies Act, 1956 is working under the administrative control of the Haryana Government in Agricultural Department. The Secretary of the appellant-Company filed a criminal complaint before the court of the Chief Judicial Magistrate, Sonepat against respondent 2 under the Sections 409, 467, 468, 466-A of the Indian Penal Code on the allegations that the second accused committed criminal breach of trust, misappropriated the stock entrusted to him and the defalcated the account books and stock registers, etc. It seems that the complaint was referred to the police for the investigation under Section 156(3) of the Code. On the final report submitted by the Inspector of Police, Sonepat city, the learned Magistrate passed the following order on April 11, 1988"In view of the report of the police, accused is ordered to be discharged. File be ordered to be consigned to the record rooms."Feeling aggrieved by the said order, the appellant took up the matter before the High Court of Punjab and Haryana in Criminal Miscellaneous No. 5492-M of 1988 and Criminal Miscellaneous No. 478 of 1989. The High Court by its impugned order dated February 10, 1989 dismissed the criminal miscellaneous petitions on the ground that the order of the Chief Judicial Magistrate discharging the accused was an "interlocutory order" and that the petition under the Section 482 of the CrPC for the quashing the order of the Magistrate is barred. Hence this appeal3. The High Court in its impugned order has placed reliance on the observation of this Court made in Bhagwant Singh v. Commissioner of Police ((1985) 2 SCC 537 : 1985 SCC (Cri) 267 : (1985) 3 SCR 942 ). The question in the said case was whether in a case where first information report is lodged and after completion of investigation initiated on the basis of the first information report, the police submits a report that no offence appears to have been committed, the Magistrate can accept the report and drop the proceedings without issuing notice to the first information or to the injured or in the case the incident has resulted in death, to the relatives of the deceased. Besides examining the above question, this Court did not examine the intendment of Section 397(2) of the Code 4. There are several decisions of this Court explaining the terms "interlocutory order" occurring in Section 397(2) of the Code. In Amar Nath v. State of Haryana ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) the said term is defined thus : (SCC p. 142, para 6) "The term "interlocutory order" is a term of well known legal significance and does not present any serious difficulty. It has been used in various statutes including the Code of Civil Procedure, letters patent of the High Court and other like statutes. In Websters New World Dictionary "interlocutory" has been defined as an order other than final decision. Decided cases have laid down that interlocutory orders to be appealable must be those which decide the rights and liabilities of the parties concerning a particular aspect. It seems to us that the terms "interlocutory order" in Section 397(2) of the 1973 Code has been used in a restricted sense and not in the any broad or artistic sense. It merely denotes orders of a purely interim or temporary nature which do not decide or touch the important rights or the liabilities of the parties. Any order which substantially affected the right of the accused, or decides certain rights of the parties cannot be said to be interlocutory order so as to bar a revision to the High Court against that order, because that would be against the very object which formed the basis for insertion of this particular provision in Section 397 of the 1973 Code."Untwalia, J. speaking for the bench in Madhu Limaye v. State of Maharashtra ((1977) 4 SCC 551 : 1978 SCC (Cri) 10 ), after referring to Amar Nath case ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) and to some more decisions and after explaining what the term "interlocutory order" means finally observed as follow : (SCC p. 561, para 17) "If a complaint is dismissed under Section 203 or under Section 204(4), or the court holds the proceeding to be void or discharges the accused, a revision to the High Court at the instance of the complainant or the prosecutor would be competent, otherwise it will make Section 398 of the new Code otiose."When the question that has arisen in the present case is examined in the light of the above observations made in Amar Nath case ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) and Madhu Limaye case ((1977) 4 SCC 551 : 1978 SCC (Cri) 10 ), it is clear that the order of the High Court is not sustainable and as such is liable to be set aside as the order of discharge passed by the Chief Judicial Magistrate does not fall within the definition of the term "interlocutory order" and the inherent power of the High Court is not limited

1[ds]When the question that has arisen in the present case is examined in the light of the above observations made in Amar Nath case ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) and Madhu Limaye case ((1977) 4 SCC 551 : 1978 SCC (Cri) 10 ), it is clear that the order of the High Court is not sustainable and as such is liable to be set aside as the order of discharge passed by the Chief Judicial Magistrate does not fall within the definition of the term "interlocutory order" and the inherent power of the High Court is not limited

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: S. RATNAVEL PANDIAN, J. Special leave granted 2. The question for consideration in this appeal is whether the order of discharge passed by the Chief Judicial Magistrate, Sonepat is or is not an "interlocutory order" within the meaning of Section 397(2) of the Code of Criminal Procedure (Hereinafter referred to as the Code). The appellant which is a State Government undertaking registered under the Companies Act, 1956 is working under the administrative control of the Haryana Government in Agricultural Department. The Secretary of the appellant-Company filed a criminal complaint before the court of the Chief Judicial Magistrate, Sonepat against respondent 2 under the Sections 409, 467, 468, 466-A of the Indian Penal Code on the allegations that the second accused committed criminal breach of trust, misappropriated the stock entrusted to him and the defalcated the account books and stock registers, etc. It seems that the complaint was referred to the police for the investigation under Section 156(3) of the Code. On the final report submitted by the Inspector of Police, Sonepat city, the learned Magistrate passed the following order on April 11, 1988"In view of the report of the police, accused is ordered to be discharged. File be ordered to be consigned to the record rooms."Feeling aggrieved by the said order, the appellant took up the matter before the High Court of Punjab and Haryana in Criminal Miscellaneous No. 5492-M of 1988 and Criminal Miscellaneous No. 478 of 1989. The High Court by its impugned order dated February 10, 1989 dismissed the criminal miscellaneous petitions on the ground that the order of the Chief Judicial Magistrate discharging the accused was an "interlocutory order" and that the petition under the Section 482 of the CrPC for the quashing the order of the Magistrate is barred. Hence this appeal3. The High Court in its impugned order has placed reliance on the observation of this Court made in Bhagwant Singh v. Commissioner of Police ((1985) 2 SCC 537 : 1985 SCC (Cri) 267 : (1985) 3 SCR 942 ). The question in the said case was whether in a case where first information report is lodged and after completion of investigation initiated on the basis of the first information report, the police submits a report that no offence appears to have been committed, the Magistrate can accept the report and drop the proceedings without issuing notice to the first information or to the injured or in the case the incident has resulted in death, to the relatives of the deceased. Besides examining the above question, this Court did not examine the intendment of Section 397(2) of the Code 4. There are several decisions of this Court explaining the terms "interlocutory order" occurring in Section 397(2) of the Code. In Amar Nath v. State of Haryana ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) the said term is defined thus : (SCC p. 142, para 6) "The term "interlocutory order" is a term of well known legal significance and does not present any serious difficulty. It has been used in various statutes including the Code of Civil Procedure, letters patent of the High Court and other like statutes. In Websters New World Dictionary "interlocutory" has been defined as an order other than final decision. Decided cases have laid down that interlocutory orders to be appealable must be those which decide the rights and liabilities of the parties concerning a particular aspect. It seems to us that the terms "interlocutory order" in Section 397(2) of the 1973 Code has been used in a restricted sense and not in the any broad or artistic sense. It merely denotes orders of a purely interim or temporary nature which do not decide or touch the important rights or the liabilities of the parties. Any order which substantially affected the right of the accused, or decides certain rights of the parties cannot be said to be interlocutory order so as to bar a revision to the High Court against that order, because that would be against the very object which formed the basis for insertion of this particular provision in Section 397 of the 1973 Code."Untwalia, J. speaking for the bench in Madhu Limaye v. State of Maharashtra ((1977) 4 SCC 551 : 1978 SCC (Cri) 10 ), after referring to Amar Nath case ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) and to some more decisions and after explaining what the term "interlocutory order" means finally observed as follow : (SCC p. 561, para 17) "If a complaint is dismissed under Section 203 or under Section 204(4), or the court holds the proceeding to be void or discharges the accused, a revision to the High Court at the instance of the complainant or the prosecutor would be competent, otherwise it will make Section 398 of the new Code otiose."When the question that has arisen in the present case is examined in the light of the above observations made in Amar Nath case ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) and Madhu Limaye case ((1977) 4 SCC 551 : 1978 SCC (Cri) 10 ), it is clear that the order of the High Court is not sustainable and as such is liable to be set aside as the order of discharge passed by the Chief Judicial Magistrate does not fall within the definition of the term "interlocutory order" and the inherent power of the High Court is not limited ### Response: 1 ### Explanation: When the question that has arisen in the present case is examined in the light of the above observations made in Amar Nath case ((1977) 4 SCC 137 : 1977 SCC (Cri) 585 ) and Madhu Limaye case ((1977) 4 SCC 551 : 1978 SCC (Cri) 10 ), it is clear that the order of the High Court is not sustainable and as such is liable to be set aside as the order of discharge passed by the Chief Judicial Magistrate does not fall within the definition of the term "interlocutory order" and the inherent power of the High Court is not limited

Shankar Textile Mills Vs. Its Workmen

Gajendragadkar, J.1. This appeal by special leave arises out of an industrial dispute between the appellant, Shankar Textile Mills and the respondents its workmen. The said dispute was the result of five demands made by the respondents against the appellant. It is one of these demands with which the present appeal is concerned. This demand was demand 2 and the reference in respect of it was made in these words :"whether the date of joining service as shown against the undermentioned workmen is correct, and if not, from what date the workmen should be considered to have joined the establishment."2. The workmen concerned are 13 in number and against their several names are shown the months in which they claimed to have joined the service of the undertaking respectively. All the items in dispute were referred by the Governor of Punjab for adjudication to the labour court at Amritsar on 14 February, 1959. The labour court considered the dispute and made its award on 9 May, 1959. In respect of the demand with which we are concerned, the labour court held that the dates of joining service of the workmen shown against their respective names in the reference were correct, except in regard to Ram Samad and Chander Bhan who should be taken to have joined the mills on 1 October, 1955 and 14 March, 1952 respectively. It is against this part of the award that the appellant has come to this Court.3. The only point which Mr. Lal urged before us in support of the appeal was that the labour court was wrong in holding that the appellant is the successor of the Hindustan Development, Ltd.., which was the original owner of the undertaking. It appears that on 30 April, 1954 the appellant took a lease of the undertaking and began to manage it as a lessee. Subsequently, from 11 May, 1955, the appellant purchased the undertaking and since then, the undertaking has been in its management as a purchaser. The argument is that the concern had been closed before the purchase took place and since the subject-matter of the purchase was not a going concern, the appellant cannot be held to be a successor-in-interest of the Hindustan Development, Ltd. This argument has been rejected by the labour court, and we think, rightly. A number of workmen have given evidence to show that they had joined the service of the mills which was managed by the Hindustan Development, Ltd., and they had been working in the mills continuously without any break. Rattan Chand, one of the partners of the appellant-firm, did no doubt suggest that when the purchase took place, the factory was closed. But that statement has been treated by the labour court to be unreliable and the labour court has believed the evidence led by the respondents. Therefore, the finding that the concern was a going concern at the time when it was sold to the appellant, cannot be disputed in the present appeal.Then it is urged that when the appellant took up the factory as a lessee, the workmen who continued to work in the factory must be deemed to have been reappointed by the appellant, and so, continuity of employment which has been assumed by the labour court is not established. This argument is clearly misconceived. On the record, there is no evidence to show that after the lessee took up the management of the factory, the employees services were terminated and the lessee re-employed them; no documents have been produced in that behalf and no oral evidence has been led in support of the plea either. In fact, it is extremely unlikely that the lessee who took on the management of the factory could have purported to re-employ the workmen; on the other hand, as a lessee, he continued the factory as it was conducted by the lessor without effecting a break in the services of the employees or in the continuity of the operation of the factory. In fact, it appears that the appellant took a lease because there was a difficulty in obtaining a sale-deed straightaway without a permit. Therefore, the position is that the appellant has purchased the undertaking and there is no term in the agreement of purchase which would take the case of the appellant outside the principles laid down by industrial adjudication in that behalf prior to the enactment of S. 25FF in 1956. Besides, it is not even suggested that any compensation has been paid to the employees by the vendor Hindustan Development, Ltd. All the facts clearly show that when the appellant took the transfer deed from the Hindustan Development, Ltd., it agreed to continue the services of the employee on the same terms and conditions as before. That, in substance, is the view taken by the labour court and we see no reason to interfere with it.

0[ds]The argument is that the concern had been closed before the purchase took place and since theof the purchase was not a going concern, the appellant cannot be held to be aof the Hindustan Development, Ltd. This argument has been rejected by the labour court, and we think, rightly. A number of workmen have given evidence to show that they had joined the service of the mills which was managed by the Hindustan Development, Ltd., and they had been working in the mills continuously without any break. Rattan Chand, one of the partners of thedid no doubt suggest that when the purchase took place, the factory was closed. But that statement has been treated by the labour court to be unreliable and the labour court has believed the evidence led by the respondents. Therefore, the finding that the concern was a going concern at the time when it was sold to the appellant, cannot be disputed in the presentit is urged that when the appellant took up the factory as a lessee, the workmen who continued to work in the factory must be deemed to have been reappointed by the appellant, and so, continuity of employment which has been assumed by the labour court is not established. This argument is clearly misconceived. On the record, there is no evidence to show that after the lessee took up the management of the factory, the employees services were terminated and the lesseethem; no documents have been produced in that behalf and no oral evidence has been led in support of the pleafact, it is extremely unlikely that the lessee who took on the management of the factory could have purported tothe workmen; on the other hand, as a lessee, he continued the factory as it was conducted by the lessor without effecting a break in the services of the employees or in the continuity of the operation of the factory. In fact, it appears that the appellant took a lease because there was a difficulty in obtaining astraightaway without a permit. Therefore, the position is that the appellant has purchased the undertaking and there is no term in the agreement of purchase which would take the case of the appellant outside the principles laid down by industrial adjudication in that behalf prior to the enactment of S. 25FF in 1956. Besides, it is not even suggested that any compensation has been paid to the employees by the vendor Hindustan Development, Ltd. All the facts clearly show that when the appellant took the transfer deed from the Hindustan Development, Ltd., it agreed to continue the services of the employee on the same terms and conditions as before. That, in substance, is the view taken by the labour court and we see no reason to interfere with it.

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: Gajendragadkar, J.1. This appeal by special leave arises out of an industrial dispute between the appellant, Shankar Textile Mills and the respondents its workmen. The said dispute was the result of five demands made by the respondents against the appellant. It is one of these demands with which the present appeal is concerned. This demand was demand 2 and the reference in respect of it was made in these words :"whether the date of joining service as shown against the undermentioned workmen is correct, and if not, from what date the workmen should be considered to have joined the establishment."2. The workmen concerned are 13 in number and against their several names are shown the months in which they claimed to have joined the service of the undertaking respectively. All the items in dispute were referred by the Governor of Punjab for adjudication to the labour court at Amritsar on 14 February, 1959. The labour court considered the dispute and made its award on 9 May, 1959. In respect of the demand with which we are concerned, the labour court held that the dates of joining service of the workmen shown against their respective names in the reference were correct, except in regard to Ram Samad and Chander Bhan who should be taken to have joined the mills on 1 October, 1955 and 14 March, 1952 respectively. It is against this part of the award that the appellant has come to this Court.3. The only point which Mr. Lal urged before us in support of the appeal was that the labour court was wrong in holding that the appellant is the successor of the Hindustan Development, Ltd.., which was the original owner of the undertaking. It appears that on 30 April, 1954 the appellant took a lease of the undertaking and began to manage it as a lessee. Subsequently, from 11 May, 1955, the appellant purchased the undertaking and since then, the undertaking has been in its management as a purchaser. The argument is that the concern had been closed before the purchase took place and since the subject-matter of the purchase was not a going concern, the appellant cannot be held to be a successor-in-interest of the Hindustan Development, Ltd. This argument has been rejected by the labour court, and we think, rightly. A number of workmen have given evidence to show that they had joined the service of the mills which was managed by the Hindustan Development, Ltd., and they had been working in the mills continuously without any break. Rattan Chand, one of the partners of the appellant-firm, did no doubt suggest that when the purchase took place, the factory was closed. But that statement has been treated by the labour court to be unreliable and the labour court has believed the evidence led by the respondents. Therefore, the finding that the concern was a going concern at the time when it was sold to the appellant, cannot be disputed in the present appeal.Then it is urged that when the appellant took up the factory as a lessee, the workmen who continued to work in the factory must be deemed to have been reappointed by the appellant, and so, continuity of employment which has been assumed by the labour court is not established. This argument is clearly misconceived. On the record, there is no evidence to show that after the lessee took up the management of the factory, the employees services were terminated and the lessee re-employed them; no documents have been produced in that behalf and no oral evidence has been led in support of the plea either. In fact, it is extremely unlikely that the lessee who took on the management of the factory could have purported to re-employ the workmen; on the other hand, as a lessee, he continued the factory as it was conducted by the lessor without effecting a break in the services of the employees or in the continuity of the operation of the factory. In fact, it appears that the appellant took a lease because there was a difficulty in obtaining a sale-deed straightaway without a permit. Therefore, the position is that the appellant has purchased the undertaking and there is no term in the agreement of purchase which would take the case of the appellant outside the principles laid down by industrial adjudication in that behalf prior to the enactment of S. 25FF in 1956. Besides, it is not even suggested that any compensation has been paid to the employees by the vendor Hindustan Development, Ltd. All the facts clearly show that when the appellant took the transfer deed from the Hindustan Development, Ltd., it agreed to continue the services of the employee on the same terms and conditions as before. That, in substance, is the view taken by the labour court and we see no reason to interfere with it. ### Response: 0 ### Explanation: The argument is that the concern had been closed before the purchase took place and since theof the purchase was not a going concern, the appellant cannot be held to be aof the Hindustan Development, Ltd. This argument has been rejected by the labour court, and we think, rightly. A number of workmen have given evidence to show that they had joined the service of the mills which was managed by the Hindustan Development, Ltd., and they had been working in the mills continuously without any break. Rattan Chand, one of the partners of thedid no doubt suggest that when the purchase took place, the factory was closed. But that statement has been treated by the labour court to be unreliable and the labour court has believed the evidence led by the respondents. Therefore, the finding that the concern was a going concern at the time when it was sold to the appellant, cannot be disputed in the presentit is urged that when the appellant took up the factory as a lessee, the workmen who continued to work in the factory must be deemed to have been reappointed by the appellant, and so, continuity of employment which has been assumed by the labour court is not established. This argument is clearly misconceived. On the record, there is no evidence to show that after the lessee took up the management of the factory, the employees services were terminated and the lesseethem; no documents have been produced in that behalf and no oral evidence has been led in support of the pleafact, it is extremely unlikely that the lessee who took on the management of the factory could have purported tothe workmen; on the other hand, as a lessee, he continued the factory as it was conducted by the lessor without effecting a break in the services of the employees or in the continuity of the operation of the factory. In fact, it appears that the appellant took a lease because there was a difficulty in obtaining astraightaway without a permit. Therefore, the position is that the appellant has purchased the undertaking and there is no term in the agreement of purchase which would take the case of the appellant outside the principles laid down by industrial adjudication in that behalf prior to the enactment of S. 25FF in 1956. Besides, it is not even suggested that any compensation has been paid to the employees by the vendor Hindustan Development, Ltd. All the facts clearly show that when the appellant took the transfer deed from the Hindustan Development, Ltd., it agreed to continue the services of the employee on the same terms and conditions as before. That, in substance, is the view taken by the labour court and we see no reason to interfere with it.

Municipal Corporation of Delhi Vs. Sh. Ram Pratap Singh

Krishna Iyer, J.1. The appellant, Municipal Corporation of Delhi, has by special leave come up in appeal attacking the decree of the High Court which affirmed the concurrent judgments of the Courts below declaring the order of dismissal of the respondent void.2. The facts so far as they are relevant for this appeal may be briefly set out. The respondent was a sewer inspector appointed in 1958 by the Commissioner of the Municipal Corporation. In 1961, he was suspended for alleged delinquency. This was followed by a departmental disciplinary enquiry which resulted in his dismissal by the Deputy Commissioner on October 25, 1962. Of course, this order had been preceded by a regular enquiry after giving an opportunity to the delinquent officer to be heard. After the dismissal order by the Deputy Commissioner, an appeal was carried to the Commissioner by the respondent but it proved fruitless because the Commissioner after examining the merits of the matter concurred in the conclusion regarding the guilt and punishment. Thereafter, the respondent brought a suit challenging the validity of the order of dismissal and for a declaration that he is deemed to have continued in service despite the dismissal. He succeeded in the trial Court and the appeals by the Corporation were all dismissed. The main ground on which the order of dismissal was set aside was that the appointing authority was the Commissioner while the dismissing authority was the Deputy Commissioner. This files in the face of the proviso to S.95(1) of the Delhi Municipal Corporation Act, 1957 which reads thus :Provided that no such officer or other employee as aforesaid shall be reduced in rank compulsorily retired, removed or dismissed by any authority subordinate to that by which he was appointed.We are satisfied that in the light of the decision reported in Management, D.T.U. v. B. B. L. Hajela, [1973-I L.L.J. 76] : (1973) 2 S.C.R. 114, the High Courts view is correct. The essence of the matter is the station or rank of the authority empowered to dismiss and the officer subjected to dismissal. That rank cannot be delegated and, therefore, the delegate if he is subordinate, cannot arrogate to himself the power to dismiss which the original appointing authority enjoyed. It follows that the order of dismissal in the present case is bad.3. This does not bring the story to an end. After all an enquiry had been conducted in accordance with the rules and the canons of natural justice and an enquiry report had been submitted. The illegality crept in when the Deputy Commissioner decided. From then on, what was done was also illegal. We think it correct in law and in accordance with justice to hold that the Commissioner will be entitled to consider the enquiry report with an open mind and reach his own conclusion as to the culpability or otherwise of the respondent. It is no longer necessary to hold a fresh enquiry regarding the alleged misconduct since the record is complete up to that stage. There is no need to re-open that part of the proceeding Of course, when making representations before the Commissioner it may will be open to the respondent to urge any infirmities about the enquiry he may like to press and the Commissioner will give due consideration to it.

0[ds]3. This does not bring the story to an end. After all an enquiry had been conducted in accordance with the rules and the canons of natural justice and an enquiry report had been submitted. The illegality crept in when the Deputy Commissioner decided. From then on, what was done was also illegal. We think it correct in law and in accordance with justice to hold that the Commissioner will be entitled to consider the enquiry report with an open mind and reach his own conclusion as to the culpability or otherwise of the respondent. It is no longer necessary to hold a fresh enquiry regarding the alleged misconduct since the record is complete up to that stage. There is no need tothat part of the proceeding Of course, when making representations before the Commissioner it may will be open to the respondent to urge any infirmities about the enquiry he may like to press and the Commissioner will give due consideration to it.

### Instruction: Speculate on the likely judgment (yes (1) or no (0) to the appeal) and then delve into the case proceeding to elucidate your prediction, focusing on critical sentences. ### Input: Krishna Iyer, J.1. The appellant, Municipal Corporation of Delhi, has by special leave come up in appeal attacking the decree of the High Court which affirmed the concurrent judgments of the Courts below declaring the order of dismissal of the respondent void.2. The facts so far as they are relevant for this appeal may be briefly set out. The respondent was a sewer inspector appointed in 1958 by the Commissioner of the Municipal Corporation. In 1961, he was suspended for alleged delinquency. This was followed by a departmental disciplinary enquiry which resulted in his dismissal by the Deputy Commissioner on October 25, 1962. Of course, this order had been preceded by a regular enquiry after giving an opportunity to the delinquent officer to be heard. After the dismissal order by the Deputy Commissioner, an appeal was carried to the Commissioner by the respondent but it proved fruitless because the Commissioner after examining the merits of the matter concurred in the conclusion regarding the guilt and punishment. Thereafter, the respondent brought a suit challenging the validity of the order of dismissal and for a declaration that he is deemed to have continued in service despite the dismissal. He succeeded in the trial Court and the appeals by the Corporation were all dismissed. The main ground on which the order of dismissal was set aside was that the appointing authority was the Commissioner while the dismissing authority was the Deputy Commissioner. This files in the face of the proviso to S.95(1) of the Delhi Municipal Corporation Act, 1957 which reads thus :Provided that no such officer or other employee as aforesaid shall be reduced in rank compulsorily retired, removed or dismissed by any authority subordinate to that by which he was appointed.We are satisfied that in the light of the decision reported in Management, D.T.U. v. B. B. L. Hajela, [1973-I L.L.J. 76] : (1973) 2 S.C.R. 114, the High Courts view is correct. The essence of the matter is the station or rank of the authority empowered to dismiss and the officer subjected to dismissal. That rank cannot be delegated and, therefore, the delegate if he is subordinate, cannot arrogate to himself the power to dismiss which the original appointing authority enjoyed. It follows that the order of dismissal in the present case is bad.3. This does not bring the story to an end. After all an enquiry had been conducted in accordance with the rules and the canons of natural justice and an enquiry report had been submitted. The illegality crept in when the Deputy Commissioner decided. From then on, what was done was also illegal. We think it correct in law and in accordance with justice to hold that the Commissioner will be entitled to consider the enquiry report with an open mind and reach his own conclusion as to the culpability or otherwise of the respondent. It is no longer necessary to hold a fresh enquiry regarding the alleged misconduct since the record is complete up to that stage. There is no need to re-open that part of the proceeding Of course, when making representations before the Commissioner it may will be open to the respondent to urge any infirmities about the enquiry he may like to press and the Commissioner will give due consideration to it. ### Response: 0 ### Explanation: 3. This does not bring the story to an end. After all an enquiry had been conducted in accordance with the rules and the canons of natural justice and an enquiry report had been submitted. The illegality crept in when the Deputy Commissioner decided. From then on, what was done was also illegal. We think it correct in law and in accordance with justice to hold that the Commissioner will be entitled to consider the enquiry report with an open mind and reach his own conclusion as to the culpability or otherwise of the respondent. It is no longer necessary to hold a fresh enquiry regarding the alleged misconduct since the record is complete up to that stage. There is no need tothat part of the proceeding Of course, when making representations before the Commissioner it may will be open to the respondent to urge any infirmities about the enquiry he may like to press and the Commissioner will give due consideration to it.

Amitabh Shrivastava Vs. State of Madhya Pradesh and Others

who had secured aggregate m arks up to 43 per cent. The order was passed at a stage when the reserved categories had come to an end under Rule 20 read with Rule 9 as sufficient number of candidates were not available. In my opinion, therefore, Dube, J. w as right in holding that the order dated 10th March, 1980 did not bring back the reservation and selection had to be made on the basis of a combined merit list for all the vacant seats irrespective of whether they originally belong to any reserved category.....There is yet another important factor to be taken notice of. Not only the vacancies in the reserved category of children of military personnel but there were also vacancies in the category of women to be filled in on the basis of a combined merit list and no reservation was at all allowed in working out the order of 10th March, 1980. The way in which this order was applied by the Board had apparently the a pproval of the Government and no other candidate excepting the petitioner has come forward to challenge its application. As already pointed out, the order is not a statutory order. It is an order passed by the Sta te Government in the exercise of its executive power. The Governments approval of the manner in which the Board has applied the order goes to show that that was the intention of the Government in passing the order. Alth ough the approval of the Government of a particular mode of application of an order is not decisive of its meaning and it is for the Court to decide the correct meaning, still when the meaning of an order which is purely executive is in doubt the way in which it has been applied by all concerned is a relevant factor to be taken into account in deciding its true meaning. The uniform application of the order by the Board with apparent approval of the Go vernment for filling in all the vacant seats, goes a long way to show that the Government intended that the order should be applied by preparing a common merit list without continuing the reservations. In these circumstances, even if the interpretation put forward by the learned counsel for the petitioner and accepted by Navkar, J. can be accepted as a possible interpretation of the order, it would not be right for me to hold that it convey s the true meaning"6. We are inclined to agree with the conclusion reached by A.R. Navkar, J., though for different reasons. The matter is simple. Under Rule 20, the minimum number of marks prescribed for admission into the Medical Colleges in the State is 50 per cent in the aggregate and 33 per cent in each of the subjects. On that basis, out of the total of 720 seats available in all the six medical colleges in the State only 8 out of 21 of the category of sons and daughters of military personnel, and only 361 out of 699 available for all other categories could be and were admitted in the academic year 1979-80. Rule 9, which has been relied upon by the respondents as well as by K. K. Dube, J. and the Chief Justice say s that in case sufficient number of candidates do not qualify for admission under any reserved category, barring, of course, the category of Scheduled Castes and Scheduled Tribes candidates, and any seats remain vacant, such vacant seats shall be filled by preparing a combined merit list of all the remaining categories of candidates on the waiting list and the candidates shall be admitted according to merit in the list so prepared. But that Rule was not applied by the respondents and could not be applied under the circumstances of the case when 338 seats in all other categories and 13 seats of the category of sons and daughters of military personnel could not be filled in 1979- 80 on the basis of the said minimum number of qualifying marks, namely, 50 per cent in the aggregate and 33 per cent in each of the subjects. Then Note (1) to Rule 20 providing for lowering of the qualifying marks upto 5 per cent in the aggregate for all categories was applied. Even then 64 seat s of all other categories and 7 seats of the category of sons and daughters of military personnel could not be filled and remained vacant. Then the Government by an executive order issued the notification dated 10th March, 1980 reducing the minimum qualifying marks to 43 per cent in the aggregate, and it is only at this stage Rule 9 was applied with the result that in the category of sons and daughters of military personnel only 2 more candidates could secure admission and 7 seats of that category had to be filled by other categories. We are of the opinion that since the minimum qualifying marks were reduced to 43 per cent by an executive order without any provision therefor in the statutory rules, Rule 9 of the statutory rules could not be applied at that stage, and that the appellant who had secured 43.6 per cent of marks in the aggregate should have been admitted in the category to which he belongs. We think that the difference between 45 per cent in the aggregate, to which the minimum qualifying marks were reduced under Note (1) to Rule 20 and 43.6 per cent of marks in the aggregate secured by the appellant is so little that it could not be a valid or sufficient reason for giving a go -bye, on the ground of merit, to the reservation provided for in Rule 7 of the Rules. The appellant deserves to be admitted even for this reason. In these circumstances we are unable to agree with the view taken by K.K. Dube, J. and the Chief Justice, and we agree with the conclusion reached by A.R. Navkar, J.

1[ds]We are inclined to agree with the conclusion reached by A.R. Navkar, J., though for different reasons. The matter is simple. Under Rule 20, the minimum number of marks prescribed for admission into the Medical Colleges in the State is 50 per cent in the aggregate and 33 per cent in each of the subjects. On that basis, out of the total of 720 seats available in all the six medical colleges in the State only 8 out of 21 of the category of sons and daughters of military personnel, and only 361 out of 699 available for all other categories could be and were admitted in the academic year 1979-80. Rule 9, which has been relied upon by the respondents as well as by K. K. Dube, J. and the Chief Justice say s that in case sufficient number of candidates do not qualify for admission under any reserved category, barring, of course, the category of Scheduled Castes and Scheduled Tribes candidates, and any seats remain vacant, such vacant seats shall be filled by preparing a combined merit list of all the remaining categories of candidates on the waiting list and the candidates shall be admitted according to merit in the list so prepared. But that Rule was not applied by the respondents and could not be applied under the circumstances of the case when 338 seats in all other categories and 13 seats of the category of sons and daughters of military personnel could not be filled in 1979- 80 on the basis of the said minimum number of qualifying marks, namely, 50 per cent in the aggregate and 33 per cent in each of the subjects. Then Note (1) to Rule 20 providing for lowering of the qualifying marks upto 5 per cent in the aggregate for all categories was applied. Even then 64 seat s of all other categories and 7 seats of the category of sons and daughters of military personnel could not be filled and remained vacant. Then the Government by an executive order issued the notification dated 10th March, 1980 reducing the minimum qualifying marks to 43 per cent in the aggregate, and it is only at this stage Rule 9 was applied with the result that in the category of sons and daughters of military personnel only 2 more candidates could secure admission and 7 seats of that category had to be filled by other categories. We are of the opinion that since the minimum qualifying marks were reduced to 43 per cent by an executive order without any provision therefor in the statutory rules, Rule 9 of the statutory rules could not be applied at that stage, and that the appellant who had secured 43.6 per cent of marks in the aggregate should have been admitted in the category to which he belongs. We think that the difference between 45 per cent in the aggregate, to which the minimum qualifying marks were reduced under Note (1) to Rule 20 and 43.6 per cent of marks in the aggregate secured by the appellant is so little that it could not be a valid or sufficient reason for giving a go -bye, on the ground of merit, to the reservation provided for in Rule 7 of the Rules. The appellant deserves to be admitted even for this reason. In these circumstances we are unable to agree with the view taken by K.K. Dube, J. and the Chief Justice, and we agree with the conclusion reached by A.R. Navkar, J.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: who had secured aggregate m arks up to 43 per cent. The order was passed at a stage when the reserved categories had come to an end under Rule 20 read with Rule 9 as sufficient number of candidates were not available. In my opinion, therefore, Dube, J. w as right in holding that the order dated 10th March, 1980 did not bring back the reservation and selection had to be made on the basis of a combined merit list for all the vacant seats irrespective of whether they originally belong to any reserved category.....There is yet another important factor to be taken notice of. Not only the vacancies in the reserved category of children of military personnel but there were also vacancies in the category of women to be filled in on the basis of a combined merit list and no reservation was at all allowed in working out the order of 10th March, 1980. The way in which this order was applied by the Board had apparently the a pproval of the Government and no other candidate excepting the petitioner has come forward to challenge its application. As already pointed out, the order is not a statutory order. It is an order passed by the Sta te Government in the exercise of its executive power. The Governments approval of the manner in which the Board has applied the order goes to show that that was the intention of the Government in passing the order. Alth ough the approval of the Government of a particular mode of application of an order is not decisive of its meaning and it is for the Court to decide the correct meaning, still when the meaning of an order which is purely executive is in doubt the way in which it has been applied by all concerned is a relevant factor to be taken into account in deciding its true meaning. The uniform application of the order by the Board with apparent approval of the Go vernment for filling in all the vacant seats, goes a long way to show that the Government intended that the order should be applied by preparing a common merit list without continuing the reservations. In these circumstances, even if the interpretation put forward by the learned counsel for the petitioner and accepted by Navkar, J. can be accepted as a possible interpretation of the order, it would not be right for me to hold that it convey s the true meaning"6. We are inclined to agree with the conclusion reached by A.R. Navkar, J., though for different reasons. The matter is simple. Under Rule 20, the minimum number of marks prescribed for admission into the Medical Colleges in the State is 50 per cent in the aggregate and 33 per cent in each of the subjects. On that basis, out of the total of 720 seats available in all the six medical colleges in the State only 8 out of 21 of the category of sons and daughters of military personnel, and only 361 out of 699 available for all other categories could be and were admitted in the academic year 1979-80. Rule 9, which has been relied upon by the respondents as well as by K. K. Dube, J. and the Chief Justice say s that in case sufficient number of candidates do not qualify for admission under any reserved category, barring, of course, the category of Scheduled Castes and Scheduled Tribes candidates, and any seats remain vacant, such vacant seats shall be filled by preparing a combined merit list of all the remaining categories of candidates on the waiting list and the candidates shall be admitted according to merit in the list so prepared. But that Rule was not applied by the respondents and could not be applied under the circumstances of the case when 338 seats in all other categories and 13 seats of the category of sons and daughters of military personnel could not be filled in 1979- 80 on the basis of the said minimum number of qualifying marks, namely, 50 per cent in the aggregate and 33 per cent in each of the subjects. Then Note (1) to Rule 20 providing for lowering of the qualifying marks upto 5 per cent in the aggregate for all categories was applied. Even then 64 seat s of all other categories and 7 seats of the category of sons and daughters of military personnel could not be filled and remained vacant. Then the Government by an executive order issued the notification dated 10th March, 1980 reducing the minimum qualifying marks to 43 per cent in the aggregate, and it is only at this stage Rule 9 was applied with the result that in the category of sons and daughters of military personnel only 2 more candidates could secure admission and 7 seats of that category had to be filled by other categories. We are of the opinion that since the minimum qualifying marks were reduced to 43 per cent by an executive order without any provision therefor in the statutory rules, Rule 9 of the statutory rules could not be applied at that stage, and that the appellant who had secured 43.6 per cent of marks in the aggregate should have been admitted in the category to which he belongs. We think that the difference between 45 per cent in the aggregate, to which the minimum qualifying marks were reduced under Note (1) to Rule 20 and 43.6 per cent of marks in the aggregate secured by the appellant is so little that it could not be a valid or sufficient reason for giving a go -bye, on the ground of merit, to the reservation provided for in Rule 7 of the Rules. The appellant deserves to be admitted even for this reason. In these circumstances we are unable to agree with the view taken by K.K. Dube, J. and the Chief Justice, and we agree with the conclusion reached by A.R. Navkar, J. ### Response: 1 ### Explanation: We are inclined to agree with the conclusion reached by A.R. Navkar, J., though for different reasons. The matter is simple. Under Rule 20, the minimum number of marks prescribed for admission into the Medical Colleges in the State is 50 per cent in the aggregate and 33 per cent in each of the subjects. On that basis, out of the total of 720 seats available in all the six medical colleges in the State only 8 out of 21 of the category of sons and daughters of military personnel, and only 361 out of 699 available for all other categories could be and were admitted in the academic year 1979-80. Rule 9, which has been relied upon by the respondents as well as by K. K. Dube, J. and the Chief Justice say s that in case sufficient number of candidates do not qualify for admission under any reserved category, barring, of course, the category of Scheduled Castes and Scheduled Tribes candidates, and any seats remain vacant, such vacant seats shall be filled by preparing a combined merit list of all the remaining categories of candidates on the waiting list and the candidates shall be admitted according to merit in the list so prepared. But that Rule was not applied by the respondents and could not be applied under the circumstances of the case when 338 seats in all other categories and 13 seats of the category of sons and daughters of military personnel could not be filled in 1979- 80 on the basis of the said minimum number of qualifying marks, namely, 50 per cent in the aggregate and 33 per cent in each of the subjects. Then Note (1) to Rule 20 providing for lowering of the qualifying marks upto 5 per cent in the aggregate for all categories was applied. Even then 64 seat s of all other categories and 7 seats of the category of sons and daughters of military personnel could not be filled and remained vacant. Then the Government by an executive order issued the notification dated 10th March, 1980 reducing the minimum qualifying marks to 43 per cent in the aggregate, and it is only at this stage Rule 9 was applied with the result that in the category of sons and daughters of military personnel only 2 more candidates could secure admission and 7 seats of that category had to be filled by other categories. We are of the opinion that since the minimum qualifying marks were reduced to 43 per cent by an executive order without any provision therefor in the statutory rules, Rule 9 of the statutory rules could not be applied at that stage, and that the appellant who had secured 43.6 per cent of marks in the aggregate should have been admitted in the category to which he belongs. We think that the difference between 45 per cent in the aggregate, to which the minimum qualifying marks were reduced under Note (1) to Rule 20 and 43.6 per cent of marks in the aggregate secured by the appellant is so little that it could not be a valid or sufficient reason for giving a go -bye, on the ground of merit, to the reservation provided for in Rule 7 of the Rules. The appellant deserves to be admitted even for this reason. In these circumstances we are unable to agree with the view taken by K.K. Dube, J. and the Chief Justice, and we agree with the conclusion reached by A.R. Navkar, J.

Amarjit Kaur Vs. Pritam Singh & Others

Mathew, J.1. In these appeals, a common question of law arises for consideration and this judgment will dispose of all the appeals.2. We will take up for consideration Civil Appeal No. 941 (N) of 1973. The appellant challenges the correctness of a decree passed by the High Court dismissing a suit for pre-emption. The plaint property belonged to defendant No. 4. He sold the same to defendants Nos. 1 to 3 by a sale deed dated July 29, 1965 and registered on October 14, 1965. The appellant who is the daughter of defendant No.4, claiming that she has a right to pre-empt, instituted the suit through her guardian. The trial court decreed the suit. Against the decree, an appeal, was preferred by the vendees. That appeal was dismissed on July 17, 1971. An appeal was preferred to the High Court against this decree. The Punjab Pre-emption (Repeal) Act, 1973 (Act 11 of 1973) received the assent of the Governor of Punjab on April 6, 1973 and was published in the Punjab Gazette on April 9, 1973. The High Court allowed the appeal and dismissed the suit holding that the provision of S.3 of the above Act should govern the decision. The plaintiff-appellant then applied for leave to file letters patent appeal. That was dismissed.3. Section 3 of the Punjab Pre-emption (Repeal) Act, 1973 provides:"Bar to pass decree in suit for pre-emption - On and from the date of commencement of the Punjab Pre-emption (Repeal) Act, 1973, no court shall pass a decree in any suit for pre-emption."The section, in effect, says that no court shall decree a suit for pre-emption after the coming into force of the Act. The question is, whether the appellate court, when it passes a decree, confirming the decree for pre-emption passed by the trial court or the lower appellate court, is passing a decree for pre-emption.4. In Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 FCR 84 = (AIR 1941 FC 5 ) it was held that once the decree passed by a court had been appealed against the matter became sub judice again and thereafter the appellate court has seisin of the whole case, though for certain purposes, e.g., execution, the decree was regarded as final and the courts below retained jurisdiction. The Court further said that it has been a principle of legislation in British India at least from 1861 that a court of appeal shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Civil Procedure Code on courts of original jurisdiction, that even before the enactment of that Code, the position was explained by Bhashyam Iyengar J. in Kristnama Chariar v. Mangammal, ILR (1902) 26 Mad 91 at pp. 95, 96 (FB) in language which makes it clear that the hearing of an appeal is under the processual law of this country in the nature of a re-hearing, and that it is on the theory of an appeal being in the nature of a re-hearing that the courts in this country have in numerous cases recognised that in moulding the relief to be granted in a case on appeal, the court of appeal is entitled to take into account even facts and events which have come into existence after the decree appealed against.5. As an appeal is a re-hearing, it would follow that if the High Court were to dismiss the appeal, it would be passing a decree in a suit for pre-emption. Therefore, the only course open to the High Court was to allow the appeal and that is what the High Court has done. In other words, if the High Court were to confirm the decree allowing the suit for per-emption, it would be passing a decree in a suit for pre-emption, for, when the appellate court confirms a decree, it passes a decree of its own,and therefore, the High Court was right in allowing the appeal.

0[ds]5. As an appeal is a re-hearing, it would follow that if the High Court were to dismiss the appeal, it would be passing a decree in a suit for pre-emption. Therefore, the only course open to the High Court was to allow the appeal and that is what the High Court has done. In other words, if the High Court were to confirm the decree allowing the suit for per-emption, it would be passing a decree in a suit for pre-emption, for, when the appellate court confirms a decree, it passes a decree of its own,and therefore, the High Court was right in allowing the appeal.In Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 FCR 84 = (AIR 1941 FC 5 ) it was held that once the decree passed by a court had been appealed against the matter became sub judice again and thereafter the appellate court has seisin of the whole case, though for certain purposes, e.g., execution, the decree was regarded as final and the courts below retained jurisdiction. The Court further said that it has been a principle of legislation in British India at least from 1861 that a court of appeal shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Civil Procedure Code on courts of original jurisdiction, that even before the enactment of that Code, the position was explained by Bhashyam Iyengar J. in Kristnama Chariar v. Mangammal, ILR (1902) 26 Mad 91 at pp. 95, 96 (FB) in language which makes it clear that the hearing of an appeal is under the processual law of this country in the nature of aand that it is on the theory of an appeal being in the nature of athat the courts in this country have in numerous cases recognised that in moulding the relief to be granted in a case on appeal, the court of appeal is entitled to take into account even facts and events which have come into existence after the decree appealed against.

### Instruction: Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding. ### Input: Mathew, J.1. In these appeals, a common question of law arises for consideration and this judgment will dispose of all the appeals.2. We will take up for consideration Civil Appeal No. 941 (N) of 1973. The appellant challenges the correctness of a decree passed by the High Court dismissing a suit for pre-emption. The plaint property belonged to defendant No. 4. He sold the same to defendants Nos. 1 to 3 by a sale deed dated July 29, 1965 and registered on October 14, 1965. The appellant who is the daughter of defendant No.4, claiming that she has a right to pre-empt, instituted the suit through her guardian. The trial court decreed the suit. Against the decree, an appeal, was preferred by the vendees. That appeal was dismissed on July 17, 1971. An appeal was preferred to the High Court against this decree. The Punjab Pre-emption (Repeal) Act, 1973 (Act 11 of 1973) received the assent of the Governor of Punjab on April 6, 1973 and was published in the Punjab Gazette on April 9, 1973. The High Court allowed the appeal and dismissed the suit holding that the provision of S.3 of the above Act should govern the decision. The plaintiff-appellant then applied for leave to file letters patent appeal. That was dismissed.3. Section 3 of the Punjab Pre-emption (Repeal) Act, 1973 provides:"Bar to pass decree in suit for pre-emption - On and from the date of commencement of the Punjab Pre-emption (Repeal) Act, 1973, no court shall pass a decree in any suit for pre-emption."The section, in effect, says that no court shall decree a suit for pre-emption after the coming into force of the Act. The question is, whether the appellate court, when it passes a decree, confirming the decree for pre-emption passed by the trial court or the lower appellate court, is passing a decree for pre-emption.4. In Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 FCR 84 = (AIR 1941 FC 5 ) it was held that once the decree passed by a court had been appealed against the matter became sub judice again and thereafter the appellate court has seisin of the whole case, though for certain purposes, e.g., execution, the decree was regarded as final and the courts below retained jurisdiction. The Court further said that it has been a principle of legislation in British India at least from 1861 that a court of appeal shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Civil Procedure Code on courts of original jurisdiction, that even before the enactment of that Code, the position was explained by Bhashyam Iyengar J. in Kristnama Chariar v. Mangammal, ILR (1902) 26 Mad 91 at pp. 95, 96 (FB) in language which makes it clear that the hearing of an appeal is under the processual law of this country in the nature of a re-hearing, and that it is on the theory of an appeal being in the nature of a re-hearing that the courts in this country have in numerous cases recognised that in moulding the relief to be granted in a case on appeal, the court of appeal is entitled to take into account even facts and events which have come into existence after the decree appealed against.5. As an appeal is a re-hearing, it would follow that if the High Court were to dismiss the appeal, it would be passing a decree in a suit for pre-emption. Therefore, the only course open to the High Court was to allow the appeal and that is what the High Court has done. In other words, if the High Court were to confirm the decree allowing the suit for per-emption, it would be passing a decree in a suit for pre-emption, for, when the appellate court confirms a decree, it passes a decree of its own,and therefore, the High Court was right in allowing the appeal. ### Response: 0 ### Explanation: 5. As an appeal is a re-hearing, it would follow that if the High Court were to dismiss the appeal, it would be passing a decree in a suit for pre-emption. Therefore, the only course open to the High Court was to allow the appeal and that is what the High Court has done. In other words, if the High Court were to confirm the decree allowing the suit for per-emption, it would be passing a decree in a suit for pre-emption, for, when the appellate court confirms a decree, it passes a decree of its own,and therefore, the High Court was right in allowing the appeal.In Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 FCR 84 = (AIR 1941 FC 5 ) it was held that once the decree passed by a court had been appealed against the matter became sub judice again and thereafter the appellate court has seisin of the whole case, though for certain purposes, e.g., execution, the decree was regarded as final and the courts below retained jurisdiction. The Court further said that it has been a principle of legislation in British India at least from 1861 that a court of appeal shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Civil Procedure Code on courts of original jurisdiction, that even before the enactment of that Code, the position was explained by Bhashyam Iyengar J. in Kristnama Chariar v. Mangammal, ILR (1902) 26 Mad 91 at pp. 95, 96 (FB) in language which makes it clear that the hearing of an appeal is under the processual law of this country in the nature of aand that it is on the theory of an appeal being in the nature of athat the courts in this country have in numerous cases recognised that in moulding the relief to be granted in a case on appeal, the court of appeal is entitled to take into account even facts and events which have come into existence after the decree appealed against.

Commissioner of Income Tax, Madras Vs. C.M. Kothari, Madras (dead) & after him his Legal Representative & wife Rama Kothari

of Mrs. D. C. Kothari from this house was assessed as the income of her husband. This was on the ground that because of the interchange of the money in the family, either the purchases were made by the donors benami in the names of the donees, or alternatively, from assets transferred indirectly by the husband to the wife in each case. The Income Tax Officer pointed out that the birth-day of Mrs. C. M. Kothari had taken place earlier in the year and there was no occasion to give a birth-day present to her several months later and on a date coinciding with the purchase of this property. The Income Tax Officer also found that in the past, the father-in-law had never given such a big present to his daughter-in-law on Diwali and this time there was no special circumstance to justify it. The appeals of the assessee to the Appellate Assistant Commissioner failed as also those filed before the Tribunal. The Tribunal, however, did not hold that the transaction was benami but confirmed the other finding that the two ladies had acquired their share in the House out of assets of the husbands indirectly transferred to them. The Tribunal, however, stated a case for the opinion of the High Court, and the High Court answered the question in the negative.6. As the question whether the two transactions were benami does not fall to be considered, the only question that survives is whether this case is covered by S. 16 (3) (a) (iii). This section reads as follows:-"16 (3). In computing the total income of any individual for the purpose of assessment, there shall be included-(a) so much of the income of a wife ......................of such individual as arises directly or indirectly-(iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart;"The section takes into account not only transference of assets made directly but also made indirectly. It is impossible to state here what sorts are conferred by the word "indirectly" because such transfers may be made in different ways.7. It is argued that the first requisite of the section is that the assets must be those of the husband and that is not the case here. It is true that the section, says that the assets must be those of the husband, but it does not mean that the same assets should reach the wife. It may be that the assets in the course of being transferred, may be changed deliberately into assets of a like value of another person, as has happened in the present case. A chain of transfers, if not comprehended by the word "in directly" would easily defeat the object of the law which is to tax the income of the wife in the hands of the husband, if the income of the wife arises to her from assets transferred by the husband. The present case is an admirable instance of how indirect transfers can be made by substituting the assets of another person who has benefited to the same or nearly the same extent from assets transferred to him by the husband.8. It is next contended that even if chain transactions be included, then, unless there is consideration for the transfer by the husband, each transfer must be regarded as independent, and in the present case, the Department has not proved that the transfers by the son to the mother and by the father-in-law to his daughter-in-law were made as consideration for each other. We do not agree. It is not necessary that there should be consideration in the technical sense. If the two transfers are inter-connected and are parts of the same transaction in such a way that it can be said that the circuitous method has been adopted as a device to evade implications of this section, the case will fall within the section. In this case, the device is palpable and the two transfers are so intimately connected that they cannot but be regarded as parts of a single transaction. It has not been successfully explained why the father-in-law made such a big gift to his daughter-in-law on the occasion of Diwali and why the son made a belated gift, equally big, to his mother on the occasion of her birth-day which took place several months before. These two gifts match each other as regards the amount. The High Court overlooked the clear implication of these facts as also the implication of the fact that though the three purchasers were to get one-third share each, Mrs. C. M. Kothari paid Rs. 200 more than the other two and that each of the ladies re-paid the shares of earnest money borne by their respective husbands. An intimate connection between the two transactions, which were prima facie separate, is thus clearly established and they attract the words of the section, namely, "transferred directly or indirectly to the wife".9. In our opinion, the High Court was in error in ignoring these pertinent matters. The High Court also overlooked the fact that the purchase of the house at first was intended to be in the names of the three partners of the firm. No evidence was tendered why there was a sudden change. It is difficult to see why the ladies were named as the vendees if they did not have sufficient funds of their own. They could only buy the property if someone gave them the money. It is reasonable to infer from the facts that before the respective husbands paid the amounts, they looked up the law and found that the income of the property would still be regarded as their own income if they transferred any assets to their wives. They hit upon the expedient that the son should transfer the assets to his mother, and the father-in-law, to the daughter-in-law, obviously failing to appreciate that the word "indirectly" is meant to cover such tricks.

1[ds]We do not agree. It is not necessary that there should be consideration in the technical sense. If the two transfers are inter-connected and are parts of the same transaction in such a way that it can be said that the circuitous method has been adopted as a device to evade implications of this section, the case will fall within the section. In this case, the device is palpable and the two transfers are so intimately connected that they cannot but be regarded as parts of a single transaction. It has not been successfully explained why the father-in-law made such a big gift to his daughter-in-law on the occasion of Diwali and why the son made a belated gift, equally big, to his mother on the occasion of her birth-day which took place several months before. These two gifts match each other as regards the amount. The High Court overlooked the clear implication of these facts as also the implication of the fact that though the three purchasers were to get one-third share each, Mrs. C. M. Kothari paid Rs. 200 more than the other two and that each of the ladies re-paid the shares of earnest money borne by their respective husbands. An intimate connection between the two transactions, which were prima facie separate, is thus clearly established and they attract the words of the section, namely, "transferred directly or indirectly to the wife".9. In our opinion, the High Court was in error in ignoring these pertinent matters. The High Court also overlooked the fact that the purchase of the house at first was intended to be in the names of the three partners of the firm. No evidence was tendered why there was a sudden change. It is difficult to see why the ladies were named as the vendees if they did not have sufficient funds of their own. They could only buy the property if someone gave them the money. It is reasonable to infer from the facts that before the respective husbands paid the amounts, they looked up the law and found that the income of the property would still be regarded as their own income if they transferred any assets to their wives. They hit upon the expedient that the son should transfer the assets to his mother, and the father-in-law, to the daughter-in-law, obviously failing to appreciate that the word "indirectly" is meant to cover such tricks.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: of Mrs. D. C. Kothari from this house was assessed as the income of her husband. This was on the ground that because of the interchange of the money in the family, either the purchases were made by the donors benami in the names of the donees, or alternatively, from assets transferred indirectly by the husband to the wife in each case. The Income Tax Officer pointed out that the birth-day of Mrs. C. M. Kothari had taken place earlier in the year and there was no occasion to give a birth-day present to her several months later and on a date coinciding with the purchase of this property. The Income Tax Officer also found that in the past, the father-in-law had never given such a big present to his daughter-in-law on Diwali and this time there was no special circumstance to justify it. The appeals of the assessee to the Appellate Assistant Commissioner failed as also those filed before the Tribunal. The Tribunal, however, did not hold that the transaction was benami but confirmed the other finding that the two ladies had acquired their share in the House out of assets of the husbands indirectly transferred to them. The Tribunal, however, stated a case for the opinion of the High Court, and the High Court answered the question in the negative.6. As the question whether the two transactions were benami does not fall to be considered, the only question that survives is whether this case is covered by S. 16 (3) (a) (iii). This section reads as follows:-"16 (3). In computing the total income of any individual for the purpose of assessment, there shall be included-(a) so much of the income of a wife ......................of such individual as arises directly or indirectly-(iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart;"The section takes into account not only transference of assets made directly but also made indirectly. It is impossible to state here what sorts are conferred by the word "indirectly" because such transfers may be made in different ways.7. It is argued that the first requisite of the section is that the assets must be those of the husband and that is not the case here. It is true that the section, says that the assets must be those of the husband, but it does not mean that the same assets should reach the wife. It may be that the assets in the course of being transferred, may be changed deliberately into assets of a like value of another person, as has happened in the present case. A chain of transfers, if not comprehended by the word "in directly" would easily defeat the object of the law which is to tax the income of the wife in the hands of the husband, if the income of the wife arises to her from assets transferred by the husband. The present case is an admirable instance of how indirect transfers can be made by substituting the assets of another person who has benefited to the same or nearly the same extent from assets transferred to him by the husband.8. It is next contended that even if chain transactions be included, then, unless there is consideration for the transfer by the husband, each transfer must be regarded as independent, and in the present case, the Department has not proved that the transfers by the son to the mother and by the father-in-law to his daughter-in-law were made as consideration for each other. We do not agree. It is not necessary that there should be consideration in the technical sense. If the two transfers are inter-connected and are parts of the same transaction in such a way that it can be said that the circuitous method has been adopted as a device to evade implications of this section, the case will fall within the section. In this case, the device is palpable and the two transfers are so intimately connected that they cannot but be regarded as parts of a single transaction. It has not been successfully explained why the father-in-law made such a big gift to his daughter-in-law on the occasion of Diwali and why the son made a belated gift, equally big, to his mother on the occasion of her birth-day which took place several months before. These two gifts match each other as regards the amount. The High Court overlooked the clear implication of these facts as also the implication of the fact that though the three purchasers were to get one-third share each, Mrs. C. M. Kothari paid Rs. 200 more than the other two and that each of the ladies re-paid the shares of earnest money borne by their respective husbands. An intimate connection between the two transactions, which were prima facie separate, is thus clearly established and they attract the words of the section, namely, "transferred directly or indirectly to the wife".9. In our opinion, the High Court was in error in ignoring these pertinent matters. The High Court also overlooked the fact that the purchase of the house at first was intended to be in the names of the three partners of the firm. No evidence was tendered why there was a sudden change. It is difficult to see why the ladies were named as the vendees if they did not have sufficient funds of their own. They could only buy the property if someone gave them the money. It is reasonable to infer from the facts that before the respective husbands paid the amounts, they looked up the law and found that the income of the property would still be regarded as their own income if they transferred any assets to their wives. They hit upon the expedient that the son should transfer the assets to his mother, and the father-in-law, to the daughter-in-law, obviously failing to appreciate that the word "indirectly" is meant to cover such tricks. ### Response: 1 ### Explanation: We do not agree. It is not necessary that there should be consideration in the technical sense. If the two transfers are inter-connected and are parts of the same transaction in such a way that it can be said that the circuitous method has been adopted as a device to evade implications of this section, the case will fall within the section. In this case, the device is palpable and the two transfers are so intimately connected that they cannot but be regarded as parts of a single transaction. It has not been successfully explained why the father-in-law made such a big gift to his daughter-in-law on the occasion of Diwali and why the son made a belated gift, equally big, to his mother on the occasion of her birth-day which took place several months before. These two gifts match each other as regards the amount. The High Court overlooked the clear implication of these facts as also the implication of the fact that though the three purchasers were to get one-third share each, Mrs. C. M. Kothari paid Rs. 200 more than the other two and that each of the ladies re-paid the shares of earnest money borne by their respective husbands. An intimate connection between the two transactions, which were prima facie separate, is thus clearly established and they attract the words of the section, namely, "transferred directly or indirectly to the wife".9. In our opinion, the High Court was in error in ignoring these pertinent matters. The High Court also overlooked the fact that the purchase of the house at first was intended to be in the names of the three partners of the firm. No evidence was tendered why there was a sudden change. It is difficult to see why the ladies were named as the vendees if they did not have sufficient funds of their own. They could only buy the property if someone gave them the money. It is reasonable to infer from the facts that before the respective husbands paid the amounts, they looked up the law and found that the income of the property would still be regarded as their own income if they transferred any assets to their wives. They hit upon the expedient that the son should transfer the assets to his mother, and the father-in-law, to the daughter-in-law, obviously failing to appreciate that the word "indirectly" is meant to cover such tricks.

THE MANAGER THE MAHARASHTRA STATE COOP. BANK LTD Vs. FARMER BANK EMPLOYEES COOPERATIVE HOUSING SOCIETY LTD

Lambat, learned Advocate for the Respondent No.1 and Mr. Satyajit A Desai, learned Advocate for the Respondent No.2. 11. The facts on record clearly indicate that neither the Respondent No.1 nor any of its members were involved when the initial allotment was made by the Respondent No.2 in favour of the Appellant, when 16 plots were carved out from the allotted land and 28 tenements were constructed. The tenements were constructed by the Appellant to take care of the needs of its employees for housing. The facility of loans was also extended to each of the allottees and the finance was made available at comfortable rate of interest. It is accepted that there was absolutely no profit motive behind the exercise and the Appellant did not even demand any interest in respect of funds employed by it and what was sought to be recovered was only the element of actual costs incurred by it. 12. It is also clear from the record that the Resolution to transfer the land in favour of the employees or the legal heirs was passed by the Appellant on 21.01.2004. There is nothing on record to indicate that any requisition or demands were made by the Society to have the land transferred and yet there was any delay on part of the Appellant in acting in terms of the Resolution. There was, thus, no deficiency on part of the Appellant or refusal on its part to act in terms of the aforesaid Resolution dated 12.01.1977. If, as a result of any delay in execution of the document in favour of the Society for which the Appellant was not responsible, the Society would now be required to pay stamp duty at an enhanced rate, that by itself does not give any entitlement to seek relief against the Appellant. 13. It is true that the tabular chart extracted in para 9 of the complaint denotes that the cost of land as well as the actual expenditure incurred in erecting 28 tenements aggregated to Rs.6,34,457.87, which was divided by 28, being number of tenements, to arrive at what would be the actual cost relatable to each of those tenements. After receiving financial accommodation and other advantages, each one of the tenement holders had made good such amount. It was, therefore, contended that all the tenement holders together had some interest in said two vacant plots.However, the documents on record do not indicate any intention on part of the Appellant that any interest in respect of said two plots was intended to be created. The idea was to make available tenements to the concerned on no profit no loss basis and not to let them have those two plots and enable them to profiteer out of the transaction. That is precisely why one of the alternatives suggested by the Respondent No.1 to resolve the dispute was option e in para 13 as extracted hereinabove. The relief in the complaint gives measure of the value of those plots which was stated to be in the region of Rs.98 lakhs in the year 2012. The nature of reliefs claimed by Respondent No.1 indicates that apart from 28 tenements and the land appurtenant thereto, the Respondent No.1 was also desirous of securing interest in respect of said two plots. 14. As stated above, it was never the intent of the Appellant and there is nothing on record to even suggest that the idea was to transfer interest in respect of those two plots in favour of the employees or the Society formed by the employees. This issue was squarely raised before the National Commission but the matter was not considered at all. Be that as it may, we have gone through the record and do not find any indication or even a whisper that any decision was taken to transfer interest in relation to those two plots as well. 15. The fact of the matter however remains that some contribution towards cost of land was made by all the tenement holders. If the amount representing cost of land was Rs.90,300/- and had there been 32 tenements, individual share of every tenement holder would have come to approximately Rs.2,822/-. However, dividing said amount by number 28, the contribution that each of the tenement holder actually paid was Rs.3,225/-; which would mean that roughly Rs.400/- extra were charged from each one of them. Accepting the plea taken by the Respondent No.1 in option e in para 13 as mentioned hereinabove, interest of justice, in our view, would be met if the appellant is directed to make over to every tenement holder a sum of Rs.10,000/- in compensation for having recovered Rs.400/- over and above what logically could have been recovered from each one of them. It is, of course, left to the appellant either pay to each tenement holder a sum of Rs.10,000/- or transfer the entire land to the Society. 16. It was seriously argued that the role played by the appellant was not that of a service provider and all that it had done was to extend a helping hand so that its employees could satisfy their housing needs. It was also submitted that there was absolutely no profit element and in fact the appellant had incurred considerable expenditure towards interest burden for having invested some money over a period of time which element was never sought to be recovered. It is, thus, seriously disputed and submitted that the instant matter could not have been gone into by fora under the provisions of the Act. However, at this length of time, we do not deem it appropriate to relegate the Respondent No.1 to any other remedy. Therefore, in peculiar circumstances of the case, we have proceeded on the footing that the matter was maintainable before the fora under the Act. But as stated earlier, there was absolutely no deficiency on part of the Appellant and no justification in imposing any costs and directing the Appellant to pay compensation to the Respondent No.1.

1[ds]11. The facts on record clearly indicate that neither the Respondent No.1 nor any of its members were involved when the initial allotment was made by the Respondent No.2 in favour of the Appellant, when 16 plots were carved out from the allotted land and 28 tenements were constructed. The tenements were constructed by the Appellant to take care of the needs of its employees for housing. The facility of loans was also extended to each of the allottees and the finance was made available at comfortable rate of interest. It is accepted that there was absolutely no profit motive behind the exercise and the Appellant did not even demand any interest in respect of funds employed by it and what was sought to be recovered was only the element of actual costs incurred by it12. It is also clear from the record that the Resolution to transfer the land in favour of the employees or the legal heirs was passed by the Appellant on 21.01.2004. There is nothing on record to indicate that any requisition or demands were made by the Society to have the land transferred and yet there was any delay on part of the Appellant in acting in terms of the Resolution. There was, thus, no deficiency on part of the Appellant or refusal on its part to act in terms of the aforesaid Resolution dated 12.01.1977. If, as a result of any delay in execution of the document in favour of the Society for which the Appellant was not responsible, the Society would now be required to pay stamp duty at an enhanced rate, that by itself does not give any entitlement to seek relief against the Appellant13. It is true that the tabular chart extracted in para 9 of the complaint denotes that the cost of land as well as the actual expenditure incurred in erecting 28 tenements aggregated to Rs.6,34,457.87, which was divided by 28, being number of tenements, to arrive at what would be the actual cost relatable to each of those tenements. After receiving financial accommodation and other advantages, each one of the tenement holders had made good such amount.However, the documents on record do not indicate any intention on part of the Appellant that any interest in respect of said two plots was intended to be created. The idea was to make available tenements to the concerned on no profit no loss basis and not to let them have those two plots and enable them to profiteer out of the transaction. That is precisely why one of the alternatives suggested by the Respondent No.1 to resolve the dispute was option e in para 13 as extracted hereinabove. The relief in the complaint gives measure of the value of those plots which was stated to be in the region of Rs.98 lakhs in the year 2012. The nature of reliefs claimed by Respondent No.1 indicates that apart from 28 tenements and the land appurtenant thereto, the Respondent No.1 was also desirous of securing interest in respect of said two plots14. As stated above, it was never the intent of the Appellant and there is nothing on record to even suggest that the idea was to transfer interest in respect of those two plots in favour of the employees or the Society formed by the employees. This issue was squarely raised before the National Commission but the matter was not considered at all. Be that as it may, we have gone through the record and do not find any indication or even a whisper that any decision was taken to transfer interest in relation to those two plots as well15. The fact of the matter however remains that some contribution towards cost of land was made by all the tenement holders. If the amount representing cost of land was Rs.90,300/- and had there been 32 tenements, individual share of every tenement holder would have come to approximately Rs.2,822/-. However, dividing said amount by number 28, the contribution that each of the tenement holder actually paid was Rs.3,225/-; which would mean that roughly Rs.400/- extra were charged from each one of them. Accepting the plea taken by the Respondent No.1 in option e in para 13 as mentioned hereinabove, interest of justice, in our view, would be met if the appellant is directed to make over to every tenement holder a sum of Rs.10,000/- in compensation for having recovered Rs.400/- over and above what logically could have been recovered from each one of them. It is, of course, left to the appellant either pay to each tenement holder a sum of Rs.10,000/- or transfer the entire land to the SocietyHowever, at this length of time, we do not deem it appropriate to relegate the Respondent No.1 to any other remedy. Therefore, in peculiar circumstances of the case, we have proceeded on the footing that the matter was maintainable before the fora under the Act. But as stated earlier, there was absolutely no deficiency on part of the Appellant and no justification in imposing any costs and directing the Appellant to pay compensation to the Respondent No.1.

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: Lambat, learned Advocate for the Respondent No.1 and Mr. Satyajit A Desai, learned Advocate for the Respondent No.2. 11. The facts on record clearly indicate that neither the Respondent No.1 nor any of its members were involved when the initial allotment was made by the Respondent No.2 in favour of the Appellant, when 16 plots were carved out from the allotted land and 28 tenements were constructed. The tenements were constructed by the Appellant to take care of the needs of its employees for housing. The facility of loans was also extended to each of the allottees and the finance was made available at comfortable rate of interest. It is accepted that there was absolutely no profit motive behind the exercise and the Appellant did not even demand any interest in respect of funds employed by it and what was sought to be recovered was only the element of actual costs incurred by it. 12. It is also clear from the record that the Resolution to transfer the land in favour of the employees or the legal heirs was passed by the Appellant on 21.01.2004. There is nothing on record to indicate that any requisition or demands were made by the Society to have the land transferred and yet there was any delay on part of the Appellant in acting in terms of the Resolution. There was, thus, no deficiency on part of the Appellant or refusal on its part to act in terms of the aforesaid Resolution dated 12.01.1977. If, as a result of any delay in execution of the document in favour of the Society for which the Appellant was not responsible, the Society would now be required to pay stamp duty at an enhanced rate, that by itself does not give any entitlement to seek relief against the Appellant. 13. It is true that the tabular chart extracted in para 9 of the complaint denotes that the cost of land as well as the actual expenditure incurred in erecting 28 tenements aggregated to Rs.6,34,457.87, which was divided by 28, being number of tenements, to arrive at what would be the actual cost relatable to each of those tenements. After receiving financial accommodation and other advantages, each one of the tenement holders had made good such amount. It was, therefore, contended that all the tenement holders together had some interest in said two vacant plots.However, the documents on record do not indicate any intention on part of the Appellant that any interest in respect of said two plots was intended to be created. The idea was to make available tenements to the concerned on no profit no loss basis and not to let them have those two plots and enable them to profiteer out of the transaction. That is precisely why one of the alternatives suggested by the Respondent No.1 to resolve the dispute was option e in para 13 as extracted hereinabove. The relief in the complaint gives measure of the value of those plots which was stated to be in the region of Rs.98 lakhs in the year 2012. The nature of reliefs claimed by Respondent No.1 indicates that apart from 28 tenements and the land appurtenant thereto, the Respondent No.1 was also desirous of securing interest in respect of said two plots. 14. As stated above, it was never the intent of the Appellant and there is nothing on record to even suggest that the idea was to transfer interest in respect of those two plots in favour of the employees or the Society formed by the employees. This issue was squarely raised before the National Commission but the matter was not considered at all. Be that as it may, we have gone through the record and do not find any indication or even a whisper that any decision was taken to transfer interest in relation to those two plots as well. 15. The fact of the matter however remains that some contribution towards cost of land was made by all the tenement holders. If the amount representing cost of land was Rs.90,300/- and had there been 32 tenements, individual share of every tenement holder would have come to approximately Rs.2,822/-. However, dividing said amount by number 28, the contribution that each of the tenement holder actually paid was Rs.3,225/-; which would mean that roughly Rs.400/- extra were charged from each one of them. Accepting the plea taken by the Respondent No.1 in option e in para 13 as mentioned hereinabove, interest of justice, in our view, would be met if the appellant is directed to make over to every tenement holder a sum of Rs.10,000/- in compensation for having recovered Rs.400/- over and above what logically could have been recovered from each one of them. It is, of course, left to the appellant either pay to each tenement holder a sum of Rs.10,000/- or transfer the entire land to the Society. 16. It was seriously argued that the role played by the appellant was not that of a service provider and all that it had done was to extend a helping hand so that its employees could satisfy their housing needs. It was also submitted that there was absolutely no profit element and in fact the appellant had incurred considerable expenditure towards interest burden for having invested some money over a period of time which element was never sought to be recovered. It is, thus, seriously disputed and submitted that the instant matter could not have been gone into by fora under the provisions of the Act. However, at this length of time, we do not deem it appropriate to relegate the Respondent No.1 to any other remedy. Therefore, in peculiar circumstances of the case, we have proceeded on the footing that the matter was maintainable before the fora under the Act. But as stated earlier, there was absolutely no deficiency on part of the Appellant and no justification in imposing any costs and directing the Appellant to pay compensation to the Respondent No.1. ### Response: 1 ### Explanation: 11. The facts on record clearly indicate that neither the Respondent No.1 nor any of its members were involved when the initial allotment was made by the Respondent No.2 in favour of the Appellant, when 16 plots were carved out from the allotted land and 28 tenements were constructed. The tenements were constructed by the Appellant to take care of the needs of its employees for housing. The facility of loans was also extended to each of the allottees and the finance was made available at comfortable rate of interest. It is accepted that there was absolutely no profit motive behind the exercise and the Appellant did not even demand any interest in respect of funds employed by it and what was sought to be recovered was only the element of actual costs incurred by it12. It is also clear from the record that the Resolution to transfer the land in favour of the employees or the legal heirs was passed by the Appellant on 21.01.2004. There is nothing on record to indicate that any requisition or demands were made by the Society to have the land transferred and yet there was any delay on part of the Appellant in acting in terms of the Resolution. There was, thus, no deficiency on part of the Appellant or refusal on its part to act in terms of the aforesaid Resolution dated 12.01.1977. If, as a result of any delay in execution of the document in favour of the Society for which the Appellant was not responsible, the Society would now be required to pay stamp duty at an enhanced rate, that by itself does not give any entitlement to seek relief against the Appellant13. It is true that the tabular chart extracted in para 9 of the complaint denotes that the cost of land as well as the actual expenditure incurred in erecting 28 tenements aggregated to Rs.6,34,457.87, which was divided by 28, being number of tenements, to arrive at what would be the actual cost relatable to each of those tenements. After receiving financial accommodation and other advantages, each one of the tenement holders had made good such amount.However, the documents on record do not indicate any intention on part of the Appellant that any interest in respect of said two plots was intended to be created. The idea was to make available tenements to the concerned on no profit no loss basis and not to let them have those two plots and enable them to profiteer out of the transaction. That is precisely why one of the alternatives suggested by the Respondent No.1 to resolve the dispute was option e in para 13 as extracted hereinabove. The relief in the complaint gives measure of the value of those plots which was stated to be in the region of Rs.98 lakhs in the year 2012. The nature of reliefs claimed by Respondent No.1 indicates that apart from 28 tenements and the land appurtenant thereto, the Respondent No.1 was also desirous of securing interest in respect of said two plots14. As stated above, it was never the intent of the Appellant and there is nothing on record to even suggest that the idea was to transfer interest in respect of those two plots in favour of the employees or the Society formed by the employees. This issue was squarely raised before the National Commission but the matter was not considered at all. Be that as it may, we have gone through the record and do not find any indication or even a whisper that any decision was taken to transfer interest in relation to those two plots as well15. The fact of the matter however remains that some contribution towards cost of land was made by all the tenement holders. If the amount representing cost of land was Rs.90,300/- and had there been 32 tenements, individual share of every tenement holder would have come to approximately Rs.2,822/-. However, dividing said amount by number 28, the contribution that each of the tenement holder actually paid was Rs.3,225/-; which would mean that roughly Rs.400/- extra were charged from each one of them. Accepting the plea taken by the Respondent No.1 in option e in para 13 as mentioned hereinabove, interest of justice, in our view, would be met if the appellant is directed to make over to every tenement holder a sum of Rs.10,000/- in compensation for having recovered Rs.400/- over and above what logically could have been recovered from each one of them. It is, of course, left to the appellant either pay to each tenement holder a sum of Rs.10,000/- or transfer the entire land to the SocietyHowever, at this length of time, we do not deem it appropriate to relegate the Respondent No.1 to any other remedy. Therefore, in peculiar circumstances of the case, we have proceeded on the footing that the matter was maintainable before the fora under the Act. But as stated earlier, there was absolutely no deficiency on part of the Appellant and no justification in imposing any costs and directing the Appellant to pay compensation to the Respondent No.1.

Gangadharrao Narayanrao Majumdar Vs. The State Of Bombay And Another With Connected Appeals)

provisions of the Code". Section 17-A provides for the issue of bonds while S. 18 provides for the application of the Bombay Tenancy and Agricultural Lands Act, 1948, to any inam village or inam land or the mutual rights and obligations of an inamdar and his tenants. Sec. 19 provides for making of rules and S. 20 deals with repeals and amendments. 5. It will be seen from this analysis of the Act that the main provisions are sections 4, 5 and 7. So far as S. 7 is concerned, there is provision for compensation with respect to lands vested in the State by virtue of that section. But no compensation is provided for the rights extinguished by Ss. 4 and 5. As we have seen already the main right of an inamdar was to hold his lands on payment of land revenue which was less than the full assessment and it is this right which has been abolished by Ss. 4 and 5 and the inamdar will now have to pay the full assessment. No compensation has been provided for the loss which the inamdar suffers by having to pay the full assessment. 6. This brings us to the first contention. On behalf of the appellants it is urged that what Ss. 4 and 5 extinguish is the right of the inamdar to appropriate to himself the difference between the full assessment and the quit-rent, and this is not an estate within the meaning of Art. 31-A of the Constitution. The relevant provisions in Art. 31-A for present purposes are these :"31-A (1) - Notwithstanding anything contained in Art. 13, no law providing for - (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or (b) ...... .......... ......... ......... (c) ...... .......... ......... ......... (d) ...... .......... ......... ......... (e) ...... .......... ......... ......... Shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Art. 14, Art. 19 or Art. 31 : Provided .......... ......... ......... ...... (2) In this article - (a) the expression estate shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in the area, and shall also include any jagir, inam or muafi or other similar grant and in the States of Madras and Kerala any janmam right; (b) the expression rights in relation to an estate shall include any rights vesting in a proprietor, sub-proprietor, under-proprietor, tenure-holder, raiyat, under-raiyat or other intermediary and any rights or privileges in respect of land revenue." 7. It will be clear from the definition of the word "estate" in Art. 31-A (2)(a) that it specifically includes an "inam" within it.As such it would be in our opinion idle to contend that inam are not estates within the meaning of the expression "estate" for the purpose of Art. 31-A.The Act specifically deals with inams and would thus be obviously protected under Art. 31-A from any attack under Art. 14, Art. 19 or Art. 31. It is, however, urged that the right of the inmadar to appropriate to himself that part of full assessment which was left over after he had paid the quit-rent to the Government is not a right in an estate. This contention also has no force. Inams being estates, the right of the inamdar to retain part of the full assessment over and above the quit-rent payable to the Government arises because he holds the inam-estate. The right therefore can be nothing more than a right in an estate. Besides the definition of the expression "rights" in Art. 31-A (2)(b) makes the position clear beyond all doubt, for it provides that the rights in relation to an estate would include any rights or privileges in respect of land revenue. Even if it were possible to say that the right of the inamdar to appropriate to himself the difference between the full assessment and the quit-rent was not a right in an estate as such, it would become a right in an estate by virtue of this inclusive definition for the inamdars right could only be a right or privilege in respect of land-revenue. Besides, it is clear that the right in question falls under S. 3(5) of the Code and as such also it is an estate under Art. 31-A. 8. The contention of the appellants therefore that inams dealt with by the Act are not covered by the expression "estate" in Art. 31-A fails. Their further contention that their right to retain the difference between full assessment and quit-rent is not a right in an estate also fails. The Act therefore when it extinguishes or modifies the rights of inamdars in the inam estates is clearly protected by Art. 31-A. 9. The next contention is that the Act does not provide for compensation and is therefore ultra vires in view of Art. 31. We find, however, that the Act has provided for compensation under S. 10 so far as that part of inam lands which are vested in the State by S. 7 are concerned. Further S. 17 provides for compensation in a possible case where anything has been left out by S. 7 and the inamdar is entitled to compensation for it. It is true that by sub-sec. (5) of S. 17 no compensation is to be paid for the loss to the inamdar of what he used to get because of the difference between the quit-rent and the full assessment. It is however clear that Art. 31-A saves the Act from any attack under Art. 31 which is the only Article providing for compensation. In this view of the matter the constitutionality of the Act cannot be assailed on the ground that it provides no compensation for extinction of certain rights. 10. Ther

0[ds]7. It will be clear from the definition of the word "estate" in Art.A (2)(a) that it specifically includes an "inam" within it.As such it would be in our opinion idle to contend that inam are not estates within the meaning of the expression "estate" for the purpose of Art.e Act specifically deals with inams and would thus be obviously protected under Art.A from any attack under Art. 14, Art. 19 or Art. 31. It is, however, urged that the right of the inmadar to appropriate to himself that part of full assessment which was left over after he had paid thet to the Government is not a right in an estate. This contention also has no force. Inams being estates, the right of the inamdar to retain part of the full assessment over and above thet payable to the Government arises because he holds the. The right therefore can be nothing more than a right in an estate. Besides the definition of the expression "rights" in Art.A (2)(b) makes the position clear beyond all doubt, for it provides that the rights in relation to an estate would include any rights or privileges in respect of land revenue. Even if it were possible to say that the right of the inamdar to appropriate to himself the difference between the full assessment and thet was not a right in an estate as such, it would become a right in an estate by virtue of this inclusive definition for the inamdars right could only be a right or privilege in respect of. Besides, it is clear that the right in question falls under S. 3(5) of the Code and as such also it is an estate under Art.. Thecontention of the appellants therefore that inams dealt with by the Act are not covered by the expression "estate" in Art.r further contention that their right to retain the difference between full assessment andt is not a right in an estate also. TheWe find, however, that the Act has provided for compensation under S. 10 so far as that part of inam lands which are vested in the State by S. 7 are concerned. Further S. 17 provides for compensation in a possible case where anything has been left out by S. 7 and the inamdar is entitled to compensation for it. It is true that by. (5) of S. 17 no compensation is to be paid for the loss to the inamdar of what he used to get because of the difference between thet and the full assessment. It is however clear that Art.A saves the Act from any attack under Art. 31 which is the only Article providing for compensation. In this view of the matter the constitutionality of the Act cannot be assailed on the ground that it provides no compensation for extinction of certain rights.

### Instruction: Evaluate the case proceeding to forecast the court's decision (1 for yes, 0 for no), and elucidate the reasoning behind this prediction with important textual evidence from the case. ### Input: provisions of the Code". Section 17-A provides for the issue of bonds while S. 18 provides for the application of the Bombay Tenancy and Agricultural Lands Act, 1948, to any inam village or inam land or the mutual rights and obligations of an inamdar and his tenants. Sec. 19 provides for making of rules and S. 20 deals with repeals and amendments. 5. It will be seen from this analysis of the Act that the main provisions are sections 4, 5 and 7. So far as S. 7 is concerned, there is provision for compensation with respect to lands vested in the State by virtue of that section. But no compensation is provided for the rights extinguished by Ss. 4 and 5. As we have seen already the main right of an inamdar was to hold his lands on payment of land revenue which was less than the full assessment and it is this right which has been abolished by Ss. 4 and 5 and the inamdar will now have to pay the full assessment. No compensation has been provided for the loss which the inamdar suffers by having to pay the full assessment. 6. This brings us to the first contention. On behalf of the appellants it is urged that what Ss. 4 and 5 extinguish is the right of the inamdar to appropriate to himself the difference between the full assessment and the quit-rent, and this is not an estate within the meaning of Art. 31-A of the Constitution. The relevant provisions in Art. 31-A for present purposes are these :"31-A (1) - Notwithstanding anything contained in Art. 13, no law providing for - (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or (b) ...... .......... ......... ......... (c) ...... .......... ......... ......... (d) ...... .......... ......... ......... (e) ...... .......... ......... ......... Shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Art. 14, Art. 19 or Art. 31 : Provided .......... ......... ......... ...... (2) In this article - (a) the expression estate shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in the area, and shall also include any jagir, inam or muafi or other similar grant and in the States of Madras and Kerala any janmam right; (b) the expression rights in relation to an estate shall include any rights vesting in a proprietor, sub-proprietor, under-proprietor, tenure-holder, raiyat, under-raiyat or other intermediary and any rights or privileges in respect of land revenue." 7. It will be clear from the definition of the word "estate" in Art. 31-A (2)(a) that it specifically includes an "inam" within it.As such it would be in our opinion idle to contend that inam are not estates within the meaning of the expression "estate" for the purpose of Art. 31-A.The Act specifically deals with inams and would thus be obviously protected under Art. 31-A from any attack under Art. 14, Art. 19 or Art. 31. It is, however, urged that the right of the inmadar to appropriate to himself that part of full assessment which was left over after he had paid the quit-rent to the Government is not a right in an estate. This contention also has no force. Inams being estates, the right of the inamdar to retain part of the full assessment over and above the quit-rent payable to the Government arises because he holds the inam-estate. The right therefore can be nothing more than a right in an estate. Besides the definition of the expression "rights" in Art. 31-A (2)(b) makes the position clear beyond all doubt, for it provides that the rights in relation to an estate would include any rights or privileges in respect of land revenue. Even if it were possible to say that the right of the inamdar to appropriate to himself the difference between the full assessment and the quit-rent was not a right in an estate as such, it would become a right in an estate by virtue of this inclusive definition for the inamdars right could only be a right or privilege in respect of land-revenue. Besides, it is clear that the right in question falls under S. 3(5) of the Code and as such also it is an estate under Art. 31-A. 8. The contention of the appellants therefore that inams dealt with by the Act are not covered by the expression "estate" in Art. 31-A fails. Their further contention that their right to retain the difference between full assessment and quit-rent is not a right in an estate also fails. The Act therefore when it extinguishes or modifies the rights of inamdars in the inam estates is clearly protected by Art. 31-A. 9. The next contention is that the Act does not provide for compensation and is therefore ultra vires in view of Art. 31. We find, however, that the Act has provided for compensation under S. 10 so far as that part of inam lands which are vested in the State by S. 7 are concerned. Further S. 17 provides for compensation in a possible case where anything has been left out by S. 7 and the inamdar is entitled to compensation for it. It is true that by sub-sec. (5) of S. 17 no compensation is to be paid for the loss to the inamdar of what he used to get because of the difference between the quit-rent and the full assessment. It is however clear that Art. 31-A saves the Act from any attack under Art. 31 which is the only Article providing for compensation. In this view of the matter the constitutionality of the Act cannot be assailed on the ground that it provides no compensation for extinction of certain rights. 10. Ther ### Response: 0 ### Explanation: 7. It will be clear from the definition of the word "estate" in Art.A (2)(a) that it specifically includes an "inam" within it.As such it would be in our opinion idle to contend that inam are not estates within the meaning of the expression "estate" for the purpose of Art.e Act specifically deals with inams and would thus be obviously protected under Art.A from any attack under Art. 14, Art. 19 or Art. 31. It is, however, urged that the right of the inmadar to appropriate to himself that part of full assessment which was left over after he had paid thet to the Government is not a right in an estate. This contention also has no force. Inams being estates, the right of the inamdar to retain part of the full assessment over and above thet payable to the Government arises because he holds the. The right therefore can be nothing more than a right in an estate. Besides the definition of the expression "rights" in Art.A (2)(b) makes the position clear beyond all doubt, for it provides that the rights in relation to an estate would include any rights or privileges in respect of land revenue. Even if it were possible to say that the right of the inamdar to appropriate to himself the difference between the full assessment and thet was not a right in an estate as such, it would become a right in an estate by virtue of this inclusive definition for the inamdars right could only be a right or privilege in respect of. Besides, it is clear that the right in question falls under S. 3(5) of the Code and as such also it is an estate under Art.. Thecontention of the appellants therefore that inams dealt with by the Act are not covered by the expression "estate" in Art.r further contention that their right to retain the difference between full assessment andt is not a right in an estate also. TheWe find, however, that the Act has provided for compensation under S. 10 so far as that part of inam lands which are vested in the State by S. 7 are concerned. Further S. 17 provides for compensation in a possible case where anything has been left out by S. 7 and the inamdar is entitled to compensation for it. It is true that by. (5) of S. 17 no compensation is to be paid for the loss to the inamdar of what he used to get because of the difference between thet and the full assessment. It is however clear that Art.A saves the Act from any attack under Art. 31 which is the only Article providing for compensation. In this view of the matter the constitutionality of the Act cannot be assailed on the ground that it provides no compensation for extinction of certain rights.

Ram Bharosey Lal Gupta(D) by Lrs. & Others Vs. M/s. Hindustan Petroleum Corp. Ltd. & Another

a trespasser not a tenant and therefore, it becomes liable to pay mesne profits by way of damages to the appellants. 24. The above important aspect of the matter has not been properly considered by the High Court while answering the substantial question of law. The High Court has committed serious error both on facts and in law in holding that there is deemed renewal of the demised premises in favour of the first respondent and it has not properly interpreted Section 7 of the Caltex Act regarding the fairness, reasonableness and non arbitrariness on the part of the first respondent Corporation though it has not complied with the requirements as provided under Clause 3 (d) of the lease deed. Therefore, framing of substantial question of law itself in the second appeal by the High Court is bad in law as the same does not arise at all. Having regard to the undisputed facts of the case in hand, the second appellate court has not rightly interpreted clause 3 (d) of the lease deed and the same is contrary to the facts and therefore, the finding recorded on the substantial question of law and holding that there is a deemed renewal of the demised property for a period of 20 years in view of the notice dated 1.4.1980 sent to the appellant but not to the mortgagee is not only erroneous but also error in law, therefore, the said finding is liable to be set aside. In the case of Bharat Petroleum Corporation Ltd. Vs. Maddula Ratnavalli and Ors. (supra) this Court has interpreted the provisions of Section 5(2) and 7 (3) of Burmah Shell (Acquisition and Undertakings in India) Act, 1976 and Section 7 (3) of the Caltex Act 1977, with reference to the provisions of T.P. Act. Indisputably, 1976 Act is a special statute. No doubt, it over rides the provisions of Section 107 of the T.P. Act. Undisputedly, the first respondent Corporation is a State as it is a successor of Caltex India Ltd. in terms of the definition of Article 12 of the Constitution of India. In the above referred case, vide para 13, this Court has laid down the legal principles after referring to its earlier decision in the case of Bharat Petroleum Corporation Ltd. Vs. P.Kesavan and Anr. [(2004) 9 SCC 772] The legal principle evolved therein shows that the finding recorded by the High Court in the impugned judgment on the substantial question of law is contrary to the decision of this Court as well as terms and conditions of clause 3(d) of the lease deed. The said paragraph is extracted hereunder:- 13. The appellant company is a State within the meaning of Article 12 of the Constitution of India. It is, therefore, enjoined with a duty to act fairly and reasonably. Just because it has been conferred with a statutory power, the same by itself would not mean that exercise thereof in any manner whatsoever will meet the requirements of law. The statute uses the words if so desired by the Central Government. Such a desire cannot be based upon a subjective satisfaction. It must be based on objective criteria. Indisputably, the 1976 Act is a special statute. It overrides the provisions of Section 107 of the Transfer of Property Act. The action of the State, however, must be judged on the touchstone of reasonableness. Learned counselfor both the parties have relied upon a three-Judge Bench decision of this Court in Bharat Petroleum Corpn. Ltd. v. P. Kesavan wherein this Court in para 11 has held as hereunder: 11. The said Act is a special statute vis-à-¶is the Transfer of Property Act which is a general statute. By reason of the provisions of the said Act, the right, title and interest of Burmah Shell vested in the Central Government and consequently in the appellant Company. A lease of immovable property is also an asset and/or right in an immovable property. The leasehold right, thus, held by Burmah Shell vested in the appellant. By reason of sub-section (2) of Section 5 of the Act, a right of renewal was created in the appellant in terms whereof in the event of exercise of its option, the existing lease was renewed for a further term on the same terms and conditions. As noticed hereinbefore, Section 11 of the Act provides for a non obstante clause. 25. In view of the undisputed facts referred to supra and the clause 3 (d) of the lease deed regarding the renewal of lease for a period of 20 years after expiry of the initial period of renewal it has come to an end on 1.7.2000. Therefore, the first appellate court was right in holding that the possession of the demised property by the first respondent Corporation is holding over month to month and therefore it is a trespasser of the said schedule property and therefore invoking Section 106 of the T.P. Act by the appellant and determining the tenancy by him and filing the suit for arrears of rent and also decree of ejectment of the first respondent from the demised premises is legally justified. Further, with reference to Section 7 of the Caltex Act the action of the first respondent is unfair as there is no fairness, reasonableness and non- arbitrariness on its part to avail the right under the above provision for continuing as a tenant in respect of the demised property. Hence, we are required to set aside the impugned judgment of the second appellate court and restore the judgment and decree of the first appellate court. The first respondent Corporation is not even willing to give fair and reasonable rent as it has offered only Rs.5000/- per month whereas the rental market value of the property according to the appellants counsel is more than Rs.30,000/- per month. 26. Therefore, we are of the view that the aforesaid decision of this Court on all fours be applicable to the fact situation in favour of the appellants.

1[ds]By careful reading of the said clause of the lease deed having regard to the undisputed fact that the demised premises was mortgaged in favour of the mortgagee with possession as the appellant had executed mortgage deed in his favour on 12.01.1962, he continued to be a mortgagee till the property was redeemed in his favour on 15.4.1983. It is also the case of the first respondent that it had sent a notice for renewal of the lease deed to the appellant, but not to the mortgagee as he had stepped into the shoes of the owner of the mortgaged property till the same was redeemed to the appellant on 15.04.1983. In view of the above undisputed fact to avail the benefit of Clause 3 (d) of the lease deed, the first respondent should have sent the notice to the mortgagee of the property seeking renewal of lease of the demised property as provided under the above clause. Therefore, the first respondent Corporation has failed to exercise its right to get the renewal of lease in respect of the demised premises. This aspect of the matter has been overlooked by both the trial court as well as the High Court though the first appellate court considered this aspect of the matter in its judgment. Therefore, the determination of tenancy of the demised property by the appellant under Section 106 of the T.P. Act is perfectly legal and valid. Further, it has been held that the first respondent after termination of tenancy continued in possession of the property as a tenant of holding-over. Thus, in law, holding over of the suit schedule property by the first respondent after the termination of lease is that of a trespasser not a tenant and therefore, it becomes liable to pay mesne profits by way of damages to the appellantsIn view of the undisputed facts referred to supra and the clause 3 (d) of the lease deed regarding the renewal of lease for a period of 20 years after expiry of the initial period of renewal it has come to an end on 1.7.2000. Therefore, the first appellate court was right in holding that the possession of the demised property by the first respondent Corporation is holding over month to month and therefore it is a trespasser of the said schedule property and therefore invoking Section 106 of the T.P. Act by the appellant and determining the tenancy by him and filing the suit for arrears of rent and also decree of ejectment of the first respondent from the demised premises is legally justified. Further, with reference to Section 7 of the Caltex Act the action of the first respondent is unfair as there is no fairness, reasonableness and non- arbitrariness on its part to avail the right under the above provision for continuing as a tenant in respect of the demised property. Hence, we are required to set aside the impugned judgment of the second appellate court and restore the judgment and decree of the first appellate court. The first respondent Corporation is not even willing to give fair and reasonable rent as it has offered only Rs.5000/- per month whereas the rental market value of the property according to the appellants counsel is more than Rs.30,000/- per monthTherefore, we are of the view that the aforesaid decision of this Court on all fours be applicable to the fact situation in favour of the appellants.

### Instruction: Conjecture the end result of the case (acceptance (1) or non-acceptance (0) of the appeal), followed by a detailed explanation using crucial sentences from the case proceeding. ### Input: a trespasser not a tenant and therefore, it becomes liable to pay mesne profits by way of damages to the appellants. 24. The above important aspect of the matter has not been properly considered by the High Court while answering the substantial question of law. The High Court has committed serious error both on facts and in law in holding that there is deemed renewal of the demised premises in favour of the first respondent and it has not properly interpreted Section 7 of the Caltex Act regarding the fairness, reasonableness and non arbitrariness on the part of the first respondent Corporation though it has not complied with the requirements as provided under Clause 3 (d) of the lease deed. Therefore, framing of substantial question of law itself in the second appeal by the High Court is bad in law as the same does not arise at all. Having regard to the undisputed facts of the case in hand, the second appellate court has not rightly interpreted clause 3 (d) of the lease deed and the same is contrary to the facts and therefore, the finding recorded on the substantial question of law and holding that there is a deemed renewal of the demised property for a period of 20 years in view of the notice dated 1.4.1980 sent to the appellant but not to the mortgagee is not only erroneous but also error in law, therefore, the said finding is liable to be set aside. In the case of Bharat Petroleum Corporation Ltd. Vs. Maddula Ratnavalli and Ors. (supra) this Court has interpreted the provisions of Section 5(2) and 7 (3) of Burmah Shell (Acquisition and Undertakings in India) Act, 1976 and Section 7 (3) of the Caltex Act 1977, with reference to the provisions of T.P. Act. Indisputably, 1976 Act is a special statute. No doubt, it over rides the provisions of Section 107 of the T.P. Act. Undisputedly, the first respondent Corporation is a State as it is a successor of Caltex India Ltd. in terms of the definition of Article 12 of the Constitution of India. In the above referred case, vide para 13, this Court has laid down the legal principles after referring to its earlier decision in the case of Bharat Petroleum Corporation Ltd. Vs. P.Kesavan and Anr. [(2004) 9 SCC 772] The legal principle evolved therein shows that the finding recorded by the High Court in the impugned judgment on the substantial question of law is contrary to the decision of this Court as well as terms and conditions of clause 3(d) of the lease deed. The said paragraph is extracted hereunder:- 13. The appellant company is a State within the meaning of Article 12 of the Constitution of India. It is, therefore, enjoined with a duty to act fairly and reasonably. Just because it has been conferred with a statutory power, the same by itself would not mean that exercise thereof in any manner whatsoever will meet the requirements of law. The statute uses the words if so desired by the Central Government. Such a desire cannot be based upon a subjective satisfaction. It must be based on objective criteria. Indisputably, the 1976 Act is a special statute. It overrides the provisions of Section 107 of the Transfer of Property Act. The action of the State, however, must be judged on the touchstone of reasonableness. Learned counselfor both the parties have relied upon a three-Judge Bench decision of this Court in Bharat Petroleum Corpn. Ltd. v. P. Kesavan wherein this Court in para 11 has held as hereunder: 11. The said Act is a special statute vis-à-¶is the Transfer of Property Act which is a general statute. By reason of the provisions of the said Act, the right, title and interest of Burmah Shell vested in the Central Government and consequently in the appellant Company. A lease of immovable property is also an asset and/or right in an immovable property. The leasehold right, thus, held by Burmah Shell vested in the appellant. By reason of sub-section (2) of Section 5 of the Act, a right of renewal was created in the appellant in terms whereof in the event of exercise of its option, the existing lease was renewed for a further term on the same terms and conditions. As noticed hereinbefore, Section 11 of the Act provides for a non obstante clause. 25. In view of the undisputed facts referred to supra and the clause 3 (d) of the lease deed regarding the renewal of lease for a period of 20 years after expiry of the initial period of renewal it has come to an end on 1.7.2000. Therefore, the first appellate court was right in holding that the possession of the demised property by the first respondent Corporation is holding over month to month and therefore it is a trespasser of the said schedule property and therefore invoking Section 106 of the T.P. Act by the appellant and determining the tenancy by him and filing the suit for arrears of rent and also decree of ejectment of the first respondent from the demised premises is legally justified. Further, with reference to Section 7 of the Caltex Act the action of the first respondent is unfair as there is no fairness, reasonableness and non- arbitrariness on its part to avail the right under the above provision for continuing as a tenant in respect of the demised property. Hence, we are required to set aside the impugned judgment of the second appellate court and restore the judgment and decree of the first appellate court. The first respondent Corporation is not even willing to give fair and reasonable rent as it has offered only Rs.5000/- per month whereas the rental market value of the property according to the appellants counsel is more than Rs.30,000/- per month. 26. Therefore, we are of the view that the aforesaid decision of this Court on all fours be applicable to the fact situation in favour of the appellants. ### Response: 1 ### Explanation: By careful reading of the said clause of the lease deed having regard to the undisputed fact that the demised premises was mortgaged in favour of the mortgagee with possession as the appellant had executed mortgage deed in his favour on 12.01.1962, he continued to be a mortgagee till the property was redeemed in his favour on 15.4.1983. It is also the case of the first respondent that it had sent a notice for renewal of the lease deed to the appellant, but not to the mortgagee as he had stepped into the shoes of the owner of the mortgaged property till the same was redeemed to the appellant on 15.04.1983. In view of the above undisputed fact to avail the benefit of Clause 3 (d) of the lease deed, the first respondent should have sent the notice to the mortgagee of the property seeking renewal of lease of the demised property as provided under the above clause. Therefore, the first respondent Corporation has failed to exercise its right to get the renewal of lease in respect of the demised premises. This aspect of the matter has been overlooked by both the trial court as well as the High Court though the first appellate court considered this aspect of the matter in its judgment. Therefore, the determination of tenancy of the demised property by the appellant under Section 106 of the T.P. Act is perfectly legal and valid. Further, it has been held that the first respondent after termination of tenancy continued in possession of the property as a tenant of holding-over. Thus, in law, holding over of the suit schedule property by the first respondent after the termination of lease is that of a trespasser not a tenant and therefore, it becomes liable to pay mesne profits by way of damages to the appellantsIn view of the undisputed facts referred to supra and the clause 3 (d) of the lease deed regarding the renewal of lease for a period of 20 years after expiry of the initial period of renewal it has come to an end on 1.7.2000. Therefore, the first appellate court was right in holding that the possession of the demised property by the first respondent Corporation is holding over month to month and therefore it is a trespasser of the said schedule property and therefore invoking Section 106 of the T.P. Act by the appellant and determining the tenancy by him and filing the suit for arrears of rent and also decree of ejectment of the first respondent from the demised premises is legally justified. Further, with reference to Section 7 of the Caltex Act the action of the first respondent is unfair as there is no fairness, reasonableness and non- arbitrariness on its part to avail the right under the above provision for continuing as a tenant in respect of the demised property. Hence, we are required to set aside the impugned judgment of the second appellate court and restore the judgment and decree of the first appellate court. The first respondent Corporation is not even willing to give fair and reasonable rent as it has offered only Rs.5000/- per month whereas the rental market value of the property according to the appellants counsel is more than Rs.30,000/- per monthTherefore, we are of the view that the aforesaid decision of this Court on all fours be applicable to the fact situation in favour of the appellants.

Election Commission Of India Vs. N.G. Ranga And Ors

its own record whether there was any justification for the grievance made by respondent 2. But in giving to respondent 1 an opportunity to submit his explanation. the appellant, far from acting beyond the scope of its statutory and constitutional powers, acted in conformity with the principles of natural justice. Article 103 (1) gives finality to the Presidents decision which, under the old provision, h ad to be in conformity with the opinion of the Election Commission. Before giving an opinion which thus had finality, the Commission acted but fairly in asking respondent 1 to submit his say. As stated above, it had the power to ascertain what explanation respondent I had to give an answer to respondent 2s allegations.8. The High Court misdirected itself in reaching the conclusion that the appellant acted beyond its jurisdiction in issuing the notice to respondent 1 calling upon him to submit his explanation in regard to the allegations made by respondent 2 in his petition to the President. According to the High Court, "facts leading to disqualification under section 10A" of the Act, "cannot be the subject matter of inquiry and decision under Article 103 of the Constitution?. It is impossible to accept this statement of law in view of the express provision contained in Article 103(1) (a) that if any question arises as to whether a member of either House of Parliament has become subject to any of the disqualifications mentioned in Article 102(1), the question shall be referred for the decision of the President. Article 102(1) provides by sub-clause (e) that a person shall be disqualified for being chosen as, and for being, a member of either House of Parliament if he is so disqualified by or under any law made by Parliament. By section 10(A) of the Act, the Election Commission has the power to declare a person to be disqualified if it is satisfied that he has failed to lodge an account of election expenses within the time and in the manner required by or under the Act and has no good reason or justification for the failure. A declaration of disqualification made in pursuance of power conferred by section 10(A) is a declaration made by the Election Commission under a law made by Parliament. It, therefore, attracts Article 102(1)(e) and consequently Article 103(1) of the Constitution.The High Court there after proceeded to hold that the question whether respondent 1 had become subject to any disqualification under section 10(A) of the Act did not arise on the facts stated in the petition by respondent. We do not see our way to accepting this statement.9. Though respondent 2 was not in a position to make a categorical assertion in his petition that respondent 1 had incurred a specific disqualification he did make allegations generally in regard to disqualifications said to have been incurred by respondent 1. Upon the making of these allegations a question arose or contemplated by Article 103(1)(a) of the Constitution and the President had to obtain the opinion of the Election Commission on that question. Respondent 2s petition could not have been rejected by the President without reference to the Election Commission on the ground that the allegations made by respondent 2 were unfounded or unsubstantial.10. A similar question arose before this Court in Brundaban Nayak v. Election Commission of India and Anr. ([1965] (3) S.C.R. 53.) Article 191(1) of the Constitution provides that a person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State if, inter alia, he is so disqualified by or under any law made by Parliament. Article 192(1), as it then stood, provided that if any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of Article 191, the question shall be referred for he decision of the Governor and his decision shall be final. By Article 192(2) the Governor had to obtain the opinion of the Election Com mission before giving his decision and he was also under an obligation to act according to the Commissions opinion. These provisions correspond to Articles 102 and 103 respectively with which we are concerned. While dealing with an argument as to whether it could be said that the question as contemplated by Article 192(1) had arisen, Gajendragadkar, C.J. speaking on behalf of the Court observed that the first clause of Article 192(1) P did not permit of any limitations and that all that the clause required was that a question should arise. How the question arose, by whom it was raised and under what circumstances it was raised were not relevant for the purpose of the application of the clause. The Court took notice of the fact that complaints made to the Governor could be frivolous or fantastic, but it held that if they were of such a character, the Election Commission would have no difficulty in expressing its opinion that they should be rejected. That however did not mean that a question as contemplated by Article 192(1) did not arise. Lastly it was urged in that case that it is the Governor and not the Election Commission who had to hold the enquiry since the Constitution required the Governor to decide the particular question. This contention was rejected on the ground that it was the opinion of the Election Commission which in substance was decisive and therefore it was legitimate to assume that when the complaint received by the Governor was forwarded by him to the Election Commission, the latter had the power and the jurisdiction to go into the matter which meant that it had the authority to issue notice to the person against whom the complaint was made, calling him to file his statement and produce evidence in support of his case. The High Court was in error in seeing "nothing" in this decision which was contrary to its view.

1[ds]The narrow question for consideration is whether the appellant had jurisdiction to issue the notice to respondent 1 calling upon him to submit his explanation in regard to the allegations contained in the petition presented by respondent 2 to the President of India who, in turn, had referred the petition for the opinion of thethe presentation of a petition by respondent 2 to the President of India, alleging that respondent 1 had become subject to the disqualifications mentioned in Article 102(1) of the Constitution, 2 question clearly arose as to whether respondent 1 had truly become subject to any of the disqualifications mentioned in that Article. B y clause (2) of Article 103, the President was bound to obtain the opinion of the appellant before giving his decision on the question. Not only that, but the President was further bound to act according to the opinion given by the appellant. The President therefore acted both in the exercise of constitutional authority and in the discharge of his constitutional obligation in referring the question raised by respondent 2s petition for the opinion of thesee no doubt that the Election Commission, by reason of these provisions, had the power and authority to require respondent 1 to furnish information on matters which were relevant to the subject matter of the inquiry, namely, the allegations contained in the petition presented by respondent 2 to the President ofsection 10(A) of the Act, the Election Commission has the power to declare a person to be disqualified if it is satisfied that he has failed to lodge an account of election expenses within the time and in the manner required by or under the Act and has no good reason or justification for the failure. A declaration of disqualification made in pursuance of power conferred by section 10(A) is a declaration made by the Election Commission under a law made by Parliament. It, therefore, attracts Article 102(1)(e) and consequently Article 103(1) of the Constitution.The High Court there after proceeded to hold that the question whether respondent 1 had become subject to any disqualification under section 10(A) of the Act did not arise on the facts stated in the petition by respondent. We do not see our way to accepting thissimilar question arose before this Court in Brundaban Nayak v. Election Commission of India and Anr. ([1965] (3) S.C.R. 53.) Article 191(1) of the Constitution provides that a person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State if, inter alia, he is so disqualified by or under any law made by Parliament. Article 192(1), as it then stood, provided that if any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of Article 191, the question shall be referred for he decision of the Governor and his decision shall be final. By Article 192(2) the Governor had to obtain the opinion of the Election Com mission before giving his decision and he was also under an obligation to act according to the Commissions opinion. These provisions correspond to Articles 102 and 103 respectively with which we are concerned. While dealing with an argument as to whether it could be said that the question as contemplated by Article 192(1) had arisen, Gajendragadkar, C.J. speaking on behalf of the Court observed that the first clause of Article 192(1) P did not permit of any limitations and that all that the clause required was that a question should arise. How the question arose, by whom it was raised and under what circumstances it was raised were not relevant for the purpose of the application of the clause. The Court took notice of the fact that complaints made to the Governor could be frivolous or fantastic, but it held that if they were of such a character, the Election Commission would have no difficulty in expressing its opinion that they should be rejected. That however did not mean that a question as contemplated by Article 192(1) did not arise.Lastly it was urged in that case that it is the Governor and not the Election Commission who had to hold the enquiry since the Constitution required the Governor to decide the particular question.This contention was rejected on the ground that it was the opinion of the Election Commission which in substance was decisive and therefore it was legitimate to assume that when the complaint received by the Governor was forwarded by him to the Election Commission, the latter had the power and the jurisdiction to go into the matter which meant that it had the authority to issue notice to the person against whom the complaint was made, calling him to file his statement and produce evidence in support of his case. The High Court was in error in seeing "nothing" in this decision which was contrary to its view

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: its own record whether there was any justification for the grievance made by respondent 2. But in giving to respondent 1 an opportunity to submit his explanation. the appellant, far from acting beyond the scope of its statutory and constitutional powers, acted in conformity with the principles of natural justice. Article 103 (1) gives finality to the Presidents decision which, under the old provision, h ad to be in conformity with the opinion of the Election Commission. Before giving an opinion which thus had finality, the Commission acted but fairly in asking respondent 1 to submit his say. As stated above, it had the power to ascertain what explanation respondent I had to give an answer to respondent 2s allegations.8. The High Court misdirected itself in reaching the conclusion that the appellant acted beyond its jurisdiction in issuing the notice to respondent 1 calling upon him to submit his explanation in regard to the allegations made by respondent 2 in his petition to the President. According to the High Court, "facts leading to disqualification under section 10A" of the Act, "cannot be the subject matter of inquiry and decision under Article 103 of the Constitution?. It is impossible to accept this statement of law in view of the express provision contained in Article 103(1) (a) that if any question arises as to whether a member of either House of Parliament has become subject to any of the disqualifications mentioned in Article 102(1), the question shall be referred for the decision of the President. Article 102(1) provides by sub-clause (e) that a person shall be disqualified for being chosen as, and for being, a member of either House of Parliament if he is so disqualified by or under any law made by Parliament. By section 10(A) of the Act, the Election Commission has the power to declare a person to be disqualified if it is satisfied that he has failed to lodge an account of election expenses within the time and in the manner required by or under the Act and has no good reason or justification for the failure. A declaration of disqualification made in pursuance of power conferred by section 10(A) is a declaration made by the Election Commission under a law made by Parliament. It, therefore, attracts Article 102(1)(e) and consequently Article 103(1) of the Constitution.The High Court there after proceeded to hold that the question whether respondent 1 had become subject to any disqualification under section 10(A) of the Act did not arise on the facts stated in the petition by respondent. We do not see our way to accepting this statement.9. Though respondent 2 was not in a position to make a categorical assertion in his petition that respondent 1 had incurred a specific disqualification he did make allegations generally in regard to disqualifications said to have been incurred by respondent 1. Upon the making of these allegations a question arose or contemplated by Article 103(1)(a) of the Constitution and the President had to obtain the opinion of the Election Commission on that question. Respondent 2s petition could not have been rejected by the President without reference to the Election Commission on the ground that the allegations made by respondent 2 were unfounded or unsubstantial.10. A similar question arose before this Court in Brundaban Nayak v. Election Commission of India and Anr. ([1965] (3) S.C.R. 53.) Article 191(1) of the Constitution provides that a person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State if, inter alia, he is so disqualified by or under any law made by Parliament. Article 192(1), as it then stood, provided that if any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of Article 191, the question shall be referred for he decision of the Governor and his decision shall be final. By Article 192(2) the Governor had to obtain the opinion of the Election Com mission before giving his decision and he was also under an obligation to act according to the Commissions opinion. These provisions correspond to Articles 102 and 103 respectively with which we are concerned. While dealing with an argument as to whether it could be said that the question as contemplated by Article 192(1) had arisen, Gajendragadkar, C.J. speaking on behalf of the Court observed that the first clause of Article 192(1) P did not permit of any limitations and that all that the clause required was that a question should arise. How the question arose, by whom it was raised and under what circumstances it was raised were not relevant for the purpose of the application of the clause. The Court took notice of the fact that complaints made to the Governor could be frivolous or fantastic, but it held that if they were of such a character, the Election Commission would have no difficulty in expressing its opinion that they should be rejected. That however did not mean that a question as contemplated by Article 192(1) did not arise. Lastly it was urged in that case that it is the Governor and not the Election Commission who had to hold the enquiry since the Constitution required the Governor to decide the particular question. This contention was rejected on the ground that it was the opinion of the Election Commission which in substance was decisive and therefore it was legitimate to assume that when the complaint received by the Governor was forwarded by him to the Election Commission, the latter had the power and the jurisdiction to go into the matter which meant that it had the authority to issue notice to the person against whom the complaint was made, calling him to file his statement and produce evidence in support of his case. The High Court was in error in seeing "nothing" in this decision which was contrary to its view. ### Response: 1 ### Explanation: The narrow question for consideration is whether the appellant had jurisdiction to issue the notice to respondent 1 calling upon him to submit his explanation in regard to the allegations contained in the petition presented by respondent 2 to the President of India who, in turn, had referred the petition for the opinion of thethe presentation of a petition by respondent 2 to the President of India, alleging that respondent 1 had become subject to the disqualifications mentioned in Article 102(1) of the Constitution, 2 question clearly arose as to whether respondent 1 had truly become subject to any of the disqualifications mentioned in that Article. B y clause (2) of Article 103, the President was bound to obtain the opinion of the appellant before giving his decision on the question. Not only that, but the President was further bound to act according to the opinion given by the appellant. The President therefore acted both in the exercise of constitutional authority and in the discharge of his constitutional obligation in referring the question raised by respondent 2s petition for the opinion of thesee no doubt that the Election Commission, by reason of these provisions, had the power and authority to require respondent 1 to furnish information on matters which were relevant to the subject matter of the inquiry, namely, the allegations contained in the petition presented by respondent 2 to the President ofsection 10(A) of the Act, the Election Commission has the power to declare a person to be disqualified if it is satisfied that he has failed to lodge an account of election expenses within the time and in the manner required by or under the Act and has no good reason or justification for the failure. A declaration of disqualification made in pursuance of power conferred by section 10(A) is a declaration made by the Election Commission under a law made by Parliament. It, therefore, attracts Article 102(1)(e) and consequently Article 103(1) of the Constitution.The High Court there after proceeded to hold that the question whether respondent 1 had become subject to any disqualification under section 10(A) of the Act did not arise on the facts stated in the petition by respondent. We do not see our way to accepting thissimilar question arose before this Court in Brundaban Nayak v. Election Commission of India and Anr. ([1965] (3) S.C.R. 53.) Article 191(1) of the Constitution provides that a person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State if, inter alia, he is so disqualified by or under any law made by Parliament. Article 192(1), as it then stood, provided that if any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of Article 191, the question shall be referred for he decision of the Governor and his decision shall be final. By Article 192(2) the Governor had to obtain the opinion of the Election Com mission before giving his decision and he was also under an obligation to act according to the Commissions opinion. These provisions correspond to Articles 102 and 103 respectively with which we are concerned. While dealing with an argument as to whether it could be said that the question as contemplated by Article 192(1) had arisen, Gajendragadkar, C.J. speaking on behalf of the Court observed that the first clause of Article 192(1) P did not permit of any limitations and that all that the clause required was that a question should arise. How the question arose, by whom it was raised and under what circumstances it was raised were not relevant for the purpose of the application of the clause. The Court took notice of the fact that complaints made to the Governor could be frivolous or fantastic, but it held that if they were of such a character, the Election Commission would have no difficulty in expressing its opinion that they should be rejected. That however did not mean that a question as contemplated by Article 192(1) did not arise.Lastly it was urged in that case that it is the Governor and not the Election Commission who had to hold the enquiry since the Constitution required the Governor to decide the particular question.This contention was rejected on the ground that it was the opinion of the Election Commission which in substance was decisive and therefore it was legitimate to assume that when the complaint received by the Governor was forwarded by him to the Election Commission, the latter had the power and the jurisdiction to go into the matter which meant that it had the authority to issue notice to the person against whom the complaint was made, calling him to file his statement and produce evidence in support of his case. The High Court was in error in seeing "nothing" in this decision which was contrary to its view

STANDARD CHARTERED BANK Vs. MSTC LIMITED

before the Recovery Officer deemed to be before a Tribunal, entirely different considerations may have arisen. From this sentence, the learned counsel sought to infer that it would not only be applications under Section 19 that would come within the application spoken of in Section 24, but other applications also. 12. We are afraid we are unable to agree with the aforesaid submission. The clear ratio decidendi of this judgment makes it abundantly clear that the only application referred to in Section 24 is an application filed under Section 19 and to no other. The sentence that is extracted and relied upon by Mr. Dave only makes sense in the context of Section 30 unamended, when read juxtaposed with Section 30 as amended. Under the unamended section, when the recovery officers order was deemed as an order of the Tribunal, appeals would lie to the Appellate Tribunal. This would mean that Section 20 of the RDB Act would apply, as a result of which Section 20(3) would kick in and would permit condonation of delay. After the amendment, it is important to note that the recovery officer is no longer considered a Tribunal, as result of which an appeal from a recovery officers order is made not to the Appellate Tribunal, but to the Tribunal of first instance. It is in this context that the aforesaid sentence in paragraph 12 of the Courts judgment is to be read, making it clear that if the unamended Section 30 were to apply, the provision contained in Section 20(3) would be attracted, permitting condonation of delay. 13. Mr. Daves second contention that, in any case, a review petition is only a correction of the order made in the original proceeding, and therefore part and parcel of the original proceeding, cannot be countenanced in view of this Courts judgment in Kamlesh Verma vs. Mayawati and Others (supra). This Court held: 13. In a criminal proceeding, review is permissible on the ground of an error apparent on the face of the record. A review proceeding cannot be equated with the original hearing of the case. 20.2. When the review will not be maintainable: (i) xxx (iii) Review proceedings cannot be equated with the original hearing of the case. 14. The peremptory language of Rule 5A would also make it clear that beyond 30 days there is no power to condone delay. We may also note that Rule 5A was added in 1997 with a longer period within which to file a review petition, namely, 60 days. This period was cut down, by amendment, with effect from 04.11.2016, to 30 days. From this two things are clear: one, whether in the original or unamended provision, there is no separate power to condone delay, as is contained in Section 20(3) of the Act; and second, that the period of 60 days was considered too long and cut down to 30 days thereby evincing an intention that review petitions, if they are to be filed, should be within a shorter period of limitation – otherwise they would not be maintainable. 15. We are also of the view that the High Court wrongly applied Order XLVII Rule 7 of the Code of Civil Procedure. Order XLVII Rule 7 states as follows: 7. Order of rejection not appealable - Objections to order granting application.- (1) An order of the Court rejecting the application shall not be appealable; but an order granting an application may be objected to at once by an appeal from the order granting the application or in an appeal from the decree or order finally passed or made in the suit. (2) Where the application has been rejected in consequence of the failure of the applicant to appear, he may apply for an order to have the rejected application restored to the file, and, where it is proved to the satisfaction of the Court that he was prevented by any sufficient cause from appearing when such application was called on for hearing, the Court shall order it to be restored to the file upon such terms as to costs or otherwise as it thinks fit, and shall appoint a day for hearing the same. (3) No order shall be made under sub-rule (2) unless notice of the application has been served on the opposite party. 16. Section 22(1) of the Act makes it clear that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, making it clear thereby that Order XLVII Rule 7 would not apply to the Tribunal. Also, in view of Section 20, which applies to all applications that may be made, including applications for review, and orders being made therein being subject to appeal, it is a little difficult to appreciate how Order XLVII Rule 7 could apply at all, given that Section 20 of the RDB Act is part of a complete and exhaustive code. Section 34 of the Act makes it clear that the 1993 Act, (and, therefore, Section 20), will have overriding effect over any other law for the time being in force, which includes the Code of Civil Procedure. The High Court, in holding that no appeal would be maintainable against the dismissal of the review petition, and that therefore a writ petition would be maintainable, was clearly in error on this count also. 17. Shri Daves contention that as to the appellants conduct, as in an application filed in 2012 an I.A praying that a judgment should be given on admission, was filed unconscionably late i.e. only in 2017, five years later, also has no legs to stand. In 2013, the respondent challenged the jurisdiction of the DRT Mumbai which challenge was repelled finally in appeal only in 2017 after which the said I.A was filed. In any event, this is not an argument which would, by itself, lead to a dismissal of the SLP filed by the appellant under Article 136 of the Constitution of India.

1[ds]6. A reading of the aforesaid provisions of the Act and Rules would show that review petitions are dealt with in Section 22(2)(e) read with Rule 5A of the Rules. Section 24, which applies the provisions of the Limitation Act to applications made to a Tribunal, would, as per the definition section contained in Section 2(b), apply only to applications that are made under Section 19, which are original applications to recover debts that are made by banks and financial institutions. What is clear is that an application for review cannot possibly be said to be an application filed under Section 19 even on a cursory reading of the provisions of the Act, as it traces its origin to Section 22(2)(e) read with Rule 5A of the Rules10. The judgment of this Court makes it plain, though in a slightly different context, that the only application that is referred to by Section 24 of the RDB Act is an application filed under Section 19 and no other. This being the case, an application for review, not being an application under Section 19, but an application under Section 22(2)(e) read with Rule 5A of the Rules, this judgment would apply on all fours to exclude applications which are review applications from the purview of Section 24 of the RDB Act12. We are afraid we are unable to agree with the aforesaid submission. The clear ratio decidendi of this judgment makes it abundantly clear that the only application referred to in Section 24 is an application filed under Section 19 and to no other. The sentence that is extracted and relied upon by Mr. Dave only makes sense in the context of Section 30 unamended, when read juxtaposed with Section 30 as amended. Under the unamended section, when the recovery officers order was deemed as an order of the Tribunal, appeals would lie to the Appellate Tribunal. This would mean that Section 20 of the RDB Act would apply, as a result of which Section 20(3) would kick in and would permit condonation of delay. After the amendment, it is important to note that the recovery officer is no longer considered a Tribunal, as result of which an appeal from a recovery officers order is made not to the Appellate Tribunal, but to the Tribunal of first instance. It is in this context that the aforesaid sentence in paragraph 12 of the Courts judgment is to be read, making it clear that if the unamended Section 30 were to apply, the provision contained in Section 20(3) would be attracted, permitting condonation of delay13. Mr. Daves second contention that, in any case, a review petition is only a correction of the order made in the original proceeding, and therefore part and parcel of the original proceeding, cannot be countenanced in view of this Courts judgment in Kamlesh Verma vs. Mayawati and Others (supra)14. The peremptory language of Rule 5A would also make it clear that beyond 30 days there is no power to condone delay. We may also note that Rule 5A was added in 1997 with a longer period within which to file a review petition, namely, 60 days. This period was cut down, by amendment, with effect from 04.11.2016, to 30 days. From this two things are clear: one, whether in the original or unamended provision, there is no separate power to condone delay, as is contained in Section 20(3) of the Act; and second, that the period of 60 days was considered too long and cut down to 30 days thereby evincing an intention that review petitions, if they are to be filed, should be within a shorter period of limitation – otherwise they would not be maintainable15. We are also of the view that the High Court wrongly applied Order XLVII Rule 7 of the Code of Civil Procedure16. Section 22(1) of the Act makes it clear that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, making it clear thereby that Order XLVII Rule 7 would not apply to the Tribunal. Also, in view of Section 20, which applies to all applications that may be made, including applications for review, and orders being made therein being subject to appeal, it is a little difficult to appreciate how Order XLVII Rule 7 could apply at all, given that Section 20 of the RDB Act is part of a complete and exhaustive code. Section 34 of the Act makes it clear that the 1993 Act, (and, therefore, Section 20), will have overriding effect over any other law for the time being in force, which includes the Code of Civil Procedure. The High Court, in holding that no appeal would be maintainable against the dismissal of the review petition, and that therefore a writ petition would be maintainable, was clearly in error on this count also17. Shri Daves contention that as to the appellants conduct, as in an application filed in 2012 an I.A praying that a judgment should be given on admission, was filed unconscionably late i.e. only in 2017, five years later, also has no legs to stand. In 2013, the respondent challenged the jurisdiction of the DRT Mumbai which challenge was repelled finally in appeal only in 2017 after which the said I.A was filed. In any event, this is not an argument which would, by itself, lead to a dismissal of the SLP filed by the appellant under Article 136 of the Constitution of India.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: before the Recovery Officer deemed to be before a Tribunal, entirely different considerations may have arisen. From this sentence, the learned counsel sought to infer that it would not only be applications under Section 19 that would come within the application spoken of in Section 24, but other applications also. 12. We are afraid we are unable to agree with the aforesaid submission. The clear ratio decidendi of this judgment makes it abundantly clear that the only application referred to in Section 24 is an application filed under Section 19 and to no other. The sentence that is extracted and relied upon by Mr. Dave only makes sense in the context of Section 30 unamended, when read juxtaposed with Section 30 as amended. Under the unamended section, when the recovery officers order was deemed as an order of the Tribunal, appeals would lie to the Appellate Tribunal. This would mean that Section 20 of the RDB Act would apply, as a result of which Section 20(3) would kick in and would permit condonation of delay. After the amendment, it is important to note that the recovery officer is no longer considered a Tribunal, as result of which an appeal from a recovery officers order is made not to the Appellate Tribunal, but to the Tribunal of first instance. It is in this context that the aforesaid sentence in paragraph 12 of the Courts judgment is to be read, making it clear that if the unamended Section 30 were to apply, the provision contained in Section 20(3) would be attracted, permitting condonation of delay. 13. Mr. Daves second contention that, in any case, a review petition is only a correction of the order made in the original proceeding, and therefore part and parcel of the original proceeding, cannot be countenanced in view of this Courts judgment in Kamlesh Verma vs. Mayawati and Others (supra). This Court held: 13. In a criminal proceeding, review is permissible on the ground of an error apparent on the face of the record. A review proceeding cannot be equated with the original hearing of the case. 20.2. When the review will not be maintainable: (i) xxx (iii) Review proceedings cannot be equated with the original hearing of the case. 14. The peremptory language of Rule 5A would also make it clear that beyond 30 days there is no power to condone delay. We may also note that Rule 5A was added in 1997 with a longer period within which to file a review petition, namely, 60 days. This period was cut down, by amendment, with effect from 04.11.2016, to 30 days. From this two things are clear: one, whether in the original or unamended provision, there is no separate power to condone delay, as is contained in Section 20(3) of the Act; and second, that the period of 60 days was considered too long and cut down to 30 days thereby evincing an intention that review petitions, if they are to be filed, should be within a shorter period of limitation – otherwise they would not be maintainable. 15. We are also of the view that the High Court wrongly applied Order XLVII Rule 7 of the Code of Civil Procedure. Order XLVII Rule 7 states as follows: 7. Order of rejection not appealable - Objections to order granting application.- (1) An order of the Court rejecting the application shall not be appealable; but an order granting an application may be objected to at once by an appeal from the order granting the application or in an appeal from the decree or order finally passed or made in the suit. (2) Where the application has been rejected in consequence of the failure of the applicant to appear, he may apply for an order to have the rejected application restored to the file, and, where it is proved to the satisfaction of the Court that he was prevented by any sufficient cause from appearing when such application was called on for hearing, the Court shall order it to be restored to the file upon such terms as to costs or otherwise as it thinks fit, and shall appoint a day for hearing the same. (3) No order shall be made under sub-rule (2) unless notice of the application has been served on the opposite party. 16. Section 22(1) of the Act makes it clear that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, making it clear thereby that Order XLVII Rule 7 would not apply to the Tribunal. Also, in view of Section 20, which applies to all applications that may be made, including applications for review, and orders being made therein being subject to appeal, it is a little difficult to appreciate how Order XLVII Rule 7 could apply at all, given that Section 20 of the RDB Act is part of a complete and exhaustive code. Section 34 of the Act makes it clear that the 1993 Act, (and, therefore, Section 20), will have overriding effect over any other law for the time being in force, which includes the Code of Civil Procedure. The High Court, in holding that no appeal would be maintainable against the dismissal of the review petition, and that therefore a writ petition would be maintainable, was clearly in error on this count also. 17. Shri Daves contention that as to the appellants conduct, as in an application filed in 2012 an I.A praying that a judgment should be given on admission, was filed unconscionably late i.e. only in 2017, five years later, also has no legs to stand. In 2013, the respondent challenged the jurisdiction of the DRT Mumbai which challenge was repelled finally in appeal only in 2017 after which the said I.A was filed. In any event, this is not an argument which would, by itself, lead to a dismissal of the SLP filed by the appellant under Article 136 of the Constitution of India. ### Response: 1 ### Explanation: 6. A reading of the aforesaid provisions of the Act and Rules would show that review petitions are dealt with in Section 22(2)(e) read with Rule 5A of the Rules. Section 24, which applies the provisions of the Limitation Act to applications made to a Tribunal, would, as per the definition section contained in Section 2(b), apply only to applications that are made under Section 19, which are original applications to recover debts that are made by banks and financial institutions. What is clear is that an application for review cannot possibly be said to be an application filed under Section 19 even on a cursory reading of the provisions of the Act, as it traces its origin to Section 22(2)(e) read with Rule 5A of the Rules10. The judgment of this Court makes it plain, though in a slightly different context, that the only application that is referred to by Section 24 of the RDB Act is an application filed under Section 19 and no other. This being the case, an application for review, not being an application under Section 19, but an application under Section 22(2)(e) read with Rule 5A of the Rules, this judgment would apply on all fours to exclude applications which are review applications from the purview of Section 24 of the RDB Act12. We are afraid we are unable to agree with the aforesaid submission. The clear ratio decidendi of this judgment makes it abundantly clear that the only application referred to in Section 24 is an application filed under Section 19 and to no other. The sentence that is extracted and relied upon by Mr. Dave only makes sense in the context of Section 30 unamended, when read juxtaposed with Section 30 as amended. Under the unamended section, when the recovery officers order was deemed as an order of the Tribunal, appeals would lie to the Appellate Tribunal. This would mean that Section 20 of the RDB Act would apply, as a result of which Section 20(3) would kick in and would permit condonation of delay. After the amendment, it is important to note that the recovery officer is no longer considered a Tribunal, as result of which an appeal from a recovery officers order is made not to the Appellate Tribunal, but to the Tribunal of first instance. It is in this context that the aforesaid sentence in paragraph 12 of the Courts judgment is to be read, making it clear that if the unamended Section 30 were to apply, the provision contained in Section 20(3) would be attracted, permitting condonation of delay13. Mr. Daves second contention that, in any case, a review petition is only a correction of the order made in the original proceeding, and therefore part and parcel of the original proceeding, cannot be countenanced in view of this Courts judgment in Kamlesh Verma vs. Mayawati and Others (supra)14. The peremptory language of Rule 5A would also make it clear that beyond 30 days there is no power to condone delay. We may also note that Rule 5A was added in 1997 with a longer period within which to file a review petition, namely, 60 days. This period was cut down, by amendment, with effect from 04.11.2016, to 30 days. From this two things are clear: one, whether in the original or unamended provision, there is no separate power to condone delay, as is contained in Section 20(3) of the Act; and second, that the period of 60 days was considered too long and cut down to 30 days thereby evincing an intention that review petitions, if they are to be filed, should be within a shorter period of limitation – otherwise they would not be maintainable15. We are also of the view that the High Court wrongly applied Order XLVII Rule 7 of the Code of Civil Procedure16. Section 22(1) of the Act makes it clear that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, making it clear thereby that Order XLVII Rule 7 would not apply to the Tribunal. Also, in view of Section 20, which applies to all applications that may be made, including applications for review, and orders being made therein being subject to appeal, it is a little difficult to appreciate how Order XLVII Rule 7 could apply at all, given that Section 20 of the RDB Act is part of a complete and exhaustive code. Section 34 of the Act makes it clear that the 1993 Act, (and, therefore, Section 20), will have overriding effect over any other law for the time being in force, which includes the Code of Civil Procedure. The High Court, in holding that no appeal would be maintainable against the dismissal of the review petition, and that therefore a writ petition would be maintainable, was clearly in error on this count also17. Shri Daves contention that as to the appellants conduct, as in an application filed in 2012 an I.A praying that a judgment should be given on admission, was filed unconscionably late i.e. only in 2017, five years later, also has no legs to stand. In 2013, the respondent challenged the jurisdiction of the DRT Mumbai which challenge was repelled finally in appeal only in 2017 after which the said I.A was filed. In any event, this is not an argument which would, by itself, lead to a dismissal of the SLP filed by the appellant under Article 136 of the Constitution of India.

Raja Bahadur Motilal Bombay Mills Ltd.And Another Vs. M/S. Govind Ram Brothers (P) Ltd., Andanother

or contrivance". All that a greedy landlord need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents. Such an evasion may amount to a fraud upon the statute. Secondly, such a construction, so manifestly subversive of one of the primary objects of the Act, would be wholly beyond the intendment of the Legislature.39. For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated. It takes us tot he second part of that question, namely, whether the principle of apportionment was correctly applied to the facts of the case?40. Mr. Cooper contends that the first trial court (Samson, J.) had rightly found that the premises in question on account of extensive alterations and constructions had undergone a complete change after the basic date, and therefore, standard rent could not be determined by apportioning the rent of the whole among the parts. It is maintained that this finding of Samson J. was wrongly set aside by the High Court and must be deemed to be still holding the field. Objection is also taken to the amendments allowed by the trial court on remand. In the alternative, it is argued that even the courts below found that properties 986/10, 983/11, 983/12 and 984/54 were admittedly new structures and extensive repairs and replacements had been made in the remaining premises which had been destroyed or severely damaged by fire in 1948-49. On account of these substantial alterations and reconstructions, the premises in question had lost their identity and consequently, the principle of apportionment was not applicable.41. The first part of the contention based on the judgment of Samson J. is groundless. The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which therefore, decided the case afresh after allowing the applicant to amend his R.A.Ns. It is too late in the day any way to argue on the assumption that the findings still survive.42. The question whether a certain property has changed its identity after the basic date is largely one of fact. The courts below have found that excepting properties 983/10, 983/11, 983/12 and 984/54 which were admittedly new structures construed near about 1948, the rest of the properties, namley 983/1 to 983/9 had not lost their identity. The courts therefore, worked out the economic rent of these new structures by capitalisign their value and gave the landlord a fair return on his investments and fixed their standard rent mainly on that basis.It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of apportionment. Even so, it allowed the landlord fair return over Rs. 14,448/- being the cost of flooring, ceiling and other fixtures fixed to property 983/6. Now it is disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs. 1,700/-. The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case. We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in exercise of its special jurisdiction under Art. 136 of the Constitution. Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other consideration dictated by a sense of justice and fairplay cannot be condemned by this court as illegal. We therefore, overrule this contention, also.43. Lastly, it is contended that the courts below have seriously erred in evaluating the land under the suit properties at Rs. 30/- per sq. yd. on the basis of an instance (Ex. R. 6) of the year 1942, while they should have taken into account the value of the land as in the year 1948. It is added that some photostat copies of saledeeds pertaining to the relevant year were produced by Mr. Deweja, architect examinsional Court wrongly rejected them as unproved. It is maintained that in 1948, the market value of the site underneath the structures was Rs. 120/- per sq. yd. In support of his contention that the value of the land at the date of the letting is the appropriate value to be taken into account. Counsel has cited - Rukmanibai Khunji Cooverji v. Shivnarayan Ram Ashre, (1965) 67 Bom LR 692.44. We are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/- per se. yd. which, according to their estimate, after adding Rs. 30/- per sq. yd. for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs. 120/- per sq. yd. We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath to re-investigate factul conclusions not shown to be perverse or manifestly unjust. Such is not the case here.

0[ds]29. True, that unlike the English Rent Control Act of 1920 or the later English Acts, the (Bombay) Act does not expressly speak of apportionment. But the language of its relevant provisions construed consistently with the scheme and inbuilt policy of the Act, is elastic enough to permit the fixation of standard rent on apportionment basis. As noticed already, Section 11(1) gives a discretion to the Court to fix such amount as standard rent as it "deems just". However, in exercising this discretion the Court has to pay due regard to (i) the provisions of the Act and (ii) the circumstances of the case.30. Apportionment - or equal distribution of the burden of rent on every portion - is a rule of justice and good sense. If the standard rent of a whole was a specific amount, it stands to reason that the standard rent of a part or sub-division of that whole should not ordinarily exceed that amount. Therefore, if in the circumstances of a given case the Court feels that for securing the end of justice and giving effect to the provisions and policy of the Act, it is reasonably necessary and feasible to work out the standard rent by apportionment, it can legitimately do so. This principle, however, is applicable where on the basic date, that portion of which the standard rent is to be determined, had not been let separately as one unit, but the whole of which it is a part, had been let on that date. Apportionment postulates that on account of its having been let on the basic date, the whole had acquired a standard rent which has to be allocated to smaller units subsequently carved out of it.31. It is thus clear that the principle of apportionment is not alien to the spirit of the Act, and has indeed been often invoked by the courts in fixing standard rent under this Act.In Narayanlal Bansilals case (1965) 67 Bom LR 352 (supra), a Division Bench of the Bombay High Court determined standard rent of another part of this very estate of the Mills in accordance with that principle.We see force in the argument as also textual and pragmatic support. But these considerations do not preclude the Court from importing the flexible factors of fairness suggested by the circumstances of the case. Indeed Section 11, as explained earlier, obliges the Court to do it. Moreover, the interpretation of "premises" adopted by the learned Judge was a little too literal, narrow and divorced from the purpose and content of the provisions relating to fixation of standard rent. Nor was it in accord with the scheme and object of the 1918 Act. The Courts jurisdiction to consider, as a strong circumstances, proper apportionment of rent is not taken away, in our view., it is contended that the courts below have seriously erred in evaluating the land under the suit properties at Rs.30/- per sq. yd.on the basis of an instance (Ex. R. 6) of the year 1942, while they should have taken into account the value of the land as in the year 1948. It is added that some photostat copies of saledeeds pertaining to the relevant year were produced by Mr. Deweja, architect examinsional Court wrongly rejected them as unproved. It is maintained that in 1948, the market value of the site underneath the structures was Rs.120/- per sq. yd.In support of his contention that the value of the land at the date of the letting is the appropriate value to be taken into account.We are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/- per se. yd. which, according to their estimate, after adding Rs.30/- per sq. yd.for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs.120/- per sq. yd.We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath to re-investigate factul conclusions not shown to be perverse or manifestly unjust. Such is not the case here.If on the basic date, the suit premises were not let out separately but were a part of theof a larger demiseas in the instant casedifficulty arises in giving effect to the statute. Clause (c) of Section 11(1) then comes into operation. To resolve the difficulty this clause and the related provisions are not to be construed in a narrow technical sense, which would stultify or defeat their object. It is to be interpreted liberally in a manner which would advance the remedy, suppress the mischief and foil subtle inventions and evasions of the Act. Construed in accordance with this socially relevant rule in Heydens case, the meaning of the premises having been let at one time as a whole, spoken of in this clause, can legitimately be deemed to cover the larger premises which, on the basic date, had been let as a whole and of which the suit premises was a part let out subsequently. In any event, the amplitude of the phrase " or any other reasons" in the latter part of the clause, is wide enough to embrace cases of this kind and confers a plenary curative power on the Court.However, while conceding that apportionment is not foreign to the scheme purpose and policy of the Act, we will like to emphasis the need for caution and circumspection in invoking it. It is not to be rigidly and indiscriminately applied as arule of law regardless of time and circumstances or the equities of the case. A doctrinnaire approach, not consistent with a just and fair determination, stultifies the whole salutary purpose of justice to both the landlord and the tenant. If necessary, it can be adjusted, adapted and attuned in the light of the particular circumstances of the case, to satisfy the statutory requirement of fixing the standard rent at a "just" amount. Thus, if after the material date, the landlord has made investments and improvements in the premises, it will be just and reasonable to take that factor also into account and to give him a fair return on such investments. Further, in apportioning the rent, the Court must consider other relevant circumstances, such as "size, accessibility, aspect and other physical advantages" enjoyed by the tenant of the premises of which the standard rent is in question, as compared with those of the rest of the property in which it is comprised (seeBainbridge v. Congdon (1925) 2 KB261). Where after the basic date, the premises completely change their identity, apportionment as a method of determining just standard rent, loses its efficacy and may be abandoned altogether. We have only illustrated, not exhaustively enumerated the relevant circumstances and their implications.We reject the narrow interpretation of the relevant provisions of Sections 2 and 11, canvassed for by the appellants, for two reasons : Firstly, it will leave the door wide open for evasion of this statute by – what Abbot C. J. in Foxv. Bishop of Chester, (1824) 2 B and C 635at p. 655called "shift or contrivance". All that a greedy landlord need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents. Such an evasion may amount to a fraud upon the statute. Secondly, such a construction, so manifestly subversive of one of the primary objects of the Act, would be wholly beyond the intendment of the Legislature.39. For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated. Ittakes us tot he second part of that question, namely, whether the principle of apportionment was correctly applied to the facts of theThe first part of the contention based on the judgment of Samson J. is groundless. The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which therefore, decided the case afresh after allowing the applicant to amend his R.A.Ns. It is too late in the day any way to argue on the assumption that the findings stillcourts below have found that excepting properties 983/10, 983/11, 983/12 and 984/54 which were admittedly new structures construed near about 1948, the rest of the properties, namley 983/1 to 983/9 had not lost their identity. The courts therefore, worked out the economic rent of these new structures by capitalisign their value and gave the landlord a fair return on his investments and fixed their standard rent mainly on that basis.It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of apportionment. Even so, it allowed the landlord fair return over Rs. 14,448/being the cost of flooring, ceiling and other fixtures fixed to property 983/6. Now it is disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs.The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case. We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in exercise of its special jurisdiction under Art. 136 of the Constitution. Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other consideration dictated by a sense of justice and fairplay cannot be condemned by this court as illegal. We therefore, overrule this contention, also.e are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/per se. yd. which, according to their estimate, after adding Rs.per sq. yd.for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs.per sq. yd.We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath tofactul conclusions not shown to be perverse or manifestly unjust. Such is not the case here.

### Instruction: Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding. ### Input: or contrivance". All that a greedy landlord need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents. Such an evasion may amount to a fraud upon the statute. Secondly, such a construction, so manifestly subversive of one of the primary objects of the Act, would be wholly beyond the intendment of the Legislature.39. For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated. It takes us tot he second part of that question, namely, whether the principle of apportionment was correctly applied to the facts of the case?40. Mr. Cooper contends that the first trial court (Samson, J.) had rightly found that the premises in question on account of extensive alterations and constructions had undergone a complete change after the basic date, and therefore, standard rent could not be determined by apportioning the rent of the whole among the parts. It is maintained that this finding of Samson J. was wrongly set aside by the High Court and must be deemed to be still holding the field. Objection is also taken to the amendments allowed by the trial court on remand. In the alternative, it is argued that even the courts below found that properties 986/10, 983/11, 983/12 and 984/54 were admittedly new structures and extensive repairs and replacements had been made in the remaining premises which had been destroyed or severely damaged by fire in 1948-49. On account of these substantial alterations and reconstructions, the premises in question had lost their identity and consequently, the principle of apportionment was not applicable.41. The first part of the contention based on the judgment of Samson J. is groundless. The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which therefore, decided the case afresh after allowing the applicant to amend his R.A.Ns. It is too late in the day any way to argue on the assumption that the findings still survive.42. The question whether a certain property has changed its identity after the basic date is largely one of fact. The courts below have found that excepting properties 983/10, 983/11, 983/12 and 984/54 which were admittedly new structures construed near about 1948, the rest of the properties, namley 983/1 to 983/9 had not lost their identity. The courts therefore, worked out the economic rent of these new structures by capitalisign their value and gave the landlord a fair return on his investments and fixed their standard rent mainly on that basis.It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of apportionment. Even so, it allowed the landlord fair return over Rs. 14,448/- being the cost of flooring, ceiling and other fixtures fixed to property 983/6. Now it is disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs. 1,700/-. The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case. We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in exercise of its special jurisdiction under Art. 136 of the Constitution. Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other consideration dictated by a sense of justice and fairplay cannot be condemned by this court as illegal. We therefore, overrule this contention, also.43. Lastly, it is contended that the courts below have seriously erred in evaluating the land under the suit properties at Rs. 30/- per sq. yd. on the basis of an instance (Ex. R. 6) of the year 1942, while they should have taken into account the value of the land as in the year 1948. It is added that some photostat copies of saledeeds pertaining to the relevant year were produced by Mr. Deweja, architect examinsional Court wrongly rejected them as unproved. It is maintained that in 1948, the market value of the site underneath the structures was Rs. 120/- per sq. yd. In support of his contention that the value of the land at the date of the letting is the appropriate value to be taken into account. Counsel has cited - Rukmanibai Khunji Cooverji v. Shivnarayan Ram Ashre, (1965) 67 Bom LR 692.44. We are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/- per se. yd. which, according to their estimate, after adding Rs. 30/- per sq. yd. for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs. 120/- per sq. yd. We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath to re-investigate factul conclusions not shown to be perverse or manifestly unjust. Such is not the case here. ### Response: 0 ### Explanation: a part let out subsequently. In any event, the amplitude of the phrase " or any other reasons" in the latter part of the clause, is wide enough to embrace cases of this kind and confers a plenary curative power on the Court.However, while conceding that apportionment is not foreign to the scheme purpose and policy of the Act, we will like to emphasis the need for caution and circumspection in invoking it. It is not to be rigidly and indiscriminately applied as arule of law regardless of time and circumstances or the equities of the case. A doctrinnaire approach, not consistent with a just and fair determination, stultifies the whole salutary purpose of justice to both the landlord and the tenant. If necessary, it can be adjusted, adapted and attuned in the light of the particular circumstances of the case, to satisfy the statutory requirement of fixing the standard rent at a "just" amount. Thus, if after the material date, the landlord has made investments and improvements in the premises, it will be just and reasonable to take that factor also into account and to give him a fair return on such investments. Further, in apportioning the rent, the Court must consider other relevant circumstances, such as "size, accessibility, aspect and other physical advantages" enjoyed by the tenant of the premises of which the standard rent is in question, as compared with those of the rest of the property in which it is comprised (seeBainbridge v. Congdon (1925) 2 KB261). Where after the basic date, the premises completely change their identity, apportionment as a method of determining just standard rent, loses its efficacy and may be abandoned altogether. We have only illustrated, not exhaustively enumerated the relevant circumstances and their implications.We reject the narrow interpretation of the relevant provisions of Sections 2 and 11, canvassed for by the appellants, for two reasons : Firstly, it will leave the door wide open for evasion of this statute by – what Abbot C. J. in Foxv. Bishop of Chester, (1824) 2 B and C 635at p. 655called "shift or contrivance". All that a greedy landlord need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents. Such an evasion may amount to a fraud upon the statute. Secondly, such a construction, so manifestly subversive of one of the primary objects of the Act, would be wholly beyond the intendment of the Legislature.39. For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated. Ittakes us tot he second part of that question, namely, whether the principle of apportionment was correctly applied to the facts of theThe first part of the contention based on the judgment of Samson J. is groundless. The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which therefore, decided the case afresh after allowing the applicant to amend his R.A.Ns. It is too late in the day any way to argue on the assumption that the findings stillcourts below have found that excepting properties 983/10, 983/11, 983/12 and 984/54 which were admittedly new structures construed near about 1948, the rest of the properties, namley 983/1 to 983/9 had not lost their identity. The courts therefore, worked out the economic rent of these new structures by capitalisign their value and gave the landlord a fair return on his investments and fixed their standard rent mainly on that basis.It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of apportionment. Even so, it allowed the landlord fair return over Rs. 14,448/being the cost of flooring, ceiling and other fixtures fixed to property 983/6. Now it is disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs.The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case. We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in exercise of its special jurisdiction under Art. 136 of the Constitution. Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other consideration dictated by a sense of justice and fairplay cannot be condemned by this court as illegal. We therefore, overrule this contention, also.e are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/per se. yd. which, according to their estimate, after adding Rs.per sq. yd.for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs.per sq. yd.We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath tofactul conclusions not shown to be perverse or manifestly unjust. Such is not the case here.

Mrs. Dhanlaxmi G. Shah Vs. Miss Sushila Shiv Prasad Masurakir and Others

Kailasam, J. The first defendant in the suit is the appellant before us. The suit was filed by the plaintiff, the daughter of one Shiv Prasad Rajaram for a declaration that she is the lawful tenant of the two defendants and for an injunction restraining the defendants from executing decree in R. A. E. Suit No. 1945 of 1957. In the plaint, the plaintiff claimed that her father Shiv Prasad Rajaram was a tenant and after his death, she became the statutory tenant. She further pleaded that though the first defendant had obtained a decree against her mother in R. A. E. Suit No. 1945 of 1957, he could not execute the decree against her as the first defendant had sold the property during the pendency of the earlier suit to second defendant and thus the second defendant has become the landlord. In the suit, the second defendant did not file any written statement. The trial Court as well as the appellate Court dismissed the appeal, but in revision, the High Court decreed the suit mainly on the ground that the first defendant had sold the property to the second defendant and as such in law the second defendant had become the landlord. As the second defendant did not file any written statement and contest the suit, an order of injunction was rightly granted against him. The High Court found that after the first defendant sold the property, he ceased to be the landlord and it is only the second defendant that could claim rights as a landlord. In this view, there could be no difficulty in decreeing the suit of the plaintiff and granting an injunction as against the second defendant.2. Mr. S. T. Desai, learned counsel for the appellant submitted that whatever the position may be as against the second defendant, so far as the first defendant is concerned, by virtue of an agreement with the second defendant he is entitled to continue the execution proceedings and after obtaining possession from the plaintiff, he is entitled to be in possession as a tenant of the second defendant. The learned counsel for respondent 1, Mrs. Urmila Sirur submitted that the sale deed by which the property was conveyed to the second defendant had not been filed and in the absence of the sale deed, the first defendant cannot rely on any such right in his favour. The document that is produced in Court and relied on by the appellant before us is the agreement to sell. The learned counsel for the respondent is right that the appellant cannot rely on the agreement. If at all any right is reserved in favour of the first defendant, it should be spelt out from the sale deed which has not been produced.

0[ds]2. Mr. S. T. Desai, learned counsel for the appellant submitted that whatever the position may be as against the second defendant, so far as the first defendant is concerned, by virtue of an agreement with the second defendant he is entitled to continue the execution proceedings and after obtaining possession from the plaintiff, he is entitled to be in possession as a tenant of the second defendant. The learned counsel for respondent 1, Mrs. Urmila Sirur submitted that the sale deed by which the property was conveyed to the second defendant had not been filed and in the absence of the sale deed, the first defendant cannot rely on any such right in his favour. The document that is produced in Court and relied on by the appellant before us is the agreement to sell. The learned counsel for the respondent is right that the appellant cannot rely on the agreement. If at all any right is reserved in favour of the first defendant, it should be spelt out from the sale deed which has not been produced.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: Kailasam, J. The first defendant in the suit is the appellant before us. The suit was filed by the plaintiff, the daughter of one Shiv Prasad Rajaram for a declaration that she is the lawful tenant of the two defendants and for an injunction restraining the defendants from executing decree in R. A. E. Suit No. 1945 of 1957. In the plaint, the plaintiff claimed that her father Shiv Prasad Rajaram was a tenant and after his death, she became the statutory tenant. She further pleaded that though the first defendant had obtained a decree against her mother in R. A. E. Suit No. 1945 of 1957, he could not execute the decree against her as the first defendant had sold the property during the pendency of the earlier suit to second defendant and thus the second defendant has become the landlord. In the suit, the second defendant did not file any written statement. The trial Court as well as the appellate Court dismissed the appeal, but in revision, the High Court decreed the suit mainly on the ground that the first defendant had sold the property to the second defendant and as such in law the second defendant had become the landlord. As the second defendant did not file any written statement and contest the suit, an order of injunction was rightly granted against him. The High Court found that after the first defendant sold the property, he ceased to be the landlord and it is only the second defendant that could claim rights as a landlord. In this view, there could be no difficulty in decreeing the suit of the plaintiff and granting an injunction as against the second defendant.2. Mr. S. T. Desai, learned counsel for the appellant submitted that whatever the position may be as against the second defendant, so far as the first defendant is concerned, by virtue of an agreement with the second defendant he is entitled to continue the execution proceedings and after obtaining possession from the plaintiff, he is entitled to be in possession as a tenant of the second defendant. The learned counsel for respondent 1, Mrs. Urmila Sirur submitted that the sale deed by which the property was conveyed to the second defendant had not been filed and in the absence of the sale deed, the first defendant cannot rely on any such right in his favour. The document that is produced in Court and relied on by the appellant before us is the agreement to sell. The learned counsel for the respondent is right that the appellant cannot rely on the agreement. If at all any right is reserved in favour of the first defendant, it should be spelt out from the sale deed which has not been produced. ### Response: 0 ### Explanation: 2. Mr. S. T. Desai, learned counsel for the appellant submitted that whatever the position may be as against the second defendant, so far as the first defendant is concerned, by virtue of an agreement with the second defendant he is entitled to continue the execution proceedings and after obtaining possession from the plaintiff, he is entitled to be in possession as a tenant of the second defendant. The learned counsel for respondent 1, Mrs. Urmila Sirur submitted that the sale deed by which the property was conveyed to the second defendant had not been filed and in the absence of the sale deed, the first defendant cannot rely on any such right in his favour. The document that is produced in Court and relied on by the appellant before us is the agreement to sell. The learned counsel for the respondent is right that the appellant cannot rely on the agreement. If at all any right is reserved in favour of the first defendant, it should be spelt out from the sale deed which has not been produced.

Commissioner of Sales Tax, U.P Vs. Sarjoo Prasad Ram Kumar

Sector II, issued to the assessee a notice under section 21 of the Act. That notice was served on the assessee on January 17, 1961. After giving an opportunity to the assessee to put forward his case, the Assistant Sales Tax Officer assessed the assessee on a turnover of Rs. 18, 000. The assessee preferred an appeal against that order to the Assistant Commissioner (Judicial), Sales Tax. Before that officer, he contended that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess him. That contention was upheld by the appellate authority. That authority came to the conclusion that the only Sales Tax Officer who would have assessed the assessee was the Assistant Sales Tax Officer, Sector III. He accordingly set aside the assessment.3. Aggrieved by that order, the department went up in appeal to the Judge (Revisions), Sales Tax. The Judge (Revisions), Sales Tax, affirmed the decision of the appellate authority. As demanded by the department, the Judge (Revisions), Sales Tax, stated the following question for ascertaining the opinion of the High Court :"Whether, under the circumstances of this case, the assessment passed by the Assistant Sales Tax Officer, Sector II, was a valid assessment or a void one without jurisdiction ?"The High Court answered that question in favour of the assessee. It came to the conclusion that the assessment in question was void as the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the assessee. The department is challenging that conclusion.4. In order to pronounce on the controversy in this case, it is necessary to refer to certain provisions of the Act and the Rules framed thereunder. Section 2(a) of the Act defines the assessing authority thus : "assessing authority means any person authorised by the State Government to make any assessment under this Act". Now we turn to the Rules framed under the Act. Rule 2(h) defines the Sales Tax Officer as "Sales Tax Officer means a Sales Tax Officer of a circle appointed by the State Government to perform the duties and exercise the powers of an assessing authority in such circle, and includes an Assistant Sales Tax Officer appointed by the Commissioner, Sales Tax, for such circle, and also includes an officer appointed under rule 3-A of these Rules". If these provisions had stood by themselves there would have been no difficulty in holding that whenever a Sales Tax Officer or an Assistant Sales Tax Officer is appointed to a circle he would have jurisdiction to assess all the dealers in that circle. But then sub-rule (3) of rule 3 provides : "Where there are more than one Sales Tax Officer in a circle, the Commissioner of Sales Tax (hereinafter called the Commissioner) shall determine their respective jurisdiction within such circle". Now we may turn to rule 6(a), which says : "The Sales Tax Officer shall be the assessing authority in respect of the dealers carrying on business within the limits of his jurisdiction."5. From the foregoing provisions, it is clear that though it is for the Government to appoint a Sales Tax Officer for a circle, power has been conferred on the Commissioner, in those cases, where there are more than one Sales Tax Officer in a circle to demarcate the jurisdiction of each Sales Tax Officer. That is what has been done in the present case. In view of that demarcation, the Assistant Sales Tax Officer, Sector II, cannot be held to have had any jurisdiction to assess the respondent.In the present case, it is not disputed that in the Lucknow Circle there are several Assistant Sales Tax Officers. It is also not disputed before us that Sector III has a separate Assistant Sales Tax Officer. It is not shown that the Assistant Sales Tax Officer, Sector II, had also been conferred with jurisdiction to assess the dealers in Sector III. In these circumstances, the only possible conclusion is that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the dealers in Sector III.6. In the High Court, the department contended that the assessees case was transferred from the file of the Assistant Sales Tax Officer, Sector III, to the file of the Assistant Sales Tax Officer, Sector II. This contention has been rejected by the High Court as having no basis. In fact, that contention has not been repeated before us. Mr. Karkhanis, appearing for the department, contended that in view of the provisions referred to earlier, we must hold that all the Assistant Sales Tax Officers in Lucknow Circle had jurisdiction to assess all the dealers in Lucknow Circle. This contention is unacceptable. If we accept that contention, sub-rule (3) of rule 3 becomes otiose. Further rule 6(a) also becomes ineffective. It is for obvious reasons the rule-making authority has empowered the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation is made, the jurisdiction of each officer is confined to the area allotted to him.7. The only other contention advanced by Mr. Karkhanis is that the assessee having not taken any objection as to the jurisdiction before the assessing authority he is precluded from raising that objection at a later stage. This contention is again unacceptable to us. Herein we are concerned with the question of jurisdiction. Unless there is some provision either in the Act or in the Rules framed which precludes the assessee from raising any objection as to jurisdiction, if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. An objection as to jurisdiction goes to the root of the case.Mr. Karkhanis placed some reliance on the decision of the Full Bench of the Allahabad High Court in Shyam Manohar Dixit v. Sales Tax Officer, Sector IV, Kanpur [[1970] 26 S.T.C. 439 (F.B.)]. In that case the jurisdiction conferred on the assessing authority under rule 3(3) included also the locality in which the dealer in question was carrying on business.8.

0[ds]From the foregoing provisions, it is clear that though it is for the Government to appoint a Sales Tax Officer for a circle, power has been conferred on the Commissioner, in those cases, where there are more than one Sales Tax Officer in a circle to demarcate the jurisdiction of each Sales Tax Officer. That is what has been done in the present case. In view of that demarcation, the Assistant Sales Tax Officer, Sector II, cannot be held to have had any jurisdiction to assess the respondent.In the present case, it is not disputed that in the Lucknow Circle there are several Assistant Sales Tax Officers. It is also not disputed before us that Sector III has a separate Assistant Sales Tax Officer. It is not shown that the Assistant Sales Tax Officer, Sector II, had also been conferred with jurisdiction to assess the dealers in Sector III. In these circumstances, the only possible conclusion is that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the dealers in Sectorthe High Court, the department contended that the assessees case was transferred from the file of the Assistant Sales Tax Officer, Sector III, to the file of the Assistant Sales Tax Officer, Sector II. This contention has been rejected by the High Court as having no basis. In fact, that contention has not been repeated before us.Mr. Karkhanis, appearing for the department, contended that in view of the provisions referred to earlier, we must hold that all the Assistant Sales Tax Officers in Lucknow Circle had jurisdiction to assess all the dealers in LucknowCircle. This contention is unacceptable. If we accept that contention,(3) of rule 3 becomes otiose. Further rule 6(a) also becomes ineffective. It is for obvious reasons theauthority has empowered the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation is made, the jurisdiction of each officer is confined to the area allotted toy other contention advanced by Mr. Karkhanis is that the assessee having not taken any objection as to the jurisdiction before the assessing authority he is precluded from raising that objection at a later stage.This contention is again unacceptable to us. Herein we are concerned with the question of jurisdiction. Unless there is some provision either in the Act or in the Rules framed which precludes the assessee from raising any objection as to jurisdiction, if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. An objection as to jurisdiction goes to the root of the case.Mr. Karkhanis placed some reliance on the decision of the Full Bench of the Allahabad High Court in Shyam Manohar Dixit v. Sales Tax Officer, Sector IV, Kanpur [[1970] 26 S.T.C. 439 (F.B.)]. In that case the jurisdiction conferred on the assessing authority under rule 3(3) included also the locality in which the dealer in question was carrying on business.

### Instruction: Conjecture the end result of the case (acceptance (1) or non-acceptance (0) of the appeal), followed by a detailed explanation using crucial sentences from the case proceeding. ### Input: Sector II, issued to the assessee a notice under section 21 of the Act. That notice was served on the assessee on January 17, 1961. After giving an opportunity to the assessee to put forward his case, the Assistant Sales Tax Officer assessed the assessee on a turnover of Rs. 18, 000. The assessee preferred an appeal against that order to the Assistant Commissioner (Judicial), Sales Tax. Before that officer, he contended that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess him. That contention was upheld by the appellate authority. That authority came to the conclusion that the only Sales Tax Officer who would have assessed the assessee was the Assistant Sales Tax Officer, Sector III. He accordingly set aside the assessment.3. Aggrieved by that order, the department went up in appeal to the Judge (Revisions), Sales Tax. The Judge (Revisions), Sales Tax, affirmed the decision of the appellate authority. As demanded by the department, the Judge (Revisions), Sales Tax, stated the following question for ascertaining the opinion of the High Court :"Whether, under the circumstances of this case, the assessment passed by the Assistant Sales Tax Officer, Sector II, was a valid assessment or a void one without jurisdiction ?"The High Court answered that question in favour of the assessee. It came to the conclusion that the assessment in question was void as the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the assessee. The department is challenging that conclusion.4. In order to pronounce on the controversy in this case, it is necessary to refer to certain provisions of the Act and the Rules framed thereunder. Section 2(a) of the Act defines the assessing authority thus : "assessing authority means any person authorised by the State Government to make any assessment under this Act". Now we turn to the Rules framed under the Act. Rule 2(h) defines the Sales Tax Officer as "Sales Tax Officer means a Sales Tax Officer of a circle appointed by the State Government to perform the duties and exercise the powers of an assessing authority in such circle, and includes an Assistant Sales Tax Officer appointed by the Commissioner, Sales Tax, for such circle, and also includes an officer appointed under rule 3-A of these Rules". If these provisions had stood by themselves there would have been no difficulty in holding that whenever a Sales Tax Officer or an Assistant Sales Tax Officer is appointed to a circle he would have jurisdiction to assess all the dealers in that circle. But then sub-rule (3) of rule 3 provides : "Where there are more than one Sales Tax Officer in a circle, the Commissioner of Sales Tax (hereinafter called the Commissioner) shall determine their respective jurisdiction within such circle". Now we may turn to rule 6(a), which says : "The Sales Tax Officer shall be the assessing authority in respect of the dealers carrying on business within the limits of his jurisdiction."5. From the foregoing provisions, it is clear that though it is for the Government to appoint a Sales Tax Officer for a circle, power has been conferred on the Commissioner, in those cases, where there are more than one Sales Tax Officer in a circle to demarcate the jurisdiction of each Sales Tax Officer. That is what has been done in the present case. In view of that demarcation, the Assistant Sales Tax Officer, Sector II, cannot be held to have had any jurisdiction to assess the respondent.In the present case, it is not disputed that in the Lucknow Circle there are several Assistant Sales Tax Officers. It is also not disputed before us that Sector III has a separate Assistant Sales Tax Officer. It is not shown that the Assistant Sales Tax Officer, Sector II, had also been conferred with jurisdiction to assess the dealers in Sector III. In these circumstances, the only possible conclusion is that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the dealers in Sector III.6. In the High Court, the department contended that the assessees case was transferred from the file of the Assistant Sales Tax Officer, Sector III, to the file of the Assistant Sales Tax Officer, Sector II. This contention has been rejected by the High Court as having no basis. In fact, that contention has not been repeated before us. Mr. Karkhanis, appearing for the department, contended that in view of the provisions referred to earlier, we must hold that all the Assistant Sales Tax Officers in Lucknow Circle had jurisdiction to assess all the dealers in Lucknow Circle. This contention is unacceptable. If we accept that contention, sub-rule (3) of rule 3 becomes otiose. Further rule 6(a) also becomes ineffective. It is for obvious reasons the rule-making authority has empowered the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation is made, the jurisdiction of each officer is confined to the area allotted to him.7. The only other contention advanced by Mr. Karkhanis is that the assessee having not taken any objection as to the jurisdiction before the assessing authority he is precluded from raising that objection at a later stage. This contention is again unacceptable to us. Herein we are concerned with the question of jurisdiction. Unless there is some provision either in the Act or in the Rules framed which precludes the assessee from raising any objection as to jurisdiction, if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. An objection as to jurisdiction goes to the root of the case.Mr. Karkhanis placed some reliance on the decision of the Full Bench of the Allahabad High Court in Shyam Manohar Dixit v. Sales Tax Officer, Sector IV, Kanpur [[1970] 26 S.T.C. 439 (F.B.)]. In that case the jurisdiction conferred on the assessing authority under rule 3(3) included also the locality in which the dealer in question was carrying on business.8. ### Response: 0 ### Explanation: From the foregoing provisions, it is clear that though it is for the Government to appoint a Sales Tax Officer for a circle, power has been conferred on the Commissioner, in those cases, where there are more than one Sales Tax Officer in a circle to demarcate the jurisdiction of each Sales Tax Officer. That is what has been done in the present case. In view of that demarcation, the Assistant Sales Tax Officer, Sector II, cannot be held to have had any jurisdiction to assess the respondent.In the present case, it is not disputed that in the Lucknow Circle there are several Assistant Sales Tax Officers. It is also not disputed before us that Sector III has a separate Assistant Sales Tax Officer. It is not shown that the Assistant Sales Tax Officer, Sector II, had also been conferred with jurisdiction to assess the dealers in Sector III. In these circumstances, the only possible conclusion is that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the dealers in Sectorthe High Court, the department contended that the assessees case was transferred from the file of the Assistant Sales Tax Officer, Sector III, to the file of the Assistant Sales Tax Officer, Sector II. This contention has been rejected by the High Court as having no basis. In fact, that contention has not been repeated before us.Mr. Karkhanis, appearing for the department, contended that in view of the provisions referred to earlier, we must hold that all the Assistant Sales Tax Officers in Lucknow Circle had jurisdiction to assess all the dealers in LucknowCircle. This contention is unacceptable. If we accept that contention,(3) of rule 3 becomes otiose. Further rule 6(a) also becomes ineffective. It is for obvious reasons theauthority has empowered the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation is made, the jurisdiction of each officer is confined to the area allotted toy other contention advanced by Mr. Karkhanis is that the assessee having not taken any objection as to the jurisdiction before the assessing authority he is precluded from raising that objection at a later stage.This contention is again unacceptable to us. Herein we are concerned with the question of jurisdiction. Unless there is some provision either in the Act or in the Rules framed which precludes the assessee from raising any objection as to jurisdiction, if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. An objection as to jurisdiction goes to the root of the case.Mr. Karkhanis placed some reliance on the decision of the Full Bench of the Allahabad High Court in Shyam Manohar Dixit v. Sales Tax Officer, Sector IV, Kanpur [[1970] 26 S.T.C. 439 (F.B.)]. In that case the jurisdiction conferred on the assessing authority under rule 3(3) included also the locality in which the dealer in question was carrying on business.

SUBORNO BOSE Vs. ENFORCEMENT DIRECTORATE & ANR

of the decision in M/s. Gujarat Travancore Agency, Cochin vs. Commissioner of Income Tax, Kerala, Ernakulam (1989) 3 SCC 52 , which had opined that the intention of the legislature such as the one under consideration is to emphasise the fact of loss of revenue and to provide a remedy for such loss, although element of coercion is present in the penalty. In Securities and Exchange Board of India vs. Cabot International Capital Corporation (2005) 123 CompCas 841 (Bom), the Court delineated principles as follows: - 47. Thus, the following extracted principles are summarised: (A) Mens rea is an essential or sine qua non for criminal offence. (B) A straitjacket formula of mens rea cannot be blindly followed in each and every case. The scheme of a particular statute may be diluted in a given case. (C) If, from the scheme, object and words used in the statute, it appears that the proceedings for imposition of the penalty are adjudicatory in nature, in contradistinction to criminal or quasi-criminal proceedings, the determination is of the breach of the civil obligation by the offender. The word penalty by itself will not be determinative to conclude the nature of proceedings being criminal or quasi-criminal. The relevant considerations being the nature of the functions being discharged by the authority and the determination of the liability of the contravenor and the delinquency. (D) Mens rea is not essential element for imposing penalty for breach of civil obligations or liabilities. (E) There can be two distinct liabilities, civil and criminal, under the same Act. As aforementioned, the contravention referred to in Section 10(6) of the FEMA Act is a continuing actionable offence. If so, the Company and the persons managing the affairs of the Company remain liable to take corrective measures in right earnest. Considering the admitted fact that the appellant took over the management of the Company on 22.10.2001 and was fully alive to the default committed by the Company, yet failed to take corrective steps in right earnest. Notably, being conscious of such contravention, the appellant had sought indulgence of the authorities for more time. It must follow that the appellant cannot now be heard to contend that no liability could be fastened on him individually. Indeed, regulation 6 of the FEMA Regulations provides for the period within which the foreign exchange ought to be surrendered if the Company was not wanting to take delivery of the goods imported. That, however, does not mean that the contravention ceased to exist beyond the specified period. On the other hand, after the specified period as predicated in regulation 6 had expired, it would be a case of deemed contravention until rectified. 12. It is not the case of the appellant that he is not an officer or a person in charge of and responsible to the Company for the conduct of the business of the Company, as well as, the Company on or after 22.10.2001. Considering the fact that the appellant admittedly became aware of the contravention yet failed to take corrective measures until the action to impose penalty for such contravention was initiated, he cannot be permitted to invoke the only defence available in terms of proviso to sub-Section (1) of Section 42 of the FEMA Act that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. In the reply filed to the show-cause notice by the appellant, no such specific plea has been taken. 13. The appellant then invited our attention to the reply filed on behalf of the Company on 27.1.2004 in which it is vaguely asserted that on the date when the Memorandum of Understanding was signed, no disclosure was made that the import was done under EPCG licence and the obligations under the said licence remained to be fulfilled. To get benefit of the proviso to Section 42(1), the appellant should have pleaded and proved that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention and made every effort to rectify the contravention in right earnest. 14. Be that as it may, once it is held that the contravention is a continuing offence, the fact that the appellant was not looking after the affairs of the Company in the year 2000 would be of no avail to the appellant until corrective steps were taken in right earnest after his taking over the management of the Company and in particular after becoming aware about the contraventions. The appellant has placed reliance on the dictum of this Court in M/s. Hindustan Steel Ltd. vs. State of Orissa (1969) 2 SCC 627 ( paragraph 8). This decision has been distinguished in the case of Shriram (supra) as can be discerned from paragraph 34 of the reported judgment, which reads thus: - 34. The Tribunal has erroneously relied on the judgment in Hindustan Steel Ltd. v. State of Orissa, (1969) 2 SCC 627 which pertained to criminal/quasi-criminal proceedings. That Section 25 of the Orissa Sales Tax Act which was in question in the said case imposed a punishment of imprisonment up to six months and fine for the offences under the Act. The said case has no application in the present case which relates to imposition of civil liabilities under the SEBI Act and the Regulations and is not a criminal/quasi-criminal proceeding. We are in agreement with the view so expressed. 15. To sum up, we hold that no error has been committed by the adjudicating authority in finding that the appellant was also liable to be proceeded with for the contravention by the Company of which he became the Managing Director and for penalty therefor as prescribed for the contravention of Section 10(6) read with Sections 46 and 47 of the FEMA Act read with paragraphs A-10 and A-11 (Current Account Transaction) of the Foreign Exchange Manual 2003-04. The first appellate authority and the High Court justly affirmed the view so taken by the adjudicating authority.

0[ds]7. Be it noted that the contravention relates to the period of the year 2000, whereas, the appellant took over the management of the Company in terms of the Memorandum of Understanding dated 22.10.2001 entered into in that behalf. The appellant wanted to argue that in the facts of the present case, there was no contravention of Section 10(5) of the FEMA Act or any other provision necessitating action under Section 10(6) of the said Act muchless initiating complaint procedure. Ordinarily, the appellant could have been allowed to pursue such argument, but for the dismissal of the special leave petition filed by the Company. In that, consequent to the dismissal of the petition filed by the Company, the finding and conclusion recorded by the adjudicating authority as upheld by the first appellate authority, and of the High Court recording contravention committed by the Company and for which complaint action was just and proper including the imposition of penalty as awarded against the Company and the appellant has attained finality. That cannot be reopened muchless at the instance of the present appellant. This is reinforced by the order issuing notice on the special leave petition filed by the present appellant, dated 30.3.2009. It is indicative of the fact that the contentions specific to absolve the appellant from the complaint action could be examined10. In the present case, the finding of fact is that the import of goods for which the foreign exchange was procured and remitted was not completed as the Bill of Entry remained to be submitted and the goods were kept in the bonded warehouse and the Company took no steps to clear the same. As a result, Section 10(6) of the FEMA Act is clearly attracted being a case of not using the procured foreign exchange for completing the import procedure. It is also possible to take the view that the Company should have taken steps to surrender the foreign exchange to the authorised person within the specified time as provided in Regulation 6 of the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 (for short, the FEMA Regulations) issued by the Reserve Bank of India11. The High Court has opined that the contravention referred to in Section 10(6) by its very nature is a continuing offence. We agree with that view. It is indisputable that the penalty provided for such contravention is on account of civil obligation under the FEMA Act or the rules or regulations or direction or order made thereunder. If the delinquency is a civil obligation, the defaulter is obligated to make efforts by payment of the penalty imposed for such contravention. So long as the imported goods remained uncleared and obligation provided under the rules and regulations to submit Bill of Entry was not discharged, the contravention would continue to operate until corrective steps were taken by the Company and the persons in charge of the affairs of the CompanyAs aforementioned, the contravention referred to in Section 10(6) of the FEMA Act is a continuing actionable offence. If so, the Company and the persons managing the affairs of the Company remain liable to take corrective measures in right earnest. Considering the admitted fact that the appellant took over the management of the Company on 22.10.2001 and was fully alive to the default committed by the Company, yet failed to take corrective steps in right earnest. Notably, being conscious of such contravention, the appellant had sought indulgence of the authorities for more time. It must follow that the appellant cannot now be heard to contend that no liability could be fastened on him individually. Indeed, regulation 6 of the FEMA Regulations provides for the period within which the foreign exchange ought to be surrendered if the Company was not wanting to take delivery of the goods imported. That, however, does not mean that the contravention ceased to exist beyond the specified period. On the other hand, after the specified period as predicated in regulation 6 had expired, it would be a case of deemed contravention until rectified12. It is not the case of the appellant that he is not an officer or a person in charge of and responsible to the Company for the conduct of the business of the Company, as well as, the Company on or after 22.10.2001. Considering the fact that the appellant admittedly became aware of the contravention yet failed to take corrective measures until the action to impose penalty for such contravention was initiated, he cannot be permitted to invoke the only defence available in terms of proviso to sub-Section (1) of Section 42 of the FEMA Act that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. In the reply filed to the show-cause notice by the appellant, no such specific plea has been takenTo get benefit of the proviso to Section 42(1), the appellant should have pleaded and proved that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention and made every effort to rectify the contravention in right earnest14. Be that as it may, once it is held that the contravention is a continuing offence, the fact that the appellant was not looking after the affairs of the Company in the year 2000 would be of no avail to the appellant until corrective steps were taken in right earnest after his taking over the management of the Company and in particular after becoming aware about the contraventionsThis decision has been distinguished in the case of Shriram (supra) as can be discerned from paragraph 34 of the reported judgment, which reads thus: -34. The Tribunal has erroneously relied on the judgment in Hindustan Steel Ltd. v. State of Orissa, (1969) 2 SCC 627 which pertained to criminal/quasi-criminal proceedings. That Section 25 of the Orissa Sales Tax Act which was in question in the said case imposed a punishment of imprisonment up to six months and fine for the offences under the Act. The said case has no application in the present case which relates to imposition of civil liabilities under the SEBI Act and the Regulations and is not a criminal/quasi-criminal proceedingWe are in agreement with the view so expressed15. To sum up, we hold that no error has been committed by the adjudicating authority in finding that the appellant was also liable to be proceeded with for the contravention by the Company of which he became the Managing Director and for penalty therefor as prescribed for the contravention of Section 10(6) read with Sections 46 and 47 of the FEMA Act read with paragraphs A-10 and A-11 (Current Account Transaction) of the Foreign Exchange Manual 2003-04. The first appellate authority and the High Court justly affirmed the view so taken by the adjudicating authority.

### Instruction: Ascertain if the court will uphold (1) or dismiss (0) the appeal in the case proceeding, and then clarify this prediction by discussing critical sentences from the text. ### Input: of the decision in M/s. Gujarat Travancore Agency, Cochin vs. Commissioner of Income Tax, Kerala, Ernakulam (1989) 3 SCC 52 , which had opined that the intention of the legislature such as the one under consideration is to emphasise the fact of loss of revenue and to provide a remedy for such loss, although element of coercion is present in the penalty. In Securities and Exchange Board of India vs. Cabot International Capital Corporation (2005) 123 CompCas 841 (Bom), the Court delineated principles as follows: - 47. Thus, the following extracted principles are summarised: (A) Mens rea is an essential or sine qua non for criminal offence. (B) A straitjacket formula of mens rea cannot be blindly followed in each and every case. The scheme of a particular statute may be diluted in a given case. (C) If, from the scheme, object and words used in the statute, it appears that the proceedings for imposition of the penalty are adjudicatory in nature, in contradistinction to criminal or quasi-criminal proceedings, the determination is of the breach of the civil obligation by the offender. The word penalty by itself will not be determinative to conclude the nature of proceedings being criminal or quasi-criminal. The relevant considerations being the nature of the functions being discharged by the authority and the determination of the liability of the contravenor and the delinquency. (D) Mens rea is not essential element for imposing penalty for breach of civil obligations or liabilities. (E) There can be two distinct liabilities, civil and criminal, under the same Act. As aforementioned, the contravention referred to in Section 10(6) of the FEMA Act is a continuing actionable offence. If so, the Company and the persons managing the affairs of the Company remain liable to take corrective measures in right earnest. Considering the admitted fact that the appellant took over the management of the Company on 22.10.2001 and was fully alive to the default committed by the Company, yet failed to take corrective steps in right earnest. Notably, being conscious of such contravention, the appellant had sought indulgence of the authorities for more time. It must follow that the appellant cannot now be heard to contend that no liability could be fastened on him individually. Indeed, regulation 6 of the FEMA Regulations provides for the period within which the foreign exchange ought to be surrendered if the Company was not wanting to take delivery of the goods imported. That, however, does not mean that the contravention ceased to exist beyond the specified period. On the other hand, after the specified period as predicated in regulation 6 had expired, it would be a case of deemed contravention until rectified. 12. It is not the case of the appellant that he is not an officer or a person in charge of and responsible to the Company for the conduct of the business of the Company, as well as, the Company on or after 22.10.2001. Considering the fact that the appellant admittedly became aware of the contravention yet failed to take corrective measures until the action to impose penalty for such contravention was initiated, he cannot be permitted to invoke the only defence available in terms of proviso to sub-Section (1) of Section 42 of the FEMA Act that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. In the reply filed to the show-cause notice by the appellant, no such specific plea has been taken. 13. The appellant then invited our attention to the reply filed on behalf of the Company on 27.1.2004 in which it is vaguely asserted that on the date when the Memorandum of Understanding was signed, no disclosure was made that the import was done under EPCG licence and the obligations under the said licence remained to be fulfilled. To get benefit of the proviso to Section 42(1), the appellant should have pleaded and proved that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention and made every effort to rectify the contravention in right earnest. 14. Be that as it may, once it is held that the contravention is a continuing offence, the fact that the appellant was not looking after the affairs of the Company in the year 2000 would be of no avail to the appellant until corrective steps were taken in right earnest after his taking over the management of the Company and in particular after becoming aware about the contraventions. The appellant has placed reliance on the dictum of this Court in M/s. Hindustan Steel Ltd. vs. State of Orissa (1969) 2 SCC 627 ( paragraph 8). This decision has been distinguished in the case of Shriram (supra) as can be discerned from paragraph 34 of the reported judgment, which reads thus: - 34. The Tribunal has erroneously relied on the judgment in Hindustan Steel Ltd. v. State of Orissa, (1969) 2 SCC 627 which pertained to criminal/quasi-criminal proceedings. That Section 25 of the Orissa Sales Tax Act which was in question in the said case imposed a punishment of imprisonment up to six months and fine for the offences under the Act. The said case has no application in the present case which relates to imposition of civil liabilities under the SEBI Act and the Regulations and is not a criminal/quasi-criminal proceeding. We are in agreement with the view so expressed. 15. To sum up, we hold that no error has been committed by the adjudicating authority in finding that the appellant was also liable to be proceeded with for the contravention by the Company of which he became the Managing Director and for penalty therefor as prescribed for the contravention of Section 10(6) read with Sections 46 and 47 of the FEMA Act read with paragraphs A-10 and A-11 (Current Account Transaction) of the Foreign Exchange Manual 2003-04. The first appellate authority and the High Court justly affirmed the view so taken by the adjudicating authority. ### Response: 0 ### Explanation: by the Company and for which complaint action was just and proper including the imposition of penalty as awarded against the Company and the appellant has attained finality. That cannot be reopened muchless at the instance of the present appellant. This is reinforced by the order issuing notice on the special leave petition filed by the present appellant, dated 30.3.2009. It is indicative of the fact that the contentions specific to absolve the appellant from the complaint action could be examined10. In the present case, the finding of fact is that the import of goods for which the foreign exchange was procured and remitted was not completed as the Bill of Entry remained to be submitted and the goods were kept in the bonded warehouse and the Company took no steps to clear the same. As a result, Section 10(6) of the FEMA Act is clearly attracted being a case of not using the procured foreign exchange for completing the import procedure. It is also possible to take the view that the Company should have taken steps to surrender the foreign exchange to the authorised person within the specified time as provided in Regulation 6 of the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 (for short, the FEMA Regulations) issued by the Reserve Bank of India11. The High Court has opined that the contravention referred to in Section 10(6) by its very nature is a continuing offence. We agree with that view. It is indisputable that the penalty provided for such contravention is on account of civil obligation under the FEMA Act or the rules or regulations or direction or order made thereunder. If the delinquency is a civil obligation, the defaulter is obligated to make efforts by payment of the penalty imposed for such contravention. So long as the imported goods remained uncleared and obligation provided under the rules and regulations to submit Bill of Entry was not discharged, the contravention would continue to operate until corrective steps were taken by the Company and the persons in charge of the affairs of the CompanyAs aforementioned, the contravention referred to in Section 10(6) of the FEMA Act is a continuing actionable offence. If so, the Company and the persons managing the affairs of the Company remain liable to take corrective measures in right earnest. Considering the admitted fact that the appellant took over the management of the Company on 22.10.2001 and was fully alive to the default committed by the Company, yet failed to take corrective steps in right earnest. Notably, being conscious of such contravention, the appellant had sought indulgence of the authorities for more time. It must follow that the appellant cannot now be heard to contend that no liability could be fastened on him individually. Indeed, regulation 6 of the FEMA Regulations provides for the period within which the foreign exchange ought to be surrendered if the Company was not wanting to take delivery of the goods imported. That, however, does not mean that the contravention ceased to exist beyond the specified period. On the other hand, after the specified period as predicated in regulation 6 had expired, it would be a case of deemed contravention until rectified12. It is not the case of the appellant that he is not an officer or a person in charge of and responsible to the Company for the conduct of the business of the Company, as well as, the Company on or after 22.10.2001. Considering the fact that the appellant admittedly became aware of the contravention yet failed to take corrective measures until the action to impose penalty for such contravention was initiated, he cannot be permitted to invoke the only defence available in terms of proviso to sub-Section (1) of Section 42 of the FEMA Act that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. In the reply filed to the show-cause notice by the appellant, no such specific plea has been takenTo get benefit of the proviso to Section 42(1), the appellant should have pleaded and proved that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention and made every effort to rectify the contravention in right earnest14. Be that as it may, once it is held that the contravention is a continuing offence, the fact that the appellant was not looking after the affairs of the Company in the year 2000 would be of no avail to the appellant until corrective steps were taken in right earnest after his taking over the management of the Company and in particular after becoming aware about the contraventionsThis decision has been distinguished in the case of Shriram (supra) as can be discerned from paragraph 34 of the reported judgment, which reads thus: -34. The Tribunal has erroneously relied on the judgment in Hindustan Steel Ltd. v. State of Orissa, (1969) 2 SCC 627 which pertained to criminal/quasi-criminal proceedings. That Section 25 of the Orissa Sales Tax Act which was in question in the said case imposed a punishment of imprisonment up to six months and fine for the offences under the Act. The said case has no application in the present case which relates to imposition of civil liabilities under the SEBI Act and the Regulations and is not a criminal/quasi-criminal proceedingWe are in agreement with the view so expressed15. To sum up, we hold that no error has been committed by the adjudicating authority in finding that the appellant was also liable to be proceeded with for the contravention by the Company of which he became the Managing Director and for penalty therefor as prescribed for the contravention of Section 10(6) read with Sections 46 and 47 of the FEMA Act read with paragraphs A-10 and A-11 (Current Account Transaction) of the Foreign Exchange Manual 2003-04. The first appellate authority and the High Court justly affirmed the view so taken by the adjudicating authority.

Suresh Vs. Vasant & Others

degree of the M.Sc. (Agri.) examination had already been held and respondent No. 1 had passed that examination. 3. A petition under Article 226 of the Constitution was filed in the High Court originally by 7 petitioners out of which two were struck off leaving petitioners 1 to 5 before the High Court. According to Petitioners 1 and 2 they had secured more than 50 per cent. marks in the aggregate as well as in the subjects in which they had applied for admission and that they were thus entitled to be admitted instead of respondent No. 1 who was not duly qualified. The High Court went into the matter at length. It proceeded on the basis that the reservations could be made for the children of Freedom Fighters under Section 5 of the Punjabrao Krishi Vidyapeeth (Agricultural University) Act, 1968, hereinafter called the Act. The reservation of the seats to the extent of 2 per cent., therefore, was valid as the previous sanction of the State Government had been obtained. 4. The High Court was of the view that the lowering of the minimum qualification for admission was unauthorised although the seats could have been increased by the Executive Council. After coming to that conclusion this is what the High Court said : "We hold that the petitioners are entitled to be considered for admission to the unreserved seats out of the 11 seats created and the petitioners have, therefore, right to approach this Court under Article 226 of the Constitution for their redress". The order of admission of respondent No. 1 in the Nagpur College was quashed and it was directed that if possible the eligible candidate should be admitted in his place. Respondent No. 1 was also entitled to be considered for admission, if otherwise qualified. 5. According to Mr. C. K. Daphtary who appeared for the appellant the writ petition should have been dismissed by the High Court on the short ground that the same was not maintainable at the instance of the present respondent. These respondents, according to him, do not belong to any of the categories of classes for which the 12 extra seats in the entire Vidyapeeth were created. They had, therefore, no interest in the suit and they had no locus standi to challenge the resolution by which the qualifications were lowered respect of the candidates belonging to classes already mentioned. Our attention has been invited to the return filed by the appellant before the High Court. It was stated therein that he had been admitted to the College in the month of July, 1970 and had been attending the classes regularly and even weekly and monthly examination were being conducted. By deciding the writ petition it would only mean that not only the career of the present appellant would be affected but also of the other 11 student who were admitted along with him and who had not been made parties would be affected, the total number of seats which had been increased being 12. In the return filed on behalf of the Vidyapeeth, etc. in the High Court it had been pointed out that the minimum qualifications of marks for the categories of certain persons had been relaxed even by the Indian Agricultural Research Institute and on that basis the Executive Council had taken a decision to reduce only one part of the qualifications, namely, that in the aggregate instead of 50 per cent., obtaining of 45 per cent. marks was sufficient. Without going into the question of the validity of the resolution of the Executive Council by which the qualifications were lowered or the number of seats was increased by 12 for sons of Freedom Fighters and others we have no hesitation in acceding to the contention of Mr. Daphtary that the writ petition was bound to fail on the short ground that none of the respondents who were petitioners before the High Court could show that he was entitled to be admitted to any one of the seats out of the 12 seats which had been newly created for specified categories pursuant to the resolution of the Executive Council. Admittedly none of these candidates was either a son of a Freedom fighter or belonged to the Scheduled Caste or Scheduled Tribe. There is another serious hurdle in the way of sustaining the relief which has been granted by the High Court. The Post-Graduate course for which the admission was to be made is about to conclude and the appellant has been attending that course and has appeared in all the examinations and may be declared successful after he has completed the course and passed all the remaining examinations. None of the respondents who was eligible for admission on the basis of the qualifications for students not belonging to the reserved categories has been attending the course in question or appearing in the examinations. If the order of the High Court is to be carried out it will only mean that the appellant will be deprived of the entire work which he has put in during this period from the date he was admitted in 1970 whereas any eligible candidate out of the present respondents who may be held entitled to admission in accordance with the judgment of the High Court cannot qualify for any Post-Graduate Degree unless he starts attending the course which will mean that another period of two years will have to lapse before he can get the Post-Graduate degree if he passes all the examinations, etc. The High Court, while granting the relief, ought to have kept in view the injustice that would result in a matter like this and which would make the grant of the writ almost futile. It is true that a good deal of time has lapsed owing to the pendency of the appeal in this Court but even the judgment of the High Court was delivered on November 6, 1970 by which time the same difficulties would have been apparent.

1[ds]5. According to Mr. C. K. Daphtary who appeared for the appellant the writ petition should have been dismissed by the High Court on the short ground that the same was not maintainable at the instance of the present respondent. These respondents, according to him, do not belong to any of the categories of classes for which the 12 extra seats in the entire Vidyapeeth were created. They had, therefore, no interest in the suit and they had no locus standi to challenge the resolution by which the qualifications were lowered respect of the candidates belonging to classes already mentioned. Our attention has been invited to the return filed by the appellant before the High Court. It was stated therein that he had been admitted to the College in the month of July, 1970 and had been attending the classes regularly and even weekly and monthly examination were being. By deciding the writ petition it would only mean that not only the career of the present appellant would be affected but also of the other 11 student who were admitted along with him and who had not been made parties would be affected, the total number of seats which had been increased being 12. In the return filed on behalf of the Vidyapeeth, etc. in the High Court it had been pointed out that the minimum qualifications of marks for the categories of certain persons had been relaxed even by the Indian Agricultural Research Institute and on that basis the Executive Council had taken a decision to reduce only one part of the qualifications, namely, that in the aggregate instead of 50 per cent., obtaining of 45 per cent. marks was sufficient. Without going into the question of the validity of the resolution of the Executive Council by which the qualifications were lowered or the number of seats was increased by 12 for sons of Freedom Fighters and others we have no hesitation in acceding to the contention of Mr. Daphtary that the writ petition was bound to fail on the short ground that none of the respondents who were petitioners before the High Court could show that he was entitled to be admitted to any one of the seats out of the 12 seats which had been newly created for specified categories pursuant to the resolution of the Executive Council. Admittedly none of these candidates was either a son of a Freedom fighter or belonged to the Scheduled Caste or Scheduled Tribe. There is another serious hurdle in the way of sustaining the relief which has been granted by the High Court. Thee course for which the admission was to be made is about to conclude and the appellant has been attending that course and has appeared in all the examinations and may be declared successful after he has completed the course and passed all the remaining examinations. None of the respondents who was eligible for admission on the basis of the qualifications for students not belonging to the reserved categories has been attending the course in question or appearing in the examinations. If the order of the High Court is to be carried out it will only mean that the appellant will be deprived of the entire work which he has put in during this period from the date he was admitted in 1970 whereas any eligible candidate out of the present respondents who may be held entitled to admission in accordance with the judgment of the High Court cannot qualify for anye Degree unless he starts attending the course which will mean that another period of two years will have to lapse before he can get thee degree if he passes all the examinations, etc. The High Court, while granting the relief, ought to have kept in view the injustice that would result in a matter like this and which would make the grant of the writ almost futile. It is true that a good deal of time has lapsed owing to the pendency of the appeal in this Court but even the judgment of the High Court was delivered on November 6, 1970 by which time the same difficulties would have been apparent5. According to Mr. C. K. Daphtary who appeared for the appellant the writ petition should have been dismissed by the High Court on the short ground that the same was not maintainable at the instance of the present respondent. These respondents, according to him, do not belong to any of the categories of classes for which the 12 extra seats in the entire Vidyapeeth were created. They had, therefore, no interest in the suit and they had no locus standi to challenge the resolution by which the qualifications were lowered respect of the candidates belonging to classes already mentioned. Our attention has been invited to the return filed by the appellant before the High Court. It was stated therein that he had been admitted to the College in the month of July, 1970 and had been attending the classes regularly and even weekly and monthly examination were being. By deciding the writ petition it would only mean that not only the career of the present appellant would be affected but also of the other 11 student who were admitted along with him and who had not been made parties would be affected, the total number of seats which had been increased being 12. In the return filed on behalf of the Vidyapeeth, etc. in the High Court it had been pointed out that the minimum qualifications of marks for the categories of certain persons had been relaxed even by the Indian Agricultural Research Institute and on that basis the Executive Council had taken a decision to reduce only one part of the qualifications, namely, that in the aggregate instead of 50 per cent., obtaining of 45 per cent. marks was sufficient. Without going into the question of the validity of the resolution of the Executive Council by which the qualifications were lowered or the number of seats was increased by 12 for sons of Freedom Fighters and others we have no hesitation in acceding to the contention of Mr. Daphtary that the writ petition was bound to fail on the short ground that none of the respondents who were petitioners before the High Court could show that he was entitled to be admitted to any one of the seats out of the 12 seats which had been newly created for specified categories pursuant to the resolution of the Executive Council. Admittedly none of these candidates was either a son of a Freedom fighter or belonged to the Scheduled Caste or Scheduled Tribe. There is another serious hurdle in the way of sustaining the relief which has been granted by the High Court. Thee course for which the admission was to be made is about to conclude and the appellant has been attending that course and has appeared in all the examinations and may be declared successful after he has completed the course and passed all the remaining examinations. None of the respondents who was eligible for admission on the basis of the qualifications for students not belonging to the reserved categories has been attending the course in question or appearing in the examinations. If the order of the High Court is to be carried out it will only mean that the appellant will be deprived of the entire work which he has put in during this period from the date he was admitted in 1970 whereas any eligible candidate out of the present respondents who may be held entitled to admission in accordance with the judgment of the High Court cannot qualify for anye Degree unless he starts attending the course which will mean that another period of two years will have to lapse before he can get thee degree if he passes all the examinations, etc. The High Court, while granting the relief, ought to have kept in view the injustice that would result in a matter like this and which would make the grant of the writ almost futile. It is true that a good deal of time has lapsed owing to the pendency of the appeal in this Court but even the judgment of the High Court was delivered on November 6, 1970 by which time the same difficulties would have been

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: degree of the M.Sc. (Agri.) examination had already been held and respondent No. 1 had passed that examination. 3. A petition under Article 226 of the Constitution was filed in the High Court originally by 7 petitioners out of which two were struck off leaving petitioners 1 to 5 before the High Court. According to Petitioners 1 and 2 they had secured more than 50 per cent. marks in the aggregate as well as in the subjects in which they had applied for admission and that they were thus entitled to be admitted instead of respondent No. 1 who was not duly qualified. The High Court went into the matter at length. It proceeded on the basis that the reservations could be made for the children of Freedom Fighters under Section 5 of the Punjabrao Krishi Vidyapeeth (Agricultural University) Act, 1968, hereinafter called the Act. The reservation of the seats to the extent of 2 per cent., therefore, was valid as the previous sanction of the State Government had been obtained. 4. The High Court was of the view that the lowering of the minimum qualification for admission was unauthorised although the seats could have been increased by the Executive Council. After coming to that conclusion this is what the High Court said : "We hold that the petitioners are entitled to be considered for admission to the unreserved seats out of the 11 seats created and the petitioners have, therefore, right to approach this Court under Article 226 of the Constitution for their redress". The order of admission of respondent No. 1 in the Nagpur College was quashed and it was directed that if possible the eligible candidate should be admitted in his place. Respondent No. 1 was also entitled to be considered for admission, if otherwise qualified. 5. According to Mr. C. K. Daphtary who appeared for the appellant the writ petition should have been dismissed by the High Court on the short ground that the same was not maintainable at the instance of the present respondent. These respondents, according to him, do not belong to any of the categories of classes for which the 12 extra seats in the entire Vidyapeeth were created. They had, therefore, no interest in the suit and they had no locus standi to challenge the resolution by which the qualifications were lowered respect of the candidates belonging to classes already mentioned. Our attention has been invited to the return filed by the appellant before the High Court. It was stated therein that he had been admitted to the College in the month of July, 1970 and had been attending the classes regularly and even weekly and monthly examination were being conducted. By deciding the writ petition it would only mean that not only the career of the present appellant would be affected but also of the other 11 student who were admitted along with him and who had not been made parties would be affected, the total number of seats which had been increased being 12. In the return filed on behalf of the Vidyapeeth, etc. in the High Court it had been pointed out that the minimum qualifications of marks for the categories of certain persons had been relaxed even by the Indian Agricultural Research Institute and on that basis the Executive Council had taken a decision to reduce only one part of the qualifications, namely, that in the aggregate instead of 50 per cent., obtaining of 45 per cent. marks was sufficient. Without going into the question of the validity of the resolution of the Executive Council by which the qualifications were lowered or the number of seats was increased by 12 for sons of Freedom Fighters and others we have no hesitation in acceding to the contention of Mr. Daphtary that the writ petition was bound to fail on the short ground that none of the respondents who were petitioners before the High Court could show that he was entitled to be admitted to any one of the seats out of the 12 seats which had been newly created for specified categories pursuant to the resolution of the Executive Council. Admittedly none of these candidates was either a son of a Freedom fighter or belonged to the Scheduled Caste or Scheduled Tribe. There is another serious hurdle in the way of sustaining the relief which has been granted by the High Court. The Post-Graduate course for which the admission was to be made is about to conclude and the appellant has been attending that course and has appeared in all the examinations and may be declared successful after he has completed the course and passed all the remaining examinations. None of the respondents who was eligible for admission on the basis of the qualifications for students not belonging to the reserved categories has been attending the course in question or appearing in the examinations. If the order of the High Court is to be carried out it will only mean that the appellant will be deprived of the entire work which he has put in during this period from the date he was admitted in 1970 whereas any eligible candidate out of the present respondents who may be held entitled to admission in accordance with the judgment of the High Court cannot qualify for any Post-Graduate Degree unless he starts attending the course which will mean that another period of two years will have to lapse before he can get the Post-Graduate degree if he passes all the examinations, etc. The High Court, while granting the relief, ought to have kept in view the injustice that would result in a matter like this and which would make the grant of the writ almost futile. It is true that a good deal of time has lapsed owing to the pendency of the appeal in this Court but even the judgment of the High Court was delivered on November 6, 1970 by which time the same difficulties would have been apparent. ### Response: 1 ### Explanation: none of these candidates was either a son of a Freedom fighter or belonged to the Scheduled Caste or Scheduled Tribe. There is another serious hurdle in the way of sustaining the relief which has been granted by the High Court. Thee course for which the admission was to be made is about to conclude and the appellant has been attending that course and has appeared in all the examinations and may be declared successful after he has completed the course and passed all the remaining examinations. None of the respondents who was eligible for admission on the basis of the qualifications for students not belonging to the reserved categories has been attending the course in question or appearing in the examinations. If the order of the High Court is to be carried out it will only mean that the appellant will be deprived of the entire work which he has put in during this period from the date he was admitted in 1970 whereas any eligible candidate out of the present respondents who may be held entitled to admission in accordance with the judgment of the High Court cannot qualify for anye Degree unless he starts attending the course which will mean that another period of two years will have to lapse before he can get thee degree if he passes all the examinations, etc. The High Court, while granting the relief, ought to have kept in view the injustice that would result in a matter like this and which would make the grant of the writ almost futile. It is true that a good deal of time has lapsed owing to the pendency of the appeal in this Court but even the judgment of the High Court was delivered on November 6, 1970 by which time the same difficulties would have been apparent5. According to Mr. C. K. Daphtary who appeared for the appellant the writ petition should have been dismissed by the High Court on the short ground that the same was not maintainable at the instance of the present respondent. These respondents, according to him, do not belong to any of the categories of classes for which the 12 extra seats in the entire Vidyapeeth were created. They had, therefore, no interest in the suit and they had no locus standi to challenge the resolution by which the qualifications were lowered respect of the candidates belonging to classes already mentioned. Our attention has been invited to the return filed by the appellant before the High Court. It was stated therein that he had been admitted to the College in the month of July, 1970 and had been attending the classes regularly and even weekly and monthly examination were being. By deciding the writ petition it would only mean that not only the career of the present appellant would be affected but also of the other 11 student who were admitted along with him and who had not been made parties would be affected, the total number of seats which had been increased being 12. In the return filed on behalf of the Vidyapeeth, etc. in the High Court it had been pointed out that the minimum qualifications of marks for the categories of certain persons had been relaxed even by the Indian Agricultural Research Institute and on that basis the Executive Council had taken a decision to reduce only one part of the qualifications, namely, that in the aggregate instead of 50 per cent., obtaining of 45 per cent. marks was sufficient. Without going into the question of the validity of the resolution of the Executive Council by which the qualifications were lowered or the number of seats was increased by 12 for sons of Freedom Fighters and others we have no hesitation in acceding to the contention of Mr. Daphtary that the writ petition was bound to fail on the short ground that none of the respondents who were petitioners before the High Court could show that he was entitled to be admitted to any one of the seats out of the 12 seats which had been newly created for specified categories pursuant to the resolution of the Executive Council. Admittedly none of these candidates was either a son of a Freedom fighter or belonged to the Scheduled Caste or Scheduled Tribe. There is another serious hurdle in the way of sustaining the relief which has been granted by the High Court. Thee course for which the admission was to be made is about to conclude and the appellant has been attending that course and has appeared in all the examinations and may be declared successful after he has completed the course and passed all the remaining examinations. None of the respondents who was eligible for admission on the basis of the qualifications for students not belonging to the reserved categories has been attending the course in question or appearing in the examinations. If the order of the High Court is to be carried out it will only mean that the appellant will be deprived of the entire work which he has put in during this period from the date he was admitted in 1970 whereas any eligible candidate out of the present respondents who may be held entitled to admission in accordance with the judgment of the High Court cannot qualify for anye Degree unless he starts attending the course which will mean that another period of two years will have to lapse before he can get thee degree if he passes all the examinations, etc. The High Court, while granting the relief, ought to have kept in view the injustice that would result in a matter like this and which would make the grant of the writ almost futile. It is true that a good deal of time has lapsed owing to the pendency of the appeal in this Court but even the judgment of the High Court was delivered on November 6, 1970 by which time the same difficulties would have been

BANK OF INDIA Vs. M/S. BRINDAVAN AGRO INDUSTRIES PVT. LTD

words, the sanction letter should not be given to the customer without ensuring that Bank has received the processing charges. It, therefore, follows that Bank would not consider in future waiver of un-recovered processing charges, in the normal course. 4. Please bring the contents of this circular letter to the attention of all staff members for strict compliance. 12. Learned counsel for the Bank also refers to the letter dated 15th October, 2011 by the Consumer seeking credit facility with the request on behalf of the Consumer to give concession of 50% on LC charges, processing charges, inspection charges etc. and fully waive DD charges and commitment charges. 13. In this background, the final proposal for sanction was submitted by the CPU on 24th January, 2012 to the Head Office of the Bank. Soon after the letter was sent by the CPU, the Consumer communicated that it was promised that the sanction would be received by 4th February, 2012 but since the Consumer had not received the sanction letter, it sought reversal of the amount debited in view of the fact that it got sanctions from other banks with attractive rate of interest and the other terms and conditions. The credit facilities were sanctioned on 17th March, 2012. 14. Learned counsel for the Consumer, on the other hand, contended that the Circular of the Bank dated 20th April, 2005, to which the reliance has been placed by the learned counsel for the Bank, was never brought to the notice of the Consumer, therefore, the conditions mentioned in such Circular will not bind the Consumer. It is also contended that the Bank had taken extra-ordinarily long time to sanction the loan which compelled the Consumer to take credit facilities from the other Banks. It is also contended that amount of Rs.27,41,165/- was debited to the account of the Consumer without its consent and knowledge and, therefore, the order passed by the SCDRC and NCDRC does not warrant any interference in the present appeal. 15. The learned NCDRC held that the services of the Bank availed for cash credit limits do not disentitle the respondent/complainant from becoming a consumer under the Act. It further held that even though the Consumer had changed its loan demand three times, the Consumer had requested to pay 50% processing and other charges, and the total amount of Rs.27,41,165/- that was debited including PPC charges and Rs.18.25 lakhs as TEV study charges. Further, as the Bank had agreed to refund Rs.9.16 lakhs, it meant that the Bank had considered to take only Rs.18.25 lakhs as TEV charges. Additionally, the Consumer had requested for 50% discount on processing and other charges to which the Bank never disagreed, hence it was presumed that the Bank had agreed to the concession sought. Therefore, the Bank should have charged only 1/4th of the TEV charges i.e. Rs.4,56,250/-. Similarly, with regard to PPC charges, the Bank at one time agreed to waive off these charges of Rs.9.16 lakhs subject to the Consumer paying the TEV charge in full. But now, it was found that the Bank was entitled to only Rs.4,56,250/- as TEV charge, therefore, on the same analogy, 1/4th of the PPC charge i.e. Rs.2,29,000/- was found to be allowed to be deducted by the Bank. Hence, the Bank was entitled to debit total of only Rs.6,85,250/- (Rs.4,56,250/- + Rs.2,29,000/-). Resultantly, the Bank was directed to refund Rs.20,55,915/- to the Consumer and the interest rate was modified from 9% p.a. to 7% p.a. 16. We find that the reasoning given by the learned NCDRC is de hors the proposal as well as Circular of the Bank and is, in fact, based on ipse dixit of the NCDRC. The Consumer had sought a waiver of 50% of all charges in the request letter dated 15th October, 2011. As per the sanction letter dated 17th March, 2012, the following were the charges claimed from the Consumer: TABLE 17. The total charges, thus, payable were Rs.68,83,000/- plus service tax. Even if, the 50% concession is conceded to the Consumer, still the amount to be charged is much more than Rs.27,47,165/-. As per the tariff mentioned in the sanction letter, TEV charges are Rs.18,25,000/- whereas processing charges are to the tune of Rs.49,63,000/-. Obviously, the Consumer had to pay charges for availing credit facilities of which the Consumer was in knowledge of and, therefore, sought a waiver of 50% of the charges. It is the Consumer who revised the requirement of credit facilities three times and the Bank sanctioned credit facilities on 17th March, 2012 i.e. within almost three months from the final modified request. 18. The Consumer admittedly was an old customer of the Bank who applied to avail credit facilities of more than Rs.40 crores and it is unbelievable that it was unaware of the procedure and the Circulars of the Bank. The ignorance of the procedure and the Circular of the Bank dated 20th April, 2005 cannot be accepted. The Consumer was aware of the processing charges and had sought a waiver of the processing charges, therefore, the processing charges had been debited by the Bank on 30th December, 2011 in terms of authority given by the Consumer on 19th January, 2011 (Annexure P/3 in the appeal paper-book). 19. Thus, we find that orders passed by the NCDRC and SCDRC are liable to be set aside. We may say that though, the Bank agreed to refund Rs.9.16 lakhs from the processing charges through email dated 29th June 2012 but the Consumer had not accepted such proposal in its e-mail dated 24th July, 2012. Therefore, we find that the Consumer is entitled to refund of Rs.9.16 lakhs only in terms of the decision of the Bank communicated to the Consumer rather than waiver of TEV charges in its entirety. The request was to give concession of 50% of all charges, therefore, it is the cumulative amount of charges which is to be taken into consideration and not the charges under a particular head.

1[ds]16. We find that the reasoning given by the learned NCDRC is de hors the proposal as well as Circular of the Bank and is, in fact, based on ipse dixit of the NCDRC. The Consumer had sought a waiver of 50% of all charges in the request letter dated 15th October, 201117. The total charges, thus, payable were Rs.68,83,000/- plus service tax. Even if, the 50% concession is conceded to the Consumer, still the amount to be charged is much more than Rs.27,47,165/-. As per the tariff mentioned in the sanction letter, TEV charges are Rs.18,25,000/- whereas processing charges are to the tune of Rs.49,63,000/-. Obviously, the Consumer had to pay charges for availing credit facilities of which the Consumer was in knowledge of and, therefore, sought a waiver of 50% of the charges. It is the Consumer who revised the requirement of credit facilities three times and the Bank sanctioned credit facilities on 17th March, 2012 i.e. within almost three months from the final modified request18. The Consumer admittedly was an old customer of the Bank who applied to avail credit facilities of more than Rs.40 crores and it is unbelievable that it was unaware of the procedure and the Circulars of the Bank. The ignorance of the procedure and the Circular of the Bank dated 20th April, 2005 cannot be accepted. The Consumer was aware of the processing charges and had sought a waiver of the processing charges, therefore, the processing charges had been debited by the Bank on 30th December, 2011 in terms of authority given by the Consumer on 19th January, 2011 (Annexure P/3 in the appeal paper-book)19. Thus, we find that orders passed by the NCDRC and SCDRC are liable to be set aside. We may say that though, the Bank agreed to refund Rs.9.16 lakhs from the processing charges through email dated 29th June 2012 but the Consumer had not accepted such proposal in its e-mail dated 24th July, 2012. Therefore, we find that the Consumer is entitled to refund of Rs.9.16 lakhs only in terms of the decision of the Bank communicated to the Consumer rather than waiver of TEV charges in its entirety. The request was to give concession of 50% of all charges, therefore, it is the cumulative amount of charges which is to be taken into consideration and not the charges under a particular head.

### Instruction: Evaluate the case proceeding to forecast the court's decision (1 for yes, 0 for no), and elucidate the reasoning behind this prediction with important textual evidence from the case. ### Input: words, the sanction letter should not be given to the customer without ensuring that Bank has received the processing charges. It, therefore, follows that Bank would not consider in future waiver of un-recovered processing charges, in the normal course. 4. Please bring the contents of this circular letter to the attention of all staff members for strict compliance. 12. Learned counsel for the Bank also refers to the letter dated 15th October, 2011 by the Consumer seeking credit facility with the request on behalf of the Consumer to give concession of 50% on LC charges, processing charges, inspection charges etc. and fully waive DD charges and commitment charges. 13. In this background, the final proposal for sanction was submitted by the CPU on 24th January, 2012 to the Head Office of the Bank. Soon after the letter was sent by the CPU, the Consumer communicated that it was promised that the sanction would be received by 4th February, 2012 but since the Consumer had not received the sanction letter, it sought reversal of the amount debited in view of the fact that it got sanctions from other banks with attractive rate of interest and the other terms and conditions. The credit facilities were sanctioned on 17th March, 2012. 14. Learned counsel for the Consumer, on the other hand, contended that the Circular of the Bank dated 20th April, 2005, to which the reliance has been placed by the learned counsel for the Bank, was never brought to the notice of the Consumer, therefore, the conditions mentioned in such Circular will not bind the Consumer. It is also contended that the Bank had taken extra-ordinarily long time to sanction the loan which compelled the Consumer to take credit facilities from the other Banks. It is also contended that amount of Rs.27,41,165/- was debited to the account of the Consumer without its consent and knowledge and, therefore, the order passed by the SCDRC and NCDRC does not warrant any interference in the present appeal. 15. The learned NCDRC held that the services of the Bank availed for cash credit limits do not disentitle the respondent/complainant from becoming a consumer under the Act. It further held that even though the Consumer had changed its loan demand three times, the Consumer had requested to pay 50% processing and other charges, and the total amount of Rs.27,41,165/- that was debited including PPC charges and Rs.18.25 lakhs as TEV study charges. Further, as the Bank had agreed to refund Rs.9.16 lakhs, it meant that the Bank had considered to take only Rs.18.25 lakhs as TEV charges. Additionally, the Consumer had requested for 50% discount on processing and other charges to which the Bank never disagreed, hence it was presumed that the Bank had agreed to the concession sought. Therefore, the Bank should have charged only 1/4th of the TEV charges i.e. Rs.4,56,250/-. Similarly, with regard to PPC charges, the Bank at one time agreed to waive off these charges of Rs.9.16 lakhs subject to the Consumer paying the TEV charge in full. But now, it was found that the Bank was entitled to only Rs.4,56,250/- as TEV charge, therefore, on the same analogy, 1/4th of the PPC charge i.e. Rs.2,29,000/- was found to be allowed to be deducted by the Bank. Hence, the Bank was entitled to debit total of only Rs.6,85,250/- (Rs.4,56,250/- + Rs.2,29,000/-). Resultantly, the Bank was directed to refund Rs.20,55,915/- to the Consumer and the interest rate was modified from 9% p.a. to 7% p.a. 16. We find that the reasoning given by the learned NCDRC is de hors the proposal as well as Circular of the Bank and is, in fact, based on ipse dixit of the NCDRC. The Consumer had sought a waiver of 50% of all charges in the request letter dated 15th October, 2011. As per the sanction letter dated 17th March, 2012, the following were the charges claimed from the Consumer: TABLE 17. The total charges, thus, payable were Rs.68,83,000/- plus service tax. Even if, the 50% concession is conceded to the Consumer, still the amount to be charged is much more than Rs.27,47,165/-. As per the tariff mentioned in the sanction letter, TEV charges are Rs.18,25,000/- whereas processing charges are to the tune of Rs.49,63,000/-. Obviously, the Consumer had to pay charges for availing credit facilities of which the Consumer was in knowledge of and, therefore, sought a waiver of 50% of the charges. It is the Consumer who revised the requirement of credit facilities three times and the Bank sanctioned credit facilities on 17th March, 2012 i.e. within almost three months from the final modified request. 18. The Consumer admittedly was an old customer of the Bank who applied to avail credit facilities of more than Rs.40 crores and it is unbelievable that it was unaware of the procedure and the Circulars of the Bank. The ignorance of the procedure and the Circular of the Bank dated 20th April, 2005 cannot be accepted. The Consumer was aware of the processing charges and had sought a waiver of the processing charges, therefore, the processing charges had been debited by the Bank on 30th December, 2011 in terms of authority given by the Consumer on 19th January, 2011 (Annexure P/3 in the appeal paper-book). 19. Thus, we find that orders passed by the NCDRC and SCDRC are liable to be set aside. We may say that though, the Bank agreed to refund Rs.9.16 lakhs from the processing charges through email dated 29th June 2012 but the Consumer had not accepted such proposal in its e-mail dated 24th July, 2012. Therefore, we find that the Consumer is entitled to refund of Rs.9.16 lakhs only in terms of the decision of the Bank communicated to the Consumer rather than waiver of TEV charges in its entirety. The request was to give concession of 50% of all charges, therefore, it is the cumulative amount of charges which is to be taken into consideration and not the charges under a particular head. ### Response: 1 ### Explanation: 16. We find that the reasoning given by the learned NCDRC is de hors the proposal as well as Circular of the Bank and is, in fact, based on ipse dixit of the NCDRC. The Consumer had sought a waiver of 50% of all charges in the request letter dated 15th October, 201117. The total charges, thus, payable were Rs.68,83,000/- plus service tax. Even if, the 50% concession is conceded to the Consumer, still the amount to be charged is much more than Rs.27,47,165/-. As per the tariff mentioned in the sanction letter, TEV charges are Rs.18,25,000/- whereas processing charges are to the tune of Rs.49,63,000/-. Obviously, the Consumer had to pay charges for availing credit facilities of which the Consumer was in knowledge of and, therefore, sought a waiver of 50% of the charges. It is the Consumer who revised the requirement of credit facilities three times and the Bank sanctioned credit facilities on 17th March, 2012 i.e. within almost three months from the final modified request18. The Consumer admittedly was an old customer of the Bank who applied to avail credit facilities of more than Rs.40 crores and it is unbelievable that it was unaware of the procedure and the Circulars of the Bank. The ignorance of the procedure and the Circular of the Bank dated 20th April, 2005 cannot be accepted. The Consumer was aware of the processing charges and had sought a waiver of the processing charges, therefore, the processing charges had been debited by the Bank on 30th December, 2011 in terms of authority given by the Consumer on 19th January, 2011 (Annexure P/3 in the appeal paper-book)19. Thus, we find that orders passed by the NCDRC and SCDRC are liable to be set aside. We may say that though, the Bank agreed to refund Rs.9.16 lakhs from the processing charges through email dated 29th June 2012 but the Consumer had not accepted such proposal in its e-mail dated 24th July, 2012. Therefore, we find that the Consumer is entitled to refund of Rs.9.16 lakhs only in terms of the decision of the Bank communicated to the Consumer rather than waiver of TEV charges in its entirety. The request was to give concession of 50% of all charges, therefore, it is the cumulative amount of charges which is to be taken into consideration and not the charges under a particular head.

C.I.T.,Trivandrum Vs. M/S.Anand Theatres

and also in other buildings. Still, however, it would be difficult to draw a distinction and differentiate by holding that a building which is specially designed and constructed for running a hotel or cinema would be covered by a plant and other buildings used for the same purpose would not get depreciation as plant, even though such business is carried on in such premises. In our view, the Delhi High Court has in the case of R.C. Chemical Industry (supra) rightly observed that mere fact that manufacture of saccharine would be better carried on in a building having atmospheric controls would not convert the building form the setting to the means for carrying the business. Similarly, Rajasthan High Court also in Lake Palace Hotels & Motels (P) Ltd.s case (supra) rightly observed that simply because some special fittings or controlling equipments are attached for the purpose of carrying on hotel business, it will take it out of the category of building and make it a plant. In our view special fittings or equipments to control atmospheric effects would be plant, but not the binding which house such equipments. Further for running almost all industries or for carrying on any trade or business building is required on occasions building may be designed and constructed to suite the requirement of a particular industry, trade or business. But that would not make such building a plant. It only shelters running of such business. For each and every business, trade or industry, building is required to carry on such activity. That means building plays some role and in other words, its function is to shelter the business, but it has no other function except in some rare cases such as dry dock where it plays an essential part in the operations which take place in getting a ship into the dock, holding it squarely and then returning it to the river. Building is more durable. If contention of the assessee is accepted, virtually all such buildings would be considered to be a plant and distinction which the Legislature has made between the building and machinery or plant would be obliterated. 42. The learned counsel for the assessee submitted that the words plant and building are not mutually exclusive. Plant may include building in certain set of circumstances and, therefore, applying the functional tests assessee would be entitled to depreciation under the head it is more beneficial to it. He submitted that in the modern era, theatre building and hotel building are integral part of operation for carrying out such business and, therefore, such building should be considered as a plant. 43. As discussed above, the aforesaid contention cannot be accepted. Firstly, it would be difficult to draw a line between a building which is specially constructed for the aforesaid purposes and buildings which are used for the aforesaid purposes by converting a residential accommodation or industrial premises for such purposes. Secondly, the depreciation as a general principle represents the diminution in value of capital asset when applied to the purpose of making profit or gain. The object is to get true picture of real income of the business. Hence, it can be inferred that the Legislature never intended to give such benefit of depreciation to a building which is usually more durable than machinery or plant. In CIT v. Alps Theatre [AIR 1967 SC 1437 ], the court considered the question - whether the cost of land is entitled to depreciation under the Schedule to the Income Tax Act along with the cost of the building standing thereon? The court observed thus :- (6) It would be noticed that the word used is depreciation and depreciation means: a decrease in value of property through wear, deterioration, or obsolescence; the allowance made for this in book-keeping, accounting, etc.(Websters New Word Dictionary). In that sense land cannot depreciate. The other words to notice are such buildings. We have noticed that in sub-clause (iv) and (v), building clearly means structures and does not include site (p. 1439) The court also held that: (7) One other consideration is important. The whole object of section 10 is to arrive at the assessable income of a business after allowing necessary expenditure and deductions. (8) Depreciation is allowable as a deduction both according to accountancy principles and according to the Indian Income Tax Act. Why? Because otherwise one would not have a true picture of the real income of the business. But land does not depreciate, and if depreciation was allowed it would give a wrong picture of the true income. (p. 1439) 44. Under the 1961 Act also for the building and machinery or plant depreciation is allowed probably after taking into consideration its life and decrease in the value of the property through wear and tear. 45. The learned counsel for the assessee vehemently submitted that even though the line between the building and the plant in some cases is absolutely thin yet the Legislature or the Central Board of Direct Taxes (Revenue Board) has not clarified the same at any point of time inspite of conflicting judgments of the High Courts on the subject. The learned counsel for the assessee further submitted that even though the Legislature was alive to the issue and amended section 43(3) of the Act by the Finance Act, 1995 by excluding tea bushes and livestock with retrospective effect from 1962, it has not excluded the buildings which are used for running hotel or cinema business. It has not clarified or carried out any amendment in the provision and, therefore, it should be held that interpretation given by the High Courts was accepted by the revenue and the Legislature. We do not know that the Revenue Board was alive to the said controversy. If that was so, it would have clarified either way and litigations could have been avoided. But that is no ground for accepting interpretation suggested by the learned counsel for the assessees which would be inconsistent with scheme of section 32.

1[ds]6. In CIT v. Taj Mahal Hotel [(1971) 82 ITR 44 (SC)] this court considered that the sanitary and pipeline fittings fell within the definition of plant in section 10(5) of the Indian Income Tax Act, 1922 and, therefore, the assessee was entitled to development rebate in respect thereof. The court further held that the fact that the assessee claimed depreciation on the basis that sanitary and pipeline fittings fell under furniture and fittings in rule 8(2) of the Indian Income Tax Rules, 1922, did not detract from this position as the rules cannot take away what is controlled by the Act or whittle down its effect. After considering the contentions raised by the revenue, the court observed as under:It cannot be denied that the business of a hotelier is carried on by adapting a building or premises in a suitable way to be used as a residential hotel where visitors come and stay and where there is arrangement for meals and other amenities are provided for their comfort and convenience. To have sanitary fittings, etc., in a bath room is one of the essential amenities or conveniences which are normally provided in any good hotel, in the present times. If the partitions in Jarrolds case (1963) 1 WLR 214 could be treated as having been used for the purpose of the business of the trader, it is incomprehensible how sanitary fittings can be said to have no connection with the business of the hotelier. He can reasonably expect to get more custom and earn large profit by charging higher rates for the use of rooms if the bath rooms have sanitary fittings and similar amenities ....(Emphasis here italicised in print supplied) (p.48)Thereafter, the court further held;If the dictionary meaning of the word plant; were to be taken into consideration on the principle that the literal construction of a statute must be adhered to unless the context renders it plain that such a construction cannot be put on the words in question - this is what is stated in Websters Third New International Dictionary. Land, buildings, machinery, apparatus and fixtures employed in carrying on trade or other industrialt is, however, unnecessary to dwell more on the dictionary meaning because, looking to the provisions of the Act, we are satisfied that the assets in question were required by the nature of the hotel business which the assessee was carrying on. They were not merely a part of the setting in which hotel business was being carried on. (p. 49)7. In Scientific Engg. House (P.) Ltds case (supra) this court considered that the drawings, designs, charts, plans, processing data and other literature comprises in the documentation service as specified in clause (3) constituted a book which fell within the definition of plant in section 43(3) of the 1961 Act. The court held that these documents did not perform any mechanical operations or processes, but that cannot militate against their being a plant since they were in a sense the basic tools of the assessees trade having a fairly enduring utility. The court further held that capital assets acquired by the assessee, namely, the technical know how in the shape of drawings, designs, Charts, plans, processing data and other literature falls within the definition of plant and, therefore, a depreciable asset. The court also referred to the functional test referred by Lord Guest in Barclay Curle & Co. Ltds case (supra) and observed as under:In other words, the test would be: Does the article fulfil the function of a plant in the assessees trading activity? Is it a tool of his trade with which he carries on his business? If the answer is in the affirmative, it will be a plant. (p. 96)We would add that the learned counsel for the assessees on 3-5-2000 has filed an additional submission pointing out the decision rendered by this court in CIT v. Dr. B. Venkata Rao [(1991) 202 ITR 302], wherein this court dismissing the appeal filed by the revenue held that the nursing home building was specifically equipped as a plant for the assessees business. The court observed:....... What is to be determined is whether the particular nursing home building was equipped as to enable the assessee to carry on the business of a nursing home therein or whether it is just any premises utilised for thate find from the order of the Tribunal as also the assessment order that the assessees nursing home is equipped to enable the sterilisation of surgical instruments and bandages to be carried on. It is reasonable to assume in the circumstances, particularly having regard to the Tribunals order which states that the sterilisation room covers about 250 square fetes that the nursing home is also equipped with an operation theatre. In the circumstance, we think that the finding of the High Court should be accepted. (p. 82)This decision is based on the facts found by the Tribunal and the High Court wherein it was held that nursing home was equipped to enable sterilisation of surgical instruments and bandages to be carried on and that room covered 250 square feets and hence was a plant. As such, no legal contentions were raised and considered by the court and the matter is decided solely on the facts as quoted above without any discussion. Hence, this decision would not be of any assistance in determining the question involved.From the aforesaid discussion, it is apparent that for a building used as a hotel there is a specific provision for granting depreciation allowance at specified rates depending upon fulfilment of the conditions mentioned therein. Hence, there is no question of referring to dictionary meaning of the word plant which may or may not include building, for arriving at a conclusion that building which is specifically designed and constructed as in hotel building would be a plant.Further, in context of legislative scheme under section 32 stated above which provides depreciation at different rates for building, machinery and plant, furniture and fixtures, ships, building used for hospital, aeroplanes, cinematograph films, machinery used in the production and exhibition of cinematograph films, recording equipment, reproducing equipment, developing machines, printing machines, synchronizers and studio lights except bulbs, projecting equipment of film exhibiting concerns, even though the word plant may include building or structure in certain set of circumstances as per the dictionary meaning, but to say that building used for running the business of hotel or a cinema would be plant under the Act appears, on the face of it, to be inconsistent with the aforesaid provisions. Such meaning would be clearly against the legislative intent.34. Applying the said test, we have to gather the meaning of words building and plant in context of Scheme of section 32 and it is not necessary that we should adopt a judge sense meaning, which is artificial and imprecise in application, given to the word plant in context of different statutory provisions. The Scheme of section 32 unequivocally leads to the conclusion that building and plant are treated separately for the purpose of grant of depreciation. Higher rate of depreciation is granted to machinery and plant as against the building which has more durability.35. In CIT v. Mir Mohammad Ali [(1964) 53 ITR 165] this court considered the meaning of the word machinery and observed that the word machinery is an ordinary and not a technical word and unless there is something in the context in the Act, the ordinary meaning would prevail. Thereafter, the court observed:According to the above definition, a diesel engine is clearly machinery. indeed, rule 8 of the Income Tax Rules treats aero-engines separately, from aircraft. It is true that this rule cannot be used to interpret the clauses in the Act but it does show that components of an aircraft, which are machinery, can be treated separately.(Emphasis here italicized in print supplied I (P. 172)For the words plant and installed the court held :Further, when the assessee purchased the diesel engines, they were not plant or part of a plant : because they had not been installed in any vehicle. They were, according to the definition given by the Privy Council, machinery. They were not yet part of a plant, and, according to the Act, 20 per cent of the cost thereof was allowable to the assessee. All the conditions required by the Act are satisfied. If we look at the point of time of purchase and installation, what was purchased and installed was machinery. (p. 172)Thereafter, the court considered the meaning of the expression install and held that when an engine is fixed in a vehicle it is installed within the meaning of sections 10(2)(vi) and 10(2)(via) of the 1922 Act. Similarly, in the present case, the word plant is given meaning under section 43(3) to include ships, vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business or profession, but this would not mean that it includes budding which is treated separately from machinery and plant. Wider meaning to word plant is given by including specified items mentioned above, that is, it includes ships, vehicles, books, etc.36. In Taj Mahal Hotels case (supra) this court specifically observed that it is well-settled that where the definition of the word has not been given it must be construed in its popular sense if it is a word of every day use. The court also observed that even books have been included plant, therefore, wider meaning should be given so as things which the interpretation clause declares that they shall include. Further, it is to be stated that section 43 itself provides that `unless the context otherwise requires the word plant is to be given wider meaning as stated therein. This wider meaning does not include building. But in any case even for the time being presuming that the judge made meaning of the word plant includes building in certain set of circumstances context of section 32 such wider meaning cannot be given and plant would not include building in which hotel business is run or a theatre building in which cinema business is carried on. Further, the court specifically observed that:. . . the business of a hotelier is carried on by adopting a building or premises in a suitable way to be used as a residential hotel where visitors come and stay.... (p. 48)37. These observations clearly indicate that business of a hotelier is carried on in a building or a premises and building is not an apparatus for running such business. It is a shelter or a home for conduct of such business. The learned counsel also pointed out the decision of the Madras High Court in. CIT v. N. Sathyanathan & Sons (P.) Ltd. [(2000) 242 ITR 514] wherein the court observed that in the case of Taj Mahal Hotel (supra) even after noticing the fact that the dictionary definition of `plant includes buildings, the court did not proceed to hold that the building in which the hotel was run, and wherein the sanitary fittings were used was itself plant, and on that ground sanitary fittings used in the hotel were part of the plant and emphasised that section specifically provides buildings used as hotel would indicate hotel building cannot be construed as a plant. We agree with this view of the Madras High Court.38. Next, it is to be stated that the judgment in the case of Barclay, Curle & Co. Ltd. (supra) would be of no assistance for holding that a building used for the purpose of a hotel or the theatre used for carrying the business of cinema will be a plant because in the said case majority view was that the dry dock was not the mere setting or the premises in which ships were repaired. It was not mere shelter or home but `itself played an essential part in the operations which took place in getting a ship into the dock, holding it securely and then returning it to the river. It was a complete unit by itself, therefore, it was a plant. Against that, for a hotel premises, under the Act, building is not considered to be an apparatus for running the hotel business but is merely a shelter or home for setting in which business is carried out. In our view, same would be the position with regard to a theatre in which cinema business is carried on. Webster Comprehensive Dictionary (International Edition) gives meaning to the word theatre that:(1) A building especially adapted to dramatic, operatic, or spectacular representations; playhouse;(2) The theatrical world and everything relating to it;(3) A room or hall arranged with seats that rise as they recede from a platform, especially adapted to lectures, surgical demonstrations, etc.;(4) Any place of semi-circular form with seats rising by easy gradations;(5) Any place or region that is the scene of events; a theatre of operations in war.This would mean that cinema business can be run in a premises adapted for that purpose which may or may not be specially designed. Further, on the basis of test laid down in the case of Barclay, Curle & Co. Ltd. (supra) such building or premises would be the place in which operation of carrying on of business takes place and not that they are means by which the operation is performed. Even the House of Lords in the case of Benson (supra) arrived at the conclusion that a ship or a floating hulks used as a restaurant was not a plant, even though the ship was used to create a shipboard feeling and certain kind of atmosphere among the patrons. In our view such buildings cannot be termed as tools for running business but are mere shelter for arriving on such business activities. Therefore, even functional test, which is followed and which according to us would not be conclusive in all cases, is also not satisfied.43. As discussed above, the aforesaid contention cannot be accepted. Firstly, it would be difficult to draw a line between a building which is specially constructed for the aforesaid purposes and buildings which are used for the aforesaid purposes by converting a residential accommodation or industrial premises for such purposes. Secondly, the depreciation as a general principle represents the diminution in value of capital asset when applied to the purpose of making profit or gain. The object is to get true picture of real income of the business. Hence, it can be inferred that the Legislature never intended to give such benefit of depreciation to a building which is usually more durable than machinery or plant. In CIT v. Alps Theatre [AIR 1967 SC 1437 ], the court considered the question - whether the cost of land is entitled to depreciation under the Schedule to the Income Tax Act along with the cost of the building standing thereon? The court observed thus :-(6) It would be noticed that the word used is depreciation and depreciationa decrease in value of property through wear, deterioration, or obsolescence; the allowance made for this in book-keeping, accounting, etc.(Websters New Wordn that sense land cannot depreciate. The other words to notice are such buildings. We have noticed that in sub-clause (iv) and (v), building clearly means structures and does not include site (p. 1439)The court also held that:(7) One other consideration is important. The whole object of section 10 is to arrive at the assessable income of a business after allowing necessary expenditure and) Depreciation is allowable as a deduction both according to accountancy principles and according to the Indian Income Tax Act. Why? Because otherwise one would not have a true picture of the real income of the business. But land does not depreciate, and if depreciation was allowed it would give a wrong picture of the true income. (p. 1439)44. Under the 1961 Act also for the building and machinery or plant depreciation is allowed probably after taking into consideration its life and decrease in the value of the property through wear and tear.We do not know that the Revenue Board was alive to the said controversy. If that was so, it would have clarified either way and litigations could have been avoided. But that is no ground for accepting interpretation suggested by the learned counsel for the assessees which would be inconsistent with scheme of section 32.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: and also in other buildings. Still, however, it would be difficult to draw a distinction and differentiate by holding that a building which is specially designed and constructed for running a hotel or cinema would be covered by a plant and other buildings used for the same purpose would not get depreciation as plant, even though such business is carried on in such premises. In our view, the Delhi High Court has in the case of R.C. Chemical Industry (supra) rightly observed that mere fact that manufacture of saccharine would be better carried on in a building having atmospheric controls would not convert the building form the setting to the means for carrying the business. Similarly, Rajasthan High Court also in Lake Palace Hotels & Motels (P) Ltd.s case (supra) rightly observed that simply because some special fittings or controlling equipments are attached for the purpose of carrying on hotel business, it will take it out of the category of building and make it a plant. In our view special fittings or equipments to control atmospheric effects would be plant, but not the binding which house such equipments. Further for running almost all industries or for carrying on any trade or business building is required on occasions building may be designed and constructed to suite the requirement of a particular industry, trade or business. But that would not make such building a plant. It only shelters running of such business. For each and every business, trade or industry, building is required to carry on such activity. That means building plays some role and in other words, its function is to shelter the business, but it has no other function except in some rare cases such as dry dock where it plays an essential part in the operations which take place in getting a ship into the dock, holding it squarely and then returning it to the river. Building is more durable. If contention of the assessee is accepted, virtually all such buildings would be considered to be a plant and distinction which the Legislature has made between the building and machinery or plant would be obliterated. 42. The learned counsel for the assessee submitted that the words plant and building are not mutually exclusive. Plant may include building in certain set of circumstances and, therefore, applying the functional tests assessee would be entitled to depreciation under the head it is more beneficial to it. He submitted that in the modern era, theatre building and hotel building are integral part of operation for carrying out such business and, therefore, such building should be considered as a plant. 43. As discussed above, the aforesaid contention cannot be accepted. Firstly, it would be difficult to draw a line between a building which is specially constructed for the aforesaid purposes and buildings which are used for the aforesaid purposes by converting a residential accommodation or industrial premises for such purposes. Secondly, the depreciation as a general principle represents the diminution in value of capital asset when applied to the purpose of making profit or gain. The object is to get true picture of real income of the business. Hence, it can be inferred that the Legislature never intended to give such benefit of depreciation to a building which is usually more durable than machinery or plant. In CIT v. Alps Theatre [AIR 1967 SC 1437 ], the court considered the question - whether the cost of land is entitled to depreciation under the Schedule to the Income Tax Act along with the cost of the building standing thereon? The court observed thus :- (6) It would be noticed that the word used is depreciation and depreciation means: a decrease in value of property through wear, deterioration, or obsolescence; the allowance made for this in book-keeping, accounting, etc.(Websters New Word Dictionary). In that sense land cannot depreciate. The other words to notice are such buildings. We have noticed that in sub-clause (iv) and (v), building clearly means structures and does not include site (p. 1439) The court also held that: (7) One other consideration is important. The whole object of section 10 is to arrive at the assessable income of a business after allowing necessary expenditure and deductions. (8) Depreciation is allowable as a deduction both according to accountancy principles and according to the Indian Income Tax Act. Why? Because otherwise one would not have a true picture of the real income of the business. But land does not depreciate, and if depreciation was allowed it would give a wrong picture of the true income. (p. 1439) 44. Under the 1961 Act also for the building and machinery or plant depreciation is allowed probably after taking into consideration its life and decrease in the value of the property through wear and tear. 45. The learned counsel for the assessee vehemently submitted that even though the line between the building and the plant in some cases is absolutely thin yet the Legislature or the Central Board of Direct Taxes (Revenue Board) has not clarified the same at any point of time inspite of conflicting judgments of the High Courts on the subject. The learned counsel for the assessee further submitted that even though the Legislature was alive to the issue and amended section 43(3) of the Act by the Finance Act, 1995 by excluding tea bushes and livestock with retrospective effect from 1962, it has not excluded the buildings which are used for running hotel or cinema business. It has not clarified or carried out any amendment in the provision and, therefore, it should be held that interpretation given by the High Courts was accepted by the revenue and the Legislature. We do not know that the Revenue Board was alive to the said controversy. If that was so, it would have clarified either way and litigations could have been avoided. But that is no ground for accepting interpretation suggested by the learned counsel for the assessees which would be inconsistent with scheme of section 32. ### Response: 1 ### Explanation: where visitors come and stay.... (p. 48)37. These observations clearly indicate that business of a hotelier is carried on in a building or a premises and building is not an apparatus for running such business. It is a shelter or a home for conduct of such business. The learned counsel also pointed out the decision of the Madras High Court in. CIT v. N. Sathyanathan & Sons (P.) Ltd. [(2000) 242 ITR 514] wherein the court observed that in the case of Taj Mahal Hotel (supra) even after noticing the fact that the dictionary definition of `plant includes buildings, the court did not proceed to hold that the building in which the hotel was run, and wherein the sanitary fittings were used was itself plant, and on that ground sanitary fittings used in the hotel were part of the plant and emphasised that section specifically provides buildings used as hotel would indicate hotel building cannot be construed as a plant. We agree with this view of the Madras High Court.38. Next, it is to be stated that the judgment in the case of Barclay, Curle & Co. Ltd. (supra) would be of no assistance for holding that a building used for the purpose of a hotel or the theatre used for carrying the business of cinema will be a plant because in the said case majority view was that the dry dock was not the mere setting or the premises in which ships were repaired. It was not mere shelter or home but `itself played an essential part in the operations which took place in getting a ship into the dock, holding it securely and then returning it to the river. It was a complete unit by itself, therefore, it was a plant. Against that, for a hotel premises, under the Act, building is not considered to be an apparatus for running the hotel business but is merely a shelter or home for setting in which business is carried out. In our view, same would be the position with regard to a theatre in which cinema business is carried on. Webster Comprehensive Dictionary (International Edition) gives meaning to the word theatre that:(1) A building especially adapted to dramatic, operatic, or spectacular representations; playhouse;(2) The theatrical world and everything relating to it;(3) A room or hall arranged with seats that rise as they recede from a platform, especially adapted to lectures, surgical demonstrations, etc.;(4) Any place of semi-circular form with seats rising by easy gradations;(5) Any place or region that is the scene of events; a theatre of operations in war.This would mean that cinema business can be run in a premises adapted for that purpose which may or may not be specially designed. Further, on the basis of test laid down in the case of Barclay, Curle & Co. Ltd. (supra) such building or premises would be the place in which operation of carrying on of business takes place and not that they are means by which the operation is performed. Even the House of Lords in the case of Benson (supra) arrived at the conclusion that a ship or a floating hulks used as a restaurant was not a plant, even though the ship was used to create a shipboard feeling and certain kind of atmosphere among the patrons. In our view such buildings cannot be termed as tools for running business but are mere shelter for arriving on such business activities. Therefore, even functional test, which is followed and which according to us would not be conclusive in all cases, is also not satisfied.43. As discussed above, the aforesaid contention cannot be accepted. Firstly, it would be difficult to draw a line between a building which is specially constructed for the aforesaid purposes and buildings which are used for the aforesaid purposes by converting a residential accommodation or industrial premises for such purposes. Secondly, the depreciation as a general principle represents the diminution in value of capital asset when applied to the purpose of making profit or gain. The object is to get true picture of real income of the business. Hence, it can be inferred that the Legislature never intended to give such benefit of depreciation to a building which is usually more durable than machinery or plant. In CIT v. Alps Theatre [AIR 1967 SC 1437 ], the court considered the question - whether the cost of land is entitled to depreciation under the Schedule to the Income Tax Act along with the cost of the building standing thereon? The court observed thus :-(6) It would be noticed that the word used is depreciation and depreciationa decrease in value of property through wear, deterioration, or obsolescence; the allowance made for this in book-keeping, accounting, etc.(Websters New Wordn that sense land cannot depreciate. The other words to notice are such buildings. We have noticed that in sub-clause (iv) and (v), building clearly means structures and does not include site (p. 1439)The court also held that:(7) One other consideration is important. The whole object of section 10 is to arrive at the assessable income of a business after allowing necessary expenditure and) Depreciation is allowable as a deduction both according to accountancy principles and according to the Indian Income Tax Act. Why? Because otherwise one would not have a true picture of the real income of the business. But land does not depreciate, and if depreciation was allowed it would give a wrong picture of the true income. (p. 1439)44. Under the 1961 Act also for the building and machinery or plant depreciation is allowed probably after taking into consideration its life and decrease in the value of the property through wear and tear.We do not know that the Revenue Board was alive to the said controversy. If that was so, it would have clarified either way and litigations could have been avoided. But that is no ground for accepting interpretation suggested by the learned counsel for the assessees which would be inconsistent with scheme of section 32.

A.P. Krishnasami Naidu & Others Vs. State of Madras

acres, which will become surplus land. This shows clearly how this double standard in the matter of ceiling read with the artificial definition of “family" will result in complete discrimination between these five members of a natural family. Under the Hindu law each member would be entitled to one-fifth share in the 300 standard acres belonging to the family.9. Under the Act however the two major sons will keep 30 standard acres each while the father and the two minor sons together will keep 30 standard acres which work out to 10 standard acres each. The two major sons will thus lose 30 standard acres each while the father and the two minor sons will lose fifty standard acres each. No justification has been shown on behalf of the State for such discriminatory treatment resulting in the case of members of a joint Hindu family; nor are we able to understand why this discrimination which clearly results from the appellant of S. 5(1) of the Act is not violative of Art. 14 of the Constitution. Examples can be multiplied with reference to joint Hindu families which would show that discrimination will result on the application of this provision. Similarly we are of opinion that discrimination will result in the case of Marumakattayyam family, Aliyasanthana family and a Nambudiri Illom, particularly in the case of the former two where the husband and wife do not belong to the same family. We are clearly of opinion that as in the case of S. 58 of the Kerala Act so in the case of S. 5(1) of the Act discrimination is writ large on the consequences that follow from S. 5(1). We therefore, hold that S. 5(1) is violative of the fundamental right enshrined in Art. 14 of the Constitution. As the section is the basis of Chapter II of the Act, the whole Chapter must fall along with it.10. Next we come to the provisions as to compensation contained in S. 50 read with Sch. III of the Act. Here again we are of opinion that the decision of this Court in K. Kunhikomans case (1962) Supp (1) SCR 829: (AIR 1962 SC 723 ) fully applies to the scheme of compensation provided in the Act which is as discriminatory as was the scheme in the Kerala Act. Learned counsel for the respondent however contends that Sch. III does not provide for any cut in the purchase price as was the case in the Kerala Act, and therefore the provision in the Act are not discriminatory. If we look at the substance of the matter however we find that there is really no difference between the provisions for compensation in the Kerala Act and the provisions in respect thereof in the Act, though the provisions in the Act are differently worded. What was done in the Kerala Act was to arrive at the figure of compensation on certain principles, and a cut was then imposed on the figure thus arrived at and this cut progressively increased by slabs of Rs. 15, 000/- In the present case, a converse method has been adopted and the provision is that first the net annual income is arrived at and thereafter compensation is provided for slabs of Rs. 5, 000/- each of net income. For the first slab of Rs. 5,000/-, the compensation is 12 times the net annual income, for the second slab of Rs. 5,000/- it is 11 times, for the third slab of Rs. 5,000/- it is ten times and thereafter it is nine times.11. Let us now work out slab system. Take the four cases where the net annual income is respectively Rs. 5,000/- Rs. 10,000/- Rs. 15,000/- and Rs. 20,000/-. The first person whose net annual income is Rs. 5,000/- will get Rs. 60,00/-, as compensation the second person whose net annual income is Rs. 10,000/- will get Rs. 1,15,000/-, and third person with a net annual income of rupees 15,000/-- will get Rs. 1,65,000/- and the person with a net annual income of Rs.20,000/- will get rupees 2,10,000/- If the same multiplier had been applied as in the case of the first slab of Rs. 5,000/- to the other three slabs also, these persons would have got compensation of Rs. 1,20,000/-; Rs. 1,80,000/- and Rs. 2,40,000/-. This will show that in effect there is a cut of about 4 per cent on the total compensation which corresponds to the purchase price in the Kerala Act in the case of a person with a net annual income of Rs. 10,000/-, of about 8 per cent in the case of a person with a net annual income of Rs. 15,000/- and of about 12 percent in the case of person with a net annual income of Rs 20,00/-. Though the manner of arriving at the total compensation is ostensibly different from that provided in the Kerala Act, its effect is the same, namely as the total net income goes up after the first slab of Rs. 5,000/-, there is a progressive cut in the total compensation just as was the case in the Kerala Act. The argument that the cut is justified on the same basis as higher rates of income-tax on higher slabs of income has already been rejected by this Court in K. Kunhikomn case, (1962) Supp (1) SCR 829: (AIR 1962 SC 723 ). Therefore, for the reasons given in that case we are of opinion that the provisions contained in S. 50 read with Sch. III of the Act with respect to compensation are discriminatory and violate Art. 14 of the Constitution.12. Sections 5 and 50 are the pivotal provisions of the Act, and if they fall, then we are of opinion that the whole Act must be struck down as unconstitutional. The working of the entire Act depends on S. 5 which provides for ceiling and S. 50 which provides for compensation. If these sections are unconstitutional, as we hold they are, the whole Act must fall.13.

1[ds]We are of opinion that this contention is correct and the ratio of that case applies with full force to the present case. It was observed in that case that " where the ceiling is fixed ... by a double standard and over and above that the family has been given an artificial definition which does not correspond with a natural family as know to personal law, there is bound to be discrimination resulting from such a provision" . In the present case alsohas been given an artificial definition as will immediately be clear on reading S. 3(14), which we have set out above. It is true that this definition ofin S. 3(14) is not exactly the same as in the Kerala Act. Even so there can be no doubt that the definition of the wordin the present case is equally artificial. Further in the Kerala Act S. 58 fixed a double standard for the purpose of ceiling; in the present case S. 5(1)(a) fixes a double standard though there is this distinction that in S. 5(1) the same ceiling is fixed in the case of a person as in the case of family consisting of not more than five members, namely, 30 standard acres while in the Kerala Act, the ceiling fixed for a family of not more than five was double that for an adult unmarried person. But that in our opinion makes no difference in substance. The provision of S. 5(1) results in discrimination between persons equally circumstanced and is thus violative of Art. 14 of the Constitution. This will be clear from a simple example of an undivided Hindu family, which we may give. Take the case of a joint Hindu family consisting of a father, two major sons and two minor sons, and assume that the mother is dead. Assume further that this natural family has 300 standard acres of land. Clearly according to the personal law, it there is a division in the family, the father and each of the four sons will get 60 standard acres per head. Now apply S. 5(1) to this family. The two major sons being not members of the family because of the artificial definition given to "family" in S.3(14) of the Act will be entitle to S. 32 standard acres each as individuals and the rest of their holdings i.e. 30 standard acres in the case of each will be surplus land. But the father and the two minor sons being an artificial family as defined in S. 3(14) will be entitled to 30 standard acres between them and will thus lose 150 standard acres, which will become surplus land. This shows clearly how this double standard in the matter of ceiling read with the artificial definition ofwill result in complete discrimination between these five members of a natural family. Under the Hindu law each member would be entitled to one-fifth share in the 300 standard acres belonging to the family.Under the Act however the two major sons will keep 30 standard acres each while the father and the two minor sons together will keep 30 standard acres which work out to 10 standard acres each. The two major sons will thus lose 30 standard acres each while the father and the two minor sons will lose fifty standard acres each. No justification has been shown on behalf of the State for such discriminatory treatment resulting in the case of members of a joint Hindu family; nor are we able to understand why this discrimination which clearly results from the appellant of S. 5(1) of the Act is not violative of Art. 14 of the Constitution. Examples can be multiplied with reference to joint Hindu families which would show that discrimination will result on the application of this provision. Similarly we are of opinion that discrimination will result in the case of Marumakattayyam family, Aliyasanthana family and a Nambudiri Illom, particularly in the case of the former two where the husband and wife do not belong to the same family. We are clearly of opinion that as in the case of S. 58 of the Kerala Act so in the case of S. 5(1) of the Act discrimination is writ large on the consequences that follow from S. 5(1). We therefore, hold that S. 5(1) is violative of the fundamental right enshrined in Art. 14 of the Constitution. As the section is the basis of Chapter II of the Act, the whole Chapter must fall along withthe four cases where the net annual income is respectively Rs. 5,000/- Rs. 10,000/- Rs. 15,000/- and Rs. 20,000/-. The first person whose net annual income is Rs. 5,000/- will get Rs. 60,00/-, as compensation the second person whose net annual income is Rs. 10,000/- will get Rs. 1,15,000/-, and third person with a net annual income of rupees 15,000/-- will get Rs. 1,65,000/- and the person with a net annual income of Rs.20,000/- will get rupees 2,10,000/- If the same multiplier had been applied as in the case of the first slab of Rs. 5,000/- to the other three slabs also, these persons would have got compensation of Rs. 1,20,000/-; Rs. 1,80,000/- and Rs. 2,40,000/-. This will show that in effect there is a cut of about 4 per cent on the total compensation which corresponds to the purchase price in the Kerala Act in the case of a person with a net annual income of Rs. 10,000/-, of about 8 per cent in the case of a person with a net annual income of Rs. 15,000/- and of about 12 percent in the case of person with a net annual income of Rs 20,00/-. Though the manner of arriving at the total compensation is ostensibly different from that provided in the Kerala Act, its effect is the same, namely as the total net income goes up after the first slab of Rs. 5,000/-, there is a progressive cut in the total compensation just as was the case in the Kerala Act. The argument that the cut is justified on the same basis as higher rates of income-tax on higher slabs of income has already been rejected by this Court in K. Kunhikomn case, (1962) Supp (1) SCR 829: (AIR 1962 SC 723 ). Therefore, for the reasons given in that case we are of opinion that the provisions contained in S. 50 read with Sch. III of the Act with respect to compensation are discriminatory and violate Art. 14 of the Constitution.Sections 5 and 50 are the pivotal provisions of the Act, and if they fall, then we are of opinion that the whole Act must be struck down as unconstitutional. The working of the entire Act depends on S. 5 which provides for ceiling and S. 50 which provides for compensation. If these sections are unconstitutional, as we hold they are, the whole Act must fall.

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: acres, which will become surplus land. This shows clearly how this double standard in the matter of ceiling read with the artificial definition of “family" will result in complete discrimination between these five members of a natural family. Under the Hindu law each member would be entitled to one-fifth share in the 300 standard acres belonging to the family.9. Under the Act however the two major sons will keep 30 standard acres each while the father and the two minor sons together will keep 30 standard acres which work out to 10 standard acres each. The two major sons will thus lose 30 standard acres each while the father and the two minor sons will lose fifty standard acres each. No justification has been shown on behalf of the State for such discriminatory treatment resulting in the case of members of a joint Hindu family; nor are we able to understand why this discrimination which clearly results from the appellant of S. 5(1) of the Act is not violative of Art. 14 of the Constitution. Examples can be multiplied with reference to joint Hindu families which would show that discrimination will result on the application of this provision. Similarly we are of opinion that discrimination will result in the case of Marumakattayyam family, Aliyasanthana family and a Nambudiri Illom, particularly in the case of the former two where the husband and wife do not belong to the same family. We are clearly of opinion that as in the case of S. 58 of the Kerala Act so in the case of S. 5(1) of the Act discrimination is writ large on the consequences that follow from S. 5(1). We therefore, hold that S. 5(1) is violative of the fundamental right enshrined in Art. 14 of the Constitution. As the section is the basis of Chapter II of the Act, the whole Chapter must fall along with it.10. Next we come to the provisions as to compensation contained in S. 50 read with Sch. III of the Act. Here again we are of opinion that the decision of this Court in K. Kunhikomans case (1962) Supp (1) SCR 829: (AIR 1962 SC 723 ) fully applies to the scheme of compensation provided in the Act which is as discriminatory as was the scheme in the Kerala Act. Learned counsel for the respondent however contends that Sch. III does not provide for any cut in the purchase price as was the case in the Kerala Act, and therefore the provision in the Act are not discriminatory. If we look at the substance of the matter however we find that there is really no difference between the provisions for compensation in the Kerala Act and the provisions in respect thereof in the Act, though the provisions in the Act are differently worded. What was done in the Kerala Act was to arrive at the figure of compensation on certain principles, and a cut was then imposed on the figure thus arrived at and this cut progressively increased by slabs of Rs. 15, 000/- In the present case, a converse method has been adopted and the provision is that first the net annual income is arrived at and thereafter compensation is provided for slabs of Rs. 5, 000/- each of net income. For the first slab of Rs. 5,000/-, the compensation is 12 times the net annual income, for the second slab of Rs. 5,000/- it is 11 times, for the third slab of Rs. 5,000/- it is ten times and thereafter it is nine times.11. Let us now work out slab system. Take the four cases where the net annual income is respectively Rs. 5,000/- Rs. 10,000/- Rs. 15,000/- and Rs. 20,000/-. The first person whose net annual income is Rs. 5,000/- will get Rs. 60,00/-, as compensation the second person whose net annual income is Rs. 10,000/- will get Rs. 1,15,000/-, and third person with a net annual income of rupees 15,000/-- will get Rs. 1,65,000/- and the person with a net annual income of Rs.20,000/- will get rupees 2,10,000/- If the same multiplier had been applied as in the case of the first slab of Rs. 5,000/- to the other three slabs also, these persons would have got compensation of Rs. 1,20,000/-; Rs. 1,80,000/- and Rs. 2,40,000/-. This will show that in effect there is a cut of about 4 per cent on the total compensation which corresponds to the purchase price in the Kerala Act in the case of a person with a net annual income of Rs. 10,000/-, of about 8 per cent in the case of a person with a net annual income of Rs. 15,000/- and of about 12 percent in the case of person with a net annual income of Rs 20,00/-. Though the manner of arriving at the total compensation is ostensibly different from that provided in the Kerala Act, its effect is the same, namely as the total net income goes up after the first slab of Rs. 5,000/-, there is a progressive cut in the total compensation just as was the case in the Kerala Act. The argument that the cut is justified on the same basis as higher rates of income-tax on higher slabs of income has already been rejected by this Court in K. Kunhikomn case, (1962) Supp (1) SCR 829: (AIR 1962 SC 723 ). Therefore, for the reasons given in that case we are of opinion that the provisions contained in S. 50 read with Sch. III of the Act with respect to compensation are discriminatory and violate Art. 14 of the Constitution.12. Sections 5 and 50 are the pivotal provisions of the Act, and if they fall, then we are of opinion that the whole Act must be struck down as unconstitutional. The working of the entire Act depends on S. 5 which provides for ceiling and S. 50 which provides for compensation. If these sections are unconstitutional, as we hold they are, the whole Act must fall.13. ### Response: 1 ### Explanation: fixed a double standard for the purpose of ceiling; in the present case S. 5(1)(a) fixes a double standard though there is this distinction that in S. 5(1) the same ceiling is fixed in the case of a person as in the case of family consisting of not more than five members, namely, 30 standard acres while in the Kerala Act, the ceiling fixed for a family of not more than five was double that for an adult unmarried person. But that in our opinion makes no difference in substance. The provision of S. 5(1) results in discrimination between persons equally circumstanced and is thus violative of Art. 14 of the Constitution. This will be clear from a simple example of an undivided Hindu family, which we may give. Take the case of a joint Hindu family consisting of a father, two major sons and two minor sons, and assume that the mother is dead. Assume further that this natural family has 300 standard acres of land. Clearly according to the personal law, it there is a division in the family, the father and each of the four sons will get 60 standard acres per head. Now apply S. 5(1) to this family. The two major sons being not members of the family because of the artificial definition given to "family" in S.3(14) of the Act will be entitle to S. 32 standard acres each as individuals and the rest of their holdings i.e. 30 standard acres in the case of each will be surplus land. But the father and the two minor sons being an artificial family as defined in S. 3(14) will be entitled to 30 standard acres between them and will thus lose 150 standard acres, which will become surplus land. This shows clearly how this double standard in the matter of ceiling read with the artificial definition ofwill result in complete discrimination between these five members of a natural family. Under the Hindu law each member would be entitled to one-fifth share in the 300 standard acres belonging to the family.Under the Act however the two major sons will keep 30 standard acres each while the father and the two minor sons together will keep 30 standard acres which work out to 10 standard acres each. The two major sons will thus lose 30 standard acres each while the father and the two minor sons will lose fifty standard acres each. No justification has been shown on behalf of the State for such discriminatory treatment resulting in the case of members of a joint Hindu family; nor are we able to understand why this discrimination which clearly results from the appellant of S. 5(1) of the Act is not violative of Art. 14 of the Constitution. Examples can be multiplied with reference to joint Hindu families which would show that discrimination will result on the application of this provision. Similarly we are of opinion that discrimination will result in the case of Marumakattayyam family, Aliyasanthana family and a Nambudiri Illom, particularly in the case of the former two where the husband and wife do not belong to the same family. We are clearly of opinion that as in the case of S. 58 of the Kerala Act so in the case of S. 5(1) of the Act discrimination is writ large on the consequences that follow from S. 5(1). We therefore, hold that S. 5(1) is violative of the fundamental right enshrined in Art. 14 of the Constitution. As the section is the basis of Chapter II of the Act, the whole Chapter must fall along withthe four cases where the net annual income is respectively Rs. 5,000/- Rs. 10,000/- Rs. 15,000/- and Rs. 20,000/-. The first person whose net annual income is Rs. 5,000/- will get Rs. 60,00/-, as compensation the second person whose net annual income is Rs. 10,000/- will get Rs. 1,15,000/-, and third person with a net annual income of rupees 15,000/-- will get Rs. 1,65,000/- and the person with a net annual income of Rs.20,000/- will get rupees 2,10,000/- If the same multiplier had been applied as in the case of the first slab of Rs. 5,000/- to the other three slabs also, these persons would have got compensation of Rs. 1,20,000/-; Rs. 1,80,000/- and Rs. 2,40,000/-. This will show that in effect there is a cut of about 4 per cent on the total compensation which corresponds to the purchase price in the Kerala Act in the case of a person with a net annual income of Rs. 10,000/-, of about 8 per cent in the case of a person with a net annual income of Rs. 15,000/- and of about 12 percent in the case of person with a net annual income of Rs 20,00/-. Though the manner of arriving at the total compensation is ostensibly different from that provided in the Kerala Act, its effect is the same, namely as the total net income goes up after the first slab of Rs. 5,000/-, there is a progressive cut in the total compensation just as was the case in the Kerala Act. The argument that the cut is justified on the same basis as higher rates of income-tax on higher slabs of income has already been rejected by this Court in K. Kunhikomn case, (1962) Supp (1) SCR 829: (AIR 1962 SC 723 ). Therefore, for the reasons given in that case we are of opinion that the provisions contained in S. 50 read with Sch. III of the Act with respect to compensation are discriminatory and violate Art. 14 of the Constitution.Sections 5 and 50 are the pivotal provisions of the Act, and if they fall, then we are of opinion that the whole Act must be struck down as unconstitutional. The working of the entire Act depends on S. 5 which provides for ceiling and S. 50 which provides for compensation. If these sections are unconstitutional, as we hold they are, the whole Act must fall.

Raja Jagaveera Rama Muthukumara Venkateswara Ettappa Naicker Ayyan Avergal, Zamindar of Ettayapuram,Tirunelvell District & Others Vs. State of Madras & Another

been described as the basic annual sum in regard to that estate, The basic annual sum comprises several items or parts which have been set out in S. 27 and the subsequent sections of the Act, and it is upon the amount of the basic annual sum determined in accordance with the provisions of these sections that the total amount of compensation money payable to a proprietor is made to depend.Mr. Ayyangar contends that S. 27(i) of the Act, which lays down that incomputing the basic annual sum only one-third of the gross annual Ryotwari demand of specified kinds is to be taken into account, is a colourable provision which ignores altogether the actual income derived from the property and introduces an artificial and an arbitrary standard for determining the income or profits which has absolutely no relation to facts.Similarly, in computing the net miscellaneous revenue, which is an element in the computation of the basic annual sum, what is to be taken into account under S. 30 is not the average of net annual income which the proprietors themselves derived from the sources, mentioned in the Act, when they were in possession of the estates, but which the Government might derive from them in future years after the date of notification. Thus if on account of mismanagement or for the other reasons the Government does not derive any income from these sources, the proprietor would not have any compensation under this head at all. It is argued that these are mere devices or contrivances aimed at confiscation of private property and they neither lay down nor are based upon any principle of compensation.9. Whatever the merits of these contentions might be, it appears to us that there is an initial and an insuperable difficulty in the way of the learned counsels invoking the authority of the majority decision of this Court in --- AIR 1952 SC 252 (B) to the circumstances of present case.The Bihar Land Reforms Act, which was the subject matter of decision in that case, was a legislation which was pending at the time when the Constitution came into force. It was reserved for consideration of the President and received his assent in due course and consequently under clause (4) of Art. 31 of the Constitution it was immune from judicial scrutiny on the ground that the compensation provided by it was inadequate or unjust.With regard to two of the provisions of the Act, however, which were embodied in Ss. 4(b) and 23(f) of the Act, it was held by the majority of this court that they were void as they really did not come within Entry 42 of List III of Sch. 7 of the Constitution, under which they purported to have been enacted. Entry 42 of List III speaks of"principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given."10. It was pointed out that Entry 42 was undoubtedly the description of a legislative head and in deciding the competency of a legislation under this entry, the court was not concerned with the justice or propriety of the principles upon which the determination of the compensation was to be made or the form or manner in which it was to be given. But even then, the legislation must rest upon some principle of giving compensation and not of denying or holding it, and a legislation could not be supported which was based upon something which was non-existent or was unrelated to facts and consequently could not have a conceivable bearing on any principle of compensation.11. The initial difficulty in the way of invoking this doctrine in the present case lies in the fact that the legislation, which is impugned here, was passed by the Madras Provincial Legislature functioning under the Government of India Act, 1935 and there was no entry in any of the lists attached to the Act of 1935 corresponding to Entry 42 in List III of the Indian Constitution. The only entry relevant to this point in the Act of 1935 was Entry 9 of List II which spoke merely of compulsory acquisition of land; and it is clear that a duty to a pay compensation or of laying down any principle regarding it was not inherent in the language of that entry. The guarantee for payment of compensation, so far as the Constitution Act of 1935 is concerned, was contained in S. 299 Cl. (2) which was worded as follows:"Neither the Federal Legislature nor a Provincial Legislature shall have power to make any law authorizing the compulsory acquisition for public purposes of any land, or any commercial or industrial undertaking............unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, it is to be determined."12. The appellants could have very well relied upon this guarantee if a bar had not been created in their way by the provision of Art. 31(6) of the Constitution. That clause of Art. 31 stands as follows :"Any law of the State enacted not more that eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the president for his certification; and thereupon, if the president by public notification so certifies it shall not be called in question in any court on the ground that it contravenes the provisions of Cl. (2) of this article or had contravenes the provisions of sub-section (2) of S. 299, Government of India Act, 1935:"13. It is not disputed that the Madras Act 26 of 1948 does fulfill all the requirements mentioned above. Consequently, it is not possible for us to allow the appellants to raise the contentions which the learned counsel on their behalf wanted to raise.

0[ds]It appears that in determining the amount of compensation, that is to be paid under the Act, in respect of an acquired estate, it is necessary, first of all, to ascertain what has been described as the basic annual sum in regard to that estate, The basic annual sum comprises several items or parts which have been set out in S. 27 and the subsequent sections of the Act, and it is upon the amount of the basic annual sum determined in accordance with the provisions of these sections that the total amount of compensation money payable to a proprietor is made to depend.

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: been described as the basic annual sum in regard to that estate, The basic annual sum comprises several items or parts which have been set out in S. 27 and the subsequent sections of the Act, and it is upon the amount of the basic annual sum determined in accordance with the provisions of these sections that the total amount of compensation money payable to a proprietor is made to depend.Mr. Ayyangar contends that S. 27(i) of the Act, which lays down that incomputing the basic annual sum only one-third of the gross annual Ryotwari demand of specified kinds is to be taken into account, is a colourable provision which ignores altogether the actual income derived from the property and introduces an artificial and an arbitrary standard for determining the income or profits which has absolutely no relation to facts.Similarly, in computing the net miscellaneous revenue, which is an element in the computation of the basic annual sum, what is to be taken into account under S. 30 is not the average of net annual income which the proprietors themselves derived from the sources, mentioned in the Act, when they were in possession of the estates, but which the Government might derive from them in future years after the date of notification. Thus if on account of mismanagement or for the other reasons the Government does not derive any income from these sources, the proprietor would not have any compensation under this head at all. It is argued that these are mere devices or contrivances aimed at confiscation of private property and they neither lay down nor are based upon any principle of compensation.9. Whatever the merits of these contentions might be, it appears to us that there is an initial and an insuperable difficulty in the way of the learned counsels invoking the authority of the majority decision of this Court in --- AIR 1952 SC 252 (B) to the circumstances of present case.The Bihar Land Reforms Act, which was the subject matter of decision in that case, was a legislation which was pending at the time when the Constitution came into force. It was reserved for consideration of the President and received his assent in due course and consequently under clause (4) of Art. 31 of the Constitution it was immune from judicial scrutiny on the ground that the compensation provided by it was inadequate or unjust.With regard to two of the provisions of the Act, however, which were embodied in Ss. 4(b) and 23(f) of the Act, it was held by the majority of this court that they were void as they really did not come within Entry 42 of List III of Sch. 7 of the Constitution, under which they purported to have been enacted. Entry 42 of List III speaks of"principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given."10. It was pointed out that Entry 42 was undoubtedly the description of a legislative head and in deciding the competency of a legislation under this entry, the court was not concerned with the justice or propriety of the principles upon which the determination of the compensation was to be made or the form or manner in which it was to be given. But even then, the legislation must rest upon some principle of giving compensation and not of denying or holding it, and a legislation could not be supported which was based upon something which was non-existent or was unrelated to facts and consequently could not have a conceivable bearing on any principle of compensation.11. The initial difficulty in the way of invoking this doctrine in the present case lies in the fact that the legislation, which is impugned here, was passed by the Madras Provincial Legislature functioning under the Government of India Act, 1935 and there was no entry in any of the lists attached to the Act of 1935 corresponding to Entry 42 in List III of the Indian Constitution. The only entry relevant to this point in the Act of 1935 was Entry 9 of List II which spoke merely of compulsory acquisition of land; and it is clear that a duty to a pay compensation or of laying down any principle regarding it was not inherent in the language of that entry. The guarantee for payment of compensation, so far as the Constitution Act of 1935 is concerned, was contained in S. 299 Cl. (2) which was worded as follows:"Neither the Federal Legislature nor a Provincial Legislature shall have power to make any law authorizing the compulsory acquisition for public purposes of any land, or any commercial or industrial undertaking............unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, it is to be determined."12. The appellants could have very well relied upon this guarantee if a bar had not been created in their way by the provision of Art. 31(6) of the Constitution. That clause of Art. 31 stands as follows :"Any law of the State enacted not more that eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the president for his certification; and thereupon, if the president by public notification so certifies it shall not be called in question in any court on the ground that it contravenes the provisions of Cl. (2) of this article or had contravenes the provisions of sub-section (2) of S. 299, Government of India Act, 1935:"13. It is not disputed that the Madras Act 26 of 1948 does fulfill all the requirements mentioned above. Consequently, it is not possible for us to allow the appellants to raise the contentions which the learned counsel on their behalf wanted to raise. ### Response: 0 ### Explanation: It appears that in determining the amount of compensation, that is to be paid under the Act, in respect of an acquired estate, it is necessary, first of all, to ascertain what has been described as the basic annual sum in regard to that estate, The basic annual sum comprises several items or parts which have been set out in S. 27 and the subsequent sections of the Act, and it is upon the amount of the basic annual sum determined in accordance with the provisions of these sections that the total amount of compensation money payable to a proprietor is made to depend.

Jardine Henderson Ltd Vs. The Workmen And Another

is only when an exceptional case is made out for allowing less than six per centum interest that the tribunal would be justified in allowing less. We are of opinion that the fact that a company declares dividend at more or less than six per centum is no reason for changing the rate of interest allowed under the Pull-Bench formula on paid-up capital. In the present case no reason has been shown besides the fact that the dividend declared was less than sun per centum to reduce the usual rate of interest from six per centum to 21/2 per Septum. We are therefore of opinion that the tribunal should have allowed six per centum interest on paid-up capital in this case and that would increase the amount due under this head from Rs. 5 lacs to Rs. 12 lacs. It is not disputed to learned counsel for the respondents that if six per centum interest is allowed on paid up capital in this case as is usually done there will be no justification for allowing more as profit bonus than what the appellant has already given. In the result the tribunals award of half a months further wages as bonus on the ground that there is available surplus to justify it must be set aside. 6. Learned counsel for the respondents however submitted that even though no further bonus could be allowed on the basis of the Pull-Bench formula the workmen were entitled to one months pay as closing bonus either as an implied condition of service or as customary bonus. So far as customary bonus is concerned, it is enough to say that customary bonus of the nature dealt with in Graham Trading Co. Ltd. v. its Workmen , 1960-1 SCR 107 : (AIR 1959 SC 1151 ), is always connected with some festival. In the present case it is not in dispute that the closing bonus is not connected with any Festival and therefore cannot be treated as customary bonus of the kind, dealt with in Grahams case, 1960-1 SCR 107 (AIR 1959 SC 1151 ). This was pointed out by this Court in B N. Elias and Co Ltd. Employees, Union v. B. N. Elias and Co. Ltd., 1960-3 SCR: 382: (AIR 1960 SC 886 ), where, it was observed that it was difficult to introduce the payment of customary bonus between employer and employee where terms of service are governed by contract, express or implied, except where the bonus may be connected with a festival, whether puja in Bengal or some other equally important festival in any other part of the country. Therefore as closing bonus is admittedly not connected with any festival it cannot be allowed as a customary bonus of the type considered in Grahams case, 1960 SCR 107: (AIR 1959 SC 1151 ). 7. Turning now to the question whether payment of one months pay as closing bonus has become an implied condition of service, the first point to be noticed is that closing bonus was always paid after the trading results of the year were known. Under these circumstances it would not be improper to infer that closing bonus was dependent upon profits made by the appellant, for it was paid only after profits for the previous year had been ascertained. In the present case during the whole of the period from 1948 to 1937 when the closing bonus was paid there was no loss incurred by the appellant. As was pointed out in Ispahanis case, 1960-1 SCR 24 : (ME: 1959 SC 1147) , the fact that bonus was paid during a year of loss also would be an important circumstance in coming to the conclusion that payment was a matter of obligation based on an implies agreement. In the present case that important circumstance is absent. The absence of this circumstance along with the fact that the bonus was paid only after the trading results of the year were known and therefore in all probability depended sport the profits would show that it could not be a matter of obligation based upon implied agreement. 8. Besides it appears that this company formerly belonged to another owner and emerged with the appellant in 1946. when the Former company was the owner it does not appear that it paid any closing bonus as such from 1940 to 1945. Even after the appellant took over no payment was made in 1946 and 1947. It was only from 1948 after trading results for the year ending on March 31, 1948 were known that one months basic wages began to be paid as closing bonus in addition to puja bonus which was originally paid at the rate of one months basic wages but which was gradually increased to two months basic wages from 1955. For the year in dispute the appellant has paid two months puja bonus; but it reduced the closing bonus from one month to half a months basic wages because of the fall in profits which fell from Rs. 27 lacs in 1957 to a lime over Rs. 15 lees in 1958.It is clear therefore that the closing bonus has not been paid from the beginning when the appellant took over the business of the previous company, though it was paid at a uniform rate from 1948 to 1957. It may be mentioned that in 1959 when profits went up again the appellant has paid one months pay as closing bonus. Taking therefore all the circumstances into account it appears that closing bonus has been paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year. In the circumstances it cannot be held that one months pay as closing bonus is payable as an implied condition of service irrespective of the profit made by the appellant. It seems to have been of the nature of profit bonus, even though it may have been paid at a uniform rate for ten years.

1[ds]We are of opinion that the tribunal was wrong in allowing only 21/2 per centum interest on paid up Capital on the ground that the actual dividend declared by the appellant was only 21/2 per centum for that year.The return on paid-up capital provided in the Full-Bench formula is not linked with actual dividends that might be declared by a company. Many a time companies declare dividends higher than six per centum. But under the formula they are usually allowed six per centum interest on paid-up capital irrespective of the dividends declared. It is only where a company can make out an exceptional case for allowing more than six per centum interest on paid-up capital that the tribunal can award more. Similarly it is only when an exceptional case is made out for allowing less than six per centum interest that the tribunal would be justified in allowing less. We are of opinion that the fact that a company declares dividend at more or less than six per centum is no reason for changing the rate of interest allowed under the Pull-Bench formula on paid-up capital. In the present case no reason has been shown besides the fact that the dividend declared was less than sun per centum to reduce the usual rate of interest from six per centum to 21/2 per Septum. We are therefore of opinion that the tribunal should have allowed six per centum interest on paid-up capital in this case and that would increase the amount due under this head from Rs. 5 lacs to Rs. 12 lacs. It is not disputed to learned counsel for the respondents that if six per centum interest is allowed on paid up capital in this case as is usually done there will be no justification for allowing more as profit bonus than what the appellant has already given. In the result the tribunals award of half a months further wages as bonus on the ground that there is available surplus to justify it must be set asideUnder these circumstances it would not be improper to infer that closing bonus was dependent upon profits made by the appellant, for it was paid only after profits for the previous year had been ascertained. In the present case during the whole of the period from 1948 to 1937 when the closing bonus was paid there was no loss incurred by the appellant. As was pointed out in Ispahanis case, 1960-1 SCR 24 : (ME: 1959 SC 1147) , the fact that bonus was paid during a year of loss also would be an important circumstance in coming to the conclusion that payment was a matter of obligation based on an implies agreement. In the present case that important circumstance is absent. The absence of this circumstance along with the fact that the bonus was paid only after the trading results of the year were known and therefore in all probability depended sport the profits would show that it could not be a matter of obligation based upon implied agreement8. Besides it appears that this company formerly belonged to another owner and emerged with the appellant in 1946. when the Former company was the owner it does not appear that it paid any closing bonus as such from 1940 to 1945. Even after the appellant took over no payment was made in 1946 and 1947. It was only from 1948 after trading results for the year ending on March 31, 1948 were known that one months basic wages began to be paid as closing bonus in addition to puja bonus which was originally paid at the rate of one months basic wages but which was gradually increased to two months basic wages from 1955. For the year in dispute the appellant has paid two months puja bonus; but it reduced the closing bonus from one month to half a months basic wages because of the fall in profits which fell from Rs. 27 lacs in 1957 to a lime over Rs. 15 lees in 1958.It is clear therefore that the closing bonus has not been paid from the beginning when the appellant took over the business of the previous company, though it was paid at a uniform rate from 1948 to 1957. It may be mentioned that in 1959 when profits went up again the appellant has paid one months pay as closing bonus. Taking therefore all the circumstances into account it appears that closing bonus has been paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year. In the circumstances it cannot be held that one months pay as closing bonus is payable as an implied condition of service irrespective of the profit made by the appellant. It seems to have been of the nature of profit bonus, even though it may have been paid at a uniform rate for ten years.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: is only when an exceptional case is made out for allowing less than six per centum interest that the tribunal would be justified in allowing less. We are of opinion that the fact that a company declares dividend at more or less than six per centum is no reason for changing the rate of interest allowed under the Pull-Bench formula on paid-up capital. In the present case no reason has been shown besides the fact that the dividend declared was less than sun per centum to reduce the usual rate of interest from six per centum to 21/2 per Septum. We are therefore of opinion that the tribunal should have allowed six per centum interest on paid-up capital in this case and that would increase the amount due under this head from Rs. 5 lacs to Rs. 12 lacs. It is not disputed to learned counsel for the respondents that if six per centum interest is allowed on paid up capital in this case as is usually done there will be no justification for allowing more as profit bonus than what the appellant has already given. In the result the tribunals award of half a months further wages as bonus on the ground that there is available surplus to justify it must be set aside. 6. Learned counsel for the respondents however submitted that even though no further bonus could be allowed on the basis of the Pull-Bench formula the workmen were entitled to one months pay as closing bonus either as an implied condition of service or as customary bonus. So far as customary bonus is concerned, it is enough to say that customary bonus of the nature dealt with in Graham Trading Co. Ltd. v. its Workmen , 1960-1 SCR 107 : (AIR 1959 SC 1151 ), is always connected with some festival. In the present case it is not in dispute that the closing bonus is not connected with any Festival and therefore cannot be treated as customary bonus of the kind, dealt with in Grahams case, 1960-1 SCR 107 (AIR 1959 SC 1151 ). This was pointed out by this Court in B N. Elias and Co Ltd. Employees, Union v. B. N. Elias and Co. Ltd., 1960-3 SCR: 382: (AIR 1960 SC 886 ), where, it was observed that it was difficult to introduce the payment of customary bonus between employer and employee where terms of service are governed by contract, express or implied, except where the bonus may be connected with a festival, whether puja in Bengal or some other equally important festival in any other part of the country. Therefore as closing bonus is admittedly not connected with any festival it cannot be allowed as a customary bonus of the type considered in Grahams case, 1960 SCR 107: (AIR 1959 SC 1151 ). 7. Turning now to the question whether payment of one months pay as closing bonus has become an implied condition of service, the first point to be noticed is that closing bonus was always paid after the trading results of the year were known. Under these circumstances it would not be improper to infer that closing bonus was dependent upon profits made by the appellant, for it was paid only after profits for the previous year had been ascertained. In the present case during the whole of the period from 1948 to 1937 when the closing bonus was paid there was no loss incurred by the appellant. As was pointed out in Ispahanis case, 1960-1 SCR 24 : (ME: 1959 SC 1147) , the fact that bonus was paid during a year of loss also would be an important circumstance in coming to the conclusion that payment was a matter of obligation based on an implies agreement. In the present case that important circumstance is absent. The absence of this circumstance along with the fact that the bonus was paid only after the trading results of the year were known and therefore in all probability depended sport the profits would show that it could not be a matter of obligation based upon implied agreement. 8. Besides it appears that this company formerly belonged to another owner and emerged with the appellant in 1946. when the Former company was the owner it does not appear that it paid any closing bonus as such from 1940 to 1945. Even after the appellant took over no payment was made in 1946 and 1947. It was only from 1948 after trading results for the year ending on March 31, 1948 were known that one months basic wages began to be paid as closing bonus in addition to puja bonus which was originally paid at the rate of one months basic wages but which was gradually increased to two months basic wages from 1955. For the year in dispute the appellant has paid two months puja bonus; but it reduced the closing bonus from one month to half a months basic wages because of the fall in profits which fell from Rs. 27 lacs in 1957 to a lime over Rs. 15 lees in 1958.It is clear therefore that the closing bonus has not been paid from the beginning when the appellant took over the business of the previous company, though it was paid at a uniform rate from 1948 to 1957. It may be mentioned that in 1959 when profits went up again the appellant has paid one months pay as closing bonus. Taking therefore all the circumstances into account it appears that closing bonus has been paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year. In the circumstances it cannot be held that one months pay as closing bonus is payable as an implied condition of service irrespective of the profit made by the appellant. It seems to have been of the nature of profit bonus, even though it may have been paid at a uniform rate for ten years. ### Response: 1 ### Explanation: We are of opinion that the tribunal was wrong in allowing only 21/2 per centum interest on paid up Capital on the ground that the actual dividend declared by the appellant was only 21/2 per centum for that year.The return on paid-up capital provided in the Full-Bench formula is not linked with actual dividends that might be declared by a company. Many a time companies declare dividends higher than six per centum. But under the formula they are usually allowed six per centum interest on paid-up capital irrespective of the dividends declared. It is only where a company can make out an exceptional case for allowing more than six per centum interest on paid-up capital that the tribunal can award more. Similarly it is only when an exceptional case is made out for allowing less than six per centum interest that the tribunal would be justified in allowing less. We are of opinion that the fact that a company declares dividend at more or less than six per centum is no reason for changing the rate of interest allowed under the Pull-Bench formula on paid-up capital. In the present case no reason has been shown besides the fact that the dividend declared was less than sun per centum to reduce the usual rate of interest from six per centum to 21/2 per Septum. We are therefore of opinion that the tribunal should have allowed six per centum interest on paid-up capital in this case and that would increase the amount due under this head from Rs. 5 lacs to Rs. 12 lacs. It is not disputed to learned counsel for the respondents that if six per centum interest is allowed on paid up capital in this case as is usually done there will be no justification for allowing more as profit bonus than what the appellant has already given. In the result the tribunals award of half a months further wages as bonus on the ground that there is available surplus to justify it must be set asideUnder these circumstances it would not be improper to infer that closing bonus was dependent upon profits made by the appellant, for it was paid only after profits for the previous year had been ascertained. In the present case during the whole of the period from 1948 to 1937 when the closing bonus was paid there was no loss incurred by the appellant. As was pointed out in Ispahanis case, 1960-1 SCR 24 : (ME: 1959 SC 1147) , the fact that bonus was paid during a year of loss also would be an important circumstance in coming to the conclusion that payment was a matter of obligation based on an implies agreement. In the present case that important circumstance is absent. The absence of this circumstance along with the fact that the bonus was paid only after the trading results of the year were known and therefore in all probability depended sport the profits would show that it could not be a matter of obligation based upon implied agreement8. Besides it appears that this company formerly belonged to another owner and emerged with the appellant in 1946. when the Former company was the owner it does not appear that it paid any closing bonus as such from 1940 to 1945. Even after the appellant took over no payment was made in 1946 and 1947. It was only from 1948 after trading results for the year ending on March 31, 1948 were known that one months basic wages began to be paid as closing bonus in addition to puja bonus which was originally paid at the rate of one months basic wages but which was gradually increased to two months basic wages from 1955. For the year in dispute the appellant has paid two months puja bonus; but it reduced the closing bonus from one month to half a months basic wages because of the fall in profits which fell from Rs. 27 lacs in 1957 to a lime over Rs. 15 lees in 1958.It is clear therefore that the closing bonus has not been paid from the beginning when the appellant took over the business of the previous company, though it was paid at a uniform rate from 1948 to 1957. It may be mentioned that in 1959 when profits went up again the appellant has paid one months pay as closing bonus. Taking therefore all the circumstances into account it appears that closing bonus has been paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year. In the circumstances it cannot be held that one months pay as closing bonus is payable as an implied condition of service irrespective of the profit made by the appellant. It seems to have been of the nature of profit bonus, even though it may have been paid at a uniform rate for ten years.

Toyoto Jidosha Kabushiki Kaisha Vs. M/s. Prius Auto Industries Ltd. & Others

the first test, i.e., likelihood of confusion is required to be satisfied only in quia timet actions and actual confusion will have to be proved when the suit or claim is being adjudicated finally as by then a considerable period of time following the initiation of the action of passing off might have elapsed. Once the claimant who has brought the action of passing off establishes his goodwill in the jurisdiction in which he claims that the defendants are trying to pass off their goods under the brand name of the claimants goods, the burden of establishing actual confusion as distinguished from possibility thereof ought not to be fastened on the claimant. The possibility or likelihood of confusion is capable of being demonstrated with reference to the particulars of the mark or marks, as may be, and the circumstances surrounding the manner of sale/marketing of the goods by the defendants and such other relevant facts. Proof of actual confusion, on the other hand, would require the claimant to bring before the Court evidence which may not be easily forthcoming and directly available to the claimant. In a given situation, there may be no complaints made to the claimant that goods marketed by the defendants under the impugned mark had been inadvertently purchased as that of the plaintiff/claimant. The onus of bringing such proof, as an invariable requirement, would be to cast on the claimant an onerous burden which may not be justified. Commercial and business morality which is the foundation of the law of passing off should not be allowed to be defeated by imposing such a requirement. In such a situation, likelihood of confusion would be a surer and better test of proving an action of passing off by the defendants. Such a test would also be consistent with commercial and business morality which the law of passing off seeks to achieve. In the last resort, therefore, it is preponderance of probabilities that must be left to judge the claim.32. The next exercise would now be the application of the above principles to the facts of the present case for determination of the correctness of either of the views arrived at in the two-tier adjudication performed by the High Court of Delhi. Indeed, the trade mark `Prius had undoubtedly acquired a great deal of goodwill in several other jurisdictions in the world and that too much earlier to the use and registration of the same by the defendants in India. But if the territoriality principle is to govern the matter, and we have already held it should, there must be adequate evidence to show that the plaintiff had acquired a substantial goodwill for its car under the brand name `Prius in the Indian market also. The car itself was introduced in the Indian market in the year 2009-2010. The advertisements in automobile magazines, international business magazines; availability of data in information-disseminating portals like Wikipedia and online Britannica dictionary and the information on the internet, even if accepted, will not be a safe basis to hold the existence of the necessary goodwill and reputation of the product in the Indian market at the relevant point of time, particularly having regard to the limited online exposure at that point of time, i.e., in the year 2001. The news items relating to the launching of the product in Japan isolatedly and singularly in the Economic Times (Issues dated 27.03.1997 and 15.12.1997) also do not firmly establish the acquisition and existence of goodwill and reputation of the brand name in the Indian market. Coupled with the above, the evidence of the plaintiffs witnesses themselves would be suggestive of a very limited sale of the product in the Indian market and virtually the absence of any advertisement of the product in India prior to April, 2001. This, in turn, would show either lack of goodwill in the domestic market or lack of knowledge and information of the product amongst a significant section of the Indian population. While it may be correct that the population to whom such knowledge or information of the product should be available would be the section of the public dealing with the product as distinguished from the general population, even proof of such knowledge and information within the limited segment of the population is not prominent. All these should lead to us to eventually agree with the conclusion of the Division Bench of the High Court that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner. In any event the core of the controversy between the parties is really one of appreciation of the evidence of the parties; an exercise that this Court would not undoubtedly repeat unless the view taken by the previous forum is wholly and palpably unacceptable which does not appear to be so in the present premises.33. If goodwill or reputation in the particular jurisdiction (in India) is not established by the plaintiff, no other issue really would need any further examination to determine the extent of the plaintiffs right in the action of passing off that it had brought against the defendants in the Delhi High Court. Consequently, even if we are to disagree with the view of the Division Bench of the High Court in accepting the defendants version of the origin of the mark `Prius, the eventual conclusion of the Division Bench will, nonetheless, have to be sustained. We cannot help but also to observe that in the present case the plaintiffs delayed approach to the Courts has remained unexplained. Such delay cannot be allowed to work to the prejudice of the defendants who had kept on using its registered mark to market its goods during the inordinately long period of silence maintained by the plaintiff.

0[ds]28. The overwhelming judicial and academic opinion all over the globe, therefore, seems to be in favour of the territoriality principle. We do not see why the same should not apply to this Country.29. To give effect to the territoriality principle, the courts must necessarily have to determine if there has been a spill over of the reputation and goodwill of the mark used by the claimant who has brought the passing off action. In the course of such determination it may be necessary to seek and ascertain the existence of not necessarily a real market but the presence of the claimant through its mark within a particular territorial jurisdiction in a more subtle form which can best be manifested by the following illustrations, though they arise from decisions of Courts which may not be final in that particular jurisdiction.Whether the second principle evolved under the trinity test, i.e., triple identity test laid down in Reckitt and Colman Ltd. (supra) would stand established on the test of likelihood of confusion or real/actual confusionanother question that seems to have arisen in the present case as the Division Bench of the High Court has taken the view that the first test, i.e., likelihood of confusion is required to be satisfied only in quia timet actions and actual confusion will have to be proved when the suit or claim is being adjudicated finally as by then a considerable period of time following the initiation of the action of passing off might have elapsed. Once the claimant who has brought the action of passing off establishes his goodwill in the jurisdiction in which he claims that the defendants are trying to pass off their goods under the brand name of the claimants goods, the burden of establishing actual confusion as distinguished from possibility thereof ought not to be fastened on the claimant. The possibility or likelihood of confusion is capable of being demonstrated with reference to the particulars of the mark or marks, as may be, and the circumstances surrounding the manner of sale/marketing of the goods by the defendants and such other relevant facts. Proof of actual confusion, on the other hand, would require the claimant to bring before the Court evidence which may not be easily forthcoming and directly available to the claimant. In a given situation, there may be no complaints made to the claimant that goods marketed by the defendants under the impugned mark had been inadvertently purchased as that of the plaintiff/claimant. The onus of bringing such proof, as an invariable requirement, would be to cast on the claimant an onerous burden which may not be justified. Commercial and business morality which is the foundation of the law of passing off should not be allowed to be defeated by imposing such a requirement. In such a situation, likelihood of confusion would be a surer and better test of proving an action of passing off by the defendants. Such a test would also be consistent with commercial and business morality which the law of passing off seeks to achieve. In the last resort, therefore, it is preponderance of probabilities that must be left to judge the claim.32. The next exercise would now be the application of the above principles to the facts of the present case for determination of the correctness of either of the views arrived at in theadjudication performed by the High Court of Delhi. Indeed, the trade mark `Prius had undoubtedly acquired a great deal of goodwill in several other jurisdictions in the world and that too much earlier to the use and registration of the same by the defendants in India. But if the territoriality principle is to govern the matter, and we have already held it should, there must be adequate evidence to show that the plaintiff had acquired a substantial goodwill for its car under the brand name `Prius in the Indian market also. The car itself was introduced in the Indian market in the yearThe advertisements in automobile magazines, international business magazines; availability of data inportals like Wikipedia and online Britannica dictionary and the information on the internet, even if accepted, will not be a safe basis to hold the existence of the necessary goodwill and reputation of the product in the Indian market at the relevant point of time, particularly having regard to the limited online exposure at that point of time, i.e., in the year 2001. The news items relating to the launching of the product in Japan isolatedly and singularly in the Economic Times (Issues dated 27.03.1997 and 15.12.1997) also do not firmly establish the acquisition and existence of goodwill and reputation of the brand name in the Indian market. Coupled with the above, the evidence of the plaintiffs witnesses themselves would be suggestive of a very limited sale of the product in the Indian market and virtually the absence of any advertisement of the product in India prior to April, 2001. This, in turn, would show either lack of goodwill in the domestic market or lack of knowledge and information of the product amongst a significant section of the Indian population. While it may be correct that the population to whom such knowledge or information of the product should be available would be the section of the public dealing with the product as distinguished from the general population, even proof of such knowledge and information within the limited segment of the population is not prominent. All these should lead to us to eventually agree with the conclusion of the Division Bench of the High Court that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner. In any event the core of the controversy between the parties is really one of appreciation of the evidence of the parties; an exercise that this Court would not undoubtedly repeat unless the view taken by the previous forum is wholly and palpably unacceptable which does not appear to be so in the present premises.33. If goodwill or reputation in the particular jurisdiction (in India) is not established by the plaintiff, no other issue really would need any further examination to determine the extent of the plaintiffs right in the action of passing off that it had brought against the defendants in the Delhi High Court. Consequently, even if we are to disagree with the view of the Division Bench of the High Court in accepting the defendants version of the origin of the mark `Prius, the eventual conclusion of the Division Bench will, nonetheless, have to be sustained. We cannot help but also to observe that in the present case the plaintiffs delayed approach to the Courts has remained unexplained. Such delay cannot be allowed to work to the prejudice of the defendants who had kept on using its registered mark to market its goods during the inordinately long period of silence maintained by the plaintiff.

### Instruction: Conjecture the end result of the case (acceptance (1) or non-acceptance (0) of the appeal), followed by a detailed explanation using crucial sentences from the case proceeding. ### Input: the first test, i.e., likelihood of confusion is required to be satisfied only in quia timet actions and actual confusion will have to be proved when the suit or claim is being adjudicated finally as by then a considerable period of time following the initiation of the action of passing off might have elapsed. Once the claimant who has brought the action of passing off establishes his goodwill in the jurisdiction in which he claims that the defendants are trying to pass off their goods under the brand name of the claimants goods, the burden of establishing actual confusion as distinguished from possibility thereof ought not to be fastened on the claimant. The possibility or likelihood of confusion is capable of being demonstrated with reference to the particulars of the mark or marks, as may be, and the circumstances surrounding the manner of sale/marketing of the goods by the defendants and such other relevant facts. Proof of actual confusion, on the other hand, would require the claimant to bring before the Court evidence which may not be easily forthcoming and directly available to the claimant. In a given situation, there may be no complaints made to the claimant that goods marketed by the defendants under the impugned mark had been inadvertently purchased as that of the plaintiff/claimant. The onus of bringing such proof, as an invariable requirement, would be to cast on the claimant an onerous burden which may not be justified. Commercial and business morality which is the foundation of the law of passing off should not be allowed to be defeated by imposing such a requirement. In such a situation, likelihood of confusion would be a surer and better test of proving an action of passing off by the defendants. Such a test would also be consistent with commercial and business morality which the law of passing off seeks to achieve. In the last resort, therefore, it is preponderance of probabilities that must be left to judge the claim.32. The next exercise would now be the application of the above principles to the facts of the present case for determination of the correctness of either of the views arrived at in the two-tier adjudication performed by the High Court of Delhi. Indeed, the trade mark `Prius had undoubtedly acquired a great deal of goodwill in several other jurisdictions in the world and that too much earlier to the use and registration of the same by the defendants in India. But if the territoriality principle is to govern the matter, and we have already held it should, there must be adequate evidence to show that the plaintiff had acquired a substantial goodwill for its car under the brand name `Prius in the Indian market also. The car itself was introduced in the Indian market in the year 2009-2010. The advertisements in automobile magazines, international business magazines; availability of data in information-disseminating portals like Wikipedia and online Britannica dictionary and the information on the internet, even if accepted, will not be a safe basis to hold the existence of the necessary goodwill and reputation of the product in the Indian market at the relevant point of time, particularly having regard to the limited online exposure at that point of time, i.e., in the year 2001. The news items relating to the launching of the product in Japan isolatedly and singularly in the Economic Times (Issues dated 27.03.1997 and 15.12.1997) also do not firmly establish the acquisition and existence of goodwill and reputation of the brand name in the Indian market. Coupled with the above, the evidence of the plaintiffs witnesses themselves would be suggestive of a very limited sale of the product in the Indian market and virtually the absence of any advertisement of the product in India prior to April, 2001. This, in turn, would show either lack of goodwill in the domestic market or lack of knowledge and information of the product amongst a significant section of the Indian population. While it may be correct that the population to whom such knowledge or information of the product should be available would be the section of the public dealing with the product as distinguished from the general population, even proof of such knowledge and information within the limited segment of the population is not prominent. All these should lead to us to eventually agree with the conclusion of the Division Bench of the High Court that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner. In any event the core of the controversy between the parties is really one of appreciation of the evidence of the parties; an exercise that this Court would not undoubtedly repeat unless the view taken by the previous forum is wholly and palpably unacceptable which does not appear to be so in the present premises.33. If goodwill or reputation in the particular jurisdiction (in India) is not established by the plaintiff, no other issue really would need any further examination to determine the extent of the plaintiffs right in the action of passing off that it had brought against the defendants in the Delhi High Court. Consequently, even if we are to disagree with the view of the Division Bench of the High Court in accepting the defendants version of the origin of the mark `Prius, the eventual conclusion of the Division Bench will, nonetheless, have to be sustained. We cannot help but also to observe that in the present case the plaintiffs delayed approach to the Courts has remained unexplained. Such delay cannot be allowed to work to the prejudice of the defendants who had kept on using its registered mark to market its goods during the inordinately long period of silence maintained by the plaintiff. ### Response: 0 ### Explanation: Court has taken the view that the first test, i.e., likelihood of confusion is required to be satisfied only in quia timet actions and actual confusion will have to be proved when the suit or claim is being adjudicated finally as by then a considerable period of time following the initiation of the action of passing off might have elapsed. Once the claimant who has brought the action of passing off establishes his goodwill in the jurisdiction in which he claims that the defendants are trying to pass off their goods under the brand name of the claimants goods, the burden of establishing actual confusion as distinguished from possibility thereof ought not to be fastened on the claimant. The possibility or likelihood of confusion is capable of being demonstrated with reference to the particulars of the mark or marks, as may be, and the circumstances surrounding the manner of sale/marketing of the goods by the defendants and such other relevant facts. Proof of actual confusion, on the other hand, would require the claimant to bring before the Court evidence which may not be easily forthcoming and directly available to the claimant. In a given situation, there may be no complaints made to the claimant that goods marketed by the defendants under the impugned mark had been inadvertently purchased as that of the plaintiff/claimant. The onus of bringing such proof, as an invariable requirement, would be to cast on the claimant an onerous burden which may not be justified. Commercial and business morality which is the foundation of the law of passing off should not be allowed to be defeated by imposing such a requirement. In such a situation, likelihood of confusion would be a surer and better test of proving an action of passing off by the defendants. Such a test would also be consistent with commercial and business morality which the law of passing off seeks to achieve. In the last resort, therefore, it is preponderance of probabilities that must be left to judge the claim.32. The next exercise would now be the application of the above principles to the facts of the present case for determination of the correctness of either of the views arrived at in theadjudication performed by the High Court of Delhi. Indeed, the trade mark `Prius had undoubtedly acquired a great deal of goodwill in several other jurisdictions in the world and that too much earlier to the use and registration of the same by the defendants in India. But if the territoriality principle is to govern the matter, and we have already held it should, there must be adequate evidence to show that the plaintiff had acquired a substantial goodwill for its car under the brand name `Prius in the Indian market also. The car itself was introduced in the Indian market in the yearThe advertisements in automobile magazines, international business magazines; availability of data inportals like Wikipedia and online Britannica dictionary and the information on the internet, even if accepted, will not be a safe basis to hold the existence of the necessary goodwill and reputation of the product in the Indian market at the relevant point of time, particularly having regard to the limited online exposure at that point of time, i.e., in the year 2001. The news items relating to the launching of the product in Japan isolatedly and singularly in the Economic Times (Issues dated 27.03.1997 and 15.12.1997) also do not firmly establish the acquisition and existence of goodwill and reputation of the brand name in the Indian market. Coupled with the above, the evidence of the plaintiffs witnesses themselves would be suggestive of a very limited sale of the product in the Indian market and virtually the absence of any advertisement of the product in India prior to April, 2001. This, in turn, would show either lack of goodwill in the domestic market or lack of knowledge and information of the product amongst a significant section of the Indian population. While it may be correct that the population to whom such knowledge or information of the product should be available would be the section of the public dealing with the product as distinguished from the general population, even proof of such knowledge and information within the limited segment of the population is not prominent. All these should lead to us to eventually agree with the conclusion of the Division Bench of the High Court that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner. In any event the core of the controversy between the parties is really one of appreciation of the evidence of the parties; an exercise that this Court would not undoubtedly repeat unless the view taken by the previous forum is wholly and palpably unacceptable which does not appear to be so in the present premises.33. If goodwill or reputation in the particular jurisdiction (in India) is not established by the plaintiff, no other issue really would need any further examination to determine the extent of the plaintiffs right in the action of passing off that it had brought against the defendants in the Delhi High Court. Consequently, even if we are to disagree with the view of the Division Bench of the High Court in accepting the defendants version of the origin of the mark `Prius, the eventual conclusion of the Division Bench will, nonetheless, have to be sustained. We cannot help but also to observe that in the present case the plaintiffs delayed approach to the Courts has remained unexplained. Such delay cannot be allowed to work to the prejudice of the defendants who had kept on using its registered mark to market its goods during the inordinately long period of silence maintained by the plaintiff.

ARVIND SINGH Vs. THE STATE OF MAHARASHTRA

who gave a tip to the other accused that there remains huge cash in the Dental Clinic of the PW-1. The accused, after they were released on bail, breached into the clinic of PW-1. Stolen goods such as cash, mobiles, camera and an ipad were recovered from the other accused. Therefore, it was argued that the accused has not left his activities even after the present case. 96. We do not wish to take into consideration the subsequent charge sheet filed against A-1 to avoid any prejudice in a trial which may proceed on the basis of charge sheet already filed against accused. We find that the accused have taken the life of a young school going boy of only 8 years of age to become rich by ransom and to take vengeance against Dr. Chandak. The argument is that since the accused are young, aged about 19 years, and have no criminal antecedents, the sentence of death imposed upon them is not warranted. It is argued that A-1 surrendered at the first available opportunity and he was fully cooperative with the investigation, therefore, there are the mitigating circumstances to absolve them from noose. We do not find any merit in the argument that being young or having no criminal antecedents are mitigating circumstances. What is required to be examined is whether there is a possibility of rehabilitation and whether it is the rarest of the rare case where the collective conscience of the community is so shocked that it will expect the holders of judicial power to inflict death penalty irrespective of their personal opinion as regards desirability or otherwise of retaining death penalty. The manner of commission of murder when committed in an extremely brutal, grotesque, diabolical, revolting or dastardly manner are aggravating factors. 97. The circumstances which are required to be taken into consideration are by now well settled. We would not like to repeat such circumstances again. This court in Machhi Singh & Ors. v. State of Punjab (1983) 3 SCC 470 held that as part of the rarest of rare test, the court should address itself as to whether: (i) there is something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence; (ii) the circumstances are such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender. 98. Further, this Court ruled that: (SCC p. 489, para 38) (i) The extreme penalty of death need not be inflicted except in gravest cases of extreme culpability. (ii) Before opting for the death penalty the circumstances of the offender also require to be taken into consideration along with the circumstances of the crime. (iii) Life imprisonment is the rule and death sentence is an exception. In other words death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided, the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances. (iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised. 99. Later this Court in Swamy Shraddananda (2) v. State of Karnataka (2008) 13 SCC 767 , held that in, the interest of justice, the court could commute the death sentence imposed on the convict and substitute it with life imprisonment with a direction that the convict would not be released from prison for the rest of his life. This view stands approved by a Constitution Bench of this Court in Union of India v. V. Sriharan & Ors. (2016) 7 SCC 1 holding that the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court. This Court held as under: 105. We, therefore, reiterate that the power derived from the Penal Code for any modified punishment within the punishment provided for in the Penal Code for such specified offences can only be exercised by the High Court and in the event of further appeal only by the Supreme Court and not by any other court in this country. T o put it differently, the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court. 106. Viewed in that respect, we state that the ratio laid down in Swamy Shraddananda (2) [Swamy Shraddananda (2) v. State of Karnataka, (2008) 13 SCC 767 : (2009) 3 SCC (Cri) 113 ] that a special category of sentence; instead of death; for a term exceeding 14 years and put that category beyond application of remission is well founded and we answer the said question in the affirmative. We are, therefore, not in agreement with the opinion expressed by this Court in Sangeet v. State of Haryana [Sangeet v. State of Haryana, (2013) 2 SCC 452 : (2013) 2 SCC (Cri) 611] that the deprival of remission power of the appropriate Government by awarding sentences of 20 or 25 years or without any remission as not permissible is not in consonance with the law and we specifically overrule the same. 100. The motive of the accused to take life was to become rich by not doing hard work but by demanding ransom after kidnapping a young, innocent boy of 8 years.

1[ds]54. We have heard learned counsel for the parties at length and find no reason to take a different view than what has been taken by the trial court and the High Court in the matter of conviction. The entire sheet anchor of the argument of learned counsel for A-1 is that A-1 was in Police custody from 18:50 hrs. on 1 st September, 2014 and such aspect has not been considered either by the trial court or by the High Court. In the written notes of the arguments submitted by A-1 before the trial court, nothing has been raised regarding A-1 being in custody from 18:50 hrs. on 1 st September, 2014. Such an argument was not raised for good reasons, which are delineated hereinafterA witness is required to be cross- examined to bring forth inconsistencies, discrepancies and to prove the untruthfulness of the witness. A-1 set up a case of his arrest on 1 st September, 2014 from 18:50 hrs., therefore, it was required for him to cross-examine the truthfulness of the prosecution witnesses with regard to that particular aspect. The argument that the accused was shown to be arrested around 19:00 hrs. is an incorrect reading of the arrest form (Ex.17). In Col. 8, it has been specifically mentioned that the accused was taken into custody on 2 nd September, 2014 at 14:30 hrs. at Wanjri Layout, Police Station, Kalamna. The time i.e. 17:10 hrs. mentioned in Col. 2, appears to be when A-1 was brought to the Police Station, Lakadganj. As per the IO, A-1 was called for interrogation as the suspicion was on an employee of Dr. Chandak since the kidnapper was wearing red colour T-shirt which was given by Dr. Chandak to his employees. A- 1 travelled from the stage of suspect to an accused only on 2 nd September, 2014. Since, no cross-examination was conducted on any of the prosecution witnesses about the place and manner of the arrest, such an argument that the accused was arrested on 1 st September, 2014 at 18:50 hrs. is not tenable63. Thus, the prosecution is required to bring home the guilt beyond reasonable doubt. It is open to an accused to raise such reasonable doubt by cross-examination of the prosecution witnesses to discredit such witness in respect of truthfulness and veracity. However, where the statement of prosecution witnesses cannot be doubted on the basis of the touchstone of truthfulness, contradictions and inconsistencies, and the accused wants to assert any particular fact which cannot be made out from the prosecution evidence, it is incumbent upon the accused to cross- examine the relevant witnesses to that extent. The witness, in order to impeach the truthfulness of his statement, must be cross- examined to seek any explanation in respect of a version, which accused wants to rely upon rather to raise an argument at the trial or appellate stage to infer a fact when the opportunity given was not availed of as part of fair play while appreciating the statement of the witnesses. Thus, we hold that a party intending to bring evidence to impeach or contradict the testimony of a witness must give an opportunity to explain or answer when the witness is in the witness box64. The testimony of the prosecution witnesses does not lead to any inference that A-1 was in Police custody from 18:50 hrs. He was only called for an inquiry for the reason that the employees engaged by Dr. Chandak used to wear a red colour T-shirt in his clinic and as the information at that stage was that one of the accused was wearing a red colour T-shirt, A-1 was called for information. His presence in the Police Station on 1 st September, 2014 was only as a suspect. He became an accused only when he was arrested on 2 nd September, 2014 at 14:30 hrs65. Mr. Chaudhary also pointed out that the CDR of A-1 (Ex.176/1) shows that his mobile phone was always in the range of Police Station Lakadganj from 18:50 hrs. The best witness to seek information of his arrest was the IO. He denied the arrest on 1 st September, 2014. The other witness who could be cross- examined was Manoj Thakkar (PW-4). But he was not cross examined in this respect. At this stage, it is not open to this Court to infer any such fact, in the absence of any evidence to the contrary on record. He had access to his mobile all through before his arrest on 2 nd September, 2014. An accused will not be provided access to mobile phone when in custody. He has called N.T. Gosawi (PW-25) at 19:49:06 hrs. on 1 st September, 2014. In fact, the statement of DW-1, the mother of the A-1, contradicts the entire argument of A-1 voluntary going to police station on 1 st September, 2014. She deposed that 4-5 policemen had taken A-1 from her house as per the information of Ankush, the juvenile. Thus, the accused has not been able to create doubt in respect of his arrest on 2 nd September 201468. We do not find any merit in the said argument as well. There is overwhelming evidence of A-1 having motive to cause damage to Dr. Chandak on account of payment of less salary, more work and scolding on account of over-charging customers. Such motive gets further strengthened by the desire in A-1 to get rich even by robbing employer of Sandeep Katre (PW-8), when he planned looting of cash. Such evidence is corroborated by Sonam Meshram (PW-19), the friend of A-1. The desire to get rich by whatever means was a driving force with A-1 to kidnap a young child of 8 years, who was a school going innocent child, who happened to be a son of well-to-do dentist couple. Initially, A-1 conspired with Sandeep Katre (PW-8) but on his developing cold-feet, he associated A-2 in his nefarious design to make money by the abduction of a young child. The conduct of A-1 in seeking assistance of Sandeep Katre (PW-8) and the calls exchanged between Sonam Meshram (PW-19) and A-1 shows the desperation of A-1 to kidnap for ransom. The intention to kidnap was only with a motive of becoming rich by obtaining a ransom. T o achieve that motive, A-1 had associated A-2, a fact deposed by Sandeep Katre (PW-8) and Sonam Meshram (PW-19). A-1 and A-2 were together at different stages of the commission of the crime from almost 16:00 hrs. till almost 18:00 hrs., and later till 18:33:59 hrs., when both of them were at the house of A-1 in Vinoba Bhave Nagar. Such facts have come on evidence from the testimony of Arun Meshram (PW-31); Rajan Tiwari (PW-2); Rupali (PW-23)-the neighbour of A-1; Ms. Madhuri Permanand Dhawalkar (PW-34)-the dispenser at the petrol pump; Divya Chandel (PW-9); Shriram Shankarrao Khadatkar (PW-10) and Namdeo Dhawale (PW-11) and the call details of both the accused. It has also come on record that A-1 and Sonam Meshram (PW-19) had earlier visited the area in question while on the way to visit the temple of Lord Ganesha. Thus A-1 was familiar with the area, therefore, he found it appropriate to achieve his nefarious design at that place70. From the CDR, A-1 was in the area of Patansaongi Lake from 17:36:53 hrs. to 17:50:49 hrs.; in Vinoba Bhave Nagar, i.e. from 18:31:46 hrs. to 18:33:59 hrs.; whereas, A-2 was in Vinoba Bhave Nagar area from 18:41:45 hrs. till 19:39:17 hrs. A-2 had called Ankush - the juvenile at 20:55:35 hrs., when he was on T akali Koradi Road i.e. the road between Patansaongi and Vinoba Bhave Nagar. The calls between A-1, A-2 and Dharmendra Yadav (PW-24) were exchanged between 19:28:15 hrs. to 19:32:50 hrs. Dharmendra Yadav (PW-24) was also in employment in the clinic of Dr. Chandak. He was acquainted with A-1 as he was also working in that clinic. He deposed that at about 19:00 hrs., A-2 called him and inquired about A-1. He also demanded the cellphone number of Dr. Chandak disclosing his name as Arvind, friend of A-1. He had not given him the cellphone number of Dr. Chandak as it was not available with him. After sometime, the phone was disconnected and within 5-10 minutes, he received another call from A-2 who sought the cellphone number of Pankaj Khurpade (PW-15). He had given cellphone number of Pankaj Khurpade (PW-15) to him71. The judgment in Abdul Subhan is not applicable to the facts of the present case for the reason that A-1 was not proved to be arrested on 1 st September, 2014. In the reported judgment, the person who was said to have arrested the accused prior to the actual date of arrest, was examined before the High Court. It was on the basis of the additional evidence recorded, the High Court observed that the statement made by Punwan, accused, in his confession to the effect that he was apprehended on 1 st March, 1938 is very probably true. The IO in his statement before the High Court could not convince the Court that he had not arrested Punnu, accused, till 6 th March, 1938. But the facts in the present appeals does not lead to any inference of the arrest of A-1 on 1 st September, 201472. The argument that the conspiracy terminated the moment, A-1 surrendered in the Lakadganj Police Station at 18:50 hrs. on 1 st September, 2014, is again not tenable73. The said judgment was quoted with approval in Central Bureau of Investigation & Anr. v. Mohd. Parvez Abdul Kayuum & Ors. (2019) 12 SCC 1 . Thus, it is not necessary that A-1 should participate till the end of conspiracy as some may quit from the conspiracy but all of them would be treated as conspirators. The common intention requires a pre-arranged plan and prior concert. Thus, there must be prior meeting of minds. The common intention must exist prior to the commission of the act in a point of time74. A-1 is the driving force behind the conspiracy to kidnap for ransom. Merely because A-1 was physically separated from co-conspirator either before or after the death of the victim will not absolve him of offence under Section 302 IPC or Section 364A as both A-1 and A-2 were acting in tandem with each other. It is so evident that A-1 received a phone call from A-2 when he was in Police Station at 19:04:17 hrs. when Dr. Chandak was also present in Police Station. Though, the ransom call was made by A-2 but in view of Section 34 IPC, the consequence of such ransom call will be equally borne by A-1 also, as the planning of kidnapping for the purpose of ransom was that of A-1. It is the A-1 who had the motive to harm Dr. Chandak and also to be rich at the earliest. We do not find any merit in the argument that to make out an offence under Section 302 IPC against A-1, the prosecution must prove the factum of death of the victim prior to 18:00 hrs. The medical evidence corroborates the time of death i.e. from 12 noon to midnight. The opinion of the expert can only suggest the time range, and not the precise time of death. The fact is that victim is proved to be in custody of A-1 and A-2 till 18:00 hrs. or so and, thus, in terms of provisions of Section 106 of the Evidence Act, it is for the accused to explain what happened to the victim before he was done to death. Since the victim was in custody of A-1 and A-2 and there is no evidence of any intervening factor to doubt that there could be a possibility of third person, it is for them to discharge the burden of such fact which is within their knowledge76. In the present appeals, the facts speak volumes about the common intention shared by both the appellants. Both the accused planned the kidnapping and executed it together. A-1 called Dharmendra Yadav (PW-24), even before the victim could be kidnapped to make sure that the parents of the child were not at home. A-2 is the one who picked up the child from the gate of the Apartment building. They were together till at least 18:33 hrs. whereas; the tower loca- tion of the mobile of A-2 was Vinoba Bhave Nagar till 19.39 hrs., which is the area of the House of A-1. The conspiracy never came to an end when A-2 called Dr. Chandak (PW-1) demanding ransom, which was the reason of kidnapping the boy. Thus, the facts prove that both the accused had a common intention to kidnap the childiii) Applicability of Section 106 of the Evidence Actiii) Applicability of Section 106 of the Evidence Act77. The most important aspect in the present appeals is presumption under Section 106 of the Evidence Act81. The Judgments referred to by Mr. Chaudhary, Sawal Das v. State of Bihar (1974) 4 SCC 193 , Reena Hazarika and Gargi v. State of Haryana (2019) 9 SCC 738 , were to argue that the last seen evidence will not absolve the prosecution from the duty of discharging its general or primary burden of proving the prosecution case beyond reasonableonly when the prosecution has led evidence which, if believed, will sustain a conviction, or which makes out a prima facie case, that the question arises of consideration of facts of which the burden of proof may lie upon the accused. However, the principles laid down in the aforesaid judgment are not applicable to the facts of the present case, when the prosecution has proved the act of kidnapping and the last seen evidence soon before the approximate time of death of victim. Therefore, the prosecution has discharged the onus of proof beyond reasonable doubt. It was then for the accused to rebut the presumption of any other intervening fact before the death of the victim. In fact, none of the prosecution witnesses have been cross- examined on that possibility at alliv) Changing version of the prosecution case82. The Judgments of this court reported as Karanpura Development Co. Ltd. and Sri Venkataramana Devaru have been relied upon to argue that an argument of fact cannot be raised for the first time before thisThe reliance on such judgments is not tenable. In both the Judgments, no fact sought to be raised in appeal before this court, was pleaded in civil proceedings. The reference to such judgments is inappropriate. In the present appeals, the arguments raised by the prosecution are on the basis of evidence led and available on recordv) Recovery of dead body at the instance of A-1 cannot be believed83. The dead body was recovered on the basis of disclosure statement of A-1. The body was lying concealed under a bridge constructed over a Rivulet. The body could not be visible to any person passing through that road. The photograph (Ex. Art./6) produced by the prosecution shows that the compartment under the bridge was more than 6 feet of diameter in which, one person could stand erect. Since the body was recovered from a concealed area covered by leaves and sand, it is the A-1 alone who could point out the concealment of dead body83. The dead body was recovered on the basis of disclosure statement of A-1. The body was lying concealed under a bridge constructed over a Rivulet. The body could not be visible to any person passing through that road. The photograph (Ex. Art./6) produced by the prosecution shows that the compartment under the bridge was more than 6 feet of diameter in which, one person could stand erect. Since the body was recovered from a concealed area covered by leaves and sand, it is the A-1 alone who could point out the concealment of dead body84. It is wholly immaterial whether the death was caused before 18:00 hrs. or afterwards as both the accused were seen with the victim together and the victim was in an inert condition. The injuries and the placement of the boulder/stone on the face of the victim was to hide the identity of the victim. As per Dr. Avinash Waghmode (PW-27), the injuries were perimortem i.e. when the vitals of the victim were functioning. That part of the statement corroborates the oral evidence led by the prosecution about the inert condition of the victim and the fact that he was carried on the shoulder by A- 1 as deposed by Shriram Shankarrao Khadatkar (PW-10) near Patansaongi Lake. It is matter of conjectures that such injuries could be caused by one person or two persons as the injuries could be caused even without any resistance by the victim in view of his inert condition. In fact, the statement of Dr. Avinash Waghmode (PW-27) is to the effect that the injuries caused to the victim occurred when the vitals were functioning, but the victim may not be in position to resist the physical assault on him85. The argument that the disclosure statement was not recorded in the exact language of the accused since the manner of killing is not recorded in such disclosure statement, is immaterial. In terms of Section 27 of the Evidence Act, the discovery of facts alone is admissible evidence when the accused is in police custody. The manner of killing is inculpatory and, therefore, not admissible in evidence. In such a case, the mere fact that the disclosure statement does not record the manner of killing of the victim is wholly inconsequential. Thus, we do not find any merit in the argument raised by the learned counsel for A-186. The reliance of Mr. Chaudhary on the Judgment of this court in Bakhshish Singh v. State of Punjab (1971) 3 SCC 182 is clearly erroneous. In the said case, the recovery of dead body was not believed as it was found to be possible for the accused to know the place where dead body was thrown in the river as broken teeth and parts of human body was lying near the place of recovery. In the present case, the dead body was lying in a concealed place and that there was no possible explanation on behalf of the accused as to how the body came to be concealed at that particular place, when the prosecution evidence proves that the accused were near the place of recovery of dead body almost at the probable time of deathvi) The effect of putting of incriminating evidence to the accused under Section 313 of the CodeFactually, in this case, A-1 and A-2 have not taken any defense except the statement that they have been implicated falsely. A-1 has been put as many as 848 questions whereas A-2 has been put as many as 754 questions but the accused have not taken any other stand except of denial of material facts. In fact, A-1 admitted to Question No. 54 that all the staff of Dr. Chandaks clinic were called in to the police station. Dr. Chandak received calls of ransom when he was in the police station. Therefore, the said judgment is of no help to the accused. An accused, as mentioned earlier, is required to cross-examine the prosecution witnesses to give him an opportunity to make any explanation which is open to him. It is a rule of professional practice in the conduct of a case. However, in the absence of any cross-examination of the prosecution witnesses, an argument cannot be built, in the absence of any evidence to that effect88. The judgments in Hate Singh Bhagat Singh and Sharad Birdhichand Sarda are not applicable to the facts of the present case. Therein, it has been laid down that in a prosecution based upon a circumstantial evidence, the prosecution is required to rule out all other probabilities except that the offence was committed by the accused and no one else. In the present case, there is overwhelming evidence that shows the victim to be in company of the accused at five different places from 16:00 hrs. to 17:30 hrs –18.00 hrs. Thereafter, the burden shifts to the accused to explain the circumstances which occurred thereafter till the time of the recovery of dead body. There is no evidence to create a doubt on the prosecution version that somebody else had access to the victim before he died. The fact that the child was carried on shoulder by A-1 shows that the child was not in a position to move and was done to death in that condition which is corroborated by medical evidence of injuries being perimortemArguments on behalf of A-2However, such an argument is wholly untenable as he is the one who picked up the child from the gate of the Apartment where the family of the child used to stay and had been seen by a number of persons up to 17:30 hrs. It is thereafter that a ransom call is proved to have been made by A- 2 on the basis of statement of Mohandas Mitharam Balani (PW-16) from whose PCO, A-2 made the call. He was an active participant in the orchestration of the crime with A-1. Still further, the blue T- shirt worn by the victim was recovered on the basis of disclosure statement of A-2. Such disclosure statement corroborates that it is he who had taken off the shirt and thrown it in a rivulet/nullah which was at a distance of 5 kms. from the place of occurrence94. This Court following the principle of residual doubt in a judgment reported as Ravishankar v. State of Madhya Pradesh (2019) 9 SCC 689 , held that another nascent evolution in the theory of death sentencing can be distilled. This Court has increasingly become cognizant of residual doubt in many recent cases which effectively create a higher standard of proof over and above the beyond reasonable doubt standard used at the stage of conviction, as a safeguard against routine capital sentencing, keeping in mind the irre- versibility of death96. We do not wish to take into consideration the subsequent charge sheet filed against A-1 to avoid any prejudice in a trial which may proceed on the basis of charge sheet already filed against accused. We find that the accused have taken the life of a young school going boy of only 8 years of age to become rich by ransom and to take vengeance against Dr. ChandakWe do not find any merit in the argument that being young or having no criminal antecedents are mitigating circumstances. What is required to be examined is whether there is a possibility of rehabilitation and whether it is the rarest of the rare case where the collective conscience of the community is so shocked that it will expect the holders of judicial power to inflict death penalty irrespective of their personal opinion as regards desirability or otherwise of retaining death penalty. The manner of commission of murder when committed in an extremely brutal, grotesque, diabolical, revolting or dastardly manner are aggravating factors97. The circumstances which are required to be taken into consideration are by now well settled. We would not like to repeat such circumstances again. This court in Machhi Singh & Ors. v. State of Punjab (1983) 3 SCC 470 held that as part of the rarest of rare test, the court should address itself as to whether:(i) there is something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence;(ii) the circumstances are such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender98. Further, this Court ruled that: (SCC p. 489, para 38)(i) The extreme penalty of death need not be inflicted except in gravest cases of extreme culpability(ii) Before opting for the death penalty the circumstances of the offender also require to be taken into consideration along with the circumstances of the crime(iii) Life imprisonment is the rule and death sentence is an exception. In other words death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided, the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances(iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised99. Later this Court in Swamy Shraddananda (2) v. State of Karnataka (2008) 13 SCC 767 , held that in, the interest of justice, the court could commute the death sentence imposed on the convict and substitute it with life imprisonment with a direction that the convict would not be released from prison for the rest of his life. This view stands approved by a Constitution Bench of this Court in Union of India v. V. Sriharan & Ors. (2016) 7 SCC 1 holding that the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court. This Court held as under:105. We, therefore, reiterate that the power derived from the Penal Code for any modified punishment within the punishment provided for in the Penal Code for such specified offences can only be exercised by the High Court and in the event of further appeal only by the Supreme Court and not by any other court in this country. T o put it differently, the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court106. Viewed in that respect, we state that the ratio laid down in Swamy Shraddananda (2) [Swamy Shraddananda (2) v. State of Karnataka, (2008) 13 SCC 767 : (2009) 3 SCC (Cri) 113 ] that a special category of sentence; instead of death; for a term exceeding 14 years and put that category beyond application of remission is well founded and we answer the said question in the affirmative. We are, therefore, not in agreement with the opinion expressed by this Court in Sangeet v. State of Haryana [Sangeet v. State of Haryana, (2013) 2 SCC 452 : (2013) 2 SCC (Cri) 611] that the deprival of remission power of the appropriate Government by awarding sentences of 20 or 25 years or without any remission as not permissible is not in consonance with the law and we specifically overrule the same100. The motive of the accused to take life was to become rich by not doing hard work but by demanding ransom after kidnapping a young, innocent boy of 8 years.

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: who gave a tip to the other accused that there remains huge cash in the Dental Clinic of the PW-1. The accused, after they were released on bail, breached into the clinic of PW-1. Stolen goods such as cash, mobiles, camera and an ipad were recovered from the other accused. Therefore, it was argued that the accused has not left his activities even after the present case. 96. We do not wish to take into consideration the subsequent charge sheet filed against A-1 to avoid any prejudice in a trial which may proceed on the basis of charge sheet already filed against accused. We find that the accused have taken the life of a young school going boy of only 8 years of age to become rich by ransom and to take vengeance against Dr. Chandak. The argument is that since the accused are young, aged about 19 years, and have no criminal antecedents, the sentence of death imposed upon them is not warranted. It is argued that A-1 surrendered at the first available opportunity and he was fully cooperative with the investigation, therefore, there are the mitigating circumstances to absolve them from noose. We do not find any merit in the argument that being young or having no criminal antecedents are mitigating circumstances. What is required to be examined is whether there is a possibility of rehabilitation and whether it is the rarest of the rare case where the collective conscience of the community is so shocked that it will expect the holders of judicial power to inflict death penalty irrespective of their personal opinion as regards desirability or otherwise of retaining death penalty. The manner of commission of murder when committed in an extremely brutal, grotesque, diabolical, revolting or dastardly manner are aggravating factors. 97. The circumstances which are required to be taken into consideration are by now well settled. We would not like to repeat such circumstances again. This court in Machhi Singh & Ors. v. State of Punjab (1983) 3 SCC 470 held that as part of the rarest of rare test, the court should address itself as to whether: (i) there is something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence; (ii) the circumstances are such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender. 98. Further, this Court ruled that: (SCC p. 489, para 38) (i) The extreme penalty of death need not be inflicted except in gravest cases of extreme culpability. (ii) Before opting for the death penalty the circumstances of the offender also require to be taken into consideration along with the circumstances of the crime. (iii) Life imprisonment is the rule and death sentence is an exception. In other words death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided, the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances. (iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised. 99. Later this Court in Swamy Shraddananda (2) v. State of Karnataka (2008) 13 SCC 767 , held that in, the interest of justice, the court could commute the death sentence imposed on the convict and substitute it with life imprisonment with a direction that the convict would not be released from prison for the rest of his life. This view stands approved by a Constitution Bench of this Court in Union of India v. V. Sriharan & Ors. (2016) 7 SCC 1 holding that the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court. This Court held as under: 105. We, therefore, reiterate that the power derived from the Penal Code for any modified punishment within the punishment provided for in the Penal Code for such specified offences can only be exercised by the High Court and in the event of further appeal only by the Supreme Court and not by any other court in this country. T o put it differently, the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court. 106. Viewed in that respect, we state that the ratio laid down in Swamy Shraddananda (2) [Swamy Shraddananda (2) v. State of Karnataka, (2008) 13 SCC 767 : (2009) 3 SCC (Cri) 113 ] that a special category of sentence; instead of death; for a term exceeding 14 years and put that category beyond application of remission is well founded and we answer the said question in the affirmative. We are, therefore, not in agreement with the opinion expressed by this Court in Sangeet v. State of Haryana [Sangeet v. State of Haryana, (2013) 2 SCC 452 : (2013) 2 SCC (Cri) 611] that the deprival of remission power of the appropriate Government by awarding sentences of 20 or 25 years or without any remission as not permissible is not in consonance with the law and we specifically overrule the same. 100. The motive of the accused to take life was to become rich by not doing hard work but by demanding ransom after kidnapping a young, innocent boy of 8 years. ### Response: 1 ### Explanation: T- shirt worn by the victim was recovered on the basis of disclosure statement of A-2. Such disclosure statement corroborates that it is he who had taken off the shirt and thrown it in a rivulet/nullah which was at a distance of 5 kms. from the place of occurrence94. This Court following the principle of residual doubt in a judgment reported as Ravishankar v. State of Madhya Pradesh (2019) 9 SCC 689 , held that another nascent evolution in the theory of death sentencing can be distilled. This Court has increasingly become cognizant of residual doubt in many recent cases which effectively create a higher standard of proof over and above the beyond reasonable doubt standard used at the stage of conviction, as a safeguard against routine capital sentencing, keeping in mind the irre- versibility of death96. We do not wish to take into consideration the subsequent charge sheet filed against A-1 to avoid any prejudice in a trial which may proceed on the basis of charge sheet already filed against accused. We find that the accused have taken the life of a young school going boy of only 8 years of age to become rich by ransom and to take vengeance against Dr. ChandakWe do not find any merit in the argument that being young or having no criminal antecedents are mitigating circumstances. What is required to be examined is whether there is a possibility of rehabilitation and whether it is the rarest of the rare case where the collective conscience of the community is so shocked that it will expect the holders of judicial power to inflict death penalty irrespective of their personal opinion as regards desirability or otherwise of retaining death penalty. The manner of commission of murder when committed in an extremely brutal, grotesque, diabolical, revolting or dastardly manner are aggravating factors97. The circumstances which are required to be taken into consideration are by now well settled. We would not like to repeat such circumstances again. This court in Machhi Singh & Ors. v. State of Punjab (1983) 3 SCC 470 held that as part of the rarest of rare test, the court should address itself as to whether:(i) there is something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence;(ii) the circumstances are such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender98. Further, this Court ruled that: (SCC p. 489, para 38)(i) The extreme penalty of death need not be inflicted except in gravest cases of extreme culpability(ii) Before opting for the death penalty the circumstances of the offender also require to be taken into consideration along with the circumstances of the crime(iii) Life imprisonment is the rule and death sentence is an exception. In other words death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided, the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances(iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised99. Later this Court in Swamy Shraddananda (2) v. State of Karnataka (2008) 13 SCC 767 , held that in, the interest of justice, the court could commute the death sentence imposed on the convict and substitute it with life imprisonment with a direction that the convict would not be released from prison for the rest of his life. This view stands approved by a Constitution Bench of this Court in Union of India v. V. Sriharan & Ors. (2016) 7 SCC 1 holding that the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court. This Court held as under:105. We, therefore, reiterate that the power derived from the Penal Code for any modified punishment within the punishment provided for in the Penal Code for such specified offences can only be exercised by the High Court and in the event of further appeal only by the Supreme Court and not by any other court in this country. T o put it differently, the power to impose a modified punishment providing for any specific term of incarceration or till the end of the convicts life as an alternate to death penalty, can be exercised only by the High Court and the Supreme Court and not by any other inferior court106. Viewed in that respect, we state that the ratio laid down in Swamy Shraddananda (2) [Swamy Shraddananda (2) v. State of Karnataka, (2008) 13 SCC 767 : (2009) 3 SCC (Cri) 113 ] that a special category of sentence; instead of death; for a term exceeding 14 years and put that category beyond application of remission is well founded and we answer the said question in the affirmative. We are, therefore, not in agreement with the opinion expressed by this Court in Sangeet v. State of Haryana [Sangeet v. State of Haryana, (2013) 2 SCC 452 : (2013) 2 SCC (Cri) 611] that the deprival of remission power of the appropriate Government by awarding sentences of 20 or 25 years or without any remission as not permissible is not in consonance with the law and we specifically overrule the same100. The motive of the accused to take life was to become rich by not doing hard work but by demanding ransom after kidnapping a young, innocent boy of 8 years.

Banarsidass Musadilal Vs. State of Uttar Pradesh and Others

Ghaziabad admeasuring 372.10 sq. mtrs. at the rate of Rs 40 per sq. mtrs was allotted to the petitioner as per allotment letter Annexure P-4. The petitioners was then called upon to execute a license agreement and get the same registered on or before January 12, 1978. He was required to pay a sum of Rs 1105.20 P. as 30 per cent. of the allotment money. Petitioner deposited the requisite amount on January 12, 1978. Thereafter the petitioner was put in possession of the plot on May 12, 1978. Subsequently by February 27, 1980 petitioner paid Rs 73, 000 being full and final payment in respect of price of the plot allotted to him. However, in April, 1980, petitioner received a letter from the second respondent threatening to cancel the allotment of the plot and he was called upon to show cause why the allotment should not be cancelled. Presumably the reason for threatened action was that the petitioner had not put up an industrial unit as promised by him. It appears that petitioner wanted to gain time to acquire experience for setting up the industrial unit which he proposed to set up. On June 19, 1981, the second respondent wrote a letter to the petitioner calling upon him to explain why, even though he was put in possession on May 12, 1978, he has not completed the construction as per the agreement entered into by him with the second respondent and called upon the petitioner to show cause why the allotment should on be cancelled. The second respondent granted extension of time to the petitioner to put up construction upto the plinth level by September 30, 1981 and the time was further extended upto December 31, 1981.2. It appears that the petitioner could not keep up the time-bound programme and on May 29, 1982 informed the respondents that he was suffering from Disc Prelapse and that he has been advised rest in bed for 6 months and on this ground sought further extension of time. This requires appears to have filled on deaf ears and by the letter dated June 8, 1982 the second respondent informed the petitioner that since the construction of the factory building on the plot allotted to him has not been completed within the initially stipulated or the extended time, the allotment in favour of the petitioner has been cancelled. Petitioner was called upon to make representation, if any, he wanted to make against the proposed action within 30 days from the date of the receipt of the letter. The petitioner apprehending danger to his possession approached this Court by this writ petition under Article 32 of the Constitution.3. A notice was ordered to be issued to the respondents calling upon them to show cause why the petition should not be admitted and in the mean time ex parte stay against dispossession was granted.4. One Mr D. B. Malik, Assistant Development Manager of the second respondent filed a counter-affidavit in reply to the petition. The main thrust of the counter-affidavit is that with a view to undertake rapid industrialisation in the State of Uttar Pradesh, various industrial estates were set up and plots were allotted on the specific understanding that the industrial units proposed to be set up must be brought into existence with the stipulated time. It was contended that if one to whom a plot is allotted cannot put up the construction with the stipulate time or even extended time, the idle unutilised plot becomes counter-productive to the purpose for which the second respondent was set up and other entrepreneurs who are in search of plots can be accommodated. It was therefore contended that as the petitioner was give liberal extension, the Court should not interfere with the order cancelling the allotment of the plot to the petitioner. It was stated that there are some allottees who are speculators in land and the Court should not encourage them.5. We head Mr Kailash Vasdev, learned counsel for the petitioner and Mr O. P. Rana, learned counsel for the respondents.6. It is clear that the petitioner has certainly not kept up the time schedule prescribed in the agreement containing condition subject to which the plot was allotted to him. It is equally true that he has been granted liberal extension. It would not be proper to accept his explanation that he could not put up the construction because he had to yet learn the trade and for which he was gaining experience before he could put up an industrial unit. If every plot-holder starts learning after allotment, the industrial estate cannot come up for decades and such a situation cannot be encouraged. It must also be conceded that the petition was given liberal extension and therefore his failure to keep to the time schedule stares into our faces. However, there are certain other circumstances which cannot be overlooked.7. Petitioner is disabled person. In the International Year for the Advancement of Disabled Persons, the worked over a movement was started to grant facilities to the disable persons to be useful citizens by making them self-reliant. Petitioner has commenced construction and has almost reached the stage of production. If the allotment of the plot is now cancelled, all his investment and expertise which he may have gained, would be lost and the disabled person would be thrown to the mercy of others. Imbued by this approach alone we propose to give one more opportunity to the petitioner to successfully carry out his industrial enterprise.8. Mr Rana stated that once an order allotting the plot is cancelled, the respondent can make a fresh allotment at the current price. Mr Rana further pointed out that the petition will have to pay Rs 40, 000 for a fresh allotment. In our opinion, this would be too harsh an approach and it would be self-defeating in that the initial allotment and the work done on the plot would be rendered nugatory and the petitioner would be exposed to heavy price rise.

1[ds]6. It is clear that the petitioner has certainly not kept up the time schedule prescribed in the agreement containing condition subject to which the plot was allotted to him. It is equally true that he has been granted liberal extension. It would not be proper to accept his explanation that he could not put up the construction because he had to yet learn the trade and for which he was gaining experience before he could put up an industrial unit. If everystarts learning after allotment, the industrial estate cannot come up for decades and such a situation cannot be encouraged. It must also be conceded that the petition was given liberal extension and therefore his failure to keep to the time schedule stares into our faces. However, there are certain other circumstances which cannot be overlooked.7. Petitioner is disabled person. In the International Year for the Advancement of Disabled Persons, the worked over a movement was started to grant facilities to the disable persons to be useful citizens by making themPetitioner has commenced construction and has almost reached the stage of production. If the allotment of the plot is now cancelled, all his investment and expertise which he may have gained, would be lost and the disabled person would be thrown to the mercy of others. Imbued by this approach alone we propose to give one more opportunity to the petitioner to successfully carry out his industrial enterprise.8. Mr Rana stated that once an order allotting the plot is cancelled, the respondent can make a fresh allotment at the current price. Mr Rana further pointed out that the petition will have to pay Rs 40, 000 for a fresh allotment. In our opinion, this would be too harsh an approach and it would bein that the initial allotment and the work done on the plot would be rendered nugatory and the petitioner would be exposed to heavy price rise.

### Instruction: Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding. ### Input: Ghaziabad admeasuring 372.10 sq. mtrs. at the rate of Rs 40 per sq. mtrs was allotted to the petitioner as per allotment letter Annexure P-4. The petitioners was then called upon to execute a license agreement and get the same registered on or before January 12, 1978. He was required to pay a sum of Rs 1105.20 P. as 30 per cent. of the allotment money. Petitioner deposited the requisite amount on January 12, 1978. Thereafter the petitioner was put in possession of the plot on May 12, 1978. Subsequently by February 27, 1980 petitioner paid Rs 73, 000 being full and final payment in respect of price of the plot allotted to him. However, in April, 1980, petitioner received a letter from the second respondent threatening to cancel the allotment of the plot and he was called upon to show cause why the allotment should not be cancelled. Presumably the reason for threatened action was that the petitioner had not put up an industrial unit as promised by him. It appears that petitioner wanted to gain time to acquire experience for setting up the industrial unit which he proposed to set up. On June 19, 1981, the second respondent wrote a letter to the petitioner calling upon him to explain why, even though he was put in possession on May 12, 1978, he has not completed the construction as per the agreement entered into by him with the second respondent and called upon the petitioner to show cause why the allotment should on be cancelled. The second respondent granted extension of time to the petitioner to put up construction upto the plinth level by September 30, 1981 and the time was further extended upto December 31, 1981.2. It appears that the petitioner could not keep up the time-bound programme and on May 29, 1982 informed the respondents that he was suffering from Disc Prelapse and that he has been advised rest in bed for 6 months and on this ground sought further extension of time. This requires appears to have filled on deaf ears and by the letter dated June 8, 1982 the second respondent informed the petitioner that since the construction of the factory building on the plot allotted to him has not been completed within the initially stipulated or the extended time, the allotment in favour of the petitioner has been cancelled. Petitioner was called upon to make representation, if any, he wanted to make against the proposed action within 30 days from the date of the receipt of the letter. The petitioner apprehending danger to his possession approached this Court by this writ petition under Article 32 of the Constitution.3. A notice was ordered to be issued to the respondents calling upon them to show cause why the petition should not be admitted and in the mean time ex parte stay against dispossession was granted.4. One Mr D. B. Malik, Assistant Development Manager of the second respondent filed a counter-affidavit in reply to the petition. The main thrust of the counter-affidavit is that with a view to undertake rapid industrialisation in the State of Uttar Pradesh, various industrial estates were set up and plots were allotted on the specific understanding that the industrial units proposed to be set up must be brought into existence with the stipulated time. It was contended that if one to whom a plot is allotted cannot put up the construction with the stipulate time or even extended time, the idle unutilised plot becomes counter-productive to the purpose for which the second respondent was set up and other entrepreneurs who are in search of plots can be accommodated. It was therefore contended that as the petitioner was give liberal extension, the Court should not interfere with the order cancelling the allotment of the plot to the petitioner. It was stated that there are some allottees who are speculators in land and the Court should not encourage them.5. We head Mr Kailash Vasdev, learned counsel for the petitioner and Mr O. P. Rana, learned counsel for the respondents.6. It is clear that the petitioner has certainly not kept up the time schedule prescribed in the agreement containing condition subject to which the plot was allotted to him. It is equally true that he has been granted liberal extension. It would not be proper to accept his explanation that he could not put up the construction because he had to yet learn the trade and for which he was gaining experience before he could put up an industrial unit. If every plot-holder starts learning after allotment, the industrial estate cannot come up for decades and such a situation cannot be encouraged. It must also be conceded that the petition was given liberal extension and therefore his failure to keep to the time schedule stares into our faces. However, there are certain other circumstances which cannot be overlooked.7. Petitioner is disabled person. In the International Year for the Advancement of Disabled Persons, the worked over a movement was started to grant facilities to the disable persons to be useful citizens by making them self-reliant. Petitioner has commenced construction and has almost reached the stage of production. If the allotment of the plot is now cancelled, all his investment and expertise which he may have gained, would be lost and the disabled person would be thrown to the mercy of others. Imbued by this approach alone we propose to give one more opportunity to the petitioner to successfully carry out his industrial enterprise.8. Mr Rana stated that once an order allotting the plot is cancelled, the respondent can make a fresh allotment at the current price. Mr Rana further pointed out that the petition will have to pay Rs 40, 000 for a fresh allotment. In our opinion, this would be too harsh an approach and it would be self-defeating in that the initial allotment and the work done on the plot would be rendered nugatory and the petitioner would be exposed to heavy price rise. ### Response: 1 ### Explanation: 6. It is clear that the petitioner has certainly not kept up the time schedule prescribed in the agreement containing condition subject to which the plot was allotted to him. It is equally true that he has been granted liberal extension. It would not be proper to accept his explanation that he could not put up the construction because he had to yet learn the trade and for which he was gaining experience before he could put up an industrial unit. If everystarts learning after allotment, the industrial estate cannot come up for decades and such a situation cannot be encouraged. It must also be conceded that the petition was given liberal extension and therefore his failure to keep to the time schedule stares into our faces. However, there are certain other circumstances which cannot be overlooked.7. Petitioner is disabled person. In the International Year for the Advancement of Disabled Persons, the worked over a movement was started to grant facilities to the disable persons to be useful citizens by making themPetitioner has commenced construction and has almost reached the stage of production. If the allotment of the plot is now cancelled, all his investment and expertise which he may have gained, would be lost and the disabled person would be thrown to the mercy of others. Imbued by this approach alone we propose to give one more opportunity to the petitioner to successfully carry out his industrial enterprise.8. Mr Rana stated that once an order allotting the plot is cancelled, the respondent can make a fresh allotment at the current price. Mr Rana further pointed out that the petition will have to pay Rs 40, 000 for a fresh allotment. In our opinion, this would be too harsh an approach and it would bein that the initial allotment and the work done on the plot would be rendered nugatory and the petitioner would be exposed to heavy price rise.

M/S EUREKA BUILDERS Vs. GULABCHAND DEAD BY LRS AND ORS ETC ETC

filing a suit to claim possession of any immovable property. The period of 12 years prescribed in these two articles is required to be counted from“the date of dispossession”(Article 64) and“when the possession of the defendant becomes adverse to the plaintiff”(Article 65).64. As held supra, the original holders (three PATIL) failed to file the civil suit against the plaintiff claiming possession of the suit land on the strength of their new title namely, re-grant in relation to the suit land, within 12 years from the date of re-grant and, therefore, by virtue of Section 27 of the Limitation Act, their all rights, title and interest in the suit land got extinguished.65. In view of these reasons, we are of the considered view that neither the original holders (three PATIL) and nor the appellants could take any benefit of the orders of re-grant dated 31.03.1973 and 01.04.1973 made by the State so as to divest the legal representatives of Shah Veljee Kanjee (plaintiffs) from their rights, title and interest in the suit land which they had legally acquired through Court Auction and direct purchase in 1942/43.66. This issue can be examined from yet another legal angle on the admitted facts situation arising in the case.67. It is not in dispute that Shah Veljee kanjee, in the first instance, acquired legal and valid title in the suit land through Court Auction proceedings in the year 1942 and second, by direct purchase of the part of the suit land on 14.05.1943 from the original holders (three PATIL).68. In our view, the plaintiff in alternative can be held to have acquired title against the original holders(three PATIL) by operation of law. The reason is not far to seek.69. Admittedly, the plaintiff continued to remain in lawful possession of the suit land since 1942/1943, first through Shah Veljee Kanjee and after his death through his legal representatives. It is not in dispute that the original holders (three PATIL) were aware of the ownership rights of Shah Veljee Kanjee over the suit land since 1942/1943 as Shah Veljee Kanjee got the suit land by State Auction proceedings and also by direct sale/purcahse.70. In this way, it was proved that the possession of Shah Veljee Kanjee over the suit land was throughout long, continuous, uninterrupted, open and peaceful with assertion of ownership from 1942 till 2004 to the knowledge of the whole world.71. The aforesaid undisputed facts confirm the possessory rights, title and interest of the plaintiff in the suit land against everyone including the original holders (three PATIL) by operation of law.72. Mr. Shekhar Naphade, learned senior counsel then referred the provisions of MHO Act and KVA Act and pointed out the nature of grant and the re-grant of the suit land made in favour of the original holders by the State and how it devolved on the holders etc.73. In our view, this submission need not be dealt with in detail because it has no relevance in the light of our findings recorded above against the appellants.74. In other words, once the rights of the original holders in the suit land stood extinguished, this submission does not survive for consideration on its merits.75. A right in the property once extinguished by operation of law, it cannot be revived unless the law itself provides for its revival in a particular situation. Such is not the case here.76. There is, however, another infirmity in the case of the appellants, which disentitle them to claim any relief in relation to the suit land.77. As mentioned above, the appellants, for proving the right of ownership of the original holders (three PATIL) in the suit land, have placed reliance on the two orders dated 31.03.1973 and 01.04.1973 of the State by which the State is alleged to have made re-grant of the suit land in favour of the original holders (three PATIL).78. In our view, in the absence of any adjudication of the right of ownership of the original holders (three PATIL) on the strength of these two orders by the competent Court as against the other stakeholders having an interest in the suit land and especially the legal representatives of Shah Veljee Kanjee, it is not possible to give any benefit of these two orders in favour of the original holders (three PATIL) in these proceedings.79. That apart, what is the effect of passing of the two orders on the rights, title and interest of the purchasers of the suit land because admittedly, the suit land was sold to the purchaser (Late Shah Veljee Kanjee) prior to passing of these two orders and whether these orders will ipso facto divest the purchasers of their rights, title and interest in the suit land were required to be gone into by the competent Court after affording an opportunity to such affected persons, namely, legal representatives of late Shah Veljee Kanjee.80. The original holders (three PATIL) though filed the civil suits to get these issues adjudicated against the affected persons but failed in their attempt to get these issues adjudicated. In other words, by the time the original holders (three PATIL) approached the Civil Court, their all rights in the suit land itself got extinguished on account of efflux of time (31 years) as has been held supra.81. It is for these reasons also, we are of the view that the appellants have no case.82. In our view, therefore, the High Court was right in its reasoning and the conclusion in holding that the original holders (three PATIL) having lost all their rights, title and interest in the suit land on the expiry of 12 years from the date of re-grant in their favour (assuming the re-grant to be valid) in 1985 and secondly, they again lost their ownership rights due to dismissal of their two suits (O.S. Nos. 364 and 365 of 2004) on 23.11.2004, neither the original holders (three PATIL) and nor the appellants, who claimed through original holders, had any right to claim any interest in the suit land.83.

0[ds]Having heard the learned counsel for the parties at length and on perusal of the record of the case, we find no merit in these appeals. In our view, the reasoning and the conclusion arrived at by the High Court cannot be faulted with. We are, therefore, inclined to uphold the reasoning and the conclusion arrived at by the High Court by assigning our reasoningAt the outset, we observe that so far as the right, title and interest of the appellants in the suit land is concerned, the appellants neither claim and nor do they have a right to claim any right, title and interest in the suit land in their own rights. In other words, the status of the appellants in this litigation are that of the intending purchasers of the suit land from the original holders of the suit land (threeIn our view, if the original holders (three PATIL) are able to prove their subsisting right, title and interest over the suit land against the plaintiff, the appellants would be able to get the relief in the suit because they are claiming through original holders (three PATIL). But if the original holders (three PATIL) are not able to prove their subsisting right, title and interest over the suit land against the plaintiff, then the appellants would also loose theIn our considered opinion, the appellants have failed to substantiate the right, title and interest of the original holders (three PATIL) in the suit land through whom they claim to derive interest in the suit land, whereas the respondent (plaintiff) has been able to prove his subsisting right, title and interest in the suit land on the date of filing of the suit, out of which these appeals arise. The appellants, therefore, have no locus to claim any interest in the suitIt is a settled principle of law that a person can only transfer to other person a right, title or interest in any tangible property which he is possessed of to transfer it for consideration orIn other words, whatever interest a person is possessed of in any tangible property, he can transfer only that interest to the other person and no other interest, which he himself does not possess in the tangibleSo, once it is proved that on the date of transfer of any tangible property, the seller of the property did not have any subsisting right, title or interest over it, then a buyer of such property would not get any right, title and interest in the property purchased by him for consideration or otherwise. Such transfer would be an illegal and voidIn our considered opinion, the reasons as to why the appellants failed to prove the subsisting right, title and interest of the original holders (intendingPATIL) in the suit land are more than one as are set out by usFirst, the original holders (three PATIL) had filed two suits (O.S. Nos. 364 and 365 of 2004) in relation to the suit land asserting therein their ownership rights over the suit land against the present plaintiff and other members of Shah Veljee Kanjee but both the suits were dismissed by the Civil Court onThese dismissal attained finality regardless of the fact as to on what grounds they suffered dismissal. These dismissals were binding on the original holder (three PATIL). A fortiori, these dismissals are binding on the appellants too because the appellants were claiming through the original holders (threeIt is for this reason, we are of the view that the original owners did not have any subsisting right, title and interest in the suit land, which they could have or/and were capable to transfer to the appellants whether for consideration or otherwise on the date when they entered into an agreement of sale of the suit land to the appellants onSecond, it cannot be disputed that original holders (three PATIL) had parted with the suit land long back by legal mode of transfer, one through Court Auction proceedings in 1942 and the other by direct sale/purchase on 14.05.1943 in favour of Shah VeljeeSince then, the original holders (three PATIL) did not have any subsisting right, title and interest in the suit land because whatever rights, title and interest which they had in the suit land, the same were transferred to Shah Veljee Kanjee through Court Auction proceedings in 1942 and by direct sale/purchase on 14.05.1943. These rights were then devolved on his legal representatives by inheritance consequent upon the death of Shah VeljeeIt also cannot be disputed, as taken note of above, that the Civil Court had already recognized the rights, title and interest of the legal representatives of Shah Veljee Kanjee in the suit land in O.S. No.9/1969 filed by them against theThis suit was decreed in favour of legal representative of Shah Veljee Kanjeeand remained upheld up to thisIt is due to these reasons also, all the rights, title and interest of original holders (three PATIL) in the suit land stoodWe find no merit in this submission for more than one reason. Assuming for the sake of argument that as a result of theorders made by the State in favour of the original holders (three PATIL), the rights, title and interest in the suit land again reverted to them in 1973 but they failed to exercise their right of ownership over the suit land for a long time, hence their right of ownership stoodIt was only after 31 years from theorder, the original holders woke up from slumber and filed two suits (O.S. Nos.364 and 365/2004) against the plaintiff and other members of Shah Veljee Kanjee in the Civil Court. It is not in dispute that the two civil suits also suffered dismissal from the Civil Court on 23.11.2004 and attainedIn our considered opinion, whateverrights, title and interest which the original holders derived from the orders ofin 1973 in the suit property in their favour, the same stood extinguished by efflux ofThe reason was that in order to keep such new rights intact and enforceable, the original holders (three PATIL) were under a legal obligation to have filed a suit for claiming a declaration and possession of the suit land and this ought to have been done by them within 12 years from the date ofThey, however, failed to do so within 12 years and when they actually tried to exercise their rights by filing the suit in 2004 (after 31 years from 1973), by then it was too late to exercise such rights in law. By that time, their rights in the suit land stoodAs held supra, the original holders (three PATIL) failed to file the civil suit against the plaintiff claiming possession of the suit land on the strength of their new title namely,in relation to the suit land, within 12 years from the date ofand, therefore, by virtue of Section 27 of the Limitation Act, their all rights, title and interest in the suit land gotIn view of these reasons, we are of the considered view that neither the original holders (three PATIL) and nor the appellants could take any benefit of the orders ofdated 31.03.1973 and 01.04.1973 made by the State so as to divest the legal representatives of Shah Veljee Kanjee (plaintiffs) from their rights, title and interest in the suit land which they had legally acquired through Court Auction and direct purchase inThis issue can be examined from yet another legal angle on the admitted facts situation arising in theIt is not in dispute that Shah Veljee kanjee, in the first instance, acquired legal and valid title in the suit land through Court Auction proceedings in the year 1942 and second, by direct purchase of the part of the suit land on 14.05.1943 from the original holders (threeIn our view, the plaintiff in alternative can be held to have acquired title against the original holders(three PATIL) by operation of law. The reason is not far toAdmittedly, the plaintiff continued to remain in lawful possession of the suit land since 1942/1943, first through Shah Veljee Kanjee and after his death through his legal representatives. It is not in dispute that the original holders (three PATIL) were aware of the ownership rights of Shah Veljee Kanjee over the suit land since 1942/1943 as Shah Veljee Kanjee got the suit land by State Auction proceedings and also by directIn this way, it was proved that the possession of Shah Veljee Kanjee over the suit land was throughout long, continuous, uninterrupted, open and peaceful with assertion of ownership from 1942 till 2004 to the knowledge of the wholeThe aforesaid undisputed facts confirm the possessory rights, title and interest of the plaintiff in the suit land against everyone including the original holders (three PATIL) by operation ofIn our view, this submission need not be dealt with in detail because it has no relevance in the light of our findings recorded above against theIn other words, once the rights of the original holders in the suit land stood extinguished, this submission does not survive for consideration on itsA right in the property once extinguished by operation of law, it cannot be revived unless the law itself provides for its revival in a particular situation. Such is not the caseThere is, however, another infirmity in the case of the appellants, which disentitle them to claim any relief in relation to the suitAs mentioned above, the appellants, for proving the right of ownership of the original holders (three PATIL) in the suit land, have placed reliance on the two orders dated 31.03.1973 and 01.04.1973 of the State by which the State is alleged to have madeof the suit land in favour of the original holders (threeIn our view, in the absence of any adjudication of the right of ownership of the original holders (three PATIL) on the strength of these two orders by the competent Court as against the other stakeholders having an interest in the suit land and especially the legal representatives of Shah Veljee Kanjee, it is not possible to give any benefit of these two orders in favour of the original holders (three PATIL) in theseThat apart, what is the effect of passing of the two orders on the rights, title and interest of the purchasers of the suit land because admittedly, the suit land was sold to the purchaser (Late Shah Veljee Kanjee) prior to passing of these two orders and whether these orders will ipso facto divest the purchasers of their rights, title and interest in the suit land were required to be gone into by the competent Court after affording an opportunity to such affected persons, namely, legal representatives of late Shah VeljeeThe original holders (three PATIL) though filed the civil suits to get these issues adjudicated against the affected persons but failed in their attempt to get these issues adjudicated. In other words, by the time the original holders (three PATIL) approached the Civil Court, their all rights in the suit land itself got extinguished on account of efflux of time (31 years) as has been heldIt is for these reasons also, we are of the view that the appellants have noIn our view, therefore, the High Court was right in its reasoning and the conclusion in holding that the original holders (three PATIL) having lost all their rights, title and interest in the suit land on the expiry of 12 years from the date ofin their favour (assuming theto be valid) in 1985 and secondly, they again lost their ownership rights due to dismissal of their two suits (O.S. Nos. 364 and 365 of 2004) on 23.11.2004, neither the original holders (three PATIL) and nor the appellants, who claimed through original holders, had any right to claim any interest in the suit land.

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: filing a suit to claim possession of any immovable property. The period of 12 years prescribed in these two articles is required to be counted from“the date of dispossession”(Article 64) and“when the possession of the defendant becomes adverse to the plaintiff”(Article 65).64. As held supra, the original holders (three PATIL) failed to file the civil suit against the plaintiff claiming possession of the suit land on the strength of their new title namely, re-grant in relation to the suit land, within 12 years from the date of re-grant and, therefore, by virtue of Section 27 of the Limitation Act, their all rights, title and interest in the suit land got extinguished.65. In view of these reasons, we are of the considered view that neither the original holders (three PATIL) and nor the appellants could take any benefit of the orders of re-grant dated 31.03.1973 and 01.04.1973 made by the State so as to divest the legal representatives of Shah Veljee Kanjee (plaintiffs) from their rights, title and interest in the suit land which they had legally acquired through Court Auction and direct purchase in 1942/43.66. This issue can be examined from yet another legal angle on the admitted facts situation arising in the case.67. It is not in dispute that Shah Veljee kanjee, in the first instance, acquired legal and valid title in the suit land through Court Auction proceedings in the year 1942 and second, by direct purchase of the part of the suit land on 14.05.1943 from the original holders (three PATIL).68. In our view, the plaintiff in alternative can be held to have acquired title against the original holders(three PATIL) by operation of law. The reason is not far to seek.69. Admittedly, the plaintiff continued to remain in lawful possession of the suit land since 1942/1943, first through Shah Veljee Kanjee and after his death through his legal representatives. It is not in dispute that the original holders (three PATIL) were aware of the ownership rights of Shah Veljee Kanjee over the suit land since 1942/1943 as Shah Veljee Kanjee got the suit land by State Auction proceedings and also by direct sale/purcahse.70. In this way, it was proved that the possession of Shah Veljee Kanjee over the suit land was throughout long, continuous, uninterrupted, open and peaceful with assertion of ownership from 1942 till 2004 to the knowledge of the whole world.71. The aforesaid undisputed facts confirm the possessory rights, title and interest of the plaintiff in the suit land against everyone including the original holders (three PATIL) by operation of law.72. Mr. Shekhar Naphade, learned senior counsel then referred the provisions of MHO Act and KVA Act and pointed out the nature of grant and the re-grant of the suit land made in favour of the original holders by the State and how it devolved on the holders etc.73. In our view, this submission need not be dealt with in detail because it has no relevance in the light of our findings recorded above against the appellants.74. In other words, once the rights of the original holders in the suit land stood extinguished, this submission does not survive for consideration on its merits.75. A right in the property once extinguished by operation of law, it cannot be revived unless the law itself provides for its revival in a particular situation. Such is not the case here.76. There is, however, another infirmity in the case of the appellants, which disentitle them to claim any relief in relation to the suit land.77. As mentioned above, the appellants, for proving the right of ownership of the original holders (three PATIL) in the suit land, have placed reliance on the two orders dated 31.03.1973 and 01.04.1973 of the State by which the State is alleged to have made re-grant of the suit land in favour of the original holders (three PATIL).78. In our view, in the absence of any adjudication of the right of ownership of the original holders (three PATIL) on the strength of these two orders by the competent Court as against the other stakeholders having an interest in the suit land and especially the legal representatives of Shah Veljee Kanjee, it is not possible to give any benefit of these two orders in favour of the original holders (three PATIL) in these proceedings.79. That apart, what is the effect of passing of the two orders on the rights, title and interest of the purchasers of the suit land because admittedly, the suit land was sold to the purchaser (Late Shah Veljee Kanjee) prior to passing of these two orders and whether these orders will ipso facto divest the purchasers of their rights, title and interest in the suit land were required to be gone into by the competent Court after affording an opportunity to such affected persons, namely, legal representatives of late Shah Veljee Kanjee.80. The original holders (three PATIL) though filed the civil suits to get these issues adjudicated against the affected persons but failed in their attempt to get these issues adjudicated. In other words, by the time the original holders (three PATIL) approached the Civil Court, their all rights in the suit land itself got extinguished on account of efflux of time (31 years) as has been held supra.81. It is for these reasons also, we are of the view that the appellants have no case.82. In our view, therefore, the High Court was right in its reasoning and the conclusion in holding that the original holders (three PATIL) having lost all their rights, title and interest in the suit land on the expiry of 12 years from the date of re-grant in their favour (assuming the re-grant to be valid) in 1985 and secondly, they again lost their ownership rights due to dismissal of their two suits (O.S. Nos. 364 and 365 of 2004) on 23.11.2004, neither the original holders (three PATIL) and nor the appellants, who claimed through original holders, had any right to claim any interest in the suit land.83. ### Response: 0 ### Explanation: and attainedIn our considered opinion, whateverrights, title and interest which the original holders derived from the orders ofin 1973 in the suit property in their favour, the same stood extinguished by efflux ofThe reason was that in order to keep such new rights intact and enforceable, the original holders (three PATIL) were under a legal obligation to have filed a suit for claiming a declaration and possession of the suit land and this ought to have been done by them within 12 years from the date ofThey, however, failed to do so within 12 years and when they actually tried to exercise their rights by filing the suit in 2004 (after 31 years from 1973), by then it was too late to exercise such rights in law. By that time, their rights in the suit land stoodAs held supra, the original holders (three PATIL) failed to file the civil suit against the plaintiff claiming possession of the suit land on the strength of their new title namely,in relation to the suit land, within 12 years from the date ofand, therefore, by virtue of Section 27 of the Limitation Act, their all rights, title and interest in the suit land gotIn view of these reasons, we are of the considered view that neither the original holders (three PATIL) and nor the appellants could take any benefit of the orders ofdated 31.03.1973 and 01.04.1973 made by the State so as to divest the legal representatives of Shah Veljee Kanjee (plaintiffs) from their rights, title and interest in the suit land which they had legally acquired through Court Auction and direct purchase inThis issue can be examined from yet another legal angle on the admitted facts situation arising in theIt is not in dispute that Shah Veljee kanjee, in the first instance, acquired legal and valid title in the suit land through Court Auction proceedings in the year 1942 and second, by direct purchase of the part of the suit land on 14.05.1943 from the original holders (threeIn our view, the plaintiff in alternative can be held to have acquired title against the original holders(three PATIL) by operation of law. The reason is not far toAdmittedly, the plaintiff continued to remain in lawful possession of the suit land since 1942/1943, first through Shah Veljee Kanjee and after his death through his legal representatives. It is not in dispute that the original holders (three PATIL) were aware of the ownership rights of Shah Veljee Kanjee over the suit land since 1942/1943 as Shah Veljee Kanjee got the suit land by State Auction proceedings and also by directIn this way, it was proved that the possession of Shah Veljee Kanjee over the suit land was throughout long, continuous, uninterrupted, open and peaceful with assertion of ownership from 1942 till 2004 to the knowledge of the wholeThe aforesaid undisputed facts confirm the possessory rights, title and interest of the plaintiff in the suit land against everyone including the original holders (three PATIL) by operation ofIn our view, this submission need not be dealt with in detail because it has no relevance in the light of our findings recorded above against theIn other words, once the rights of the original holders in the suit land stood extinguished, this submission does not survive for consideration on itsA right in the property once extinguished by operation of law, it cannot be revived unless the law itself provides for its revival in a particular situation. Such is not the caseThere is, however, another infirmity in the case of the appellants, which disentitle them to claim any relief in relation to the suitAs mentioned above, the appellants, for proving the right of ownership of the original holders (three PATIL) in the suit land, have placed reliance on the two orders dated 31.03.1973 and 01.04.1973 of the State by which the State is alleged to have madeof the suit land in favour of the original holders (threeIn our view, in the absence of any adjudication of the right of ownership of the original holders (three PATIL) on the strength of these two orders by the competent Court as against the other stakeholders having an interest in the suit land and especially the legal representatives of Shah Veljee Kanjee, it is not possible to give any benefit of these two orders in favour of the original holders (three PATIL) in theseThat apart, what is the effect of passing of the two orders on the rights, title and interest of the purchasers of the suit land because admittedly, the suit land was sold to the purchaser (Late Shah Veljee Kanjee) prior to passing of these two orders and whether these orders will ipso facto divest the purchasers of their rights, title and interest in the suit land were required to be gone into by the competent Court after affording an opportunity to such affected persons, namely, legal representatives of late Shah VeljeeThe original holders (three PATIL) though filed the civil suits to get these issues adjudicated against the affected persons but failed in their attempt to get these issues adjudicated. In other words, by the time the original holders (three PATIL) approached the Civil Court, their all rights in the suit land itself got extinguished on account of efflux of time (31 years) as has been heldIt is for these reasons also, we are of the view that the appellants have noIn our view, therefore, the High Court was right in its reasoning and the conclusion in holding that the original holders (three PATIL) having lost all their rights, title and interest in the suit land on the expiry of 12 years from the date ofin their favour (assuming theto be valid) in 1985 and secondly, they again lost their ownership rights due to dismissal of their two suits (O.S. Nos. 364 and 365 of 2004) on 23.11.2004, neither the original holders (three PATIL) and nor the appellants, who claimed through original holders, had any right to claim any interest in the suit land.

The Motor Transport Controller, Maharashtra State, Bomb Vs. Provincial Rashtriya Motor Kamgar Union,Nagpur And Ors

that the Governments action in abolishing posts and terminating services of employees was not bad because of contravention of S. 25F (b) and (c) of the Industrial Disputes Act, questioned before us. We have, therefore, not examined the correctness or otherwise of these conclusions and shall dispose of the appeal on the basis that the decisions on these points are correct.6. The first contention urged in support of the appeal is that the High Court was wrong in thinking that in ordering the abolition of posts and terminating the services of employees in those posts the Government had contravened the provisions of S. 31 of the C. P. and Berar Industrial Disputes Settlement Act. That section is in these words:"31. (1) If an employer intends to effect a change in any standing orders settled under S. 30 or in respect of any industrial matter mentioned in Schedule II, he shall give fourteen days notice of such intention in the prescribed form to the representative of employees.(2) The employer shall send a copy of the notice to the Labour Commissioner, Labour Officer and to such other person as may be prescribed and shall also affix a copy of the notice at a conspicuous place on the premises where the employees affected by the proposed change are employed and at such other places as may be specially directed by the proposed change are employed and at such other places as may be specially directed by the Labour Commissioner in any case.(3) On receipt of such notice the representative of employees concerned shall negotiate with the employers."7. Schedule II of this Act mentions a number of matters. The first of which is"Reduction intended to be of permanent or semi permanent character in the number of persons employed or to be employed not due to force majeure."The argument that prevailed in the High Court was that abolition of all posts amounted to permanent reduction within the meaning of this Item in Schedule II. If that be correct it would necessarily follow that the Government had to observe the procedure prescribed in S. 31. Admittedly, that was not done.The short question, therefore, is whether the abolition of all posts of an establishment amount to reduction of posts. In our opinion, the ward reduction can only be used when something is left after reduction. To speak of abolition as a reduction of the whole thing does not sound sensible or reasonable. We are unable to agree with the High Court that the term "reduction in the number of persons employed or to be employed" as mentioned in Item I of Schedule II covers abolition of all posts. In our opinion, the Government Order in abolishing the posts and terminating the services of the employees did not amount to a change within the meaning of S. 31 of the C. P. and Berar Industrial Disputes Settlement Act. The Government was, therefore, not required to follow the procedure mentioned in S. 31.8. This brings us to the question about the validity of the proviso to sub-cl. (3) of cl. 9 of the Order. As already indicated the workmens contention was that the proviso contravened the provisions of S. 77 of the Bombay Reorganisation Act. That section contained a provision that on transfer or re-employment of any workman in consequence of reconstitution, amalgamation or dissolution by any body corporate, co-operative society or any commercal undertaking or industrial undertaking the terms and conditions of service applicable to the workman after such transfer or re-employment shall not be less favourable to the workman than those applicable to him immediately before the transfer or re-employment. it was apparently apprehended by the workmen that though sub-cl. (3) of cl. 9 of the Order did state definitely that the right of the Maharashtra State Road Transport Corporation to determine or vary the conditions of service of any person who is continued in the service of the corporation was subject to the provisions of S. 77 of the Bombay Reorganisation Act, advantage might be taken of the proviso to the sub-clause, which seems at least at first sight to suggest that with the approval of the Central Government the conditions of service of a workman might be varied to his disadvantage notwithstanding the provisions of S. 77 of the Bombay Reorganisation Act. We are informed however that there has been no such variation. The petition itself did not contain any specific assertion that there had been any variation to the disadvantage of any workman. Only an apprehension that there might be a change in future was expressed. In the counter affidavit the Government stated that the Order passed in the notices issued clearly gave a guarantee that the conditions of service will not be changed. If there was any reason to think that there had been any change in any conditions of service or that in the immediate future there was any likelihood of any such change being made on the strength of the impugned proviso it would have been necessary for us to examine the question about the validity of this proviso. As however no change appears to have been made and it does not appear that there was any apprehension of any change being made in the immediate future, we have thought it desirable to leave this question open - particularly in view of the fact that the workmen were not represented before us in this appeal. We have, therefore, not heard full arguments on this question from the learned Counsel for the appellant.9. The decision of the High Court that the proviso is bad is therefore set side and the question is left open for decision if and when it becomes really necessary to do so. In view of our decision that the High Court erred in thinking that S. 31 of the C. P. and Berar Industrial Disputes Settlement Act had to be applied the High Courts order quashing the abolition of posts and the notices of termination cannot be sustained.

1[ds]In our opinion, the ward reduction can only be used when something is left after reduction. To speak of abolition as a reduction of the whole thing does not sound sensible or reasonable. We are unable to agree with the High Court that the term "reduction in the number of persons employed or to be employed" as mentioned in Item I of Schedule II covers abolition of all posts. In our opinion, the Government Order in abolishing the posts and terminating the services of the employees did not amount to a change within the meaning of S. 31 of the C. P. and Berar Industrial Disputes Settlement Act. The Government was, therefore, not required to follow the procedure mentioned in S.already indicated the workmens contention was that the proviso contravened the provisions of S. 77 of the Bombay Reorganisation Act. That section contained a provision that on transfer or re-employment of any workman in consequence of reconstitution, amalgamation or dissolution by any body corporate, co-operative society or any commercal undertaking or industrial undertaking the terms and conditions of service applicable to the workman after such transfer or re-employment shall not be less favourable to the workman than those applicable to him immediately before the transfer or re-employment. it was apparently apprehended by the workmen that though sub-cl.(3) of cl. 9 of theOrder did state definitely that the right of the Maharashtra State Road Transport Corporation to determine or vary the conditions of service of any person who is continued in the service of the corporation was subject to the provisions of S. 77 of the Bombay Reorganisation Act, advantage might be taken of the proviso to the sub-clause, which seems at least at first sight to suggest that with the approval of the Central Government the conditions of service of a workman might be varied to his disadvantage notwithstanding the provisions of S. 77 of the Bombay Reorganisation Act. We are informed however that there has been no such variation. The petition itself did not contain any specific assertion that there had been any variation to the disadvantage of any workman. Only an apprehension that there might be a change in future was expressed. In the counter affidavit the Government stated that the Order passed in the notices issued clearly gave a guarantee that the conditions of service will not be changed. If there was any reason to think that there had been any change in any conditions of service or that in the immediate future there was any likelihood of any such change being made on the strength of the impugned proviso it would have been necessary for us to examine the question about the validity of this proviso. As however no change appears to have been made and it does not appear that there was any apprehension of any change being made in the immediate future, we have thought it desirable to leave this question open - particularly in view of the fact that the workmen were not represented before us in this appeal. We have, therefore, not heard full arguments on this question from the learned Counsel for theview of our decision that the High Court erred in thinking that S. 31 of the C. P. and Berar Industrial Disputes Settlement Act had to be applied the High Courts order quashing the abolition of posts and the notices of termination cannot becorrectness of the High Courts decision that the order of the 27th May 1961 did not violate S.47A of the Actwas not challenged before us. Nor was the High Courts decision that the Governments action in abolishing posts and terminating services of employees was not bad because of contravention of S. 25F (b) and (c) of the Industrial Disputes Act, questioned before us. We have, therefore, not examined the correctness or otherwise of these conclusions and shall dispose of the appeal on the basis that the decisions on these points are correct.The decision of the High Court that the proviso is bad is therefore set side and the question is left open for decision if and when it becomes really necessary to do so.

### Instruction: Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding. ### Input: that the Governments action in abolishing posts and terminating services of employees was not bad because of contravention of S. 25F (b) and (c) of the Industrial Disputes Act, questioned before us. We have, therefore, not examined the correctness or otherwise of these conclusions and shall dispose of the appeal on the basis that the decisions on these points are correct.6. The first contention urged in support of the appeal is that the High Court was wrong in thinking that in ordering the abolition of posts and terminating the services of employees in those posts the Government had contravened the provisions of S. 31 of the C. P. and Berar Industrial Disputes Settlement Act. That section is in these words:"31. (1) If an employer intends to effect a change in any standing orders settled under S. 30 or in respect of any industrial matter mentioned in Schedule II, he shall give fourteen days notice of such intention in the prescribed form to the representative of employees.(2) The employer shall send a copy of the notice to the Labour Commissioner, Labour Officer and to such other person as may be prescribed and shall also affix a copy of the notice at a conspicuous place on the premises where the employees affected by the proposed change are employed and at such other places as may be specially directed by the proposed change are employed and at such other places as may be specially directed by the Labour Commissioner in any case.(3) On receipt of such notice the representative of employees concerned shall negotiate with the employers."7. Schedule II of this Act mentions a number of matters. The first of which is"Reduction intended to be of permanent or semi permanent character in the number of persons employed or to be employed not due to force majeure."The argument that prevailed in the High Court was that abolition of all posts amounted to permanent reduction within the meaning of this Item in Schedule II. If that be correct it would necessarily follow that the Government had to observe the procedure prescribed in S. 31. Admittedly, that was not done.The short question, therefore, is whether the abolition of all posts of an establishment amount to reduction of posts. In our opinion, the ward reduction can only be used when something is left after reduction. To speak of abolition as a reduction of the whole thing does not sound sensible or reasonable. We are unable to agree with the High Court that the term "reduction in the number of persons employed or to be employed" as mentioned in Item I of Schedule II covers abolition of all posts. In our opinion, the Government Order in abolishing the posts and terminating the services of the employees did not amount to a change within the meaning of S. 31 of the C. P. and Berar Industrial Disputes Settlement Act. The Government was, therefore, not required to follow the procedure mentioned in S. 31.8. This brings us to the question about the validity of the proviso to sub-cl. (3) of cl. 9 of the Order. As already indicated the workmens contention was that the proviso contravened the provisions of S. 77 of the Bombay Reorganisation Act. That section contained a provision that on transfer or re-employment of any workman in consequence of reconstitution, amalgamation or dissolution by any body corporate, co-operative society or any commercal undertaking or industrial undertaking the terms and conditions of service applicable to the workman after such transfer or re-employment shall not be less favourable to the workman than those applicable to him immediately before the transfer or re-employment. it was apparently apprehended by the workmen that though sub-cl. (3) of cl. 9 of the Order did state definitely that the right of the Maharashtra State Road Transport Corporation to determine or vary the conditions of service of any person who is continued in the service of the corporation was subject to the provisions of S. 77 of the Bombay Reorganisation Act, advantage might be taken of the proviso to the sub-clause, which seems at least at first sight to suggest that with the approval of the Central Government the conditions of service of a workman might be varied to his disadvantage notwithstanding the provisions of S. 77 of the Bombay Reorganisation Act. We are informed however that there has been no such variation. The petition itself did not contain any specific assertion that there had been any variation to the disadvantage of any workman. Only an apprehension that there might be a change in future was expressed. In the counter affidavit the Government stated that the Order passed in the notices issued clearly gave a guarantee that the conditions of service will not be changed. If there was any reason to think that there had been any change in any conditions of service or that in the immediate future there was any likelihood of any such change being made on the strength of the impugned proviso it would have been necessary for us to examine the question about the validity of this proviso. As however no change appears to have been made and it does not appear that there was any apprehension of any change being made in the immediate future, we have thought it desirable to leave this question open - particularly in view of the fact that the workmen were not represented before us in this appeal. We have, therefore, not heard full arguments on this question from the learned Counsel for the appellant.9. The decision of the High Court that the proviso is bad is therefore set side and the question is left open for decision if and when it becomes really necessary to do so. In view of our decision that the High Court erred in thinking that S. 31 of the C. P. and Berar Industrial Disputes Settlement Act had to be applied the High Courts order quashing the abolition of posts and the notices of termination cannot be sustained. ### Response: 1 ### Explanation: In our opinion, the ward reduction can only be used when something is left after reduction. To speak of abolition as a reduction of the whole thing does not sound sensible or reasonable. We are unable to agree with the High Court that the term "reduction in the number of persons employed or to be employed" as mentioned in Item I of Schedule II covers abolition of all posts. In our opinion, the Government Order in abolishing the posts and terminating the services of the employees did not amount to a change within the meaning of S. 31 of the C. P. and Berar Industrial Disputes Settlement Act. The Government was, therefore, not required to follow the procedure mentioned in S.already indicated the workmens contention was that the proviso contravened the provisions of S. 77 of the Bombay Reorganisation Act. That section contained a provision that on transfer or re-employment of any workman in consequence of reconstitution, amalgamation or dissolution by any body corporate, co-operative society or any commercal undertaking or industrial undertaking the terms and conditions of service applicable to the workman after such transfer or re-employment shall not be less favourable to the workman than those applicable to him immediately before the transfer or re-employment. it was apparently apprehended by the workmen that though sub-cl.(3) of cl. 9 of theOrder did state definitely that the right of the Maharashtra State Road Transport Corporation to determine or vary the conditions of service of any person who is continued in the service of the corporation was subject to the provisions of S. 77 of the Bombay Reorganisation Act, advantage might be taken of the proviso to the sub-clause, which seems at least at first sight to suggest that with the approval of the Central Government the conditions of service of a workman might be varied to his disadvantage notwithstanding the provisions of S. 77 of the Bombay Reorganisation Act. We are informed however that there has been no such variation. The petition itself did not contain any specific assertion that there had been any variation to the disadvantage of any workman. Only an apprehension that there might be a change in future was expressed. In the counter affidavit the Government stated that the Order passed in the notices issued clearly gave a guarantee that the conditions of service will not be changed. If there was any reason to think that there had been any change in any conditions of service or that in the immediate future there was any likelihood of any such change being made on the strength of the impugned proviso it would have been necessary for us to examine the question about the validity of this proviso. As however no change appears to have been made and it does not appear that there was any apprehension of any change being made in the immediate future, we have thought it desirable to leave this question open - particularly in view of the fact that the workmen were not represented before us in this appeal. We have, therefore, not heard full arguments on this question from the learned Counsel for theview of our decision that the High Court erred in thinking that S. 31 of the C. P. and Berar Industrial Disputes Settlement Act had to be applied the High Courts order quashing the abolition of posts and the notices of termination cannot becorrectness of the High Courts decision that the order of the 27th May 1961 did not violate S.47A of the Actwas not challenged before us. Nor was the High Courts decision that the Governments action in abolishing posts and terminating services of employees was not bad because of contravention of S. 25F (b) and (c) of the Industrial Disputes Act, questioned before us. We have, therefore, not examined the correctness or otherwise of these conclusions and shall dispose of the appeal on the basis that the decisions on these points are correct.The decision of the High Court that the proviso is bad is therefore set side and the question is left open for decision if and when it becomes really necessary to do so.

Deputy Commissioner of Income-Tax, Circle 11 (1), Bangalore Vs. M/s. Ace Multi Axes Systems Ltd

thereof, the same should not be denied.24. In this context, reference to T.N. Electricity Board v. Status Spg. Mills Ltd.[(2008) 7 SCC 353] would be fruitful. It has been held therein: (SCC p. 367, para 32)"32. It may be true that the exemption notification should receive a strict construction as has been held by this Court in Novopan India Ltd. v. CCE and Customs[ 1994 (Supp) 3 SCC 606], but it is also true that once it is found that the industry is entitled to the benefit of exemption notification, it would received a broad construction. (See TISCO Ltd. v. State of Jharkhand[(2005) 4 SCC 272] and A.P. Steel Re-Rolling Mill Ltd. v. State of Kerala[(2007) 2 SCC 725] .) A notification granting exemption can be withdrawn in public interest. What would be the public interest would, however, depend upon the facts of each case."25. From the aforesaid authorities, it is clear as crystal that a statutory rule or an exemption notification which confers benefit on the assessee on certain conditions should be liberally construed but the beneficiary should fall within the ambit of the rule or notification and further if there are conditions and violation thereof are provided, then the concept of liberal construction would not arise. Exemption being an exception has to be respected regard being had to its nature and purpose. There can be cases where liberal interpretation or understanding would be permissible, but in the present case, the rule position being clear, the same does not arise." 19. Same view was taken in Commissioner of Customs v. M. Ambalal & Co., (2011) 2 SCC 74 as follows : "16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances." 20. In State of Jharkhand v. Ambay Cements, (2005) 1 SCC 368 , the question was whether exemption for newly set up industrial units was applicable to the assessee therein. The High Court having allowed the benefit even though the assessee did not qualify for the same, this Court reversed the view of the High Court and held that the conditions for grant of exemption from tax are mandatory and in absence thereof exemption could not be granted. Distinguishing the judgments of this Court in Bajaj Tempo (supra), it was observed : "23. Mr Bharuka further submitted that in taxing statutes, provision of concessional rate of tax should be liberally construed and in respect of the above submission, he cited the judgment of this Court in CST v. Industrial Coal Enterprises [(1992) 3 SCC 78] and in the case of Bajaj Tempo Ltd. v. CIT. We are unable to countenance the above submission. In our view, the provisions of exemption clause should be strictly construed and if the condition under which the exemption was granted stood changed on account of any subsequent event the exemption would not operate.24. In our view, an exception or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the industrial policy and the exemption notifications.25. In our view, the failure to comply with the requirements renders the writ petition filed by the respondent liable to be dismissed. While mandatory rule must be strictly observed, substantial compliance might suffice in the case of a directory rule.26. Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed. Since the requirement, in the instant case, of obtaining prior permission is mandatory, therefore, non-compliance with the same must result in cancelling the concession made in favour of the grantee, the respondent herein." 21. In view of the above judgments, we do not see any difference in the situation where the assessee, is not initially eligible, or where the assessee though initially eligible loses the qualification of eligibililty in subsequent assessment years. In both such situations, principle of interpretation remains the same.22. Thus, while there is no conflict with the principle that interpretation has to be given to advance the object of law, in the present case, the assessee having not retained the character of `small scale industrial undertaking, is not eligible to the incentive meant for that category. Permitting incentive in such case will be against the object of law.23. For the above reasons, we hold that the assessee is not entitled to benefit of exemption if it loses its eligibility as a small scale industrial undertaking in a particular assessment year even if in initial year eligibility was satisfied. 24.

1[ds]13. On examination of the scheme of the provision, there is no manner of doubt that incentive meant for small scale industrial undertakings cannot be availed by industrial undertakings which do not continue as small scale industrial undertakings during the relevant period. Needless to say, each assessment year is a different assessment year, except for block assessment.14. The observations in the impugned order are that the object of legislature is to encourage industrial expansion which implies that incentive should remain applicable even where on account of industrial expansion small scale industrial undertakings ceases to be small scale industrial undertakings. We are unable to appreciate the logic for these observations. Incentive is given to a particular category of industry for a specified purpose. An incentive meant for small scale industrial undertaking cannot be availed by an assessee which is not such an undertaking. It does not, in any manner, mean that the object of permitting industrial expansion is defeated, if benefit is not allowed to other undertakings. On this logic, incentive must be given irrespective of any condition as the incentive certainly helps further expansion by reducing the tax burden. The concept of vertical equity is well known under which all the assessees need not be uniformally taxed. Progressive taxation is a well known element of tax policy. Higher slabs of tax or higher tax burden on an assessee having higher income or higher capacity cannot in any manner, be considered unreasonable.The principle of law considered in Bajaj Tempo (supra) is certainly a valid principle of interpretation where there is ambiguity or absurdity or where conditions of eligibility are substantially complied. In the present case, the scheme of the statute is clear that the incentive is applicable to a small scale industrial undertaking. The intention of legislature is in no manner defeated by not allowing the said incentive if the assessee ceases to be the class of industrial undertaking for which the incentive is provided even if it was eligible in the initial year. Each assessment year is a separate unit.In view of the above judgments, we do not see any difference in the situation where the assessee, is not initially eligible, or where the assessee though initially eligible loses the qualification of eligibililty in subsequent assessment years. In both such situations, principle of interpretation remains the same.22. Thus, while there is no conflict with the principle that interpretation has to be given to advance the object of law, in the present case, the assessee having not retained the character of `small scale industrial undertaking, is not eligible to the incentive meant for that category. Permitting incentive in such case will be against the object of law.23. For the above reasons, we hold that the assessee is not entitled to benefit of exemption if it loses its eligibility as a small scale industrial undertaking in a particular assessment year even if in initial year eligibility was satisfied.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: thereof, the same should not be denied.24. In this context, reference to T.N. Electricity Board v. Status Spg. Mills Ltd.[(2008) 7 SCC 353] would be fruitful. It has been held therein: (SCC p. 367, para 32)"32. It may be true that the exemption notification should receive a strict construction as has been held by this Court in Novopan India Ltd. v. CCE and Customs[ 1994 (Supp) 3 SCC 606], but it is also true that once it is found that the industry is entitled to the benefit of exemption notification, it would received a broad construction. (See TISCO Ltd. v. State of Jharkhand[(2005) 4 SCC 272] and A.P. Steel Re-Rolling Mill Ltd. v. State of Kerala[(2007) 2 SCC 725] .) A notification granting exemption can be withdrawn in public interest. What would be the public interest would, however, depend upon the facts of each case."25. From the aforesaid authorities, it is clear as crystal that a statutory rule or an exemption notification which confers benefit on the assessee on certain conditions should be liberally construed but the beneficiary should fall within the ambit of the rule or notification and further if there are conditions and violation thereof are provided, then the concept of liberal construction would not arise. Exemption being an exception has to be respected regard being had to its nature and purpose. There can be cases where liberal interpretation or understanding would be permissible, but in the present case, the rule position being clear, the same does not arise." 19. Same view was taken in Commissioner of Customs v. M. Ambalal & Co., (2011) 2 SCC 74 as follows : "16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances." 20. In State of Jharkhand v. Ambay Cements, (2005) 1 SCC 368 , the question was whether exemption for newly set up industrial units was applicable to the assessee therein. The High Court having allowed the benefit even though the assessee did not qualify for the same, this Court reversed the view of the High Court and held that the conditions for grant of exemption from tax are mandatory and in absence thereof exemption could not be granted. Distinguishing the judgments of this Court in Bajaj Tempo (supra), it was observed : "23. Mr Bharuka further submitted that in taxing statutes, provision of concessional rate of tax should be liberally construed and in respect of the above submission, he cited the judgment of this Court in CST v. Industrial Coal Enterprises [(1992) 3 SCC 78] and in the case of Bajaj Tempo Ltd. v. CIT. We are unable to countenance the above submission. In our view, the provisions of exemption clause should be strictly construed and if the condition under which the exemption was granted stood changed on account of any subsequent event the exemption would not operate.24. In our view, an exception or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the industrial policy and the exemption notifications.25. In our view, the failure to comply with the requirements renders the writ petition filed by the respondent liable to be dismissed. While mandatory rule must be strictly observed, substantial compliance might suffice in the case of a directory rule.26. Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed. Since the requirement, in the instant case, of obtaining prior permission is mandatory, therefore, non-compliance with the same must result in cancelling the concession made in favour of the grantee, the respondent herein." 21. In view of the above judgments, we do not see any difference in the situation where the assessee, is not initially eligible, or where the assessee though initially eligible loses the qualification of eligibililty in subsequent assessment years. In both such situations, principle of interpretation remains the same.22. Thus, while there is no conflict with the principle that interpretation has to be given to advance the object of law, in the present case, the assessee having not retained the character of `small scale industrial undertaking, is not eligible to the incentive meant for that category. Permitting incentive in such case will be against the object of law.23. For the above reasons, we hold that the assessee is not entitled to benefit of exemption if it loses its eligibility as a small scale industrial undertaking in a particular assessment year even if in initial year eligibility was satisfied. 24. ### Response: 1 ### Explanation: 13. On examination of the scheme of the provision, there is no manner of doubt that incentive meant for small scale industrial undertakings cannot be availed by industrial undertakings which do not continue as small scale industrial undertakings during the relevant period. Needless to say, each assessment year is a different assessment year, except for block assessment.14. The observations in the impugned order are that the object of legislature is to encourage industrial expansion which implies that incentive should remain applicable even where on account of industrial expansion small scale industrial undertakings ceases to be small scale industrial undertakings. We are unable to appreciate the logic for these observations. Incentive is given to a particular category of industry for a specified purpose. An incentive meant for small scale industrial undertaking cannot be availed by an assessee which is not such an undertaking. It does not, in any manner, mean that the object of permitting industrial expansion is defeated, if benefit is not allowed to other undertakings. On this logic, incentive must be given irrespective of any condition as the incentive certainly helps further expansion by reducing the tax burden. The concept of vertical equity is well known under which all the assessees need not be uniformally taxed. Progressive taxation is a well known element of tax policy. Higher slabs of tax or higher tax burden on an assessee having higher income or higher capacity cannot in any manner, be considered unreasonable.The principle of law considered in Bajaj Tempo (supra) is certainly a valid principle of interpretation where there is ambiguity or absurdity or where conditions of eligibility are substantially complied. In the present case, the scheme of the statute is clear that the incentive is applicable to a small scale industrial undertaking. The intention of legislature is in no manner defeated by not allowing the said incentive if the assessee ceases to be the class of industrial undertaking for which the incentive is provided even if it was eligible in the initial year. Each assessment year is a separate unit.In view of the above judgments, we do not see any difference in the situation where the assessee, is not initially eligible, or where the assessee though initially eligible loses the qualification of eligibililty in subsequent assessment years. In both such situations, principle of interpretation remains the same.22. Thus, while there is no conflict with the principle that interpretation has to be given to advance the object of law, in the present case, the assessee having not retained the character of `small scale industrial undertaking, is not eligible to the incentive meant for that category. Permitting incentive in such case will be against the object of law.23. For the above reasons, we hold that the assessee is not entitled to benefit of exemption if it loses its eligibility as a small scale industrial undertaking in a particular assessment year even if in initial year eligibility was satisfied.

Cotton Corporation Of India Vs. United Industrial Bank

disputed or the presentation of the petition is mala fide, actuated by an ulterior motive, or an abuse of the process of the court certainly the judge may decline to admit the petition and may direct the party presenting the winding up petition to prove its claim by a suit or in any other manner. It is undoubtedly true that a winding up petition is not a recognised mode for recovery of a debt and if the company is shown to be solvent and the debt is bona fide disputed, the court generally is reluctant to admit the petition. Therefore, the power is conferred on the judge before whom the petition comes up for admission to issue pre-admission notice to the company so that the company is not taken unawares and may appear and point out to the judge that the petitioner is actuated by an ulterior motive and presentation of the petition is a device to pressurise the company to submit to an unjust claim. This is a sufficient safeguard against mala fide action and the company would not suffer any consequences as apprehended, and the company can as well appear and ask for stay of further proceeding till the petitioner-creditor proves his debt by a regular suit. This is the jurisdiction of the company court and it cannot be restrained from exercising the same by some other court restraining the creditor from presenting a winding up petition. There is sufficient built-in safeguard in the provisions of the Companies Act and the Rules framed thereunder which would save the company from any adverse consequences, if a petitioner actuated by an ulterior motive presents the petition. This was taken notice of by this court in National Conduits (P) Ltd. v. S. S. Arora [1967] 37 Comp Cas 786; [1968] 1 SCR 430 , wherein this court set aside the order of the High Court of Delhi which was of the opinion that once a petition for winding up is admitted to the file, the court is bound to forthwith advertise the petition. This court held that the High Court was in error in holding that a petition for winding up must be advertised even before the application filed by the company for staying the proceeding for the ends of justice or to prevent abuse of the process of the court. This court held that the view taken by the High Court that the court must as soon as the petition is admitted, advertise the petition is contrary to the plain terms of r. 96 and such a view, if accepted, would make the court the instrument, in possible cases, of harassment and even of blackmail, for once a petition is advertised, the business of the company is bound to suffer serious loss and injury. This legal position effectively answers the apprehension voiced by Mr. Sen and even entertained by the High Court as it can be said with confidence that this must be the procedure which Pennycuick J. was in search of when in Bryanston Finance Ltd.s case [1976] 1 All ER 25, he said that it should be possible to devise some more apt form of procedure than to injunct a person from initiating the proceeding. In fact, the Kerala High Court in George v. Athimattam Rubber Co. Ltd., AIR 1964 Ker 212 ; [1965] 35 Comp Cas 17 (Ker), went to the extent of showing that when a pre-admission notice is issued to the company under r. 96, it would be open to the company to appear and ask for stay of proceedings or even revoke the admission on the ground that the petitioner was not acting bona fide in filing the petition and in the facts before the Kerala High Court it allowed the application of the company and the winding up petition was dismissed. We are, therefore, not disposed to accept the contention of Mr. Sen that the power to grant injunction restraining one from presenting a winding up petition must either be spelt out for the protection of the company or as held by decisions hereinabove quoted kept intact and should not be tinkered with to save the company from being harassed by persons actuated by ill will towards the company from presenting the petition.Turning to the facts of this case, let it be recalled that the learned single judge had declined to grant any temporary injunction against the present appellant, the Corporation, and in our opinion rightly. The Appellate Bench interfered with the order for the reasons which are far from convincing and it overlooked the provision contained in s. 41(b) and the effect thereof. Taking the most favourable view of the decision of the Appellate Bench and assuming that the Bench had in its mind the inherent power of the court to grant injunction despite statutory inhibition and consistent with the view taken by the courts in England, it had then in order to do justice between the parties first reach an affirmative finding that the winding up petition as and when presented by the Corporation-the creditor would be frivolous and would constitute an abuse of the process of the court or a device to pressurise the Bank to submit to an unjust and dishonest claim. It must also reach an affirmative conclusion that the debtor-Bank is sufficiently solvent to satisfy the claim as and when established. It has also to record an affirmative finding that the Corporation-the creditor-is not seeking bona fide to present a petition for winding up but is actuated by an ulterior motive in presenting the petition. Decisions in New Travellers Chambers Ltd. [1894] 70 LT 271, Charles Forte Investments Ltd. [1963] 2 All ER 940; [1964] 34 Comp Cas 233 (CA) and Bryanston Finance Ltd. [1976] 1 All ER 25 (CA), would require these findings to be recorded before an interim injunction can be granted. The decision of the Appellate Bench is conspicuously silent on these relevant points and for this additional reason also the appeal must succeed.13

1[ds]We have meticulously gone through the appellate judgment and we find not the slightest reference to the invocation of the inherent power of the court in granting the order of injunction now under challenge. Not only that, but the court has not held that the contention of the Corporation is frivolous or untenable or the claim is mala fide. This becomes clear from the observation of the court that the order passed by it is not founded on the merits of the Banks case or lack of merit in any claim which the Corporation may have against the plaintiff-Bank and it would be open to the Corporation to file a regular suit or summary suit against the plaintiff-Bank in which appropriate orders would be passed by the court seized of the matter as and when the occasion arises for the same. We find it very difficult to appreciate this approach of the court because the court has not rejected even at the stage of the consideration of prima facie case or on balance of convenience that the claim of the Corporation is frivolous or untenable or not prima facie substantiated. On the contrary the court leaves it open to the Corporation to file a suit if it is so advised. The High Court only restrains the Corporation from presenting a winding-up petition. We again see no justification for this dichotomy introduced by the court in respect of various proceedings which were open to the Corporation to be taken against the Bank leaving some open and some restrained by injunction. Neither in statute law nor in equity, we find any justification for this dichotomy.Mr. Sen, however, urged that the presentation of winding-up petition coupled with advertisement thereof in newspaper as required by law has certain serious consequences on the status, standing, financial viability and stability and operational efficiency of the company. Mr. Sen further urged that where the debt is bona fide disputed, a petition for winding up is not an alternative to the suit to recover the same, but may be a pressure tactic to obtain an unfair advantage and, therefore, despite the provision contained in s. 41(b) the court must spell out a power in appropriate cases to injunct a person from filing a winding-up petition. Most of the decisions in England hereinabove discussed at length have been influenced by this aspect. This approach, however, clearly overlooks various statutory safeguards against admission, advertising and publication of winding up petitions. Section 433 ofthe Companies Act, 1956, sets out circumstances in which a company may be wound up by the court, one such being where the company is unable to pay its debts. Section 434 sets out the circumstances and situations in which a company may be deemed to be unable to pay its debts. Such a deeming fiction would arise where a notice is served upon the company making a demand of a debt exceeding Rs. 500 then due and requiring the company to pay the same and the company has for a period of 3 weeks neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor. Rule 95 of the Companies (Court) Rules, 1959, provides that the petition for winding up a company shall be presented in the Registry. Then comes r. 96 which is very material. It provides that:" upon the filing of the petition, it shall be posted before the judge in Chambers for admission of the petition and fixing a date for the hearing thereof and for directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served. The judge may, if he thinks fit, direct notice to be given to the company before giving directions as to the advertisement of the petition."It would appear at a glance that the petition has to come up in Chambers before the company judge and not in open court, and the rule confers a discretionary power on the judge not to give any directions at that stage but merely issue a notice to the company before giving directions. If upon receipt of such notice the company appears and satisfies the judge that the debt is bona fide disputed or the presentation of the petition is mala fide, actuated by an ulterior motive, or an abuse of the process of the court certainly the judge may decline to admit the petition and may direct the party presenting the winding up petition to prove its claim by a suit or in any other manner. It is undoubtedly true that a winding up petition is not a recognised mode for recovery of a debt and if the company is shown to be solvent and the debt is bona fide disputed, the court generally is reluctant to admit the petition. Therefore, the power is conferred on the judge before whom the petition comes up for admission to issue pre-admission notice to the company so that the company is not taken unawares and may appear and point out to the judge that the petitioner is actuated by an ulterior motive and presentation of the petition is a device to pressurise the company to submit to an unjust claim. This is a sufficient safeguard against mala fide action and the company would not suffer any consequences as apprehended, and the company can as well appear and ask for stay of further proceeding till the petitioner-creditor proves his debt by a regular suit. This is the jurisdiction of the company court and it cannot be restrained from exercising the same by some other court restraining the creditor from presenting a winding up petition. There is sufficient built-in safeguard in the provisions of the Companies Act and the Rules framed thereunder which would save the company from any adverse consequences, if a petitioner actuated by an ulterior motive presents the petition. This was taken notice of by this court in National Conduits (P) Ltd. v. S. S. Arora [1967] 37 Comp Cas 786; [1968] 1 SCR 430 , wherein this court set aside the order of the High Court of Delhi which was of the opinion that once a petition for winding up is admitted to the file, the court is bound to forthwith advertise the petition. This court held that the High Court was in error in holding that a petition for winding up must be advertised even before the application filed by the company for staying the proceeding for the ends of justice or to prevent abuse of the process of the court. This court held that the view taken by the High Court that the court must as soon as the petition is admitted, advertise the petition is contrary to the plain terms of r. 96 and such a view, if accepted, would make the court the instrument, in possible cases, of harassment and even of blackmail, for once a petition is advertised, the business of the company is bound to suffer serious loss and injury. This legal position effectively answers the apprehension voiced by Mr. Sen and even entertained by the High Court as it can be said with confidence that this must be the procedure which Pennycuick J. was in search of when in BryanstonFinance Ltd.s case [1976] 1 All ER25, he said that it should be possible to devise some more apt form of procedure than to injunct a person from initiating the proceeding. In fact, the Kerala High Court in George v. Athimattam Rubber Co. Ltd., AIR 1964 Ker 212 ; [1965] 35 Comp Cas 17 (Ker), went to the extent of showing that when a pre-admission notice is issued to the company under r. 96, it would be open to the company to appear and ask for stay of proceedings or even revoke the admission on the ground that the petitioner was not acting bona fide in filing the petition and in the facts before the Kerala High Court it allowed the application of the company and the winding up petition was dismissed. We are, therefore, not disposed to accept the contention of Mr. Sen that the power to grant injunction restraining one from presenting a winding up petition must either be spelt out for the protection of the company or as held by decisions hereinabove quoted kept intact and should not be tinkered with to save the company from being harassed by persons actuated by ill will towards the company from presenting the petition.Turning to the facts of this case, let it be recalled that the learned single judge had declined to grant any temporary injunction against the present appellant, the Corporation, and in our opinion rightly. The Appellate Bench interfered with the order for the reasons which are far from convincing and it overlooked the provision contained in s. 41(b) and the effect thereof. Taking the most favourable view of the decision of the Appellate Bench and assuming that the Bench had in its mind the inherent power of the court to grant injunction despite statutory inhibition and consistent with the view taken by the courts in England, it had then in order to do justice between the parties first reach an affirmative finding that the winding up petition as and when presented by the Corporation-the creditor would be frivolous and would constitute an abuse of the process of the court or a device to pressurise the Bank to submit to an unjust and dishonest claim. It must also reach an affirmative conclusion that the debtor-Bank is sufficiently solvent to satisfy the claim as and when established. It has also to record an affirmative finding that the Corporation-the creditor-is not seeking bona fide to present a petition for winding up but is actuated by an ulterior motive in presenting the petition. Decisions in NewTravellers Chambers Ltd. [1894] 70 LT 271, Charles Forte Investments Ltd. [1963] 2 All ER 940; [1964] 34 Comp Cas 233 (CA) and Bryanston Finance Ltd. [1976] 1 All ER 25would require these findings to be recorded before an interim injunction can be granted. The decision of the Appellate Bench is conspicuously silent on these relevant points and for this additional reason also the appeal must succeed.

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: disputed or the presentation of the petition is mala fide, actuated by an ulterior motive, or an abuse of the process of the court certainly the judge may decline to admit the petition and may direct the party presenting the winding up petition to prove its claim by a suit or in any other manner. It is undoubtedly true that a winding up petition is not a recognised mode for recovery of a debt and if the company is shown to be solvent and the debt is bona fide disputed, the court generally is reluctant to admit the petition. Therefore, the power is conferred on the judge before whom the petition comes up for admission to issue pre-admission notice to the company so that the company is not taken unawares and may appear and point out to the judge that the petitioner is actuated by an ulterior motive and presentation of the petition is a device to pressurise the company to submit to an unjust claim. This is a sufficient safeguard against mala fide action and the company would not suffer any consequences as apprehended, and the company can as well appear and ask for stay of further proceeding till the petitioner-creditor proves his debt by a regular suit. This is the jurisdiction of the company court and it cannot be restrained from exercising the same by some other court restraining the creditor from presenting a winding up petition. There is sufficient built-in safeguard in the provisions of the Companies Act and the Rules framed thereunder which would save the company from any adverse consequences, if a petitioner actuated by an ulterior motive presents the petition. This was taken notice of by this court in National Conduits (P) Ltd. v. S. S. Arora [1967] 37 Comp Cas 786; [1968] 1 SCR 430 , wherein this court set aside the order of the High Court of Delhi which was of the opinion that once a petition for winding up is admitted to the file, the court is bound to forthwith advertise the petition. This court held that the High Court was in error in holding that a petition for winding up must be advertised even before the application filed by the company for staying the proceeding for the ends of justice or to prevent abuse of the process of the court. This court held that the view taken by the High Court that the court must as soon as the petition is admitted, advertise the petition is contrary to the plain terms of r. 96 and such a view, if accepted, would make the court the instrument, in possible cases, of harassment and even of blackmail, for once a petition is advertised, the business of the company is bound to suffer serious loss and injury. This legal position effectively answers the apprehension voiced by Mr. Sen and even entertained by the High Court as it can be said with confidence that this must be the procedure which Pennycuick J. was in search of when in Bryanston Finance Ltd.s case [1976] 1 All ER 25, he said that it should be possible to devise some more apt form of procedure than to injunct a person from initiating the proceeding. In fact, the Kerala High Court in George v. Athimattam Rubber Co. Ltd., AIR 1964 Ker 212 ; [1965] 35 Comp Cas 17 (Ker), went to the extent of showing that when a pre-admission notice is issued to the company under r. 96, it would be open to the company to appear and ask for stay of proceedings or even revoke the admission on the ground that the petitioner was not acting bona fide in filing the petition and in the facts before the Kerala High Court it allowed the application of the company and the winding up petition was dismissed. We are, therefore, not disposed to accept the contention of Mr. Sen that the power to grant injunction restraining one from presenting a winding up petition must either be spelt out for the protection of the company or as held by decisions hereinabove quoted kept intact and should not be tinkered with to save the company from being harassed by persons actuated by ill will towards the company from presenting the petition.Turning to the facts of this case, let it be recalled that the learned single judge had declined to grant any temporary injunction against the present appellant, the Corporation, and in our opinion rightly. The Appellate Bench interfered with the order for the reasons which are far from convincing and it overlooked the provision contained in s. 41(b) and the effect thereof. Taking the most favourable view of the decision of the Appellate Bench and assuming that the Bench had in its mind the inherent power of the court to grant injunction despite statutory inhibition and consistent with the view taken by the courts in England, it had then in order to do justice between the parties first reach an affirmative finding that the winding up petition as and when presented by the Corporation-the creditor would be frivolous and would constitute an abuse of the process of the court or a device to pressurise the Bank to submit to an unjust and dishonest claim. It must also reach an affirmative conclusion that the debtor-Bank is sufficiently solvent to satisfy the claim as and when established. It has also to record an affirmative finding that the Corporation-the creditor-is not seeking bona fide to present a petition for winding up but is actuated by an ulterior motive in presenting the petition. Decisions in New Travellers Chambers Ltd. [1894] 70 LT 271, Charles Forte Investments Ltd. [1963] 2 All ER 940; [1964] 34 Comp Cas 233 (CA) and Bryanston Finance Ltd. [1976] 1 All ER 25 (CA), would require these findings to be recorded before an interim injunction can be granted. The decision of the Appellate Bench is conspicuously silent on these relevant points and for this additional reason also the appeal must succeed.13 ### Response: 1 ### Explanation: is bona fide disputed or the presentation of the petition is mala fide, actuated by an ulterior motive, or an abuse of the process of the court certainly the judge may decline to admit the petition and may direct the party presenting the winding up petition to prove its claim by a suit or in any other manner. It is undoubtedly true that a winding up petition is not a recognised mode for recovery of a debt and if the company is shown to be solvent and the debt is bona fide disputed, the court generally is reluctant to admit the petition. Therefore, the power is conferred on the judge before whom the petition comes up for admission to issue pre-admission notice to the company so that the company is not taken unawares and may appear and point out to the judge that the petitioner is actuated by an ulterior motive and presentation of the petition is a device to pressurise the company to submit to an unjust claim. This is a sufficient safeguard against mala fide action and the company would not suffer any consequences as apprehended, and the company can as well appear and ask for stay of further proceeding till the petitioner-creditor proves his debt by a regular suit. This is the jurisdiction of the company court and it cannot be restrained from exercising the same by some other court restraining the creditor from presenting a winding up petition. There is sufficient built-in safeguard in the provisions of the Companies Act and the Rules framed thereunder which would save the company from any adverse consequences, if a petitioner actuated by an ulterior motive presents the petition. This was taken notice of by this court in National Conduits (P) Ltd. v. S. S. Arora [1967] 37 Comp Cas 786; [1968] 1 SCR 430 , wherein this court set aside the order of the High Court of Delhi which was of the opinion that once a petition for winding up is admitted to the file, the court is bound to forthwith advertise the petition. This court held that the High Court was in error in holding that a petition for winding up must be advertised even before the application filed by the company for staying the proceeding for the ends of justice or to prevent abuse of the process of the court. This court held that the view taken by the High Court that the court must as soon as the petition is admitted, advertise the petition is contrary to the plain terms of r. 96 and such a view, if accepted, would make the court the instrument, in possible cases, of harassment and even of blackmail, for once a petition is advertised, the business of the company is bound to suffer serious loss and injury. This legal position effectively answers the apprehension voiced by Mr. Sen and even entertained by the High Court as it can be said with confidence that this must be the procedure which Pennycuick J. was in search of when in BryanstonFinance Ltd.s case [1976] 1 All ER25, he said that it should be possible to devise some more apt form of procedure than to injunct a person from initiating the proceeding. In fact, the Kerala High Court in George v. Athimattam Rubber Co. Ltd., AIR 1964 Ker 212 ; [1965] 35 Comp Cas 17 (Ker), went to the extent of showing that when a pre-admission notice is issued to the company under r. 96, it would be open to the company to appear and ask for stay of proceedings or even revoke the admission on the ground that the petitioner was not acting bona fide in filing the petition and in the facts before the Kerala High Court it allowed the application of the company and the winding up petition was dismissed. We are, therefore, not disposed to accept the contention of Mr. Sen that the power to grant injunction restraining one from presenting a winding up petition must either be spelt out for the protection of the company or as held by decisions hereinabove quoted kept intact and should not be tinkered with to save the company from being harassed by persons actuated by ill will towards the company from presenting the petition.Turning to the facts of this case, let it be recalled that the learned single judge had declined to grant any temporary injunction against the present appellant, the Corporation, and in our opinion rightly. The Appellate Bench interfered with the order for the reasons which are far from convincing and it overlooked the provision contained in s. 41(b) and the effect thereof. Taking the most favourable view of the decision of the Appellate Bench and assuming that the Bench had in its mind the inherent power of the court to grant injunction despite statutory inhibition and consistent with the view taken by the courts in England, it had then in order to do justice between the parties first reach an affirmative finding that the winding up petition as and when presented by the Corporation-the creditor would be frivolous and would constitute an abuse of the process of the court or a device to pressurise the Bank to submit to an unjust and dishonest claim. It must also reach an affirmative conclusion that the debtor-Bank is sufficiently solvent to satisfy the claim as and when established. It has also to record an affirmative finding that the Corporation-the creditor-is not seeking bona fide to present a petition for winding up but is actuated by an ulterior motive in presenting the petition. Decisions in NewTravellers Chambers Ltd. [1894] 70 LT 271, Charles Forte Investments Ltd. [1963] 2 All ER 940; [1964] 34 Comp Cas 233 (CA) and Bryanston Finance Ltd. [1976] 1 All ER 25would require these findings to be recorded before an interim injunction can be granted. The decision of the Appellate Bench is conspicuously silent on these relevant points and for this additional reason also the appeal must succeed.

Rattan Kumar Tandan Vs. State Of Uttar Pradesh

of the compensation. The limited right given to the State is only in respect of excess compensation awarded by the Collector. Therefore, in respect of the apportionment of the compensation covered under the Ceiling Act, there is no need for reference under Section 18(3). Moreover, it could be seen that on a reference made under Section 18(1) to the court, as required under Section 20(c) of the Act, the court is enjoined to give notice to the Collector when the objection relates to the area of the land or the amount of compensation. Section 21 restricts the scope of the proceedings envisaging that "the Court shall restrict the scope" of consideration of "interests of the persons affected by the objection". Thus, it could be seen that the court is enjoined to go into the acquisition of the land of the persons entitled to the compensation. On a reference made, the compensation would be restricted to the interest in the land held by the claimant and the court should enquire as to the extent to which the claimant will be entitled to get compensation under Section 23(1) of the Act towards his interest in the acquired land. The interest consists of right and title to the compensation. Admittedly, the appellants had lease of Government land for 50 years on 1-10-1892 obviously under Crown Grants Act with a right to a renewal for further period of 50 years. Admittedly, further renewal was granted on 30-9-1942 for a further period of 50 years which stood expired on 30-9-1992. It would, therefore, be clear that the term of the lease as granted by the Government was up to 30-9-1992. It is then contended by Shri Satish Chandra that it was a licence since the appellants were permitted to construct permanent building under the lease and, therefore, it is in perpetuity by operation of Section 60 of the Easement Act. We find no force in the contention. The lease itself expressly mentions demising the vacant land to the appellants with exclusive possession but subject to construction of the building within the specified period and be in peaceful exclusive possession and enjoyment thereof subject to paying the lease amount to the Government under the Act. Therefore, it cannot be treated to be a licence but a lease. 15. Lease having been given for a specified period up to 30-9-1992, the question is whether the appellants are entitled to full compensation ? In this behalf, the contention of Shri Satish Chandra is that since the first renewal contained the same covenant as contained in the first lease, the appellants are entitled to further renewal of lease in property. In support thereof, he placed reliance on the judgment of the Division Bench of the Allahabad High Court as confirmed by this Court in the special leave petition, namely, Purshottam Dass Tandon v. State of U.P. 1987 AIR(All) 56 : 1987 (13) All(LR) 92 It seems that Tandons are having large extent of leasehold lands from the Government and one such leasehold land is under acquisition. We are not concerned with regard to the legality of the mandamus or directions issued in the above case. Suffice it to state that since the State had acquired the property before the expiry of the first renewal, we are constrained to go into the language used in the first lease. It expressly mentions that lease initially was granted for a period of 50 years and a right of another renewal for another 50 years, i.e., up to 30-9-1992. Before its expiry, the Government have already acquired the lands for public purpose and taken possession. The question of further renewal would not arise in this case. Under these circumstances, residuary period of lease is hardly 7 years. 16. The question, therefore, is whether the appellants are entitled to the entire compensation in respect of the land within the ceiling limit under the Ceiling Act. In support thereof, Shri Satish Chandra placed reliance on two judgments of this Court in Inder Parshad v. Union of India and Piedade Fernandes v. Union of India [(1994) 3 Scale 860]. In Inder Parshad case, land was sought to be acquired for public purpose but the Land Acquisition Officer was unable to decide the proportion in which the leaseholders and the Union of India are entitled to the compensation. On reference under Section 30, the reference court had determined the compensation at a particular rate ultimately the High Court determined the proportion at 75% and 25%. Since the Union of India had not filed appeal, this Court upheld the proportion to the leaseholders and the Government of India. It was a perpetual lease. In that backdrop, this Court had upheld the view of the High Court granting apportionment in the ratio of 75 : 25 to the lessee and the Government. In Piedade Fernandes case [(1994) 3 Scale 860], the covenant expressly gave power to the Government to get the land for a public purpose without payment of the compensation. That was not covered under the Ceiling Act. Instead of invoking the clause thereunder, proceedings under the Land Acquisition Act were initiated. It was, therefore, held that the State is enjoined to pay full compensation for the land acquired. The ratio of either case does not help the appellants in this case. As seen, the appellants have got hardly 7 years leasehold right in the land and thereafter the lands would stand revested to the State. Thereafter, the State would be entitled to resume the land after ejectment of the appellants. Under those circumstances, they are not entitled to the full compensation. The High Court directed that compensation should be apportioned for the extent of land within the limit in the ratio of 50:50 to the State and the appellants. It is also to be seen that the State has not questioned at least the apportionment granted by the High Court. Considered from this perspective, we hold that it is not a fit case to reserve the judgment.

0[ds]Since they have not discharged their burden, the evidence is not sufficient to hold that the value of the trees would be Rs. 50, 000. The Additional District Judge accepted the ipse dixit of the claimants and gave arbitrary amount on mere asking. The High Court, therefore, was right, though for different reasons, in reversing the award of the reference court in that behalf and confirming that of the Land Acquisition Officer. In this case, since the land is separately valued, the building cannot again be separately assessed and compensation awarded except the value of debris. However, since State has not come in appeal, we need not go into the legality of the award of the Additional District Judge and of the High Court in that behalf. It would, therefore, be unnecessary to go into that question and we confirm of the compensation in respect of building at Rs. 8, 33, 000 and oddIt is seen that the appellants have relied upon a solitary sale deed dated 1-1-1985 with reference to an extent of Rs. 434 per sq. yd. which worked out @ Rs. 423 per sq. yd. The appellants, on the basis of the report given by the valuation officer who was not examined, claimed @ Rs. 500 per sq. yd. They have also relied upon the paper-cutting in respect of the prevailing prices notified in the newspapers. It is settled law that either the vendor or vendee of a sale deed should be examined in proof of the circumstances in which the sale deed came to be executed and the consideration passed thereunder and in respect of the value etc. The said sale deed is a freehold small piece of land as compared to encumbered leasehold land of 4 acres and odd. The vendor of the sale deed by name Jai Prakash Singh was not examined. Therefore, the sale deed cannot be relied upon as proof of valuation prevailing in the area. The High Court has relied upon that document and granted the compensation @ Rs. 423 per sq. yd. Since the State had not come up in appeal, nor filed cross-objections, we need not go into the correctness of the award of compensation on that rate. The paper-cutting as to the publication of the prices in the local newspapers is not evidence and the reference court, therefore, committed clear error in relying upon those transactions and in proof of document of the sale deed executed by Jai Prakash Singh. If those documents are excluded, there is no other evidence to further enhance the compensation. The High Court granted the maximum compensation as reflected in unproved solitary sale deed of small extent of land. Accordingly, we are constrained to uphold the valuation of the land @ Rs. 423 per sq. ydIt is not in dispute that the lands are situated in the urban agglomeration and 1500 sq.m. is the urban vacant land ceiling limit in Allahabad to which the holder is entitled under the Ceiling Act. It appears that the appellants have filed three writ petitions in the High Court which are pending disposal on the question of surplus lands. It is, therefore, unnecessary for us to go into the question of the actual extent of the surplus landThis controversy was considered in H.E.H., Nizam case, after surveying the relevant provisions of the Ceiling Act. It is not necessary to traverse the ground once over. It was held that it is not necessary for the Government to determine the compensation under Section 23(1) of the Act in respect of the excess land found under the Ceiling Act since Ceiling Act is a special Act, notwithstanding any contrary law. In that case, it was noticed that the Government have exempted the acquired land from the purview of the Ceiling Act, the determination of the compensation in respect of that land by civil court was upheld with modification. Far from helping the appellants, the ratio therein is against the appellants. This question was also considered in another judgment of this Court in State of Gujarat v. Parshottamdas Ramdas Patel. It was held therein that the provisions of the Ceiling Act have overriding effect on all other lands. In Surendra Kumar case, the purchase of vacant land within ceiling limit pending determination by competent authority came up for consideration. Therein this Court had pointed out the procedure to be adopted in dealing with the situation. The Bombay case, with due respect, was not correctly decided. The principle of withdrawing notification under Section 48(1) of the Act need not be followed for the reason that compensation for the land within ceiling limit be determined under Section 23(1) and excess land is covered by Section 11(6) of the Ceiling Act. Until ceiling area and excess land are determined, it would be difficult to postulate as to what extent of excess vacant land would be available to pay compensation either under Section 23(1) of the Act or Section 11(6) of the Ceiling Act. The excess urban land covered under the Ceiling Act is not required to be denotified as it statutorily stands vested in the Government and the Government cannot be compelled to acquire the excess urban vacant land covered under the provisions of the Ceiling Act, and compensation paid under the provisions contained in the Land Acquisition ActIt is seen that the Government has given instructions to the respective authorities under Section 35 of the Ceiling Act that where the authorities were not able to dispose of the matter under the Ceiling Act and land is required for public purpose, it would be necessary to drop the proceedings under the Ceiling Act and to proceed under the Land Acquisition Act. These are only administrative instructions. They do not have any statutory effect on the operation of law. In case of yearning gaps, they may guide the officers. In view of the law laid down by this Court, the instructions do not have any overriding effect on the operation of the Ceiling Act and the law declared by this Court under Article 141. Therefore, it is not necessary for the State to proceed with the determination of the compensation under Section 23(1) of the Act to the extent of the excess land found under the Ceiling Act. Compensation shall be paid only as per Section 11(6) of the Ceiling Act14. A reading of this sub-section would indicate that without prejudice to the provisions in sub-section (1), the Land Reforms Commissioner where he considers the amount of compensation allowed by the award under Section 11 to be excessive, may require the Collector that the matter may be referred to the court for determination of the amount of compensation. It is settled law that the award of the Collector is an offer and it binds the Government without objections thereto. The State Legislature felt that where the Collector under Section 11 made excess award of compensation for the land which was not capable of fetching that value, the Land Reforms Commissioner has been empowered to seek a reference to the court for determination of the compensation. The limited right given to the State is only in respect of excess compensation awarded by the Collector. Therefore, in respect of the apportionment of the compensation covered under the Ceiling Act, there is no need for reference under Section 18(3). Moreover, it could be seen that on a reference made under Section 18(1) to the court, as required under Section 20(c) of the Act, the court is enjoined to give notice to the Collector when the objection relates to the area of the land or the amount of compensation. Section 21 restricts the scope of the proceedings envisaging that "the Court shall restrict the scope" of consideration of "interests of the persons affected by the objection". Thus, it could be seen that the court is enjoined to go into the acquisition of the land of the persons entitled to the compensation. On a reference made, the compensation would be restricted to the interest in the land held by the claimant and the court should enquire as to the extent to which the claimant will be entitled to get compensation under Section 23(1) of the Act towards his interest in the acquired land. The interest consists of right and title to the compensation. Admittedly, the appellants had lease of Government land for 50 years on 1-10-1892 obviously under Crown Grants Act with a right to a renewal for further period of 50 years. Admittedly, further renewal was granted on 30-9-1942 for a further period of 50 years which stood expired on 30-9-1992. It would, therefore, be clear that the term of the lease as granted by the Government was up to 30-9-1992.It is then contended by Shri Satish Chandra that it was a licence since the appellants were permitted to construct permanent building under the lease and, therefore, it is in perpetuity by operation of Section 60 of the Easement Act.We find no force in the contention. The lease itself expressly mentions demising the vacant land to the appellants with exclusive possession but subject to construction of the building within the specified period and be in peaceful exclusive possession and enjoyment thereof subject to paying the lease amount to the Government under the Act. Therefore, it cannot be treated to be a licence but a leaseWe are not concerned with regard to the legality of the mandamus or directions issued in the above case. Suffice it to state that since the State had acquired the property before the expiry of the first renewal, we are constrained to go into the language used in the first lease. It expressly mentions that lease initially was granted for a period of 50 years and a right of another renewal for another 50 years, i.e., up to 30-9-1992. Before its expiry, the Government have already acquired the lands for public purpose and taken possession. The question of further renewal would not arise in this case. Under these circumstances, residuary period of lease is hardly 7 yearsIn Inder Parshad case, land was sought to be acquired for public purpose but the Land Acquisition Officer was unable to decide the proportion in which the leaseholders and the Union of India are entitled to the compensation. On reference under Section 30, the reference court had determined the compensation at a particular rate ultimately the High Court determined the proportion at 75% and 25%. Since the Union of India had not filed appeal, this Court upheld the proportion to the leaseholders and the Government of India. It was a perpetual lease. In that backdrop, this Court had upheld the view of the High Court granting apportionment in the ratio of 75 : 25 to the lessee and the Government. In Piedade Fernandes case [(1994) 3 Scale 860], the covenant expressly gave power to the Government to get the land for a public purpose without payment of the compensation. That was not covered under the Ceiling Act. Instead of invoking the clause thereunder, proceedings under the Land Acquisition Act were initiated. It was, therefore, held that the State is enjoined to pay full compensation for the land acquired. The ratio of either case does not help the appellants in this case. As seen, the appellants have got hardly 7 years leasehold right in the land and thereafter the lands would stand revested to the State. Thereafter, the State would be entitled to resume the land after ejectment of the appellants. Under those circumstances, they are not entitled to the full compensation. The High Court directed that compensation should be apportioned for the extent of land within the limit in the ratio of 50:50 to the State and the appellants. It is also to be seen that the State has not questioned at least the apportionment granted by the High Court. Considered from this perspective, we hold that it is not a fit case to reserve the judgment

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: of the compensation. The limited right given to the State is only in respect of excess compensation awarded by the Collector. Therefore, in respect of the apportionment of the compensation covered under the Ceiling Act, there is no need for reference under Section 18(3). Moreover, it could be seen that on a reference made under Section 18(1) to the court, as required under Section 20(c) of the Act, the court is enjoined to give notice to the Collector when the objection relates to the area of the land or the amount of compensation. Section 21 restricts the scope of the proceedings envisaging that "the Court shall restrict the scope" of consideration of "interests of the persons affected by the objection". Thus, it could be seen that the court is enjoined to go into the acquisition of the land of the persons entitled to the compensation. On a reference made, the compensation would be restricted to the interest in the land held by the claimant and the court should enquire as to the extent to which the claimant will be entitled to get compensation under Section 23(1) of the Act towards his interest in the acquired land. The interest consists of right and title to the compensation. Admittedly, the appellants had lease of Government land for 50 years on 1-10-1892 obviously under Crown Grants Act with a right to a renewal for further period of 50 years. Admittedly, further renewal was granted on 30-9-1942 for a further period of 50 years which stood expired on 30-9-1992. It would, therefore, be clear that the term of the lease as granted by the Government was up to 30-9-1992. It is then contended by Shri Satish Chandra that it was a licence since the appellants were permitted to construct permanent building under the lease and, therefore, it is in perpetuity by operation of Section 60 of the Easement Act. We find no force in the contention. The lease itself expressly mentions demising the vacant land to the appellants with exclusive possession but subject to construction of the building within the specified period and be in peaceful exclusive possession and enjoyment thereof subject to paying the lease amount to the Government under the Act. Therefore, it cannot be treated to be a licence but a lease. 15. Lease having been given for a specified period up to 30-9-1992, the question is whether the appellants are entitled to full compensation ? In this behalf, the contention of Shri Satish Chandra is that since the first renewal contained the same covenant as contained in the first lease, the appellants are entitled to further renewal of lease in property. In support thereof, he placed reliance on the judgment of the Division Bench of the Allahabad High Court as confirmed by this Court in the special leave petition, namely, Purshottam Dass Tandon v. State of U.P. 1987 AIR(All) 56 : 1987 (13) All(LR) 92 It seems that Tandons are having large extent of leasehold lands from the Government and one such leasehold land is under acquisition. We are not concerned with regard to the legality of the mandamus or directions issued in the above case. Suffice it to state that since the State had acquired the property before the expiry of the first renewal, we are constrained to go into the language used in the first lease. It expressly mentions that lease initially was granted for a period of 50 years and a right of another renewal for another 50 years, i.e., up to 30-9-1992. Before its expiry, the Government have already acquired the lands for public purpose and taken possession. The question of further renewal would not arise in this case. Under these circumstances, residuary period of lease is hardly 7 years. 16. The question, therefore, is whether the appellants are entitled to the entire compensation in respect of the land within the ceiling limit under the Ceiling Act. In support thereof, Shri Satish Chandra placed reliance on two judgments of this Court in Inder Parshad v. Union of India and Piedade Fernandes v. Union of India [(1994) 3 Scale 860]. In Inder Parshad case, land was sought to be acquired for public purpose but the Land Acquisition Officer was unable to decide the proportion in which the leaseholders and the Union of India are entitled to the compensation. On reference under Section 30, the reference court had determined the compensation at a particular rate ultimately the High Court determined the proportion at 75% and 25%. Since the Union of India had not filed appeal, this Court upheld the proportion to the leaseholders and the Government of India. It was a perpetual lease. In that backdrop, this Court had upheld the view of the High Court granting apportionment in the ratio of 75 : 25 to the lessee and the Government. In Piedade Fernandes case [(1994) 3 Scale 860], the covenant expressly gave power to the Government to get the land for a public purpose without payment of the compensation. That was not covered under the Ceiling Act. Instead of invoking the clause thereunder, proceedings under the Land Acquisition Act were initiated. It was, therefore, held that the State is enjoined to pay full compensation for the land acquired. The ratio of either case does not help the appellants in this case. As seen, the appellants have got hardly 7 years leasehold right in the land and thereafter the lands would stand revested to the State. Thereafter, the State would be entitled to resume the land after ejectment of the appellants. Under those circumstances, they are not entitled to the full compensation. The High Court directed that compensation should be apportioned for the extent of land within the limit in the ratio of 50:50 to the State and the appellants. It is also to be seen that the State has not questioned at least the apportionment granted by the High Court. Considered from this perspective, we hold that it is not a fit case to reserve the judgment. ### Response: 0 ### Explanation: have any overriding effect on the operation of the Ceiling Act and the law declared by this Court under Article 141. Therefore, it is not necessary for the State to proceed with the determination of the compensation under Section 23(1) of the Act to the extent of the excess land found under the Ceiling Act. Compensation shall be paid only as per Section 11(6) of the Ceiling Act14. A reading of this sub-section would indicate that without prejudice to the provisions in sub-section (1), the Land Reforms Commissioner where he considers the amount of compensation allowed by the award under Section 11 to be excessive, may require the Collector that the matter may be referred to the court for determination of the amount of compensation. It is settled law that the award of the Collector is an offer and it binds the Government without objections thereto. The State Legislature felt that where the Collector under Section 11 made excess award of compensation for the land which was not capable of fetching that value, the Land Reforms Commissioner has been empowered to seek a reference to the court for determination of the compensation. The limited right given to the State is only in respect of excess compensation awarded by the Collector. Therefore, in respect of the apportionment of the compensation covered under the Ceiling Act, there is no need for reference under Section 18(3). Moreover, it could be seen that on a reference made under Section 18(1) to the court, as required under Section 20(c) of the Act, the court is enjoined to give notice to the Collector when the objection relates to the area of the land or the amount of compensation. Section 21 restricts the scope of the proceedings envisaging that "the Court shall restrict the scope" of consideration of "interests of the persons affected by the objection". Thus, it could be seen that the court is enjoined to go into the acquisition of the land of the persons entitled to the compensation. On a reference made, the compensation would be restricted to the interest in the land held by the claimant and the court should enquire as to the extent to which the claimant will be entitled to get compensation under Section 23(1) of the Act towards his interest in the acquired land. The interest consists of right and title to the compensation. Admittedly, the appellants had lease of Government land for 50 years on 1-10-1892 obviously under Crown Grants Act with a right to a renewal for further period of 50 years. Admittedly, further renewal was granted on 30-9-1942 for a further period of 50 years which stood expired on 30-9-1992. It would, therefore, be clear that the term of the lease as granted by the Government was up to 30-9-1992.It is then contended by Shri Satish Chandra that it was a licence since the appellants were permitted to construct permanent building under the lease and, therefore, it is in perpetuity by operation of Section 60 of the Easement Act.We find no force in the contention. The lease itself expressly mentions demising the vacant land to the appellants with exclusive possession but subject to construction of the building within the specified period and be in peaceful exclusive possession and enjoyment thereof subject to paying the lease amount to the Government under the Act. Therefore, it cannot be treated to be a licence but a leaseWe are not concerned with regard to the legality of the mandamus or directions issued in the above case. Suffice it to state that since the State had acquired the property before the expiry of the first renewal, we are constrained to go into the language used in the first lease. It expressly mentions that lease initially was granted for a period of 50 years and a right of another renewal for another 50 years, i.e., up to 30-9-1992. Before its expiry, the Government have already acquired the lands for public purpose and taken possession. The question of further renewal would not arise in this case. Under these circumstances, residuary period of lease is hardly 7 yearsIn Inder Parshad case, land was sought to be acquired for public purpose but the Land Acquisition Officer was unable to decide the proportion in which the leaseholders and the Union of India are entitled to the compensation. On reference under Section 30, the reference court had determined the compensation at a particular rate ultimately the High Court determined the proportion at 75% and 25%. Since the Union of India had not filed appeal, this Court upheld the proportion to the leaseholders and the Government of India. It was a perpetual lease. In that backdrop, this Court had upheld the view of the High Court granting apportionment in the ratio of 75 : 25 to the lessee and the Government. In Piedade Fernandes case [(1994) 3 Scale 860], the covenant expressly gave power to the Government to get the land for a public purpose without payment of the compensation. That was not covered under the Ceiling Act. Instead of invoking the clause thereunder, proceedings under the Land Acquisition Act were initiated. It was, therefore, held that the State is enjoined to pay full compensation for the land acquired. The ratio of either case does not help the appellants in this case. As seen, the appellants have got hardly 7 years leasehold right in the land and thereafter the lands would stand revested to the State. Thereafter, the State would be entitled to resume the land after ejectment of the appellants. Under those circumstances, they are not entitled to the full compensation. The High Court directed that compensation should be apportioned for the extent of land within the limit in the ratio of 50:50 to the State and the appellants. It is also to be seen that the State has not questioned at least the apportionment granted by the High Court. Considered from this perspective, we hold that it is not a fit case to reserve the judgment

PUNE METROPOLITAN REGIONAL DEVELOPMENT AUTHORITY (PMRDA) Vs. PRAKASH HARKACHAND PARAKH & ORS

used only by LMVs, two-wheelers and auto-rickshaws. To ensure this, a height barrier may be installed by the petitioner. The costs of the gates/barriers will be borne by the petitioner/societies. (j) There will be no public parking on this road and all parking will be for residents only. (k) This order will operate as an interim arrangement during the pendency of this writ petition. 4. The facts in brief relevant for the purpose manifest that the appellant is the competent authority constituted under Section 18 of the Maharashtra Regional and Town and Country Planning Act, 1966 by the Urban Development Department of Government of Maharashtra. The 1st respondent who owns and possess the subject land in question bearing Survey No. 65A, Hissas admeasuring 37600 sq. meters situated at Village Majri bk, tal Haveli, District Pune decided to develop the residential project. The lay out plan was submitted by the 1st respondent of the subject land comprised of 12 meters wide pathway road, on the right side of the lay out, from first end to the other end of the project, along with an application under Section 44 of the Maharashtra Land Revenue Code, 1966 to the 2nd respondent and permission was granted for non-agricultural use on terms and conditions of the subject land by order dated 25th September, 2012. The condition No.4 relevant for the purpose is referred hereunder as:- 4). The maintenance of the open Space and Roads in the Layout should be done by the applicant, otherwise, it should be handed over to the appropriate authority for maintenance. These places and roads should be kept open to all public consumption. Also, the roads should be kept open for use by the neighboring landowners. 5. In furtherance thereof, 1st respondent submitted an application for sanction of the revised lay out and building plans of the subject property to the 2nd respondent, which was approved on the terms and conditions vide Order dated 29th December, 2014/24th February, 2015. The condition No. 4 of Order dated 25th September, 2012 and No.6 of Order dated 24th February, 2015 are almost parametria and relevant for the purpose in reference to grant of the use of 12 meters road to be made accessible to the public is referred to hereunder:- 6) The applicant shall maintain the roads and open spaces of the project or else shall hand it over to the competent authority for its maintenance. These open places and the roads shall be open for the use of all the public. Similar roads shall be kept open for the use of the neighbouring /adjacent land owners. 6. It reveals from the record that Shewalewadi Grampanchayat (respondent no. 3) made a representation to the appellant, and raised certain objections. 7. After issuance of notice to the 1st respondent and taking note of the material on record, the appellant directed the 1st respondent to open the access of 12 meters road to the public at large vide its Order dated 4th September, 2018 which came to be challenged by the 1st respondent in Writ Petition No. 11775/2018 and was disposed of with a direction to grant a fair opportunity of hearing to the 1st respondent vide Order dated 16th October, 2018. 8. In pursuance thereof, the matter was examined afresh and after affording an opportunity of hearing, Order came to be passed on 18th January, 2019 with a direction to the 1st respondent that the subject road and open space shall be kept open for the use of general public and also to be kept open for the use of the adjoining(neighbouring) land owners. The relevant part of the order is as under:- Considering the above facts, and the approved plans, it is seen that the FSI of an area admeasuring 3838.18 sq.m. under the 12.0 wide internal road has been utilized in the building plans. In the Non Agricultural order No. PMH/NA/ SR/520/2012, dated 25/09/2012 the Collector, Pune has put condition No.4 as under : The layout roads and open space shall be taken care of (maintenance) by the applicant, else they shall be handed over to the appropriate authority for maintenance. These road and open space shall be kept open for the use of general public. Also the roads shall be kept open for the use of the adjoining (neighbouring) land owners. It is mandatory for the developer to comply with this condition. In the public interest and as per sanctioned building permission, the north south 12.0 mtr. wide road shall be opened for the general public by the developer immediately. Else action shall be taken by the Authority to open the road. 9. The same came to be challenged by the 1st respondent in Writ Petition No. 8242 of 2019. The Division Bench of the High Court, pending writ petition, taking note of the submissions by an interim order practically modified and made the ad-hoc arrangement by order dated 4th October, 2019 on its own terms, imposing certain time limits when the subject road would be made available for public use, and when it would be used strictly as an internal road for the occupants of the building. We were informed that the public was using the road throughout till the impugned order was passed by the High Court. 10. The learned counsel for the parties have made their submissions on merits of the writ petition, and also on the legality of the order dated 18th January, 2019. However, we are not dilating on the issue at this stage, as the writ petition is pending consideration before the High Court. 11. The nature of modification which has been made by the High Court vide order impugned dated 4th October, 2019 in the form of an ad-hoc interim arrangement, in our view, is exceeding its jurisdiction, and not within the realm of power of judicial review to be exercised under Article 226 of the Constitution. It is well settled that by an interim order, even the final relief ordinarily should not be granted.

1[ds]10. The learned counsel for the parties have made their submissions on merits of the writ petition, and also on the legality of the order dated 18th January, 2019. However, we are not dilating on the issue at this stage, as the writ petition is pending consideration before the High Court.11. The nature of modification which has been made by the High Court vide order impugned dated 4th October, 2019 in the form of an ad-hoc interim arrangement, in our view, is exceeding its jurisdiction, and not within the realm of power of judicial review to be exercised under Article 226 of the Constitution. It is well settled that by an interim order, even the final relief ordinarily should not be granted.

### Instruction: Estimate the outcome of the case (positive (1) or negative (0) for the appellant) and then give a reasoned explanation by examining important sentences within the case documentation. ### Input: used only by LMVs, two-wheelers and auto-rickshaws. To ensure this, a height barrier may be installed by the petitioner. The costs of the gates/barriers will be borne by the petitioner/societies. (j) There will be no public parking on this road and all parking will be for residents only. (k) This order will operate as an interim arrangement during the pendency of this writ petition. 4. The facts in brief relevant for the purpose manifest that the appellant is the competent authority constituted under Section 18 of the Maharashtra Regional and Town and Country Planning Act, 1966 by the Urban Development Department of Government of Maharashtra. The 1st respondent who owns and possess the subject land in question bearing Survey No. 65A, Hissas admeasuring 37600 sq. meters situated at Village Majri bk, tal Haveli, District Pune decided to develop the residential project. The lay out plan was submitted by the 1st respondent of the subject land comprised of 12 meters wide pathway road, on the right side of the lay out, from first end to the other end of the project, along with an application under Section 44 of the Maharashtra Land Revenue Code, 1966 to the 2nd respondent and permission was granted for non-agricultural use on terms and conditions of the subject land by order dated 25th September, 2012. The condition No.4 relevant for the purpose is referred hereunder as:- 4). The maintenance of the open Space and Roads in the Layout should be done by the applicant, otherwise, it should be handed over to the appropriate authority for maintenance. These places and roads should be kept open to all public consumption. Also, the roads should be kept open for use by the neighboring landowners. 5. In furtherance thereof, 1st respondent submitted an application for sanction of the revised lay out and building plans of the subject property to the 2nd respondent, which was approved on the terms and conditions vide Order dated 29th December, 2014/24th February, 2015. The condition No. 4 of Order dated 25th September, 2012 and No.6 of Order dated 24th February, 2015 are almost parametria and relevant for the purpose in reference to grant of the use of 12 meters road to be made accessible to the public is referred to hereunder:- 6) The applicant shall maintain the roads and open spaces of the project or else shall hand it over to the competent authority for its maintenance. These open places and the roads shall be open for the use of all the public. Similar roads shall be kept open for the use of the neighbouring /adjacent land owners. 6. It reveals from the record that Shewalewadi Grampanchayat (respondent no. 3) made a representation to the appellant, and raised certain objections. 7. After issuance of notice to the 1st respondent and taking note of the material on record, the appellant directed the 1st respondent to open the access of 12 meters road to the public at large vide its Order dated 4th September, 2018 which came to be challenged by the 1st respondent in Writ Petition No. 11775/2018 and was disposed of with a direction to grant a fair opportunity of hearing to the 1st respondent vide Order dated 16th October, 2018. 8. In pursuance thereof, the matter was examined afresh and after affording an opportunity of hearing, Order came to be passed on 18th January, 2019 with a direction to the 1st respondent that the subject road and open space shall be kept open for the use of general public and also to be kept open for the use of the adjoining(neighbouring) land owners. The relevant part of the order is as under:- Considering the above facts, and the approved plans, it is seen that the FSI of an area admeasuring 3838.18 sq.m. under the 12.0 wide internal road has been utilized in the building plans. In the Non Agricultural order No. PMH/NA/ SR/520/2012, dated 25/09/2012 the Collector, Pune has put condition No.4 as under : The layout roads and open space shall be taken care of (maintenance) by the applicant, else they shall be handed over to the appropriate authority for maintenance. These road and open space shall be kept open for the use of general public. Also the roads shall be kept open for the use of the adjoining (neighbouring) land owners. It is mandatory for the developer to comply with this condition. In the public interest and as per sanctioned building permission, the north south 12.0 mtr. wide road shall be opened for the general public by the developer immediately. Else action shall be taken by the Authority to open the road. 9. The same came to be challenged by the 1st respondent in Writ Petition No. 8242 of 2019. The Division Bench of the High Court, pending writ petition, taking note of the submissions by an interim order practically modified and made the ad-hoc arrangement by order dated 4th October, 2019 on its own terms, imposing certain time limits when the subject road would be made available for public use, and when it would be used strictly as an internal road for the occupants of the building. We were informed that the public was using the road throughout till the impugned order was passed by the High Court. 10. The learned counsel for the parties have made their submissions on merits of the writ petition, and also on the legality of the order dated 18th January, 2019. However, we are not dilating on the issue at this stage, as the writ petition is pending consideration before the High Court. 11. The nature of modification which has been made by the High Court vide order impugned dated 4th October, 2019 in the form of an ad-hoc interim arrangement, in our view, is exceeding its jurisdiction, and not within the realm of power of judicial review to be exercised under Article 226 of the Constitution. It is well settled that by an interim order, even the final relief ordinarily should not be granted. ### Response: 1 ### Explanation: 10. The learned counsel for the parties have made their submissions on merits of the writ petition, and also on the legality of the order dated 18th January, 2019. However, we are not dilating on the issue at this stage, as the writ petition is pending consideration before the High Court.11. The nature of modification which has been made by the High Court vide order impugned dated 4th October, 2019 in the form of an ad-hoc interim arrangement, in our view, is exceeding its jurisdiction, and not within the realm of power of judicial review to be exercised under Article 226 of the Constitution. It is well settled that by an interim order, even the final relief ordinarily should not be granted.

Apm Terminals B.V., A Company Incorporated Under Dutch Laws, Having Their Registered Office At The Hague Vs. Union of India, Through The Ministry of Shipping Having Its Office At Transport Bhuvan & Another

agreement came to be entered into between the parties pursuant to the guidelines issued in the year 1996 by Ministry of Shipping to be followed by the Ports for Private Sector Participation in Major Ports so as to ensure that private investment does not result in creation of private monopoly. Thereafter the Ministry of Shipping has issued guidelines under letter No. PD12013/ 2/2005JNPT dated 26.9.2007 wherein it has been mentioned that a formal policy is to be finalized and notified and in the meantime in view of subsequent change in the policy carried out by the Government, the blanket restriction was modified and accordingly as per 2007 policy even existing contractors were permitted to bid for setting up of a container terminal at the same port albeit for the next but one already awarded to the successful contracting party and, therefore, the petitioner was also to be extended the benefit of the 2007 policy. It has been specifically pointed out that the Union of India had succeeded in debarring the petitioner from participating in the bid on account of 1996 policy but permitted NSICT to bid for the third container terminal in keeping with 2007 policy as they were also to bid for the fourth container terminal and, therefore, the petitioner has been denied illegally, arbitrarily and in wholly discriminatory manner the right to bid for the tender for the fourth container terminal. 35. It is further contended that even otherwise it being an adhoc policy, the respondents ought to have given a liberal construction to clause 8.31 as it was done in the case of NSICT. 36. It is submitted that the stand taken by the respondents by enforcement of clause 8.31 goes contrary to the well accepted principle of reasonableness. 37. In so far as the case of the petitioner that due to change in the policy which is still an adhoc decision, causes unreasonable restriction, has to be put to test by considering the policy which was in vogue on the date when the parties entered into the contract and the said restriction was imposed and on the relevant date i.e. 10.2.2004 when GIT which was a joint venture company of the petitioner and Container Corporation of India Ltd., and at the relevant time the 1996 police was in vogue and in keeping with the said policy, the respondent no. 2 have inserted clause 8.31 into the license agreement dated 10.8.2004 between GTI and Respondent No. 2 and, therefore, the petitioner cannot raise a plea that it operates unfairly in the circumstances on the unveil of new policy as issued in the circular of 2007 for the reason that the petitioner as well as others who participated in the tender have entered into the contract being fully aware of the Respondent No. 2 restraining the successful party to be awarded the contract to bid for similar contract for a period of 30 years in future and the said restriction was evenly applicable to all who participated in the tender process. Now having entered into a contract, the petitioner cannot be permitted to invoke the test of reasonableness by pleading doctrine of proportionality on having lost their right to participate in the subject contract which is much more substantial than what they received by entering into. It was for the petitioner to weigh the pros and cons before entering into the contract. 38. A subsequent change in the public policy will not exonerate the petitioner from the covenant, that the same will continue to operate during the continuance of the contract and there is no provision in the contract that in such a contingency the covenant imposing restraint on the right of the petitioner to bid for future contract will not be applicable nor the circular of 2007 provides for discharging the covenant of restraint in the contract entered into between the parties as per the policy of 1996. 39. It is a well accepted principle of restaint of trade, if reasonably necessary, shall prevail unless contrary to public policy. It is not the matter of debate that the policy that was in vogue at the time was not in larger public interst and, therefore, it cannot be said, as tried to be contended, that clause 8.31 of the agreement dated 10.8.2004 with JNPT for the development of an existing bulk Terminal at JNPT into a Container Terminal on BOT basis was not part of the contract and was inserted under duress. A person after claiming a contract taking into accounts its term, cannot later be allowed to assail validity of its terms or the rules constituting the terms of the contract by invoking the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India. It is now well settled by catena of decisions Orissa State Financial Corporation vs. Narsingh Ch. Nayak & Ors. (2003) 10 SCC 261 that Court cannot rewrite or replace an existing contract by passing directions under its power of writ jurisdiction. The Additional Solicitor General appearing for the respondents has pointed out that if at all the petitioners find that the terms of the contract require any modification the same cannot be sought in this petition as the agreement dated 10.8.2004 itself provides for in house remedy for settlement of disputes and that the appropriate forum for modifying the terms of the contract would be either to go to Civil Court or invoke the arbitration clause in the agreement. [(i) State of Orissa and others. vs. Narain Prasad and others (1996) 5 SCC 740 and (ii) Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another, (2008) 8 SCC 172. 40. We, therefore, do find that the decision of the respondents to disqualify the petitioner from bidding for the tender by referring to clause 8.31 of the license agreement dated 10.8.2004 entered into between M/s. Gateway Terminal India Private Limited and the respondent no. 2 is just and proper. The same does not call for any interference.

0[ds]37. In so far as the case of the petitioner that due to change in the policy which is still an adhoc decision, causes unreasonable restriction, has to be put to test by considering the policy which was in vogue on the date when the parties entered into the contract and the said restriction was imposed and on the relevant date i.e. 10.2.2004 when GIT which was a joint venture company of the petitioner and Container Corporation of India Ltd., and at the relevant time the 1996 police was in vogue and in keeping with the said policy, the respondent no. 2 have inserted clause 8.31 into the license agreement dated 10.8.2004 between GTI and Respondent No. 2 and, therefore, the petitioner cannot raise a plea that it operates unfairly in the circumstances on the unveil of new policy as issued in the circular of 2007 for the reason that the petitioner as well as others who participated in the tender have entered into the contract being fully aware of the Respondent No. 2 restraining the successful party to be awarded the contract to bid for similar contract for a period of 30 years in future and the said restriction was evenly applicable to all who participated in the tender process. Now having entered into a contract, the petitioner cannot be permitted to invoke the test of reasonableness by pleading doctrine of proportionality on having lost their right to participate in the subject contract which is much more substantial than what they received by entering into. It was for the petitioner to weigh the pros and cons before entering into the contract.A subsequent change in the public policy will not exonerate the petitioner from the covenant, that the same will continue to operate during the continuance of the contract and there is no provision in the contract that in such a contingency the covenant imposing restraint on the right of the petitioner to bid for future contract will not be applicable nor the circular of 2007 provides for discharging the covenant of restraint in the contract entered into between the parties as per the policy of 1996.It is a well accepted principle of restaint of trade, if reasonably necessary, shall prevail unless contrary to public policy. It is not the matter of debate that the policy that was in vogue at the time was not in larger public interst and, therefore, it cannot be said, as tried to be contended, that clause 8.31 of the agreement dated 10.8.2004 with JNPT for the development of an existing bulk Terminal at JNPT into a Container Terminal on BOT basis was not part of the contract and was inserted under duress. A person after claiming a contract taking into accounts its term, cannot later be allowed to assail validity of its terms or the rules constituting the terms of the contract by invoking the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India. It is now well settled by catena of decisions Orissa State Financial Corporation vs. Narsingh Ch. NayakOrs. (2003) 10 SCC 261 that Court cannot rewrite or replace an existing contract by passing directions under its power of writ jurisdiction. The Additional Solicitor General appearing for the respondents has pointed out that if at all the petitioners find that the terms of the contract require any modification the same cannot be sought in this petition as the agreement dated 10.8.2004 itself provides for in house remedy for settlement of disputes and that the appropriate forum for modifying the terms of the contract would be either to go to Civil Court or invoke the arbitration clause in the agreement. [(i) State of Orissa and others. vs. Narain Prasad and others (1996) 5 SCC 740 and (ii) Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another, (2008) 8 SCC 172. 40. We, therefore, do find that the decision of the respondents to disqualify the petitioner from bidding for the tender by referring to clause 8.31 of the license agreement dated 10.8.2004 entered into between M/s. Gateway Terminal India Private Limited and the respondent no. 2 is just and proper. The same does not call for any interference

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: agreement came to be entered into between the parties pursuant to the guidelines issued in the year 1996 by Ministry of Shipping to be followed by the Ports for Private Sector Participation in Major Ports so as to ensure that private investment does not result in creation of private monopoly. Thereafter the Ministry of Shipping has issued guidelines under letter No. PD12013/ 2/2005JNPT dated 26.9.2007 wherein it has been mentioned that a formal policy is to be finalized and notified and in the meantime in view of subsequent change in the policy carried out by the Government, the blanket restriction was modified and accordingly as per 2007 policy even existing contractors were permitted to bid for setting up of a container terminal at the same port albeit for the next but one already awarded to the successful contracting party and, therefore, the petitioner was also to be extended the benefit of the 2007 policy. It has been specifically pointed out that the Union of India had succeeded in debarring the petitioner from participating in the bid on account of 1996 policy but permitted NSICT to bid for the third container terminal in keeping with 2007 policy as they were also to bid for the fourth container terminal and, therefore, the petitioner has been denied illegally, arbitrarily and in wholly discriminatory manner the right to bid for the tender for the fourth container terminal. 35. It is further contended that even otherwise it being an adhoc policy, the respondents ought to have given a liberal construction to clause 8.31 as it was done in the case of NSICT. 36. It is submitted that the stand taken by the respondents by enforcement of clause 8.31 goes contrary to the well accepted principle of reasonableness. 37. In so far as the case of the petitioner that due to change in the policy which is still an adhoc decision, causes unreasonable restriction, has to be put to test by considering the policy which was in vogue on the date when the parties entered into the contract and the said restriction was imposed and on the relevant date i.e. 10.2.2004 when GIT which was a joint venture company of the petitioner and Container Corporation of India Ltd., and at the relevant time the 1996 police was in vogue and in keeping with the said policy, the respondent no. 2 have inserted clause 8.31 into the license agreement dated 10.8.2004 between GTI and Respondent No. 2 and, therefore, the petitioner cannot raise a plea that it operates unfairly in the circumstances on the unveil of new policy as issued in the circular of 2007 for the reason that the petitioner as well as others who participated in the tender have entered into the contract being fully aware of the Respondent No. 2 restraining the successful party to be awarded the contract to bid for similar contract for a period of 30 years in future and the said restriction was evenly applicable to all who participated in the tender process. Now having entered into a contract, the petitioner cannot be permitted to invoke the test of reasonableness by pleading doctrine of proportionality on having lost their right to participate in the subject contract which is much more substantial than what they received by entering into. It was for the petitioner to weigh the pros and cons before entering into the contract. 38. A subsequent change in the public policy will not exonerate the petitioner from the covenant, that the same will continue to operate during the continuance of the contract and there is no provision in the contract that in such a contingency the covenant imposing restraint on the right of the petitioner to bid for future contract will not be applicable nor the circular of 2007 provides for discharging the covenant of restraint in the contract entered into between the parties as per the policy of 1996. 39. It is a well accepted principle of restaint of trade, if reasonably necessary, shall prevail unless contrary to public policy. It is not the matter of debate that the policy that was in vogue at the time was not in larger public interst and, therefore, it cannot be said, as tried to be contended, that clause 8.31 of the agreement dated 10.8.2004 with JNPT for the development of an existing bulk Terminal at JNPT into a Container Terminal on BOT basis was not part of the contract and was inserted under duress. A person after claiming a contract taking into accounts its term, cannot later be allowed to assail validity of its terms or the rules constituting the terms of the contract by invoking the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India. It is now well settled by catena of decisions Orissa State Financial Corporation vs. Narsingh Ch. Nayak & Ors. (2003) 10 SCC 261 that Court cannot rewrite or replace an existing contract by passing directions under its power of writ jurisdiction. The Additional Solicitor General appearing for the respondents has pointed out that if at all the petitioners find that the terms of the contract require any modification the same cannot be sought in this petition as the agreement dated 10.8.2004 itself provides for in house remedy for settlement of disputes and that the appropriate forum for modifying the terms of the contract would be either to go to Civil Court or invoke the arbitration clause in the agreement. [(i) State of Orissa and others. vs. Narain Prasad and others (1996) 5 SCC 740 and (ii) Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another, (2008) 8 SCC 172. 40. We, therefore, do find that the decision of the respondents to disqualify the petitioner from bidding for the tender by referring to clause 8.31 of the license agreement dated 10.8.2004 entered into between M/s. Gateway Terminal India Private Limited and the respondent no. 2 is just and proper. The same does not call for any interference. ### Response: 0 ### Explanation: 37. In so far as the case of the petitioner that due to change in the policy which is still an adhoc decision, causes unreasonable restriction, has to be put to test by considering the policy which was in vogue on the date when the parties entered into the contract and the said restriction was imposed and on the relevant date i.e. 10.2.2004 when GIT which was a joint venture company of the petitioner and Container Corporation of India Ltd., and at the relevant time the 1996 police was in vogue and in keeping with the said policy, the respondent no. 2 have inserted clause 8.31 into the license agreement dated 10.8.2004 between GTI and Respondent No. 2 and, therefore, the petitioner cannot raise a plea that it operates unfairly in the circumstances on the unveil of new policy as issued in the circular of 2007 for the reason that the petitioner as well as others who participated in the tender have entered into the contract being fully aware of the Respondent No. 2 restraining the successful party to be awarded the contract to bid for similar contract for a period of 30 years in future and the said restriction was evenly applicable to all who participated in the tender process. Now having entered into a contract, the petitioner cannot be permitted to invoke the test of reasonableness by pleading doctrine of proportionality on having lost their right to participate in the subject contract which is much more substantial than what they received by entering into. It was for the petitioner to weigh the pros and cons before entering into the contract.A subsequent change in the public policy will not exonerate the petitioner from the covenant, that the same will continue to operate during the continuance of the contract and there is no provision in the contract that in such a contingency the covenant imposing restraint on the right of the petitioner to bid for future contract will not be applicable nor the circular of 2007 provides for discharging the covenant of restraint in the contract entered into between the parties as per the policy of 1996.It is a well accepted principle of restaint of trade, if reasonably necessary, shall prevail unless contrary to public policy. It is not the matter of debate that the policy that was in vogue at the time was not in larger public interst and, therefore, it cannot be said, as tried to be contended, that clause 8.31 of the agreement dated 10.8.2004 with JNPT for the development of an existing bulk Terminal at JNPT into a Container Terminal on BOT basis was not part of the contract and was inserted under duress. A person after claiming a contract taking into accounts its term, cannot later be allowed to assail validity of its terms or the rules constituting the terms of the contract by invoking the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India. It is now well settled by catena of decisions Orissa State Financial Corporation vs. Narsingh Ch. NayakOrs. (2003) 10 SCC 261 that Court cannot rewrite or replace an existing contract by passing directions under its power of writ jurisdiction. The Additional Solicitor General appearing for the respondents has pointed out that if at all the petitioners find that the terms of the contract require any modification the same cannot be sought in this petition as the agreement dated 10.8.2004 itself provides for in house remedy for settlement of disputes and that the appropriate forum for modifying the terms of the contract would be either to go to Civil Court or invoke the arbitration clause in the agreement. [(i) State of Orissa and others. vs. Narain Prasad and others (1996) 5 SCC 740 and (ii) Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another, (2008) 8 SCC 172. 40. We, therefore, do find that the decision of the respondents to disqualify the petitioner from bidding for the tender by referring to clause 8.31 of the license agreement dated 10.8.2004 entered into between M/s. Gateway Terminal India Private Limited and the respondent no. 2 is just and proper. The same does not call for any interference

Ram Bharosey Agarwal Vs. Har Swarup Maheshwari

four issues, three of which related to the alleged misconduct in regard to the three matters mentioned above, while the fourth issue was meant to decide whether the appellant was guilty of professional misconduct. Instead of dealing with the three substantial issues one by one, the Disciplinary Committee examined them all together even though they raised different questions of fact. What was worse the Disciplinary Committee did not give reasons in support of its finding on any of the issues. All the same, it reached the conclusion that the appellant was guilty of professional misconduct, suspended him from practice for a period of two years, and awarded Rs. 100 as costs to the complainant.4. An appeal was taken by Ram Bharosey Agarwal to the Bar Council of India. The Council held by its order dated December 10, 1974 that he was not guilty of professional misconduct in respect of the first two matters, but that there was no reason for interfering with the finding of fact of the Bar Council (of Uttar Pradesh) in the third matter regarding the writing of the aforesaid letter dated August 14, 1967, to Jagdish Narain Agarwal, Advocate, for having the appeal dismissed in the High Court. The Bar Council therefore affirmed the finding on the third charge, but modified the order of the Disciplinary Committee of the Bar Council of Uttar Pradesh by directing the suspension of the appellant for a total period of three months and ordering him to pay Rs. 1000 by way of costs to the complainant.5. Mr. Sen appearing for the appellant has argued that the appellate order of the Bar Council of India dated December 10, 1974, should be set aside for three reasons.6. Firstly, he has pointed out that although a specimen of the hand-writing of the appellant was taken by the Disciplinary Committee of Uttar Pradesh by its order dated January 26, 1969, for the purpose of comparing it with the letter said to have been written by him on August 14, 1967 to Jagdish Narain Agarwal, Advocate, that letter was not sent to handwriting expert D. Alexander and he was thereby prevented from comparing the signature on the disputed letter dated August 14, 1967 which was alleged to be the principal evidence against the appellant and formed the basis of the allegation of misconduct against him. We have been taken through the relevant record, and it appears that there is justification for this argument of Mr. Sen.7. Secondly, it has been pointed out by Mr. Sen that while the hand-writing expert was required to compare the signature on the aforesaid letter dated August 14, 1967, with a letter said to have been written by the appellant to one Bhuley Ram Sharma, who was examined by the Disciplinary Committee in respect of the allegation against the appellant, the appellant was not given an opportunity to cross-examine Bhuley Ram Sharma at all, so that this defence was seriously prejudiced. We find from the proceedings dated January 6, 1974, that while the complainant and his witness Bhuley Ram Sharma were present on that date, the appellant was absent. The examination-in-chief of Bhuley Ram Sharma was however recorded, and the case was adjourned to February 3, 1974 with the direction that information of the adjourned date may be given to the appellant. The appellant appeared on February 3, 1974, but the cross-examination of Bhuley Ram Sharma was not allowed even though he was present. The case was then adjourned to March 24, 1974. Complainant Har Swarup Maheshwari was not present on that date, but the appellant was present. The Disciplinary Committee however closed the evidence of the complaint, and fixed May 5, 1974, for recording the defence evidence. In this way the appellant was denied the opportunity of cross-examining Bhuley Ram Sharma who was an important witness in the case. There is therefore justification for the argument of Mr. Sen that a serious illegality was committed by the Bar Council of Uttar Pradesh in denying the opportunity of cross-examination to the appellant.8. As is obvious, the illegalities mentioned above seriously prejudiced the appellants defence in the inquiry held by the Disciplinary Committee of the Bar Council of Uttar Pradesh. It is surprising that such serious illegalities should have been committed by the Disciplinary Committee, and it is difficult for us to overlook the contention of Mr. Sen that this was so because in the words of Mr. Sen the Bar Council was a "hot bed of politics". Be that as it may, there can be no doubt that the order under appeal cannot be sustained when it suffers from such serious defects.9. Thirdly, is has been argued by Mr. Sen that although Section 9 of the Advocates Act provided that the Bar Council shall constitute one or more disciplinary committees, each of which "shall consist of three persons", only two persons were present on July 21, 1974 when the appellants defence was closed and arguments were heard in the case. Mr. Sharma appearing on behalf of the respondent has not been able to deny that this was so. He has argued that, by virtue of Section 13 of the Act, no act done by the Bar Council or its committee could be called in question on the ground merely of the existence of any vacancy in, or any defect in the constitution of the Council or committees, as the case may be. We have gone through Section 13, but it is inapplicable to the present controversy as it cannot be said that there was any "vacancy" in the Disciplinary Committee. It is nobodys case that any of the three members of the committee ceased to be a member thereof at any time during the course of the proceedings before the committee. It is also nobodys case that there was any defect in the constitution of the committee or that it was permissible to function with two members only. There is therefore justification for the third argument of Mr. Sen also.

1[ds]We have gone through Section 13, but it is inapplicable to the present controversy as it cannot be said that there was any "vacancy" in the Disciplinary Committee. It is nobodys case that any of the three members of the committee ceased to be a member thereof at any time during the course of the proceedings before the committee. It is also nobodys case that there was any defect in the constitution of the committee or that it was permissible to function with two members only. There is therefore justification for the third argument of Mr. Sen also.

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: four issues, three of which related to the alleged misconduct in regard to the three matters mentioned above, while the fourth issue was meant to decide whether the appellant was guilty of professional misconduct. Instead of dealing with the three substantial issues one by one, the Disciplinary Committee examined them all together even though they raised different questions of fact. What was worse the Disciplinary Committee did not give reasons in support of its finding on any of the issues. All the same, it reached the conclusion that the appellant was guilty of professional misconduct, suspended him from practice for a period of two years, and awarded Rs. 100 as costs to the complainant.4. An appeal was taken by Ram Bharosey Agarwal to the Bar Council of India. The Council held by its order dated December 10, 1974 that he was not guilty of professional misconduct in respect of the first two matters, but that there was no reason for interfering with the finding of fact of the Bar Council (of Uttar Pradesh) in the third matter regarding the writing of the aforesaid letter dated August 14, 1967, to Jagdish Narain Agarwal, Advocate, for having the appeal dismissed in the High Court. The Bar Council therefore affirmed the finding on the third charge, but modified the order of the Disciplinary Committee of the Bar Council of Uttar Pradesh by directing the suspension of the appellant for a total period of three months and ordering him to pay Rs. 1000 by way of costs to the complainant.5. Mr. Sen appearing for the appellant has argued that the appellate order of the Bar Council of India dated December 10, 1974, should be set aside for three reasons.6. Firstly, he has pointed out that although a specimen of the hand-writing of the appellant was taken by the Disciplinary Committee of Uttar Pradesh by its order dated January 26, 1969, for the purpose of comparing it with the letter said to have been written by him on August 14, 1967 to Jagdish Narain Agarwal, Advocate, that letter was not sent to handwriting expert D. Alexander and he was thereby prevented from comparing the signature on the disputed letter dated August 14, 1967 which was alleged to be the principal evidence against the appellant and formed the basis of the allegation of misconduct against him. We have been taken through the relevant record, and it appears that there is justification for this argument of Mr. Sen.7. Secondly, it has been pointed out by Mr. Sen that while the hand-writing expert was required to compare the signature on the aforesaid letter dated August 14, 1967, with a letter said to have been written by the appellant to one Bhuley Ram Sharma, who was examined by the Disciplinary Committee in respect of the allegation against the appellant, the appellant was not given an opportunity to cross-examine Bhuley Ram Sharma at all, so that this defence was seriously prejudiced. We find from the proceedings dated January 6, 1974, that while the complainant and his witness Bhuley Ram Sharma were present on that date, the appellant was absent. The examination-in-chief of Bhuley Ram Sharma was however recorded, and the case was adjourned to February 3, 1974 with the direction that information of the adjourned date may be given to the appellant. The appellant appeared on February 3, 1974, but the cross-examination of Bhuley Ram Sharma was not allowed even though he was present. The case was then adjourned to March 24, 1974. Complainant Har Swarup Maheshwari was not present on that date, but the appellant was present. The Disciplinary Committee however closed the evidence of the complaint, and fixed May 5, 1974, for recording the defence evidence. In this way the appellant was denied the opportunity of cross-examining Bhuley Ram Sharma who was an important witness in the case. There is therefore justification for the argument of Mr. Sen that a serious illegality was committed by the Bar Council of Uttar Pradesh in denying the opportunity of cross-examination to the appellant.8. As is obvious, the illegalities mentioned above seriously prejudiced the appellants defence in the inquiry held by the Disciplinary Committee of the Bar Council of Uttar Pradesh. It is surprising that such serious illegalities should have been committed by the Disciplinary Committee, and it is difficult for us to overlook the contention of Mr. Sen that this was so because in the words of Mr. Sen the Bar Council was a "hot bed of politics". Be that as it may, there can be no doubt that the order under appeal cannot be sustained when it suffers from such serious defects.9. Thirdly, is has been argued by Mr. Sen that although Section 9 of the Advocates Act provided that the Bar Council shall constitute one or more disciplinary committees, each of which "shall consist of three persons", only two persons were present on July 21, 1974 when the appellants defence was closed and arguments were heard in the case. Mr. Sharma appearing on behalf of the respondent has not been able to deny that this was so. He has argued that, by virtue of Section 13 of the Act, no act done by the Bar Council or its committee could be called in question on the ground merely of the existence of any vacancy in, or any defect in the constitution of the Council or committees, as the case may be. We have gone through Section 13, but it is inapplicable to the present controversy as it cannot be said that there was any "vacancy" in the Disciplinary Committee. It is nobodys case that any of the three members of the committee ceased to be a member thereof at any time during the course of the proceedings before the committee. It is also nobodys case that there was any defect in the constitution of the committee or that it was permissible to function with two members only. There is therefore justification for the third argument of Mr. Sen also. ### Response: 1 ### Explanation: We have gone through Section 13, but it is inapplicable to the present controversy as it cannot be said that there was any "vacancy" in the Disciplinary Committee. It is nobodys case that any of the three members of the committee ceased to be a member thereof at any time during the course of the proceedings before the committee. It is also nobodys case that there was any defect in the constitution of the committee or that it was permissible to function with two members only. There is therefore justification for the third argument of Mr. Sen also.

State of Uttar Pradesh Vs. P.A. Madhu

the evidence of PW 5 that the brief case of the respondent was being handled by DW 1.We might state here that the High Court has applied two different standards to assess the evidence of the prosecution and that of the defence. While the High Court accepts the uncorro borated evidence of DW 1, who is as much interested in the dispute as the deceased, if not more, being Vice-President of the Union and also in possession of the brief case of the respondent, yet it disbelieves the evidence of PWs 5 and 7 mainly on the ground that they were highly interested. The relevant finding of the High Court on this point may be extracted thus: In the first place, it shows that Subrat Kumar Gui and M.R. Bhaumik were mainly responsible for the prosecution of the case, although the deceased had been in general supervision of all labour disputes of the company at all the places. In the second place, it also points out that these two witnesses were not happy with the appellant who had been representing the cause of the labourers before the Industrial Tribunal and that they were sore about his conduct. In these circumstances these two witnesses could not be said to be independent 9. Here, t he High Court completely lost sight of two important facts-(1) that PWs 5 and 7 were high officers of the Company and were not likely to depose falsely on a matter like this, and (2) that PW-6, who was the standing counsel of the Company and other labour cases for more than 3 decades, fully corroborates the evidence of PWs 5 and 7. We have examined the evidence of PWs S and 7 with very great care and caution but we are unable to find any discrepancy or defect in their evidence so as to lead any court to reject the same. On the other hand, on a consideration of their evidence. we are satisfied that are throughout consistent and congruous and that their evidence bears a ring of truth; We are indeed surprised how th e High Court could disbelieve the evidence of the eye-witnesses in the case of a cold-blooded murder committed in broad day light where the respondent was caught red-handed at the spot. The High Court also over looked the crying conduct of the respondent who went on firing one shot after the other so as to make sure that Sirgaonkar does not survive at any cost.Another ground on which the High Court has reversed the judgment of the Sessions Judge is that it is difficult to believe that after the respondent threw the pistol he continued to remain at the spot and did not make any attempt to escape. With due respect, this finding of the High Court is also most unrealistic. There is clear evidence of PWs. 5, 6 and 7 that after the respondent threw down the pistol he was surrounded by the three witnesses so that he could not escape. The High Court has failed to consider this important aspect of the matter. Moreover, if a person commits a cold-blooded murder in the premises of a court which is bound to be full of other litigants also, he cannot think of escaping and is bound to be caught by someone or the other. 10. The High Court was further of the view that it is extremely doubtful that the witnesses could see the incident from inside the court room as there was no door or window through which the incident could be seen. To buttress this observation, the High Court seems to have relied on the evidence of DW 1 that the four persons, including DW 1, entered the court room as soon as the first shot was fired. This statement is obviously wrong because all the three witnesses stated that the shots were fired while they were outside the court room and they actually saw the respondent firing the shots. I t was only after a few shots were fired that they entered the court room and even so they were able to see the whole occurrence from the glass panes of the court room. There is absolutely no evidence on record to show that there were no glass panes in the window and that the place of occurrence could not be visible from the court room. In these circumstances the conclusion of the High Court is purely speculative and against the weight of evidence on the record.The High Court seems to have placed some reliance on the evidence of D.W.1 but as he was highly interested, his evidence unless corroborated by independent evidence should not have been acted upon in the peculiar facts and circumstances of this case. 11. Lastly, the High Court seems to have completely overlooked the fact that there was no reason for three eye- witnesses, one of whom was a standing counsel far about 30 years, to have falsely implicated the respondent merely because he was Secretary of the Union. The consistent course of conduct of the respondent speaks volumes against his innocence. He was caught red-handed at the spot and was surrounded by the witnesses so that he could not escape, and the police arrived within fifteen minutes of the occurrence and took him to the police station. Some comment was made by the High Court about the delay in the inquest report but that does not appear to be of any consequence if the evidence of the three eye-w itnesses is to be believed. 12. We have given our anxious consideration to the evidence of the three witnesses (PWs 5, 6 and 7) and we find ourselves in complete agreement with the Sessions Judge that these witnesses were both reliable and trustworthy. In fact, the High Court committed a grave error of law in not going into the intrinsic merits of the evidence of each of the eye-witnesses and in discarding the same on general ground which also have no substance.

1[ds]The High Court was further of the view that it is extremely doubtful that the witnesses could see the incident from inside the court room as there was no door or window through which the incident could be seen. To buttress this observation, the High Court seems to have relied on the evidence of DW 1 that the four persons, including DW 1, entered the court room as soon as the first shot was fired. This statement is obviously wrong because all the three witnesses stated that the shots were fired while they were outside the court room and they actually saw the respondent firing the shots. I t was only after a few shots were fired that they entered the court room and even so they were able to see the whole occurrence from the glass panes of the court room. There is absolutely no evidence on record to show that there were no glass panes in the window and that the place of occurrence could not be visible from the court room. In these circumstances the conclusion of the High Court is purely speculative and against the weight of evidence on the record.The High Court seems to have placed some reliance on the evidence of D.W.1 but as he was highly interested, his evidence unless corroborated by independent evidence should not have been acted upon in the peculiar facts and circumstances of this caseLastly, the High Court seems to have completely overlooked the fact that there was no reason for three eye- witnesses, one of whom was a standing counsel far about 30 years, to have falsely implicated the respondent merely because he was Secretary of the Union. The consistent course of conduct of the respondent speaks volumes against his innocence. He was caught red-handed at the spot and was surrounded by the witnesses so that he could not escape, and the police arrived within fifteen minutes of the occurrence and took him to the police station. Some comment was made by the High Court about the delay in the inquest report but that does not appear to be of any consequence if the evidence of the three eye-w itnesses is to be believedWe have given our anxious consideration to the evidence of the three witnesses (PWs 5, 6 and 7) and we find ourselves in complete agreement with the Sessions Judge that these witnesses were both reliable and trustworthy. In fact, the High Court committed a grave error of law in not going into the intrinsic merits of the evidence of each of the eye-witnesses and in discarding the same on general ground which also have no substance9. Here, t he High Court completely lost sight of two important) that PWs 5 and 7 were high officers of the Company and were not likely to depose falsely on a matter like this, and (2) that, who was the standing counsel of the Company and other labour cases for more than 3 decades, fully corroborates the evidence of PWs 5 and 7. We have examined the evidence of PWs S and 7 with very great care and caution but we are unable to find any discrepancy or defect in their evidence so as to lead any court to reject the same. On the other hand, on a consideration of their evidence. we are satisfied that are throughout consistent and congruous and that their evidence bears a ring of truth; We are indeed surprised how th e High Court could disbelieve the evidence of thes in the case of ad murder committed in broad day light where the respondent was caughtd at the spot. The High Court also over looked the crying conduct of the respondent who went on firing one shot after the other so as to make sure that Sirgaonkar does not survive at any cost.Another ground on which the High Court has reversed the judgment of the Sessions Judge is that it is difficult to believe that after the respondent threw the pistol he continued to remain at the spot and did not make any attempt to escape. With due respect, this finding of the High Court is also most unrealistic. There is clear evidence of PWs. 5, 6 and 7 that after the respondent threw down the pistol he was surrounded by the three witnesses so that he could not escape. The High Court has failed to consider this important aspect of the matter. Moreover, if a person commits ad murder in the premises of a court which is bound to be full of other litigants also, he cannot think of escaping and is bound to be caught by someone or the otherThe High Court was further of the view that it is extremely doubtful that the witnesses could see the incident from inside the court room as there was no door or window through which the incident could be seen. To buttress this observation, the High Court seems to have relied on the evidence of DW 1 that the four persons, including DW 1, entered the court room as soon as the first shot was fired. This statement is obviously wrong because all the three witnesses stated that the shots were fired while they were outside the court room and they actually saw the respondent firing the shots. I t was only after a few shots were fired that they entered the court room and even so they were able to see the whole occurrence from the glass panes of the court room. There is absolutely no evidence on record to show that there were no glass panes in the window and that the place of occurrence could not be visible from the court room. In these circumstances the conclusion of the High Court is purely speculative and against the weight of evidence on the record.The High Court seems to have placed some reliance on the evidence of D.W.1 but as he was highly interested, his evidence unless corroborated by independent evidence should not have been acted upon in the peculiar facts and circumstances of this

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: the evidence of PW 5 that the brief case of the respondent was being handled by DW 1.We might state here that the High Court has applied two different standards to assess the evidence of the prosecution and that of the defence. While the High Court accepts the uncorro borated evidence of DW 1, who is as much interested in the dispute as the deceased, if not more, being Vice-President of the Union and also in possession of the brief case of the respondent, yet it disbelieves the evidence of PWs 5 and 7 mainly on the ground that they were highly interested. The relevant finding of the High Court on this point may be extracted thus: In the first place, it shows that Subrat Kumar Gui and M.R. Bhaumik were mainly responsible for the prosecution of the case, although the deceased had been in general supervision of all labour disputes of the company at all the places. In the second place, it also points out that these two witnesses were not happy with the appellant who had been representing the cause of the labourers before the Industrial Tribunal and that they were sore about his conduct. In these circumstances these two witnesses could not be said to be independent 9. Here, t he High Court completely lost sight of two important facts-(1) that PWs 5 and 7 were high officers of the Company and were not likely to depose falsely on a matter like this, and (2) that PW-6, who was the standing counsel of the Company and other labour cases for more than 3 decades, fully corroborates the evidence of PWs 5 and 7. We have examined the evidence of PWs S and 7 with very great care and caution but we are unable to find any discrepancy or defect in their evidence so as to lead any court to reject the same. On the other hand, on a consideration of their evidence. we are satisfied that are throughout consistent and congruous and that their evidence bears a ring of truth; We are indeed surprised how th e High Court could disbelieve the evidence of the eye-witnesses in the case of a cold-blooded murder committed in broad day light where the respondent was caught red-handed at the spot. The High Court also over looked the crying conduct of the respondent who went on firing one shot after the other so as to make sure that Sirgaonkar does not survive at any cost.Another ground on which the High Court has reversed the judgment of the Sessions Judge is that it is difficult to believe that after the respondent threw the pistol he continued to remain at the spot and did not make any attempt to escape. With due respect, this finding of the High Court is also most unrealistic. There is clear evidence of PWs. 5, 6 and 7 that after the respondent threw down the pistol he was surrounded by the three witnesses so that he could not escape. The High Court has failed to consider this important aspect of the matter. Moreover, if a person commits a cold-blooded murder in the premises of a court which is bound to be full of other litigants also, he cannot think of escaping and is bound to be caught by someone or the other. 10. The High Court was further of the view that it is extremely doubtful that the witnesses could see the incident from inside the court room as there was no door or window through which the incident could be seen. To buttress this observation, the High Court seems to have relied on the evidence of DW 1 that the four persons, including DW 1, entered the court room as soon as the first shot was fired. This statement is obviously wrong because all the three witnesses stated that the shots were fired while they were outside the court room and they actually saw the respondent firing the shots. I t was only after a few shots were fired that they entered the court room and even so they were able to see the whole occurrence from the glass panes of the court room. There is absolutely no evidence on record to show that there were no glass panes in the window and that the place of occurrence could not be visible from the court room. In these circumstances the conclusion of the High Court is purely speculative and against the weight of evidence on the record.The High Court seems to have placed some reliance on the evidence of D.W.1 but as he was highly interested, his evidence unless corroborated by independent evidence should not have been acted upon in the peculiar facts and circumstances of this case. 11. Lastly, the High Court seems to have completely overlooked the fact that there was no reason for three eye- witnesses, one of whom was a standing counsel far about 30 years, to have falsely implicated the respondent merely because he was Secretary of the Union. The consistent course of conduct of the respondent speaks volumes against his innocence. He was caught red-handed at the spot and was surrounded by the witnesses so that he could not escape, and the police arrived within fifteen minutes of the occurrence and took him to the police station. Some comment was made by the High Court about the delay in the inquest report but that does not appear to be of any consequence if the evidence of the three eye-w itnesses is to be believed. 12. We have given our anxious consideration to the evidence of the three witnesses (PWs 5, 6 and 7) and we find ourselves in complete agreement with the Sessions Judge that these witnesses were both reliable and trustworthy. In fact, the High Court committed a grave error of law in not going into the intrinsic merits of the evidence of each of the eye-witnesses and in discarding the same on general ground which also have no substance. ### Response: 1 ### Explanation: doubtful that the witnesses could see the incident from inside the court room as there was no door or window through which the incident could be seen. To buttress this observation, the High Court seems to have relied on the evidence of DW 1 that the four persons, including DW 1, entered the court room as soon as the first shot was fired. This statement is obviously wrong because all the three witnesses stated that the shots were fired while they were outside the court room and they actually saw the respondent firing the shots. I t was only after a few shots were fired that they entered the court room and even so they were able to see the whole occurrence from the glass panes of the court room. There is absolutely no evidence on record to show that there were no glass panes in the window and that the place of occurrence could not be visible from the court room. In these circumstances the conclusion of the High Court is purely speculative and against the weight of evidence on the record.The High Court seems to have placed some reliance on the evidence of D.W.1 but as he was highly interested, his evidence unless corroborated by independent evidence should not have been acted upon in the peculiar facts and circumstances of this caseLastly, the High Court seems to have completely overlooked the fact that there was no reason for three eye- witnesses, one of whom was a standing counsel far about 30 years, to have falsely implicated the respondent merely because he was Secretary of the Union. The consistent course of conduct of the respondent speaks volumes against his innocence. He was caught red-handed at the spot and was surrounded by the witnesses so that he could not escape, and the police arrived within fifteen minutes of the occurrence and took him to the police station. Some comment was made by the High Court about the delay in the inquest report but that does not appear to be of any consequence if the evidence of the three eye-w itnesses is to be believedWe have given our anxious consideration to the evidence of the three witnesses (PWs 5, 6 and 7) and we find ourselves in complete agreement with the Sessions Judge that these witnesses were both reliable and trustworthy. In fact, the High Court committed a grave error of law in not going into the intrinsic merits of the evidence of each of the eye-witnesses and in discarding the same on general ground which also have no substance9. Here, t he High Court completely lost sight of two important) that PWs 5 and 7 were high officers of the Company and were not likely to depose falsely on a matter like this, and (2) that, who was the standing counsel of the Company and other labour cases for more than 3 decades, fully corroborates the evidence of PWs 5 and 7. We have examined the evidence of PWs S and 7 with very great care and caution but we are unable to find any discrepancy or defect in their evidence so as to lead any court to reject the same. On the other hand, on a consideration of their evidence. we are satisfied that are throughout consistent and congruous and that their evidence bears a ring of truth; We are indeed surprised how th e High Court could disbelieve the evidence of thes in the case of ad murder committed in broad day light where the respondent was caughtd at the spot. The High Court also over looked the crying conduct of the respondent who went on firing one shot after the other so as to make sure that Sirgaonkar does not survive at any cost.Another ground on which the High Court has reversed the judgment of the Sessions Judge is that it is difficult to believe that after the respondent threw the pistol he continued to remain at the spot and did not make any attempt to escape. With due respect, this finding of the High Court is also most unrealistic. There is clear evidence of PWs. 5, 6 and 7 that after the respondent threw down the pistol he was surrounded by the three witnesses so that he could not escape. The High Court has failed to consider this important aspect of the matter. Moreover, if a person commits ad murder in the premises of a court which is bound to be full of other litigants also, he cannot think of escaping and is bound to be caught by someone or the otherThe High Court was further of the view that it is extremely doubtful that the witnesses could see the incident from inside the court room as there was no door or window through which the incident could be seen. To buttress this observation, the High Court seems to have relied on the evidence of DW 1 that the four persons, including DW 1, entered the court room as soon as the first shot was fired. This statement is obviously wrong because all the three witnesses stated that the shots were fired while they were outside the court room and they actually saw the respondent firing the shots. I t was only after a few shots were fired that they entered the court room and even so they were able to see the whole occurrence from the glass panes of the court room. There is absolutely no evidence on record to show that there were no glass panes in the window and that the place of occurrence could not be visible from the court room. In these circumstances the conclusion of the High Court is purely speculative and against the weight of evidence on the record.The High Court seems to have placed some reliance on the evidence of D.W.1 but as he was highly interested, his evidence unless corroborated by independent evidence should not have been acted upon in the peculiar facts and circumstances of this

South India Corporation Private Limited Vs. Secretary, Board of Revenue Trivandrum & Another

political jurisdiction and legislative power - and the latter is involved in the former - to the United States, the laws of the country in support of an established religion or abridging the freedom of the press, or authorising cruel and unusual punishments and the like, would at once cease to be of obligatory force without any declaration to that effect; and the laws of the country on other subject would necessarily be superseded by existing laws of the new government upon the same matters."14. The same view was reiterated by the Supreme Court of the United States of America in a later decision in Vilas v. City of Manila ((1910) 55 L. Ed.491). We are not concerned in this case with the general principles enunciated by the law of America, but only with the express provisions of Art. 372 of our Constitution. That apart, it may also be inappropriate to rely upon the legal consequences of a cession of a State under the American law for the interpretation of Art. 372 of our Constitution which deals with different situation and lays down expressly the legal position to meet the same. We would, therefore, confine our attention to the express provisions of the Constitution in considering the question raised before us.15. The relevant provisions which have a bearing on the said question are found in Part XII of the Constitution. Chapter I deals with finance; and this chapter contains a scheme of federal financial integration in the States. Though the Constitution conferred upon the Union and the States independent powers of taxation and constituted separate consolidated funds, it evolved a procedure for an equitable readjustment of the taxes collected between the Union and the States. But before the Constitution came into force the States were levying and collecting certain taxes which, under the Constitution, were allotted to the Union. The immediate exercise of the Union power of taxation in respect of such taxes would dislocate the finances of the State and introduce difficulties in the administration. To avoid this, Art. 277 saved the existing taxes levied by the States, though they have been transferred to the Union List by the Constitution, till Parliament made appropriate law. But the Constitution was also applicable to Part B States. They had plenary powers of taxation. Their relationship with the paramount power different from State to State. Further, most of the States were in a state of financial instability and required substantial help from the Union to bring them up to the standard of Part A States. There would be a serious dislocation in the administration of the said States by a sudden withdrawal of the federal sources of revenues. The provisions of Part XII of the Constitution with the saving embodied in Art. 277, may have met the situation obtaining in Part A States, but they were inadequate for Part B States. Therefore, a special provision under Art. 278 was made in respect of Part B States enabling them to enter into an agreement with the Union embodying terms contrary to the other provisions of the Constitution in respect of levy and collection of taxes and the grant of any financial assistance to such State or States.With this background let us now consider the following two questions raised before us : (1) Whether Art. 372 of the Constitution is subject to Art. 277 thereof; and (2) whether Art. 372 is subject to Art. 278 thereof. Article 372 is a general provision and Art. 277 is a special provision. It is settled law that a special provision should be given effect to the extent of its scope, leaving the general provision to control cases where the special provision does not apply. The earlier discussion makes it abundantly clear that the Constitution gives a separate treatment to the subject of finance, and Art. 277 saves the existing taxes etc. levied by States if the conditions mentioned therein are complied with. While Art. 372 saves all pre-Constitution valid laws, Art. 277 is confined only of taxes, duties, cesses, or fees lawfully levied immediately before the Constitution. Therefore, Art. 372 cannot be construed in such a very as to enlarge the scope of the saving of taxes, duties cesses or fees. To state it differently, Art. 372 must be read subject to Art. 277. We have already held that an agreement can be entered into between the Union and the States in terms of Art. 278 abrogating or modifying the power preserved to the States under Art. 277.16. That apart, even if Art. 372 continues the pre-Constitution laws of taxation, that provision is expressly made subject to the other provisions of the Constitution. The expression "subject to" conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. Further Art. 278 opens out with a non-obstante clause. The phrase "notwithstanding anything in the Constitution" is equivalent to saying that in spite of the other articles of the Constitution, or that the other articles shall not be an impediment to the operation of Art. 278. While Art. 372 is subject to Art. 278, Art. 278 operates in its own sphere in spite of Art. 372. The result is that Art. 278 overrides Art. 372; that is to say, notwithstanding the fact that a pre-Constitution taxation law continues in force under Art. 372, the Union and the State Government can enter into an agreement in terms of Art. 278 in respect of Part B States depriving the State law of its efficacy. In one view Art. 277 excludes the operation of Art. 372, and in the other view, an agreement in terms of Art. 278 overrides Art. 372. In either view, the result is the same, namely, that at any rate during the period covered by the agreement the States ceased to have any power to impose the tax in respect of "works contracts".In this view we need not express our opinion on the other contentions raised by Mr. Nambiar.

1[ds]But this question is covered by a decision of this Court in Union of India v. Maharaja Krishnagarh Mills Ltd. ([1961] 3 S.C.R. 524.). There, the question for determination was whether the Union of India was entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949 to March 31, 1950, payable by the respondent, a cloth mill in the State of Rajasthan, under the Rajasthan Excise duties Ordinance, 1949. By reason of art. 277 of the Constitution, the State of Rajasthan became entitled to recover the said duty notwithstanding the fact that it was transferred to the Union List. The provision to the contrary contemplated by Art. 277 of the Constitution was made by Finance Act XXV of 1950 s. 11 whereof extended the Central Excise and Salt Act, 1944, along with other Acts, to the whole to India except the State of Jammu and Kashmir. That section had effect only from April 1, 1950 and did not apply to arrears of duty of excise in regard to the earlier period. The Union pleaded that an agreement envisaged by Art. 278 was entered into on February 25, 1950 which conceded to the Centre the right to levy and collect the arrears of duty in question. The question now raised before us, namely, whether there can be a valid agreement under Art. 278 of the Constitution in respect of taxes leviable by the State and leviable by the Government of India till an appropriate law is made by Parliament arose for consideration in that case. The learned Chief Justice, speaking for the Court came to the following conclusion, at p. 535 :"Thus, the combined operation of Arts. 277 and 278 read with the agreement vests the power of levy and collection of the duty in the Union of India.This Court, therefore, held that after the coming into force of the Constitution excise duty in question in that case was leviable only by the Government of India, though there was a saving provision in favour of the State of Rajasthan till Parliament made an appropriate law; on that reasoning it held that the agreement under Art. 278 could be made in respect of such a levy notwithstanding the temporary reservation made in favour of the State. The only difference between that case that case and the present one is that at the time the agreement was entered into between the Union and the State, Parliament had not made the appropriate law depriving the State of its power to levy taxes in respect of "works contracts". But that cannot make any difference in principle, for, even the earlier decision related only to the validity of the agreement in respect of arrears leviable by the State before the appropriate law was made. The effect of the provisions in Art. 278 is that to the extent covered by an agreement the power of the State Government to continue to levy taxes under Art. 277 is superseded.The next question is whether there was any such agreement whereunder the State agreed to give up its right to levy the said tax as a part of the agreement entered into by it with the Union. This leads us to consider the terms of the agreement dated February 25, 1950, entered into between the President of India and the Rajpramukh of the State ofIt will be seen from the said agreement that it incorporated the recommendations made by the Indian States Finances Enquiry Committee with some modifications and that the Union of India agreed to recoup the State for the loss caused to it by reason of the federal financial integration in the manner described thereunder. It was not a piecemeal agreement confined to a few items, but a comprehensive one to fill up the entire revenue-gap caused to the State by reason of some of its sources of revenue having been taken away by the Union or otherwise lost to it. A perusal of the main recommendations made by the Indian States Finance Enquiry Committee and incorporated in the agreement also indicates the completeness of the agreement. The Committee was asked to examine and report, inter alia, whether, and if so, the extent to which, the process of so integrating Federal Finance in the Indian States and Union with that of the rest of India should be gradual and the manner in which it should be brought about. One of the general principles followed by the Committee was that federal financial integration in States involved not merely the taking over of all their "federal" revenues by the Central, but also the assumption of all expenditure in States upon Departments and Services of a "federal" character. In Ch. II of Part II, which dealt with "Specific matter concerning "Federal" revenues and "Federal" service departments, it was stated that with effect from the prescribed date, the Centre will take over all "federal" sources of Revenue and all "federal" items of expenditure in States, together with the administration of the Departments concerned, and that the Centre must also take over all the current outstandings, liabilities claims, etc. and all productive and unproductive Capital assets connected with these departments. Dealing with the States rights, it observed :"With effect from the prescribed date, all rights and immunities enjoyed or claimed by the States, whether expressly or by usage, and whether relating to federal revenues and taxes generally present or future, or to specific matters such as Railways, Customs, Posts and Telegraphs, Opium, Salt, etc. will terminate and must be extinguished. Thereafter, their constitutional position in respect of these matters should be the same as that of provinces under the new Constitution ofagreement, read with the Report, makes the following position clear : The loss arising to the State on account of the federal financial integration in the State was ascertained and a provision was made for subsidizing the State by filling up the said revenue-gap. The agreement ex facie appears to be a comprehensive one. It takes into consideration the entire loss caused to the State by reason of some of its sources of revenue being transferred under the Constitution to the Union. It would be unreasonable to construe the agreement as to exclude from its operation certain taxes which the State was authorized to levy for a temporary period. As we have said, that saving was subject to an agreement and, as by the agreement effective adjustments were made to meet the loss which the State would have incurred but for the agreement, there was no longer any necessity for the continuance of the saving and, it ceased to have any force thereafter between the parties to the agreement. We are not called upon in this case to decide whether the said power revived after the expiry of ten from the commencement of the Constitution, for all the impugned assessments fall within the said period. Nor do we find any force in the contention that as Art. 278 was omitted by the Constitution (Seventh Amendment) Act, 1956, the agreement entered into in exercise of a power thereunder automatically came to an end and thereafter the power of the State to levy the tax came into life again. An obvious fallacy underlies this ingenious argument. The validity of an agreement depends upon the existence of power at the time it was entered into. Its duration will be limited by its terms or by the conditions imposed on the power itself. Article 278 conferred a power upon the Union and the B State to enter into an agreement which could continue in force for a period not exceeding ten years from the commencement of the Constitution. The agreement in question fell squarely within the scope of the power. That agreement, therefore, would have its full force unless the Constitution (Seventh Amendment) Act, 1956, in terms avoided it. The said amendment was only prospective in operation and it could not have affected the validity of the agreement. We, therefore, hold that the impugned assessment orders were not validly made by the sales tax authorities in exercise of the power saved under Art. 277 of the Constitution.Learned Advocate-General for the State of Kerala raises an interesting point, namely, that the impugned law, i.e., the Travancore-Cochin General Sales Tax Act of 1125 M.E. continued in force after the Constitution under the express provisions of Art. 372 therefore till the said law was altered, repealed or amended by the competent authority and, therefore, even if there was an agreement between the Union and the State as aforesaid it could not affect the power of the State to impose the tax under the said law.It is not necessary to consider in detail the said decisions, as they either assume the said legal position or sustain it, but do not go further. They held that a law made by a competent authority before the Constitution continues to be in force after the Constitution till it is altered or modified or repealed by the appropriate authority, even though it is beyond the legislative competence of the said authority under the Constitution. We give our full assent to the view and hold that a pre-Constitution law made by a competent authority, though it has lost its legislative competency under the Constitution, shall continue in force provided the law does not contravene the "other provision" of the372 is a general provision and Art. 277 is a special provision. It is settled law that a special provision should be given effect to the extent of its scope, leaving the general provision to control cases where the special provision does not apply. The earlier discussion makes it abundantly clear that the Constitution gives a separate treatment to the subject of finance, and Art. 277 saves the existing taxes etc. levied by States if the conditions mentioned therein are complied with. While Art. 372 saves all pre-Constitution valid laws, Art. 277 is confined only of taxes, duties, cesses, or fees lawfully levied immediately before the Constitution. Therefore, Art. 372 cannot be construed in such a very as to enlarge the scope of the saving of taxes, duties cesses or fees. To state it differently, Art. 372 must be read subject to Art. 277. We have already held that an agreement can be entered into between the Union and the States in terms of Art. 278 abrogating or modifying the power preserved to the States under Art. 277.16. That apart, even if Art. 372 continues the pre-Constitution laws of taxation, that provision is expressly made subject to the other provisions of the Constitution. The expression "subject to" conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. Further Art. 278 opens out with a non-obstante clause. The phrase "notwithstanding anything in the Constitution" is equivalent to saying that in spite of the other articles of the Constitution, or that the other articles shall not be an impediment to the operation of Art. 278. While Art. 372 is subject to Art. 278, Art. 278 operates in its own sphere in spite of Art. 372. The result is that Art. 278 overrides Art. 372; that is to say, notwithstanding the fact that a pre-Constitution taxation law continues in force under Art. 372, the Union and the State Government can enter into an agreement in terms of Art. 278 in respect of Part B States depriving the State law of its efficacy. In one view Art. 277 excludes the operation of Art. 372, and in the other view, an agreement in terms of Art. 278 overrides Art. 372. In either view, the result is the same, namely, that at any rate during the period covered by the agreement the States ceased to have any power to impose the tax in respect of "works contracts".In this view we need not express our opinion on the other contentions raised by Mr. Nambiar.

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: political jurisdiction and legislative power - and the latter is involved in the former - to the United States, the laws of the country in support of an established religion or abridging the freedom of the press, or authorising cruel and unusual punishments and the like, would at once cease to be of obligatory force without any declaration to that effect; and the laws of the country on other subject would necessarily be superseded by existing laws of the new government upon the same matters."14. The same view was reiterated by the Supreme Court of the United States of America in a later decision in Vilas v. City of Manila ((1910) 55 L. Ed.491). We are not concerned in this case with the general principles enunciated by the law of America, but only with the express provisions of Art. 372 of our Constitution. That apart, it may also be inappropriate to rely upon the legal consequences of a cession of a State under the American law for the interpretation of Art. 372 of our Constitution which deals with different situation and lays down expressly the legal position to meet the same. We would, therefore, confine our attention to the express provisions of the Constitution in considering the question raised before us.15. The relevant provisions which have a bearing on the said question are found in Part XII of the Constitution. Chapter I deals with finance; and this chapter contains a scheme of federal financial integration in the States. Though the Constitution conferred upon the Union and the States independent powers of taxation and constituted separate consolidated funds, it evolved a procedure for an equitable readjustment of the taxes collected between the Union and the States. But before the Constitution came into force the States were levying and collecting certain taxes which, under the Constitution, were allotted to the Union. The immediate exercise of the Union power of taxation in respect of such taxes would dislocate the finances of the State and introduce difficulties in the administration. To avoid this, Art. 277 saved the existing taxes levied by the States, though they have been transferred to the Union List by the Constitution, till Parliament made appropriate law. But the Constitution was also applicable to Part B States. They had plenary powers of taxation. Their relationship with the paramount power different from State to State. Further, most of the States were in a state of financial instability and required substantial help from the Union to bring them up to the standard of Part A States. There would be a serious dislocation in the administration of the said States by a sudden withdrawal of the federal sources of revenues. The provisions of Part XII of the Constitution with the saving embodied in Art. 277, may have met the situation obtaining in Part A States, but they were inadequate for Part B States. Therefore, a special provision under Art. 278 was made in respect of Part B States enabling them to enter into an agreement with the Union embodying terms contrary to the other provisions of the Constitution in respect of levy and collection of taxes and the grant of any financial assistance to such State or States.With this background let us now consider the following two questions raised before us : (1) Whether Art. 372 of the Constitution is subject to Art. 277 thereof; and (2) whether Art. 372 is subject to Art. 278 thereof. Article 372 is a general provision and Art. 277 is a special provision. It is settled law that a special provision should be given effect to the extent of its scope, leaving the general provision to control cases where the special provision does not apply. The earlier discussion makes it abundantly clear that the Constitution gives a separate treatment to the subject of finance, and Art. 277 saves the existing taxes etc. levied by States if the conditions mentioned therein are complied with. While Art. 372 saves all pre-Constitution valid laws, Art. 277 is confined only of taxes, duties, cesses, or fees lawfully levied immediately before the Constitution. Therefore, Art. 372 cannot be construed in such a very as to enlarge the scope of the saving of taxes, duties cesses or fees. To state it differently, Art. 372 must be read subject to Art. 277. We have already held that an agreement can be entered into between the Union and the States in terms of Art. 278 abrogating or modifying the power preserved to the States under Art. 277.16. That apart, even if Art. 372 continues the pre-Constitution laws of taxation, that provision is expressly made subject to the other provisions of the Constitution. The expression "subject to" conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. Further Art. 278 opens out with a non-obstante clause. The phrase "notwithstanding anything in the Constitution" is equivalent to saying that in spite of the other articles of the Constitution, or that the other articles shall not be an impediment to the operation of Art. 278. While Art. 372 is subject to Art. 278, Art. 278 operates in its own sphere in spite of Art. 372. The result is that Art. 278 overrides Art. 372; that is to say, notwithstanding the fact that a pre-Constitution taxation law continues in force under Art. 372, the Union and the State Government can enter into an agreement in terms of Art. 278 in respect of Part B States depriving the State law of its efficacy. In one view Art. 277 excludes the operation of Art. 372, and in the other view, an agreement in terms of Art. 278 overrides Art. 372. In either view, the result is the same, namely, that at any rate during the period covered by the agreement the States ceased to have any power to impose the tax in respect of "works contracts".In this view we need not express our opinion on the other contentions raised by Mr. Nambiar. ### Response: 1 ### Explanation: said revenue-gap. The agreement ex facie appears to be a comprehensive one. It takes into consideration the entire loss caused to the State by reason of some of its sources of revenue being transferred under the Constitution to the Union. It would be unreasonable to construe the agreement as to exclude from its operation certain taxes which the State was authorized to levy for a temporary period. As we have said, that saving was subject to an agreement and, as by the agreement effective adjustments were made to meet the loss which the State would have incurred but for the agreement, there was no longer any necessity for the continuance of the saving and, it ceased to have any force thereafter between the parties to the agreement. We are not called upon in this case to decide whether the said power revived after the expiry of ten from the commencement of the Constitution, for all the impugned assessments fall within the said period. Nor do we find any force in the contention that as Art. 278 was omitted by the Constitution (Seventh Amendment) Act, 1956, the agreement entered into in exercise of a power thereunder automatically came to an end and thereafter the power of the State to levy the tax came into life again. An obvious fallacy underlies this ingenious argument. The validity of an agreement depends upon the existence of power at the time it was entered into. Its duration will be limited by its terms or by the conditions imposed on the power itself. Article 278 conferred a power upon the Union and the B State to enter into an agreement which could continue in force for a period not exceeding ten years from the commencement of the Constitution. The agreement in question fell squarely within the scope of the power. That agreement, therefore, would have its full force unless the Constitution (Seventh Amendment) Act, 1956, in terms avoided it. The said amendment was only prospective in operation and it could not have affected the validity of the agreement. We, therefore, hold that the impugned assessment orders were not validly made by the sales tax authorities in exercise of the power saved under Art. 277 of the Constitution.Learned Advocate-General for the State of Kerala raises an interesting point, namely, that the impugned law, i.e., the Travancore-Cochin General Sales Tax Act of 1125 M.E. continued in force after the Constitution under the express provisions of Art. 372 therefore till the said law was altered, repealed or amended by the competent authority and, therefore, even if there was an agreement between the Union and the State as aforesaid it could not affect the power of the State to impose the tax under the said law.It is not necessary to consider in detail the said decisions, as they either assume the said legal position or sustain it, but do not go further. They held that a law made by a competent authority before the Constitution continues to be in force after the Constitution till it is altered or modified or repealed by the appropriate authority, even though it is beyond the legislative competence of the said authority under the Constitution. We give our full assent to the view and hold that a pre-Constitution law made by a competent authority, though it has lost its legislative competency under the Constitution, shall continue in force provided the law does not contravene the "other provision" of the372 is a general provision and Art. 277 is a special provision. It is settled law that a special provision should be given effect to the extent of its scope, leaving the general provision to control cases where the special provision does not apply. The earlier discussion makes it abundantly clear that the Constitution gives a separate treatment to the subject of finance, and Art. 277 saves the existing taxes etc. levied by States if the conditions mentioned therein are complied with. While Art. 372 saves all pre-Constitution valid laws, Art. 277 is confined only of taxes, duties, cesses, or fees lawfully levied immediately before the Constitution. Therefore, Art. 372 cannot be construed in such a very as to enlarge the scope of the saving of taxes, duties cesses or fees. To state it differently, Art. 372 must be read subject to Art. 277. We have already held that an agreement can be entered into between the Union and the States in terms of Art. 278 abrogating or modifying the power preserved to the States under Art. 277.16. That apart, even if Art. 372 continues the pre-Constitution laws of taxation, that provision is expressly made subject to the other provisions of the Constitution. The expression "subject to" conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. Further Art. 278 opens out with a non-obstante clause. The phrase "notwithstanding anything in the Constitution" is equivalent to saying that in spite of the other articles of the Constitution, or that the other articles shall not be an impediment to the operation of Art. 278. While Art. 372 is subject to Art. 278, Art. 278 operates in its own sphere in spite of Art. 372. The result is that Art. 278 overrides Art. 372; that is to say, notwithstanding the fact that a pre-Constitution taxation law continues in force under Art. 372, the Union and the State Government can enter into an agreement in terms of Art. 278 in respect of Part B States depriving the State law of its efficacy. In one view Art. 277 excludes the operation of Art. 372, and in the other view, an agreement in terms of Art. 278 overrides Art. 372. In either view, the result is the same, namely, that at any rate during the period covered by the agreement the States ceased to have any power to impose the tax in respect of "works contracts".In this view we need not express our opinion on the other contentions raised by Mr. Nambiar.

All India Idbi Sc, St, Nav Buddhist & Obc Vs. Idbi Bank Limited

India Act, 1964. Therefore, this is a transfer of undertaking and Repeal Act. By Chapter II transfer and vesting of the undertaking of development bank meaning Industrial Development Bank of India established under subsection (1) of Section 3 of the IDBI Act, 1964 is provided. The Central Government may by a Notification appoint a date on which there will be a transfer to and vesting in the company of the whole of the undertaking of development bank. That is provided by Section-3. The general effect of transfer and vesting of undertaking as set out in Sections 4 and 5 would mean that the general effect of transfer and vesting of the undertaking, is provided by Section-4, whereas in respect of officers and other employees of the development bank, Section-5 is enacted. Sub-section (1) of Section-5 says every officer or other employee of the development bank except a Director of the Board or the Chairman and Managing Director or any whole time Director serving in the employment immediately before the appointed day shall, insofar as such officer or other employee is employed in connection with the undertaking which has vested in the company by virtue of the subject Act, become on and from the appointed day, an officer or, as the case may be, the other employee of the company and he shall hold his office or service therein by same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave etc and other benefits as he would have held under the development bank if its undertaking had not vested in the company and shall continue to do so until expiry of a period of six months from the appointed day, if such officer or other employee opts not to continue to be the officer or other employee of the company within such period. Therefore, such of those officers or other employee of the development bank opting not to continue to be the officer or other employee of the company would derive their benefits for six months from the appointed date and equally there is no guarantee that these service conditions can never be altered or revised. The subsections of Section 5 would indicate as to how it would be open for the company to manage the affairs of the bank as it deems fit or proper so as to achieve the object and purpose of setting up the same.21. We do not see any reason for the Petitioner to rely upon language of sub-section (1) of Section-5. It does not mean and by any stretch of imagination that the terms and conditions of service as prevailing prior to this vesting and transfer of IDBI in a company remain and continue in the same form, despite the vesting in a company. The undertaking vests in different legal entity and if that different entity decides to operate on business principles so as to face other competitors in the market, then, it was open for it to take such decisions as it deems fit and proper. We do not think, therefore, that there is any prejudice caused or any right which is pre-established is violated. Therefore there is no question of any alteration in the terms and conditions, to the detriment of the officers of the bank.22. We do not see how in the above circumstances the principles of either legitimate expectation or promissory estoppel can be invoked. The tests for applicability of the same are salutary. They have been set out in several decisions of the Honble Supreme Court of India. Even if we refer to the decision relied upon and copy of which is annexed to the written submissions, what we find is, in that decision itself, (Pratima Chowdhury v/s Kalpana Mukherjee and Another reported in (2014) 4 SCC Pg.196, the Honble Supreme Court clarifies that rule of estoppel is a doctrine based on fairness. It postulates the exclusion of the truth of the matter. All for the sake of fairness. For Section 115 to apply firstly one party should make a factual representation to the other and secondly the other should accept and rely upon the factual representation. Thirdly, having relied on the same, the second or other party should alter its position. The instant altering of position should be such that it would be inequitable to require him to revert back to the original position. Thus, for the principles to apply, certain preconditions and prerequisites have to be satisfied. We do not think that they are satisfied in the facts and circumstances of the present case.23. The concept of legitimate expectation has no role to play where the States action is, as a public policy or in public interest unless the action taken amounts to an abuse of power. The Court cannot by invoking this doctrine usurp the discretion of the public authority which is empowered to take decisions under law and the Court is expected to apply an objective standard which leaves to the deciding authority a full range of choice which the legislature has presumed as intended. In the case of Union of India v/s Hindustan Development Corporation reported in 1993 3 SCC 499 , the legal principles have been set out and which are reiterated in Sethi Auto Service Station V/s Delhi Development Authority and Others reported in (2009) I SCC pg.180. We are therefore of the view that the Petitioner cannot rely upon above principles. Equally, they cannot rely upon any correspondence and which is exchanged by some officer or association or its office bearers or some member of the Parliament with the Ministry of Finance. Whatever it might have to say earlier, the Ministry of Finance is before us. It has now supported the stand of 1st Respondent and has not placed any material contrary to it. In such circumstances, all the more we do not think that in writ jurisdiction, we can grant any relief to the Petitioner.

0[ds]It is in these circumstances that it was advised that the Bank undertakes a broad consultative process and thereafter arrive at an informed and rational decision. It is in these circumstances the bank submits that prior to conversion into a commercial bank and subsequent merger of two other commercial banking entities having varied set of terms and conditions of service as also pay and allowances, the employees of IDBI bank Limited had different terms and conditions than what are prevailing now. The then rules of sick leave provided for availing of sick leave not exceeding 18 months at half pay on production of a medical certificate during the entire period of service of an employee. Accordingly, certain employees were having their sick leave account equivalent to 18 months at half pay. It is in these circumstances that the bank decided to take decision as contained in the Circular. Mr. Talsania would submit that the prevailing leave of 540 days at half pay now post rationalization has been readjusted and revised cap of 360 days. As such the readjustment cap to 360 days was done with the approval of the Board and the Circular was issued as per the practice. There is nothing unilateral and/or arbitrary. The IDBI was earlier governed by the Act of Parliament, namely, the Industrial Development Bank of India Act, 1964. That was repealed on IDBI converting into a banking company in 2004, through Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003. In terms of Section 5 (1) of the IDBI Repeal Act, IDBI does not intend to perpetually protect the terms and conditions of service of employees as the provision is designed to be effective to only six months, essentially to protect those employees who opt not to continue in the service of the new entity namely, IDBI Bank Ltd. The IDBI Repeal Act does not create a static situation and is not intended to perpetually freeze the terms and conditions of contract of employment including the remuneration structure in an ever changing, vibrant and dynamic market environment. Mr. Talsania therefore submits that paragraph 6.5 at page 100 of thecannot be read in isolation but must be read together with the preceding and subsequent paragraphs which would indicate that there is absolutely no discrimination. No terms and conditions including pay leave etc have been altered to the detriment and prejudice of the officers. Sick leave is a conditional right. That is not earned by the officer but it is accumulated for a period of service rendered by the employee with the bank subject to limit specified with the approval of the Board. It is in such circumstances that Mr. Talsania would submit that there is no legal, statutory or contractual right which has been infringed Hence, the Writ Petition be dismissed.15. With the assistance of both the advocates, we have perused the bulky record namely, the Petition, its Annexures, the affidavits filed in reply, rejoinder,r so also written submissions.16. Upon perusal of all these materials, we are of the considered view that there is no merit in the Writ Petition. The Petitioner has not been able to demonstrate anypreexisting legal right and whichwould enable it to seek a writ of mandamus for the enforcement of the same. As is well settled, a writ of mandamus is not issued for the mere asking. It is a writ and one of the prerogative writ which can be issued in this Courts extraordinary, equitable and discretionary jurisdiction under Article 226 of the Constitution of India. In a recent decision of the Honble Supreme Court of India delivered in the case of Rajasthan State Industrial Development and Investment Corporation and Another v/s Diamond and Gem Development Corporation Limited and Another reported in AIR 2013 Supreme Court 1241, the preconditions for issuance of such a writ are set out. The relevant paragraphs of this judgment readIt is evident from the above, that generally the court should not exercise its writ jurisdiction to enforce the contractual obligation. The primary purpose of a writ of mandamus, is to protect and establish rights and to impose a corresponding imperative duty existing in law. It is designed to promote justice (ex debito justiceiae). The grant or refusal of the writ is at the discretion of the court. The writ cannot be granted unless it is established that there is an existing legal right of the applicant, or an existing duty of the respondent. Thus, the writ does not lie to create or to establish a legal right, but to enforce one that is already established. While dealing with a writ petition, the court must exercise discretion, taking into consideration a wide variety of circumstances,the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant or refusal of the writ, and the nature and extent of injury that is likely to ensue by such grant or refusal.15. Hence, discretion must be exercised by the court on grounds of public policy, public interest and public good. The writ is equitable in nature and thus, its issuance is governed by equitable principles. Refusal of relief must be for reasons which would lead to injustice. The prime consideration for the issuance of the said writ is, whether or not substantial justice will be promoted. Furthermore, while granting such a writ, the court must make every effort to ensure from the averments of the writ petition, whether there exist proper pleadings. In order to maintain the writ of mandamus, the first and foremost requirement is that the petition must not be frivolous, and must be filed in good faith. Additionally, the applicant must make a demand which is clear, plain and unambiguous. It must be made to an officer having the requisite authority to perform the act demanded. Furthermore, the authority against whom mandamus is issued, should have rejected the demand earlier. Therefore, a demand and its subsequent refusal, either by words, or by conduct, are necessary to satisfy the court that the opposite party is determined to ignore the demand of the applicant with respect to the enforcement of his legal right. However, a demand may not be necessary when the same is manifest from the facts of the case, that is, when it is an empty formality, or when it is obvious that the opposite party would not consider the demand.17. These are not tests evolved for the first time. The conditions and the tests were always there and have been merely reiterated in this decision. We have seen that the Circular dated 31st July, 2009, copy of which isto the Writ Petition is issued by the bank after a meeting was held on 23rd May, 2009. It is a Circular issued and internally to the Heads of Verticals, Departments/ Regional and Branch Heads, Director of the JN IDBI Staff College of the IDBI Bank Limited. The Circular states that the Board of Directors at its meeting held on 23rd May, 2009 has approved certain changes to the leave rules as applicable to the officers ofeIDBI in terms ofthe relevant provisions of Officers Service Rules, 2006. The modified service rules shall be uniformly applicable to all officers of IDBI bank Including the officers ofB, effective from August 01, 2009. The types of leave enumerated in paragraph 2 of this Circular were revised and harmonized. The Circular is not challenged, the authority and power of the Board to meet and take a decision is not challenged, that the banks power to issue such Circulars and therefore they can be issued and amended or substituted from time to time also is not challenged. Pertinently, this is not a entire union or association of officers before us. It is All India Industrial Development Bank of India Scheduled Caste/Scheduled Tribes andas also Other Backward Class Officers Welfare Association through its Vice President Mr. Mane which is before us. There is therefore enough material on record for us to conclude that it is only one of the group of officials and organizing themselves as above which is seeking to challenge this Circular. Though paragraph 2 of this Circular is read and insofar as it concerns leave, what we must read also is that the revised and harmonized categories of leave were applicable to all officers of bank and effective from August 1, 2009. From 10th August 2009, the officers can apply for modified leave, through the Absence Management System. Consequent to the approval of the revised and harmonized type of leave by the board of the bank, the extent and types of leave and leave rules applicable to above officers earlier stood abolished. The details of the revised rules are atto this Circular. The process to be followed by the officers / supervisors and LRKs for the types of leave indicated in paragraph 2, is furnished atto this Circular. The issues relating to migration of leaves as per the revised rules and course of action to be followed, is furnished atThe entire procedure is set out and what is evident from the Appendix and particularly in relation to sick leave is that an officer shall be eligible for 30 days of half pay sick leave for each completed year of service, subject to a maximum of 360 days during the entire service period. The officers will be eligible for sick leave on half pay only after completion of one year of service. Availment of sick leave is for a minimum of four days. If sufficient casual leave balance is not available, less than four days of sick leave can be availed. On completion of three years of service, an officer will be eligible for sick leave on full pay. Sick leave on full pay means an officer would get salary on full pay on double debit of the number of days of sick leave availed. The sick leave can be availed of only on production of medical certificate, acceptable to the bank. The bank reserves its right to require, an officer desiring to resume duty on expiry of sick leave, to produce medical fitness certificate indicating that the officer is fit to resume duty. Sick leave can be combined with ordinary leave. The officer is not allowed to apply for sick leave while serving a notice period.18. Thus, a one sided projection and without reading the circular in its entirety particularly as above would definitely give an impression that the bank has in the garb of revision and harmonization of various leaves unilaterally reduced the leave period. However, nothing has been done beyond harmonizing and revising it but in the above manner. Therefore, if this Circular and the Appendices are all read together, it would mean that there is a power vesting in the Board to organize and manage so also administer the affairs of the bank and additionally to revise and harmonize the leaves. It is pertinent to note that several types of leaves availed of, have been harmonized and revised. The Petitioner only picks up for challenging the decision to revise and harmonize the sick leave. Even the decision in relation thereto has not been demonstrated to be affecting the interests of the employees/officers adversely. In the representation dated 11th September, 2009 requesting withdrawal of the Circular, it is vaguely stated that the two Circulars adversely affect the established service conditions of the officers ofby way of reduction, withdrawal and cancellation of existing facilities relating to various types of leave including violation of statues etc which are detrimental to the officers interest. Further, this has resulted into causing pecuniary loss, mental torture, harassment, indiscrimination and injustice to all. This is a vague assertion. If the pleadings in the Writ Petition are properly perused, this is not a grievance of all the officers. It is only a group of officials and organized on the above lines and members of the Petitioner who are aggrieved by this decision. Even when they make a representation they are unable to spell out a particular legal right vesting in them which has been adversely affected. In such circumstances, we do not think that the Petitioners counsel can successfully urge that the banks decision is arbitrary, discriminatory and violative of the mandate of Articles 14 and 16 of the Constitution of India. In matters of public employment, the right guaranteed by Article 16 (1) is of a fair, just and equitable treatment. We have perused the subsequent letter of 5th September, 2009, as well. The All India IDBI Officers Association, through its General Secretary complained to the bank that the various Circulars on the subject of terms and conditions of service and issued by the bank, are not acceptable to the officers and they requested to withdraw the same. The Officers association was aware, as of 5th September, 2009, that the Board Meeting was convened on 23rd May, 2009 but its Minutes have not been confirmed by the Board at subsequent meeting held on 15th July, 2009 and 28th August, 2009. IDBI Officers Association and which is claiming to be an All India Association prayed for withdrawal of the Circulars in their entirety. However, they have not pursued their grievances as allegedly projected in this letter. Further, on 3rd October, 2009, the President of the Petitioner association was informed by the bank that the modified rules have already been implemented. Therefore, the bank cannot accede to the request of the Petitioner to withdraw the Circular.19. Then, there was an Appeal which was stated to have been preferred under Section 19 (1) of the Right to Information Act, 2005. We need not pursue this part for we have substantial material on record to indicate that the necessary and requisite particulars and information as a whole, was provided by the bank.20. A small contention was raised in regard to the interpretation ofsubsection (1) of Section5 of theIndustrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003.This is an Act to provide for transfer and vesting of the undertaking of the Industrial Development Bank of India and in the company to be formed and registered as a company under the Companies Act, 1956 to carry on banking business and for matters connected therewith or incidental thereto and also to repeal the Industrial Development Bank of India Act, 1964. Therefore, this is a transfer of undertaking and Repeal Act. By Chapter II transfer and vesting of the undertaking of development bank meaning Industrial Development Bank of India established undersubsection (1) of Section3 of the IDBI Act, 1964 is provided. The Central Government may by a Notification appoint a date on which there will be a transfer to and vesting in the company of the whole of the undertaking of development bank. That is provided byThe general effect of transfer and vesting of undertaking as set out in Sections 4 and 5 would mean that the general effect of transfer and vesting of the undertaking, is provided bywhereas in respect of officers and other employees of the development bank,ion (1) ofsays every officer or other employee of the development bank except a Director of the Board or the Chairman and Managing Director or any whole time Director serving in the employment immediately before the appointed day shall, insofar as such officer or other employee is employed in connection with the undertaking which has vested in the company by virtue of the subject Act, become on and from the appointed day, an officer or, as the case may be, the other employee of the company and he shall hold his office or service therein by same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave etc and other benefits as he would have held under the development bank if its undertaking had not vested in the company and shall continue to do so until expiry of a period of six months from the appointed day, if such officer or other employee opts not to continue to be the officer or other employee of the company within such period. Therefore, such of those officers or other employee of the development bank opting not to continue to be the officer or other employee of the company would derive their benefits for six months from the appointed date and equally there is no guarantee that these service conditions can never be altered or revised. The subsections of Section 5 would indicate as to how it would be open for the company to manage the affairs of the bank as it deems fit or proper so as to achieve the object and purpose of setting up the same.21. We do not see any reason for the Petitioner to rely upon language ofIt does not mean and by any stretch of imagination that the terms and conditions of service as prevailing prior to this vesting and transfer of IDBI in a company remain and continue in the same form, despite the vesting in a company. The undertaking vests in different legal entity and if that different entity decides to operate on business principles so as to face other competitors in the market, then, it was open for it to take such decisions as it deems fit and proper. We do not think, therefore, that there is any prejudice caused or any right which isis violated. Therefore there is no question of any alteration in the terms and conditions, to the detriment of the officers of the bank.22. We do not see how in the above circumstances the principles of either legitimate expectation or promissory estoppel can be invoked. The tests for applicability of the same are salutary. They have been set out in several decisions of the Honble Supreme Court of India. Even if we refer to the decision relied upon and copy of which is annexed to the written submissions, what we find is, in that decision itself, (Pratima Chowdhury v/s Kalpana Mukherjee and Another reported in (2014) 4 SCC Pg.196, the Honble Supreme Court clarifies that rule of estoppel is a doctrine based on fairness. It postulates the exclusion of the truth of the matter. All for the sake of fairness. For Section 115 to apply firstly one party should make a factual representation to the other and secondly the other should accept and rely upon the factual representation. Thirdly, having relied on the same, the second or other party should alter its position. The instant altering of position should be such that it would be inequitable to require him to revert back to the original position. Thus, for the principles to apply, certain preconditions and prerequisites have to be satisfied. We do not think that they are satisfied in the facts and circumstances of the present case.23. The concept of legitimate expectation has no role to play where the States action is, as a public policy or in public interest unless the action taken amounts to an abuse of power. The Court cannot by invoking this doctrine usurp the discretion of the public authority which is empowered to take decisions under law and the Court is expected to apply an objective standard which leaves to the deciding authority a full range of choice which the legislature has presumed as intended. In the case of Union of India v/s Hindustan Development Corporation reported in 1993 3 SCC 499 , the legal principles have been set out and which are reiterated in Sethi Auto Service Station V/s Delhi Development Authority and Others reported in (2009) I SCC pg.180. We are therefore of the view that the Petitioner cannot rely upon above principles. Equally, they cannot rely upon any correspondence and which is exchanged by some officer or association or its office bearers or some member of the Parliament with the Ministry of Finance. Whatever it might have to say earlier, the Ministry of Finance is before us. It has now supported the stand of 1st Respondent and has not placed any material contrary to it. In such circumstances, all the more we do not think that in writ jurisdiction, we can grant any relief to the Petitioner.

### Instruction: Evaluate the case proceeding to forecast the court's decision (1 for yes, 0 for no), and elucidate the reasoning behind this prediction with important textual evidence from the case. ### Input: India Act, 1964. Therefore, this is a transfer of undertaking and Repeal Act. By Chapter II transfer and vesting of the undertaking of development bank meaning Industrial Development Bank of India established under subsection (1) of Section 3 of the IDBI Act, 1964 is provided. The Central Government may by a Notification appoint a date on which there will be a transfer to and vesting in the company of the whole of the undertaking of development bank. That is provided by Section-3. The general effect of transfer and vesting of undertaking as set out in Sections 4 and 5 would mean that the general effect of transfer and vesting of the undertaking, is provided by Section-4, whereas in respect of officers and other employees of the development bank, Section-5 is enacted. Sub-section (1) of Section-5 says every officer or other employee of the development bank except a Director of the Board or the Chairman and Managing Director or any whole time Director serving in the employment immediately before the appointed day shall, insofar as such officer or other employee is employed in connection with the undertaking which has vested in the company by virtue of the subject Act, become on and from the appointed day, an officer or, as the case may be, the other employee of the company and he shall hold his office or service therein by same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave etc and other benefits as he would have held under the development bank if its undertaking had not vested in the company and shall continue to do so until expiry of a period of six months from the appointed day, if such officer or other employee opts not to continue to be the officer or other employee of the company within such period. Therefore, such of those officers or other employee of the development bank opting not to continue to be the officer or other employee of the company would derive their benefits for six months from the appointed date and equally there is no guarantee that these service conditions can never be altered or revised. The subsections of Section 5 would indicate as to how it would be open for the company to manage the affairs of the bank as it deems fit or proper so as to achieve the object and purpose of setting up the same.21. We do not see any reason for the Petitioner to rely upon language of sub-section (1) of Section-5. It does not mean and by any stretch of imagination that the terms and conditions of service as prevailing prior to this vesting and transfer of IDBI in a company remain and continue in the same form, despite the vesting in a company. The undertaking vests in different legal entity and if that different entity decides to operate on business principles so as to face other competitors in the market, then, it was open for it to take such decisions as it deems fit and proper. We do not think, therefore, that there is any prejudice caused or any right which is pre-established is violated. Therefore there is no question of any alteration in the terms and conditions, to the detriment of the officers of the bank.22. We do not see how in the above circumstances the principles of either legitimate expectation or promissory estoppel can be invoked. The tests for applicability of the same are salutary. They have been set out in several decisions of the Honble Supreme Court of India. Even if we refer to the decision relied upon and copy of which is annexed to the written submissions, what we find is, in that decision itself, (Pratima Chowdhury v/s Kalpana Mukherjee and Another reported in (2014) 4 SCC Pg.196, the Honble Supreme Court clarifies that rule of estoppel is a doctrine based on fairness. It postulates the exclusion of the truth of the matter. All for the sake of fairness. For Section 115 to apply firstly one party should make a factual representation to the other and secondly the other should accept and rely upon the factual representation. Thirdly, having relied on the same, the second or other party should alter its position. The instant altering of position should be such that it would be inequitable to require him to revert back to the original position. Thus, for the principles to apply, certain preconditions and prerequisites have to be satisfied. We do not think that they are satisfied in the facts and circumstances of the present case.23. The concept of legitimate expectation has no role to play where the States action is, as a public policy or in public interest unless the action taken amounts to an abuse of power. The Court cannot by invoking this doctrine usurp the discretion of the public authority which is empowered to take decisions under law and the Court is expected to apply an objective standard which leaves to the deciding authority a full range of choice which the legislature has presumed as intended. In the case of Union of India v/s Hindustan Development Corporation reported in 1993 3 SCC 499 , the legal principles have been set out and which are reiterated in Sethi Auto Service Station V/s Delhi Development Authority and Others reported in (2009) I SCC pg.180. We are therefore of the view that the Petitioner cannot rely upon above principles. Equally, they cannot rely upon any correspondence and which is exchanged by some officer or association or its office bearers or some member of the Parliament with the Ministry of Finance. Whatever it might have to say earlier, the Ministry of Finance is before us. It has now supported the stand of 1st Respondent and has not placed any material contrary to it. In such circumstances, all the more we do not think that in writ jurisdiction, we can grant any relief to the Petitioner. ### Response: 0 ### Explanation: business and for matters connected therewith or incidental thereto and also to repeal the Industrial Development Bank of India Act, 1964. Therefore, this is a transfer of undertaking and Repeal Act. By Chapter II transfer and vesting of the undertaking of development bank meaning Industrial Development Bank of India established undersubsection (1) of Section3 of the IDBI Act, 1964 is provided. The Central Government may by a Notification appoint a date on which there will be a transfer to and vesting in the company of the whole of the undertaking of development bank. That is provided byThe general effect of transfer and vesting of undertaking as set out in Sections 4 and 5 would mean that the general effect of transfer and vesting of the undertaking, is provided bywhereas in respect of officers and other employees of the development bank,ion (1) ofsays every officer or other employee of the development bank except a Director of the Board or the Chairman and Managing Director or any whole time Director serving in the employment immediately before the appointed day shall, insofar as such officer or other employee is employed in connection with the undertaking which has vested in the company by virtue of the subject Act, become on and from the appointed day, an officer or, as the case may be, the other employee of the company and he shall hold his office or service therein by same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave etc and other benefits as he would have held under the development bank if its undertaking had not vested in the company and shall continue to do so until expiry of a period of six months from the appointed day, if such officer or other employee opts not to continue to be the officer or other employee of the company within such period. Therefore, such of those officers or other employee of the development bank opting not to continue to be the officer or other employee of the company would derive their benefits for six months from the appointed date and equally there is no guarantee that these service conditions can never be altered or revised. The subsections of Section 5 would indicate as to how it would be open for the company to manage the affairs of the bank as it deems fit or proper so as to achieve the object and purpose of setting up the same.21. We do not see any reason for the Petitioner to rely upon language ofIt does not mean and by any stretch of imagination that the terms and conditions of service as prevailing prior to this vesting and transfer of IDBI in a company remain and continue in the same form, despite the vesting in a company. The undertaking vests in different legal entity and if that different entity decides to operate on business principles so as to face other competitors in the market, then, it was open for it to take such decisions as it deems fit and proper. We do not think, therefore, that there is any prejudice caused or any right which isis violated. Therefore there is no question of any alteration in the terms and conditions, to the detriment of the officers of the bank.22. We do not see how in the above circumstances the principles of either legitimate expectation or promissory estoppel can be invoked. The tests for applicability of the same are salutary. They have been set out in several decisions of the Honble Supreme Court of India. Even if we refer to the decision relied upon and copy of which is annexed to the written submissions, what we find is, in that decision itself, (Pratima Chowdhury v/s Kalpana Mukherjee and Another reported in (2014) 4 SCC Pg.196, the Honble Supreme Court clarifies that rule of estoppel is a doctrine based on fairness. It postulates the exclusion of the truth of the matter. All for the sake of fairness. For Section 115 to apply firstly one party should make a factual representation to the other and secondly the other should accept and rely upon the factual representation. Thirdly, having relied on the same, the second or other party should alter its position. The instant altering of position should be such that it would be inequitable to require him to revert back to the original position. Thus, for the principles to apply, certain preconditions and prerequisites have to be satisfied. We do not think that they are satisfied in the facts and circumstances of the present case.23. The concept of legitimate expectation has no role to play where the States action is, as a public policy or in public interest unless the action taken amounts to an abuse of power. The Court cannot by invoking this doctrine usurp the discretion of the public authority which is empowered to take decisions under law and the Court is expected to apply an objective standard which leaves to the deciding authority a full range of choice which the legislature has presumed as intended. In the case of Union of India v/s Hindustan Development Corporation reported in 1993 3 SCC 499 , the legal principles have been set out and which are reiterated in Sethi Auto Service Station V/s Delhi Development Authority and Others reported in (2009) I SCC pg.180. We are therefore of the view that the Petitioner cannot rely upon above principles. Equally, they cannot rely upon any correspondence and which is exchanged by some officer or association or its office bearers or some member of the Parliament with the Ministry of Finance. Whatever it might have to say earlier, the Ministry of Finance is before us. It has now supported the stand of 1st Respondent and has not placed any material contrary to it. In such circumstances, all the more we do not think that in writ jurisdiction, we can grant any relief to the Petitioner.

Akhil Bharat Goseva Sangh and Others Vs. State of Andhra Pradesh and Others

was for the Central Government to consider the contents of the Krishnan Committee report and take a decision in the matter of establishment and operation of the said slaughterhouse. It cannot but be said that the Central Government has singularly failed to comply with the directions of the High Court. It also does not appear that the various authorities like Central Government, State Government, Animal Husbandry Department, Industries Department and the APPCB which granted the requisite permissions took the above factors into consideration or that they were conscious of the said considerations before granting the permissions. We may make it clear that we have not taken into consideration the objections of the several voluntary organisations opposing the establishment of the said slaughterhouse. We have only referred to the objections of the Food and Agriculture Department which have found favour with the Krishnan Committee - and which recommendations have gone unconsidered by the Central. Government. In this behalf, we may mention that the endorsement of the Chief Secretary, which is at variance with the Krishnan Committee report is not only bald but is unsupported by any facts and figures. It appears to be the mere ipse dixit of the Chief Secretary 29. We are of the opinion that the learned Judges of the High Court have not appreciated this aspect in its proper perspective in the judgment under appeal. The learned Judges dealt with this aspect only in their judgment in Writ Petition No. 13062 of 1992. The learned Judges disposed of the said objection in the following words"As regards the effect of the project on depletion of cattle population, the Director of Animal Husbandry granted NOC on the ground that the effect of project on cattle growth is negligible. Shri R. V. Krishnans report without considering the report of Animal Husbandry Department supported the comments made by the Secretary, Food and Agriculture Department, who expressed the view that it will have enormous effect on depletion of cattle wealth. According to the Chief Secretary, the Agriculture Department expressed their view without taking into account the total figures of Andhra Pradesh and placing reliance on district figures alone is not enough. We are of the view that the effect of the project on the cattle wealth is a disputable area. The best judge for making the correct assessment is the Department of Animal Husbandry." * 30. We are of the opinion that the rejection of Krishnan Committee report in the above manner really amounts to slurring over the main recommendation of the said report. Moreover, the learned Judges have not dealt with the failure of the Central Government to consider the said report and pass appropriate orders pursuant to the directions of the High Court in its judgment dated 16-11-1991. The learned Judges have observed in the said judgment that it is not possible for the Court to go into conflicting reports of experts and that, therefore, they should leave the matter for the judgment of the Government. This observation again does not take into account the directions made by the said High Court in its judgment referred to above. They have also observed that the Director of Animal Husbandry has given his opinion or revised opinion, as the case may be, after taking into consideration the objections of the Food and Agriculture Department. Though no material has been brought to our notice in support of the said statement, we shall assume that it is so. Even then the fact remains that this reconsideration by Director, Animal Husbandry Department is Said to have taken place sometime in 1990, whereas even in 1992 the Food and Agriculture Department was yet protesting with its views before the Krishnan Committee. Above all, the said reconsideration by the Director, Animal Husbandry Department far prior to the judgment of the High Court dated 16-11-1991 does not relieve the Central Government of the obligation to consider the Krishnan Committee report and pass appropriate orders in the matter as directed by the judgment of the High Court dated 16-11-1991. It was for the Central Government to consider the said report taking into consideration the several facts and circumstances mentioned therein as also the contending views expressed by the several authorities and departments referred to therein. This the Central Government has clearly failed to do31. There is another relevant consideration. The slaughterhouse has been in operation for the past eighteen months or so. It would be possible to find out the effect, if any, the operation of the slaughterhouse had on the cattle population of Medak and adjacent and nearby districts. It would equally be relevant to ascertain, if possible, what percentage of cattle slaughtered have been brought from other States and what percentage from the surrounding areas. In this connection, it is relevant to mention that the Animal Husbandry Department has taken the total cattle population of the Andhra Pradesh State which is indeed misleading. The slaughterhouse is situated on the western border of Andhra Pradesh State, almost on the trijunction of Andhra Pradesh, Maharashtra and Karnataka. In such a situation, the slaughterhouse would rather draw its requirements of cattle from the surrounding and nearby districts rather than go all the way to far away districts of Andhra Pradesh State like Srikakulam, Visakhapatnam or for that matter, Nellore and Anantapur, which are situated several hundreds of miles away. The transport of cattle over long distances may induce the slaughterhouse to go in for cattle from the nearby areas, whether in Andhra Pradesh, Maharashtra or Karnataka - unless, of course, the cattle are available at far cheaper rates at distant places, which together with transport charges would make it more economic for the slaughterhouse to bring cattle from far away districts or from far away areas in the country. Therefore, taking the entire cattle population of Andhra Pradesh State is bound to convey an incorrect picture. Perhaps, it would be more appropriate to take into consideration the cattle population of, what the Krishnan Committee calls, the hinterland of the slaughterhouse

0[ds]29. We are of the opinion that the learned Judges of the High Court have not appreciated this aspect in its proper perspective in the judgment under appeal. The learned Judges dealt with this aspect only in their judgment in Writ Petition No. 13062 of 1992. The learned Judges disposed of the said objection in the following words"As regards the effect of the project on depletion of cattle population, the Director of Animal Husbandry granted NOC on the ground that the effect of project on cattle growth is negligible. Shri R. V. Krishnans report without considering the report of Animal Husbandry Department supported the comments made by the Secretary, Food and Agriculture Department, who expressed the view that it will have enormous effect on depletion of cattle wealth. According to the Chief Secretary, the Agriculture Department expressed their view without taking into account the total figures of Andhra Pradesh and placing reliance on district figures alone is not enough. We are of the view that the effect of the project on the cattle wealth is a disputable area. The best judge for making the correct assessment is the Department of Animal Husbandry."We are of the opinion that the rejection of Krishnan Committee report in the above manner really amounts to slurring over the main recommendation of the said report. Moreover, the learned Judges have not dealt with the failure of the Central Government to consider the said report and pass appropriate orders pursuant to the directions of the High Court in its judgment datedThe learned Judges have observed in the said judgment that it is not possible for the Court to go into conflicting reports of experts and that, therefore, they should leave the matter for the judgment of the Government. This observation again does not take into account the directions made by the said High Court in its judgment referred to above. They have also observed that the Director of Animal Husbandry has given his opinion or revised opinion, as the case may be, after taking into consideration the objections of the Food and Agriculture Department. Though no material has been brought to our notice in support of the said statement, we shall assume that it is so. Even then the fact remains that this reconsideration by Director, Animal Husbandry Department is Said to have taken place sometime in 1990, whereas even in 1992 the Food and Agriculture Department was yet protesting with its views before the Krishnan Committee. Above all, the said reconsideration by the Director, Animal Husbandry Department far prior to the judgment of the High Court dateddoes not relieve the Central Government of the obligation to consider the Krishnan Committee report and pass appropriate orders in the matter as directed by the judgment of the High Court datedIt was for the Central Government to consider the said report taking into consideration the several facts and circumstances mentioned therein as also the contending views expressed by the several authorities and departments referred to therein. This the Central Government has clearly failed to do31. There is another relevant consideration. The slaughterhouse has been in operation for the past eighteen months or so. It would be possible to find out the effect, if any, the operation of the slaughterhouse had on the cattle population of Medak and adjacent and nearby districts. It would equally be relevant to ascertain, if possible, what percentage of cattle slaughtered have been brought from other States and what percentage from the surrounding areas. In this connection, it is relevant to mention that the Animal Husbandry Department has taken the total cattle population of the Andhra Pradesh State which is indeed misleading. The slaughterhouse is situated on the western border of Andhra Pradesh State, almost on the trijunction of Andhra Pradesh, Maharashtra and Karnataka. In such a situation, the slaughterhouse would rather draw its requirements of cattle from the surrounding and nearby districts rather than go all the way to far away districts of Andhra Pradesh State like Srikakulam, Visakhapatnam or for that matter, Nellore and Anantapur, which are situated several hundreds of miles away. The transport of cattle over long distances may induce the slaughterhouse to go in for cattle from the nearby areas, whether in Andhra Pradesh, Maharashtra or Karnatakaunless, of course, the cattle are available at far cheaper rates at distant places, which together with transport charges would make it more economic for the slaughterhouse to bring cattle from far away districts or from far away areas in the country. Therefore, taking the entire cattle population of Andhra Pradesh State is bound to convey an incorrect picture. Perhaps, it would be more appropriate to take into consideration the cattle population of, what the Krishnan Committee calls, the hinterland of the slaughterhouse

### Instruction: Ascertain if the court will uphold (1) or dismiss (0) the appeal in the case proceeding, and then clarify this prediction by discussing critical sentences from the text. ### Input: was for the Central Government to consider the contents of the Krishnan Committee report and take a decision in the matter of establishment and operation of the said slaughterhouse. It cannot but be said that the Central Government has singularly failed to comply with the directions of the High Court. It also does not appear that the various authorities like Central Government, State Government, Animal Husbandry Department, Industries Department and the APPCB which granted the requisite permissions took the above factors into consideration or that they were conscious of the said considerations before granting the permissions. We may make it clear that we have not taken into consideration the objections of the several voluntary organisations opposing the establishment of the said slaughterhouse. We have only referred to the objections of the Food and Agriculture Department which have found favour with the Krishnan Committee - and which recommendations have gone unconsidered by the Central. Government. In this behalf, we may mention that the endorsement of the Chief Secretary, which is at variance with the Krishnan Committee report is not only bald but is unsupported by any facts and figures. It appears to be the mere ipse dixit of the Chief Secretary 29. We are of the opinion that the learned Judges of the High Court have not appreciated this aspect in its proper perspective in the judgment under appeal. The learned Judges dealt with this aspect only in their judgment in Writ Petition No. 13062 of 1992. The learned Judges disposed of the said objection in the following words"As regards the effect of the project on depletion of cattle population, the Director of Animal Husbandry granted NOC on the ground that the effect of project on cattle growth is negligible. Shri R. V. Krishnans report without considering the report of Animal Husbandry Department supported the comments made by the Secretary, Food and Agriculture Department, who expressed the view that it will have enormous effect on depletion of cattle wealth. According to the Chief Secretary, the Agriculture Department expressed their view without taking into account the total figures of Andhra Pradesh and placing reliance on district figures alone is not enough. We are of the view that the effect of the project on the cattle wealth is a disputable area. The best judge for making the correct assessment is the Department of Animal Husbandry." * 30. We are of the opinion that the rejection of Krishnan Committee report in the above manner really amounts to slurring over the main recommendation of the said report. Moreover, the learned Judges have not dealt with the failure of the Central Government to consider the said report and pass appropriate orders pursuant to the directions of the High Court in its judgment dated 16-11-1991. The learned Judges have observed in the said judgment that it is not possible for the Court to go into conflicting reports of experts and that, therefore, they should leave the matter for the judgment of the Government. This observation again does not take into account the directions made by the said High Court in its judgment referred to above. They have also observed that the Director of Animal Husbandry has given his opinion or revised opinion, as the case may be, after taking into consideration the objections of the Food and Agriculture Department. Though no material has been brought to our notice in support of the said statement, we shall assume that it is so. Even then the fact remains that this reconsideration by Director, Animal Husbandry Department is Said to have taken place sometime in 1990, whereas even in 1992 the Food and Agriculture Department was yet protesting with its views before the Krishnan Committee. Above all, the said reconsideration by the Director, Animal Husbandry Department far prior to the judgment of the High Court dated 16-11-1991 does not relieve the Central Government of the obligation to consider the Krishnan Committee report and pass appropriate orders in the matter as directed by the judgment of the High Court dated 16-11-1991. It was for the Central Government to consider the said report taking into consideration the several facts and circumstances mentioned therein as also the contending views expressed by the several authorities and departments referred to therein. This the Central Government has clearly failed to do31. There is another relevant consideration. The slaughterhouse has been in operation for the past eighteen months or so. It would be possible to find out the effect, if any, the operation of the slaughterhouse had on the cattle population of Medak and adjacent and nearby districts. It would equally be relevant to ascertain, if possible, what percentage of cattle slaughtered have been brought from other States and what percentage from the surrounding areas. In this connection, it is relevant to mention that the Animal Husbandry Department has taken the total cattle population of the Andhra Pradesh State which is indeed misleading. The slaughterhouse is situated on the western border of Andhra Pradesh State, almost on the trijunction of Andhra Pradesh, Maharashtra and Karnataka. In such a situation, the slaughterhouse would rather draw its requirements of cattle from the surrounding and nearby districts rather than go all the way to far away districts of Andhra Pradesh State like Srikakulam, Visakhapatnam or for that matter, Nellore and Anantapur, which are situated several hundreds of miles away. The transport of cattle over long distances may induce the slaughterhouse to go in for cattle from the nearby areas, whether in Andhra Pradesh, Maharashtra or Karnataka - unless, of course, the cattle are available at far cheaper rates at distant places, which together with transport charges would make it more economic for the slaughterhouse to bring cattle from far away districts or from far away areas in the country. Therefore, taking the entire cattle population of Andhra Pradesh State is bound to convey an incorrect picture. Perhaps, it would be more appropriate to take into consideration the cattle population of, what the Krishnan Committee calls, the hinterland of the slaughterhouse ### Response: 0 ### Explanation: 29. We are of the opinion that the learned Judges of the High Court have not appreciated this aspect in its proper perspective in the judgment under appeal. The learned Judges dealt with this aspect only in their judgment in Writ Petition No. 13062 of 1992. The learned Judges disposed of the said objection in the following words"As regards the effect of the project on depletion of cattle population, the Director of Animal Husbandry granted NOC on the ground that the effect of project on cattle growth is negligible. Shri R. V. Krishnans report without considering the report of Animal Husbandry Department supported the comments made by the Secretary, Food and Agriculture Department, who expressed the view that it will have enormous effect on depletion of cattle wealth. According to the Chief Secretary, the Agriculture Department expressed their view without taking into account the total figures of Andhra Pradesh and placing reliance on district figures alone is not enough. We are of the view that the effect of the project on the cattle wealth is a disputable area. The best judge for making the correct assessment is the Department of Animal Husbandry."We are of the opinion that the rejection of Krishnan Committee report in the above manner really amounts to slurring over the main recommendation of the said report. Moreover, the learned Judges have not dealt with the failure of the Central Government to consider the said report and pass appropriate orders pursuant to the directions of the High Court in its judgment datedThe learned Judges have observed in the said judgment that it is not possible for the Court to go into conflicting reports of experts and that, therefore, they should leave the matter for the judgment of the Government. This observation again does not take into account the directions made by the said High Court in its judgment referred to above. They have also observed that the Director of Animal Husbandry has given his opinion or revised opinion, as the case may be, after taking into consideration the objections of the Food and Agriculture Department. Though no material has been brought to our notice in support of the said statement, we shall assume that it is so. Even then the fact remains that this reconsideration by Director, Animal Husbandry Department is Said to have taken place sometime in 1990, whereas even in 1992 the Food and Agriculture Department was yet protesting with its views before the Krishnan Committee. Above all, the said reconsideration by the Director, Animal Husbandry Department far prior to the judgment of the High Court dateddoes not relieve the Central Government of the obligation to consider the Krishnan Committee report and pass appropriate orders in the matter as directed by the judgment of the High Court datedIt was for the Central Government to consider the said report taking into consideration the several facts and circumstances mentioned therein as also the contending views expressed by the several authorities and departments referred to therein. This the Central Government has clearly failed to do31. There is another relevant consideration. The slaughterhouse has been in operation for the past eighteen months or so. It would be possible to find out the effect, if any, the operation of the slaughterhouse had on the cattle population of Medak and adjacent and nearby districts. It would equally be relevant to ascertain, if possible, what percentage of cattle slaughtered have been brought from other States and what percentage from the surrounding areas. In this connection, it is relevant to mention that the Animal Husbandry Department has taken the total cattle population of the Andhra Pradesh State which is indeed misleading. The slaughterhouse is situated on the western border of Andhra Pradesh State, almost on the trijunction of Andhra Pradesh, Maharashtra and Karnataka. In such a situation, the slaughterhouse would rather draw its requirements of cattle from the surrounding and nearby districts rather than go all the way to far away districts of Andhra Pradesh State like Srikakulam, Visakhapatnam or for that matter, Nellore and Anantapur, which are situated several hundreds of miles away. The transport of cattle over long distances may induce the slaughterhouse to go in for cattle from the nearby areas, whether in Andhra Pradesh, Maharashtra or Karnatakaunless, of course, the cattle are available at far cheaper rates at distant places, which together with transport charges would make it more economic for the slaughterhouse to bring cattle from far away districts or from far away areas in the country. Therefore, taking the entire cattle population of Andhra Pradesh State is bound to convey an incorrect picture. Perhaps, it would be more appropriate to take into consideration the cattle population of, what the Krishnan Committee calls, the hinterland of the slaughterhouse

Union Of India Vs. Prem Kumar Jain & Ors. Etc

President to make any adaptation or modification of any law under Clause (2) of article 372 was, spent after three years, Parliament felt the necessary of giving such a power to the President once again for The purpose of bringing me provisions of any law in forced immediately before the commencement of the constitution (seventh Amendment) Act, 1956, into accord with the provisions or the (constitution as amended by that Act. that was therefore a necessary power as it was meant to make the amended (constitution workable. 1 or instance, section 3 (58) of the (general Clauses act, 1897, as it stood before the coming into force of the seventh Amendment Act, defined a `State" to mean `a Part A State, A part B State or a part C State ."As has been stated, that definition had itself been substituted by the Adaptation of Laws Order, 1950, to make it workable, and it served the purpose, for the country had those three types of States at that time. but an i mportant change was made by the constitution (seventh Amendment) Act, 1956, which abolished the distinction of part A, part B and part C states and provided, inter alia, that the territory of the country shall comprise the territories of the States and the Union territories specified in the First Schedule. the definition the expression "state as it stood before November 1, 1956, became unsuitable and misleading on the coming into force of the Constitution (Seventh Amendment) Act, 1956, from November 1, 1956, and it will, for obvious reasons, be futile to contend that it should have continued to be applicable for all time to come and remained the final definition of "State" " merely because The period of three years provided by Clause (3) (a) of article., 372 of the (constitution expired and was not extended by an amendment of that Clause, or because article 367(1) was not amended by the Seventh Amendment Act "to say that adaptations made in the General Clauses Act otherwise than those made under article 372(2) would be applicable to the interpretation of the Constitution." The High Court also erred in thinking that such "abstention seems to be deliberate." On the other hand, it is quite clear from the fact that Parliament inserted article 372A by the Constitution (Seventh Amendment) Act, 1956, that it was aware that the power of adoption under article 372(2) had come to an end, and was alive to the necessity of giving a similar power of adapting the laws once again to the President for the purposes of bringing the provisions of any law in force in the country immediately before the commencement of that Act "into accord" with the provisions of: the Constitution. It is therefore futile to contend that the definition of the expression "State" which was applicable upto November, 1956, remained the final definition for all time to come. That view is incorrect, for it overlooks or ignores the anxiety or the Parliament to remove any such misapprehensions by inserting article 372A. It was a special provision, and it was meant to serve the purpose of making the Seventh Amendment Act workable. As has been held by t his Court in Management of advance insurance Co. Ltd. v. Shri. Gurudas mal and others([1970] 3 S.C.R. 881), article 372A gave a fresh power to the President Which was equal and analogous to the power under article 372(2).It follows therefore that, as and from November 1, 1956, when the Constitution (Seventh Amendment) Act, 1956, came into force, the President had the power to adapt the laws for the purpose of bringing the provisions of any law in force in India into accord with the provisions of the Constitution. It was under that power that the President issued the Adaptation of Laws (No. 1) order, 1956, which, as has been shown, substituted a new Clause (58) in section 3 of The General Clauses Act providing, inter alia, that the expression "State" shall, as respects any period after the commencement of the Constitution (Seventh Amendment) Act 1956. mean "a State specified in the First Schedule to the Constitution and shall include a Union territory." It cannot be said with any justification that there was anything repugnant in the subject or context to make that definition inapplicable. By virtue of article 372A(1) of the Constitution, it was that definition of the expression "State" which had effect from the 1st day of November, 1956, and the Constitution expressly provided that it could "not be questioned in any court of law." The High Court therefore went wrong in taking a contrary view and in holding that "Union Territories are not States for purposes of Article 312(1) of the Constitution and 1 the preamble to the Act of 1951." That was why the High Court erred in holding that the definition of "State" in the Cadre Rules was ultra vires the All India Services Act, 1951 and the Constitution, and that the Union Territories Cadre of the Service was "not common to the Union and the States" within the meaning of article 312(1) of the Constitution. and that the Central Government could not make the Indian Administrative Service (Cadre) Rule s. 1954 in consultation with the State Governments as there were no such Governments in the Union Territories.The High Court has held further that section 3 of the All India Services Act, 1951 and rule 5 of the Cadre Rules have been contravened by the "direct appointment of respondents 2 to 37 to the Union Territories Cadre and by their being not recruited first to the IAS." But no such ground appears to have been taken in the writ petition. Moreover the validity or rule 4( 1) of the Recruitment Rules. which contained a non-obstante Clause providing for recruitment to the Joint Cadre of the Union Territories on its initial constitution by such method the Central (Government may after consultation with the Union Public Service Commission prescribe was not examined by the High Court.6.

1[ds]The power of adaptation or modification was therefore spent after the expiry of three years, and the High Court has taken the view that as it were only the adaptations made in the General Clauses Act under article 372(2) which applied to the interpretation of the Constitution in view of articl e 367(1) the adaptation made later, by article 372A, were not sono such ground appears to have been taken in the writ petition. Moreover the validity or rule 4( 1) of the Recruitment Rules. which contained a non-obstante Clause providing for recruitment to the Joint Cadre of the Union Territories on its initial constitution by such method the Central (Government may after consultation with the Union Public Service Commission prescribe was not examined by the Highhas been stated, that definition had itself been substituted by the Adaptation of Laws Order, 1950, to make it workable, and it served the purpose, for the country had those three types of States at that time. but an i mportant change was made by the constitution (seventh Amendment) Act, 1956, which abolished the distinction of part A, part B and part C states and provided, inter alia, that the territory of the country shall comprise the territories of the States and the Union territories specified in the First Schedule. the definition the expression "state as it stood before November 1, 1956, became unsuitable and misleading on the coming into force of the Constitution (Seventh Amendment) Act, 1956, from November 1, 1956, and it will, for obvious reasons, be futile to contend that it should have continued to be applicable for all time to come and remained the final definition of "State" " merely because The period of three years provided by Clause (3) (a) of article., 372 of the (constitution expired and was not extended by an amendment of that Clause, or because article 367(1) was not amended by the Seventh Amendment Act "to say that adaptations made in the General Clauses Act otherwise than those made under article 372(2) would be applicable to the interpretation of the Constitution." The High Court also erred in thinking that such "abstention seems to be deliberate." On the other hand, it is quite clear from the fact that Parliament inserted article 372A by the Constitution (Seventh Amendment) Act, 1956, that it was aware that the power of adoption under article 372(2) had come to an end, and was alive to the necessity of giving a similar power of adapting the laws once again to the President for the purposes of bringing the provisions of any law in force in the country immediately before the commencement of that Act "into accord" with the provisions of: the Constitution. It is therefore futile to contend that the definition of the expression "State" which was applicable upto November, 1956, remained the final definition for all time to come. That view is incorrect, for it overlooks or ignores the anxiety or the Parliament to remove any such misapprehensions by inserting article 372A. It was a special provision, and it was meant to serve the purpose of making the Seventh Amendment Act workable. As has been held by t his Court in Management of advance insurance Co. Ltd. v. Shri. Gurudas mal and others([1970] 3 S.C.R. 881), article 372A gave a fresh power to the President Which was equal and analogous to the power under article 372(2).It follows therefore that, as and from November 1, 1956, when the Constitution (Seventh Amendment) Act, 1956, came into force, the President had the power to adapt the laws for the purpose of bringing the provisions of any law in force in India into accord with the provisions of the Constitution. It was under that power that the President issued the Adaptation of Laws (No. 1) order, 1956, which, as has been shown, substituted a new Clause (58) in section 3 of The General Clauses Act providing, inter alia, that the expression "State" shall, as respects any period after the commencement of the Constitution (Seventh Amendment) Act 1956. mean "a State specified in the First Schedule to the Constitution and shall include a Union territory." It cannot be said with any justification that there was anything repugnant in the subject or context to make that definition inapplicable. By virtue of article 372A(1) of the Constitution, it was that definition of the expression "State" which had effect from the 1st day of November, 1956, and the Constitution expressly provided that it could "not be questioned in any court of law." The High Court therefore went wrong in taking a contrary view and in holding that "Union Territories are not States for purposes of Article 312(1) of the Constitution and 1 the preamble to the Act of 1951." That was why the High Court erred in holding that the definition of "State" in the Cadre Rules was ultra viresthe All India Services Act, 1951 and the Constitution, and that the Union Territories Cadre of the Service was "not common to the Union and the States" within the meaning of article 312(1) of the Constitution. and that the Central Government could not make the Indian Administrative Service (Cadre) Rule s. 1954 in consultation with the State Governments as there were no such Governments in the Union Territories.The High Court has held further that section 3 ofthe All India Services Act, 1951 and rule 5 of the Cadre Rules have been contravened by the "direct appointment of respondents 2 to 37 to the Union Territories Cadre and by their being not recruited first to the IAS." Butno such ground appears to have been taken in the writ petition. Moreover the validity or rule 4( 1) of the Recruitment Rules. which contained aClause providing for recruitment to the Joint Cadre of the Union Territories on its initial constitution by such method the Central (Government may after consultation with the Union Public Service Commission prescribe was not examined by the High

### Instruction: Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding. ### Input: President to make any adaptation or modification of any law under Clause (2) of article 372 was, spent after three years, Parliament felt the necessary of giving such a power to the President once again for The purpose of bringing me provisions of any law in forced immediately before the commencement of the constitution (seventh Amendment) Act, 1956, into accord with the provisions or the (constitution as amended by that Act. that was therefore a necessary power as it was meant to make the amended (constitution workable. 1 or instance, section 3 (58) of the (general Clauses act, 1897, as it stood before the coming into force of the seventh Amendment Act, defined a `State" to mean `a Part A State, A part B State or a part C State ."As has been stated, that definition had itself been substituted by the Adaptation of Laws Order, 1950, to make it workable, and it served the purpose, for the country had those three types of States at that time. but an i mportant change was made by the constitution (seventh Amendment) Act, 1956, which abolished the distinction of part A, part B and part C states and provided, inter alia, that the territory of the country shall comprise the territories of the States and the Union territories specified in the First Schedule. the definition the expression "state as it stood before November 1, 1956, became unsuitable and misleading on the coming into force of the Constitution (Seventh Amendment) Act, 1956, from November 1, 1956, and it will, for obvious reasons, be futile to contend that it should have continued to be applicable for all time to come and remained the final definition of "State" " merely because The period of three years provided by Clause (3) (a) of article., 372 of the (constitution expired and was not extended by an amendment of that Clause, or because article 367(1) was not amended by the Seventh Amendment Act "to say that adaptations made in the General Clauses Act otherwise than those made under article 372(2) would be applicable to the interpretation of the Constitution." The High Court also erred in thinking that such "abstention seems to be deliberate." On the other hand, it is quite clear from the fact that Parliament inserted article 372A by the Constitution (Seventh Amendment) Act, 1956, that it was aware that the power of adoption under article 372(2) had come to an end, and was alive to the necessity of giving a similar power of adapting the laws once again to the President for the purposes of bringing the provisions of any law in force in the country immediately before the commencement of that Act "into accord" with the provisions of: the Constitution. It is therefore futile to contend that the definition of the expression "State" which was applicable upto November, 1956, remained the final definition for all time to come. That view is incorrect, for it overlooks or ignores the anxiety or the Parliament to remove any such misapprehensions by inserting article 372A. It was a special provision, and it was meant to serve the purpose of making the Seventh Amendment Act workable. As has been held by t his Court in Management of advance insurance Co. Ltd. v. Shri. Gurudas mal and others([1970] 3 S.C.R. 881), article 372A gave a fresh power to the President Which was equal and analogous to the power under article 372(2).It follows therefore that, as and from November 1, 1956, when the Constitution (Seventh Amendment) Act, 1956, came into force, the President had the power to adapt the laws for the purpose of bringing the provisions of any law in force in India into accord with the provisions of the Constitution. It was under that power that the President issued the Adaptation of Laws (No. 1) order, 1956, which, as has been shown, substituted a new Clause (58) in section 3 of The General Clauses Act providing, inter alia, that the expression "State" shall, as respects any period after the commencement of the Constitution (Seventh Amendment) Act 1956. mean "a State specified in the First Schedule to the Constitution and shall include a Union territory." It cannot be said with any justification that there was anything repugnant in the subject or context to make that definition inapplicable. By virtue of article 372A(1) of the Constitution, it was that definition of the expression "State" which had effect from the 1st day of November, 1956, and the Constitution expressly provided that it could "not be questioned in any court of law." The High Court therefore went wrong in taking a contrary view and in holding that "Union Territories are not States for purposes of Article 312(1) of the Constitution and 1 the preamble to the Act of 1951." That was why the High Court erred in holding that the definition of "State" in the Cadre Rules was ultra vires the All India Services Act, 1951 and the Constitution, and that the Union Territories Cadre of the Service was "not common to the Union and the States" within the meaning of article 312(1) of the Constitution. and that the Central Government could not make the Indian Administrative Service (Cadre) Rule s. 1954 in consultation with the State Governments as there were no such Governments in the Union Territories.The High Court has held further that section 3 of the All India Services Act, 1951 and rule 5 of the Cadre Rules have been contravened by the "direct appointment of respondents 2 to 37 to the Union Territories Cadre and by their being not recruited first to the IAS." But no such ground appears to have been taken in the writ petition. Moreover the validity or rule 4( 1) of the Recruitment Rules. which contained a non-obstante Clause providing for recruitment to the Joint Cadre of the Union Territories on its initial constitution by such method the Central (Government may after consultation with the Union Public Service Commission prescribe was not examined by the High Court.6. ### Response: 1 ### Explanation: The power of adaptation or modification was therefore spent after the expiry of three years, and the High Court has taken the view that as it were only the adaptations made in the General Clauses Act under article 372(2) which applied to the interpretation of the Constitution in view of articl e 367(1) the adaptation made later, by article 372A, were not sono such ground appears to have been taken in the writ petition. Moreover the validity or rule 4( 1) of the Recruitment Rules. which contained a non-obstante Clause providing for recruitment to the Joint Cadre of the Union Territories on its initial constitution by such method the Central (Government may after consultation with the Union Public Service Commission prescribe was not examined by the Highhas been stated, that definition had itself been substituted by the Adaptation of Laws Order, 1950, to make it workable, and it served the purpose, for the country had those three types of States at that time. but an i mportant change was made by the constitution (seventh Amendment) Act, 1956, which abolished the distinction of part A, part B and part C states and provided, inter alia, that the territory of the country shall comprise the territories of the States and the Union territories specified in the First Schedule. the definition the expression "state as it stood before November 1, 1956, became unsuitable and misleading on the coming into force of the Constitution (Seventh Amendment) Act, 1956, from November 1, 1956, and it will, for obvious reasons, be futile to contend that it should have continued to be applicable for all time to come and remained the final definition of "State" " merely because The period of three years provided by Clause (3) (a) of article., 372 of the (constitution expired and was not extended by an amendment of that Clause, or because article 367(1) was not amended by the Seventh Amendment Act "to say that adaptations made in the General Clauses Act otherwise than those made under article 372(2) would be applicable to the interpretation of the Constitution." The High Court also erred in thinking that such "abstention seems to be deliberate." On the other hand, it is quite clear from the fact that Parliament inserted article 372A by the Constitution (Seventh Amendment) Act, 1956, that it was aware that the power of adoption under article 372(2) had come to an end, and was alive to the necessity of giving a similar power of adapting the laws once again to the President for the purposes of bringing the provisions of any law in force in the country immediately before the commencement of that Act "into accord" with the provisions of: the Constitution. It is therefore futile to contend that the definition of the expression "State" which was applicable upto November, 1956, remained the final definition for all time to come. That view is incorrect, for it overlooks or ignores the anxiety or the Parliament to remove any such misapprehensions by inserting article 372A. It was a special provision, and it was meant to serve the purpose of making the Seventh Amendment Act workable. As has been held by t his Court in Management of advance insurance Co. Ltd. v. Shri. Gurudas mal and others([1970] 3 S.C.R. 881), article 372A gave a fresh power to the President Which was equal and analogous to the power under article 372(2).It follows therefore that, as and from November 1, 1956, when the Constitution (Seventh Amendment) Act, 1956, came into force, the President had the power to adapt the laws for the purpose of bringing the provisions of any law in force in India into accord with the provisions of the Constitution. It was under that power that the President issued the Adaptation of Laws (No. 1) order, 1956, which, as has been shown, substituted a new Clause (58) in section 3 of The General Clauses Act providing, inter alia, that the expression "State" shall, as respects any period after the commencement of the Constitution (Seventh Amendment) Act 1956. mean "a State specified in the First Schedule to the Constitution and shall include a Union territory." It cannot be said with any justification that there was anything repugnant in the subject or context to make that definition inapplicable. By virtue of article 372A(1) of the Constitution, it was that definition of the expression "State" which had effect from the 1st day of November, 1956, and the Constitution expressly provided that it could "not be questioned in any court of law." The High Court therefore went wrong in taking a contrary view and in holding that "Union Territories are not States for purposes of Article 312(1) of the Constitution and 1 the preamble to the Act of 1951." That was why the High Court erred in holding that the definition of "State" in the Cadre Rules was ultra viresthe All India Services Act, 1951 and the Constitution, and that the Union Territories Cadre of the Service was "not common to the Union and the States" within the meaning of article 312(1) of the Constitution. and that the Central Government could not make the Indian Administrative Service (Cadre) Rule s. 1954 in consultation with the State Governments as there were no such Governments in the Union Territories.The High Court has held further that section 3 ofthe All India Services Act, 1951 and rule 5 of the Cadre Rules have been contravened by the "direct appointment of respondents 2 to 37 to the Union Territories Cadre and by their being not recruited first to the IAS." Butno such ground appears to have been taken in the writ petition. Moreover the validity or rule 4( 1) of the Recruitment Rules. which contained aClause providing for recruitment to the Joint Cadre of the Union Territories on its initial constitution by such method the Central (Government may after consultation with the Union Public Service Commission prescribe was not examined by the High

National Insurance Co. Ltd Vs. Abhaysing Pratapsing Waghela

1923) in respect of the death of, or bodily injury to, any such employee- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. 14. An insurance company, however, is entitled to deny its liability to indemnify the owner of the vehicle on limited grounds as provided for under sub-section (2) of Section 149 thereof. 15. One of the grounds which are available to the insurance company to deny its statutory liability as envisaged under sub-section (2) of Section 149 of the Act is that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particulars. 16. Indisputably, the first respondent is a third party in relation to the contract of insurance which had been entered into by and between the appellant and the owner of the vehicle in question. We have noticed hereinbefore that a document was produced before the Tribunal. Even according to the appellant, although it was only a Motor Input Advice cum Receipt, it contained the Cover Note No. 279106. We, therefore, have to suppose that a Cover Note had, in fact, been issued. If a Cover Note had been issued which in terms of clause (b) of sub-Section 1 of Section 145 of the Act would come within the purview of definition of certificate of insurance; it also would come within the purview of the definition of a insurance policy. If a Cover Note is issued, it remains valid till it is cancelled. Indisputably, the insurance policy was cancelled only after the accident took place. A finding of fact, therefore, has been arrived at that prior to the deposit of the premium of insurance in cash by the owner of the vehicle, the cover note was not cancelled. 17. It is in the aforementioned situation, we are of the opinion, that the judgment of the High Court cannot be faulted. No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be borne in mind between a contract of insurance which has been entered into for the purpose of giving effect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory flavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the Contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third party risk must, therefore, be viewed differently vis-à-vis a contract of insurance qua contract. 18. In National Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700] , this Court opined: 23. As noted above, there is no contractual relation between the third party and the insurer. Because of the statutory intervention in terms of Section 149, the same becomes operative in essence and Section 149 provides complete insulation. 24. In the background of the statutory provisions, one thing is crystal clear i.e. the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake license has to be considered differently in respect of third party and in respect of own damage claims. The same view was reiterated in Oriental Insurance Co. Ltd. v. Meena Variyal & Ors. [(2007) 5 SCC 428] stating: 14. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmens Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods. This Court in Oriental Insurance Co. Ltd. v. Sudhakaran K.V. and Ors. [2008 (8) SCALE 402 ] held: 14. The provisions of the Act and, in particular, Section 147 of the Act were enacted for the purpose of enforcing the principles of social justice. It, however, must be kept confined to a third party risk. A contract of insurance which is not statutory in nature should be construed like any other contract. This Court in Oriental Insurance Co. Ltd. v. Inderjeet Kaur [(1998) 1 SCC 71] held that once a certificate of insurance is issued, the insurance company would not be absolved of its obligations to third parties. Yet again in Deddappa & Ors. V. Branch Manager, National Insurance Co. Ltd. [(2008) 2 SCC 595] , having regard to the provisions contained in Section 54(v) of the Insurance Act, 1938, in the fact situation obtaining therein, it was opined : A contract is based on reciprocal promise. Reciprocal promises by the parties are condition precedents for a valid contract. A contract furthermore must be for consideration. 19. We, therefore, in the facts and circumstances of the case, are unable to agree with the contention of the learned counsel for the appellant. In any event, this is a case where this Court should not exercise its discretionary jurisdiction under Article 136 of the Constitution of India as only a sum of Rs.46,000/- is awarded in favour of respondent No.1. 20. In our opinion, the impugned judgment does not warrant any interference.

0[ds]we are of the opinion, that the judgment of the High Court cannot be faulted. No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be borne in mind between a contract of insurance which has been entered into for the purpose of giving effect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory flavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the Contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third party risk must, therefore, be viewed differently vis-à-vis a contract of insurance qua contractWe, therefore, in the facts and circumstances of the case, are unable to agree with the contention of the learned counsel for the appellant. In any event, this is a case where this Court should not exercise its discretionary jurisdiction under Article 136 of the Constitution of India as only a sum of Rs.46,000/- is awarded in favour of respondent No.1In our opinion, the impugned judgment does not warrant any interference.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: 1923) in respect of the death of, or bodily injury to, any such employee- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. 14. An insurance company, however, is entitled to deny its liability to indemnify the owner of the vehicle on limited grounds as provided for under sub-section (2) of Section 149 thereof. 15. One of the grounds which are available to the insurance company to deny its statutory liability as envisaged under sub-section (2) of Section 149 of the Act is that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particulars. 16. Indisputably, the first respondent is a third party in relation to the contract of insurance which had been entered into by and between the appellant and the owner of the vehicle in question. We have noticed hereinbefore that a document was produced before the Tribunal. Even according to the appellant, although it was only a Motor Input Advice cum Receipt, it contained the Cover Note No. 279106. We, therefore, have to suppose that a Cover Note had, in fact, been issued. If a Cover Note had been issued which in terms of clause (b) of sub-Section 1 of Section 145 of the Act would come within the purview of definition of certificate of insurance; it also would come within the purview of the definition of a insurance policy. If a Cover Note is issued, it remains valid till it is cancelled. Indisputably, the insurance policy was cancelled only after the accident took place. A finding of fact, therefore, has been arrived at that prior to the deposit of the premium of insurance in cash by the owner of the vehicle, the cover note was not cancelled. 17. It is in the aforementioned situation, we are of the opinion, that the judgment of the High Court cannot be faulted. No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be borne in mind between a contract of insurance which has been entered into for the purpose of giving effect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory flavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the Contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third party risk must, therefore, be viewed differently vis-à-vis a contract of insurance qua contract. 18. In National Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700] , this Court opined: 23. As noted above, there is no contractual relation between the third party and the insurer. Because of the statutory intervention in terms of Section 149, the same becomes operative in essence and Section 149 provides complete insulation. 24. In the background of the statutory provisions, one thing is crystal clear i.e. the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake license has to be considered differently in respect of third party and in respect of own damage claims. The same view was reiterated in Oriental Insurance Co. Ltd. v. Meena Variyal & Ors. [(2007) 5 SCC 428] stating: 14. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmens Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods. This Court in Oriental Insurance Co. Ltd. v. Sudhakaran K.V. and Ors. [2008 (8) SCALE 402 ] held: 14. The provisions of the Act and, in particular, Section 147 of the Act were enacted for the purpose of enforcing the principles of social justice. It, however, must be kept confined to a third party risk. A contract of insurance which is not statutory in nature should be construed like any other contract. This Court in Oriental Insurance Co. Ltd. v. Inderjeet Kaur [(1998) 1 SCC 71] held that once a certificate of insurance is issued, the insurance company would not be absolved of its obligations to third parties. Yet again in Deddappa & Ors. V. Branch Manager, National Insurance Co. Ltd. [(2008) 2 SCC 595] , having regard to the provisions contained in Section 54(v) of the Insurance Act, 1938, in the fact situation obtaining therein, it was opined : A contract is based on reciprocal promise. Reciprocal promises by the parties are condition precedents for a valid contract. A contract furthermore must be for consideration. 19. We, therefore, in the facts and circumstances of the case, are unable to agree with the contention of the learned counsel for the appellant. In any event, this is a case where this Court should not exercise its discretionary jurisdiction under Article 136 of the Constitution of India as only a sum of Rs.46,000/- is awarded in favour of respondent No.1. 20. In our opinion, the impugned judgment does not warrant any interference. ### Response: 0 ### Explanation: we are of the opinion, that the judgment of the High Court cannot be faulted. No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be borne in mind between a contract of insurance which has been entered into for the purpose of giving effect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory flavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the Contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third party risk must, therefore, be viewed differently vis-à-vis a contract of insurance qua contractWe, therefore, in the facts and circumstances of the case, are unable to agree with the contention of the learned counsel for the appellant. In any event, this is a case where this Court should not exercise its discretionary jurisdiction under Article 136 of the Constitution of India as only a sum of Rs.46,000/- is awarded in favour of respondent No.1In our opinion, the impugned judgment does not warrant any interference.

Mani Kumar Thapa Vs. State Of Sikkim

safeguard by seeking help from others. Failure to do so makes us infer that the appellant already already knew the intention of A-1 and acquiesced with the same. Here we would also note that in the normal course if the deceased was being taken for interrogation of for the purpose of keeping him away from any mischief that A-1 suspected him of planning to commit in the meeting of the Chief Minister then the normal destination would have been the Police Station but that was not the direction in which the vehicle was moving, therefore, it is legitimate for us to conclude that the appellant know that the deceased was being taken towards the check-post with certain other oblique motive. This conduct of the appellant in not trying to find out the reason for taking the deceased and the destination further strengthen our inference that the appellant knew well in advance what was the reason and the destination to which the deceased was being taken. Assuming for arguments sake that he was no obedient or innocent or ignorant enough to keep quiet right through the journey then one would have expected him on his return at least to having informed of the incident to some person in authority or at least to a friend with a view to exculpate himself from the incident in which the deceased lost his life except what he told PW-5 on 13th and 16th of February. Which, of course, is only one of the version of his story which the appellant had adopted to mislead the investigation. This statement to PW-5 apart we see there is nothing which the appellant did which is in consonance with his innocence. Per contra, it is seen that the appellant accompanied A-1 in the evening of 2.2.1988 to a farewell function organised to bid farewell to one of their colleagues, this also indicates the appellants conduct in sharing A-1s intention. It is further seen that on 13.2.1988 the appellant accompanied A-1 went to Ramam check-post without there being any official reason for the same except to deliver two torch-lights. We find it difficult to believe that the appellant who witnessed a crime to which he is not party, would venture to go again with A-1 on 13.2.1988 to the scene of the occurrence if he was actually innocent. It is also to be noticed that though on 13.2.1988he told PW.5 about the incident of 12.2.1988 without inculpating himself, he again goes to Ramam check-post on 14.2.1988. This constant visit to the place of the incident along with A-1 makes the hypothesis presented on behalf of the appellant highly improbable and gives sufficient room to infer that the appellant did know and share the intention harboured by A-1 in the crime. If we analyse the prosecution evidence further it is seen that in regard to the travelling in the jeep from where they picked up the deceased then on to Ramam check-post and back, we see the appellant has given 3 different occasions. To PW-5 he stated that while taking the deceased towards Singla from the check-post, the allowed him to run away from the jeep after they crossed the Ramam check-post when A-1 had got from the jeep to ease himself. To PW-36 he told that when they were bringing a smuggler from Darjeeling side to Ramam check-post i.e. from the opposite direction the smuggler escaped from the jeep and in the process of running he fell down and suffered fatal injuries. In his statement u/s. 313 Cr. PC before the court, he stated that on 12.2.1988 he had gone to Soreng on the orders of his S.P. as the Chief Minister was visiting Soreng and on the evening of that day as he did not have any vehicle, he took a lift in the vehicle of A-1 up to Jorthang from where he went to his quarters the accused No.1 went to Naya Bazar Dak bungalow as he was camping there on duty. These 3 different versions which are self-contradictory further show that the appellant has not been consistent in his stand as to what happened on 12.2.1988. This Court in the case of State of Maharashtra v. Suresh (2000 (1) SCC 471 ) has held that a false answer offered by the accused when his attention was drawn to any inculpating circumstance would render such circumstance as capable of inculpating him. The Court also held that in such a situation a false answer can also be counted as providing "a missing link" in completing the chain. If the said principle in law is to be accepted, the statement of the appellant made u/s. 313 Cr.PC being palpably false and there being cogent evidence adduced by the prosecution to show that the appellant had given two either versions to the incident of 12.2.1988, we will have to proceed on the basis that the appellant has not explained the inculpating circumstances established by the prosecution against him which from an additional link in the chain of circumstances. Then again there is another factor to be taken note of regard to the sharing of the common object of A-1 by the appellant. It has come in evidence of PW-5 that the appellant had told him that after the body of the deceased was taken from the place where it had fallen in the first instance, the appellant had taken away certain possible identification materials like Panchayat seal and some personal papers with a view to create a false evidence as to the whereabouts of the deceased. This also indicates the involvement of the appellant in the crime. These circumstances and inferences drawn from such proved circumstances establish beyond all reasonable doubt that the appellant did share the common intention of A-1 in taking the deceased away in the jeep driven by A-1 and causing the murder, therefore, the hypothesis of innocence pleaded on behalf of the appellant in our opinion is not in consonance with the innocence of the appellant.

0[ds]We do not find much force in this argument of Mr. Lalit. It is aprinciple in law that in a trial for murder, it is neither an absolute necessity nor an essential ingredient to establish corpus delicti. The fact of the death of the deceased must be established like any other fact. Corpus delicti in some cases may not be possible to be traced or recovered. There are a number of possibilities where a dead body could be disposed of without trace, therefore, if the recovery of the dead body is to be held to be mandatory to convict an accused, in many a case the accused would manage to see that dead body is destroyed which would afford the accused complete immunity from being held guilty or from being punished. What is therefore required in law to base a conviction for an offence of murder is that there should be reliable and plausible evidence that the offence of murder like any other factum of death was committed and it must be proved by direct or circumstantial evidence albeit the dead body many not be traced. (See Sevaka Perumal & Anr. vs. State of Tamil Nadu (1991 (3) SCC 471 ). Therefore, the argument that in the absence of corpus delicti the prosecution case should be rejected, cannot be accepted. Similar fate will follow the argument that in the absence of any specific motive there can be no conviction. In the instant casewife of the deceased, has spoken about some enmity betweenand the deceased. Assuming that this evidence is insufficient to establish the motive for murder even then if the prosecution is able to establish beyond all reasonable doubt from other circumstantial evidence that it is the accused (including the appellant) alone who could have committed the murder, the absence of the motive will not hamper a safe conviction. In the instant case the chain of circumstances starting from the afternoon of 12.2.1988 right up to 16.2.1998 clearly shows that the deceased was taken byand the appellant in the jeep and thereafter the deceased was never seen. The subsequent conduct ofost in the night,visiting thethereafter at different times without an acceptable reason,visiting theKerabari Forest Headquarters on 13.2.1988 and thereafter recovery of the belongings of the deceased from the place where the dead body was allegedly thrown in the first instance, the apprehension entertained by the deceased which was made known tothe apprehension entertained bywhich was made known to his superior vide letters Ex.3, the statements of the accused made to(to the extent they are acceptable), the contradictory versions given by the appellant to PWs. 5 and 36, the presence of the appellant andtogether at the farewell function of their colleague in the evening of 12.2.1988 and unacceptable explanation amounting to falsehood given by the appellant in regard to his whereabouts on 12.2.1988 cumulatively establish the continuous links in the chain of circumstances which was, in our opinion, rightly accepted by the courts below to base a conviction. Having carefully considered the evidence led by the prosecution in regard to the above circumstances we are of the opinion that the courts below were justified in arriving at the finding that the appellant was guilty of the charge framed against him, and we find no reason whatsoever to disagree with thisthe presentation of this hypothesis, Mr. Lalit points out that admittedly there was no motive for the appellant to be involved in the abduction or murder of the deceased. From the evidence of PWs. 3, 5 to 9, 11 and 12, learned counsel points out that at every point of time it waswho was asking for the whereabouts of the deceased and the appellant as a subordinate ofwas only accompanyingin the jeep. He did not play any role in search of the deceased. Thereafter too from the evidence ofhe points out even when the deceased was being taken in the jeep in the presence ofno conversation took place involving the appellant and nobody entertained any apprehension about the conduct of the appellant. He further points out from the letters Ex.that evendid not suspect the involvement of the appellant. Assuming that the prosecution case is that the appellant was present at the time when the deceased was abducted, the learned counsel contends since there is no overt act on his part, he cannot be held guilty for the intention ofHe further tries to build an argument by pointing out that the statement made by him toon 13.2.1988 and 16.2.1988 as also the statement made toon 13.2.1988 clearly shows that he tried to help the deceased to get away, therefore, he had nothing whatsoever to do with the act ofHe submits that this hypothesis presented by him based clearly on the prosecution case being one which is reasonable and in consonance with the case of the prosecution, in a case of circumstantial evidence, he is entitled to the benefit of doubt.6. If the prosecution case were to be confined only to the facts referred to by the learned counsel for the appellant in his presentation of the hypothesis then there may be some force in the said argument. But then while considering a hypothesis of this nature, we will have to take into consideration the entire prosecution case and the circumstances proved by the prosecution as also any legitimate inference that could be drawn from such proved circumstances. If that is done then we notice the main plank of the appellants hypothesis that the appellant did not know the intention ofin taking away the deceased with him in his jeep, falls to the ground. In this regard we notice that it is an admitted fact as could be seen hereafter that the appellant was found in the company ofon 12.2.1988 sometime in the afternoon while travelling in the jeep driven byand searching for the deceased. To the extent that he was withon that afternoon is admitted by the appellant himself in his statement u/s. 313 Cr.P.C. From the evidence of PWs. 3, 5 to 9, 11 and 12, the prosecution has established thatand the appellant ultimately met the deceased and took him away in the jeep driven byDuring that timealso accompanied these accused persons and the deceased to some distance in the jeep. It is a fact that then the appellant did not in any manner indicate that he shared the common intention ofin taking the deceased away. But then if we examine the conduct of the appellant we find if really the appellant did not know the object for which the deceased was being taken in the jeep, one would have expected as a natural conduct at least afteralighted from the vehicle, the appellant would have askedthe purpose of taking the deceased with them. The appellant had done no such thing nor has the appellant given any explanation in his statement u/s. 313 Cr.PC in this regard. The explanation in this regard is only found in the argument of the learned counsel in this Court which is that the appellant being an obedient subordinate ofmight not have questioned the authority of his superior. We do not think such an explanation is acceptable to anybody. If really the appellant was innocent, having known that a crime is committed, any prudent person if he was innocent, would certainly have tried to dissuadefrom committing a crime and if he failed in his attempt, he would have certainly taken steps to see that his non involvement is safeguard by seeking help from others. Failure to do so makes us infer that the appellant already already knew the intention ofand acquiesced with the same. Here we would also note that in the normal course if the deceased was being taken for interrogation of for the purpose of keeping him away from any mischief thatsuspected him of planning to commit in the meeting of the Chief Minister then the normal destination would have beenbut that was not the direction in which the vehicle was moving, therefore, it is legitimate for us to conclude that the appellant know that the deceased was being taken towards thewith certain other oblique motive. This conduct of the appellant in not trying to find out the reason for taking the deceased and the destination further strengthen our inference that the appellant knew well in advance what was the reason and the destination to which the deceased was being taken. Assuming for arguments sake that he was no obedient or innocent or ignorant enough to keep quiet right through the journey then one would have expected him on his return at least to having informed of the incident to some person in authority or at least to a friend with a view to exculpate himself from the incident in which the deceased lost his life except what he toldon 13th and 16th of February. Which, of course, is only one of the version of his story which the appellant had adopted to mislead the investigation. This statement toapart we see there is nothing which the appellant did which is in consonance with his innocence. Per contra, it is seen that the appellant accompaniedin the evening of 2.2.1988 to a farewell function organised to bid farewell to one of their colleagues, this also indicates the appellants conduct in sharingintention. It is further seen that on 13.2.1988 the appellant accompaniedwent to Ramamwithout there being any official reason for the same except to deliver twoWe find it difficult to believe that the appellant who witnessed a crime to which he is not party, would venture to go again withon 13.2.1988 to the scene of the occurrence if he was actually innocent. It is also to be noticed that though on 13.2.1988he told PW.5 about the incident of 12.2.1988 without inculpating himself, he again goes to Ramamon 14.2.1988. This constant visit to the place of the incident along withmakes the hypothesis presented on behalf of the appellant highly improbable and gives sufficient room to infer that the appellant did know and share the intention harboured byin the crime. If we analyse the prosecution evidence further it is seen that in regard to the travelling in the jeep from where they picked up the deceased then on to Ramamand back, we see the appellant has given 3 different occasions. Tohe stated that while taking the deceased towards Singla from thethe allowed him to run away from the jeep after they crossed the Ramamhad got from the jeep to ease himself. Tohe told that when they were bringing a smuggler from Darjeeling side to Ramami.e. from the opposite direction the smuggler escaped from the jeep and in the process of running he fell down and suffered fatal injuries. In his statement u/s. 313 Cr. PC before the court, he stated that on 12.2.1988 he had gone to Soreng on the orders of his S.P. as the Chief Minister was visiting Soreng and on the evening of that day as he did not have any vehicle, he took a lift in the vehicle ofup to Jorthang from where he went to his quarters the accused No.1 went to Naya Bazar Dak bungalow as he was camping there on duty. These 3 different versions which arefurther show that the appellant has not been consistent in his stand as to what happened on 12.2.1988. This Court in the case of State of Maharashtra v. Suresh (2000 (1) SCC 471 ) has held that a false answer offered by the accused when his attention was drawn to any inculpating circumstance would render such circumstance as capable of inculpating him. The Court also held that in such a situation a false answer can also be counted as providing "a missing link" in completing the chain. If the said principle in law is to be accepted, the statement of the appellant made u/s. 313 Cr.PC being palpably false and there being cogent evidence adduced by the prosecution to show that the appellant had given two either versions to the incident of 12.2.1988, we will have to proceed on the basis that the appellant has not explained the inculpating circumstances established by the prosecution against him which from an additional link in the chain of circumstances.n there is another factor to be taken note of regard to the sharing of the common object ofby the appellant. It has come in evidence ofthat the appellant had told him that after the body of the deceased was taken from the place where it had fallen in the first instance, the appellant had taken away certain possible identification materials like Panchayat seal and some personal papers with a view to create a false evidence as to the whereabouts of the deceased. This also indicates the involvement of the appellant in the crime. These circumstances and inferences drawn from such proved circumstances establish beyond all reasonable doubt that the appellant did share the common intention ofin taking the deceased away in the jeep driven byand causing the murder, therefore, the hypothesis of innocence pleaded on behalf of the appellant in our opinion is not in consonance with the innocence of the appellant

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: safeguard by seeking help from others. Failure to do so makes us infer that the appellant already already knew the intention of A-1 and acquiesced with the same. Here we would also note that in the normal course if the deceased was being taken for interrogation of for the purpose of keeping him away from any mischief that A-1 suspected him of planning to commit in the meeting of the Chief Minister then the normal destination would have been the Police Station but that was not the direction in which the vehicle was moving, therefore, it is legitimate for us to conclude that the appellant know that the deceased was being taken towards the check-post with certain other oblique motive. This conduct of the appellant in not trying to find out the reason for taking the deceased and the destination further strengthen our inference that the appellant knew well in advance what was the reason and the destination to which the deceased was being taken. Assuming for arguments sake that he was no obedient or innocent or ignorant enough to keep quiet right through the journey then one would have expected him on his return at least to having informed of the incident to some person in authority or at least to a friend with a view to exculpate himself from the incident in which the deceased lost his life except what he told PW-5 on 13th and 16th of February. Which, of course, is only one of the version of his story which the appellant had adopted to mislead the investigation. This statement to PW-5 apart we see there is nothing which the appellant did which is in consonance with his innocence. Per contra, it is seen that the appellant accompanied A-1 in the evening of 2.2.1988 to a farewell function organised to bid farewell to one of their colleagues, this also indicates the appellants conduct in sharing A-1s intention. It is further seen that on 13.2.1988 the appellant accompanied A-1 went to Ramam check-post without there being any official reason for the same except to deliver two torch-lights. We find it difficult to believe that the appellant who witnessed a crime to which he is not party, would venture to go again with A-1 on 13.2.1988 to the scene of the occurrence if he was actually innocent. It is also to be noticed that though on 13.2.1988he told PW.5 about the incident of 12.2.1988 without inculpating himself, he again goes to Ramam check-post on 14.2.1988. This constant visit to the place of the incident along with A-1 makes the hypothesis presented on behalf of the appellant highly improbable and gives sufficient room to infer that the appellant did know and share the intention harboured by A-1 in the crime. If we analyse the prosecution evidence further it is seen that in regard to the travelling in the jeep from where they picked up the deceased then on to Ramam check-post and back, we see the appellant has given 3 different occasions. To PW-5 he stated that while taking the deceased towards Singla from the check-post, the allowed him to run away from the jeep after they crossed the Ramam check-post when A-1 had got from the jeep to ease himself. To PW-36 he told that when they were bringing a smuggler from Darjeeling side to Ramam check-post i.e. from the opposite direction the smuggler escaped from the jeep and in the process of running he fell down and suffered fatal injuries. In his statement u/s. 313 Cr. PC before the court, he stated that on 12.2.1988 he had gone to Soreng on the orders of his S.P. as the Chief Minister was visiting Soreng and on the evening of that day as he did not have any vehicle, he took a lift in the vehicle of A-1 up to Jorthang from where he went to his quarters the accused No.1 went to Naya Bazar Dak bungalow as he was camping there on duty. These 3 different versions which are self-contradictory further show that the appellant has not been consistent in his stand as to what happened on 12.2.1988. This Court in the case of State of Maharashtra v. Suresh (2000 (1) SCC 471 ) has held that a false answer offered by the accused when his attention was drawn to any inculpating circumstance would render such circumstance as capable of inculpating him. The Court also held that in such a situation a false answer can also be counted as providing "a missing link" in completing the chain. If the said principle in law is to be accepted, the statement of the appellant made u/s. 313 Cr.PC being palpably false and there being cogent evidence adduced by the prosecution to show that the appellant had given two either versions to the incident of 12.2.1988, we will have to proceed on the basis that the appellant has not explained the inculpating circumstances established by the prosecution against him which from an additional link in the chain of circumstances. Then again there is another factor to be taken note of regard to the sharing of the common object of A-1 by the appellant. It has come in evidence of PW-5 that the appellant had told him that after the body of the deceased was taken from the place where it had fallen in the first instance, the appellant had taken away certain possible identification materials like Panchayat seal and some personal papers with a view to create a false evidence as to the whereabouts of the deceased. This also indicates the involvement of the appellant in the crime. These circumstances and inferences drawn from such proved circumstances establish beyond all reasonable doubt that the appellant did share the common intention of A-1 in taking the deceased away in the jeep driven by A-1 and causing the murder, therefore, the hypothesis of innocence pleaded on behalf of the appellant in our opinion is not in consonance with the innocence of the appellant. ### Response: 0 ### Explanation: We do not think such an explanation is acceptable to anybody. If really the appellant was innocent, having known that a crime is committed, any prudent person if he was innocent, would certainly have tried to dissuadefrom committing a crime and if he failed in his attempt, he would have certainly taken steps to see that his non involvement is safeguard by seeking help from others. Failure to do so makes us infer that the appellant already already knew the intention ofand acquiesced with the same. Here we would also note that in the normal course if the deceased was being taken for interrogation of for the purpose of keeping him away from any mischief thatsuspected him of planning to commit in the meeting of the Chief Minister then the normal destination would have beenbut that was not the direction in which the vehicle was moving, therefore, it is legitimate for us to conclude that the appellant know that the deceased was being taken towards thewith certain other oblique motive. This conduct of the appellant in not trying to find out the reason for taking the deceased and the destination further strengthen our inference that the appellant knew well in advance what was the reason and the destination to which the deceased was being taken. Assuming for arguments sake that he was no obedient or innocent or ignorant enough to keep quiet right through the journey then one would have expected him on his return at least to having informed of the incident to some person in authority or at least to a friend with a view to exculpate himself from the incident in which the deceased lost his life except what he toldon 13th and 16th of February. Which, of course, is only one of the version of his story which the appellant had adopted to mislead the investigation. This statement toapart we see there is nothing which the appellant did which is in consonance with his innocence. Per contra, it is seen that the appellant accompaniedin the evening of 2.2.1988 to a farewell function organised to bid farewell to one of their colleagues, this also indicates the appellants conduct in sharingintention. It is further seen that on 13.2.1988 the appellant accompaniedwent to Ramamwithout there being any official reason for the same except to deliver twoWe find it difficult to believe that the appellant who witnessed a crime to which he is not party, would venture to go again withon 13.2.1988 to the scene of the occurrence if he was actually innocent. It is also to be noticed that though on 13.2.1988he told PW.5 about the incident of 12.2.1988 without inculpating himself, he again goes to Ramamon 14.2.1988. This constant visit to the place of the incident along withmakes the hypothesis presented on behalf of the appellant highly improbable and gives sufficient room to infer that the appellant did know and share the intention harboured byin the crime. If we analyse the prosecution evidence further it is seen that in regard to the travelling in the jeep from where they picked up the deceased then on to Ramamand back, we see the appellant has given 3 different occasions. Tohe stated that while taking the deceased towards Singla from thethe allowed him to run away from the jeep after they crossed the Ramamhad got from the jeep to ease himself. Tohe told that when they were bringing a smuggler from Darjeeling side to Ramami.e. from the opposite direction the smuggler escaped from the jeep and in the process of running he fell down and suffered fatal injuries. In his statement u/s. 313 Cr. PC before the court, he stated that on 12.2.1988 he had gone to Soreng on the orders of his S.P. as the Chief Minister was visiting Soreng and on the evening of that day as he did not have any vehicle, he took a lift in the vehicle ofup to Jorthang from where he went to his quarters the accused No.1 went to Naya Bazar Dak bungalow as he was camping there on duty. These 3 different versions which arefurther show that the appellant has not been consistent in his stand as to what happened on 12.2.1988. This Court in the case of State of Maharashtra v. Suresh (2000 (1) SCC 471 ) has held that a false answer offered by the accused when his attention was drawn to any inculpating circumstance would render such circumstance as capable of inculpating him. The Court also held that in such a situation a false answer can also be counted as providing "a missing link" in completing the chain. If the said principle in law is to be accepted, the statement of the appellant made u/s. 313 Cr.PC being palpably false and there being cogent evidence adduced by the prosecution to show that the appellant had given two either versions to the incident of 12.2.1988, we will have to proceed on the basis that the appellant has not explained the inculpating circumstances established by the prosecution against him which from an additional link in the chain of circumstances.n there is another factor to be taken note of regard to the sharing of the common object ofby the appellant. It has come in evidence ofthat the appellant had told him that after the body of the deceased was taken from the place where it had fallen in the first instance, the appellant had taken away certain possible identification materials like Panchayat seal and some personal papers with a view to create a false evidence as to the whereabouts of the deceased. This also indicates the involvement of the appellant in the crime. These circumstances and inferences drawn from such proved circumstances establish beyond all reasonable doubt that the appellant did share the common intention ofin taking the deceased away in the jeep driven byand causing the murder, therefore, the hypothesis of innocence pleaded on behalf of the appellant in our opinion is not in consonance with the innocence of the appellant

Krishan Murari Lal Sehgal Vs. State Of Punjab

hold the same post in the new State of Punjab and shall be deemed as from that day to have been duly appointed to such post by the Government of Punjab. We are not concerned in the instant case about the appointment being deemed to be made by "other appropriate authority" in the State of Punjab since the appellant had been appointed by the Rajpramukh of Pepsu which is equivalent to the State Government of Pepsu and the coordinate authority in the new state of Punjab is the Governor of Punjab. The argument that in the new State of Punjab the Financial Commissioner (Revenue) is the appropriate authority for appointing Assistant is absolutely irrelevant in the context of S. 116(1) which enables them status quo ante to continue except where the post cases to exist under the provisions of the Act. It is also important to bear in mind the provisions of S.115(7) of the Act where under the proviso thereto "the conditions of service applicable immediately before the appointed day to the case of any person referred to in sub-s. (1) or sub-s. (2) shall not be varied to his disadvantage except with the previous approval of the Central Government."13. One of the conditions of service of the appellant was that having been appointed by the State Government of Pepsu he could be only dismissed by the State Government of Pepsu if he had continued there. Under S. 116 when he is integrated in the new State of Punjab he carries with him that condition of service with regard to his termination of employment and it cannot be varied to his disadvantage under S.115(7) of the Act except with the previous approval of the Central Government, (Takhatray Shivdatray Manked v. State of Gujarat, (1970) I S.C.R. 244 and Bholanath J. Thaker v. The State of Saurashtra.) A.I.R. 1954 S.C. 680. No such approval of the Central Government in the instant case is produced before us. It is, therefore, clear that an authority sub-ordinate to the Governor of Punjab was not competent to pass the order of dismissal of the appellant.14. Mr. Sharma submits that the Punjab Financial Commissioners Office (State Service Class III) Rules, 1957, are applicable in the instant case. Therefore, under Rule 4 thereof the Financial Commissioner is the appointing authority for Assistant, the category to which the appellant belongs. He adds that even though these Rules may be disadvantageous to the appellant he cannot complain on account of the approval of these Rules by the Central Government under S.115(7) of the Act. Mr. Sharma submits that these Rules received the approval of the Central Government as will appear from the general circular dated May 11, 1957, to all the State Governments. He further submits that in N. Raghavendra Rao v. Deputy Commissioner, South Kerala Mangalore (1964) 7 S.C.R. 549 and in a recent decision in Mohammad Shujat Ali v. Union of India (1975) I S.C.R. 440, this Court referred to that circular of May 11, 1957, and held that circular amounted to general approval under the proviso to S.115(7) of the Act. We are, however, unable to see how this memorandum of May 11, 1957, can be called in aid as "previous approval" under S.115(7) of the Act when the Punjab Financial Commissioners Office (State Service Class III) Rules, 1957 were already promulgated on February 8, 1957. Approval under S. 115(7) is previous approval and not subsequent notification. The above decisions, therefore, do not come to the aid of the respondent.15. Mr. Sharma also drew our attention to a decision of this Court in Rajvi Amar Singh v. The State of Rajasthan (1958) S.C.R. 1013, which is clearly distinguishable on facts. This Court was not called upon in that case to consider the provisions of the States Reorganisation Act.16. Our attention has been drawn by the appellant to an unreported judgment of this Court in Mysore State Road Transport Corporation etc. v. Mirja Khasim Ali Beg and another etc. C.A. Nos. 1601 - 1609 and 2402 - 2405 of 1968 dated 1-12-1976, [1977-I L.L.J. 262] pronounced on December 1, 1976. This Court had to deal with a similar question although appertaining to the "competent authority" under S.116(2) of the Act in the background of Art. 311(1) of the Constitution. The following passage from that decision will make the point clear :"In the instant cases, the first respondents were undeniably appointed by the Superintendent of the Traffic Department of the erstwhile State of Hyderabad who was the head of the Road Transport Department of that state. On the coming into force of the State Reorganisation Act, 1956, on November 1, 1956, they were to be deemed by virtue of sub-s.(1) of S.116 of the States Reorganisation Act to have been appointed with effect from that date to the posts held by them on that date by the appropriate authority in the new State of Mysore which could not in the context mean an authority other than the one equivalent to or co-ordinate in rank with the aforesaid authority in the erstwhile State of Hyderabad. The authority equivalent to or co-ordinate in rank with the aforesaid authority on the relevant date being the General Manager of the Mysore Government Road Transport Department according to the appellants own admission as contained in answer to the aforesaid interrogatories served on them by the first respondents, he alone could be considered to be the competent authority in terms of sub-s.(1) of S.116 of the States reorganisation Act, 1956. The fact that there was no post of Superintendent of the Traffic in the Mysore Government Road Transport Department in the State of Mysore is of no consequence. Such being the petition, the first respondents could not have been dismissed from service by an authority lower or subordinate in rank to the General Manager of the Transport Department as it would tantamount to deprivation of the guarantee enshrined in Art. 311 of the Constitution read with S.115(7) of the States Reorganisation Act, 1956.."

1[ds]10. As noted earlier, factually, the appellant was confirmed and necessarily appointed by the Rajpramukh. Under the Pepsu Rules the Rajpramukh alone was the appointing authority. The appellant, therefore, cannot be removed from service by any authority subordinate to the Governor in Punjab. The coordinate authority in Punjab is the State Government. The Governor of Punjab alone, therefore, was competent to pass the order of dismissal of the appellant. The financial Commissioner (Revenue), is an authority subordinate to the Governor. He was, therefore, not competent to pass the order of dismissal. The order of dismissal is violative of Art. 311(1) of the Constitution and is, therefore, invalid and is liable to be struck down.We are unable to appreciate the above line of reasoning of the High Court. Section 116(1) is very clear. To concretise the appellants case in terms of S. 116(1). It is sufficient to state that the appellant who, immediately before the appointed day, was holding the post of an Assistant in the former State of Pepsu, shall continue to hold the same post in the new State of Punjab and shall be deemed as from that day to have been duly appointed to such post by the Government of Punjab. We are not concerned in the instant case about the appointment being deemed to be made by "other appropriate authority" in the State of Punjab since the appellant had been appointed by the Rajpramukh of Pepsu which is equivalent to the State Government of Pepsu and the coordinate authority in the new state of Punjab is the Governor of Punjab. The argument that in the new State of Punjab the Financial Commissioner (Revenue) is the appropriate authority for appointing Assistant is absolutely irrelevant in the context of S. 116(1) which enables them status quo ante to continue except where the post cases to exist under the provisions of the Act. It is also important to bear in mind the provisions of S.115(7) of the Act where under the proviso thereto "the conditions of service applicable immediately before the appointed day to the case of any person referred to in sub-s. (1) or sub-s. (2) shall not be varied to his disadvantage except with the previous approval of the Central Government."13. One of the conditions of service of the appellant was that having been appointed by the State Government of Pepsu he could be only dismissed by the State Government of Pepsu if he had continued there. Under S. 116 when he is integrated in the new State of Punjab he carries with him that condition of service with regard to his termination of employment and it cannot be varied to his disadvantage under S.115(7) of the Act except with the previous approval of the Central Government, (Takhatray Shivdatray Manked v. State of Gujarat, (1970) I S.C.R. 244 and Bholanath J. Thaker v. The State of Saurashtra.) A.I.R. 1954 S.C. 680. No such approval of the Central Government in the instant case is produced before us. It is, therefore, clear that an authority sub-ordinate to the Governor of Punjab was not competent to pass the order of dismissal of theunder Rule 4 thereof the Financial Commissioner is the appointing authority for Assistant, the category to which the appellant belongs. He adds that even though these Rules may be disadvantageous to the appellant he cannot complain on account of the approval of these Rules by the Central Government under S.115(7) of thesuch approval of the Central Government in the instant case is produced before us. It is, therefore, clear that an authority sub-ordinate to the Governor of Punjab was not competent to pass the order of dismissal of theare, however, unable to see how this memorandum of May 11, 1957, can be called in aid as "previous approval" under S.115(7) of the Act when the Punjab Financial Commissioners Office (State Service Class III) Rules, 1957 were already promulgated on February 8,1957. Approval under S. 115(7) is previous approval and not subsequent notification. The above decisions, therefore, do not come to the aid of the respondent.

### Instruction: Predict the outcome of the case proceeding (1 for acceptance, 0 for rejection) and subsequently provide an explanation based on significant sentences in the proceeding. ### Input: hold the same post in the new State of Punjab and shall be deemed as from that day to have been duly appointed to such post by the Government of Punjab. We are not concerned in the instant case about the appointment being deemed to be made by "other appropriate authority" in the State of Punjab since the appellant had been appointed by the Rajpramukh of Pepsu which is equivalent to the State Government of Pepsu and the coordinate authority in the new state of Punjab is the Governor of Punjab. The argument that in the new State of Punjab the Financial Commissioner (Revenue) is the appropriate authority for appointing Assistant is absolutely irrelevant in the context of S. 116(1) which enables them status quo ante to continue except where the post cases to exist under the provisions of the Act. It is also important to bear in mind the provisions of S.115(7) of the Act where under the proviso thereto "the conditions of service applicable immediately before the appointed day to the case of any person referred to in sub-s. (1) or sub-s. (2) shall not be varied to his disadvantage except with the previous approval of the Central Government."13. One of the conditions of service of the appellant was that having been appointed by the State Government of Pepsu he could be only dismissed by the State Government of Pepsu if he had continued there. Under S. 116 when he is integrated in the new State of Punjab he carries with him that condition of service with regard to his termination of employment and it cannot be varied to his disadvantage under S.115(7) of the Act except with the previous approval of the Central Government, (Takhatray Shivdatray Manked v. State of Gujarat, (1970) I S.C.R. 244 and Bholanath J. Thaker v. The State of Saurashtra.) A.I.R. 1954 S.C. 680. No such approval of the Central Government in the instant case is produced before us. It is, therefore, clear that an authority sub-ordinate to the Governor of Punjab was not competent to pass the order of dismissal of the appellant.14. Mr. Sharma submits that the Punjab Financial Commissioners Office (State Service Class III) Rules, 1957, are applicable in the instant case. Therefore, under Rule 4 thereof the Financial Commissioner is the appointing authority for Assistant, the category to which the appellant belongs. He adds that even though these Rules may be disadvantageous to the appellant he cannot complain on account of the approval of these Rules by the Central Government under S.115(7) of the Act. Mr. Sharma submits that these Rules received the approval of the Central Government as will appear from the general circular dated May 11, 1957, to all the State Governments. He further submits that in N. Raghavendra Rao v. Deputy Commissioner, South Kerala Mangalore (1964) 7 S.C.R. 549 and in a recent decision in Mohammad Shujat Ali v. Union of India (1975) I S.C.R. 440, this Court referred to that circular of May 11, 1957, and held that circular amounted to general approval under the proviso to S.115(7) of the Act. We are, however, unable to see how this memorandum of May 11, 1957, can be called in aid as "previous approval" under S.115(7) of the Act when the Punjab Financial Commissioners Office (State Service Class III) Rules, 1957 were already promulgated on February 8, 1957. Approval under S. 115(7) is previous approval and not subsequent notification. The above decisions, therefore, do not come to the aid of the respondent.15. Mr. Sharma also drew our attention to a decision of this Court in Rajvi Amar Singh v. The State of Rajasthan (1958) S.C.R. 1013, which is clearly distinguishable on facts. This Court was not called upon in that case to consider the provisions of the States Reorganisation Act.16. Our attention has been drawn by the appellant to an unreported judgment of this Court in Mysore State Road Transport Corporation etc. v. Mirja Khasim Ali Beg and another etc. C.A. Nos. 1601 - 1609 and 2402 - 2405 of 1968 dated 1-12-1976, [1977-I L.L.J. 262] pronounced on December 1, 1976. This Court had to deal with a similar question although appertaining to the "competent authority" under S.116(2) of the Act in the background of Art. 311(1) of the Constitution. The following passage from that decision will make the point clear :"In the instant cases, the first respondents were undeniably appointed by the Superintendent of the Traffic Department of the erstwhile State of Hyderabad who was the head of the Road Transport Department of that state. On the coming into force of the State Reorganisation Act, 1956, on November 1, 1956, they were to be deemed by virtue of sub-s.(1) of S.116 of the States Reorganisation Act to have been appointed with effect from that date to the posts held by them on that date by the appropriate authority in the new State of Mysore which could not in the context mean an authority other than the one equivalent to or co-ordinate in rank with the aforesaid authority in the erstwhile State of Hyderabad. The authority equivalent to or co-ordinate in rank with the aforesaid authority on the relevant date being the General Manager of the Mysore Government Road Transport Department according to the appellants own admission as contained in answer to the aforesaid interrogatories served on them by the first respondents, he alone could be considered to be the competent authority in terms of sub-s.(1) of S.116 of the States reorganisation Act, 1956. The fact that there was no post of Superintendent of the Traffic in the Mysore Government Road Transport Department in the State of Mysore is of no consequence. Such being the petition, the first respondents could not have been dismissed from service by an authority lower or subordinate in rank to the General Manager of the Transport Department as it would tantamount to deprivation of the guarantee enshrined in Art. 311 of the Constitution read with S.115(7) of the States Reorganisation Act, 1956.." ### Response: 1 ### Explanation: 10. As noted earlier, factually, the appellant was confirmed and necessarily appointed by the Rajpramukh. Under the Pepsu Rules the Rajpramukh alone was the appointing authority. The appellant, therefore, cannot be removed from service by any authority subordinate to the Governor in Punjab. The coordinate authority in Punjab is the State Government. The Governor of Punjab alone, therefore, was competent to pass the order of dismissal of the appellant. The financial Commissioner (Revenue), is an authority subordinate to the Governor. He was, therefore, not competent to pass the order of dismissal. The order of dismissal is violative of Art. 311(1) of the Constitution and is, therefore, invalid and is liable to be struck down.We are unable to appreciate the above line of reasoning of the High Court. Section 116(1) is very clear. To concretise the appellants case in terms of S. 116(1). It is sufficient to state that the appellant who, immediately before the appointed day, was holding the post of an Assistant in the former State of Pepsu, shall continue to hold the same post in the new State of Punjab and shall be deemed as from that day to have been duly appointed to such post by the Government of Punjab. We are not concerned in the instant case about the appointment being deemed to be made by "other appropriate authority" in the State of Punjab since the appellant had been appointed by the Rajpramukh of Pepsu which is equivalent to the State Government of Pepsu and the coordinate authority in the new state of Punjab is the Governor of Punjab. The argument that in the new State of Punjab the Financial Commissioner (Revenue) is the appropriate authority for appointing Assistant is absolutely irrelevant in the context of S. 116(1) which enables them status quo ante to continue except where the post cases to exist under the provisions of the Act. It is also important to bear in mind the provisions of S.115(7) of the Act where under the proviso thereto "the conditions of service applicable immediately before the appointed day to the case of any person referred to in sub-s. (1) or sub-s. (2) shall not be varied to his disadvantage except with the previous approval of the Central Government."13. One of the conditions of service of the appellant was that having been appointed by the State Government of Pepsu he could be only dismissed by the State Government of Pepsu if he had continued there. Under S. 116 when he is integrated in the new State of Punjab he carries with him that condition of service with regard to his termination of employment and it cannot be varied to his disadvantage under S.115(7) of the Act except with the previous approval of the Central Government, (Takhatray Shivdatray Manked v. State of Gujarat, (1970) I S.C.R. 244 and Bholanath J. Thaker v. The State of Saurashtra.) A.I.R. 1954 S.C. 680. No such approval of the Central Government in the instant case is produced before us. It is, therefore, clear that an authority sub-ordinate to the Governor of Punjab was not competent to pass the order of dismissal of theunder Rule 4 thereof the Financial Commissioner is the appointing authority for Assistant, the category to which the appellant belongs. He adds that even though these Rules may be disadvantageous to the appellant he cannot complain on account of the approval of these Rules by the Central Government under S.115(7) of thesuch approval of the Central Government in the instant case is produced before us. It is, therefore, clear that an authority sub-ordinate to the Governor of Punjab was not competent to pass the order of dismissal of theare, however, unable to see how this memorandum of May 11, 1957, can be called in aid as "previous approval" under S.115(7) of the Act when the Punjab Financial Commissioners Office (State Service Class III) Rules, 1957 were already promulgated on February 8,1957. Approval under S. 115(7) is previous approval and not subsequent notification. The above decisions, therefore, do not come to the aid of the respondent.

M/S. Nagarjuna Construction Co. Ltd Vs. Govt. Of A.P.

than that the substantial requirements of justice shall not be violated. He is not a judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice when he will proceed with the matter and he must act honestly and impartially and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There would be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice". Lord Selbourne also added that the essence of justice consisted in requiring that all parties should have an opportunity of submitting to the person by whose decision they are to be bound, such considerations as in their judgment ought to be brought before him. All these cases lay down the very important rule of natural justice contained in the oft-quoted phrase ‘justice should not only be done, but should be seen to be done. 39. Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the frame-work of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. Expression ‘civil consequences encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations, and non-pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life. 40. Natural justice has been variously defined by different Judges. A few instances will suffice. In Drew v. Drew and Lebura (1855(2) Macg. 1.8, Lord Cranworth defined it as ‘universal justice. In James Dunber Smith v. Her Majesty the Queen (1877-78(3) App.Case 614, 623 JC) Sir Robort P. Collier, speaking for the judicial committee of Privy council, used the phrase ‘the requirements of substantial justice, while in Arthur John Specman v. Plumstead District Board of Works (1884-85(10) App. Case 229, 240), Earl of Selbourne, S.C. preferred the phrase ‘the substantial requirement of justice. In Vionet v. Barrett (1885(55) LJRD 39, 41), Lord Esher, MR defined natural justice as ‘the natural sense of what is right and wrong. While, however, deciding Hookings v. Smethwick Local Board of Health (1890 (24) QBD 712), Lord Fasher, M.R. instead of using the definition given earlier by him in Vionets case (supra) chose to define natural justice as ‘fundamental justice. In Ridge v. Baldwin (1963(1) WB 569, 578), Harman LJ, in the Court of Appeal countered natural justice with ‘fair-play in action a phrase favoured by Bhagawati, J. in Maneka Gandhi v. Union of India (1978 (2) SCR 621 ). In re R.N. (An Infaot) (1967 (2) B617, 530), Lord Parker, CJ, preferred to describe natural justice as ‘a duty to act fairly. In fairmount Investments Ltd. v. Secretary to State for Environment (1976 WLR 1255) Lord Russell of Willowan somewhat picturesquely described natural justice as ‘a fair crack of the whip while Geoffrey Lane, LJ. In Regina v. Secretary of State for Home Affairs Ex Parte Hosenball (1977 (1) WLR 766) preferred the homely phrase ‘common fairness. 41. How then have the principles of natural justice been interpreted in the Courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair-play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is ‘nemo judex in causa sua or ‘nemo debet esse judex in propria causa sua as stated in (1605) 12 Co.Rep.114 that is, ‘no man shall be a judge in his own cause. Coke used the form ‘aliquis non debet esse judex in propria causa quia non potest esse judex at pars (Co. Litt. 1418), that is, ‘no man ought to be a judge in his own case, because he cannot act as Judge and at the same time be a party. The form ‘nemo potest esse simul actor et judex, that is, ‘no one can be at once suitor and judge is also at times used. The second rule is ‘audi alteram partem, that is, ‘hear the other side. At times and particularly in continental countries, the form ‘audietur at altera pars is used, meaning very much the same thing. A corollary has been deduced from the above two rules and particularly the audi alteram partem rule, namely ‘qui aliquid statuerit parte inaudita alteram actquam licet dixerit, haud acquum facerit that is, ‘he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right (See Bosewells case (1605) 6 Co.Rep. 48-b, 52-a) or in other words, as it is now expressed, ‘justice should not only be done but should manifestly be seen to be done. Whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and fresh proceedings are left upon. All that is done is to vacate the order assailed by virtue of its inherent defect, but the proceedings are not terminated.

1[ds]26. Additionally, it is noticed the High Court has relied on certain records which purportedly contain the inspection notes of the sites from where the appellants had excavated the material. It is to be noted that for the first time before the High Court these records were produced. Since there was no reference to the so called inspection notes at any point of time the question of the appellant pleading prejudice because of non-supply of the same does not arise. The High Court observed that since the appellant had not demanded for the inspection notes during hearing of the revision there was no question of any prejudice. The approach is clearly wrong. At no point of time, not even at the time of hearing of revision petition or in the revisional order there is any reference to the so called inspection notes. Added to that, the High Court did not consider the effect of the stand taken by the Government earlier.The High Court did not accept the view expressed by a learned Single Judge while disposing of writ petition No.4579 of 2001 filed by one of the sub contractors M/s Gayatri Projects Ltd. Though that order was not challenged by the Department, the Division Bench thought that the decision was not proper. In any event, that question is of no relevance in the present case. The High Court rightly observed that since the amendments referred to, were introduced after the expiry of the contract period they were really of non consequence.29. Looked at from any angle the judgment of the High Court is unsustainable.The basic principles of natural justice seem to have been disregarded by the State Government while revising the order. It acted on materials which were not supplied to the appellants. Additionally the High Court for the first time made reference to the report/inspection notes which was not even referred to by the State Government while exercising revisional

### Instruction: Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding. ### Input: than that the substantial requirements of justice shall not be violated. He is not a judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice when he will proceed with the matter and he must act honestly and impartially and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There would be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice". Lord Selbourne also added that the essence of justice consisted in requiring that all parties should have an opportunity of submitting to the person by whose decision they are to be bound, such considerations as in their judgment ought to be brought before him. All these cases lay down the very important rule of natural justice contained in the oft-quoted phrase ‘justice should not only be done, but should be seen to be done. 39. Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the frame-work of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. Expression ‘civil consequences encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations, and non-pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life. 40. Natural justice has been variously defined by different Judges. A few instances will suffice. In Drew v. Drew and Lebura (1855(2) Macg. 1.8, Lord Cranworth defined it as ‘universal justice. In James Dunber Smith v. Her Majesty the Queen (1877-78(3) App.Case 614, 623 JC) Sir Robort P. Collier, speaking for the judicial committee of Privy council, used the phrase ‘the requirements of substantial justice, while in Arthur John Specman v. Plumstead District Board of Works (1884-85(10) App. Case 229, 240), Earl of Selbourne, S.C. preferred the phrase ‘the substantial requirement of justice. In Vionet v. Barrett (1885(55) LJRD 39, 41), Lord Esher, MR defined natural justice as ‘the natural sense of what is right and wrong. While, however, deciding Hookings v. Smethwick Local Board of Health (1890 (24) QBD 712), Lord Fasher, M.R. instead of using the definition given earlier by him in Vionets case (supra) chose to define natural justice as ‘fundamental justice. In Ridge v. Baldwin (1963(1) WB 569, 578), Harman LJ, in the Court of Appeal countered natural justice with ‘fair-play in action a phrase favoured by Bhagawati, J. in Maneka Gandhi v. Union of India (1978 (2) SCR 621 ). In re R.N. (An Infaot) (1967 (2) B617, 530), Lord Parker, CJ, preferred to describe natural justice as ‘a duty to act fairly. In fairmount Investments Ltd. v. Secretary to State for Environment (1976 WLR 1255) Lord Russell of Willowan somewhat picturesquely described natural justice as ‘a fair crack of the whip while Geoffrey Lane, LJ. In Regina v. Secretary of State for Home Affairs Ex Parte Hosenball (1977 (1) WLR 766) preferred the homely phrase ‘common fairness. 41. How then have the principles of natural justice been interpreted in the Courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair-play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is ‘nemo judex in causa sua or ‘nemo debet esse judex in propria causa sua as stated in (1605) 12 Co.Rep.114 that is, ‘no man shall be a judge in his own cause. Coke used the form ‘aliquis non debet esse judex in propria causa quia non potest esse judex at pars (Co. Litt. 1418), that is, ‘no man ought to be a judge in his own case, because he cannot act as Judge and at the same time be a party. The form ‘nemo potest esse simul actor et judex, that is, ‘no one can be at once suitor and judge is also at times used. The second rule is ‘audi alteram partem, that is, ‘hear the other side. At times and particularly in continental countries, the form ‘audietur at altera pars is used, meaning very much the same thing. A corollary has been deduced from the above two rules and particularly the audi alteram partem rule, namely ‘qui aliquid statuerit parte inaudita alteram actquam licet dixerit, haud acquum facerit that is, ‘he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right (See Bosewells case (1605) 6 Co.Rep. 48-b, 52-a) or in other words, as it is now expressed, ‘justice should not only be done but should manifestly be seen to be done. Whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and fresh proceedings are left upon. All that is done is to vacate the order assailed by virtue of its inherent defect, but the proceedings are not terminated. ### Response: 1 ### Explanation: 26. Additionally, it is noticed the High Court has relied on certain records which purportedly contain the inspection notes of the sites from where the appellants had excavated the material. It is to be noted that for the first time before the High Court these records were produced. Since there was no reference to the so called inspection notes at any point of time the question of the appellant pleading prejudice because of non-supply of the same does not arise. The High Court observed that since the appellant had not demanded for the inspection notes during hearing of the revision there was no question of any prejudice. The approach is clearly wrong. At no point of time, not even at the time of hearing of revision petition or in the revisional order there is any reference to the so called inspection notes. Added to that, the High Court did not consider the effect of the stand taken by the Government earlier.The High Court did not accept the view expressed by a learned Single Judge while disposing of writ petition No.4579 of 2001 filed by one of the sub contractors M/s Gayatri Projects Ltd. Though that order was not challenged by the Department, the Division Bench thought that the decision was not proper. In any event, that question is of no relevance in the present case. The High Court rightly observed that since the amendments referred to, were introduced after the expiry of the contract period they were really of non consequence.29. Looked at from any angle the judgment of the High Court is unsustainable.The basic principles of natural justice seem to have been disregarded by the State Government while revising the order. It acted on materials which were not supplied to the appellants. Additionally the High Court for the first time made reference to the report/inspection notes which was not even referred to by the State Government while exercising revisional

Balram and Others Vs. IIIrd Additional District Judge and Another

applying for substitution, nor was there any period prescribed in Rule 3 of Order XXII of the Code of Civil Procedure (Code for short) which became applicable in view of s. 38 of the Act. Therefore, on the expiry of 90 days from the date of death of Rameshwar no abatement set in and the application for substitution made on October 25, 1980 could not have been rejected as being barred by limitation. The High Court referred to s. 38 (1) of the Act and to Rules 3, 9 and 11 of Order XXI I of the Code and held that Article 120 of the First Schedule of the Limitation Act, 1963, was applicable and the petition for substitution should have been filed within 90 days from the date of death. The writ application was, therefore, dismissed .The decision of the Allahabad High Court is assailed before this Court. When on the special leave petition notice was given it was indicated that the case would be disposed of on merits. The respondents have, however, not appeared to contest. 3. Mr. Sen appearing in support of the appeal says that s. 38 (1) of the Act makes it clear that the procedure in the Code has been made applicable for hearing and disposal of appeals. Under s. 42 of the Act, sections 4, 5 and 12 of the Limitation A ct, 1963, have been made applicable to proceedings including appeals under the Act. According to Mr. Sen, in view of the provisions in ss. 38 and 42 of the Act the appellate authority and the High Court should have accepted the contention of the appellants that the Code was applied only for the disposal of appeals and the provisions of the Limitation Act excepting ss. 4, 5 and 12 were not applicable to proceedings under the Act. Section 38 (1) of the Act provides: In hearing and deciding an appeal under this Act, the appellate court shall have all the powers and the privileges of a civil court and follow the procedure for the hearing and disposal of appeals laid down in the Code of Civil Procedure, 1908. Under the Code when death occurs at an appellate stage, substitution is effected in accordance with the procedure laid down in Order XXII. In terms of sub-s. (1) of s. 38 of the Act, if death occurred of one of the parties at the appellate stage of a Ceiling Appeal, substitution had also to be made according to the procedure laid down in Order XXII of the Code. Rule 3 of order XXII of the Code provides: (1) where one of two or more plaintiffs dies and the right to sue does not survive to the surviving plaintiff or plaintiffs alone, or a sole plaintiff or sole surviving plaintiff dies and the right to sue survives, the Court, on an application made in that behalf, shall cause the legal representatives of the deceased plaintiff to be made a party and shall proceed with the suit. Rule 11 of order XXII of the Code indicates that the provisions of that Order do apply to appeals.There is another aspect which militates against Mr. Sens argument. Sub-rule (2) of rule 3 of that order provides: where within the time limited by law no application is made under sub-rule (1), the suit shall abate so far as the deceased plaintiff is concerned, and, on the application of the defendant, the Court may award to him the costs which he may have incurred in defending the suit, to be recovered from the estate of the deceased plaintiff. (Emphasis is added by us by underlining the words in the provision). Obviously, time has been limited by law in Article 120 of the First Schedule of the Limitation Act to which we shall presently refer. 4. Article 120 of First Schedule of the Limitation Act provides that an application under the Code to have the legal representatives of the deceased appellant made a party has to be made within 90 days from the date of death of the appellant and Article 121 provides 60 days period for the application for an order to set aside abatement from the date of abatement. It is not disputed that the application for substitution of the legal representatives of Rameshwar when made was beyond 150 days from the date of his death. If the Code and the Limitation Act applied at the time when the application for substitution was made, the legal representatives had to ask for substitution, setting aside of abatement and condonation of delay in terms of rule 9 (3) of order XXII of the Code. Whether there was sufficient cause for the delay to be condoned and for abatement to be vacated were matters for the appellate court and Mr. Sen has rightly not canvassed before us that discretion which vested in the appellate court had not been properly exercised. The sole ground pressed before us, as we have already stated, is as to whether to an appeal under the Act the provisions of the Code and the Limitation Act referred to above would apply. There is little room to dispute that if Order XXII of the Code applies necessarily Articles 120 and 121 of t he First Schedule of the Limitation Act would also apply. The contention that only three sections of the Limitation Act have been specially extended to proceedings under the Act by s. 42 thereof is of no consequence once it is held that order XXII o f the Code is applicable to appeals under the Act. Section 38 (1) of the Act in our view clearly extends the procedure applicable to appeals under the Code to appeals under the Act. The extension of the procedure available under the Code to appeals under the Act attracts the entire procedure of the Code relevant for the purpose of disposing of an appeal under the Act. There is no scope to reckon an exception unless the statute indicates any.

1[ds]Article 120 of First Schedule of the Limitation Act provides that an application under the Code to have the legal representatives of the deceased appellant made a party has to be made within 90 days from the date of death of the appellant and Article 121 provides 60 days period for the application for an order to set aside abatement from the date of abatement. It is not disputed that the application for substitution of the legal representatives of Rameshwar when made was beyond 150 days from the date of his death. If the Code and the Limitation Act applied at the time when the application for substitution was made, the legal representatives had to ask for substitution, setting aside of abatement and condonation of delay in terms of rule 9 (3) of order XXII of the Code. Whether there was sufficient cause for the delay to be condoned and for abatement to be vacated were matters for the appellate court and Mr. Sen has rightly not canvassed before us that discretion which vested in the appellate court had not been properly exercised. The sole ground pressed before us, as we have already stated, is as to whether to an appeal under the Act the provisions of the Code and the Limitation Act referred to above would apply. There is little room to dispute that if Order XXII of the Code applies necessarily Articles 120 and 121 of t he First Schedule of the Limitation Act would also apply. The contention that only three sections of the Limitation Act have been specially extended to proceedings under the Act by s. 42 thereof is of no consequence once it is held that order XXII o f the Code is applicable to appeals under the Act. Section 38 (1) of the Act in our view clearly extends the procedure applicable to appeals under the Code to appeals under the Act. The extension of the procedure available under the Code to appeals under the Act attracts the entire procedure of the Code relevant for the purpose of disposing of an appeal under the Act. There is no scope to reckon an exception unless the statute indicates any. We are, therefore, not inclined to accept the submission advanced before us by Mr. Sen that the principles of abatement and delay were not applicable to the case in question and the appellate judge as also the High Court had gone wrong in applying the provisions of the Code and the Limitation Act to deal with the application for substitution.

### Instruction: Conjecture the end result of the case (acceptance (1) or non-acceptance (0) of the appeal), followed by a detailed explanation using crucial sentences from the case proceeding. ### Input: applying for substitution, nor was there any period prescribed in Rule 3 of Order XXII of the Code of Civil Procedure (Code for short) which became applicable in view of s. 38 of the Act. Therefore, on the expiry of 90 days from the date of death of Rameshwar no abatement set in and the application for substitution made on October 25, 1980 could not have been rejected as being barred by limitation. The High Court referred to s. 38 (1) of the Act and to Rules 3, 9 and 11 of Order XXI I of the Code and held that Article 120 of the First Schedule of the Limitation Act, 1963, was applicable and the petition for substitution should have been filed within 90 days from the date of death. The writ application was, therefore, dismissed .The decision of the Allahabad High Court is assailed before this Court. When on the special leave petition notice was given it was indicated that the case would be disposed of on merits. The respondents have, however, not appeared to contest. 3. Mr. Sen appearing in support of the appeal says that s. 38 (1) of the Act makes it clear that the procedure in the Code has been made applicable for hearing and disposal of appeals. Under s. 42 of the Act, sections 4, 5 and 12 of the Limitation A ct, 1963, have been made applicable to proceedings including appeals under the Act. According to Mr. Sen, in view of the provisions in ss. 38 and 42 of the Act the appellate authority and the High Court should have accepted the contention of the appellants that the Code was applied only for the disposal of appeals and the provisions of the Limitation Act excepting ss. 4, 5 and 12 were not applicable to proceedings under the Act. Section 38 (1) of the Act provides: In hearing and deciding an appeal under this Act, the appellate court shall have all the powers and the privileges of a civil court and follow the procedure for the hearing and disposal of appeals laid down in the Code of Civil Procedure, 1908. Under the Code when death occurs at an appellate stage, substitution is effected in accordance with the procedure laid down in Order XXII. In terms of sub-s. (1) of s. 38 of the Act, if death occurred of one of the parties at the appellate stage of a Ceiling Appeal, substitution had also to be made according to the procedure laid down in Order XXII of the Code. Rule 3 of order XXII of the Code provides: (1) where one of two or more plaintiffs dies and the right to sue does not survive to the surviving plaintiff or plaintiffs alone, or a sole plaintiff or sole surviving plaintiff dies and the right to sue survives, the Court, on an application made in that behalf, shall cause the legal representatives of the deceased plaintiff to be made a party and shall proceed with the suit. Rule 11 of order XXII of the Code indicates that the provisions of that Order do apply to appeals.There is another aspect which militates against Mr. Sens argument. Sub-rule (2) of rule 3 of that order provides: where within the time limited by law no application is made under sub-rule (1), the suit shall abate so far as the deceased plaintiff is concerned, and, on the application of the defendant, the Court may award to him the costs which he may have incurred in defending the suit, to be recovered from the estate of the deceased plaintiff. (Emphasis is added by us by underlining the words in the provision). Obviously, time has been limited by law in Article 120 of the First Schedule of the Limitation Act to which we shall presently refer. 4. Article 120 of First Schedule of the Limitation Act provides that an application under the Code to have the legal representatives of the deceased appellant made a party has to be made within 90 days from the date of death of the appellant and Article 121 provides 60 days period for the application for an order to set aside abatement from the date of abatement. It is not disputed that the application for substitution of the legal representatives of Rameshwar when made was beyond 150 days from the date of his death. If the Code and the Limitation Act applied at the time when the application for substitution was made, the legal representatives had to ask for substitution, setting aside of abatement and condonation of delay in terms of rule 9 (3) of order XXII of the Code. Whether there was sufficient cause for the delay to be condoned and for abatement to be vacated were matters for the appellate court and Mr. Sen has rightly not canvassed before us that discretion which vested in the appellate court had not been properly exercised. The sole ground pressed before us, as we have already stated, is as to whether to an appeal under the Act the provisions of the Code and the Limitation Act referred to above would apply. There is little room to dispute that if Order XXII of the Code applies necessarily Articles 120 and 121 of t he First Schedule of the Limitation Act would also apply. The contention that only three sections of the Limitation Act have been specially extended to proceedings under the Act by s. 42 thereof is of no consequence once it is held that order XXII o f the Code is applicable to appeals under the Act. Section 38 (1) of the Act in our view clearly extends the procedure applicable to appeals under the Code to appeals under the Act. The extension of the procedure available under the Code to appeals under the Act attracts the entire procedure of the Code relevant for the purpose of disposing of an appeal under the Act. There is no scope to reckon an exception unless the statute indicates any. ### Response: 1 ### Explanation: Article 120 of First Schedule of the Limitation Act provides that an application under the Code to have the legal representatives of the deceased appellant made a party has to be made within 90 days from the date of death of the appellant and Article 121 provides 60 days period for the application for an order to set aside abatement from the date of abatement. It is not disputed that the application for substitution of the legal representatives of Rameshwar when made was beyond 150 days from the date of his death. If the Code and the Limitation Act applied at the time when the application for substitution was made, the legal representatives had to ask for substitution, setting aside of abatement and condonation of delay in terms of rule 9 (3) of order XXII of the Code. Whether there was sufficient cause for the delay to be condoned and for abatement to be vacated were matters for the appellate court and Mr. Sen has rightly not canvassed before us that discretion which vested in the appellate court had not been properly exercised. The sole ground pressed before us, as we have already stated, is as to whether to an appeal under the Act the provisions of the Code and the Limitation Act referred to above would apply. There is little room to dispute that if Order XXII of the Code applies necessarily Articles 120 and 121 of t he First Schedule of the Limitation Act would also apply. The contention that only three sections of the Limitation Act have been specially extended to proceedings under the Act by s. 42 thereof is of no consequence once it is held that order XXII o f the Code is applicable to appeals under the Act. Section 38 (1) of the Act in our view clearly extends the procedure applicable to appeals under the Code to appeals under the Act. The extension of the procedure available under the Code to appeals under the Act attracts the entire procedure of the Code relevant for the purpose of disposing of an appeal under the Act. There is no scope to reckon an exception unless the statute indicates any. We are, therefore, not inclined to accept the submission advanced before us by Mr. Sen that the principles of abatement and delay were not applicable to the case in question and the appellate judge as also the High Court had gone wrong in applying the provisions of the Code and the Limitation Act to deal with the application for substitution.

Jamnabai and Others Vs. Deeak Automobiles and Others

1. Leave granted. By consent of learned counsel for the parties the appeal is heard finally 2. The short question is whether the claimants are entitled to enhanced damages as compared to Rs 33, 000 granted by the High Court for the death of the son of Appellants 1 and 2 and brother of the remaining appellants. The High Court has passed the aforesaid award in motor accident claim on the ground that the deceased at the age of 20 must be earning about Rs 200 per month. The contention of the appellants was that he was gainfully employed at the relevant time with Shrikrishna Vijay Sawmill, Aurangabad drawing Rs 700 per month. But even leaving aside that tall claim, in our view, the deceased must be earning more than Rs 200 per month and, therefore, this is a case for marginal enhancement of the compensation on the ground of future economic loss suffered by the claimants on account of snatching away of the breadwinner by the motor accident. Considering the relevant facts of the case, we deem it fit to enhance the compensation on the aforesaid ground by Rs 17, 000 more, thus making the total award of compensation to be Rs 50, 000. That would also fall in the permissible liability of Respondent 3, Insurance Company 3. We, therefore, enhance the total compensation to Rs 50, 000 in all. We are told that the awarded amount of Rs 33, 000 has been paid by the Insurance Company to the appellant. Therefore, Respondent 3, Insurance Company, shall now pay an additional amount of Rs 17, 000 to the claimants. Respondent 3 shall deposit the aforesaid amount of Rs 17, 000 in the Motor Accident Claims Tribunal, Aurangabad in Motor Accident Claim No. 11 of 1983 within a period of six weeks from today. The said amount shall be permitted to be withdrawn by the claimants in full and final satisfaction of the claimants in these proceedings, on due verification of the claimants.

1[ds]3. We, therefore, enhance the total compensation to Rs 50, 000 in all. We are told that the awarded amount of Rs 33, 000 has been paid by the Insurance Company to the appellant. Therefore, Respondent 3, Insurance Company, shall now pay an additional amount of Rs 17, 000 to the claimants. Respondent 3 shall deposit the aforesaid amount of Rs 17, 000 in the Motor Accident Claims Tribunal, Aurangabad in Motor Accident Claim No. 11 of 1983 within a period of six weeks from today. The said amount shall be permitted to be withdrawn by the claimants in full and final satisfaction of the claimants in these proceedings, on due verification of the claimants.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: 1. Leave granted. By consent of learned counsel for the parties the appeal is heard finally 2. The short question is whether the claimants are entitled to enhanced damages as compared to Rs 33, 000 granted by the High Court for the death of the son of Appellants 1 and 2 and brother of the remaining appellants. The High Court has passed the aforesaid award in motor accident claim on the ground that the deceased at the age of 20 must be earning about Rs 200 per month. The contention of the appellants was that he was gainfully employed at the relevant time with Shrikrishna Vijay Sawmill, Aurangabad drawing Rs 700 per month. But even leaving aside that tall claim, in our view, the deceased must be earning more than Rs 200 per month and, therefore, this is a case for marginal enhancement of the compensation on the ground of future economic loss suffered by the claimants on account of snatching away of the breadwinner by the motor accident. Considering the relevant facts of the case, we deem it fit to enhance the compensation on the aforesaid ground by Rs 17, 000 more, thus making the total award of compensation to be Rs 50, 000. That would also fall in the permissible liability of Respondent 3, Insurance Company 3. We, therefore, enhance the total compensation to Rs 50, 000 in all. We are told that the awarded amount of Rs 33, 000 has been paid by the Insurance Company to the appellant. Therefore, Respondent 3, Insurance Company, shall now pay an additional amount of Rs 17, 000 to the claimants. Respondent 3 shall deposit the aforesaid amount of Rs 17, 000 in the Motor Accident Claims Tribunal, Aurangabad in Motor Accident Claim No. 11 of 1983 within a period of six weeks from today. The said amount shall be permitted to be withdrawn by the claimants in full and final satisfaction of the claimants in these proceedings, on due verification of the claimants. ### Response: 1 ### Explanation: 3. We, therefore, enhance the total compensation to Rs 50, 000 in all. We are told that the awarded amount of Rs 33, 000 has been paid by the Insurance Company to the appellant. Therefore, Respondent 3, Insurance Company, shall now pay an additional amount of Rs 17, 000 to the claimants. Respondent 3 shall deposit the aforesaid amount of Rs 17, 000 in the Motor Accident Claims Tribunal, Aurangabad in Motor Accident Claim No. 11 of 1983 within a period of six weeks from today. The said amount shall be permitted to be withdrawn by the claimants in full and final satisfaction of the claimants in these proceedings, on due verification of the claimants.

Hindustan Steelworks Construction Limited Vs. Tarapore and Company and Another

the observations of Mukharji J. in paragraph 28 and that of Shetty J. in paragraph 53 of the judgment in U. P. Co-operative Federation Ltd., this court in paragraph 9 of that judgment has observed that what is stated therein is the settled position of law. What is overlooked by learned counsel is that in that very paragraph the opinion of Mukherji J. that "it is only in exceptional cases that is to say in face of fraud or in case irretrievable injustice be done the courts should interfere" is also quoted. Moreover, while dealing with the facts of that case this court in paragraph 10 of the judgment has stated that "the bank cannot be interdicted by the court at the instance of respondent No. 1 in the absence of fraud or special equities in the form of irretrievable injustice between the parties." * 14. This observation would clearly go to show that the three-judge Bench has approved the view that fraud and other exceptional circumstances leading to irretrievable injustice are exceptions to the rule.Lastly, learned counsel for the appellant relied upon the following observations made in paragraph 60 of the three-judge Bench decision of this court in Svenska Handelsbanken v. Indian Charge Chrome: "We have referred to the observations of both Sabyasachi Mukharji as well as Shetty JJ. in extenso to emphasise that in cases of confirmed bank guarantees/irrevocable letters of credit, they cannot be interfered with unless there is fraud and irretrievable injustice involved in the case and fraud has to be an established fraud." * 15. In that case the question which fell for consideration was whether the High Court was right in taking the view that while deciding an application for interim relief against enforcement of a bank guarantee general principles of injunction on lenders should be applicable and not the principles of injunction in relation to bank guarantee. This court was not called upon to decide whether apart from the case of fraud there can be any other exceptional case wherein the court can interfere in the matter of encashment of a bank guarantee. It is also significant to note that the said observation in paragraph 60 has been made after quoting the following observations made by Mukharji J., in paragraph 21 of his judgment in U. P. Co-operative Federation Ltd.s case. "An irrevocable commitment either in the form of confirmed bank guarantee or irrevocable letter of credit cannot be interfered with except in case of fraud or in case of a question of apprehension of irretrievable injustice has been made out. This is the well-settled principle of law in England. This is also a well-settled principle of law in India...No fraud and no question of irretrievable injustice was involved in the case." * 16. Therefore, we cannot attach much importance to the use of the word "and" in the observation that "it cannot be interferred with unless there is fraud and irretrievable injustice involved in the case...". It is also significant to note that in that case this court referred to the decision of the Court of Appeal in England in the case of Elian and Rabbath v. Matsas and Matsas [1966] 2 Lloyds List Law Reports 495 and distinguished it by stating that the facts of that case were peculiar but did not state that the view taken in that case is not correct. The decision in Handerson v. Canadian Imperial Bank of Commerce and Peat Marwick Ltd. (40 British Columbia LR 318) was also referred to and distinguished on the ground that the facts of that case were peculiar but with respect to the decision in that case also it has not been stated that it does not represent the correct position of law. That was not a case of that type of fraud which has been recognised as an exception to the rule though the request by the beneficiary for payment was considered fraudulent in the circumstances because there was no right to payment. This court also referred to the case of Itek Corporation v. First National Bank of Boston 566 (Fed Supp 1210). In that case the underlying contract had become impossible of performance, because of "force majeure". It was an event subsequent to the execution of the contract. Yet injunction was granted by the court on the ground that the plaintiff had no adequate remedy at law and the allegations of irreparable harm were not speculative but genuine and immediate and the plaintiff would have suffered irreparable harm if the request for relief was not granted. Though this court observed that "this judgment is based on peculiar facts" it has not disapproved the view taken in that case.We are, therefore, of the opinion that the correct position of law is that commitment of banks must be honoured free from interference by the courts and it is only in exceptional cases, that is to say, in case of fraud or in a case where irretrievable injustice would be done if the bank guarantee is allowed to be encashed, that the court should interfere. In this case fraud has not been pleaded and the relief for injunction was sought by the contractor/respondent No. 1 on the ground that special equities or the special circumstances of the case required it. The special circumstances and/or special equities which have been pleaded in this case are that there is a serious dispute on the question as to who has committed breach of the contract, that the contractor has a counter claim against the appellant, that the disputes between the parties have been referred to the arbitrators and that no amount can be said to be due and payable by the contractor to the appellant till the arbitrators declare their award. In our opinion, these factors are not sufficient to make this case an exceptional case justifying interference by restraining the appellant from enforcing the bank guarantees. The High Court was, therefore, not right in restraining the appellant from enforcing the bank guarantees. 17.

1[ds]It is, therefore, difficult to appreciate the attempt of the High Court to distinguish that decision and to raise a doubt whether in India also the same principles apply in case of a performance guarantee issued by a bank. In our opinion, the High Court was not right either in its attempt to distinguish that decision or to raise a doubt regarding the correct position of lawThe High Court also committed a grave error in restraining the appellant from invoking the bank guarantees on the ground that in India only a reasonable amount can be awarded by way of damages even when the parties to the contract have provided for liquidated damages and that a term in a bank guarantee making the beneficiary the sole judge on the question of breach of contract and the extent of loss or damages would be invalid and that no amount can be said to be due till an adjudication in that behalf is made either by a court or an arbitrator, as the case may be. In taking that view the High Court has overlooked the correct position that a bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the primary contract between the person at whose instance the bank guarantee is given and the beneficiary. What the High Court has observed would be applicable only to the parties to the underlying transaction or the primary contract but can have no relevance to the bank guarantee given by the bank, as the transaction between the bank and the beneficiary is independent and of a different nature. In the case of an unconditional bank guarantee, the nature of obligation of the bank is absolute and not dependent upon any dispute or proceeding between the party at whose instance the bank guarantee is given and the beneficiary. The High Court thus failed to appreciate the real object and nature of a bank guarantee. The distinction which the High Court has drawn between a guarantee for due performance of a works contract and a guarantee given towards security deposit for that contract is also unwarranted. The said distinction appears to be the result of the same fallacy committed by the High Court of not appreciating the distinction between the primary contract between the parties and a bank guarantee and also the real object of a bank guarantee and the nature of the banks obligation thereunder. Whether the bank guarantee is towards security deposit or mobilisation advance or working funds or for due performance of the contract if the same is unconditional and if there is a stipulation in the bank guarantee that the bank should pay on demand without a demur and that the beneficiary shall be the sole judge not only on the question of breach of contract but also with respect to the amount of loss or damages, the obligation of the bank would remain the same and that obligation has to be discharged in the manner provided in the bank guarantee. In General Electric Technical Services Company Inc. v. Punj Sons (P.) Ltd. while dealing with a case of bank guarantee given for securing mobilisation advance it has been held that the right of a contractor to recover certain amounts under running bills would have no relevance to the liability of the bank under the guarantee given by it. In that case also the stipulations in the bank guarantee were that the bank had to pay on demand without a demur and that the beneficiary was to be the sole judge as regards the loss or damage caused to it. This court held that notwithstanding the dispute between the contractor and the party giving the contract, the bank was under an obligation to discharge its liability as per the terms of the bank guarantee. Larsen and Toubro Limited v. Maharashtra State Electricity Board and Hindustan Steel Workers Construction Ltd. v. G. S. Atwal and Co. (Engineers) Pvt. Ltd. were also cases of work contracts wherein bank guarantees were given either towards advances or release of security deposits or for due performance of the contract. In both those cases this court held that the bank guarantees being irrevocable and unconditional and as the beneficiary was made the sole judge on the question of breach of performance of the contract and the extent of loss or damages an injunction restraining the beneficiary from invoking the bank guarantees could not have been granted. The above referred to three subsequent decisions of this court also go to show that the view taken by the High Court is clearly wrongThis observation would clearly go to show that the three-judge Bench has approved the view that fraud and other exceptional circumstances leading to irretrievable injustice are exceptions to the ruleIn this case fraud has not been pleaded and the relief for injunction was sought by the contractor/respondent No. 1 on the ground that special equities or the special circumstances of the case required it. The special circumstances and/or special equities which have been pleaded in this case are that there is a serious dispute on the question as to who has committed breach of the contract, that the contractor has a counter claim against the appellant, that the disputes between the parties have been referred to the arbitrators and that no amount can be said to be due and payable by the contractor to the appellant till the arbitrators declare their award. In our opinion, these factors are not sufficient to make this case an exceptional case justifying interference by restraining the appellant from enforcing the bank guarantees. The High Court was, therefore, not right in restraining the appellant from enforcing the bank guarantees.

### Instruction: Forecast the likely verdict of the case (granting (1) or denying (0) the appeal) and then rationalize your prediction by pinpointing and explaining pivotal sentences in the case document. ### Input: the observations of Mukharji J. in paragraph 28 and that of Shetty J. in paragraph 53 of the judgment in U. P. Co-operative Federation Ltd., this court in paragraph 9 of that judgment has observed that what is stated therein is the settled position of law. What is overlooked by learned counsel is that in that very paragraph the opinion of Mukherji J. that "it is only in exceptional cases that is to say in face of fraud or in case irretrievable injustice be done the courts should interfere" is also quoted. Moreover, while dealing with the facts of that case this court in paragraph 10 of the judgment has stated that "the bank cannot be interdicted by the court at the instance of respondent No. 1 in the absence of fraud or special equities in the form of irretrievable injustice between the parties." * 14. This observation would clearly go to show that the three-judge Bench has approved the view that fraud and other exceptional circumstances leading to irretrievable injustice are exceptions to the rule.Lastly, learned counsel for the appellant relied upon the following observations made in paragraph 60 of the three-judge Bench decision of this court in Svenska Handelsbanken v. Indian Charge Chrome: "We have referred to the observations of both Sabyasachi Mukharji as well as Shetty JJ. in extenso to emphasise that in cases of confirmed bank guarantees/irrevocable letters of credit, they cannot be interfered with unless there is fraud and irretrievable injustice involved in the case and fraud has to be an established fraud." * 15. In that case the question which fell for consideration was whether the High Court was right in taking the view that while deciding an application for interim relief against enforcement of a bank guarantee general principles of injunction on lenders should be applicable and not the principles of injunction in relation to bank guarantee. This court was not called upon to decide whether apart from the case of fraud there can be any other exceptional case wherein the court can interfere in the matter of encashment of a bank guarantee. It is also significant to note that the said observation in paragraph 60 has been made after quoting the following observations made by Mukharji J., in paragraph 21 of his judgment in U. P. Co-operative Federation Ltd.s case. "An irrevocable commitment either in the form of confirmed bank guarantee or irrevocable letter of credit cannot be interfered with except in case of fraud or in case of a question of apprehension of irretrievable injustice has been made out. This is the well-settled principle of law in England. This is also a well-settled principle of law in India...No fraud and no question of irretrievable injustice was involved in the case." * 16. Therefore, we cannot attach much importance to the use of the word "and" in the observation that "it cannot be interferred with unless there is fraud and irretrievable injustice involved in the case...". It is also significant to note that in that case this court referred to the decision of the Court of Appeal in England in the case of Elian and Rabbath v. Matsas and Matsas [1966] 2 Lloyds List Law Reports 495 and distinguished it by stating that the facts of that case were peculiar but did not state that the view taken in that case is not correct. The decision in Handerson v. Canadian Imperial Bank of Commerce and Peat Marwick Ltd. (40 British Columbia LR 318) was also referred to and distinguished on the ground that the facts of that case were peculiar but with respect to the decision in that case also it has not been stated that it does not represent the correct position of law. That was not a case of that type of fraud which has been recognised as an exception to the rule though the request by the beneficiary for payment was considered fraudulent in the circumstances because there was no right to payment. This court also referred to the case of Itek Corporation v. First National Bank of Boston 566 (Fed Supp 1210). In that case the underlying contract had become impossible of performance, because of "force majeure". It was an event subsequent to the execution of the contract. Yet injunction was granted by the court on the ground that the plaintiff had no adequate remedy at law and the allegations of irreparable harm were not speculative but genuine and immediate and the plaintiff would have suffered irreparable harm if the request for relief was not granted. Though this court observed that "this judgment is based on peculiar facts" it has not disapproved the view taken in that case.We are, therefore, of the opinion that the correct position of law is that commitment of banks must be honoured free from interference by the courts and it is only in exceptional cases, that is to say, in case of fraud or in a case where irretrievable injustice would be done if the bank guarantee is allowed to be encashed, that the court should interfere. In this case fraud has not been pleaded and the relief for injunction was sought by the contractor/respondent No. 1 on the ground that special equities or the special circumstances of the case required it. The special circumstances and/or special equities which have been pleaded in this case are that there is a serious dispute on the question as to who has committed breach of the contract, that the contractor has a counter claim against the appellant, that the disputes between the parties have been referred to the arbitrators and that no amount can be said to be due and payable by the contractor to the appellant till the arbitrators declare their award. In our opinion, these factors are not sufficient to make this case an exceptional case justifying interference by restraining the appellant from enforcing the bank guarantees. The High Court was, therefore, not right in restraining the appellant from enforcing the bank guarantees. 17. ### Response: 1 ### Explanation: It is, therefore, difficult to appreciate the attempt of the High Court to distinguish that decision and to raise a doubt whether in India also the same principles apply in case of a performance guarantee issued by a bank. In our opinion, the High Court was not right either in its attempt to distinguish that decision or to raise a doubt regarding the correct position of lawThe High Court also committed a grave error in restraining the appellant from invoking the bank guarantees on the ground that in India only a reasonable amount can be awarded by way of damages even when the parties to the contract have provided for liquidated damages and that a term in a bank guarantee making the beneficiary the sole judge on the question of breach of contract and the extent of loss or damages would be invalid and that no amount can be said to be due till an adjudication in that behalf is made either by a court or an arbitrator, as the case may be. In taking that view the High Court has overlooked the correct position that a bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the primary contract between the person at whose instance the bank guarantee is given and the beneficiary. What the High Court has observed would be applicable only to the parties to the underlying transaction or the primary contract but can have no relevance to the bank guarantee given by the bank, as the transaction between the bank and the beneficiary is independent and of a different nature. In the case of an unconditional bank guarantee, the nature of obligation of the bank is absolute and not dependent upon any dispute or proceeding between the party at whose instance the bank guarantee is given and the beneficiary. The High Court thus failed to appreciate the real object and nature of a bank guarantee. The distinction which the High Court has drawn between a guarantee for due performance of a works contract and a guarantee given towards security deposit for that contract is also unwarranted. The said distinction appears to be the result of the same fallacy committed by the High Court of not appreciating the distinction between the primary contract between the parties and a bank guarantee and also the real object of a bank guarantee and the nature of the banks obligation thereunder. Whether the bank guarantee is towards security deposit or mobilisation advance or working funds or for due performance of the contract if the same is unconditional and if there is a stipulation in the bank guarantee that the bank should pay on demand without a demur and that the beneficiary shall be the sole judge not only on the question of breach of contract but also with respect to the amount of loss or damages, the obligation of the bank would remain the same and that obligation has to be discharged in the manner provided in the bank guarantee. In General Electric Technical Services Company Inc. v. Punj Sons (P.) Ltd. while dealing with a case of bank guarantee given for securing mobilisation advance it has been held that the right of a contractor to recover certain amounts under running bills would have no relevance to the liability of the bank under the guarantee given by it. In that case also the stipulations in the bank guarantee were that the bank had to pay on demand without a demur and that the beneficiary was to be the sole judge as regards the loss or damage caused to it. This court held that notwithstanding the dispute between the contractor and the party giving the contract, the bank was under an obligation to discharge its liability as per the terms of the bank guarantee. Larsen and Toubro Limited v. Maharashtra State Electricity Board and Hindustan Steel Workers Construction Ltd. v. G. S. Atwal and Co. (Engineers) Pvt. Ltd. were also cases of work contracts wherein bank guarantees were given either towards advances or release of security deposits or for due performance of the contract. In both those cases this court held that the bank guarantees being irrevocable and unconditional and as the beneficiary was made the sole judge on the question of breach of performance of the contract and the extent of loss or damages an injunction restraining the beneficiary from invoking the bank guarantees could not have been granted. The above referred to three subsequent decisions of this court also go to show that the view taken by the High Court is clearly wrongThis observation would clearly go to show that the three-judge Bench has approved the view that fraud and other exceptional circumstances leading to irretrievable injustice are exceptions to the ruleIn this case fraud has not been pleaded and the relief for injunction was sought by the contractor/respondent No. 1 on the ground that special equities or the special circumstances of the case required it. The special circumstances and/or special equities which have been pleaded in this case are that there is a serious dispute on the question as to who has committed breach of the contract, that the contractor has a counter claim against the appellant, that the disputes between the parties have been referred to the arbitrators and that no amount can be said to be due and payable by the contractor to the appellant till the arbitrators declare their award. In our opinion, these factors are not sufficient to make this case an exceptional case justifying interference by restraining the appellant from enforcing the bank guarantees. The High Court was, therefore, not right in restraining the appellant from enforcing the bank guarantees.

Supdt. of Central Excise and Ors Vs. Ayyangar Match Works and Ors

1967.7. The case of the respondents in the High Court was that they filed declaration on 22 December, 1969 for 1969-70 that they would not produce more than 75 million match sticks during the financial year. The respondents claimed to be entitled to the concessional rate of Excise duty at Rs. 3.75 per gross pursuant to the Notification dated 21 July, 1967. The further case of the respondents in the High Court was that the Notification dated 4 September, 1967 was issued stating that the concession of Rs. 3.75 per gross would be available to such "D" Class manufacturers who had filed the declaration before 4 September, 1967. The respondents challenged the fixing of the date 4 September, 1967 as an arbitrary time limit making unreasonable discrimination between the same category of manufacturer simply on the basis of the application being before or after 4 September, 1967. The respondents craved reference to the judgment of the High Court in Writ petition No. 3838 of 1968, dated 11 December, 1968 and prayed for orders in terms of that judgment.8. The High Court accepted the petition of the respondents following the judgment in Writ Petition No. 3838 of 1968, dated 11 December, 1968.9. The appellants challenged the decision of the High Court and relied on the decision of this Court in M/s. Parameswaran Match Works case (supra). This Court in M/s. Parameswaran Match Works case (supra) held that the purpose of the Notification dated 4 September, 1967 was to enable bona fide small manufacturers of matches to earn a concessional rate of duty by filing the declaration. The small manufacturers whose estimated clearance in a year was less than 75 million matches would have availed themselves of the opportunity by making the declaration as early as possible because they would become entitled to the concessional rate of duty on their clearance from time to time. The purpose of the notification was to prevent larger units who were producing or clearing more than 100 million matches in a year and who could not have made a declaration from splitting up into smaller units in order to avail of the concessional rate of duty by making the declaration subsequently. The classification founded on a particular date was held to be reasonable because the choice of a date was to protect the smaller units in the industry from competition by the larger ones and that object would have been frustrated if by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of the bounty.10. Counsel for the respondents relied on an observation of this Court in M/s. Parameswaran Match Works case (supra) at Page 576 of the Report to the effect that the manufacturers who came to the field after 4 September, 1967 were entitled to concessional rate of duty if they satisfied the condition prescribed in Clause (d) of the Notification dated 4 September, 1967. In M/s. Parameswaran Match Works case (supra) the match works asked for a licence on 5 September, 1967 for manufacturing matches stating that it began the industry from 5 March, 1967 and also filed a declaration that the estimated manufacture for the financial year 1967-68 would not exceed 75 million matches. Parmeswaran Match Works contended there that it was denied the benefit of the concessional rate of duty on the ground that it applied for a licence and filed the declaration on 5 September, 1967 after the expiry of the fixed date. This Court held that the concessional rate would be availed by them who satisfied the condition laid down in the notification.11. The case of the respondents as laid in the petition before the High Court was that they were claiming an order in terms of the judgment in Writ Petition No. 3838 of 1968. There is no allegation in the petition that the respondents came to the field after 4 September, 1967 or that they started manufacturing matches after 4 September, 1967. The Notification dated 4 September, 1967 gave relief, inter alia, to factories mentioned in sub-clause (d) of the notification. The factories mentioned in sub-clause (d) are those "whose production during any financial year does not exceed or is not estimated to exceed 100 million matches and are recommended by the Khadi and Village Industries Commission for exemption under this notification as a bonafide cottage unit or which is set up by a cooperative society registered under any law relating to cooperative societies for the time being in force". There are no allegations in the petitions in the High Court that the respondents were recommended by the Khadi and Village Industries Commission for exemption as bona fide cottage units or were set up by cooperative society registered under any law relating to cooperative societies. No case was made by the respondents in the petitions on the basis of exemption under sub-clause (d).12. A contention was advanced by the respondents that the, Khadi and Village Industries Commission was not competent to make any recommendation as contemplated in sub-clause (d). Section 15 of the Khadi and Village Industries Commission Act, 1956 which speaks of the functions of the Commission states in Clauses (c), (d), (f), (g) and (h) that the Commission may take steps to provide for the sale and marketing of Khadi or of products of village industries, to encourage and promote research in the development of village industries, to undertake, assist or encourage the development of village industries, to promote and encourage cooperative efforts among manufacturers of Khadi and persons engaged in village industries. Section 15(h) specifically states that the Commission may take steps for ensuring the genuineness of, and for granting certificates to producers of, or dealers in, Khadi or the products of any village industry. These provisions indicate that the Khadi and Village Industries Commission is competent to grant certificates recommending village industries for exemption under Clause (d) of the Notification dated 4 September, 1967.13. The appeals are all covered by the decision in M/s. Parameswaran Match Works case (supra).

1[ds]13. The appeals are all covered by the decision in M/s. Parameswaran Match Works case (supra).Court in M/s. Parameswaran Match Works case (supra) held that the purpose of the Notification dated 4 September, 1967 was to enable bona fide small manufacturers of matches to earn a concessional rate of duty by filing the declaration. The small manufacturers whose estimated clearance in a year was less than 75 million matches would have availed themselves of the opportunity by making the declaration as early as possible because they would become entitled to the concessional rate of duty on their clearance from time to time. The purpose of the notification was to prevent larger units who were producing or clearing more than 100 million matches in a year and who could not have made a declaration from splitting up into smaller units in order to avail of the concessional rate of duty by making the declaration subsequently. The classification founded on a particular date was held to be reasonable because the choice of a date was to protect the smaller units in the industry from competition by the larger ones and that object would have been frustrated if by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of theare no allegations in the petitions in the High Court that the respondents were recommended by the Khadi and Village Industries Commission for exemption as bona fide cottage units or were set up by cooperative society registered under any law relating to cooperative societies. No case was made by the respondents in the petitions on the basis of exemption under sub-clause (d).These provisions indicate that the Khadi and Village Industries Commission is competent to grant certificates recommending village industries for exemption under Clause (d) of the Notification dated 4 September, 1967.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: 1967.7. The case of the respondents in the High Court was that they filed declaration on 22 December, 1969 for 1969-70 that they would not produce more than 75 million match sticks during the financial year. The respondents claimed to be entitled to the concessional rate of Excise duty at Rs. 3.75 per gross pursuant to the Notification dated 21 July, 1967. The further case of the respondents in the High Court was that the Notification dated 4 September, 1967 was issued stating that the concession of Rs. 3.75 per gross would be available to such "D" Class manufacturers who had filed the declaration before 4 September, 1967. The respondents challenged the fixing of the date 4 September, 1967 as an arbitrary time limit making unreasonable discrimination between the same category of manufacturer simply on the basis of the application being before or after 4 September, 1967. The respondents craved reference to the judgment of the High Court in Writ petition No. 3838 of 1968, dated 11 December, 1968 and prayed for orders in terms of that judgment.8. The High Court accepted the petition of the respondents following the judgment in Writ Petition No. 3838 of 1968, dated 11 December, 1968.9. The appellants challenged the decision of the High Court and relied on the decision of this Court in M/s. Parameswaran Match Works case (supra). This Court in M/s. Parameswaran Match Works case (supra) held that the purpose of the Notification dated 4 September, 1967 was to enable bona fide small manufacturers of matches to earn a concessional rate of duty by filing the declaration. The small manufacturers whose estimated clearance in a year was less than 75 million matches would have availed themselves of the opportunity by making the declaration as early as possible because they would become entitled to the concessional rate of duty on their clearance from time to time. The purpose of the notification was to prevent larger units who were producing or clearing more than 100 million matches in a year and who could not have made a declaration from splitting up into smaller units in order to avail of the concessional rate of duty by making the declaration subsequently. The classification founded on a particular date was held to be reasonable because the choice of a date was to protect the smaller units in the industry from competition by the larger ones and that object would have been frustrated if by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of the bounty.10. Counsel for the respondents relied on an observation of this Court in M/s. Parameswaran Match Works case (supra) at Page 576 of the Report to the effect that the manufacturers who came to the field after 4 September, 1967 were entitled to concessional rate of duty if they satisfied the condition prescribed in Clause (d) of the Notification dated 4 September, 1967. In M/s. Parameswaran Match Works case (supra) the match works asked for a licence on 5 September, 1967 for manufacturing matches stating that it began the industry from 5 March, 1967 and also filed a declaration that the estimated manufacture for the financial year 1967-68 would not exceed 75 million matches. Parmeswaran Match Works contended there that it was denied the benefit of the concessional rate of duty on the ground that it applied for a licence and filed the declaration on 5 September, 1967 after the expiry of the fixed date. This Court held that the concessional rate would be availed by them who satisfied the condition laid down in the notification.11. The case of the respondents as laid in the petition before the High Court was that they were claiming an order in terms of the judgment in Writ Petition No. 3838 of 1968. There is no allegation in the petition that the respondents came to the field after 4 September, 1967 or that they started manufacturing matches after 4 September, 1967. The Notification dated 4 September, 1967 gave relief, inter alia, to factories mentioned in sub-clause (d) of the notification. The factories mentioned in sub-clause (d) are those "whose production during any financial year does not exceed or is not estimated to exceed 100 million matches and are recommended by the Khadi and Village Industries Commission for exemption under this notification as a bonafide cottage unit or which is set up by a cooperative society registered under any law relating to cooperative societies for the time being in force". There are no allegations in the petitions in the High Court that the respondents were recommended by the Khadi and Village Industries Commission for exemption as bona fide cottage units or were set up by cooperative society registered under any law relating to cooperative societies. No case was made by the respondents in the petitions on the basis of exemption under sub-clause (d).12. A contention was advanced by the respondents that the, Khadi and Village Industries Commission was not competent to make any recommendation as contemplated in sub-clause (d). Section 15 of the Khadi and Village Industries Commission Act, 1956 which speaks of the functions of the Commission states in Clauses (c), (d), (f), (g) and (h) that the Commission may take steps to provide for the sale and marketing of Khadi or of products of village industries, to encourage and promote research in the development of village industries, to undertake, assist or encourage the development of village industries, to promote and encourage cooperative efforts among manufacturers of Khadi and persons engaged in village industries. Section 15(h) specifically states that the Commission may take steps for ensuring the genuineness of, and for granting certificates to producers of, or dealers in, Khadi or the products of any village industry. These provisions indicate that the Khadi and Village Industries Commission is competent to grant certificates recommending village industries for exemption under Clause (d) of the Notification dated 4 September, 1967.13. The appeals are all covered by the decision in M/s. Parameswaran Match Works case (supra). ### Response: 1 ### Explanation: 13. The appeals are all covered by the decision in M/s. Parameswaran Match Works case (supra).Court in M/s. Parameswaran Match Works case (supra) held that the purpose of the Notification dated 4 September, 1967 was to enable bona fide small manufacturers of matches to earn a concessional rate of duty by filing the declaration. The small manufacturers whose estimated clearance in a year was less than 75 million matches would have availed themselves of the opportunity by making the declaration as early as possible because they would become entitled to the concessional rate of duty on their clearance from time to time. The purpose of the notification was to prevent larger units who were producing or clearing more than 100 million matches in a year and who could not have made a declaration from splitting up into smaller units in order to avail of the concessional rate of duty by making the declaration subsequently. The classification founded on a particular date was held to be reasonable because the choice of a date was to protect the smaller units in the industry from competition by the larger ones and that object would have been frustrated if by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of theare no allegations in the petitions in the High Court that the respondents were recommended by the Khadi and Village Industries Commission for exemption as bona fide cottage units or were set up by cooperative society registered under any law relating to cooperative societies. No case was made by the respondents in the petitions on the basis of exemption under sub-clause (d).These provisions indicate that the Khadi and Village Industries Commission is competent to grant certificates recommending village industries for exemption under Clause (d) of the Notification dated 4 September, 1967.

Purshottam Lal & Others Vs. Union of India & Another

recommended by us. Generall speaking scales carrying a maximum of Rupees 500/- may be repealed by scale (j) those with a maximum of Rs. 300 and above (except in the Department of Atomic Energy) by scale (ii), unless in the case of posts with a maximum of Rs. 400 or Rs. 450 (30 posts in all according to our information) the qualification for recruitment and the nature of duties are such that they can be more appropriately placed on scale (i); scales with a maximum of Rs. 200 or Rs. 250 by scale (iii) and those with a maximum of Rs. 150 and Rs. 130 by scale (iv). As regards the posts on the scale of Rs. 100-300 for which a university degree is not required, a suitable remuneration may be fixed in the light of our recommendations - after re-examining the question of qualifications for recruitment."7. It is the contention of the petitioners that their case was also covered by the recommendations of the Commission.8. On August 2, 1960 the Government issued a notification giving effect to the recommendations of the Pay Commission. On June 21, 1962 the Government of India revised the pay scales of the petitioners in the Forest Research Institute and Colleges, Dehra Dun, giving them the revised scales as follows :“TABLE”But it was stated in the order dated June 21, 1962 that the revision of the pay scales mentioned in column 4 above will take effect from the date of issue of these orders, and that refixation of the pay of the incumbents of these posts will be done under the provisions of the Fundamental Rules only.9. The Research staff protested by letter dated October 18, 1962. They stated therein that "the revised pay scales of similar posts in other similar sister institutions (except F.R.I.) of this Institute under this very Ministry as well as other ministries have been implemented from 1st July, 1959 according to the 2nd Pay Commission recommendations accepted by the Government of India." They requested that the benefit of the retrospective date, i.e. July 1, 1959 be given to them in accordance with the recommendations of the Pay Commission.10. The Government replied on January 30, 1963 that "the revision of pay scales in respect of Research Assistants and Computers at this Institute has been done on the basis of the duties attached to these posts and not on the basis of the recommendations of the Pay Commission. In view of this the pay scale of Rs. 150-300 now given would have effect from the date of issue of the orders and pay fixation in this case has to be done under F. R. only."11. Representation was also made to the President of India. Again in their representation to the President of the Forest Research Institute and College, it was requested that the reasons on the basis of which revision with retrospective effect is said to be not possible may be made known to them. In his reply dated March 23, 1967 the President replied that "the points are being examined and if necessary Ministry will be consulted."12. In his letter dated May 16, 1967 the President of the Forest Research Institute and Colleges stated as follows :"The Government of India to whom a reference on the subject was made again by this office have informed that the posts of Research Assistants Grade II and Computers at Forest Research Institute and Colleges were not specifically included in the list of Scientific Posts mentioned in para 28 of Chapter XV of the 2nd Pay Commissions Report, hence the revised pay scales for these posts could not have retrospective effect from 1-7-59."13. In the affidavit, in reply, the same stand is reiterated. It is submitted that the posts held by the petitioners were not covered by para 36 of Chapter XV and para 8 of Chapter XVIII of the Report of the Second Pay Commission. Reference is only made to para 36 and no reference is made to para 39 of the Report.14. Mr. Dhebar on behalf of the Government maintains the same position and he says that the Pay Commission Report did not deal with the case of the petitioners. We are unable to accept this contention. The terms of reference are wide, and if any category of government servants was excluded material should have been placed before this Court. The Pay Commission has clearly stated that for the purposes of their enquiry they had taken all persons in the civil services of the Central Government or holding civil posts under that Government and paid out of the Consolidated Fund of India, to be Central Government employees. It is not denied by Mr. Dhebar that the petitioners are paid out of the Consolidated Fund of India.15. Mr. Dhebar contends that it was for the Government to accept the recommendations of the Pay Commission and while doing so to determine which categories of employees should be taken to have been included in the terms of reference. We are unable to appreciate this point. Either the Government has made reference in respect of all Government employees or it has not. But if it has made a reference in respect of all Government employees and it accepts the recommendations it is bound to implement the recommendations in respect of all Government employees. If it does not implement the report regarding some employees only it commits a breach of Arts. 14 and 16 of the Constitution. This is what the Government has done as far as these petitioners are concerned.16. The learned counsel next contends that there has been great delay in bringing this petition and we should not exercise our discretion. There has been some delay but on the facts of this case we are of the opinion that there has not been undue delay, especially as in his letter dated March 23, 1967 the President, Forest Research Institute and Colleges said that the points were being examined and if necessary the Ministry would be consulted.

1[ds]We are unable to accept this contention. The terms of reference are wide, and if any category of government servants was excluded material should have been placed before this Court. The Pay Commission has clearly stated that for the purposes of their enquiry they had taken all persons in the civil services of the Central Government or holding civil posts under that Government and paid out of the Consolidated Fund of India, to be Central Government employees. It is not denied by Mr. Dhebar that the petitioners are paid out of the Consolidated Fund ofare unable to appreciate this point. Either the Government has made reference in respect of all Government employees or it has not. But if it has made a reference in respect of all Government employees and it accepts the recommendations it is bound to implement the recommendations in respect of all Government employees. If it does not implement the report regarding some employees only it commits a breach of Arts. 14 and 16 of the Constitution. This is what the Government has done as far as these petitioners arehas been some delay but on the facts of this case we are of the opinion that there has not been undue delay, especially as in his letter dated March 23, 1967 the President, Forest Research Institute and Colleges said that the points were being examined and if necessary the Ministry would be consulted.

### Instruction: Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding. ### Input: recommended by us. Generall speaking scales carrying a maximum of Rupees 500/- may be repealed by scale (j) those with a maximum of Rs. 300 and above (except in the Department of Atomic Energy) by scale (ii), unless in the case of posts with a maximum of Rs. 400 or Rs. 450 (30 posts in all according to our information) the qualification for recruitment and the nature of duties are such that they can be more appropriately placed on scale (i); scales with a maximum of Rs. 200 or Rs. 250 by scale (iii) and those with a maximum of Rs. 150 and Rs. 130 by scale (iv). As regards the posts on the scale of Rs. 100-300 for which a university degree is not required, a suitable remuneration may be fixed in the light of our recommendations - after re-examining the question of qualifications for recruitment."7. It is the contention of the petitioners that their case was also covered by the recommendations of the Commission.8. On August 2, 1960 the Government issued a notification giving effect to the recommendations of the Pay Commission. On June 21, 1962 the Government of India revised the pay scales of the petitioners in the Forest Research Institute and Colleges, Dehra Dun, giving them the revised scales as follows :“TABLE”But it was stated in the order dated June 21, 1962 that the revision of the pay scales mentioned in column 4 above will take effect from the date of issue of these orders, and that refixation of the pay of the incumbents of these posts will be done under the provisions of the Fundamental Rules only.9. The Research staff protested by letter dated October 18, 1962. They stated therein that "the revised pay scales of similar posts in other similar sister institutions (except F.R.I.) of this Institute under this very Ministry as well as other ministries have been implemented from 1st July, 1959 according to the 2nd Pay Commission recommendations accepted by the Government of India." They requested that the benefit of the retrospective date, i.e. July 1, 1959 be given to them in accordance with the recommendations of the Pay Commission.10. The Government replied on January 30, 1963 that "the revision of pay scales in respect of Research Assistants and Computers at this Institute has been done on the basis of the duties attached to these posts and not on the basis of the recommendations of the Pay Commission. In view of this the pay scale of Rs. 150-300 now given would have effect from the date of issue of the orders and pay fixation in this case has to be done under F. R. only."11. Representation was also made to the President of India. Again in their representation to the President of the Forest Research Institute and College, it was requested that the reasons on the basis of which revision with retrospective effect is said to be not possible may be made known to them. In his reply dated March 23, 1967 the President replied that "the points are being examined and if necessary Ministry will be consulted."12. In his letter dated May 16, 1967 the President of the Forest Research Institute and Colleges stated as follows :"The Government of India to whom a reference on the subject was made again by this office have informed that the posts of Research Assistants Grade II and Computers at Forest Research Institute and Colleges were not specifically included in the list of Scientific Posts mentioned in para 28 of Chapter XV of the 2nd Pay Commissions Report, hence the revised pay scales for these posts could not have retrospective effect from 1-7-59."13. In the affidavit, in reply, the same stand is reiterated. It is submitted that the posts held by the petitioners were not covered by para 36 of Chapter XV and para 8 of Chapter XVIII of the Report of the Second Pay Commission. Reference is only made to para 36 and no reference is made to para 39 of the Report.14. Mr. Dhebar on behalf of the Government maintains the same position and he says that the Pay Commission Report did not deal with the case of the petitioners. We are unable to accept this contention. The terms of reference are wide, and if any category of government servants was excluded material should have been placed before this Court. The Pay Commission has clearly stated that for the purposes of their enquiry they had taken all persons in the civil services of the Central Government or holding civil posts under that Government and paid out of the Consolidated Fund of India, to be Central Government employees. It is not denied by Mr. Dhebar that the petitioners are paid out of the Consolidated Fund of India.15. Mr. Dhebar contends that it was for the Government to accept the recommendations of the Pay Commission and while doing so to determine which categories of employees should be taken to have been included in the terms of reference. We are unable to appreciate this point. Either the Government has made reference in respect of all Government employees or it has not. But if it has made a reference in respect of all Government employees and it accepts the recommendations it is bound to implement the recommendations in respect of all Government employees. If it does not implement the report regarding some employees only it commits a breach of Arts. 14 and 16 of the Constitution. This is what the Government has done as far as these petitioners are concerned.16. The learned counsel next contends that there has been great delay in bringing this petition and we should not exercise our discretion. There has been some delay but on the facts of this case we are of the opinion that there has not been undue delay, especially as in his letter dated March 23, 1967 the President, Forest Research Institute and Colleges said that the points were being examined and if necessary the Ministry would be consulted. ### Response: 1 ### Explanation: We are unable to accept this contention. The terms of reference are wide, and if any category of government servants was excluded material should have been placed before this Court. The Pay Commission has clearly stated that for the purposes of their enquiry they had taken all persons in the civil services of the Central Government or holding civil posts under that Government and paid out of the Consolidated Fund of India, to be Central Government employees. It is not denied by Mr. Dhebar that the petitioners are paid out of the Consolidated Fund ofare unable to appreciate this point. Either the Government has made reference in respect of all Government employees or it has not. But if it has made a reference in respect of all Government employees and it accepts the recommendations it is bound to implement the recommendations in respect of all Government employees. If it does not implement the report regarding some employees only it commits a breach of Arts. 14 and 16 of the Constitution. This is what the Government has done as far as these petitioners arehas been some delay but on the facts of this case we are of the opinion that there has not been undue delay, especially as in his letter dated March 23, 1967 the President, Forest Research Institute and Colleges said that the points were being examined and if necessary the Ministry would be consulted.

Bank Of India Vs. Ketan Parekh

found to be valid. Therefore, this case cannot provide any assistance. Our attention was invited to another decision of this Court in Tax Recovery Officer, Central Range-I v. Custodian & Ors. [(2007) 7 SCC 461] . In that case it was held that that the property of any person notified under section 3(2) & (3) of the Act can be attached and the jurisdiction of the Special Court is confined to that property of the notified person only. It was found that the Company D which was notified as a party under section 3(2) of the Act of 1992 and not the Company K. Company D owed money from Company K and its subsidiaries and it was in execution of the decree passed in the favour of Company D, the property of Company K was put to auction. Thus, the Special Court could not have entertained the application moved by the Income-Tax Department for realization of its income tax dues from the Company K and therefore, it was held that the application moved by the Income Tax Department was rightly rejected by the Special Court. Our attention was invited to a decision of this Court in Life Insurance Corporation of India v. D.J. Bahadur & Ors. [(1981) 1 SCC 315] . In this case, the question was whether the provisions of the Industrial Disputes Act will prevail or the provisions of the Life Insurance ( Alteration of Remuneration and other Terms and Conditions of Service of Employees) Order, 1957 framed under the Life Insurance Corporation Act, 1956. In that context, their Lordships after dealing with the provisions of Life Insurance Corporation Act and the Rules framed thereunder held that the case will be covered by the Industrial Disputes Act. It was observed per Krishna Iyer, J as follows: "In determining whether a statute is a special or a general one, the focus must be on the principal subject-matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purpose it may be special. Vis-`-vis ` industrial vists at the termination of the settlement as between the workmen and the Corporation the ID Act is a special legislation and the LIC Act a general legislation. So the ID Act, being a special law, will prevail over the LIC Act which is a general law." Pathak, J. concurring with Krishna Iyer, J observed as follows " "Law declared by the court in respect of an award holds true in the case of a settlement. Not only are the statutory provisions pertaining to a settlement and an award comparable in this regard but, if anything the observations if read in respect of a settlement, which after all is a voluntary agreement between the parties, would seem to hold more strongly. " Our attention was invited to a decision of this Court in L.S. Synthetics Ltd. v. Fairgrowth Financial Services Ltd. & Anr. [(2004)11 SCC 456] . In this case it was held that the contention that only those properties belonging to the notified person which are the subject-matter of the transactions in securities would stand attached and for that purpose Section 9-A of the Act must be read down was not sustainable. Our attention was also invited to a decision of this Court in Allahabad Bank v. Canara Bank & Anr. [(2000) 4 SCC 406] . In this case there was a question of jurisdiction whether the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 will prevail or the provisions of the Companies Act, 1956. In that context their Lordships observed as follows: "Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely Section 34. Therefore, in view of Section 34 of the RDB Act, the said Act overrides the Companies Act, to the extent there is anything inconsistent between the Acts." 8. In the present case, both the two Acts i.e. the Act of 1992 and the Act of 1993 start with the non- obstante clause. Section 34 of the Act of 1993 starts with non-obstante clause, likewise Section 9-A of the Act of 1992. But incidentally, in this case Section 9-A came subsequently, i.e. it came on 25.1.1994. Therefore, it is a subsequent legislation which will have the over-riding effect over the Act of 1993. But cases might arise where both the enactments have the non-obstante clause then in that case, the proper perspective would be that one has to see the subject and the dominant purpose for which the special enactment was made and in case the dominant purpose is covered by that contingencies, then notwithstanding that the Act might have come at a later point of time still the intention can be ascertained by looking to the objects and reasons. However, so far as the present case is concerned, it is more than clear that Section 9-A of the Act of 1992 was amended on 25.1.1994 whereas the Act of 1993 came in 1993. Therefore, the Act of 1992 as amended to include Section 9-A in 1994 being subsequent legislation will prevail and not the provisions of the Act of 1993.9. Apart from this, in the present case both the Acts can be read harmoniously. Whatever dues are due to the Banks or the Financial Institutions can be claimed under Section 11 (2) of the Act of 1992 which specially empowers that the liabilities can be adjusted out of the securities of the person notified in the manner provided under Section 11(2)(b). Therefore, in the present case, the Bank can certainly make an application before the Special Court under Section 11(2)(b) of the Act of 1992 for discharge of their liabilities against the securities of the notified person.

0[ds]5. The admitted facts are that the respondent No.1-Ketan Parekh was a notified party on 6.10.2001. Therefore, on 6.10.2001 all his movable and immovable properties stood attached. Under the Act of 1992, under Section 3(3), the Custodian may, on being satisfied on information received that any person has been involved in any offence relating to transactions in securities after the lst day of April, 1991 and on and before 7th June, 1992, notify the name of such person in the official gazette and from the date when such party is notified all properties, movable or immovable or both belonging to any person notified shall stand attached simultaneously with the issue of the notification, notwithstanding anything contained in the Code and any other law for the time being in force. After attaching that property the Custodian will have the right to deal with such property in such manner as directed the Special Court. Therefore, an analysis of this section means that the moment a person is notified, his property stands attached and the Custodian is in authority of that property and he shall deal with the property in the manner as directed by the Special Court notwithstanding anything contained in the Code (Code means the Civil Procedure Code). Therefore, the property of the respondent herein stood attached under the orders of the Special Court on 6.10.2001 when the respondent was declared a notified person under sub-section (3) of Section 3 of the Act of 1992. Section 9-A which was introduced in 1994 gives full power from the date this amended provision came into force i.e. in 1994 that the Special Court alone will have the jurisdiction to deal with all the cases pending immediately before such commencement by any Civil Court in relation to any manner or claim relating to the property standing attached under sub-section (3) of Section 3. Sub-section (2) of Section 9-A says that every suit, claim or other legal proceeding (other than an appeal) pending before any Court immediately before the commencement of the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Act, 1994, being a suit, claim or proceeding, the cause of action whereon it is based is such that it would have been, if it had arisen after such commencement, within the jurisdiction of the Special Court under sub-section (1), shall stand transferred on such commencement of the Special Court and the Special Court may, on receipt of the records of such suit, claim or other legal proceedings proceed to deal with it so far as may be in the same manner as a suit, claim or legal proceeding from the stage which was reached before such transfer or from any earlier stage or de novo as the Special Court may deem fit. Sub-section (3) further says that no Court other than the Special Court shall have, or be entitled to exercise any jurisdiction, power or authority in relation to any matter or claim referred to in sub-section (1). Sub-section (4) further says that the Special Court shall not be bound by the procedure laid down by the Code of Civil Procedure. But it shall be guided by the principles of natural justice and subject to the other provisions of this Act and the Rules framed thereunder. Sub-section (5) further says that the Special Court shall have all powers as a Civil Court under the Code of Civil Procedure for trying such suits. Section 11 deals with the discharge of liabilities. It also starts with a non-obstante clause and says that notwithstanding anything contained in the Code or any other law for the time being in force, the Special Court shall direct the Custodian for disposal of the property under attachment and liabilities shall be discharged in the order i.e. (a) all revenues, taxes, cesses and rates due from the persons notified by the Custodian under sub-section (2) of Sec. 3 to the Central Government or any State Government or any local authority. (b) all amounts due from the person so notified by the Custodian to any bank or financial institution or mutual fund; and any other liability as may be specified by the Special Court. Therefore, by virtue of section 11, the first priority has been given to all dues of the revenues, taxes, cesses etc. The second priority has been given to any bank or financial institution or mutual fund and the last priority has been given as directed the Special Court. Section 13 clearly lays down that this Act will have over-riding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any Court, tribunal or other authority. The analysis of these necessary provisions clearly establishes that once the property of a notified person is attached by the Custodian and the same having been notified then the property of the notified person being movable or immovable shall be subject to the order passed by the Special Court and the manner in which properties for discharge of the liabilities would be dealt with has already been mentioned in Section 11 of the Act of 1992 and lastly that the provisions of this Act will have the over-riding effect even on Tribunals as is clearly and categorically mentioned in Section 13 of the Act of 1992. Therefore, in the scheme of things this Act has been given priority over all Acts. The Act of 1993 came for recovery of debts due to the Banks and Financial Institutions. This Act also contains the over-riding effect. Section 34 of the Act of 1993 clearly says that this Act will have the over-riding effect for recovery of debts due to the Banks and Financial Institutions. Both the Acts have non-obstante clause. The Act of 1993 is a subsequent legislation and the Act of 1992 is a prior legislation. Therefore, it was contended by learned senior counsel for the appellant that since the Act of 1993 is a subsequent legislation, it should have the over-riding effect over the Act of 1992. As against this, learned senior counsel for the respondent No.1, contended that Section 9-A of the Act of 1992 came by the amending Act 24 of 1994 on 25.1.1994 and it is specifically provided that after a person is notified under section 3(3) of the Act of 1992, his property pertaining to the transactions in securities entered after the 1st day of April, 1991 and on and before 6th June, 1992 shall stand attached and the Special Court will have the jurisdiction and none else. Learned senior counsel for the respondent No.1 submitted that this provisions having come subsequently after the Act of 1993, Section 9-A of the Act of 1992 (came into force w.e.f. 25.1.1994) will have the over-riding effect over the Act of 1993. The contention of learned senior counsel for respondent No.1 appears to be justified. Apart from that it is provided in sub-section (3) of Section 3 that the transactions in securities entered into after 1st day of April, 1991 and on or before 6th June, 1992, the properties pertaining to these securities shall vest with the Custodian to be dealt with as directed by the Special Court. Therefore, the properties pertaining to these transactions during the aforesaid period, will be subject to the jurisdiction of the Special Court only. There is another reason to come to this conclusion that in fact this Act was specially meant to deal with the fraudulent transactions which has taken place from 1st of April, 1991 to 6th of June, 1992. Therefore, this Act has special purpose to deal with the scam which has taken place in securities transactions during this period. The special purpose behind this Act is more than apparent from the Statement of Objects and Reasons and the Statement of Objects and Reasons amply clarifies this position.Therefore, this Act has a special task before it and that task has to be dealt with in the parameters laid down by this Act. The Act of 1993 was of comparatively general in nature pertaining to recovery of debts due to the Banks and Financial Institutions. The idea was that all the suits pertaining to recoveries of Banks and Financial Institutions spreading over the Civil Courts and this has resulted into great strain on the Banks and Financial Institutions.In the present case, both the two Acts i.e. the Act of 1992 and the Act of 1993 start with the non- obstante clause. Section 34 of the Act of 1993 starts with non-obstante clause, likewise Section 9-A of the Act of 1992. But incidentally, in this case Section 9-A came subsequently, i.e. it came on 25.1.1994. Therefore, it is a subsequent legislation which will have the over-riding effect over the Act of 1993. But cases might arise where both the enactments have the non-obstante clause then in that case, the proper perspective would be that one has to see the subject and the dominant purpose for which the special enactment was made and in case the dominant purpose is covered by that contingencies, then notwithstanding that the Act might have come at a later point of time still the intention can be ascertained by looking to the objects and reasons. However, so far as the present case is concerned, it is more than clear that Section 9-A of the Act of 1992 was amended on 25.1.1994 whereas the Act of 1993 came in 1993. Therefore, the Act of 1992 as amended to include Section 9-A in 1994 being subsequent legislation will prevail and not the provisions of the Act of 1993.9. Apart from this, in the present case both the Acts can be read harmoniously. Whatever dues are due to the Banks or the Financial Institutions can be claimed under Section 11 (2) of the Act of 1992 which specially empowers that the liabilities can be adjusted out of the securities of the person notified in the manner provided under Section 11(2)(b). Therefore, in the present case, the Bank can certainly make an application before the Special Court under Section 11(2)(b) of the Act of 1992 for discharge of their liabilities against the securities of the notified person.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: found to be valid. Therefore, this case cannot provide any assistance. Our attention was invited to another decision of this Court in Tax Recovery Officer, Central Range-I v. Custodian & Ors. [(2007) 7 SCC 461] . In that case it was held that that the property of any person notified under section 3(2) & (3) of the Act can be attached and the jurisdiction of the Special Court is confined to that property of the notified person only. It was found that the Company D which was notified as a party under section 3(2) of the Act of 1992 and not the Company K. Company D owed money from Company K and its subsidiaries and it was in execution of the decree passed in the favour of Company D, the property of Company K was put to auction. Thus, the Special Court could not have entertained the application moved by the Income-Tax Department for realization of its income tax dues from the Company K and therefore, it was held that the application moved by the Income Tax Department was rightly rejected by the Special Court. Our attention was invited to a decision of this Court in Life Insurance Corporation of India v. D.J. Bahadur & Ors. [(1981) 1 SCC 315] . In this case, the question was whether the provisions of the Industrial Disputes Act will prevail or the provisions of the Life Insurance ( Alteration of Remuneration and other Terms and Conditions of Service of Employees) Order, 1957 framed under the Life Insurance Corporation Act, 1956. In that context, their Lordships after dealing with the provisions of Life Insurance Corporation Act and the Rules framed thereunder held that the case will be covered by the Industrial Disputes Act. It was observed per Krishna Iyer, J as follows: "In determining whether a statute is a special or a general one, the focus must be on the principal subject-matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purpose it may be special. Vis-`-vis ` industrial vists at the termination of the settlement as between the workmen and the Corporation the ID Act is a special legislation and the LIC Act a general legislation. So the ID Act, being a special law, will prevail over the LIC Act which is a general law." Pathak, J. concurring with Krishna Iyer, J observed as follows " "Law declared by the court in respect of an award holds true in the case of a settlement. Not only are the statutory provisions pertaining to a settlement and an award comparable in this regard but, if anything the observations if read in respect of a settlement, which after all is a voluntary agreement between the parties, would seem to hold more strongly. " Our attention was invited to a decision of this Court in L.S. Synthetics Ltd. v. Fairgrowth Financial Services Ltd. & Anr. [(2004)11 SCC 456] . In this case it was held that the contention that only those properties belonging to the notified person which are the subject-matter of the transactions in securities would stand attached and for that purpose Section 9-A of the Act must be read down was not sustainable. Our attention was also invited to a decision of this Court in Allahabad Bank v. Canara Bank & Anr. [(2000) 4 SCC 406] . In this case there was a question of jurisdiction whether the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 will prevail or the provisions of the Companies Act, 1956. In that context their Lordships observed as follows: "Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely Section 34. Therefore, in view of Section 34 of the RDB Act, the said Act overrides the Companies Act, to the extent there is anything inconsistent between the Acts." 8. In the present case, both the two Acts i.e. the Act of 1992 and the Act of 1993 start with the non- obstante clause. Section 34 of the Act of 1993 starts with non-obstante clause, likewise Section 9-A of the Act of 1992. But incidentally, in this case Section 9-A came subsequently, i.e. it came on 25.1.1994. Therefore, it is a subsequent legislation which will have the over-riding effect over the Act of 1993. But cases might arise where both the enactments have the non-obstante clause then in that case, the proper perspective would be that one has to see the subject and the dominant purpose for which the special enactment was made and in case the dominant purpose is covered by that contingencies, then notwithstanding that the Act might have come at a later point of time still the intention can be ascertained by looking to the objects and reasons. However, so far as the present case is concerned, it is more than clear that Section 9-A of the Act of 1992 was amended on 25.1.1994 whereas the Act of 1993 came in 1993. Therefore, the Act of 1992 as amended to include Section 9-A in 1994 being subsequent legislation will prevail and not the provisions of the Act of 1993.9. Apart from this, in the present case both the Acts can be read harmoniously. Whatever dues are due to the Banks or the Financial Institutions can be claimed under Section 11 (2) of the Act of 1992 which specially empowers that the liabilities can be adjusted out of the securities of the person notified in the manner provided under Section 11(2)(b). Therefore, in the present case, the Bank can certainly make an application before the Special Court under Section 11(2)(b) of the Act of 1992 for discharge of their liabilities against the securities of the notified person. ### Response: 0 ### Explanation: revenues, taxes, cesses etc. The second priority has been given to any bank or financial institution or mutual fund and the last priority has been given as directed the Special Court. Section 13 clearly lays down that this Act will have over-riding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any Court, tribunal or other authority. The analysis of these necessary provisions clearly establishes that once the property of a notified person is attached by the Custodian and the same having been notified then the property of the notified person being movable or immovable shall be subject to the order passed by the Special Court and the manner in which properties for discharge of the liabilities would be dealt with has already been mentioned in Section 11 of the Act of 1992 and lastly that the provisions of this Act will have the over-riding effect even on Tribunals as is clearly and categorically mentioned in Section 13 of the Act of 1992. Therefore, in the scheme of things this Act has been given priority over all Acts. The Act of 1993 came for recovery of debts due to the Banks and Financial Institutions. This Act also contains the over-riding effect. Section 34 of the Act of 1993 clearly says that this Act will have the over-riding effect for recovery of debts due to the Banks and Financial Institutions. Both the Acts have non-obstante clause. The Act of 1993 is a subsequent legislation and the Act of 1992 is a prior legislation. Therefore, it was contended by learned senior counsel for the appellant that since the Act of 1993 is a subsequent legislation, it should have the over-riding effect over the Act of 1992. As against this, learned senior counsel for the respondent No.1, contended that Section 9-A of the Act of 1992 came by the amending Act 24 of 1994 on 25.1.1994 and it is specifically provided that after a person is notified under section 3(3) of the Act of 1992, his property pertaining to the transactions in securities entered after the 1st day of April, 1991 and on and before 6th June, 1992 shall stand attached and the Special Court will have the jurisdiction and none else. Learned senior counsel for the respondent No.1 submitted that this provisions having come subsequently after the Act of 1993, Section 9-A of the Act of 1992 (came into force w.e.f. 25.1.1994) will have the over-riding effect over the Act of 1993. The contention of learned senior counsel for respondent No.1 appears to be justified. Apart from that it is provided in sub-section (3) of Section 3 that the transactions in securities entered into after 1st day of April, 1991 and on or before 6th June, 1992, the properties pertaining to these securities shall vest with the Custodian to be dealt with as directed by the Special Court. Therefore, the properties pertaining to these transactions during the aforesaid period, will be subject to the jurisdiction of the Special Court only. There is another reason to come to this conclusion that in fact this Act was specially meant to deal with the fraudulent transactions which has taken place from 1st of April, 1991 to 6th of June, 1992. Therefore, this Act has special purpose to deal with the scam which has taken place in securities transactions during this period. The special purpose behind this Act is more than apparent from the Statement of Objects and Reasons and the Statement of Objects and Reasons amply clarifies this position.Therefore, this Act has a special task before it and that task has to be dealt with in the parameters laid down by this Act. The Act of 1993 was of comparatively general in nature pertaining to recovery of debts due to the Banks and Financial Institutions. The idea was that all the suits pertaining to recoveries of Banks and Financial Institutions spreading over the Civil Courts and this has resulted into great strain on the Banks and Financial Institutions.In the present case, both the two Acts i.e. the Act of 1992 and the Act of 1993 start with the non- obstante clause. Section 34 of the Act of 1993 starts with non-obstante clause, likewise Section 9-A of the Act of 1992. But incidentally, in this case Section 9-A came subsequently, i.e. it came on 25.1.1994. Therefore, it is a subsequent legislation which will have the over-riding effect over the Act of 1993. But cases might arise where both the enactments have the non-obstante clause then in that case, the proper perspective would be that one has to see the subject and the dominant purpose for which the special enactment was made and in case the dominant purpose is covered by that contingencies, then notwithstanding that the Act might have come at a later point of time still the intention can be ascertained by looking to the objects and reasons. However, so far as the present case is concerned, it is more than clear that Section 9-A of the Act of 1992 was amended on 25.1.1994 whereas the Act of 1993 came in 1993. Therefore, the Act of 1992 as amended to include Section 9-A in 1994 being subsequent legislation will prevail and not the provisions of the Act of 1993.9. Apart from this, in the present case both the Acts can be read harmoniously. Whatever dues are due to the Banks or the Financial Institutions can be claimed under Section 11 (2) of the Act of 1992 which specially empowers that the liabilities can be adjusted out of the securities of the person notified in the manner provided under Section 11(2)(b). Therefore, in the present case, the Bank can certainly make an application before the Special Court under Section 11(2)(b) of the Act of 1992 for discharge of their liabilities against the securities of the notified person.

State Of Rajasthan And Others Vs. Ghasilal

for the prescribed periods in the prescribed form, in the prescribed manner and within the prescribed time to the assessing authority.Provided that the assessing authority may extend the date for the submission of such returns by any dealer or class of dealers by a period not exceeding fifteen days in the aggregate.(2) Every such return shall be accompanied by a Treasury receipt or receipt of any bank authorised to receive money on behalf of the State Government showing the deposit of the full amount of tax due on the basis of return in the Government Treasury or bank concerned.(3) If any dealer discovers any omission, error or wrong statement in any returns furnished by him under sub-s. (1), he may furnish a revised return in the prescribed manner before the time prescribed for the submission of the next return but not later.(4) Every deposit of tax made under sub-s. (2) shall be deemed to be provisional subject to necessary adjustments in pursuance of the final assessment of tax made for any year under S. 10.Section 16(1)-- If any person-----(a) has without reasonable cause failed to get himself registered as required by sub-s. (1) of S. 6 within the time prescribed; or(b) has without reasonable cause failed to pay the tax due within the time allowed; or(c) has without reasonable cause failed to furnish the return of the turnover, or failed to furnish it within the time allowed; or............................................................................................................................the assessing authority may direct that such person shall pay by way of penalty, in the case referred to in clause (a) in addition to the fee payable by him, a sum not exceeding Rs. 50 and in case referred to in clause (b), in addition to the amount payable by him, a sum not exceeding half of that amount, and that in cases referred to in clauses (c) and (d), in addition to the tax payable by him, sum not exceeding half the amount of tax determined; in the case referred to in clause (e), in addition to the tax payable by him a sum not exceeding double the amount of tax, if any which would have been avoided if taxable turnover as returned by such person had been accepted as correct turnover, and in the cases referred to in clauses (f), (ff) and (g), a sum not exceeding Rs. 100."8. Mr. Garg contends that there was no breach of S. 16(1)(b) of the Act. No tax was due till the respondent filed return under Section 7(1) of the Act. Section 7(2), which requires a deposit of full amount due on the basis of the return was complied with when the respondent filed the returns on December 18, 1959, and in January to March, 1960. There cannot be noncompliance of S. 7(2) unless a return is filed without depositing the tax due on the basis of the return, and as no return was filed earlier than December 18, 1959, there had been no violation of the requirements of S.7(2). He further contends that no tax is due till assessment is made under S. 10 of the Act.9. The learned Advocate-General, on the other hand, urges that tax becomes due because of the charging sections of the Act, i.e., S. 3 read with S. 5. He further contends that a show cause notice had been given on December 4, 1959, and as there was delay in complying with the notice, there was breach of S. 16(1)(b) of the Act.10. In our opinion, there has been no breach of S. 16(1)(b) of the Act, and consequently, the orders imposing the penalties cannot be sustained. According to the terms of Section 16(1)(b), there must be a tax due and there must be a failure to pay the tax due within the time allowed. There was some discussion before us as to the meaning of the words time allowed, but we need not decide in this case whether the words time allowed connote time allowed by an assessing authority or time allowed by a provision in the Rules or the Act, or all these things, as we are of the view that no tax was due within the terms of S. 16(1)(b) of the Act. Section 3, the charging section, read with S. 5, makes tax payable, i.e., creates a liability to pay the tax. That is the normal function of a charging section in a taxing statute. But till the tax payable is ascertained by the assessing authority under S. 10, or by the assessee under Section 7 (2), no tax can be said to be due within S. 16 (1) (b) of the Act, for till then there is only a liability to be assessed to tax.11. The contention of the learned Advocate-General that the show-cause, notice dated December 4, 1959, makes tax due is without any substance. He was not able to point to any rule or provision of the Act, under which the show cause notice was issued. It may be that the assessing authority had in mind R. 31, but that rule comes into the picture only when an assessment has been completed.12. The last contention of the learned Advocate-General is that the stay order passed by the High Court required the respondent to submit returns. This, according to him, implied that he had to submit returns in accordance with law, including S. 7 (2). As he had failed to submit returns and deposit the tax in accordance with the directions of the High Court, there was a breach of S. 16 (1) (b).We are unable to read the stay order as implying that the respondent was obliged to deposit tax for the stay order then would be of no utility to the assessee. Apart from that, the respondent did not file returns till December 1959, and January-March 1960, and S. 7 (2) could not be attracted till then.13. We may mention that we are not concerned with the question whether there has been any breach of S. 16 (1) (c).14.

0[ds]But we express no opinion one way or the other on this point as the appeals can be disposed of on a narrow, point of the contruction of theof Section 16(1)(b), there must be a tax due and there must be a failure to pay the tax due within the time allowed. There was some discussion before us as to the meaning of the words time allowed, but we need not decide in this case whether the words time allowed connote time allowed by an assessing authority or time allowed by a provision in the Rules or the Act, or all these things, as we are of the view that no tax was due within the terms of S. 16(1)(b) of the Act. Section 3, the charging section, read with S. 5, makes tax payable, i.e., creates a liability to pay the tax. That is the normal function of a charging section in a taxing statute. But till the tax payable is ascertained by the assessing authority under S. 10, or by the assessee under Section 7 (2), no tax can be said to be due within S. 16 (1) (b) of the Act, for till then there is only a liability to be assessed to tax.The contention of the learned Advocate-General that the show-cause, notice dated December 4, 1959, makes tax due is without any substance. He was not able to point to any rule or provision of the Act, under which the show cause notice was issued. It may be that the assessing authority had in mind R. 31, but that rule comes into the picture only when an assessment has beenare unable to read the stay order as implying that the respondent was obliged to deposit tax for the stay order then would be of no utility to the assessee. Apart from that, the respondent did not file returns till December 1959, and January-March 1960, and S. 7 (2) could not be attracted till then.We may mention that we are not concerned with the question whether there has been any breach of S. 16 (1) (c).

### Instruction: Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding. ### Input: for the prescribed periods in the prescribed form, in the prescribed manner and within the prescribed time to the assessing authority.Provided that the assessing authority may extend the date for the submission of such returns by any dealer or class of dealers by a period not exceeding fifteen days in the aggregate.(2) Every such return shall be accompanied by a Treasury receipt or receipt of any bank authorised to receive money on behalf of the State Government showing the deposit of the full amount of tax due on the basis of return in the Government Treasury or bank concerned.(3) If any dealer discovers any omission, error or wrong statement in any returns furnished by him under sub-s. (1), he may furnish a revised return in the prescribed manner before the time prescribed for the submission of the next return but not later.(4) Every deposit of tax made under sub-s. (2) shall be deemed to be provisional subject to necessary adjustments in pursuance of the final assessment of tax made for any year under S. 10.Section 16(1)-- If any person-----(a) has without reasonable cause failed to get himself registered as required by sub-s. (1) of S. 6 within the time prescribed; or(b) has without reasonable cause failed to pay the tax due within the time allowed; or(c) has without reasonable cause failed to furnish the return of the turnover, or failed to furnish it within the time allowed; or............................................................................................................................the assessing authority may direct that such person shall pay by way of penalty, in the case referred to in clause (a) in addition to the fee payable by him, a sum not exceeding Rs. 50 and in case referred to in clause (b), in addition to the amount payable by him, a sum not exceeding half of that amount, and that in cases referred to in clauses (c) and (d), in addition to the tax payable by him, sum not exceeding half the amount of tax determined; in the case referred to in clause (e), in addition to the tax payable by him a sum not exceeding double the amount of tax, if any which would have been avoided if taxable turnover as returned by such person had been accepted as correct turnover, and in the cases referred to in clauses (f), (ff) and (g), a sum not exceeding Rs. 100."8. Mr. Garg contends that there was no breach of S. 16(1)(b) of the Act. No tax was due till the respondent filed return under Section 7(1) of the Act. Section 7(2), which requires a deposit of full amount due on the basis of the return was complied with when the respondent filed the returns on December 18, 1959, and in January to March, 1960. There cannot be noncompliance of S. 7(2) unless a return is filed without depositing the tax due on the basis of the return, and as no return was filed earlier than December 18, 1959, there had been no violation of the requirements of S.7(2). He further contends that no tax is due till assessment is made under S. 10 of the Act.9. The learned Advocate-General, on the other hand, urges that tax becomes due because of the charging sections of the Act, i.e., S. 3 read with S. 5. He further contends that a show cause notice had been given on December 4, 1959, and as there was delay in complying with the notice, there was breach of S. 16(1)(b) of the Act.10. In our opinion, there has been no breach of S. 16(1)(b) of the Act, and consequently, the orders imposing the penalties cannot be sustained. According to the terms of Section 16(1)(b), there must be a tax due and there must be a failure to pay the tax due within the time allowed. There was some discussion before us as to the meaning of the words time allowed, but we need not decide in this case whether the words time allowed connote time allowed by an assessing authority or time allowed by a provision in the Rules or the Act, or all these things, as we are of the view that no tax was due within the terms of S. 16(1)(b) of the Act. Section 3, the charging section, read with S. 5, makes tax payable, i.e., creates a liability to pay the tax. That is the normal function of a charging section in a taxing statute. But till the tax payable is ascertained by the assessing authority under S. 10, or by the assessee under Section 7 (2), no tax can be said to be due within S. 16 (1) (b) of the Act, for till then there is only a liability to be assessed to tax.11. The contention of the learned Advocate-General that the show-cause, notice dated December 4, 1959, makes tax due is without any substance. He was not able to point to any rule or provision of the Act, under which the show cause notice was issued. It may be that the assessing authority had in mind R. 31, but that rule comes into the picture only when an assessment has been completed.12. The last contention of the learned Advocate-General is that the stay order passed by the High Court required the respondent to submit returns. This, according to him, implied that he had to submit returns in accordance with law, including S. 7 (2). As he had failed to submit returns and deposit the tax in accordance with the directions of the High Court, there was a breach of S. 16 (1) (b).We are unable to read the stay order as implying that the respondent was obliged to deposit tax for the stay order then would be of no utility to the assessee. Apart from that, the respondent did not file returns till December 1959, and January-March 1960, and S. 7 (2) could not be attracted till then.13. We may mention that we are not concerned with the question whether there has been any breach of S. 16 (1) (c).14. ### Response: 0 ### Explanation: But we express no opinion one way or the other on this point as the appeals can be disposed of on a narrow, point of the contruction of theof Section 16(1)(b), there must be a tax due and there must be a failure to pay the tax due within the time allowed. There was some discussion before us as to the meaning of the words time allowed, but we need not decide in this case whether the words time allowed connote time allowed by an assessing authority or time allowed by a provision in the Rules or the Act, or all these things, as we are of the view that no tax was due within the terms of S. 16(1)(b) of the Act. Section 3, the charging section, read with S. 5, makes tax payable, i.e., creates a liability to pay the tax. That is the normal function of a charging section in a taxing statute. But till the tax payable is ascertained by the assessing authority under S. 10, or by the assessee under Section 7 (2), no tax can be said to be due within S. 16 (1) (b) of the Act, for till then there is only a liability to be assessed to tax.The contention of the learned Advocate-General that the show-cause, notice dated December 4, 1959, makes tax due is without any substance. He was not able to point to any rule or provision of the Act, under which the show cause notice was issued. It may be that the assessing authority had in mind R. 31, but that rule comes into the picture only when an assessment has beenare unable to read the stay order as implying that the respondent was obliged to deposit tax for the stay order then would be of no utility to the assessee. Apart from that, the respondent did not file returns till December 1959, and January-March 1960, and S. 7 (2) could not be attracted till then.We may mention that we are not concerned with the question whether there has been any breach of S. 16 (1) (c).

G.B. Mahajan & Others Vs. Jalgaon Municipal Council & Others

it might almost be described as being done in bad faith, and in fact, all these things run into one another." 44. Referring to the doctrine, Prof. Wade says: "This has become the most frequently cited passage (though most commonly cited only by its nickname) in administrative law. It explains how `unreasonableness, in its classic formulation, covers a multitude of sins. These various errors commonly result from paying too much attention to the mere words of the Act and too little to its general scheme and purpose, and from the fallacy that unrestricted language naturally confers unfettered discretion. Unreasonableness has thus become a generalised rubric covering not only sheer absurdity or caprice, but merging into illegitimate motives and purposes, a wide category of errors commonly described as `irrelevant considerations, and mistakes and misunderstandings which can be classed as self-misdirection, or addressing oneself to the wrong question....." The point to note is that a thing is not unreasonable in the legal sense merely because the Court thinks it is unwise. Some observations of Lord Scarman in Nottinghamshire County Council v. Secretary of State for Environment, 1986 A.C. 240 at 247, might usefully be recalled: "But I cannot accept that it is constitutionally appropriate, save in very exceptional circumstances, for the courts to intervene on the ground of "unreasonableness" to quash guidance framed by the Secretary of State and by necessary implication approved by the House of Commons, the guidance being concerned with the limits of public expenditure by local authorities and the incidence of the tax burden as between taxpayers and ratepayers. Unless and until a statute provides otherwise, or it is established that the Secretary of State has abused his power, these are matters of political judgment for him and for the House of Commons. They are not for the judges or your Lordships House in its judicial capacity." "For myself, I refuse in this case to examine the detail of the guidance or its consequences. My reasons are these. Such an examination by a Court would be justified only if a prima facie case were to be shown for holding that the Secretary of State had acted in bad faith, or for an improper motive, or that the consequences of his guidance were so absurd that he must have taken leave of his senses........." 45. When Lord Denning MR stated in the Court of Appeal that "Not only must (the probationer-Counsellor) be given a fair hearing, but the decision itself must be fair and reasonable" (emphasis supplied). The House of Lords thought that the statement of the learned Master of the Rolls if allowed to pass into law would wrongly transform the remedy of judicial review, as the statement would imply that the Court can itself sit, as in appeal, on judgment of the reasonableness of the decision instead of on the correctness of the decision making process. "The purpose of judicial Review", it was stated " ......is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the Court." 46. While it is true that principles of judicial review apply to the exercise by a Government body of its contractual powers, the inherent limitations on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be shown a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of what the law requires to justify interference. 47. In regard to the allegation that the Project Scheme was tailored to suit respondent 6 alone or that the project as put to tender did not admit of tenders on fixed comparable parameters, we find no merit. Sri K.K. Singhvi submitted that the tender papers were prepared by reputed Architects and the precise points on which comparative quotations were invited were specifically incorporated in the tender-papers. The point again is that no other tenderer expressed any grievance. The tenders were such that the tenderer could identify the terms which form the basis of comparative evaluation. The charge of arbitrariness cannot be upheld. Tests to be applied in a given case may be influenced by the extent to which a decision is supported by a democratic unanimity which evidences the decision granted, of course, the power. 48. Sri K.K. Jain stated that the scheme enables respondent 6 to resort to certain well-known financial malpractices for tax evasion now known to be rampant when properties change hands. Sri Jain said that the Court ought to take judicial notice of so rampant and pervasive an evil and in anything that tends to promote such unhealthy economic trends. While it is true that large scale tax evasion and evils of unaccounted money bedevils the nations economic discipline and that with the increasing erosion of morality in public life and the serious personal degradations for unjust gains one sees all-round, the situation is, indeed, serious. But we fail to see what the Court can do in a case like this. The present argument proceeds on two assumptions. The first is that respondent No.6 has, in fact, indulged in such practices in the matter of disposal of occupancy rights. This is a mere allegation which is emphatically repudiated by respondent No.6. The second is that the accommodation in this commercial complex is such good competitive selling proposition that there is great demand and limited supply enabling respondent 6 to exploit the situation. This again is a matter of mere allegation. To condemn the Municipal authoritys decision, otherwise valid, on the ground alone that the developer is likely to resort to transactions of unaccounted money would, as a judicial remedy, be plainly unthinkable. 49. Contention (d) requires to be and is also held against appellants.

0[ds]14. There might be some force in what Sri Jain says if the observations which Sri Jain takes exception to are alone taken into account. The High Court was possibly wrong in its view as to the effect of this Courts earlier orders. But what appears clear is that the High Court also went into the merits of the matter. Therefore the grievance that the High Court abdicated its jurisdiction on an erroneous interpretation of this Courts earlier order may not be correct. However, in order that there be no dissatisfaction on the question that the matter did not receive adequate consideration in the High Court, we asked the appellants to present their case on the merits also so that any need for a remit of the matter to the High Court at this late stage was obviated. Parties placed their case fully before usRe Contention (a)This contention of the appellants, as a legal contentions is not somewhat vague and does not admit of clear-cut legal contours. As we apprehend the contention, it pertains to the legality or propriety of a policy-option22. On a consideration of the matter, it appears to us that the argument that a project envisaging a self-financing scheme, by reason alone of the particular policy behind it, is beyond the powers of the local authority is somewhat too broadly stated to be acceptable. A project, otherwise legal, does not become any the less permissible by reason alone that the local authority, instead of executing the project itself, had entered into an agreement with a developer for its financing and execution. The criticism of the project `unconventional does not add to or advance the legal contention any further.The question is not whether it is un-conventional by the standard of the extant practices, but whether there was something in the law rendering it. There is, no doubt, a degree of public accountability in all governmental enterprises. But, the present question is one of the extent and scope of judicial review over such matters. With the expansion of the States presence in the field of trade and commerce and of the range of economic and commercial enterprises of Government and its instrumentalities there is an increasing dimension to Governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost over-runs in projects, balancing of costs against time-scales, quality-control, cost-benefit ratios etc. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable prerogative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrators right to trial and error, as long as both trial and error are bona fide and within the limits of authorityappears to us that in the context of expanding exigencies of urban planning it will be difficult for the Court to say that a particular policy option was better than another. The contention that the project is ultra virus of the powers of the Municipal Council does not appeal to us27. We hold that contention (a) does not justify quashing of the impugned Resolution of the Municipal CouncilRe : Contentions (b) and (c)is reasonably possible to fit in the basic conception of this project into what can be held to be comprised in the power under section 272(1), there is no reason why the provision to stifle be interpreted unduly restricitively to exclude such enterprise32. On a consideration of the matter it appears to us that the appellants have not been able to establish that the essential elements of the transaction are such that section 92 of the Act is violated. It would, indeed, be unduly restrictive of the statutory powers of the local authority if a provision enabling the establishment of markets and disposal of occupancy-rights therein are hedged in by restrictions not found in the statute. The point to note is that the developer to the extent he is authorized to induct occupiers in respect of the area earmarked for him merely exercises, with the consent of the Municipal Council, a power to substitute an occupier in his own place. This is not impermissible when it is with the express consent of the Municipal Council34. On a consideration of the matter we find no substance in contentions (b) and (c) eitherRe : Contention (d)While it is true that principles of judicial review apply to the exercise by a Government body of its contractual powers, the inherent limitations on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be shown a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of what the law requires to justify interference47. In regard to the allegation that the Project Scheme was tailored to suit respondent 6 alone or that the project as put to tender did not admit of tenders on fixed comparable parameters, we find no merit.Sri K.K. Singhvi submitted that the tender papers were prepared by reputed Architects and the precise points on which comparative quotations were invited were specifically incorporated in the tender-papers.The point again is that no other tenderer expressed any grievance. The tenders were such that the tenderer could identify the terms which form the basis of comparative evaluation. The charge of arbitrariness cannot be upheld. Tests to be applied in a given case may be influenced by the extent to which a decision is supported by a democratic unanimity which evidences the decision granted, of course, the powerWhile it is true that large scale tax evasion and evils of unaccounted money bedevils the nations economic discipline and that with the increasing erosion of morality in public life and the serious personal degradations for unjust gains one sees all-round, the situation is, indeed, serious. But we fail to see what the Court can do in a case like this. The present argument proceeds on two assumptions. The first is that respondent No.6 has, in fact, indulged in such practices in the matter of disposal of occupancy rights. This is a mere allegation which is emphatically repudiated by respondent No.6. The second is that the accommodation in this commercial complex is such good competitive selling proposition that there is great demand and limited supply enabling respondent 6 to exploit the situation. This again is a matter of mere allegation. To condemn the Municipal authoritys decision, otherwise valid, on the ground alone that the developer is likely to resort to transactions of unaccounted money would, as a judicial remedy, be plainly unthinkable49. Contention (d) requires to be and is also held against appellants.

### Instruction: Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding. ### Input: it might almost be described as being done in bad faith, and in fact, all these things run into one another." 44. Referring to the doctrine, Prof. Wade says: "This has become the most frequently cited passage (though most commonly cited only by its nickname) in administrative law. It explains how `unreasonableness, in its classic formulation, covers a multitude of sins. These various errors commonly result from paying too much attention to the mere words of the Act and too little to its general scheme and purpose, and from the fallacy that unrestricted language naturally confers unfettered discretion. Unreasonableness has thus become a generalised rubric covering not only sheer absurdity or caprice, but merging into illegitimate motives and purposes, a wide category of errors commonly described as `irrelevant considerations, and mistakes and misunderstandings which can be classed as self-misdirection, or addressing oneself to the wrong question....." The point to note is that a thing is not unreasonable in the legal sense merely because the Court thinks it is unwise. Some observations of Lord Scarman in Nottinghamshire County Council v. Secretary of State for Environment, 1986 A.C. 240 at 247, might usefully be recalled: "But I cannot accept that it is constitutionally appropriate, save in very exceptional circumstances, for the courts to intervene on the ground of "unreasonableness" to quash guidance framed by the Secretary of State and by necessary implication approved by the House of Commons, the guidance being concerned with the limits of public expenditure by local authorities and the incidence of the tax burden as between taxpayers and ratepayers. Unless and until a statute provides otherwise, or it is established that the Secretary of State has abused his power, these are matters of political judgment for him and for the House of Commons. They are not for the judges or your Lordships House in its judicial capacity." "For myself, I refuse in this case to examine the detail of the guidance or its consequences. My reasons are these. Such an examination by a Court would be justified only if a prima facie case were to be shown for holding that the Secretary of State had acted in bad faith, or for an improper motive, or that the consequences of his guidance were so absurd that he must have taken leave of his senses........." 45. When Lord Denning MR stated in the Court of Appeal that "Not only must (the probationer-Counsellor) be given a fair hearing, but the decision itself must be fair and reasonable" (emphasis supplied). The House of Lords thought that the statement of the learned Master of the Rolls if allowed to pass into law would wrongly transform the remedy of judicial review, as the statement would imply that the Court can itself sit, as in appeal, on judgment of the reasonableness of the decision instead of on the correctness of the decision making process. "The purpose of judicial Review", it was stated " ......is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the Court." 46. While it is true that principles of judicial review apply to the exercise by a Government body of its contractual powers, the inherent limitations on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be shown a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of what the law requires to justify interference. 47. In regard to the allegation that the Project Scheme was tailored to suit respondent 6 alone or that the project as put to tender did not admit of tenders on fixed comparable parameters, we find no merit. Sri K.K. Singhvi submitted that the tender papers were prepared by reputed Architects and the precise points on which comparative quotations were invited were specifically incorporated in the tender-papers. The point again is that no other tenderer expressed any grievance. The tenders were such that the tenderer could identify the terms which form the basis of comparative evaluation. The charge of arbitrariness cannot be upheld. Tests to be applied in a given case may be influenced by the extent to which a decision is supported by a democratic unanimity which evidences the decision granted, of course, the power. 48. Sri K.K. Jain stated that the scheme enables respondent 6 to resort to certain well-known financial malpractices for tax evasion now known to be rampant when properties change hands. Sri Jain said that the Court ought to take judicial notice of so rampant and pervasive an evil and in anything that tends to promote such unhealthy economic trends. While it is true that large scale tax evasion and evils of unaccounted money bedevils the nations economic discipline and that with the increasing erosion of morality in public life and the serious personal degradations for unjust gains one sees all-round, the situation is, indeed, serious. But we fail to see what the Court can do in a case like this. The present argument proceeds on two assumptions. The first is that respondent No.6 has, in fact, indulged in such practices in the matter of disposal of occupancy rights. This is a mere allegation which is emphatically repudiated by respondent No.6. The second is that the accommodation in this commercial complex is such good competitive selling proposition that there is great demand and limited supply enabling respondent 6 to exploit the situation. This again is a matter of mere allegation. To condemn the Municipal authoritys decision, otherwise valid, on the ground alone that the developer is likely to resort to transactions of unaccounted money would, as a judicial remedy, be plainly unthinkable. 49. Contention (d) requires to be and is also held against appellants. ### Response: 0 ### Explanation: usRe Contention (a)This contention of the appellants, as a legal contentions is not somewhat vague and does not admit of clear-cut legal contours. As we apprehend the contention, it pertains to the legality or propriety of a policy-option22. On a consideration of the matter, it appears to us that the argument that a project envisaging a self-financing scheme, by reason alone of the particular policy behind it, is beyond the powers of the local authority is somewhat too broadly stated to be acceptable. A project, otherwise legal, does not become any the less permissible by reason alone that the local authority, instead of executing the project itself, had entered into an agreement with a developer for its financing and execution. The criticism of the project `unconventional does not add to or advance the legal contention any further.The question is not whether it is un-conventional by the standard of the extant practices, but whether there was something in the law rendering it. There is, no doubt, a degree of public accountability in all governmental enterprises. But, the present question is one of the extent and scope of judicial review over such matters. With the expansion of the States presence in the field of trade and commerce and of the range of economic and commercial enterprises of Government and its instrumentalities there is an increasing dimension to Governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost over-runs in projects, balancing of costs against time-scales, quality-control, cost-benefit ratios etc. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable prerogative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrators right to trial and error, as long as both trial and error are bona fide and within the limits of authorityappears to us that in the context of expanding exigencies of urban planning it will be difficult for the Court to say that a particular policy option was better than another. The contention that the project is ultra virus of the powers of the Municipal Council does not appeal to us27. We hold that contention (a) does not justify quashing of the impugned Resolution of the Municipal CouncilRe : Contentions (b) and (c)is reasonably possible to fit in the basic conception of this project into what can be held to be comprised in the power under section 272(1), there is no reason why the provision to stifle be interpreted unduly restricitively to exclude such enterprise32. On a consideration of the matter it appears to us that the appellants have not been able to establish that the essential elements of the transaction are such that section 92 of the Act is violated. It would, indeed, be unduly restrictive of the statutory powers of the local authority if a provision enabling the establishment of markets and disposal of occupancy-rights therein are hedged in by restrictions not found in the statute. The point to note is that the developer to the extent he is authorized to induct occupiers in respect of the area earmarked for him merely exercises, with the consent of the Municipal Council, a power to substitute an occupier in his own place. This is not impermissible when it is with the express consent of the Municipal Council34. On a consideration of the matter we find no substance in contentions (b) and (c) eitherRe : Contention (d)While it is true that principles of judicial review apply to the exercise by a Government body of its contractual powers, the inherent limitations on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be shown a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of what the law requires to justify interference47. In regard to the allegation that the Project Scheme was tailored to suit respondent 6 alone or that the project as put to tender did not admit of tenders on fixed comparable parameters, we find no merit.Sri K.K. Singhvi submitted that the tender papers were prepared by reputed Architects and the precise points on which comparative quotations were invited were specifically incorporated in the tender-papers.The point again is that no other tenderer expressed any grievance. The tenders were such that the tenderer could identify the terms which form the basis of comparative evaluation. The charge of arbitrariness cannot be upheld. Tests to be applied in a given case may be influenced by the extent to which a decision is supported by a democratic unanimity which evidences the decision granted, of course, the powerWhile it is true that large scale tax evasion and evils of unaccounted money bedevils the nations economic discipline and that with the increasing erosion of morality in public life and the serious personal degradations for unjust gains one sees all-round, the situation is, indeed, serious. But we fail to see what the Court can do in a case like this. The present argument proceeds on two assumptions. The first is that respondent No.6 has, in fact, indulged in such practices in the matter of disposal of occupancy rights. This is a mere allegation which is emphatically repudiated by respondent No.6. The second is that the accommodation in this commercial complex is such good competitive selling proposition that there is great demand and limited supply enabling respondent 6 to exploit the situation. This again is a matter of mere allegation. To condemn the Municipal authoritys decision, otherwise valid, on the ground alone that the developer is likely to resort to transactions of unaccounted money would, as a judicial remedy, be plainly unthinkable49. Contention (d) requires to be and is also held against appellants.

Gade Lakshmi Mangraju @ Ramesh Vs. State of Andhra Pradesh

identify criminals. Police dogs engage in these actions by virtue of instincts and also by the training imparted to them. 14. We will now refer to two decisions of this Court in which the evidence relating to sniffer dogs movement have been tested. 15. In Abdul Razak Murtaza Dafadar v. State of Maharashtra, AIR 1970 SC 283 , a three- Judge Bench of this Court declined to express any concluded opinion or to lay down any general rule with regard to tracker dog’s evidence or its admissibility against the accused, as it was not necessary to do so on the fact situation. However, Their Lordships made the following observations on the usefulness or otherwise of such evidence : “It was argued that the tracker dog’s evidence could be likened to the type of evidence accepted from scientific experts describing chemical reactions, blood tests and the actions of bacilli. The comparison does not, however, appear to be sound because the behaviour of chemicals, blood corpuscle and bacilli contains no element of conscious volition or deliberate choice. But dogs are intelligent animals with many thought process similar to the thought processes of human beings and wherever you have thought processes there is always the risk of error, deception and even self-deception. For these reasons we are of the opinion that in the present state of scientific knowledge evidence of dog tracking, even, if admissible, is not ordinarily of much weight”. 16. In Surinder Pal Jain v. Delhi Administration, 1993 Suppl. (3) SCC 681, a two-Judge Bench expressed the opinion that “the pointing out by the dogs could as well lead to a misguided suspicion that the appellant had committed the crime, so save Their Lordships sidelined that item of evidence from consideration”. 17. We are of the view that Criminal Courts need not bother much about the evidence based on sniffer dogs due to the inherent frailties adumbrated above, although we cannot disapprove the Investigating Agency employing such sniffer dogs for helping the investigation to track down criminals.18. Investigating exercises can afford to make attempts or forays with the help of canine faculties but judicial exercise can ill-afford them.19. Exclusion of that circumstance would not affect strength or sturdiness of the chain found through the other circumstances which have been established by the prosecution. Dealing with the fingerprints collected from the almirah at the place of occurrence, learned Counsel for the appellant contended, first, that prosecution did not prove that the fingerprint used by PW 7 to compare the finger impression from the almirah was that of A-2 Golla Bujji. In our view the appellant cannot dispute that fact as A-2 Golla Bujji himself did not challenge it when a formal evidence was tendered by the prosecution on that score. 20. Learned Counsel alternatively contended that even if the involvement of A-2 is treated as proved that is not sufficient to inveigle the appellant into the dragnet. He said that the very fact that no fingerprint of the appellant was collected from the scene is enough to exclude his presence from the scene at the time of occurrence. 21. Presence of a fingerprint at the scene of occurrence is a positive evidence. But the absence of a fingerprint is not enough to foreclose the presence of the persons concerned at the scene. If during perpetration of the crime the fingerprint of the culprit could possibly be remitted at the scene it is equally a possibility that such a remnant would not be remitted at all. Hence absence of finger impression is not guarantee of absence of the person concerned at the scene. 22. Learned Counsel contended next that the inability of the prosecution to indicate the time of murder can go to the benefit of the appellant because the appellant alone was once found in the house whereas he was found only at the restaurant in the company of A-2. According to the Counsel if A-2’s finger impressions on the almirah is of any use the possibility of A-2 committing the murder all alone cannot be ruled out. 23. We cannot approve of the said contention as a safe method for appreciating a case based on circumstantial evidence. One circumstance by itself may not unerringly point to the guilt of the accused. It is the cumulative result of all circumstances which could matter. Hence, we are not inclined to cull out one circumstance from the rest for the purpose of giving a different meaning to it.24. Learned Counsel lastly contended that identification of ornaments as those of the deceased is a very fragile evidence. The witnesses who identified the ornaments as those belonging to the deceased were PW 1 and PW 2 who are the sons of the deceased. We agree with the contention of the learned Counsel that a female kin of the deceased female would have been in a better position than a male kin to identify the jewellery or ornaments worn by a woman. But we make a note of the fact that when a Test Identification Parade was conducted to identify the ornaments the daughter of the deceased was also called in. There is no case for the prosecution or the defence that she would have failed to identify such ornaments as those of her mother. It is difficult for us to believe that PW 1 and PW 2 the sons would have contradicted their sister while identify the ornaments during the Test Identification Parade. Hence non-examination of the daughter of the deceased need not be taken as a serious flaw which could vitally affect the prosecution evidence regarding the identification of the ornaments.25. We do not find any infirmity as to the appreciation of evidence as done by the Trial Court and the High Court. We hold the view that the circumstances enumerated above, even barring the evidence pertaining to the sniffer dog, are quite enough to form the completed chain pointing unerringly to the active involvement of the appellant in the murder of the deceased. 26.

0[ds]17. We are of the view that Criminal Courts need not bother much about the evidence based on sniffer dogs due to the inherent frailties adumbrated above, although we cannot disapprove the Investigating Agency employing such sniffer dogs for helping the investigation to track down criminals.18. Investigating exercises can afford to make attempts or forays with the help of canine faculties but judicial exercise can ill-afford them.19. Exclusion of that circumstance would not affect strength or sturdiness of the chain found through the other circumstances which have been established by the prosecution. Dealing with the fingerprints collected from the almirah at the place of occurrence, learned Counsel for the appellant contended, first, that prosecution did not prove that the fingerprint used by PW 7 to compare the finger impression from the almirah was that of A-2 Golla Bujji. In our view the appellant cannot dispute that fact as A-2 Golla Bujji himself did not challenge it when a formal evidence was tendered by the prosecution on that score.We cannot approve of the said contention as a safe method for appreciating a case based on circumstantial evidence. One circumstance by itself may not unerringly point to the guilt of the accused. It is the cumulative result of all circumstances which could matter. Hence, we are not inclined to cull out one circumstance from the rest for the purpose of giving a different meaning to it.24. Learned Counsel lastly contended that identification of ornaments as those of the deceased is a very fragile evidence. The witnesses who identified the ornaments as those belonging to the deceased were PW 1 and PW 2 who are the sons of the deceased. We agree with the contention of the learned Counsel that a female kin of the deceased female would have been in a better position than a male kin to identify the jewellery or ornaments worn by a woman. But we make a note of the fact that when a Test Identification Parade was conducted to identify the ornaments the daughter of the deceased was also called in. There is no case for the prosecution or the defence that she would have failed to identify such ornaments as those of her mother. It is difficult for us to believe that PW 1 and PW 2 the sons would have contradicted their sister while identify the ornaments during the Test Identification Parade. Hence non-examination of the daughter of the deceased need not be taken as a serious flaw which could vitally affect the prosecution evidence regarding the identification of the ornaments.25. We do not find any infirmity as to the appreciation of evidence as done by the Trial Court and the High Court.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: identify criminals. Police dogs engage in these actions by virtue of instincts and also by the training imparted to them. 14. We will now refer to two decisions of this Court in which the evidence relating to sniffer dogs movement have been tested. 15. In Abdul Razak Murtaza Dafadar v. State of Maharashtra, AIR 1970 SC 283 , a three- Judge Bench of this Court declined to express any concluded opinion or to lay down any general rule with regard to tracker dog’s evidence or its admissibility against the accused, as it was not necessary to do so on the fact situation. However, Their Lordships made the following observations on the usefulness or otherwise of such evidence : “It was argued that the tracker dog’s evidence could be likened to the type of evidence accepted from scientific experts describing chemical reactions, blood tests and the actions of bacilli. The comparison does not, however, appear to be sound because the behaviour of chemicals, blood corpuscle and bacilli contains no element of conscious volition or deliberate choice. But dogs are intelligent animals with many thought process similar to the thought processes of human beings and wherever you have thought processes there is always the risk of error, deception and even self-deception. For these reasons we are of the opinion that in the present state of scientific knowledge evidence of dog tracking, even, if admissible, is not ordinarily of much weight”. 16. In Surinder Pal Jain v. Delhi Administration, 1993 Suppl. (3) SCC 681, a two-Judge Bench expressed the opinion that “the pointing out by the dogs could as well lead to a misguided suspicion that the appellant had committed the crime, so save Their Lordships sidelined that item of evidence from consideration”. 17. We are of the view that Criminal Courts need not bother much about the evidence based on sniffer dogs due to the inherent frailties adumbrated above, although we cannot disapprove the Investigating Agency employing such sniffer dogs for helping the investigation to track down criminals.18. Investigating exercises can afford to make attempts or forays with the help of canine faculties but judicial exercise can ill-afford them.19. Exclusion of that circumstance would not affect strength or sturdiness of the chain found through the other circumstances which have been established by the prosecution. Dealing with the fingerprints collected from the almirah at the place of occurrence, learned Counsel for the appellant contended, first, that prosecution did not prove that the fingerprint used by PW 7 to compare the finger impression from the almirah was that of A-2 Golla Bujji. In our view the appellant cannot dispute that fact as A-2 Golla Bujji himself did not challenge it when a formal evidence was tendered by the prosecution on that score. 20. Learned Counsel alternatively contended that even if the involvement of A-2 is treated as proved that is not sufficient to inveigle the appellant into the dragnet. He said that the very fact that no fingerprint of the appellant was collected from the scene is enough to exclude his presence from the scene at the time of occurrence. 21. Presence of a fingerprint at the scene of occurrence is a positive evidence. But the absence of a fingerprint is not enough to foreclose the presence of the persons concerned at the scene. If during perpetration of the crime the fingerprint of the culprit could possibly be remitted at the scene it is equally a possibility that such a remnant would not be remitted at all. Hence absence of finger impression is not guarantee of absence of the person concerned at the scene. 22. Learned Counsel contended next that the inability of the prosecution to indicate the time of murder can go to the benefit of the appellant because the appellant alone was once found in the house whereas he was found only at the restaurant in the company of A-2. According to the Counsel if A-2’s finger impressions on the almirah is of any use the possibility of A-2 committing the murder all alone cannot be ruled out. 23. We cannot approve of the said contention as a safe method for appreciating a case based on circumstantial evidence. One circumstance by itself may not unerringly point to the guilt of the accused. It is the cumulative result of all circumstances which could matter. Hence, we are not inclined to cull out one circumstance from the rest for the purpose of giving a different meaning to it.24. Learned Counsel lastly contended that identification of ornaments as those of the deceased is a very fragile evidence. The witnesses who identified the ornaments as those belonging to the deceased were PW 1 and PW 2 who are the sons of the deceased. We agree with the contention of the learned Counsel that a female kin of the deceased female would have been in a better position than a male kin to identify the jewellery or ornaments worn by a woman. But we make a note of the fact that when a Test Identification Parade was conducted to identify the ornaments the daughter of the deceased was also called in. There is no case for the prosecution or the defence that she would have failed to identify such ornaments as those of her mother. It is difficult for us to believe that PW 1 and PW 2 the sons would have contradicted their sister while identify the ornaments during the Test Identification Parade. Hence non-examination of the daughter of the deceased need not be taken as a serious flaw which could vitally affect the prosecution evidence regarding the identification of the ornaments.25. We do not find any infirmity as to the appreciation of evidence as done by the Trial Court and the High Court. We hold the view that the circumstances enumerated above, even barring the evidence pertaining to the sniffer dog, are quite enough to form the completed chain pointing unerringly to the active involvement of the appellant in the murder of the deceased. 26. ### Response: 0 ### Explanation: 17. We are of the view that Criminal Courts need not bother much about the evidence based on sniffer dogs due to the inherent frailties adumbrated above, although we cannot disapprove the Investigating Agency employing such sniffer dogs for helping the investigation to track down criminals.18. Investigating exercises can afford to make attempts or forays with the help of canine faculties but judicial exercise can ill-afford them.19. Exclusion of that circumstance would not affect strength or sturdiness of the chain found through the other circumstances which have been established by the prosecution. Dealing with the fingerprints collected from the almirah at the place of occurrence, learned Counsel for the appellant contended, first, that prosecution did not prove that the fingerprint used by PW 7 to compare the finger impression from the almirah was that of A-2 Golla Bujji. In our view the appellant cannot dispute that fact as A-2 Golla Bujji himself did not challenge it when a formal evidence was tendered by the prosecution on that score.We cannot approve of the said contention as a safe method for appreciating a case based on circumstantial evidence. One circumstance by itself may not unerringly point to the guilt of the accused. It is the cumulative result of all circumstances which could matter. Hence, we are not inclined to cull out one circumstance from the rest for the purpose of giving a different meaning to it.24. Learned Counsel lastly contended that identification of ornaments as those of the deceased is a very fragile evidence. The witnesses who identified the ornaments as those belonging to the deceased were PW 1 and PW 2 who are the sons of the deceased. We agree with the contention of the learned Counsel that a female kin of the deceased female would have been in a better position than a male kin to identify the jewellery or ornaments worn by a woman. But we make a note of the fact that when a Test Identification Parade was conducted to identify the ornaments the daughter of the deceased was also called in. There is no case for the prosecution or the defence that she would have failed to identify such ornaments as those of her mother. It is difficult for us to believe that PW 1 and PW 2 the sons would have contradicted their sister while identify the ornaments during the Test Identification Parade. Hence non-examination of the daughter of the deceased need not be taken as a serious flaw which could vitally affect the prosecution evidence regarding the identification of the ornaments.25. We do not find any infirmity as to the appreciation of evidence as done by the Trial Court and the High Court.

Dattatraya Vs. Rangnath Gopalrao Kawathekar, (dead) by his legal representatives & Others

Property mentioned in thedocument S.No. Acres Gun- Rev. Sharethas Asst.455 2 20 8-0-0 Whole456 2 19 7-8-0 do457 2 30 8-8-0 do458 2 19 7-8-0 do459 15 37 20-0-0 do3. Kind of the document Sale deed4. Name of the executant ofdocument Dagdu s/o Dattatraya5. Name of the person in whosefavour documents is executed (1) Rangnathrao s/o Gopalrao(2) Vasantrao s/o Digambarrao6. No. of the documents 1887. No. of the page 28-838. Volume One of 1955 F.9. Date of registration 20th Khurdad 1355 F."8. That exhibit shows the names of the concerned parties, the nature of the document and description of the properties dealt with. It shows that the document executed was a sale deed. The vendor is the first defendant and the vendees are the plaintiffs. The description of the properties shown therein tallies with the suit properties. It is true, as contended by Mr. Sanghi that the nature of the document mentioned therein is not conclusive. But so far as the nature of the document is concerned, both the vendor and the vendee admit that it was a sale deed. Therefore that question does not arise for consideration. We agree with the High Court that the learned district Judge erred in thinking that the secondary evidence afforded by Exh. 1 is not a satisfactory one.9. The only question that remains for consideration is whether the suit properties fell to the share of the first defendant in the partition that took place between him and the second defendant. On this question, we have the unimpeachable evidence afforded by Ex. 2 executed by the second defendant in favour of the plaintiffs on January 12, 1952. That document styles itself as an arrangement. English translation of that document reads as follows :"Agreement deed executed by Raosaheb Duttoba Bandgar r/o Sindphal at present Tuljapur 1952 on Shake 1873 Khar Name Sawanchere, Miti Poush Sudh 15, in favour of Shri Rangnath Gopalrao Kawthekar and Vasant Digamberrao Kawthekar r/o Kasba Tuljapur. The terms of the agreement are that you both are the absolute owners of the lands bearing Survey Nos. 455, 456, 457, 458, 459 named Thike Nagral, situated at Sinaphal which were sold by my elder brother Dugdoba Duttoba Bandgar through Registered sale-deed along with the mango trees situated in the said lands and right to use that water of the well as an owner. I agree that I will not interfere or obstruct in your right of possession. You are the owners as per the said registered sale-deed and I accordingly apply to Patel, Patwari of the said village to make necessary entries in the (D) Form (in vernacular). If registered I will fail to do so you can do it as per terms of this agreement and registered Sale-deed. Neither I nor my heirs have any right in it. The sale-deed of the said land is registered on July 20, 1955. I admit it. You enjoy the land as before so the Agreement Deed is executed with the consent. Dated January 12, 1952."10. From this document it is clear that the second defendant admitted that the suit properties were of the exclusive ownership of the first defendant, his brother and that he had no right in the same. The plaintiffs evidently were put to the necessity of taking this document from the second defendant in view of the destruction of the records referred to earlier. It is clear that the second defendant after executing that document is now trying to resile from the admissions made by him with a view to take advantage of the situation in which the plaintiffs are placed. Mr. Sanghi contended that unless we come to the conclusion that in view of Ex. 2, the appellant is estopped from putting forward his title to the suit properties, Ex. 2 is irrelevant. We are unable to accept this contention. Exh. 2 is relied on by the plaintiffs to prove the admission of the second defendant that the suit properties belonged to his brother and that his brother had sold the same to the plaintiffs. Admission is an important piece of evidence. But it is open to the person who made the admission to prove that those admissions are not true. It was not the case of the appellant that the admissions contained in Ex. 2 are wrong admissions and he made those admissions under some erroneous impression or that they were obtained from him by misrepresentation. His case was that he never executed Ex. 2. We have already rejected that case. Hence the admissions contained in Ex. 2 assume importance. Admission is one thing, estoppel is another. Admission is a piece of evidence but estoppel creates title. Ex. 2 was relied on as an admission and not as an estoppel. We agree with the High Court that Ex. 2 affords satisfactory evidence to prove the first defendants title to the suit properties. It further proves the alienation effected by the first defendant in favour of the plaintiffs.11. The only other contention advanced on behalf of the plaintiffs is that the alienation put forward in the plaint is an invalid as it contravened the provisions of Agricultural Lands Alienation Act inasmuch as the purchaser did not obtain the sanction of the Collector before purchasing the properties as the first defendant was a shepherd and as such a member of a protected tribe. The trial Court came to the conclusion that the first defendant was note shepherd and it was not proved that he was inclined to of a protected tribe. In appeal the learned District Judge was inclined to think that the first defendant was a member of a protected tribe but it left open the issue relating to the validity of the sale and chose to decide the case on other grounds. In the High Court the plea covered by the afore-mentioned issue was not agitated. The High Court did not consider that plea and as such we did not permit Mr. Sanghi to raise that plea in this Court.

0[ds]4. As seen earlier both the first defendant as well as the second defendant had pleaded that there was partition in the family. Therefore the only question that fell for decision was whether the suit properties fell to the share of the first defendant or the second defendant. There was no basis in the pleadings for the finding of the learned District Judge that the suit properties were the joint family properties of the first and the second defendants. This was entirely a new case made out by the District Judge. The pleadings in the case did not permit learned District judge to come to such a conclusion. Hence in our opinion the High Court was justified in reversing that finding of the first appellate court. An attempt was made before us to justify the finding of the first appellate court that the suit properties were joint family properties of defendants 1 and 2 by referring to the evidence in the case. We are not satisfied that there is any evidence to support that case. Further a case not pleaded cannot be made out byit was not open to the first appellate court to consider whether the deed in question was invalid on the ground that it was obtained by misrepresentation. The only plea put forward by the second defendant was that the deed was a forgery. Both the trial Court as well as the first appellate court have rejected thatthe only plea taken is that the executant has not signed the document and that the document need not adduce evidence to show that the party who signed the document knew the contents of the document. Ordinarily no one is expected to sign a document without knowing its contents but if it is pleaded that the party who signed the document did not know the contents of the document then it may in certain circumstance be necessary for the party seeking to prove the document to place material before the Court to satisfy it that the party who signed the document had the knowledge of its contents.That exhibit shows the names of the concerned parties, the nature of the document and description of the properties dealt with. It shows that the document executed was a sale deed. The vendor is the first defendant and the vendees are the plaintiffs. The description of the properties shown therein tallies with the suit properties. It is true, as contended by Mr. Sanghi that the nature of the document mentioned therein is not conclusive. But so far as the nature of the document is concerned, both the vendor and the vendee admit that it was a sale deed. Therefore that question does not arise for consideration. We agree with the High Court that the learned district Judge erred in thinking that the secondary evidence afforded by Exh. 1 is not a satisfactory one.From this document it is clear that the second defendant admitted that the suit properties were of the exclusive ownership of the first defendant, his brother and that he had no right in the same. The plaintiffs evidently were put to the necessity of taking this document from the second defendant in view of the destruction of the records referred to earlier. It is clear that the second defendant after executing that document is now trying to resile from the admissions made by him with a view to take advantage of the situation in which the plaintiffs are placed. Mr. Sanghi contended that unless we come to the conclusion that in view of Ex. 2, the appellant is estopped from putting forward his title to the suit properties, Ex. 2 is irrelevant. We are unable to accept this contention. Exh. 2 is relied on by the plaintiffs to prove the admission of the second defendant that the suit properties belonged to his brother and that his brother had sold the same to the plaintiffs. Admission is an important piece of evidence. But it is open to the person who made the admission to prove that those admissions are not true. It was not the case of the appellant that the admissions contained in Ex. 2 are wrong admissions and he made those admissions under some erroneous impression or that they were obtained from him by misrepresentation. His case was that he never executed Ex. 2. We have already rejected that case. Hence the admissions contained in Ex. 2 assume importance. Admission is one thing, estoppel is another. Admission is a piece of evidence but estoppel creates title. Ex. 2 was relied on as an admission and not as an estoppel. We agree with the High Court that Ex. 2 affords satisfactory evidence to prove the first defendants title to the suit properties. It further proves the alienation effected by the first defendant in favour of thetrial Court came to the conclusion that the first defendant was note shepherd and it was not proved that he was inclined to of a protected tribe. In appeal the learned District Judge was inclined to think that the first defendant was a member of a protected tribe but it left open the issue relating to the validity of the sale and chose to decide the case on other grounds. In the High Court the plea covered by theissue was not agitated. The High Court did not consider that plea and as such we did not permit Mr. Sanghi to raise that plea in this Court.

### Instruction: Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding. ### Input: Property mentioned in thedocument S.No. Acres Gun- Rev. Sharethas Asst.455 2 20 8-0-0 Whole456 2 19 7-8-0 do457 2 30 8-8-0 do458 2 19 7-8-0 do459 15 37 20-0-0 do3. Kind of the document Sale deed4. Name of the executant ofdocument Dagdu s/o Dattatraya5. Name of the person in whosefavour documents is executed (1) Rangnathrao s/o Gopalrao(2) Vasantrao s/o Digambarrao6. No. of the documents 1887. No. of the page 28-838. Volume One of 1955 F.9. Date of registration 20th Khurdad 1355 F."8. That exhibit shows the names of the concerned parties, the nature of the document and description of the properties dealt with. It shows that the document executed was a sale deed. The vendor is the first defendant and the vendees are the plaintiffs. The description of the properties shown therein tallies with the suit properties. It is true, as contended by Mr. Sanghi that the nature of the document mentioned therein is not conclusive. But so far as the nature of the document is concerned, both the vendor and the vendee admit that it was a sale deed. Therefore that question does not arise for consideration. We agree with the High Court that the learned district Judge erred in thinking that the secondary evidence afforded by Exh. 1 is not a satisfactory one.9. The only question that remains for consideration is whether the suit properties fell to the share of the first defendant in the partition that took place between him and the second defendant. On this question, we have the unimpeachable evidence afforded by Ex. 2 executed by the second defendant in favour of the plaintiffs on January 12, 1952. That document styles itself as an arrangement. English translation of that document reads as follows :"Agreement deed executed by Raosaheb Duttoba Bandgar r/o Sindphal at present Tuljapur 1952 on Shake 1873 Khar Name Sawanchere, Miti Poush Sudh 15, in favour of Shri Rangnath Gopalrao Kawthekar and Vasant Digamberrao Kawthekar r/o Kasba Tuljapur. The terms of the agreement are that you both are the absolute owners of the lands bearing Survey Nos. 455, 456, 457, 458, 459 named Thike Nagral, situated at Sinaphal which were sold by my elder brother Dugdoba Duttoba Bandgar through Registered sale-deed along with the mango trees situated in the said lands and right to use that water of the well as an owner. I agree that I will not interfere or obstruct in your right of possession. You are the owners as per the said registered sale-deed and I accordingly apply to Patel, Patwari of the said village to make necessary entries in the (D) Form (in vernacular). If registered I will fail to do so you can do it as per terms of this agreement and registered Sale-deed. Neither I nor my heirs have any right in it. The sale-deed of the said land is registered on July 20, 1955. I admit it. You enjoy the land as before so the Agreement Deed is executed with the consent. Dated January 12, 1952."10. From this document it is clear that the second defendant admitted that the suit properties were of the exclusive ownership of the first defendant, his brother and that he had no right in the same. The plaintiffs evidently were put to the necessity of taking this document from the second defendant in view of the destruction of the records referred to earlier. It is clear that the second defendant after executing that document is now trying to resile from the admissions made by him with a view to take advantage of the situation in which the plaintiffs are placed. Mr. Sanghi contended that unless we come to the conclusion that in view of Ex. 2, the appellant is estopped from putting forward his title to the suit properties, Ex. 2 is irrelevant. We are unable to accept this contention. Exh. 2 is relied on by the plaintiffs to prove the admission of the second defendant that the suit properties belonged to his brother and that his brother had sold the same to the plaintiffs. Admission is an important piece of evidence. But it is open to the person who made the admission to prove that those admissions are not true. It was not the case of the appellant that the admissions contained in Ex. 2 are wrong admissions and he made those admissions under some erroneous impression or that they were obtained from him by misrepresentation. His case was that he never executed Ex. 2. We have already rejected that case. Hence the admissions contained in Ex. 2 assume importance. Admission is one thing, estoppel is another. Admission is a piece of evidence but estoppel creates title. Ex. 2 was relied on as an admission and not as an estoppel. We agree with the High Court that Ex. 2 affords satisfactory evidence to prove the first defendants title to the suit properties. It further proves the alienation effected by the first defendant in favour of the plaintiffs.11. The only other contention advanced on behalf of the plaintiffs is that the alienation put forward in the plaint is an invalid as it contravened the provisions of Agricultural Lands Alienation Act inasmuch as the purchaser did not obtain the sanction of the Collector before purchasing the properties as the first defendant was a shepherd and as such a member of a protected tribe. The trial Court came to the conclusion that the first defendant was note shepherd and it was not proved that he was inclined to of a protected tribe. In appeal the learned District Judge was inclined to think that the first defendant was a member of a protected tribe but it left open the issue relating to the validity of the sale and chose to decide the case on other grounds. In the High Court the plea covered by the afore-mentioned issue was not agitated. The High Court did not consider that plea and as such we did not permit Mr. Sanghi to raise that plea in this Court. ### Response: 0 ### Explanation: 4. As seen earlier both the first defendant as well as the second defendant had pleaded that there was partition in the family. Therefore the only question that fell for decision was whether the suit properties fell to the share of the first defendant or the second defendant. There was no basis in the pleadings for the finding of the learned District Judge that the suit properties were the joint family properties of the first and the second defendants. This was entirely a new case made out by the District Judge. The pleadings in the case did not permit learned District judge to come to such a conclusion. Hence in our opinion the High Court was justified in reversing that finding of the first appellate court. An attempt was made before us to justify the finding of the first appellate court that the suit properties were joint family properties of defendants 1 and 2 by referring to the evidence in the case. We are not satisfied that there is any evidence to support that case. Further a case not pleaded cannot be made out byit was not open to the first appellate court to consider whether the deed in question was invalid on the ground that it was obtained by misrepresentation. The only plea put forward by the second defendant was that the deed was a forgery. Both the trial Court as well as the first appellate court have rejected thatthe only plea taken is that the executant has not signed the document and that the document need not adduce evidence to show that the party who signed the document knew the contents of the document. Ordinarily no one is expected to sign a document without knowing its contents but if it is pleaded that the party who signed the document did not know the contents of the document then it may in certain circumstance be necessary for the party seeking to prove the document to place material before the Court to satisfy it that the party who signed the document had the knowledge of its contents.That exhibit shows the names of the concerned parties, the nature of the document and description of the properties dealt with. It shows that the document executed was a sale deed. The vendor is the first defendant and the vendees are the plaintiffs. The description of the properties shown therein tallies with the suit properties. It is true, as contended by Mr. Sanghi that the nature of the document mentioned therein is not conclusive. But so far as the nature of the document is concerned, both the vendor and the vendee admit that it was a sale deed. Therefore that question does not arise for consideration. We agree with the High Court that the learned district Judge erred in thinking that the secondary evidence afforded by Exh. 1 is not a satisfactory one.From this document it is clear that the second defendant admitted that the suit properties were of the exclusive ownership of the first defendant, his brother and that he had no right in the same. The plaintiffs evidently were put to the necessity of taking this document from the second defendant in view of the destruction of the records referred to earlier. It is clear that the second defendant after executing that document is now trying to resile from the admissions made by him with a view to take advantage of the situation in which the plaintiffs are placed. Mr. Sanghi contended that unless we come to the conclusion that in view of Ex. 2, the appellant is estopped from putting forward his title to the suit properties, Ex. 2 is irrelevant. We are unable to accept this contention. Exh. 2 is relied on by the plaintiffs to prove the admission of the second defendant that the suit properties belonged to his brother and that his brother had sold the same to the plaintiffs. Admission is an important piece of evidence. But it is open to the person who made the admission to prove that those admissions are not true. It was not the case of the appellant that the admissions contained in Ex. 2 are wrong admissions and he made those admissions under some erroneous impression or that they were obtained from him by misrepresentation. His case was that he never executed Ex. 2. We have already rejected that case. Hence the admissions contained in Ex. 2 assume importance. Admission is one thing, estoppel is another. Admission is a piece of evidence but estoppel creates title. Ex. 2 was relied on as an admission and not as an estoppel. We agree with the High Court that Ex. 2 affords satisfactory evidence to prove the first defendants title to the suit properties. It further proves the alienation effected by the first defendant in favour of thetrial Court came to the conclusion that the first defendant was note shepherd and it was not proved that he was inclined to of a protected tribe. In appeal the learned District Judge was inclined to think that the first defendant was a member of a protected tribe but it left open the issue relating to the validity of the sale and chose to decide the case on other grounds. In the High Court the plea covered by theissue was not agitated. The High Court did not consider that plea and as such we did not permit Mr. Sanghi to raise that plea in this Court.

Comnr. Of Customs Chennai Vs. M/S. Hewlett Packard India Sales (P) Ltd

laptop and has claimed the benefit of Notification No.21/2002-Cus dated 1.3.2002. 8. To answer the above controversy meaning of the words software, hard disk and platter need to be noted (See: Computer Dictionary by Microsoft - Fifth Edition at pp.489, 246 and 408 respectively): "Hard disk. A device containing one or more inflexible platters coated with material in which data can be recorded magnetically, together with their read/write heads, the head-positioning mechanism, and the spindly motor in a sealed case that protects against outside contaminants. The protected environment allows the head to fly 10 to 25 millionths of an inch above the surface of a platter rotating typically at 3600 to 7200 rpm; therefore, much more data can be stored and accessed much more quickly than on a floppy disk. Most hard disks contain from two to eight platters. See the illustration. Also called: hard disk drive. Hard disk drive n. See hard disk Platter. One of the individual metal data storage disks within a hard disk drive. Most hard disks have from two to eight platters. See the illustration. See also hard disk.Software. Computer programs; instructions that make hardware work. Two main types of software are system software (operating systems), which controls the workings of the computer, and applications, such as word processing programs, spreadsheets, and databases, which perform the tasks for which people use computers. Two additional categories, which are neither system nor application software but contain elements of both, are network software, which enables groups of computers to communicate, and language software, which provides programmers with the tools they need to write programs. In addition to these task-based categories, several types of software are described based on their method of distribution. These include packaged software (canned programs), sold primarily through retail outlets; freeware and public domain software, which are distributed free of charge; shareware, which is also distributed free of charge; although users are requested to pay a small registration fee for continued use of the program; and vaporware, software that is announced by a company or individuals but either never makes it to market or is very late. See also application, canned software, freeware, network software, operating system, shareware, system software, vaporware, Compare firmware, hardware, liveware." 9. On the basis of the above dictionary meanings it becomes clear that a software is a computer programme. It consists of instructions that make hardware work. There are two types of softwares, namely, system software which controls the working of the computer and application software such as word processing programmes, databases etc., which perform the tasks for which we use computers. In addition, we now have network software which enables groups of computers to communicate, and language software which provides programmers with the tools with which they write programmes. We also have what is called as packaged softwares which are sold through retail outlets. In the present case, the respondent imported laptops containing preloaded HDD. The said drives were preloaded with operating systems (software), which, as stated above, controls the working of the computer. The value of the laptop depends on the operating system, which is preloaded. The computer cannot open without the operating system. The laptop without an operating system is like an empty building. At this stage, it may be clarified that the operating system can also be imported as a packaged software which is like an accessory and which in the present case is classified by the department under CTH 85.24. However, a preloaded operating system recorded on HDD is an integral part of the laptop (unit). Such preloaded operating system on the HDD forms an integral part of the laptop. It is important to note that laptop as a stand-alone unit is classifiable under CTH 84.71. A laptop is a small portable Personal Computer (in short PC). It runs either on battery or electricity. Laptop has a screen and a small key board. Most of the laptops run on the same software as their desktop counterparts. Most of the laptops accept floppy disks, CD ROM Drives, External or Internal Modem etc. A notebook computer is a laptop. It is a machine. A CD or a floppy disk is a peripheral.10. Applying the above tests to the facts of the present case, we are of the view that preloaded operating system recorded in HDD in the laptop (which is the item of import) forms an integral part of the laptop. What was imported in the present case was a laptop as a stand alone item (unit). Present dispute relates to the transaction value of the unit. An importer who buys a laptop containing an operating system pays for the laptop as a unit. As stated above, without the operating system, like Windows, the laptop cannot work. The computer cannot open without operating system. In the present case, the respondent has not only imported laptops, it has also imported HDDs on which the operating system was recorded (packaged software) which has been classified by the Department under CTH 85.24. However, when a laptop is imported with in-built preloaded operating system recorded on HDD the said item forms an integral part of the laptop (computer system) and in which case the Department is right in treating the laptop as one single unit imported by the respondent. The Department has rightly classified the laptop as a unit under CTH 84.71, quoted above.11. Before concluding it may be pointed out that in none of the decisions cited on behalf of the respondent, the question raised in the present dispute was ever raised. Although laptop is similar PC, the former is more compact. It cannot be assembled as easily as PC. In the present case, the Department has rightly taken the value of the laptop as a unit and it has given the deduction for the value of the software. There is no error in the computation, particularly, when the respondent has refused to give the value of the software to the adjudicating authority despite being called upon to do so.

1[ds]8. To answer the above controversy meaning of the words software, hard disk and platter need to be noted (See: Computer Dictionary by Microsoft - Fifth Edition at pp.489, 246 and 408disk. A device containing one or more inflexible platters coated with material in which data can be recorded magnetically, together with their read/write heads, the head-positioning mechanism, and the spindly motor in a sealed case that protects against outside contaminants. The protected environment allows the head to fly 10 to 25 millionths of an inch above the surface of a platter rotating typically at 3600 to 7200 rpm; therefore, much more data can be stored and accessed much more quickly than on a floppy disk. Most hard disks contain from two to eight platters. See the illustration. Also called: hard disk drive. Hard disk drive n. See hard disk Platter. One of the individual metal data storage disks within a hard disk drive. Most hard disks have from two to eight platters. See the illustration. See also hard disk.Software. Computer programs; instructions that make hardware work. Two main types of software are system software (operating systems), which controls the workings of the computer, and applications, such as word processing programs, spreadsheets, and databases, which perform the tasks for which people use computers. Two additional categories, which are neither system nor application software but contain elements of both, are network software, which enables groups of computers to communicate, and language software, which provides programmers with the tools they need to write programs. In addition to these task-based categories, several types of software are described based on their method of distribution. These include packaged software (canned programs), sold primarily through retail outlets; freeware and public domain software, which are distributed free of charge; shareware, which is also distributed free of charge; although users are requested to pay a small registration fee for continued use of the program; and vaporware, software that is announced by a company or individuals but either never makes it to market or is very late. See also application, canned software, freeware, network software, operating system, shareware, system software, vaporware, Compare firmware, hardware, liveware.On the basis of the above dictionary meanings it becomes clear that a software is a computer programme. It consists of instructions that make hardware work. There are two types of softwares, namely, system software which controls the working of the computer and application software such as word processing programmes, databases etc., which perform the tasks for which we use computers. In addition, we now have network software which enables groups of computers to communicate, and language software which provides programmers with the tools with which they write programmes. We also have what is called as packaged softwares which are sold through retail outlets. In the present case, the respondent imported laptops containing preloaded HDD. The said drives were preloaded with operating systems (software), which, as stated above, controls the working of the computer. The value of the laptop depends on the operating system, which is preloaded. The computer cannot open without the operating system. The laptop without an operating system is like an empty building. At this stage, it may be clarified that the operating system can also be imported as a packaged software which is like an accessory and which in the present case is classified by the department under CTH 85.24. However, a preloaded operating system recorded on HDD is an integral part of the laptop (unit). Such preloaded operating system on the HDD forms an integral part of the laptop. It is important to note that laptop as a stand-alone unit is classifiable under CTH 84.71. A laptop is a small portable Personal Computer (in short PC). It runs either on battery or electricity. Laptop has a screen and a small key board. Most of the laptops run on the same software as their desktop counterparts. Most of the laptops accept floppy disks, CD ROM Drives, External or Internal Modem etc. A notebook computer is a laptop. It is a machine. A CD or a floppy disk is a peripheral.10. Applying the above tests to the facts of the present case, we are of the view that preloaded operating system recorded in HDD in the laptop (which is the item of import) forms an integral part of the laptop. What was imported in the present case was a laptop as a stand alone item (unit). Present dispute relates to the transaction value of the unit. An importer who buys a laptop containing an operating system pays for the laptop as a unit. As stated above, without the operating system, like Windows, the laptop cannot work. The computer cannot open without operating system. In the present case, the respondent has not only imported laptops, it has also imported HDDs on which the operating system was recorded (packaged software) which has been classified by the Department under CTH 85.24. However, when a laptop is imported with in-built preloaded operating system recorded on HDD the said item forms an integral part of the laptop (computer system) and in which case the Department is right in treating the laptop as one single unit imported by the respondent. The Department has rightly classified the laptop as a unit under CTH 84.71, quoted above.11. Before concluding it may be pointed out that in none of the decisions cited on behalf of the respondent, the question raised in the present dispute was ever raised. Although laptop is similar PC, the former is more compact. It cannot be assembled as easily as PC. In the present case, the Department has rightly taken the value of the laptop as a unit and it has given the deduction for the value of the software. There is no error in the computation, particularly, when the respondent has refused to give the value of the software to the adjudicating authority despite being called upon to do so.

### Instruction: Estimate the outcome of the case (positive (1) or negative (0) for the appellant) and then give a reasoned explanation by examining important sentences within the case documentation. ### Input: laptop and has claimed the benefit of Notification No.21/2002-Cus dated 1.3.2002. 8. To answer the above controversy meaning of the words software, hard disk and platter need to be noted (See: Computer Dictionary by Microsoft - Fifth Edition at pp.489, 246 and 408 respectively): "Hard disk. A device containing one or more inflexible platters coated with material in which data can be recorded magnetically, together with their read/write heads, the head-positioning mechanism, and the spindly motor in a sealed case that protects against outside contaminants. The protected environment allows the head to fly 10 to 25 millionths of an inch above the surface of a platter rotating typically at 3600 to 7200 rpm; therefore, much more data can be stored and accessed much more quickly than on a floppy disk. Most hard disks contain from two to eight platters. See the illustration. Also called: hard disk drive. Hard disk drive n. See hard disk Platter. One of the individual metal data storage disks within a hard disk drive. Most hard disks have from two to eight platters. See the illustration. See also hard disk.Software. Computer programs; instructions that make hardware work. Two main types of software are system software (operating systems), which controls the workings of the computer, and applications, such as word processing programs, spreadsheets, and databases, which perform the tasks for which people use computers. Two additional categories, which are neither system nor application software but contain elements of both, are network software, which enables groups of computers to communicate, and language software, which provides programmers with the tools they need to write programs. In addition to these task-based categories, several types of software are described based on their method of distribution. These include packaged software (canned programs), sold primarily through retail outlets; freeware and public domain software, which are distributed free of charge; shareware, which is also distributed free of charge; although users are requested to pay a small registration fee for continued use of the program; and vaporware, software that is announced by a company or individuals but either never makes it to market or is very late. See also application, canned software, freeware, network software, operating system, shareware, system software, vaporware, Compare firmware, hardware, liveware." 9. On the basis of the above dictionary meanings it becomes clear that a software is a computer programme. It consists of instructions that make hardware work. There are two types of softwares, namely, system software which controls the working of the computer and application software such as word processing programmes, databases etc., which perform the tasks for which we use computers. In addition, we now have network software which enables groups of computers to communicate, and language software which provides programmers with the tools with which they write programmes. We also have what is called as packaged softwares which are sold through retail outlets. In the present case, the respondent imported laptops containing preloaded HDD. The said drives were preloaded with operating systems (software), which, as stated above, controls the working of the computer. The value of the laptop depends on the operating system, which is preloaded. The computer cannot open without the operating system. The laptop without an operating system is like an empty building. At this stage, it may be clarified that the operating system can also be imported as a packaged software which is like an accessory and which in the present case is classified by the department under CTH 85.24. However, a preloaded operating system recorded on HDD is an integral part of the laptop (unit). Such preloaded operating system on the HDD forms an integral part of the laptop. It is important to note that laptop as a stand-alone unit is classifiable under CTH 84.71. A laptop is a small portable Personal Computer (in short PC). It runs either on battery or electricity. Laptop has a screen and a small key board. Most of the laptops run on the same software as their desktop counterparts. Most of the laptops accept floppy disks, CD ROM Drives, External or Internal Modem etc. A notebook computer is a laptop. It is a machine. A CD or a floppy disk is a peripheral.10. Applying the above tests to the facts of the present case, we are of the view that preloaded operating system recorded in HDD in the laptop (which is the item of import) forms an integral part of the laptop. What was imported in the present case was a laptop as a stand alone item (unit). Present dispute relates to the transaction value of the unit. An importer who buys a laptop containing an operating system pays for the laptop as a unit. As stated above, without the operating system, like Windows, the laptop cannot work. The computer cannot open without operating system. In the present case, the respondent has not only imported laptops, it has also imported HDDs on which the operating system was recorded (packaged software) which has been classified by the Department under CTH 85.24. However, when a laptop is imported with in-built preloaded operating system recorded on HDD the said item forms an integral part of the laptop (computer system) and in which case the Department is right in treating the laptop as one single unit imported by the respondent. The Department has rightly classified the laptop as a unit under CTH 84.71, quoted above.11. Before concluding it may be pointed out that in none of the decisions cited on behalf of the respondent, the question raised in the present dispute was ever raised. Although laptop is similar PC, the former is more compact. It cannot be assembled as easily as PC. In the present case, the Department has rightly taken the value of the laptop as a unit and it has given the deduction for the value of the software. There is no error in the computation, particularly, when the respondent has refused to give the value of the software to the adjudicating authority despite being called upon to do so. ### Response: 1 ### Explanation: 8. To answer the above controversy meaning of the words software, hard disk and platter need to be noted (See: Computer Dictionary by Microsoft - Fifth Edition at pp.489, 246 and 408disk. A device containing one or more inflexible platters coated with material in which data can be recorded magnetically, together with their read/write heads, the head-positioning mechanism, and the spindly motor in a sealed case that protects against outside contaminants. The protected environment allows the head to fly 10 to 25 millionths of an inch above the surface of a platter rotating typically at 3600 to 7200 rpm; therefore, much more data can be stored and accessed much more quickly than on a floppy disk. Most hard disks contain from two to eight platters. See the illustration. Also called: hard disk drive. Hard disk drive n. See hard disk Platter. One of the individual metal data storage disks within a hard disk drive. Most hard disks have from two to eight platters. See the illustration. See also hard disk.Software. Computer programs; instructions that make hardware work. Two main types of software are system software (operating systems), which controls the workings of the computer, and applications, such as word processing programs, spreadsheets, and databases, which perform the tasks for which people use computers. Two additional categories, which are neither system nor application software but contain elements of both, are network software, which enables groups of computers to communicate, and language software, which provides programmers with the tools they need to write programs. In addition to these task-based categories, several types of software are described based on their method of distribution. These include packaged software (canned programs), sold primarily through retail outlets; freeware and public domain software, which are distributed free of charge; shareware, which is also distributed free of charge; although users are requested to pay a small registration fee for continued use of the program; and vaporware, software that is announced by a company or individuals but either never makes it to market or is very late. See also application, canned software, freeware, network software, operating system, shareware, system software, vaporware, Compare firmware, hardware, liveware.On the basis of the above dictionary meanings it becomes clear that a software is a computer programme. It consists of instructions that make hardware work. There are two types of softwares, namely, system software which controls the working of the computer and application software such as word processing programmes, databases etc., which perform the tasks for which we use computers. In addition, we now have network software which enables groups of computers to communicate, and language software which provides programmers with the tools with which they write programmes. We also have what is called as packaged softwares which are sold through retail outlets. In the present case, the respondent imported laptops containing preloaded HDD. The said drives were preloaded with operating systems (software), which, as stated above, controls the working of the computer. The value of the laptop depends on the operating system, which is preloaded. The computer cannot open without the operating system. The laptop without an operating system is like an empty building. At this stage, it may be clarified that the operating system can also be imported as a packaged software which is like an accessory and which in the present case is classified by the department under CTH 85.24. However, a preloaded operating system recorded on HDD is an integral part of the laptop (unit). Such preloaded operating system on the HDD forms an integral part of the laptop. It is important to note that laptop as a stand-alone unit is classifiable under CTH 84.71. A laptop is a small portable Personal Computer (in short PC). It runs either on battery or electricity. Laptop has a screen and a small key board. Most of the laptops run on the same software as their desktop counterparts. Most of the laptops accept floppy disks, CD ROM Drives, External or Internal Modem etc. A notebook computer is a laptop. It is a machine. A CD or a floppy disk is a peripheral.10. Applying the above tests to the facts of the present case, we are of the view that preloaded operating system recorded in HDD in the laptop (which is the item of import) forms an integral part of the laptop. What was imported in the present case was a laptop as a stand alone item (unit). Present dispute relates to the transaction value of the unit. An importer who buys a laptop containing an operating system pays for the laptop as a unit. As stated above, without the operating system, like Windows, the laptop cannot work. The computer cannot open without operating system. In the present case, the respondent has not only imported laptops, it has also imported HDDs on which the operating system was recorded (packaged software) which has been classified by the Department under CTH 85.24. However, when a laptop is imported with in-built preloaded operating system recorded on HDD the said item forms an integral part of the laptop (computer system) and in which case the Department is right in treating the laptop as one single unit imported by the respondent. The Department has rightly classified the laptop as a unit under CTH 84.71, quoted above.11. Before concluding it may be pointed out that in none of the decisions cited on behalf of the respondent, the question raised in the present dispute was ever raised. Although laptop is similar PC, the former is more compact. It cannot be assembled as easily as PC. In the present case, the Department has rightly taken the value of the laptop as a unit and it has given the deduction for the value of the software. There is no error in the computation, particularly, when the respondent has refused to give the value of the software to the adjudicating authority despite being called upon to do so.

Barauni Refinery Pragatisheel Shramik Parishad Vs. Indian Oil Corporation Ltd

award in a case where a notification has been issued under sub-section (3-A) of Section 10-A or award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on -(a) all parties to the industrial dispute;(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, Arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part." * It may be seen on a plain reading of sub-sections (1) and (3) of Section 18 that settlements are divided into two categories, namely, (i) those arrived at outside the conciliation proceedings and (ii) those arrived at in the course of conciliation proceedings. A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has extended application since it is binding on all parties to the industrial dispute, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. Therefore, a settlement arrived at in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. To that extent it departs from the ordinary law of contract. The object obviously is to uphold the sanctity of settlements reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minority union from scuttling the settlement. There is an underlying assumption that a settlement reached with the help of the Conciliation Officer must be fair and reasonable and can, therefore, safely be made binding not only on the workmen belonging to the union signing the settlement but also on others. That is why a settlement arrived at in the course of conciliation proceedings is put on par with an award made by an adjudicatory authority. The High Court was, therefore, right in coming to the conclusion that the settlement dated August 4, 1983 was binding on all the workmen of the Barauni Refinery including the members of Petroleum and Chemical Mazdoor Union. 9. The settlement does not make any specific mention about the age of retirement. Clause 19 of the settlement, however, provides that such terms and conditions of service as are not changed under this settlement shall remain unchanged and operative for the period of the settlement. The age of retirement prescribed by clause 20 of the certified Standing Orders was undoubtedly a condition of service which was kept intact by clause 19 of the settlement. The provisions of the Standing Orders Act to which we have adverted earlier clearly show that the purpose of the certified Standing Orders is to define with sufficient precision the conditions of employment of workman and to acquaint them with the same. The charter of demands contained several matters touching the conditions of service including the one concerning the upward revision of the age of retirement. After deliberation certain conditions were altered while in respect of others no change was considered necessary. In the case of the latter clause 19 was introduced making it clear that the conditions of service which have not been changed shall remain unchanged, i.e. they will continue as they are. That means that the demands in respect of revision of the age of retirement was not acceded to. 10. By clause 21 of the settlement extracted earlier the Union agreed that during the period of the operation of the settlement they shall not raise any demand which would throw an additional financial burden on the management, other than bonus. Of course the proviso to that clause exempted matters covered under Section 9-A of the Industrial Disputes Act from the application of the said clause. However, Section 9-A is not attracted in the present case. The High Court was, therefore, right in observing : "when the settlement had been arrived at between the workmen and the company and which is still in force, the parties are to remain bound by the terms of the said settlement. It is only after the settlement is terminated that the parties can raise any dispute for fresh adjudication." * The argument that the upward revision of the age of superannuation will not entail any financial burden cannot be accepted. The High Court rightly points out : "workmen who remain in service for a longer period have to be paid a larger amount by way of salary, bonus and gratuity than workmen who may newly join in place of retiring men". The High Court was, therefore, right in concluding that the upward revision of the age of superannuation would throw an additional financial burden on the management in violation of clause 21 of the settlement. Therefore, during the operation of the settlement it was not open to the workmen to demand a change in clause 20 of the certified Standing Orders because any upward revision of the age of superannuation would come in conflict with clauses 19 and 21 of the settlement. We are, therefore, of the opinion that the conclusion reached by the High Court is unassailable. 11. In view of the above

0[ds]8. Since the High Court has answered the first point in the affirmative i.e. in favour of the workmen, we do not consider it necessary to deal with that aspect of the matter and would confine ourselves to the second aspect which concerns the binding character of the settlement. Section 2(p) ofthe Industrial Disputes Act, 1947 defines a settlement as a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the officer authorised in this behalf by the appropriate government and the Conciliation Officer. Section 4 provides for the appointment of Conciliation Officer by the appropriate government. Section 12(1) says that where any industrial dispute exists or is apprehended the Conciliation Officer may, or where the dispute relates to a public utility service and a notice under Section 22 has been given, shall, hold conciliation proceedings in the prescribed manner. Sub-section (2) of Section 12 casts a duty on the Conciliation Officer to investigate the dispute and all matters connected therewith with a view to inducing the parties to arrive at a fair and amicable settlement of the dispute. If such a settlement is arrived at in the course of conciliation proceedings, sub-section (3) requires the Conciliation Officer to send a report thereof to the appropriate government together with the memorandum of settlement signed by the parties to the dispute. Section 18(1) says that a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of the conciliation proceedings shall be binding on the parties to the agreement.The settlement does not make any specific mention about the age of retirement. Clause 19 of the settlement, however, provides that such terms and conditions of service as are not changed under this settlement shall remain unchanged and operative for the period of the settlement. The age of retirement prescribed by clause 20 of the certified Standing Orders was undoubtedly a condition of service which was kept intact by clause 19 of the settlement. The provisions of the Standing Orders Act to which we have adverted earlier clearly show that the purpose of the certified Standing Orders is to define with sufficient precision the conditions of employment of workman and to acquaint them with the same. The charter of demands contained several matters touching the conditions of service including the one concerning the upward revision of the age of retirement. After deliberation certain conditions were altered while in respect of others no change was considered necessary. In the case of the latter clause 19 was introduced making it clear that the conditions of service which have not been changed shall remain unchanged, i.e. they will continue as they are. That means that the demands in respect of revision of the age of retirement was not accededBy clause 21 of the settlement extracted earlier the Union agreed that during the period of the operation of the settlement they shall not raise any demand which would throw an additional financial burden on the management, other than bonus. Of course the proviso to that clause exempted matters covered under Section 9-A of the Industrial Disputes Act from the application of the said clause. However, Section 9-A is not attracted in the present case. The High Court was, therefore, right in observingthe settlement had been arrived at between the workmen and the company and which is still in force, the parties are to remain bound by the terms of the said settlement. It is only after the settlement is terminated that the parties can raise any dispute for fresh adjudication."argument that the upward revision of the age of superannuation will not entail any financial burden cannot be accepted. The High Court rightly points out : "workmen who remain in service for a longer period have to be paid a larger amount by way of salary, bonus and gratuity than workmen who may newly join in place of retiring men". The High Court was, therefore, right in concluding that the upward revision of the age of superannuation would throw an additional financial burden on the management in violation of clause 21 of the settlement. Therefore, during the operation of the settlement it was not open to the workmen to demand a change in clause 20 of the certified Standing Orders because any upward revision of the age of superannuation would come in conflict with clauses 19 and 21 of the settlement. We are, therefore, of the opinion that the conclusion reached by the High Court is unassailable

### Instruction: Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding. ### Input: award in a case where a notification has been issued under sub-section (3-A) of Section 10-A or award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on -(a) all parties to the industrial dispute;(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, Arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part." * It may be seen on a plain reading of sub-sections (1) and (3) of Section 18 that settlements are divided into two categories, namely, (i) those arrived at outside the conciliation proceedings and (ii) those arrived at in the course of conciliation proceedings. A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has extended application since it is binding on all parties to the industrial dispute, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. Therefore, a settlement arrived at in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. To that extent it departs from the ordinary law of contract. The object obviously is to uphold the sanctity of settlements reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minority union from scuttling the settlement. There is an underlying assumption that a settlement reached with the help of the Conciliation Officer must be fair and reasonable and can, therefore, safely be made binding not only on the workmen belonging to the union signing the settlement but also on others. That is why a settlement arrived at in the course of conciliation proceedings is put on par with an award made by an adjudicatory authority. The High Court was, therefore, right in coming to the conclusion that the settlement dated August 4, 1983 was binding on all the workmen of the Barauni Refinery including the members of Petroleum and Chemical Mazdoor Union. 9. The settlement does not make any specific mention about the age of retirement. Clause 19 of the settlement, however, provides that such terms and conditions of service as are not changed under this settlement shall remain unchanged and operative for the period of the settlement. The age of retirement prescribed by clause 20 of the certified Standing Orders was undoubtedly a condition of service which was kept intact by clause 19 of the settlement. The provisions of the Standing Orders Act to which we have adverted earlier clearly show that the purpose of the certified Standing Orders is to define with sufficient precision the conditions of employment of workman and to acquaint them with the same. The charter of demands contained several matters touching the conditions of service including the one concerning the upward revision of the age of retirement. After deliberation certain conditions were altered while in respect of others no change was considered necessary. In the case of the latter clause 19 was introduced making it clear that the conditions of service which have not been changed shall remain unchanged, i.e. they will continue as they are. That means that the demands in respect of revision of the age of retirement was not acceded to. 10. By clause 21 of the settlement extracted earlier the Union agreed that during the period of the operation of the settlement they shall not raise any demand which would throw an additional financial burden on the management, other than bonus. Of course the proviso to that clause exempted matters covered under Section 9-A of the Industrial Disputes Act from the application of the said clause. However, Section 9-A is not attracted in the present case. The High Court was, therefore, right in observing : "when the settlement had been arrived at between the workmen and the company and which is still in force, the parties are to remain bound by the terms of the said settlement. It is only after the settlement is terminated that the parties can raise any dispute for fresh adjudication." * The argument that the upward revision of the age of superannuation will not entail any financial burden cannot be accepted. The High Court rightly points out : "workmen who remain in service for a longer period have to be paid a larger amount by way of salary, bonus and gratuity than workmen who may newly join in place of retiring men". The High Court was, therefore, right in concluding that the upward revision of the age of superannuation would throw an additional financial burden on the management in violation of clause 21 of the settlement. Therefore, during the operation of the settlement it was not open to the workmen to demand a change in clause 20 of the certified Standing Orders because any upward revision of the age of superannuation would come in conflict with clauses 19 and 21 of the settlement. We are, therefore, of the opinion that the conclusion reached by the High Court is unassailable. 11. In view of the above ### Response: 0 ### Explanation: 8. Since the High Court has answered the first point in the affirmative i.e. in favour of the workmen, we do not consider it necessary to deal with that aspect of the matter and would confine ourselves to the second aspect which concerns the binding character of the settlement. Section 2(p) ofthe Industrial Disputes Act, 1947 defines a settlement as a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the officer authorised in this behalf by the appropriate government and the Conciliation Officer. Section 4 provides for the appointment of Conciliation Officer by the appropriate government. Section 12(1) says that where any industrial dispute exists or is apprehended the Conciliation Officer may, or where the dispute relates to a public utility service and a notice under Section 22 has been given, shall, hold conciliation proceedings in the prescribed manner. Sub-section (2) of Section 12 casts a duty on the Conciliation Officer to investigate the dispute and all matters connected therewith with a view to inducing the parties to arrive at a fair and amicable settlement of the dispute. If such a settlement is arrived at in the course of conciliation proceedings, sub-section (3) requires the Conciliation Officer to send a report thereof to the appropriate government together with the memorandum of settlement signed by the parties to the dispute. Section 18(1) says that a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of the conciliation proceedings shall be binding on the parties to the agreement.The settlement does not make any specific mention about the age of retirement. Clause 19 of the settlement, however, provides that such terms and conditions of service as are not changed under this settlement shall remain unchanged and operative for the period of the settlement. The age of retirement prescribed by clause 20 of the certified Standing Orders was undoubtedly a condition of service which was kept intact by clause 19 of the settlement. The provisions of the Standing Orders Act to which we have adverted earlier clearly show that the purpose of the certified Standing Orders is to define with sufficient precision the conditions of employment of workman and to acquaint them with the same. The charter of demands contained several matters touching the conditions of service including the one concerning the upward revision of the age of retirement. After deliberation certain conditions were altered while in respect of others no change was considered necessary. In the case of the latter clause 19 was introduced making it clear that the conditions of service which have not been changed shall remain unchanged, i.e. they will continue as they are. That means that the demands in respect of revision of the age of retirement was not accededBy clause 21 of the settlement extracted earlier the Union agreed that during the period of the operation of the settlement they shall not raise any demand which would throw an additional financial burden on the management, other than bonus. Of course the proviso to that clause exempted matters covered under Section 9-A of the Industrial Disputes Act from the application of the said clause. However, Section 9-A is not attracted in the present case. The High Court was, therefore, right in observingthe settlement had been arrived at between the workmen and the company and which is still in force, the parties are to remain bound by the terms of the said settlement. It is only after the settlement is terminated that the parties can raise any dispute for fresh adjudication."argument that the upward revision of the age of superannuation will not entail any financial burden cannot be accepted. The High Court rightly points out : "workmen who remain in service for a longer period have to be paid a larger amount by way of salary, bonus and gratuity than workmen who may newly join in place of retiring men". The High Court was, therefore, right in concluding that the upward revision of the age of superannuation would throw an additional financial burden on the management in violation of clause 21 of the settlement. Therefore, during the operation of the settlement it was not open to the workmen to demand a change in clause 20 of the certified Standing Orders because any upward revision of the age of superannuation would come in conflict with clauses 19 and 21 of the settlement. We are, therefore, of the opinion that the conclusion reached by the High Court is unassailable

Rustamji Nasarvanji Danger Vs. Joram Kunverji Ganatra And Ors

from municipality is not a disqualification for becoming or continuing as a councillor, if the councillor "acts as a councillor" in getting such lease from the municipality, he shall be disabled from continuing to be a councillor. The president of the municipality being a council, lot, this provision also applies to him. The question therefore is whether the appellant in this case acted as a councillor in the matter of allotment of the land to him.Section 275 of the Act authorises the municipality to make bylaws not inconsistent with the Act. The Anjar municipality has framed by-laws regulating the conditions on which permission may be given for the temporary occupation of public streets or land. An English translation of by-law 4 of these by-laws which are in Gujarati reads:"Permission will be given for the, use of public road or land within the municipal limits but not of private land for temporary period for the matters mentioned in Schedule 1 hereto on advance payment of fee as stated in the Schedule.Any person who intends to occupy such land shall have to make a written application to the chief officer. But to give such permission or not shall be within the absolute discretion of the chief officer."Schedule 1 mentioned here prescribes the fees payable by the applicant on such permission being granted. The chief officer in this case permitted the appellant to occupy the land in question in exercise of the power given to him by this by-law. The High Court found that the appellant acted as a councillor and President of the municipality in having the p lot allotted to him mainly upon the provisions of sections 49 and 45 of the Act. Section 49 defines the power and duties of the chief officer. Sub-section (1)(a) of section 49 which is relevant in this context is as follows:"49. Power and duties of chief officer.- (1) The chief officer shall -(a) subject to the general control of the president watch over the financial and executive administration of the municipality and perform all the duties and exercise all the powers specifically imposed or conferred upon him by, or delegated to him under, this Act."3. Section 45 enumerates the functions of the President; one of the functions is to exercise supervision and control over the acts and proceedings of all officers and servants of the municipality in matters of executive administration. The High Court after referring to these provisions observed that the chief officer being under the general control of the president in all matters of executive , administration, must have felt himself bound to grant the appellants application. The High Court referred to an earlier application for the plot made by one Karan Kanji which the chief officer had rejected. There is also a finding that by-law 4 did not permit the use of the plot for the purpose for which the appellant had applied and that the chief officer went out of his way to help his president. The High Court concluded that if the appellant had not been a councillor of the municipality and its president, his application would have met with the same fate as Karan Kanjis.The legality of the chief officers order is not however an issue in this case, and the question whether or not the intended use of the plot by the appellant was beyond the scope of by-law 4 need not detain us. According to the High Court it was only because the appellant held the office of president of the municipality that the chief officer allowed his application. This may or may not be true, but it is not a matter relevant to the real question that arises for consideration in this case. Section 38(1)(b)(i) disables a councillor from continuing as such if he "acts as a councillor" in the matter of allotment of any land to himself, there is no bar in the Act to a councillor getting a lease of the land from the municipality as would appear from section 11(3)(A)(i). It is only in a case where he acts as a councillor in getting the lease that he is disqualified. There is nothing in the record of this case to show that the appellant had acted as a councillor to have the plot allotted to himself. Even if the chief officer was influenced by the fact that the applicant before him was president of the municipality, that would not attract section 38(1)(b)(i). It is true that section 45 confers a general power of supervision and control on the president over the acts of all officers of the municipality and section 49, which enumerates the power and duties of chief officer, also makes him subject to the general control of the president in the discharge of these powers. But the general power of supervision conferred on the president does not, in our opinion, imply that in every case where he applies for a lease, which he is entitled to do as section 11(3)(A) (i) indicates, he should be deemed to have "acted" within the meaning of section 38(1)(b), otherwise, the president of a municipality under this Act, by virtue of his office would be disentitled altogether from applying for permission to use any land of the municipality. If this were the correct position then there was no point in limiting the disqualification contemplated in section 38(1) (b) (i) to cases where the councillor acts as a councillor. The words "acts as a councillor" cannot be treated as redundant. In our view the councillor acts as a councillor within the meaning of section 38(1)(b) when he performs any of the functions which under the Act he is required to perform. An allegation of misuse of his position against a councillor would not attract the disability under section 38(1) (b)(i) unless it was shown further that he has acted as a councillor in the matter. In view of the clear provision of section 38(1)(b)(i) we do not find it possible to support the impugned judgment.4.

1[ds]Section 45 enumerates the functions of the President; one of the functions is to exercise supervision and control over the acts and proceedings of all officers and servants of the municipality in matters of executive administration. The High Court after referring to these provisions observed that the chief officer being under the general control of the president in all matters of executive , administration, must have felt himself bound to grant the appellants application. The High Court referred to an earlier application for the plot made by one Karan Kanji which the chief officer had rejected. There is also a finding that by-law 4 did not permit the use of the plot for the purpose for which the appellant had applied and that the chief officer went out of his way to help his president. The High Court concluded that if the appellant had not been a councillor of the municipality and its president, his application would have met with the same fate as Karan Kanjis.The legality of the chief officers order is not however an issue in this case, and the question whether or not the intended use of the plot by the appellant was beyond the scope of by-law 4 need not detain us. According to the High Court it was only because the appellant held the office of president of the municipality that the chief officer allowed his application. This may or may not be true, but it is not a matter relevant to the real question that arises for consideration in this case. Section 38(1)(b)(i) disables a councillor from continuing as such if he "acts as a councillor" in the matter of allotment of any land to himself, there is no bar in the Act to a councillor getting a lease of the land from the municipality as would appear from section 11(3)(A)(i). It is only in a case where he acts as a councillor in getting the lease that he is disqualified. There is nothing in the record of this case to show that the appellant had acted as a councillor to have the plot allotted to himself. Even if the chief officer was influenced by the fact that the applicant before him was president of the municipality, that would not attract section 38(1)(b)(i). It is true that section 45 confers a general power of supervision and control on the president over the acts of all officers of the municipality and section 49, which enumerates the power and duties of chief officer, also makes him subject to the general control of the president in the discharge of these powers. But the general power of supervision conferred on the president does not, in our opinion, imply that in every case where he applies for a lease, which he is entitled to do as section 11(3)(A) (i) indicates, he should be deemed to have "acted" within the meaning of section 38(1)(b), otherwise, the president of a municipality under this Act, by virtue of his office would be disentitled altogether from applying for permission to use any land of the municipality. If this were the correct position then there was no point in limiting the disqualification contemplated in section 38(1) (b) (i) to cases where the councillor acts as a councillor. The words "acts as a councillor" cannot be treated as redundant. In our view the councillor acts as a councillor within the meaning of section 38(1)(b) when he performs any of the functions which under the Act he is required to perform. An allegation of misuse of his position against a councillor would not attract the disability under section 38(1) (b)(i) unless it was shown further that he has acted as a councillor in the matter. In view of the clear provision of section 38(1)(b)(i) we do not find it possible to support the impugned judgment.

### Instruction: Forecast the likely verdict of the case (granting (1) or denying (0) the appeal) and then rationalize your prediction by pinpointing and explaining pivotal sentences in the case document. ### Input: from municipality is not a disqualification for becoming or continuing as a councillor, if the councillor "acts as a councillor" in getting such lease from the municipality, he shall be disabled from continuing to be a councillor. The president of the municipality being a council, lot, this provision also applies to him. The question therefore is whether the appellant in this case acted as a councillor in the matter of allotment of the land to him.Section 275 of the Act authorises the municipality to make bylaws not inconsistent with the Act. The Anjar municipality has framed by-laws regulating the conditions on which permission may be given for the temporary occupation of public streets or land. An English translation of by-law 4 of these by-laws which are in Gujarati reads:"Permission will be given for the, use of public road or land within the municipal limits but not of private land for temporary period for the matters mentioned in Schedule 1 hereto on advance payment of fee as stated in the Schedule.Any person who intends to occupy such land shall have to make a written application to the chief officer. But to give such permission or not shall be within the absolute discretion of the chief officer."Schedule 1 mentioned here prescribes the fees payable by the applicant on such permission being granted. The chief officer in this case permitted the appellant to occupy the land in question in exercise of the power given to him by this by-law. The High Court found that the appellant acted as a councillor and President of the municipality in having the p lot allotted to him mainly upon the provisions of sections 49 and 45 of the Act. Section 49 defines the power and duties of the chief officer. Sub-section (1)(a) of section 49 which is relevant in this context is as follows:"49. Power and duties of chief officer.- (1) The chief officer shall -(a) subject to the general control of the president watch over the financial and executive administration of the municipality and perform all the duties and exercise all the powers specifically imposed or conferred upon him by, or delegated to him under, this Act."3. Section 45 enumerates the functions of the President; one of the functions is to exercise supervision and control over the acts and proceedings of all officers and servants of the municipality in matters of executive administration. The High Court after referring to these provisions observed that the chief officer being under the general control of the president in all matters of executive , administration, must have felt himself bound to grant the appellants application. The High Court referred to an earlier application for the plot made by one Karan Kanji which the chief officer had rejected. There is also a finding that by-law 4 did not permit the use of the plot for the purpose for which the appellant had applied and that the chief officer went out of his way to help his president. The High Court concluded that if the appellant had not been a councillor of the municipality and its president, his application would have met with the same fate as Karan Kanjis.The legality of the chief officers order is not however an issue in this case, and the question whether or not the intended use of the plot by the appellant was beyond the scope of by-law 4 need not detain us. According to the High Court it was only because the appellant held the office of president of the municipality that the chief officer allowed his application. This may or may not be true, but it is not a matter relevant to the real question that arises for consideration in this case. Section 38(1)(b)(i) disables a councillor from continuing as such if he "acts as a councillor" in the matter of allotment of any land to himself, there is no bar in the Act to a councillor getting a lease of the land from the municipality as would appear from section 11(3)(A)(i). It is only in a case where he acts as a councillor in getting the lease that he is disqualified. There is nothing in the record of this case to show that the appellant had acted as a councillor to have the plot allotted to himself. Even if the chief officer was influenced by the fact that the applicant before him was president of the municipality, that would not attract section 38(1)(b)(i). It is true that section 45 confers a general power of supervision and control on the president over the acts of all officers of the municipality and section 49, which enumerates the power and duties of chief officer, also makes him subject to the general control of the president in the discharge of these powers. But the general power of supervision conferred on the president does not, in our opinion, imply that in every case where he applies for a lease, which he is entitled to do as section 11(3)(A) (i) indicates, he should be deemed to have "acted" within the meaning of section 38(1)(b), otherwise, the president of a municipality under this Act, by virtue of his office would be disentitled altogether from applying for permission to use any land of the municipality. If this were the correct position then there was no point in limiting the disqualification contemplated in section 38(1) (b) (i) to cases where the councillor acts as a councillor. The words "acts as a councillor" cannot be treated as redundant. In our view the councillor acts as a councillor within the meaning of section 38(1)(b) when he performs any of the functions which under the Act he is required to perform. An allegation of misuse of his position against a councillor would not attract the disability under section 38(1) (b)(i) unless it was shown further that he has acted as a councillor in the matter. In view of the clear provision of section 38(1)(b)(i) we do not find it possible to support the impugned judgment.4. ### Response: 1 ### Explanation: Section 45 enumerates the functions of the President; one of the functions is to exercise supervision and control over the acts and proceedings of all officers and servants of the municipality in matters of executive administration. The High Court after referring to these provisions observed that the chief officer being under the general control of the president in all matters of executive , administration, must have felt himself bound to grant the appellants application. The High Court referred to an earlier application for the plot made by one Karan Kanji which the chief officer had rejected. There is also a finding that by-law 4 did not permit the use of the plot for the purpose for which the appellant had applied and that the chief officer went out of his way to help his president. The High Court concluded that if the appellant had not been a councillor of the municipality and its president, his application would have met with the same fate as Karan Kanjis.The legality of the chief officers order is not however an issue in this case, and the question whether or not the intended use of the plot by the appellant was beyond the scope of by-law 4 need not detain us. According to the High Court it was only because the appellant held the office of president of the municipality that the chief officer allowed his application. This may or may not be true, but it is not a matter relevant to the real question that arises for consideration in this case. Section 38(1)(b)(i) disables a councillor from continuing as such if he "acts as a councillor" in the matter of allotment of any land to himself, there is no bar in the Act to a councillor getting a lease of the land from the municipality as would appear from section 11(3)(A)(i). It is only in a case where he acts as a councillor in getting the lease that he is disqualified. There is nothing in the record of this case to show that the appellant had acted as a councillor to have the plot allotted to himself. Even if the chief officer was influenced by the fact that the applicant before him was president of the municipality, that would not attract section 38(1)(b)(i). It is true that section 45 confers a general power of supervision and control on the president over the acts of all officers of the municipality and section 49, which enumerates the power and duties of chief officer, also makes him subject to the general control of the president in the discharge of these powers. But the general power of supervision conferred on the president does not, in our opinion, imply that in every case where he applies for a lease, which he is entitled to do as section 11(3)(A) (i) indicates, he should be deemed to have "acted" within the meaning of section 38(1)(b), otherwise, the president of a municipality under this Act, by virtue of his office would be disentitled altogether from applying for permission to use any land of the municipality. If this were the correct position then there was no point in limiting the disqualification contemplated in section 38(1) (b) (i) to cases where the councillor acts as a councillor. The words "acts as a councillor" cannot be treated as redundant. In our view the councillor acts as a councillor within the meaning of section 38(1)(b) when he performs any of the functions which under the Act he is required to perform. An allegation of misuse of his position against a councillor would not attract the disability under section 38(1) (b)(i) unless it was shown further that he has acted as a councillor in the matter. In view of the clear provision of section 38(1)(b)(i) we do not find it possible to support the impugned judgment.

ASHOK KUMAR Vs. RAJ GUPTA & ORS

time the test of preponderance of probability is too light as that might expose many children to the peril of being illegitimatized. If a court declares that the husband is not the father of his wifes child, without tracing out its real father the fallout on the child is ruinous apart from all the ignominy visiting his mother. The bastardised child, when grows up would be socially ostracised and can easily fall into wayward life. Hence, by way of abundant caution and as a matter of public policy, law cannot afford to allow such consequence befalling an innocent child on the strength of a mere tilting of probability. Its corollary is that the burden of the plaintiff husband should be higher than the standard of preponderance of probabilities. The standard of proof in such cases must at least be of a degree in between the two as to ensure that there was no possibility of the child being conceived through the plaintiff husband. 12. It was also the view of the Court that normal rule of evidence is that the burden is on the party that asserts the positive. But in instances where that is challenged, the burden is shifted to the party, that pleads the negative. Keeping in mind the issue of burden of proof, it would be safe to conclude that in a case like the present, the Courts decision should be rendered only after balancing the interests of the parties, i.e, the quest for truth, and the social and cultural implications involved therein. The possibility of stigmatizing a person as a bastard, the ignominy that attaches to an adult who, in the mature years of his life is shown to be not the biological son of his parents may not only be a heavy cross to bear but would also intrude upon his right of privacy. 13. DNA is unique to an individual (barring twins) and can be used to identify a persons identity, trace familial linkages or even reveal sensitive health information. Whether a person can be compelled to provide a sample for DNA in such matters can also be answered considering the test of proportionality laid down in the unanimous decision of this Court in K.S Puttaswamy v. Union of India 2019 (1) SCC 1 , wherein the right to privacy has been declared a constitutionally protected right in India. The Court should therefore examine the proportionality of the legitimate aims being pursued, i.e whether the same are not arbitrary or discriminatory, whether they may have an adverse impact on the person and that they justify the encroachment upon the privacy and personal autonomy of the person, being subjected to the DNA Test. It cannot be overlooked that in the present case, the application to subject the Plaintiff to a DNA Test is in a declaratory suit and the plaintiff has already adduced evidence and is not interested to produce additional evidence (DNA), to prove his case. It is now the turn of the defendants to adduce their evidence. At this stage, they are asking for subjecting the plaintiff to a DNA test. Questioning the timing of the application the trial Court dismissed the defendants application and we feel that it was the correct order. 14. In the yet to be decided suit, the plaintiff has led evidence through sworn affidavits of the Respondents, his School Leaving Certificates and his Domicile Certificate. Significantly, the respondent No.1, who is one of the 3 siblings (defendants) had declared in her affidavit that the Plaintiff was raised as a son by her parents. Therefore, the nature of further evidence to be adduced by the plaintiff (by providing DNA sample), need not be ordered by the Court at the instance of the other side. In such kind of litigation where the interest will have to be balanced and the test of eminent need is not satisfied our considered opinion is that the protection of the right to privacy of the Plaintiff should get precedence. 15. Having answered these questions, additional issue to be resolved is whether refusal to undergo DNA Testing amounts to other evidence or in other words, can an adverse inference be drawn in such situation. In Sharda vs. Dharmpal 2003(4) SCC 493 a three judges bench in the opinion written by Justice S.B. Sinha rightly observed in paragraph 79 that if despite an order passed by the court, a person refuses to submit himself to such medical examination, a strong case for drawing an adverse inference can be made out against the person within the ambit of Section 114 of the Evidence Act. The plaintiff here has adduced his documentary evidence and is disinclined to produce further evidence. He is conscious of the adverse consequences of his refusal but is standing firm in refusing to undergo the DNA Test. His suit eventually will be decided on the nature and quality of the evidence adduced. The issue of drawing adverse inference may also arise based on the refusal. The Court is to weigh both sides evidence with all attendant circumstances and then reach a verdict in the Suit and this is not the kind of case where a DNA test of the plaintiff is without exception. 16. The respondent cannot compel the plaintiff to adduce further evidence in support of the defendants case. In any case, it is the burden on a litigating party to prove his case adducing evidence in support of his plea and the court should not compel the party to prove his case in the manner, suggested by the contesting party. 17. The appellant (plaintiff) as noted earlier, has brought on record the evidence in his support which in his assessment adequately establishes his case. His suit will succeed or fall with those evidence, subject of course to the evidence adduced by the other side. When the plaintiff is unwilling to subject himself to the DNA test, forcing him to undergo one would impinge on his personal liberty and his right to privacy.

1[ds]7. The pleadings were exchanged quite early in the Civil Suit No. 53/2013, but only after closure of the plaintiffs evidence, the defendants filed application on 19.4.2017 for subjecting the plaintiff to a DNA test.The timing of the application is equally relevant. The plaintiff has already led evidence from his side to prove relationship between the parties and at this stage whether the High Court should have directed the plaintiff to undergo the DNA test.8. This court in Banarsi Dass V. Teeku Dutta 2005(4) SCC 449 had declared that DNA test is not to be directed as a matter of routine but only in deserving cases. A petition was filed in that case for grant of succession certificate in respect of properties of the deceased. The Plaintiff claimed to be the deceaseds daughter and the only Class 1 legal heir, under the Hindu Succession Act, 1956. The deceased had died intestate, leaving behind 5 brothers. The Delhi High Court denied one of the brothers applications for conducting the DNA test of the daughter to establish her paternity. Justice Arijit Pasayat upheld the decision of the High Court in the following passage of the judgment: -10. In matters of this kind the court must have regard to Section 112 of the Evidence Act. This section is based on the well-known maxim pater is est quem nuptiae demonstrant (he is the father whom the marriage indicates). The presumption of legitimacy is this, that a child born of a married woman is deemed to be legitimate, it throws on the person who is interested in making out the illegitimacy, the whole burden of proving it. The law presumes both that a marriage ceremony is valid, and that every person is legitimate. Marriage or filiation (parentage) may be presumed, the law in general presuming against vice and immorality.9. In Bhabani Prasad Jena vs. Convenor Secretary, Orissa State Commission for Women &Anr. (2010) 8 SCC 633 , Justice R.M. Lodha, while reconciling two earlier decisions of this Court on the point, had rightfully prescribed that;23. There is no conflict in the two decisions of this Court, namely, Goutam Kundu [(1993) 3 SCC 418 : 1993 SCC (Cri) 928 ] and Sharda [(2003) 4 SCC 493] . In Goutam Kundu [(1993) 3 SCC 418 : 1993 SCC (Cri) 928 ] it has been laid down that courts in India cannot order blood test as a matter of course and such prayers cannot be granted to have roving inquiry; there must be strong prima facie case and the court must carefully examine as to what would be the consequence of ordering the blood test. In Sharda [(2003) 4 SCC 493] while concluding that a matrimonial court has power to order a person to undergo a medical test, it was reiterated that the court should exercise such a power if the applicant has a strong prima facie case and there is sufficient material before the court. Obviously, therefore, any order for DNA test can be given by the court only if a strong prima facie case is made out for such a course.The learned Judge while noting the sensitivities involved with the issue of ordering a DNA test, opined that the discretion of the court must be exercised after balancing the interests of the parties and whether a DNA Test is needed for a just decision in the matter and such a direction satisfies the test of eminent need.This Court, in Kamti Devi v. Poshi Ram 2001 (5) SCC 311 , while determining the question of standard of proof required to displace the presumption in favor of paternity of child born during subsistence of valid marriage held:10. We may remember that Section 112 of the Evidence Act was enacted at a time when the modern scientific advancements with deoxyribonucleic acid (DNA) as well as ribonucleic acid (RNA) tests were not even in contemplation of the legislature. The result of a genuine DNA test is said to be scientifically accurate. But even that is not enough to escape from the conclusiveness of Section 112 of the Act e.g. if a husband and wife were living together during the time of conception but the DNA test revealed that the child was not born to the husband, the conclusiveness in law would remain irrebuttable. This may look hard from the point of view of the husband who would be compelled to bear the fatherhood of a child of which he may be innocent. But even in such a case the law leans in favor of the innocent child from being bastardised if his mother and her spouse were living together during the time of conception. Hence the question regarding the degree of proof of non-access for rebutting the conclusiveness must be answered in the light of what is meant by access or non-access as delineated above.11.2. The presumption of legitimacy of a child can only be displaced by strong preponderance of evidence, and not merely by balance of probabilities. The material portion of the Courts opinion is produced herein below:11 …..But at the same time the test of preponderance of probability is too light as that might expose many children to the peril of being illegitimatized. If a court declares that the husband is not the father of his wifes child, without tracing out its real father the fallout on the child is ruinous apart from all the ignominy visiting his mother. The bastardised child, when grows up would be socially ostracised and can easily fall into wayward life. Hence, by way of abundant caution and as a matter of public policy, law cannot afford to allow such consequence befalling an innocent child on the strength of a mere tilting of probability. Its corollary is that the burden of the plaintiff husband should be higher than the standard of preponderance of probabilities. The standard of proof in such cases must at least be of a degree in between the two as to ensure that there was no possibility of the child being conceived through the plaintiff husband.12. It was also the view of the Court that normal rule of evidence is that the burden is on the party that asserts the positive. But in instances where that is challenged, the burden is shifted to the party, that pleads the negative. Keeping in mind the issue of burden of proof, it would be safe to conclude that in a case like the present, the Courts decision should be rendered only after balancing the interests of the parties, i.e, the quest for truth, and the social and cultural implications involved therein. The possibility of stigmatizing a person as a bastard, the ignominy that attaches to an adult who, in the mature years of his life is shown to be not the biological son of his parents may not only be a heavy cross to bear but would also intrude upon his right of privacy.13. DNA is unique to an individual (barring twins) and can be used to identify a persons identity, trace familial linkages or even reveal sensitive health information. Whether a person can be compelled to provide a sample for DNA in such matters can also be answered considering the test of proportionality laid down in the unanimous decision of this Court in K.S Puttaswamy v. Union of India 2019 (1) SCC 1 , wherein the right to privacy has been declared a constitutionally protected right in India. The Court should therefore examine the proportionality of the legitimate aims being pursued, i.e whether the same are not arbitrary or discriminatory, whether they may have an adverse impact on the person and that they justify the encroachment upon the privacy and personal autonomy of the person, being subjected to the DNA Test. It cannot be overlooked that in the present case, the application to subject the Plaintiff to a DNA Test is in a declaratory suit and the plaintiff has already adduced evidence and is not interested to produce additional evidence (DNA), to prove his case. It is now the turn of the defendants to adduce their evidence. At this stage, they are asking for subjecting the plaintiff to a DNA test. Questioning the timing of the application the trial Court dismissed the defendants application and we feel that it was the correct order.14. In the yet to be decided suit, the plaintiff has led evidence through sworn affidavits of the Respondents, his School Leaving Certificates and his Domicile Certificate. Significantly, the respondent No.1, who is one of the 3 siblings (defendants) had declared in her affidavit that the Plaintiff was raised as a son by her parents. Therefore, the nature of further evidence to be adduced by the plaintiff (by providing DNA sample), need not be ordered by the Court at the instance of the other side. In such kind of litigation where the interest will have to be balanced and the test of eminent need is not satisfied our considered opinion is that the protection of the right to privacy of the Plaintiff should get precedence.In Sharda vs. Dharmpal 2003(4) SCC 493 a three judges bench in the opinion written by Justice S.B. Sinha rightly observed in paragraph 79 that if despite an order passed by the court, a person refuses to submit himself to such medical examination, a strong case for drawing an adverse inference can be made out against the person within the ambit of Section 114 of the Evidence Act. The plaintiff here has adduced his documentary evidence and is disinclined to produce further evidence. He is conscious of the adverse consequences of his refusal but is standing firm in refusing to undergo the DNA Test. His suit eventually will be decided on the nature and quality of the evidence adduced. The issue of drawing adverse inference may also arise based on the refusal. The Court is to weigh both sides evidence with all attendant circumstances and then reach a verdict in the Suit and this is not the kind of case where a DNA test of the plaintiff is without exception.16. The respondent cannot compel the plaintiff to adduce further evidence in support of the defendants case. In any case, it is the burden on a litigating party to prove his case adducing evidence in support of his plea and the court should not compel the party to prove his case in the manner, suggested by the contesting party.17. The appellant (plaintiff) as noted earlier, has brought on record the evidence in his support which in his assessment adequately establishes his case. His suit will succeed or fall with those evidence, subject of course to the evidence adduced by the other side. When the plaintiff is unwilling to subject himself to the DNA test, forcing him to undergo one would impinge on his personal liberty and his right to privacy.

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: time the test of preponderance of probability is too light as that might expose many children to the peril of being illegitimatized. If a court declares that the husband is not the father of his wifes child, without tracing out its real father the fallout on the child is ruinous apart from all the ignominy visiting his mother. The bastardised child, when grows up would be socially ostracised and can easily fall into wayward life. Hence, by way of abundant caution and as a matter of public policy, law cannot afford to allow such consequence befalling an innocent child on the strength of a mere tilting of probability. Its corollary is that the burden of the plaintiff husband should be higher than the standard of preponderance of probabilities. The standard of proof in such cases must at least be of a degree in between the two as to ensure that there was no possibility of the child being conceived through the plaintiff husband. 12. It was also the view of the Court that normal rule of evidence is that the burden is on the party that asserts the positive. But in instances where that is challenged, the burden is shifted to the party, that pleads the negative. Keeping in mind the issue of burden of proof, it would be safe to conclude that in a case like the present, the Courts decision should be rendered only after balancing the interests of the parties, i.e, the quest for truth, and the social and cultural implications involved therein. The possibility of stigmatizing a person as a bastard, the ignominy that attaches to an adult who, in the mature years of his life is shown to be not the biological son of his parents may not only be a heavy cross to bear but would also intrude upon his right of privacy. 13. DNA is unique to an individual (barring twins) and can be used to identify a persons identity, trace familial linkages or even reveal sensitive health information. Whether a person can be compelled to provide a sample for DNA in such matters can also be answered considering the test of proportionality laid down in the unanimous decision of this Court in K.S Puttaswamy v. Union of India 2019 (1) SCC 1 , wherein the right to privacy has been declared a constitutionally protected right in India. The Court should therefore examine the proportionality of the legitimate aims being pursued, i.e whether the same are not arbitrary or discriminatory, whether they may have an adverse impact on the person and that they justify the encroachment upon the privacy and personal autonomy of the person, being subjected to the DNA Test. It cannot be overlooked that in the present case, the application to subject the Plaintiff to a DNA Test is in a declaratory suit and the plaintiff has already adduced evidence and is not interested to produce additional evidence (DNA), to prove his case. It is now the turn of the defendants to adduce their evidence. At this stage, they are asking for subjecting the plaintiff to a DNA test. Questioning the timing of the application the trial Court dismissed the defendants application and we feel that it was the correct order. 14. In the yet to be decided suit, the plaintiff has led evidence through sworn affidavits of the Respondents, his School Leaving Certificates and his Domicile Certificate. Significantly, the respondent No.1, who is one of the 3 siblings (defendants) had declared in her affidavit that the Plaintiff was raised as a son by her parents. Therefore, the nature of further evidence to be adduced by the plaintiff (by providing DNA sample), need not be ordered by the Court at the instance of the other side. In such kind of litigation where the interest will have to be balanced and the test of eminent need is not satisfied our considered opinion is that the protection of the right to privacy of the Plaintiff should get precedence. 15. Having answered these questions, additional issue to be resolved is whether refusal to undergo DNA Testing amounts to other evidence or in other words, can an adverse inference be drawn in such situation. In Sharda vs. Dharmpal 2003(4) SCC 493 a three judges bench in the opinion written by Justice S.B. Sinha rightly observed in paragraph 79 that if despite an order passed by the court, a person refuses to submit himself to such medical examination, a strong case for drawing an adverse inference can be made out against the person within the ambit of Section 114 of the Evidence Act. The plaintiff here has adduced his documentary evidence and is disinclined to produce further evidence. He is conscious of the adverse consequences of his refusal but is standing firm in refusing to undergo the DNA Test. His suit eventually will be decided on the nature and quality of the evidence adduced. The issue of drawing adverse inference may also arise based on the refusal. The Court is to weigh both sides evidence with all attendant circumstances and then reach a verdict in the Suit and this is not the kind of case where a DNA test of the plaintiff is without exception. 16. The respondent cannot compel the plaintiff to adduce further evidence in support of the defendants case. In any case, it is the burden on a litigating party to prove his case adducing evidence in support of his plea and the court should not compel the party to prove his case in the manner, suggested by the contesting party. 17. The appellant (plaintiff) as noted earlier, has brought on record the evidence in his support which in his assessment adequately establishes his case. His suit will succeed or fall with those evidence, subject of course to the evidence adduced by the other side. When the plaintiff is unwilling to subject himself to the DNA test, forcing him to undergo one would impinge on his personal liberty and his right to privacy. ### Response: 1 ### Explanation: delineated above.11.2. The presumption of legitimacy of a child can only be displaced by strong preponderance of evidence, and not merely by balance of probabilities. The material portion of the Courts opinion is produced herein below:11 …..But at the same time the test of preponderance of probability is too light as that might expose many children to the peril of being illegitimatized. If a court declares that the husband is not the father of his wifes child, without tracing out its real father the fallout on the child is ruinous apart from all the ignominy visiting his mother. The bastardised child, when grows up would be socially ostracised and can easily fall into wayward life. Hence, by way of abundant caution and as a matter of public policy, law cannot afford to allow such consequence befalling an innocent child on the strength of a mere tilting of probability. Its corollary is that the burden of the plaintiff husband should be higher than the standard of preponderance of probabilities. The standard of proof in such cases must at least be of a degree in between the two as to ensure that there was no possibility of the child being conceived through the plaintiff husband.12. It was also the view of the Court that normal rule of evidence is that the burden is on the party that asserts the positive. But in instances where that is challenged, the burden is shifted to the party, that pleads the negative. Keeping in mind the issue of burden of proof, it would be safe to conclude that in a case like the present, the Courts decision should be rendered only after balancing the interests of the parties, i.e, the quest for truth, and the social and cultural implications involved therein. The possibility of stigmatizing a person as a bastard, the ignominy that attaches to an adult who, in the mature years of his life is shown to be not the biological son of his parents may not only be a heavy cross to bear but would also intrude upon his right of privacy.13. DNA is unique to an individual (barring twins) and can be used to identify a persons identity, trace familial linkages or even reveal sensitive health information. Whether a person can be compelled to provide a sample for DNA in such matters can also be answered considering the test of proportionality laid down in the unanimous decision of this Court in K.S Puttaswamy v. Union of India 2019 (1) SCC 1 , wherein the right to privacy has been declared a constitutionally protected right in India. The Court should therefore examine the proportionality of the legitimate aims being pursued, i.e whether the same are not arbitrary or discriminatory, whether they may have an adverse impact on the person and that they justify the encroachment upon the privacy and personal autonomy of the person, being subjected to the DNA Test. It cannot be overlooked that in the present case, the application to subject the Plaintiff to a DNA Test is in a declaratory suit and the plaintiff has already adduced evidence and is not interested to produce additional evidence (DNA), to prove his case. It is now the turn of the defendants to adduce their evidence. At this stage, they are asking for subjecting the plaintiff to a DNA test. Questioning the timing of the application the trial Court dismissed the defendants application and we feel that it was the correct order.14. In the yet to be decided suit, the plaintiff has led evidence through sworn affidavits of the Respondents, his School Leaving Certificates and his Domicile Certificate. Significantly, the respondent No.1, who is one of the 3 siblings (defendants) had declared in her affidavit that the Plaintiff was raised as a son by her parents. Therefore, the nature of further evidence to be adduced by the plaintiff (by providing DNA sample), need not be ordered by the Court at the instance of the other side. In such kind of litigation where the interest will have to be balanced and the test of eminent need is not satisfied our considered opinion is that the protection of the right to privacy of the Plaintiff should get precedence.In Sharda vs. Dharmpal 2003(4) SCC 493 a three judges bench in the opinion written by Justice S.B. Sinha rightly observed in paragraph 79 that if despite an order passed by the court, a person refuses to submit himself to such medical examination, a strong case for drawing an adverse inference can be made out against the person within the ambit of Section 114 of the Evidence Act. The plaintiff here has adduced his documentary evidence and is disinclined to produce further evidence. He is conscious of the adverse consequences of his refusal but is standing firm in refusing to undergo the DNA Test. His suit eventually will be decided on the nature and quality of the evidence adduced. The issue of drawing adverse inference may also arise based on the refusal. The Court is to weigh both sides evidence with all attendant circumstances and then reach a verdict in the Suit and this is not the kind of case where a DNA test of the plaintiff is without exception.16. The respondent cannot compel the plaintiff to adduce further evidence in support of the defendants case. In any case, it is the burden on a litigating party to prove his case adducing evidence in support of his plea and the court should not compel the party to prove his case in the manner, suggested by the contesting party.17. The appellant (plaintiff) as noted earlier, has brought on record the evidence in his support which in his assessment adequately establishes his case. His suit will succeed or fall with those evidence, subject of course to the evidence adduced by the other side. When the plaintiff is unwilling to subject himself to the DNA test, forcing him to undergo one would impinge on his personal liberty and his right to privacy.

Md. Usman & Ors Vs. State Of Andhra Pradesh & Ors

to be selected from the L.D.Cs. after the L.D.Cs. had put in certain number of years of service and after they had passed the Accounts Test as well as the Registration Test. A.U.D.C. holds superior post to that of an L.D.C. His salary is higher and his conditions of service are better than that of an L.D.C. Hence it was urged that as rule 5 treats U.D.Cs. as well as L.D.Cs. as equal for the purpose of recruitment for the post of a Grade II Sub Registrar, the rule violates the doctrine of equality. According to the petitioners the equality doctrine is attracted not only when equals are treated as unequals but also where unequals are treated as equals. It was contended on behalf of the petitioners that a statutory provision may offend Art. 14 of the Constitution both by finding differences where there are none and by making no difference where there is one. The proposition of law advanced on behalf of the petitioners is unexceptionable. This Court ruled in Kunnathat Thathunni Moopil Nair v. The State of Kerala and another, (1961) 3 S.C.R. 77, that when the statute obliged every person who held land to pay tax at the flat rate prescribed, whether or not he made any income out of the property, or whether or not the property was capable of yielding any income, there being no attempt at classification in the provisions of the statute, the statute denied equality before law because of lack of classification. Similar views have been expressed by this Court in other decisions. It is not necessary to refer to those decisions.4. On the other hand it was argued on behalf of the contesting respondents that before considering the vires of rule 5 we must first ascertain the reason behind the rule to find out whether in fact there is discrimination. The contesting respondents do not deny that the position of an U.D.C. is superior to that of an L.D.C. But according to them it became necessary for the State to pool together the U.D.Cs. as well as the L.D.Cs. for the purpose of recruitment in question for the following reasons :-5. The Grade II Sub-Registrars are in a state wise cadre whereas the U.D.Cs. and L.D.Cs. belong to a district-wise cadres. Promotion from L.D.C. to U.D.C. is made district-wise. The chances of promotion from L.D.C. to U.D.C. in one district materially differs from another district. It depends on the number of posts available in a particular district. In one district an L.D.C. may be promoted as a U.D.C. as soon as he puts in a service of 5 years, whereas in another district an L.D.C. possessing the same or better qualifications as well as efficiency may not be promoted as a U.D.C. for 15 years or more. That being so while making recruitment to a State-wise cadre it was not possible for the State to make distinction between the L.D.Cs. and the U.D.Cs. The only reasonable basis that could have been adopted was to treat the U.D.Cs. and L.D.Cs. as one class for the purpose of recruitment. But at the same time the rule provides for giving preference to the U.D.Cs. who had put in a service of 5 years or more. There is force in these contentions though there may be some anomaly in the case of L.D.Cs. and U.D.Cs. serving in the same district. But that anomaly cannot be avoided. The validity of a rule has to be judged by assessing its over-all effect and not by picking up exceptional case. What the court has to see is whether the classification made is a just one taking all aspects into consideration.6. On the facts before us we are unable to agree that for the purpose of recruitment with which we are concerned herein the State should have classified the U.D.Cs. and L.D.Cs. separately. If the State had treated the U.D.C. as being superior to the L.D.Cs. for the purpose of that recruitment it would have resulted in a great deal of injustice to a large section of the clerks. The fortuitous circumstances of an officer in a particular district becoming a U.D.C. would have given him an undue advantage over his seniors who might have been as efficient or even more efficient than himself, merely because they chanced to serve in some other district. For the reasons mentioned above, we do not think that in the present case the State can be said to have treated unequals as equals. The rule of equality is intended to advance justice by avoiding discrimination. In our opinion the High Court by overlooking the reason behind rule 5 came to the erroneous conclusion that the said rule violated Art. 14 of the Constitution.7. We agree with the High Court that there is no substance in the petitioners contention that the impugned recruitments were not made in accordance with rule 5. It is clear from the affidavit filed on behalf of the State and the Registrar that the Registrar had considered the case of all the qualified clerks, but the Registrar though that the best basis for recruitment was to prepare a list of all the clerks, U.D.Cs. as well as L.D.Cs. arranging the names in the order of seniority as L.D.Cs. and thereafter consider each name and reject the unfit. In other words, the selection was made on the basis of seniority-cum-merit. The seniors among the clerks were selected subject to suitability. Those persons who were entitled to be given preference under the rules were considered separately and recruited at the first instance. Only thereafter the other recruitments were made. The rules do not prescribe that the recruitment should be made on the basis of merit and merit alone. Bearing in mind the fact that the recruitment with which we are concerned in this case is a recruitment by transfer which means recruitment from among the ministerial officials, the method adopted by the Registrar appears to us to be the most reasonable one.

1[ds]The rules provide for the promotion to the posts of Sub-Registrar as well as for recruitment to those posts. Rule 2 provides that a post of Grade-I Sub-Registrar should be filled by promotion from Grade-II Sub-Registrar. So far as Grade II Sub-Registrars are concerned, they are to be appointed either by promotion from reserve Sub-Registrars or by "recruitment by transfer from the clerks of the Registration and Stamps Department including the office of the Registrar General of Births, Deaths and Marriages and the office of the Registrar of the Firms." Rule 5 deals with qualifications for being recruited as Grade-IIshall be given to persons who, in addition to the qualifications specified in items (i) to (iii) possess a degree in Law of a University in the State or any other equivalent qualification or a leadership certificate in the first category or Upper Division Clerks in the Registration Department".It was urged that this rule is violative of Art. 14 of the Constitution because though among the clerks there are U.D.Cs. as well as L.D.Cs. yet all of them had been put in one class for the purpose of recruitment. As per the Ministerial Service Rules the U.D.Cs. had to be selected from the L.D.Cs. after the L.D.Cs. had put in certain number of years of service and after they had passed the Accounts Test as well as the Registration Test. A.U.D.C. holds superior post to that of an L.D.C. His salary is higher and his conditions of service are better than that of anit was urged that as rule 5 treats U.D.Cs. as well as L.D.Cs. as equal for the purpose of recruitment for the post of a Grade II Sub Registrar, the rule violates the doctrine of equality.The Grade II Sub-Registrars are in a state wise cadre whereas the U.D.Cs. and L.D.Cs. belong to a district-wise cadres. Promotion from L.D.C. to U.D.C. is made district-wise. The chances of promotion from L.D.C. to U.D.C. in one district materially differs from another district. It depends on the number of posts available in a particular district. In one district an L.D.C. may be promoted as a U.D.C. as soon as he puts in a service of 5 years, whereas in another district an L.D.C. possessing the same or better qualifications as well as efficiency may not be promoted as a U.D.C. for 15 years or more. That being so while making recruitment to a State-wise cadre it was not possible for the State to make distinction between the L.D.Cs. and the U.D.Cs. The only reasonable basis that could have been adopted was to treat the U.D.Cs. and L.D.Cs. as one class for the purpose of recruitment. But at the same time the rule provides for giving preference to the U.D.Cs. who had put in a service of 5 years or more. There is force in these contentions though there may be some anomaly in the case of L.D.Cs. and U.D.Cs. serving in the same district. But that anomaly cannot be avoided. The validity of a rule has to be judged by assessing its over-all effect and not by picking up exceptional case. What the court has to see is whether the classification made is a just one taking all aspects into consideration.6. On the facts before us we are unable to agree that for the purpose of recruitment with which we are concerned herein the State should have classified the U.D.Cs. and L.D.Cs. separately. If the State had treated the U.D.C. as being superior to the L.D.Cs. for the purpose of that recruitment it would have resulted in a great deal of injustice to a large section of the clerks. The fortuitous circumstances of an officer in a particular district becoming a U.D.C. would have given him an undue advantage over his seniors who might have been as efficient or even more efficient than himself, merely because they chanced to serve in some other district. For the reasons mentioned above, we do not think that in the present case the State can be said to have treated unequals as equals. The rule of equality is intended to advance justice by avoiding discrimination. In our opinion the High Court by overlooking the reason behind rule 5 came to the erroneous conclusion that the said rule violated Art. 14 of the Constitution.7. We agree with the High Court that there is no substance in the petitioners contention that the impugned recruitments were not made in accordance with rule 5. It is clear from the affidavit filed on behalf of the State and the Registrar that the Registrar had considered the case of all the qualified clerks, but the Registrar though that the best basis for recruitment was to prepare a list of all the clerks, U.D.Cs. as well as L.D.Cs. arranging the names in the order of seniority as L.D.Cs. and thereafter consider each name and reject the unfit. In other words, the selection was made on the basis of seniority-cum-merit. The seniors among the clerks were selected subject to suitability. Those persons who were entitled to be given preference under the rules were considered separately and recruited at the first instance. Only thereafter the other recruitments were made. The rules do not prescribe that the recruitment should be made on the basis of merit and merit alone. Bearing in mind the fact that the recruitment with which we are concerned in this case is a recruitment by transfer which means recruitment from among the ministerial officials, the method adopted by the Registrar appears to us to be the most reasonable one.

### Instruction: Evaluate the case proceeding to forecast the court's decision (1 for yes, 0 for no), and elucidate the reasoning behind this prediction with important textual evidence from the case. ### Input: to be selected from the L.D.Cs. after the L.D.Cs. had put in certain number of years of service and after they had passed the Accounts Test as well as the Registration Test. A.U.D.C. holds superior post to that of an L.D.C. His salary is higher and his conditions of service are better than that of an L.D.C. Hence it was urged that as rule 5 treats U.D.Cs. as well as L.D.Cs. as equal for the purpose of recruitment for the post of a Grade II Sub Registrar, the rule violates the doctrine of equality. According to the petitioners the equality doctrine is attracted not only when equals are treated as unequals but also where unequals are treated as equals. It was contended on behalf of the petitioners that a statutory provision may offend Art. 14 of the Constitution both by finding differences where there are none and by making no difference where there is one. The proposition of law advanced on behalf of the petitioners is unexceptionable. This Court ruled in Kunnathat Thathunni Moopil Nair v. The State of Kerala and another, (1961) 3 S.C.R. 77, that when the statute obliged every person who held land to pay tax at the flat rate prescribed, whether or not he made any income out of the property, or whether or not the property was capable of yielding any income, there being no attempt at classification in the provisions of the statute, the statute denied equality before law because of lack of classification. Similar views have been expressed by this Court in other decisions. It is not necessary to refer to those decisions.4. On the other hand it was argued on behalf of the contesting respondents that before considering the vires of rule 5 we must first ascertain the reason behind the rule to find out whether in fact there is discrimination. The contesting respondents do not deny that the position of an U.D.C. is superior to that of an L.D.C. But according to them it became necessary for the State to pool together the U.D.Cs. as well as the L.D.Cs. for the purpose of recruitment in question for the following reasons :-5. The Grade II Sub-Registrars are in a state wise cadre whereas the U.D.Cs. and L.D.Cs. belong to a district-wise cadres. Promotion from L.D.C. to U.D.C. is made district-wise. The chances of promotion from L.D.C. to U.D.C. in one district materially differs from another district. It depends on the number of posts available in a particular district. In one district an L.D.C. may be promoted as a U.D.C. as soon as he puts in a service of 5 years, whereas in another district an L.D.C. possessing the same or better qualifications as well as efficiency may not be promoted as a U.D.C. for 15 years or more. That being so while making recruitment to a State-wise cadre it was not possible for the State to make distinction between the L.D.Cs. and the U.D.Cs. The only reasonable basis that could have been adopted was to treat the U.D.Cs. and L.D.Cs. as one class for the purpose of recruitment. But at the same time the rule provides for giving preference to the U.D.Cs. who had put in a service of 5 years or more. There is force in these contentions though there may be some anomaly in the case of L.D.Cs. and U.D.Cs. serving in the same district. But that anomaly cannot be avoided. The validity of a rule has to be judged by assessing its over-all effect and not by picking up exceptional case. What the court has to see is whether the classification made is a just one taking all aspects into consideration.6. On the facts before us we are unable to agree that for the purpose of recruitment with which we are concerned herein the State should have classified the U.D.Cs. and L.D.Cs. separately. If the State had treated the U.D.C. as being superior to the L.D.Cs. for the purpose of that recruitment it would have resulted in a great deal of injustice to a large section of the clerks. The fortuitous circumstances of an officer in a particular district becoming a U.D.C. would have given him an undue advantage over his seniors who might have been as efficient or even more efficient than himself, merely because they chanced to serve in some other district. For the reasons mentioned above, we do not think that in the present case the State can be said to have treated unequals as equals. The rule of equality is intended to advance justice by avoiding discrimination. In our opinion the High Court by overlooking the reason behind rule 5 came to the erroneous conclusion that the said rule violated Art. 14 of the Constitution.7. We agree with the High Court that there is no substance in the petitioners contention that the impugned recruitments were not made in accordance with rule 5. It is clear from the affidavit filed on behalf of the State and the Registrar that the Registrar had considered the case of all the qualified clerks, but the Registrar though that the best basis for recruitment was to prepare a list of all the clerks, U.D.Cs. as well as L.D.Cs. arranging the names in the order of seniority as L.D.Cs. and thereafter consider each name and reject the unfit. In other words, the selection was made on the basis of seniority-cum-merit. The seniors among the clerks were selected subject to suitability. Those persons who were entitled to be given preference under the rules were considered separately and recruited at the first instance. Only thereafter the other recruitments were made. The rules do not prescribe that the recruitment should be made on the basis of merit and merit alone. Bearing in mind the fact that the recruitment with which we are concerned in this case is a recruitment by transfer which means recruitment from among the ministerial officials, the method adopted by the Registrar appears to us to be the most reasonable one. ### Response: 1 ### Explanation: The rules provide for the promotion to the posts of Sub-Registrar as well as for recruitment to those posts. Rule 2 provides that a post of Grade-I Sub-Registrar should be filled by promotion from Grade-II Sub-Registrar. So far as Grade II Sub-Registrars are concerned, they are to be appointed either by promotion from reserve Sub-Registrars or by "recruitment by transfer from the clerks of the Registration and Stamps Department including the office of the Registrar General of Births, Deaths and Marriages and the office of the Registrar of the Firms." Rule 5 deals with qualifications for being recruited as Grade-IIshall be given to persons who, in addition to the qualifications specified in items (i) to (iii) possess a degree in Law of a University in the State or any other equivalent qualification or a leadership certificate in the first category or Upper Division Clerks in the Registration Department".It was urged that this rule is violative of Art. 14 of the Constitution because though among the clerks there are U.D.Cs. as well as L.D.Cs. yet all of them had been put in one class for the purpose of recruitment. As per the Ministerial Service Rules the U.D.Cs. had to be selected from the L.D.Cs. after the L.D.Cs. had put in certain number of years of service and after they had passed the Accounts Test as well as the Registration Test. A.U.D.C. holds superior post to that of an L.D.C. His salary is higher and his conditions of service are better than that of anit was urged that as rule 5 treats U.D.Cs. as well as L.D.Cs. as equal for the purpose of recruitment for the post of a Grade II Sub Registrar, the rule violates the doctrine of equality.The Grade II Sub-Registrars are in a state wise cadre whereas the U.D.Cs. and L.D.Cs. belong to a district-wise cadres. Promotion from L.D.C. to U.D.C. is made district-wise. The chances of promotion from L.D.C. to U.D.C. in one district materially differs from another district. It depends on the number of posts available in a particular district. In one district an L.D.C. may be promoted as a U.D.C. as soon as he puts in a service of 5 years, whereas in another district an L.D.C. possessing the same or better qualifications as well as efficiency may not be promoted as a U.D.C. for 15 years or more. That being so while making recruitment to a State-wise cadre it was not possible for the State to make distinction between the L.D.Cs. and the U.D.Cs. The only reasonable basis that could have been adopted was to treat the U.D.Cs. and L.D.Cs. as one class for the purpose of recruitment. But at the same time the rule provides for giving preference to the U.D.Cs. who had put in a service of 5 years or more. There is force in these contentions though there may be some anomaly in the case of L.D.Cs. and U.D.Cs. serving in the same district. But that anomaly cannot be avoided. The validity of a rule has to be judged by assessing its over-all effect and not by picking up exceptional case. What the court has to see is whether the classification made is a just one taking all aspects into consideration.6. On the facts before us we are unable to agree that for the purpose of recruitment with which we are concerned herein the State should have classified the U.D.Cs. and L.D.Cs. separately. If the State had treated the U.D.C. as being superior to the L.D.Cs. for the purpose of that recruitment it would have resulted in a great deal of injustice to a large section of the clerks. The fortuitous circumstances of an officer in a particular district becoming a U.D.C. would have given him an undue advantage over his seniors who might have been as efficient or even more efficient than himself, merely because they chanced to serve in some other district. For the reasons mentioned above, we do not think that in the present case the State can be said to have treated unequals as equals. The rule of equality is intended to advance justice by avoiding discrimination. In our opinion the High Court by overlooking the reason behind rule 5 came to the erroneous conclusion that the said rule violated Art. 14 of the Constitution.7. We agree with the High Court that there is no substance in the petitioners contention that the impugned recruitments were not made in accordance with rule 5. It is clear from the affidavit filed on behalf of the State and the Registrar that the Registrar had considered the case of all the qualified clerks, but the Registrar though that the best basis for recruitment was to prepare a list of all the clerks, U.D.Cs. as well as L.D.Cs. arranging the names in the order of seniority as L.D.Cs. and thereafter consider each name and reject the unfit. In other words, the selection was made on the basis of seniority-cum-merit. The seniors among the clerks were selected subject to suitability. Those persons who were entitled to be given preference under the rules were considered separately and recruited at the first instance. Only thereafter the other recruitments were made. The rules do not prescribe that the recruitment should be made on the basis of merit and merit alone. Bearing in mind the fact that the recruitment with which we are concerned in this case is a recruitment by transfer which means recruitment from among the ministerial officials, the method adopted by the Registrar appears to us to be the most reasonable one.

Vasant Balu Patil & Others Vs. Mohan Hirachand Shah & Others

behalf of the villagers. It is additionally urged that some part of the suit land was acquired by the Government under the Land Acquisition Act and the materials on record indicate that possession of such land was handed over by Hirachand Gujjar on behalf of the villagers and compensation for such acquisition was received by Hirachand Gujjar alongwith two other villagers, namely, Nathram and Chaya Nakhawa.9. It is further urged that the plaintiffs’ suits was barred by limitation inasmuch as though the defendants had disputed the title of the plaintiffs to the suit land in the written statement filed in the year 1985, the plaintiffs had by an amendment of the suits prayed for addition of the relief of declaration of title. The said amendment was allowed by the learned trial court on 16.07.1995. The amended relief sought and granted, therefore, is clearly barred under the provisions of the Limitation Act, it is urged.10. Finally, it is contended that though voluminous documents were introduced in evidence on behalf of the plaintiffs to prove their title, none of the exhibited documents had a relevant bearing to the survey numbers covering the suit lands except Survey No.43. It is, therefore, contended that the findings of the learned courts below regarding title of the plaintiffs is plainly untenable in law. 11. The aforesaid arguments on behalf of the appellants have been countered by Shri Jay Savla learned counsel for the respondents by contending that the legitimacy of the mutation entries on the basis of which, primarily, the suit was dismissed by the learned trial court has been conclusively decided in the revenue proceedings holding the same to be highly suspicious in view of the interpolations and the overwritings therein. The said facts and findings recorded thereon were noticed in the course of the adjudication of the suits and were accepted by the learned courts below. The same are essentially findings of fact. If the mutation entry of 1916 which was the foundation of the claim of the parties is suspect, as has been held by the learned courts below, the claim of the plaintiffs to ownership is established and the substratum of the defendants’ claim, including the claim of title on the basis of khata No.47 and payment of revenue in respect of the land covered by the said khata No. 47 (allegedly the suit land) will necessarily fall through. It is urged that the materials on record and the documents relied upon do not conclusively prove that compensation was received by Hirachand Gujjar on behalf of the villagers. In any case, the said issue would also stand concluded by the findings recorded in respect of the legitimacy of the original mutation entries. So far as the plea of limitation is concerned, it is urged that the order allowing the amendment of the suits to bring on record the additional relief of declaration of title has gone unchallenged and has attained finality in law. Therefore, the issue with regard to limitation issue necessarily had to be decided in favour of the plaintiffs inasmuch as the said amendment(s) would relate back to the date of filing of the suits. Reliance in this behalf has been placed on a judgment of this Court in Siddalingamma & Anr. vs. Mamtha Shenoy (2001 (8) SCC 561 ). 12. We have considered the submissions advanced on behalf of the parties. While there can be no manner of doubt that mutation entries do not conclusively establish title, we remain unimpressed by the arguments and contentions advanced on behalf of the appellants that the title of the plaintiffs in the instant case was found in their favour merely on the basis of the mutation entries in question. The suit scheduled property as described in the plaints filed in both the suits show that the suit land measuring 2 hectares 70 ares is covered by survey No.43, 49, 49A/1 and 54 which corresponds to new survey nos. 262, 214, 214A/1, 214B. The materials on record indicate that the title of the plaintiffs to land covered by survey No.43 stands established by Exh.63 whereas land covered by survey No.49 and 54 stands proved by Exh.154 and 158. It is the aforesaid survey numbers which are mentioned against the mutation entries of 1916 as well as the mutation entries of the year 1927. Coupled with the above, if the entry with regard to the land being held on behalf of the villagers as made in the mutation records are to be ignored, on account of the findings recorded in the order of the revenue authority dated 6.1.1993, which findings have been finally approved in the appeal proceedings arising out of the suits as being findings of fact recorded on the basis of the evidence on record, there can be no difficulty in holding that the title of the plaintiffs to the suit land covered by the survey Nos. indicated above stands proved and established. The entries in khata No.47 would also have to be understood with reference to the conclusions as above. Insofar as the land acquisition proceedings are concerned there is no conclusive material to hold that the payment of compensation was received by Hirachand Gujjar on behalf of the villagers so as to belie the case of the plaintiffs and/or establish the title of the defendants. The plea of the defendants that the voluminous documents brought on record do not establish the title of the plaintiffs has already been dealt with in the context of the specific exhibits which are relatable to the survey Nos. relevant to the suit land. So far as the plea of limitation is concerned there can be no manner of doubt that the amendment of the plaint(s) to incorporate the relief of declaration of title has necessarily to relate back to the date of filing of the suit. Once the said amendments were allowed and were not challenged by the defendants, the issue with regard to limitation has to be decided in favour of the plaintiffs.

0[ds]While there can be no manner of doubt that mutation entries do not conclusively establish title, we remain unimpressed by the arguments and contentions advanced on behalf of the appellants that the title of the plaintiffs in the instant case was found in their favour merely on the basis of the mutation entries in question. The suit scheduled property as described in the plaints filed in both the suits show that the suit land measuring 2 hectares 70 ares is covered by survey No.43, 49, 49A/1 and 54 which corresponds to new survey nos. 262, 214, 214A/1, 214B. The materials on record indicate that the title of the plaintiffs to land covered by survey No.43 stands established by Exh.63 whereas land covered by survey No.49 and 54 stands proved by Exh.154 and 158. It is the aforesaid survey numbers which are mentioned against the mutation entries of 1916 as well as the mutation entries of the year 1927. Coupled with the above, if the entry with regard to the land being held on behalf of the villagers as made in the mutation records are to be ignored, on account of the findings recorded in the order of the revenue authority dated 6.1.1993, which findings have been finally approved in the appeal proceedings arising out of the suits as being findings of fact recorded on the basis of the evidence on record, there can be no difficulty in holding that the title of the plaintiffs to the suit land covered by the survey Nos. indicated above stands proved and established. The entries in khata No.47 would also have to be understood with reference to the conclusions as above. Insofar as the land acquisition proceedings are concerned there is no conclusive material to hold that the payment of compensation was received by Hirachand Gujjar on behalf of the villagers so as to belie the case of the plaintiffs and/or establish the title of the defendants. The plea of the defendants that the voluminous documents brought on record do not establish the title of the plaintiffs has already been dealt with in the context of the specific exhibits which are relatable to the survey Nos. relevant to the suit land. So far as the plea of limitation is concerned there can be no manner of doubt that the amendment of the plaint(s) to incorporate the relief of declaration of title has necessarily to relate back to the date of filing of the suit. Once the said amendments were allowed and were not challenged by the defendants, the issue with regard to limitation has to be decided in favour of the plaintiffs.13. For the aforesaid reasons we do not find any merit in the case of the appellants as laid before us on the grounds and contentions as noticed. The appeals therefore will have to fail and are accordingly dismissed. However in the facts and circumstances of the case we make no order as to costs.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: behalf of the villagers. It is additionally urged that some part of the suit land was acquired by the Government under the Land Acquisition Act and the materials on record indicate that possession of such land was handed over by Hirachand Gujjar on behalf of the villagers and compensation for such acquisition was received by Hirachand Gujjar alongwith two other villagers, namely, Nathram and Chaya Nakhawa.9. It is further urged that the plaintiffs’ suits was barred by limitation inasmuch as though the defendants had disputed the title of the plaintiffs to the suit land in the written statement filed in the year 1985, the plaintiffs had by an amendment of the suits prayed for addition of the relief of declaration of title. The said amendment was allowed by the learned trial court on 16.07.1995. The amended relief sought and granted, therefore, is clearly barred under the provisions of the Limitation Act, it is urged.10. Finally, it is contended that though voluminous documents were introduced in evidence on behalf of the plaintiffs to prove their title, none of the exhibited documents had a relevant bearing to the survey numbers covering the suit lands except Survey No.43. It is, therefore, contended that the findings of the learned courts below regarding title of the plaintiffs is plainly untenable in law. 11. The aforesaid arguments on behalf of the appellants have been countered by Shri Jay Savla learned counsel for the respondents by contending that the legitimacy of the mutation entries on the basis of which, primarily, the suit was dismissed by the learned trial court has been conclusively decided in the revenue proceedings holding the same to be highly suspicious in view of the interpolations and the overwritings therein. The said facts and findings recorded thereon were noticed in the course of the adjudication of the suits and were accepted by the learned courts below. The same are essentially findings of fact. If the mutation entry of 1916 which was the foundation of the claim of the parties is suspect, as has been held by the learned courts below, the claim of the plaintiffs to ownership is established and the substratum of the defendants’ claim, including the claim of title on the basis of khata No.47 and payment of revenue in respect of the land covered by the said khata No. 47 (allegedly the suit land) will necessarily fall through. It is urged that the materials on record and the documents relied upon do not conclusively prove that compensation was received by Hirachand Gujjar on behalf of the villagers. In any case, the said issue would also stand concluded by the findings recorded in respect of the legitimacy of the original mutation entries. So far as the plea of limitation is concerned, it is urged that the order allowing the amendment of the suits to bring on record the additional relief of declaration of title has gone unchallenged and has attained finality in law. Therefore, the issue with regard to limitation issue necessarily had to be decided in favour of the plaintiffs inasmuch as the said amendment(s) would relate back to the date of filing of the suits. Reliance in this behalf has been placed on a judgment of this Court in Siddalingamma & Anr. vs. Mamtha Shenoy (2001 (8) SCC 561 ). 12. We have considered the submissions advanced on behalf of the parties. While there can be no manner of doubt that mutation entries do not conclusively establish title, we remain unimpressed by the arguments and contentions advanced on behalf of the appellants that the title of the plaintiffs in the instant case was found in their favour merely on the basis of the mutation entries in question. The suit scheduled property as described in the plaints filed in both the suits show that the suit land measuring 2 hectares 70 ares is covered by survey No.43, 49, 49A/1 and 54 which corresponds to new survey nos. 262, 214, 214A/1, 214B. The materials on record indicate that the title of the plaintiffs to land covered by survey No.43 stands established by Exh.63 whereas land covered by survey No.49 and 54 stands proved by Exh.154 and 158. It is the aforesaid survey numbers which are mentioned against the mutation entries of 1916 as well as the mutation entries of the year 1927. Coupled with the above, if the entry with regard to the land being held on behalf of the villagers as made in the mutation records are to be ignored, on account of the findings recorded in the order of the revenue authority dated 6.1.1993, which findings have been finally approved in the appeal proceedings arising out of the suits as being findings of fact recorded on the basis of the evidence on record, there can be no difficulty in holding that the title of the plaintiffs to the suit land covered by the survey Nos. indicated above stands proved and established. The entries in khata No.47 would also have to be understood with reference to the conclusions as above. Insofar as the land acquisition proceedings are concerned there is no conclusive material to hold that the payment of compensation was received by Hirachand Gujjar on behalf of the villagers so as to belie the case of the plaintiffs and/or establish the title of the defendants. The plea of the defendants that the voluminous documents brought on record do not establish the title of the plaintiffs has already been dealt with in the context of the specific exhibits which are relatable to the survey Nos. relevant to the suit land. So far as the plea of limitation is concerned there can be no manner of doubt that the amendment of the plaint(s) to incorporate the relief of declaration of title has necessarily to relate back to the date of filing of the suit. Once the said amendments were allowed and were not challenged by the defendants, the issue with regard to limitation has to be decided in favour of the plaintiffs. ### Response: 0 ### Explanation: While there can be no manner of doubt that mutation entries do not conclusively establish title, we remain unimpressed by the arguments and contentions advanced on behalf of the appellants that the title of the plaintiffs in the instant case was found in their favour merely on the basis of the mutation entries in question. The suit scheduled property as described in the plaints filed in both the suits show that the suit land measuring 2 hectares 70 ares is covered by survey No.43, 49, 49A/1 and 54 which corresponds to new survey nos. 262, 214, 214A/1, 214B. The materials on record indicate that the title of the plaintiffs to land covered by survey No.43 stands established by Exh.63 whereas land covered by survey No.49 and 54 stands proved by Exh.154 and 158. It is the aforesaid survey numbers which are mentioned against the mutation entries of 1916 as well as the mutation entries of the year 1927. Coupled with the above, if the entry with regard to the land being held on behalf of the villagers as made in the mutation records are to be ignored, on account of the findings recorded in the order of the revenue authority dated 6.1.1993, which findings have been finally approved in the appeal proceedings arising out of the suits as being findings of fact recorded on the basis of the evidence on record, there can be no difficulty in holding that the title of the plaintiffs to the suit land covered by the survey Nos. indicated above stands proved and established. The entries in khata No.47 would also have to be understood with reference to the conclusions as above. Insofar as the land acquisition proceedings are concerned there is no conclusive material to hold that the payment of compensation was received by Hirachand Gujjar on behalf of the villagers so as to belie the case of the plaintiffs and/or establish the title of the defendants. The plea of the defendants that the voluminous documents brought on record do not establish the title of the plaintiffs has already been dealt with in the context of the specific exhibits which are relatable to the survey Nos. relevant to the suit land. So far as the plea of limitation is concerned there can be no manner of doubt that the amendment of the plaint(s) to incorporate the relief of declaration of title has necessarily to relate back to the date of filing of the suit. Once the said amendments were allowed and were not challenged by the defendants, the issue with regard to limitation has to be decided in favour of the plaintiffs.13. For the aforesaid reasons we do not find any merit in the case of the appellants as laid before us on the grounds and contentions as noticed. The appeals therefore will have to fail and are accordingly dismissed. However in the facts and circumstances of the case we make no order as to costs.

Sohan Lal Naraindas Vs. Laxmidas Raghunath Gadit

the said shop for a period one year commencing from Aso Vad 13 S.Y. 2014 to Aso Vad 12 S.Y. 2015. 2. The Licensee (the defendant) shall pay to the Owner monthly compensation or Licensee fee at the rate of Rs. 250/-per month, and the Licensee has paid Rs. 3000/-(Rupee three thousand) only to the Owner as compensation or licence fee for the said period in advance on or before the execution of this agreement. 3. The Licensee shall have no right as a tenant or Sub-tenant in respect of the said loft (Medo) of the said shop. The Licensee shall not Sub-let, allow to use, transfer or assign in any way the said loft (Medo) of the shop to any one else. 4. The Owner shall bear and pay the rent of the said shop. 5. The Licensee shall use and occupy the said loft (Medo) of the said shop as a cloth merchants only and shall not be entitled to carry on any other business. 6. The parties hereto shall give one months clear notice of their intention to terminate this agreements in writing. 7. . . . . . . . 8. If the Licensee commits breach of any of the terms of this agreement in that case the Owner shall be entitled to terminate and revoke the leave and licence hereby granted without giving notice to the Licensee. 5. The defendant was put in exclusive possession of the loft. The plaintiff did not reserve possession of any part of the loft or a right of entry therein. The loft had a separate entrance. The customers of the defendant used the separate entrance to the loft during the business hours and his stock of cloth remained in the loft after business hours. The plaintiff and defendant were both cloth merchants, and the only consideration for granting the licence was the payment of Rs. 250/-per month. There is no evidence that the loft was given to the defendant out of sympathy or because of friendship, or relationship, or any similar motive. It was stipulated that the plaintiff may terminate the agreement by giving one months clear notice, the agreement could not be terminated by notice of a shorter duration. 6. An attempt was deliberately made to camouflage the true nature of. the agreement, by reciting in several clauses that the agreement was for leave and licence, and to emphasise the presence it was also recited that the defendant was not to have any right as tenant or Sub-tenant in respect of the loft. 7. At the trial the elder brother of the defendant was examined as a witness. He stated that the agreement dated November 3, 1958 was intended to be an agreement of lease, but the plaintiff insisted that the agreement be drafted with the conditions set out therein. Section 52 of the Easements Act defines a Licence : Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence Section 105 of the Transfer of Property Act defines lease : A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transfer or by the transferee, who accepts the transfer on such terms. . . . . . . . . . A licence confers a right to do or continue to do something in or upon immovable property of grantor which but for the grant of the right may be unlawful, but it creates no estate or interest in the immovable property of the grantor. A lease on the other hand creates an interest in the property demised. 8. Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operating as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a licence. In determining whether the agreement creates a lease or a licence the test of exclusive possession, though not decisive, is of significance. Mrs. M.N. Clubwala v. Fida Hussain Saheb and Ors : [1964]6SCR642 . 9. The Trial Court regarded exclusive possession of the premises given to the defendant as conclusive of the question whether the loft was in the occupation of the defendant as a tenant. The Court observed that on a consideration of the clauses of the agreement it was unable to reach a conclusion whether the agreement was intended to operate as a lease or as a licence but since exclusive possession was given it must be regarded a lease. The High Court considered all the covenants and the attendant circumstances and reached the conclusion that having regard to the exclusive possession given to the defendant it was intended to confer an interest in the loft and on that account the agreement operated as a lease and not as a licence. 10. We have carefully considered the covenants in the light of the relevant surrounding circumstances.

0[ds]3. The certificate granted by the High Court is defective. The plaintiff applied for certificate under Article 133(1)(a) of the Constitution and in the alternative under Article 133(1)(c) of the Constitution. The High Court passed an order certifying the case under Article 133(1)(c). A certificate granted by the High Court must be supported by adequate reasons. It is obligatory upon the High Court to set out the question of public or private importance which in their opinion fall to be determined in the proposed appeal. Since we are of the view that there is no merit in this appeal, we have not thought it fit to vacate the certificate5. The defendant was put in exclusive possession of the loft. The plaintiff did not reserve possession of any part of the loft or a right of entry therein. The loft had a separate entrance. The customers of the defendant used the separate entrance to the loft during the business hours and his stock of cloth remained in the loft after business hours. The plaintiff and defendant were both cloth merchants, and the only consideration for granting the licence was the payment of Rs. 250/-per month. There is no evidence that the loft was given to the defendant out of sympathy or because of friendship, or relationship, or any similar motive. It was stipulated that the plaintiff may terminate the agreement by giving one months clear notice, the agreement could not be terminated by notice of a shorter duration6. An attempt was deliberately made to camouflage the true nature of. the agreement, by reciting in several clauses that the agreement was for leave and licence, and to emphasise the presence it was also recited that the defendant was not to have any right as tenant or Sub-tenant in respect of the loft7. At the trial the elder brother of the defendant was examined as a witness. He stated that the agreement dated November 3, 1958 was intended to be an agreement of lease, but the plaintiff insisted that the agreement be drafted with the conditions set out therein8. Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operating as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a licence. In determining whether the agreement creates a lease or a licence the test of exclusive possession, though not decisive, is of significance. Mrs. M.N. Clubwala v. Fida Hussain Saheb and Ors : [1964]6SCR6429. The Trial Court regarded exclusive possession of the premises given to the defendant as conclusive of the question whether the loft was in the occupation of the defendant as a tenant. The Court observed that on a consideration of the clauses of the agreement it was unable to reach a conclusion whether the agreement was intended to operate as a lease or as a licence but since exclusive possession was given it must be regarded a lease. The High Court considered all the covenants and the attendant circumstances and reached the conclusion that having regard to the exclusive possession given to the defendant it was intended to confer an interest in the loft and on that account the agreement operated as a lease and not as a licence10. We have carefully considered the covenants in the light of the relevant surrounding circumstances.

### Instruction: Determine the likely decision of the case (acceptance (1) or rejection (0)) and follow up with an explanation highlighting key sentences that support this prediction. ### Input: the said shop for a period one year commencing from Aso Vad 13 S.Y. 2014 to Aso Vad 12 S.Y. 2015. 2. The Licensee (the defendant) shall pay to the Owner monthly compensation or Licensee fee at the rate of Rs. 250/-per month, and the Licensee has paid Rs. 3000/-(Rupee three thousand) only to the Owner as compensation or licence fee for the said period in advance on or before the execution of this agreement. 3. The Licensee shall have no right as a tenant or Sub-tenant in respect of the said loft (Medo) of the said shop. The Licensee shall not Sub-let, allow to use, transfer or assign in any way the said loft (Medo) of the shop to any one else. 4. The Owner shall bear and pay the rent of the said shop. 5. The Licensee shall use and occupy the said loft (Medo) of the said shop as a cloth merchants only and shall not be entitled to carry on any other business. 6. The parties hereto shall give one months clear notice of their intention to terminate this agreements in writing. 7. . . . . . . . 8. If the Licensee commits breach of any of the terms of this agreement in that case the Owner shall be entitled to terminate and revoke the leave and licence hereby granted without giving notice to the Licensee. 5. The defendant was put in exclusive possession of the loft. The plaintiff did not reserve possession of any part of the loft or a right of entry therein. The loft had a separate entrance. The customers of the defendant used the separate entrance to the loft during the business hours and his stock of cloth remained in the loft after business hours. The plaintiff and defendant were both cloth merchants, and the only consideration for granting the licence was the payment of Rs. 250/-per month. There is no evidence that the loft was given to the defendant out of sympathy or because of friendship, or relationship, or any similar motive. It was stipulated that the plaintiff may terminate the agreement by giving one months clear notice, the agreement could not be terminated by notice of a shorter duration. 6. An attempt was deliberately made to camouflage the true nature of. the agreement, by reciting in several clauses that the agreement was for leave and licence, and to emphasise the presence it was also recited that the defendant was not to have any right as tenant or Sub-tenant in respect of the loft. 7. At the trial the elder brother of the defendant was examined as a witness. He stated that the agreement dated November 3, 1958 was intended to be an agreement of lease, but the plaintiff insisted that the agreement be drafted with the conditions set out therein. Section 52 of the Easements Act defines a Licence : Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence Section 105 of the Transfer of Property Act defines lease : A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transfer or by the transferee, who accepts the transfer on such terms. . . . . . . . . . A licence confers a right to do or continue to do something in or upon immovable property of grantor which but for the grant of the right may be unlawful, but it creates no estate or interest in the immovable property of the grantor. A lease on the other hand creates an interest in the property demised. 8. Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operating as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a licence. In determining whether the agreement creates a lease or a licence the test of exclusive possession, though not decisive, is of significance. Mrs. M.N. Clubwala v. Fida Hussain Saheb and Ors : [1964]6SCR642 . 9. The Trial Court regarded exclusive possession of the premises given to the defendant as conclusive of the question whether the loft was in the occupation of the defendant as a tenant. The Court observed that on a consideration of the clauses of the agreement it was unable to reach a conclusion whether the agreement was intended to operate as a lease or as a licence but since exclusive possession was given it must be regarded a lease. The High Court considered all the covenants and the attendant circumstances and reached the conclusion that having regard to the exclusive possession given to the defendant it was intended to confer an interest in the loft and on that account the agreement operated as a lease and not as a licence. 10. We have carefully considered the covenants in the light of the relevant surrounding circumstances. ### Response: 0 ### Explanation: 3. The certificate granted by the High Court is defective. The plaintiff applied for certificate under Article 133(1)(a) of the Constitution and in the alternative under Article 133(1)(c) of the Constitution. The High Court passed an order certifying the case under Article 133(1)(c). A certificate granted by the High Court must be supported by adequate reasons. It is obligatory upon the High Court to set out the question of public or private importance which in their opinion fall to be determined in the proposed appeal. Since we are of the view that there is no merit in this appeal, we have not thought it fit to vacate the certificate5. The defendant was put in exclusive possession of the loft. The plaintiff did not reserve possession of any part of the loft or a right of entry therein. The loft had a separate entrance. The customers of the defendant used the separate entrance to the loft during the business hours and his stock of cloth remained in the loft after business hours. The plaintiff and defendant were both cloth merchants, and the only consideration for granting the licence was the payment of Rs. 250/-per month. There is no evidence that the loft was given to the defendant out of sympathy or because of friendship, or relationship, or any similar motive. It was stipulated that the plaintiff may terminate the agreement by giving one months clear notice, the agreement could not be terminated by notice of a shorter duration6. An attempt was deliberately made to camouflage the true nature of. the agreement, by reciting in several clauses that the agreement was for leave and licence, and to emphasise the presence it was also recited that the defendant was not to have any right as tenant or Sub-tenant in respect of the loft7. At the trial the elder brother of the defendant was examined as a witness. He stated that the agreement dated November 3, 1958 was intended to be an agreement of lease, but the plaintiff insisted that the agreement be drafted with the conditions set out therein8. Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operating as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a licence. In determining whether the agreement creates a lease or a licence the test of exclusive possession, though not decisive, is of significance. Mrs. M.N. Clubwala v. Fida Hussain Saheb and Ors : [1964]6SCR6429. The Trial Court regarded exclusive possession of the premises given to the defendant as conclusive of the question whether the loft was in the occupation of the defendant as a tenant. The Court observed that on a consideration of the clauses of the agreement it was unable to reach a conclusion whether the agreement was intended to operate as a lease or as a licence but since exclusive possession was given it must be regarded a lease. The High Court considered all the covenants and the attendant circumstances and reached the conclusion that having regard to the exclusive possession given to the defendant it was intended to confer an interest in the loft and on that account the agreement operated as a lease and not as a licence10. We have carefully considered the covenants in the light of the relevant surrounding circumstances.

SMRITI MADAN KANSAGRA Vs. PERRY KANSAGRA

our view, the registration of the Judgment is sufficient compliance of the direction to obtain a Mirror Order issued from a competent court in Kenya. The fact that the registration was given at the instance of the respondent and the unconditional undertaking given by the respondent to this Court, are sufficient compliance of the directions issued by this Court. 11. Insofar as the matter mentioned at placitum a is concerned, it is submitted by Mr. Divan, learned Senior Advocate that the Family Court and the High Court had granted certain reliefs to the appellant even while granting custody to the respondent. A comparative chart of the directions issued by the High Court and those in the Judgment has also been presented as under:- table 12. It is submitted that the entitlement of the appellant in terms of the order issued by the High Court was not under challenge before this Court. Neither any substantive appeal was filed by the respondent nor any cross objections were preferred and, as such, said entitlement could not be reduced or whittled down. It is submitted that the appellant was entitled in terms of the directions of the High Court, to have the temporary custody of Aditya throughout the winter and summer vacations. But, that entitlement is now reduced to only 50% of one of the vacations. 13. It is true that there was no appeal or any challenge on part of the respondent insofar as the temporary custody during two vacations are concerned. However, that direction was modified by this Court exercising parens patriae jurisdiction which is why the expression in supersession of the Orders passed by the courts below was used in paragraph 20 of the Judgment. Requiring Aditya to travel to India and spend the entirety of his two vacations spreading over a period of three months, was considered to be causing hindrance to his normal educational and other activities. Aditya is a bright child of 11 years. In the coming years, his activities on the academic side are likely to increase substantially since he will be required to study under the I.B. curriculum, and learn the local language. As he grows, his horizons are going to be wider. In child custody matters, rather than the entitlement of either of the parents, what is of paramount importance is the wellbeing and welfare of the child. Therefore, considering the totality of circumstances, including his age at present, it was considered appropriate to grant half of one vacation with the appellant, which is sufficient and serves the desired purpose. 14. In terms of the directions issued by this Court, the appellant along with maternal grandmother of Aditya will be entitled, at the expense of the respondent to spend seven days in Kenya once a year. The directions thus contemplated that in a year, the appellant will have sufficient physical contact and interaction as well as benefit of stay with Aditya. 15. In the circumstances, subject to the discussion with regard to the matter at Placitum b, the submissions under first segment are rejected. 16. Insofar as the directions sought under the second segment are concerned, Mr. Mehta, learned Counsel for the respondent has welcomed the suggestions of furnishing school report and activities report of Aditya to the appellant. It is also accepted that the respondent shall keep the appellant informed about parents-teachers meetings, and about other functions and activities in the school, and that the appellant will be at liberty to visit Adityas school, and attend school events and interact with school teachers. In order to facilitate the interaction of the appellant on these aspects, the e-mail Id. of the appellant as well as her mobile details shall be furnished to Adityas school, so that the appellant shall be kept in touch with the developments. It is also agreed that appellant shall be informed in case Adityas school is changed on any future date. 17. Placitum a of directions sought under the third segment is in addition to the one prayed for under placitum a of the first segment. On one hand, the appellant desires the temporary custody of Aditya all through Easter, Winter and Summer vacations, and seeks directions that she be allowed to visit Kenya every two months at the expenses of the respondent; while on the other hand, the anxiety and apprehension expressed by the respondent is that repeated visits to India all through the vacations will not allow Aditya sufficient time for his activities and pursuits. Since we have rejected the case of the appellant for having temporary custody all through the summer and winter vacations, we do not accept the present suggestion which is, therefore, rejected. Similarly, it will not be possible to pass a direction that the appellant be allowed to visit Kenya every two months at the cost and expense of the respondent. If the appellant chooses on her own to go to Kenya, she will certainly be free to do so. But, putting an obligation upon the respondent to finance her trips, would not be appropriate. We, therefore, reject the submission. With regard to placitum c, the matter will be dealt with separately hereafter With regard to the matter at placitum d, it must be stated that in accordance with the directions issued in paragraph 20 of the Judgment, Aditya will be at liberty to speak to his relations and friends. Therefore, no further directions in that behalf are called for. 18. We now turn to the directions sought under the fourth segment. It is accepted by Mr. Mehta, learned counsel for the respondent that the respondent will always keep the appellant informed about Adityas health and medical issues, and will certainly share his medical reports with the appellant; and that in case of any medical emergency, the appellant shall always be kept informed. Placitum b under this segment prays that the matter be kept pending and Aditya be directed to be produced before this Court for an evaluation every six months for next four years.

1[ds]7. We will deal with the matter mentioned at placitum a under the first segment after having dealt with other aspects under said segment.(i) With regard to the matter at placitum b, the learned counsel for the respondent has fairly accepted the suggestion.(ii) With regard to the matter at placitum c, as against 10 minutes a day, what has been granted is one hour over the week end. Thus, as against 70 minutes in a week, what has been granted is 60 minutes over the weekends which will be sufficiently long and a comprehensive interaction. It has also been directed that the child will be at liberty to speak to his mother, as and when he desires to do so. Therefore, in our view, the directions issued by this Court with regard to this issue do not call for any modification.Though, we accept the submission made by the learned counsel for the respondent, it is hereby clarified that paragraph 3 of the undertaking given by respondent dated 02.03.2020 to the High Court shall continue to be operative, in addition to the undertaking given to this Court.(iv) In the context of the matter mentioned against placitum e, it must be stated that this Court did not deem it appropriate to bind the paternal grandmother of Aditya, because of the various other directions issued in the Judgment, including the one requiring the respondent to obtain a Mirror Order.The High Court had not insisted upon furnishing of any Mirror Order and, therefore, the direction to have the affidavit of the grandmother who is an Indian citizen, was issued. However, the direction to obtain a Mirror Order was taken to be sufficient security by this Court, to take care of any apprehension that the respondent may not fulfil the obligations cast upon him by the Judgment.10. Having considered the rival submissions, in our view, the Order passed by the High Court of Kenya respectfully deserves and must be shown due deference. Nothing turns on the form and format of the Order, so long as the High Court of Kenya was apprised of all the facts, and the context in which it was approached, for compliance of the directions passed by this Court in the Judgment. Since the registration of the Judgment passed by this Court has been done under the orders of the High Court of Kenya, we accept the submissions made by the respondent. In our view, the registration of the Judgment is sufficient compliance of the direction to obtain a Mirror Order issued from a competent court in Kenya. The fact that the registration was given at the instance of the respondent and the unconditional undertaking given by the respondent to this Court, are sufficient compliance of the directions issued by this Court.13. It is true that there was no appeal or any challenge on part of the respondent insofar as the temporary custody during two vacations are concerned. However, that direction was modified by this Court exercising parens patriae jurisdiction which is why the expression in supersession of the Orders passed by the courts below was used in paragraph 20 of the Judgment. Requiring Aditya to travel to India and spend the entirety of his two vacations spreading over a period of three months, was considered to be causing hindrance to his normal educational and other activities. Aditya is a bright child of 11 years. In the coming years, his activities on the academic side are likely to increase substantially since he will be required to study under the I.B. curriculum, and learn the local language. As he grows, his horizons are going to be wider. In child custody matters, rather than the entitlement of either of the parents, what is of paramount importance is the wellbeing and welfare of the child. Therefore, considering the totality of circumstances, including his age at present, it was considered appropriate to grant half of one vacation with the appellant, which is sufficient and serves the desired purpose.14. In terms of the directions issued by this Court, the appellant along with maternal grandmother of Aditya will be entitled, at the expense of the respondent to spend seven days in Kenya once a year. The directions thus contemplated that in a year, the appellant will have sufficient physical contact and interaction as well as benefit of stay with Aditya.15. In the circumstances, subject to the discussion with regard to the matter at Placitum b, the submissions under first segment are rejected.16. Insofar as the directions sought under the second segment are concerned, Mr. Mehta, learned Counsel for the respondent has welcomed the suggestions of furnishing school report and activities report of Aditya to the appellant. It is also accepted that the respondent shall keep the appellant informed about parents-teachers meetings, and about other functions and activities in the school, and that the appellant will be at liberty to visit Adityas school, and attend school events and interact with school teachers. In order to facilitate the interaction of the appellant on these aspects, the e-mail Id. of the appellant as well as her mobile details shall be furnished to Adityas school, so that the appellant shall be kept in touch with the developments. It is also agreed that appellant shall be informed in case Adityas school is changed on any future date.17. Placitum a of directions sought under the third segment is in addition to the one prayed for under placitum a of the first segment. On one hand, the appellant desires the temporary custody of Aditya all through Easter, Winter and Summer vacations, and seeks directions that she be allowed to visit Kenya every two months at the expenses of the respondent; while on the other hand, the anxiety and apprehension expressed by the respondent is that repeated visits to India all through the vacations will not allow Aditya sufficient time for his activities and pursuits. Since we have rejected the case of the appellant for having temporary custody all through the summer and winter vacations, we do not accept the present suggestion which is, therefore, rejected.Similarly, it will not be possible to pass a direction that the appellant be allowed to visit Kenya every two months at the cost and expense of the respondent. If the appellant chooses on her own to go to Kenya, she will certainly be free to do so. But, putting an obligation upon the respondent to finance her trips, would not be appropriate. We, therefore, reject the submission.With regard to placitum c, the matter will be dealt with separately hereafterWith regard to the matter at placitum d, it must be stated that in accordance with the directions issued in paragraph 20 of the Judgment, Aditya will be at liberty to speak to his relations and friends. Therefore, no further directions in that behalf are called for.18. We now turn to the directions sought under the fourth segment. It is accepted by Mr. Mehta, learned counsel for the respondent that the respondent will always keep the appellant informed about Adityas health and medical issues, and will certainly share his medical reports with the appellant; and that in case of any medical emergency, the appellant shall always be kept informed. Placitum b under this segment prays that the matter be kept pending and Aditya be directed to be produced before this Court for an evaluation every six months for next four years.

### Instruction: Determine the likely decision of the case (acceptance (1) or rejection (0)) and follow up with an explanation highlighting key sentences that support this prediction. ### Input: our view, the registration of the Judgment is sufficient compliance of the direction to obtain a Mirror Order issued from a competent court in Kenya. The fact that the registration was given at the instance of the respondent and the unconditional undertaking given by the respondent to this Court, are sufficient compliance of the directions issued by this Court. 11. Insofar as the matter mentioned at placitum a is concerned, it is submitted by Mr. Divan, learned Senior Advocate that the Family Court and the High Court had granted certain reliefs to the appellant even while granting custody to the respondent. A comparative chart of the directions issued by the High Court and those in the Judgment has also been presented as under:- table 12. It is submitted that the entitlement of the appellant in terms of the order issued by the High Court was not under challenge before this Court. Neither any substantive appeal was filed by the respondent nor any cross objections were preferred and, as such, said entitlement could not be reduced or whittled down. It is submitted that the appellant was entitled in terms of the directions of the High Court, to have the temporary custody of Aditya throughout the winter and summer vacations. But, that entitlement is now reduced to only 50% of one of the vacations. 13. It is true that there was no appeal or any challenge on part of the respondent insofar as the temporary custody during two vacations are concerned. However, that direction was modified by this Court exercising parens patriae jurisdiction which is why the expression in supersession of the Orders passed by the courts below was used in paragraph 20 of the Judgment. Requiring Aditya to travel to India and spend the entirety of his two vacations spreading over a period of three months, was considered to be causing hindrance to his normal educational and other activities. Aditya is a bright child of 11 years. In the coming years, his activities on the academic side are likely to increase substantially since he will be required to study under the I.B. curriculum, and learn the local language. As he grows, his horizons are going to be wider. In child custody matters, rather than the entitlement of either of the parents, what is of paramount importance is the wellbeing and welfare of the child. Therefore, considering the totality of circumstances, including his age at present, it was considered appropriate to grant half of one vacation with the appellant, which is sufficient and serves the desired purpose. 14. In terms of the directions issued by this Court, the appellant along with maternal grandmother of Aditya will be entitled, at the expense of the respondent to spend seven days in Kenya once a year. The directions thus contemplated that in a year, the appellant will have sufficient physical contact and interaction as well as benefit of stay with Aditya. 15. In the circumstances, subject to the discussion with regard to the matter at Placitum b, the submissions under first segment are rejected. 16. Insofar as the directions sought under the second segment are concerned, Mr. Mehta, learned Counsel for the respondent has welcomed the suggestions of furnishing school report and activities report of Aditya to the appellant. It is also accepted that the respondent shall keep the appellant informed about parents-teachers meetings, and about other functions and activities in the school, and that the appellant will be at liberty to visit Adityas school, and attend school events and interact with school teachers. In order to facilitate the interaction of the appellant on these aspects, the e-mail Id. of the appellant as well as her mobile details shall be furnished to Adityas school, so that the appellant shall be kept in touch with the developments. It is also agreed that appellant shall be informed in case Adityas school is changed on any future date. 17. Placitum a of directions sought under the third segment is in addition to the one prayed for under placitum a of the first segment. On one hand, the appellant desires the temporary custody of Aditya all through Easter, Winter and Summer vacations, and seeks directions that she be allowed to visit Kenya every two months at the expenses of the respondent; while on the other hand, the anxiety and apprehension expressed by the respondent is that repeated visits to India all through the vacations will not allow Aditya sufficient time for his activities and pursuits. Since we have rejected the case of the appellant for having temporary custody all through the summer and winter vacations, we do not accept the present suggestion which is, therefore, rejected. Similarly, it will not be possible to pass a direction that the appellant be allowed to visit Kenya every two months at the cost and expense of the respondent. If the appellant chooses on her own to go to Kenya, she will certainly be free to do so. But, putting an obligation upon the respondent to finance her trips, would not be appropriate. We, therefore, reject the submission. With regard to placitum c, the matter will be dealt with separately hereafter With regard to the matter at placitum d, it must be stated that in accordance with the directions issued in paragraph 20 of the Judgment, Aditya will be at liberty to speak to his relations and friends. Therefore, no further directions in that behalf are called for. 18. We now turn to the directions sought under the fourth segment. It is accepted by Mr. Mehta, learned counsel for the respondent that the respondent will always keep the appellant informed about Adityas health and medical issues, and will certainly share his medical reports with the appellant; and that in case of any medical emergency, the appellant shall always be kept informed. Placitum b under this segment prays that the matter be kept pending and Aditya be directed to be produced before this Court for an evaluation every six months for next four years. ### Response: 1 ### Explanation: respondent to obtain a Mirror Order.The High Court had not insisted upon furnishing of any Mirror Order and, therefore, the direction to have the affidavit of the grandmother who is an Indian citizen, was issued. However, the direction to obtain a Mirror Order was taken to be sufficient security by this Court, to take care of any apprehension that the respondent may not fulfil the obligations cast upon him by the Judgment.10. Having considered the rival submissions, in our view, the Order passed by the High Court of Kenya respectfully deserves and must be shown due deference. Nothing turns on the form and format of the Order, so long as the High Court of Kenya was apprised of all the facts, and the context in which it was approached, for compliance of the directions passed by this Court in the Judgment. Since the registration of the Judgment passed by this Court has been done under the orders of the High Court of Kenya, we accept the submissions made by the respondent. In our view, the registration of the Judgment is sufficient compliance of the direction to obtain a Mirror Order issued from a competent court in Kenya. The fact that the registration was given at the instance of the respondent and the unconditional undertaking given by the respondent to this Court, are sufficient compliance of the directions issued by this Court.13. It is true that there was no appeal or any challenge on part of the respondent insofar as the temporary custody during two vacations are concerned. However, that direction was modified by this Court exercising parens patriae jurisdiction which is why the expression in supersession of the Orders passed by the courts below was used in paragraph 20 of the Judgment. Requiring Aditya to travel to India and spend the entirety of his two vacations spreading over a period of three months, was considered to be causing hindrance to his normal educational and other activities. Aditya is a bright child of 11 years. In the coming years, his activities on the academic side are likely to increase substantially since he will be required to study under the I.B. curriculum, and learn the local language. As he grows, his horizons are going to be wider. In child custody matters, rather than the entitlement of either of the parents, what is of paramount importance is the wellbeing and welfare of the child. Therefore, considering the totality of circumstances, including his age at present, it was considered appropriate to grant half of one vacation with the appellant, which is sufficient and serves the desired purpose.14. In terms of the directions issued by this Court, the appellant along with maternal grandmother of Aditya will be entitled, at the expense of the respondent to spend seven days in Kenya once a year. The directions thus contemplated that in a year, the appellant will have sufficient physical contact and interaction as well as benefit of stay with Aditya.15. In the circumstances, subject to the discussion with regard to the matter at Placitum b, the submissions under first segment are rejected.16. Insofar as the directions sought under the second segment are concerned, Mr. Mehta, learned Counsel for the respondent has welcomed the suggestions of furnishing school report and activities report of Aditya to the appellant. It is also accepted that the respondent shall keep the appellant informed about parents-teachers meetings, and about other functions and activities in the school, and that the appellant will be at liberty to visit Adityas school, and attend school events and interact with school teachers. In order to facilitate the interaction of the appellant on these aspects, the e-mail Id. of the appellant as well as her mobile details shall be furnished to Adityas school, so that the appellant shall be kept in touch with the developments. It is also agreed that appellant shall be informed in case Adityas school is changed on any future date.17. Placitum a of directions sought under the third segment is in addition to the one prayed for under placitum a of the first segment. On one hand, the appellant desires the temporary custody of Aditya all through Easter, Winter and Summer vacations, and seeks directions that she be allowed to visit Kenya every two months at the expenses of the respondent; while on the other hand, the anxiety and apprehension expressed by the respondent is that repeated visits to India all through the vacations will not allow Aditya sufficient time for his activities and pursuits. Since we have rejected the case of the appellant for having temporary custody all through the summer and winter vacations, we do not accept the present suggestion which is, therefore, rejected.Similarly, it will not be possible to pass a direction that the appellant be allowed to visit Kenya every two months at the cost and expense of the respondent. If the appellant chooses on her own to go to Kenya, she will certainly be free to do so. But, putting an obligation upon the respondent to finance her trips, would not be appropriate. We, therefore, reject the submission.With regard to placitum c, the matter will be dealt with separately hereafterWith regard to the matter at placitum d, it must be stated that in accordance with the directions issued in paragraph 20 of the Judgment, Aditya will be at liberty to speak to his relations and friends. Therefore, no further directions in that behalf are called for.18. We now turn to the directions sought under the fourth segment. It is accepted by Mr. Mehta, learned counsel for the respondent that the respondent will always keep the appellant informed about Adityas health and medical issues, and will certainly share his medical reports with the appellant; and that in case of any medical emergency, the appellant shall always be kept informed. Placitum b under this segment prays that the matter be kept pending and Aditya be directed to be produced before this Court for an evaluation every six months for next four years.

Navnitlal C. Javeri Vs. K. K. Sen, Appellate Assistant Commissioner Ofincome-Tax

with respect to which no action has been taken under S. 23A was justified and that, therefore, if in case a company could spare the money to advance to a shareholder for his needs, that alone should not lead to the inference that the advance was made to evade the payment of super-tax by the shareholder. The third point of distinction; and of significance, is that no individual shareholder is made liable for tax on an amount of the undistributed profits in excess of his proportionate share in those profits. The shareholder is not there by prejudiced. His income is increased by an amount which he could have legitimately got from the company if the persons in control had acted reasonably and had retained such profits undistributed as were necessary for the purposes of the company.39. Another objection taken in Baldev Singhs Case; (1961) 1 SCR 482 : (AIR 1961 SC 736 ), was about the constitutionality of S. 23A on the ground that it purports to tax the shareholders on the income of the company in which they held share, especially when it does not give a right to the shareholders to realise from the company the dividend which by the order is deemed to have been paid to them. The section was held to be constitutionally valid as it was enacted for preventing evasion of tax in view of the conditions of its applicability. In the circumstances of the cases covered by S. 23A, there was a reasonable connection between the amount deemed to be distributed as dividend and the possible attempt for evading payment of super tax. The assessee could not have been prejudiced if the persons in control of the management of the company had acted reasonably or actually distributed that amount as profits subsequent to the order of the Income-tax Officer.40. In Balajis Case, (1962) 2 SCR 983 : (AIR 1962 SC 123 ), the validity of S. 16(3)(a), clauses (i) and (ii) came up for consideration. These clauses provide that in computing the total income of any individual for the purpose of assessment there shall be included so much of the income of his wife or minor child as arises directly or indirectly from the membership of the wife in a firm of which her husband is a partner or from the admission of the minor to the benefits of partnership in a firm of which such individual is partner. These provisions were held valid. The Court left open the question whether A could be taxed on the income of B and formulated the question for decision as to whether S.16(3) (a), clauses (i) and (ii), is a provision made by thy Legislature to prevent evasion of tax and answered it in the affirmative, as the husband or the father could nominally take his wife or minor child, in partnership with him, so that the tax burden may be lightened and as this device enabled the assessee to secure the entire income of the business and yet evade income-tax which he would otherwise have been liable to pay. It was said at p. 999 (of SCR) : (at p. 129 of AIR) :"The scope of the provisions is limited only to a few of the intimate members of a family who ordinarily are under the protection of the assessee and are dependants of him. The persons selected by the provisions, namely, wife and minor children, cannot also be ordinarily expected to carry on their business independently with their own funds when the husband or the father is alive and when they are under his protection."It is, therefore, clear that the basis for holding S. 16(3) (a), clauses (i) and (ii), valid was that in effect the husband or the father was the real person who ran the firm and that the others were made partners nominally and, therefore, the partnership was not genuine. In this view, there could be no question of the provisions affecting the husband or the father prejudicially or including in his income amounts which were not his income. This, however, cannot be said in the present case or in cases which come within the purview of the impugned sections.41. In dealing with the contention that the provisions of S. 16(3)(a), clauses (i) and (ii), contravened Art. 14 of the Constitution, it was said at p. 991 (of SCR) : (at p. 126 of AIR) :"We have held that the object of the legislation was to prevent evasion of tax. A similar device would not ordinarily be resorted to by individuals by entering into partnership with persons other than those mentioned in the sub-section, as it would involve a risk of the third party turning round and asserting his own rights. The Legislature, therefore, selected for the purpose of classification only that group of persons who in fact are used as a cloak to perpetuate fraud on taxation."Such a risk is always involved in a company making payments as advances or loans to a shareholder when it possesses accumulated profits as the other shareholders run the risk of not getting their proportionate share of profits which, they would have got if they had been really distributed as dividends. This consideration, again points to the conclusion that the probability of such an advance or loan being genuine would be dependent not so much on the existence of accumulated profits but on the number of shareholders in the company and the proportion of the number of shares the borrower has to the total number of shares held by the shareholders of the company the lesser the proportion, the greater is the chance of the advance or loan being genuine, as there would in that case be greater risk of the other shareholders losing their share in the profits deemed to be distributed as dividends.42. I am, therefore, of opinion that the impugned sections, viz., Ss. 2 (6A) (e) and 12 (1B) of the Act are void and that this appeal should be allowed.

0[ds]5. It is thus clear that the combined effect of these two provisions is that three kinds of payments made to the shareholder of a company to which the said provisions apply, are treated as taxable dividend to the extent of the accumulated profits held by the company. These three kinds of payments are: (I) payments made to the shareholder by way of advance or loan; (2) payments made on his behalf; and (3) payments made for his individual benefit. There are five conditions which must be satisfied before S. 12(1B) can be invoked against a shareholder. The first condition is that the company in question must be one in which the public are not substantially interested within the meaning of S. 23A as it stood in the year in which the loan was advanced. The second condition is that the borrower must be a shareholder at the date when the loan was advanced; it is immaterial what the extent of his shareholding is. The third condition is that the loan advanced to a shareholder by such, a company can be deemed to be, dividend only to the extent to which it is shown that the company possessed accumulated profits, at the date of the loan. This is an important limit prescribed by the relevant section. The fourth condition is that the loan must not have been advanced by the company in the ordinary course of its business. In other words, this provision would not apply to cases where the company which advances a loan to its shareholder carries on the business of money lending itself; and the last condition is that the loan must have remained outstanding at the commencement of the shareholders previous year in relation to the assessment year 1955-56. In dealing with the question about the constitutionality of the impugned provisions, it is necessary to bear in mind these respective conditions which govern the application of the saidis no doubt that if the impugned provision is beyond the legislative powers of Parliament, it would be bad. Similarly, it is now well settled that even tax legislation must stand the scrutiny of the fundamental rights guaranteed by the Constitution, and so, there can be no doubt that if the impugned provision invades the fundamental rights of the appellant and the invasion is not constitutionally justified, it would becompanies to which the impugned section applies are companies in which at least 75 per cent of the voting power lies in the hands of persons other than the public, and that means that the companies are controlled by a group of persons allied together and having the same interest. In the case of such companies, the controlling group can do what it likes with the management of the company, its affairs and its profits within the limits of the Companies Act. It is for this group to determine whether the profits made by the company should be distributed as dividends or not. The declaration of dividend is entirely within the discretion of this group. When the legislature realised that though money was reasonably available with the company in the form of profits, those in charge of the company deliberately refused to distribute it as dividends to the shareholders, but adopted the device of advancing the said accumulated profits by way of loan or advance to one of its shareholders, it was plain that the object of such a loan or advance was to evade the payment of tax on accumulated profits under S. 3A. It will be remembered that an advance or loan which falls within the mischief of the impugned section is advance or loan made by a company which does not normally deal in money lending, and it is made with full knowledge of the provisions contained in the impugned section. The object of keeping accumulated profits without distributing them obviously is to take the benefit of the lower rate of super-tax prescribed for companies. This object was defeated by S. 23A which provides that in the case of undistributed profits, tax would be levied on the shareholders on the basis that the accumulated profits will be deemed to have been distributed amongst them. Similarly, S. 12(1B) provides that if a controlled company adopts the device of making a loan or advance to one of its shareholders, such shareholder will be deemed to have received the said amount out of the accumulated profits and would be liable to pay tax on the basis that he has received the said loan by way of dividend. It is clear that when such a device is adopted by a controlled company, the controlling group consisting of shareholders have deliberately decided to adopt the device of making a loan or advance. Such an arrangement is intended to evade the application of S.23A. The loan may carry interest and the said interest may be received by the company; but the main object underlying the loans is to avoid payment of tax. It may ultimately be repaid to the company and when it is so repaid, it may or may not be treated as part of accumulated profits. It is this kind of well planned device which S. 12(1B) intends to reach for the purpose ofwe have already noticed, the word "income" in the context must receive a wide interpretation; how wide it should be it is unnecessary to consider, because such an enquiry would be hypothetical. The question must be decided on the facts of each case. There must no doubt be some rational connection between the item taxed and the concept of income liberally construed. If the legislature realises that the private controlled companies generally adopt the device of making advances or giving loans to their shareholders with the object of evading the payment of tax, it can step in to meet this mischief, and in that connection, it has created a, fiction by which the amount ostensibly and nominally advanced to a shareholder, as a loan is treated in reality for tax purposes as the payment of dividend to him. We have already explainer how a small number of shareholders controlling a private company adopt this device. Having regard to the fact that the legislature was aware of such devices, would it not be competent to the legislature to device a fiction for treating the ostensible loan as the receipt of dividend? In our opinion, it would be difficult to hold that in making the fiction, the legislature has travelled beyond the legislative field assigned to it by entry 82 in Listare not inclined to accept this argument. If the legislature thinks that the advances or loans are in almost every case the result of a device, it would be competent to it to prescribe a fiction and hold that in cases of such advances or loans, tax should be recovered, from the shareholder on the basis that he has received the dividend. Therefore, we are satisfied that the High Court was right in coming to the conclusion that the impugned section is not beyond the legislative competence of theis not easy to appreciate this argument. Article 19(1)(f) recognises the right of a citizen to acquire, hold and dispose of property Art.19(1)(g) recognises the right to practice any profession, or to carry on any occupation, trade or business. The impugned provision does not contravene either of these rights. The shareholders right to borrow money from his own company cannot be said to be a fundamental right, besides all that the impugned section does is to provide that if a loan is borrowed by a shareholder from a company to which the said provision applies, it will be deemed to be a receipt by him of the dividend. This provision does not affect the appellants right to borrow money from any other source; and his company from which he borrows does not ordinarily do money lending business. That is why the restriction imposed by the section cannot be said to be unreasonable at all. In dealing with the question about the reasonableness of this provision, we cannot also overlook the fact that past transactions were excluded from its operation by the issue of a circular to which we have already referred. There is no element of unfairness in the fiction, because the other shareholders have deliberately agreed to make the loan or the advance and the shareholder to whom the loan is advanced deliberately takes it with a view to assist the company to evade the payment of tax and to have the benefit of the use of the amount subject to the payment of interest. The company receives interest, the shareholder enjoys the use of the money, and in the process the payment of due tax is evaded. That is the assumption made by the legislature in making this provision. How can it be urged that either the shareholder who is taxed, or the other shareholders who deliberately make the advance to a colleague of theirs, are unfairly dealt with by the impugned provision. In our opinion, there is no scope for arguing that the fundamental rights of the shareholder under Art. 19(1)(f) and (g) have been contravened by the impugned provision. Therefore, we must reject Mr. Pathaks argument that the impugned provision is invalid on the ground that it contravenes Art. 19(1)(f) and (g). There is obviously no scope for suggesting that the impugned provision contravenes Art. 14; and in fact Mr. Pathak has not raised this point before us.

### Instruction: Estimate the outcome of the case (positive (1) or negative (0) for the appellant) and then give a reasoned explanation by examining important sentences within the case documentation. ### Input: with respect to which no action has been taken under S. 23A was justified and that, therefore, if in case a company could spare the money to advance to a shareholder for his needs, that alone should not lead to the inference that the advance was made to evade the payment of super-tax by the shareholder. The third point of distinction; and of significance, is that no individual shareholder is made liable for tax on an amount of the undistributed profits in excess of his proportionate share in those profits. The shareholder is not there by prejudiced. His income is increased by an amount which he could have legitimately got from the company if the persons in control had acted reasonably and had retained such profits undistributed as were necessary for the purposes of the company.39. Another objection taken in Baldev Singhs Case; (1961) 1 SCR 482 : (AIR 1961 SC 736 ), was about the constitutionality of S. 23A on the ground that it purports to tax the shareholders on the income of the company in which they held share, especially when it does not give a right to the shareholders to realise from the company the dividend which by the order is deemed to have been paid to them. The section was held to be constitutionally valid as it was enacted for preventing evasion of tax in view of the conditions of its applicability. In the circumstances of the cases covered by S. 23A, there was a reasonable connection between the amount deemed to be distributed as dividend and the possible attempt for evading payment of super tax. The assessee could not have been prejudiced if the persons in control of the management of the company had acted reasonably or actually distributed that amount as profits subsequent to the order of the Income-tax Officer.40. In Balajis Case, (1962) 2 SCR 983 : (AIR 1962 SC 123 ), the validity of S. 16(3)(a), clauses (i) and (ii) came up for consideration. These clauses provide that in computing the total income of any individual for the purpose of assessment there shall be included so much of the income of his wife or minor child as arises directly or indirectly from the membership of the wife in a firm of which her husband is a partner or from the admission of the minor to the benefits of partnership in a firm of which such individual is partner. These provisions were held valid. The Court left open the question whether A could be taxed on the income of B and formulated the question for decision as to whether S.16(3) (a), clauses (i) and (ii), is a provision made by thy Legislature to prevent evasion of tax and answered it in the affirmative, as the husband or the father could nominally take his wife or minor child, in partnership with him, so that the tax burden may be lightened and as this device enabled the assessee to secure the entire income of the business and yet evade income-tax which he would otherwise have been liable to pay. It was said at p. 999 (of SCR) : (at p. 129 of AIR) :"The scope of the provisions is limited only to a few of the intimate members of a family who ordinarily are under the protection of the assessee and are dependants of him. The persons selected by the provisions, namely, wife and minor children, cannot also be ordinarily expected to carry on their business independently with their own funds when the husband or the father is alive and when they are under his protection."It is, therefore, clear that the basis for holding S. 16(3) (a), clauses (i) and (ii), valid was that in effect the husband or the father was the real person who ran the firm and that the others were made partners nominally and, therefore, the partnership was not genuine. In this view, there could be no question of the provisions affecting the husband or the father prejudicially or including in his income amounts which were not his income. This, however, cannot be said in the present case or in cases which come within the purview of the impugned sections.41. In dealing with the contention that the provisions of S. 16(3)(a), clauses (i) and (ii), contravened Art. 14 of the Constitution, it was said at p. 991 (of SCR) : (at p. 126 of AIR) :"We have held that the object of the legislation was to prevent evasion of tax. A similar device would not ordinarily be resorted to by individuals by entering into partnership with persons other than those mentioned in the sub-section, as it would involve a risk of the third party turning round and asserting his own rights. The Legislature, therefore, selected for the purpose of classification only that group of persons who in fact are used as a cloak to perpetuate fraud on taxation."Such a risk is always involved in a company making payments as advances or loans to a shareholder when it possesses accumulated profits as the other shareholders run the risk of not getting their proportionate share of profits which, they would have got if they had been really distributed as dividends. This consideration, again points to the conclusion that the probability of such an advance or loan being genuine would be dependent not so much on the existence of accumulated profits but on the number of shareholders in the company and the proportion of the number of shares the borrower has to the total number of shares held by the shareholders of the company the lesser the proportion, the greater is the chance of the advance or loan being genuine, as there would in that case be greater risk of the other shareholders losing their share in the profits deemed to be distributed as dividends.42. I am, therefore, of opinion that the impugned sections, viz., Ss. 2 (6A) (e) and 12 (1B) of the Act are void and that this appeal should be allowed. ### Response: 0 ### Explanation: profits under S. 3A. It will be remembered that an advance or loan which falls within the mischief of the impugned section is advance or loan made by a company which does not normally deal in money lending, and it is made with full knowledge of the provisions contained in the impugned section. The object of keeping accumulated profits without distributing them obviously is to take the benefit of the lower rate of super-tax prescribed for companies. This object was defeated by S. 23A which provides that in the case of undistributed profits, tax would be levied on the shareholders on the basis that the accumulated profits will be deemed to have been distributed amongst them. Similarly, S. 12(1B) provides that if a controlled company adopts the device of making a loan or advance to one of its shareholders, such shareholder will be deemed to have received the said amount out of the accumulated profits and would be liable to pay tax on the basis that he has received the said loan by way of dividend. It is clear that when such a device is adopted by a controlled company, the controlling group consisting of shareholders have deliberately decided to adopt the device of making a loan or advance. Such an arrangement is intended to evade the application of S.23A. The loan may carry interest and the said interest may be received by the company; but the main object underlying the loans is to avoid payment of tax. It may ultimately be repaid to the company and when it is so repaid, it may or may not be treated as part of accumulated profits. It is this kind of well planned device which S. 12(1B) intends to reach for the purpose ofwe have already noticed, the word "income" in the context must receive a wide interpretation; how wide it should be it is unnecessary to consider, because such an enquiry would be hypothetical. The question must be decided on the facts of each case. There must no doubt be some rational connection between the item taxed and the concept of income liberally construed. If the legislature realises that the private controlled companies generally adopt the device of making advances or giving loans to their shareholders with the object of evading the payment of tax, it can step in to meet this mischief, and in that connection, it has created a, fiction by which the amount ostensibly and nominally advanced to a shareholder, as a loan is treated in reality for tax purposes as the payment of dividend to him. We have already explainer how a small number of shareholders controlling a private company adopt this device. Having regard to the fact that the legislature was aware of such devices, would it not be competent to the legislature to device a fiction for treating the ostensible loan as the receipt of dividend? In our opinion, it would be difficult to hold that in making the fiction, the legislature has travelled beyond the legislative field assigned to it by entry 82 in Listare not inclined to accept this argument. If the legislature thinks that the advances or loans are in almost every case the result of a device, it would be competent to it to prescribe a fiction and hold that in cases of such advances or loans, tax should be recovered, from the shareholder on the basis that he has received the dividend. Therefore, we are satisfied that the High Court was right in coming to the conclusion that the impugned section is not beyond the legislative competence of theis not easy to appreciate this argument. Article 19(1)(f) recognises the right of a citizen to acquire, hold and dispose of property Art.19(1)(g) recognises the right to practice any profession, or to carry on any occupation, trade or business. The impugned provision does not contravene either of these rights. The shareholders right to borrow money from his own company cannot be said to be a fundamental right, besides all that the impugned section does is to provide that if a loan is borrowed by a shareholder from a company to which the said provision applies, it will be deemed to be a receipt by him of the dividend. This provision does not affect the appellants right to borrow money from any other source; and his company from which he borrows does not ordinarily do money lending business. That is why the restriction imposed by the section cannot be said to be unreasonable at all. In dealing with the question about the reasonableness of this provision, we cannot also overlook the fact that past transactions were excluded from its operation by the issue of a circular to which we have already referred. There is no element of unfairness in the fiction, because the other shareholders have deliberately agreed to make the loan or the advance and the shareholder to whom the loan is advanced deliberately takes it with a view to assist the company to evade the payment of tax and to have the benefit of the use of the amount subject to the payment of interest. The company receives interest, the shareholder enjoys the use of the money, and in the process the payment of due tax is evaded. That is the assumption made by the legislature in making this provision. How can it be urged that either the shareholder who is taxed, or the other shareholders who deliberately make the advance to a colleague of theirs, are unfairly dealt with by the impugned provision. In our opinion, there is no scope for arguing that the fundamental rights of the shareholder under Art. 19(1)(f) and (g) have been contravened by the impugned provision. Therefore, we must reject Mr. Pathaks argument that the impugned provision is invalid on the ground that it contravenes Art. 19(1)(f) and (g). There is obviously no scope for suggesting that the impugned provision contravenes Art. 14; and in fact Mr. Pathak has not raised this point before us.

Income-Tax Officer, Tuticorin Vs. T. S. Devinath Nadar & Ors

(5) includes an assessment which had become final prior to April 1, 1952. 37. I am unable to find out how the firms assessment could have been validly reopened under Section 34, in September 1952. By the time the notice under Sec. 34 was issued the eight years period of limitation prescribed in Section 34 had expired. But the validity of the firms reassesment does not appear to have been challenged at any time before the hearing of these appeals. Hence it is not safe to pursue that question. 38. The concept of a completed assessment was introduced for the first time by the amending Act 25 of 1952. The Act as it stood till then only spoke of assessments, re-assessments and rectification of assessments. What did the legislature mean by saying completed assessment Sec. 35 (5). That expression is not defined in the Act. The legislature must he considered to have deliberately used that expression in place of the expression assessment an expression familiar to courts and the connotation of which is well settled. On the basis of well recognised canons of construction of statutes we must give that expression a meaning different from that given to assessment Evidently, the legislature used the expression completed assessments to distinguish that class of assessments from assessments which are final under the Act. It appears to me, by using that expression, the legislature intended that the assessment of a partner should not be considered as a final assessment till the assessment of the firm becomes final. In other words, the partners assessment would continue to be tentative till the companys assessment becomes final. If that be the true interpretation of the expression completed assessment as I think it is, then that expression can only apply to assessments of partners made on or after April 1, 1952. The respondents assessment as mentioned earlier had become final prior to that date. Hence the respondents assessments cannot be considered as completed assessments within the meaning of that word in Section 35 (5). Consequently those assessments must be held to be outside the scope of that section. 39. Section 35 (5) neither expressly nor by necessary implication empowers the I. T. O. to reopen assessments which had become final. If the legislature wanted to confer such a power it should have said so as it did in Section 35 (6) and in several other provisions in the amending Act, Sections 3 (2), 7 (2) and 30 (2) of the Act. Further, if Section 35 (5) empowers the reopening of all final assessments of partners of firms, where was the need to give that provision a partial retrospectivity. That very circumstance negatives the contention of the department. Even if it is to be held that the expression completed assessment is an ambiguous expression, in that event also, the power conferred under Section 35 (5) could not have teen exercised to rectify the assessments in question. 40. From the foregoing it follows that the decision of this Court in Atmala Nagarajs case 1962-46 ITR 609 (SC) is correct.Even assuming that Section 35 (5) can receive a different interpretation and that interpretation is more reasonable than that adopted by this Court in Atmala Nagarajs case, 1962 46 ITR 609 (SC) In that event also this Court would not be justified in overruling its previous decision, which has the force of law in view of Article 141 of the Constitution.. I am of the opinion that the decisions of this Court should not be overruled excepting under compelling, circumstances. It is only when this Court is fully convinced that public interest of substantial character would he jeopardized by a previous decision of this Court, this Court should overrule that decision Every time this Court overrules its previous decision, the confidence of the public in the soundness of the decision of this Court is bound to be shaken. 41. Re-consideration of the decisions of this Court should be confined to questions of great public importance. In law finality is of utmost importance. Legal problems should not be treated as mere subjects for mental exercise. This Court must overrule its previous decisions only when it comes to the conclusion that it is manifestly wrong not upon a mere suggestion that some or as of the members of the later Court might arrive at a different conclusion if the matter was res integra. 42. In Bengal immunity Co. Ltd. v. State of Bihar, 1955-2 SCR 603 = (AIR 1955 SC 661 ),this Court laid down that there is nothing in the Constitution which prevents the Supreme Court from departing from a previous decision of its own if the Court is satisfied of its error and its baneful effect on the general interest of the public. Das, Acting C. J. speaking for the majority, observed in the course of his judgment (at p. 630 of the report of SCR) = (at p. 673 of AIR) : It is needless for us to say that we should not lightly dissent from a previous pronouncement of this Court. One power of review which undoubtedly exists, must be exercised with due care and caution and only for advancing the public weld being in the light of the surrounding circumstances of each case brought to our notice but we do not consider it right to confine our power within rigidly fixed limits as suggested before us. 43. The question of law with which we are concerned in this case was of minor importance, at all times. It has become all the more so because of the passage of time, as it has relevance only to assessments of partners of firms made before April 1, 1952, and that too in cases where the question of enhancing those assessments arises as a result of the assessment or reassessment of the concerned firms on or after April 1, 1952. Such eases are not likely to be many. 44. For the reasons mentioned above, I dismiss these appeals with costs. Order 45.

1[ds]7. Applying the above principles, we find that the aim of the legislation was to bring into line the assessment of the individual partner with that of the firm. It was well known that in many cases a firms final assessment dragged on for years while the assessments of the individuals composing of it were completed long before the assessment of the firm itself because in the case of individuals the matter was fairly simple It does not stand to reason that if the assessment of the firm is completed long after that of the individual by reason of proceedings under S. 34 or otherwise, the discrepancy in the income of the partner as shown by the assessment of the firm and as an individual should continue or be deft untouched and the obvious and logical course should be to rectify the assessment of the individual on the basic of the final assessment of the firm. Sub-s. (5) of S. 35 is only a step in that direction but the legislature in its wisdom thought it beet that assessments of individuals which had taken place before the final order in the assessment of the firm should not be disturbed except within four years therefrom. Under tax-Income-tax Act, 1922 a final assessment could not be altered except under proceedings sanctioned by S. 34 or S. 35 of the Act within the limits of time thereby prescribed. Leaving aside for a moment the point of time when sub-s. (5) came into the statute book, on a plain reading of the provision it appears to us that the legislature intended that the finding as to the non-inclusion of the proper share of the partner in the profit or loss of the firm in the assessment of the partner should excite the power of rectificationAs we have already said, sub-section (5) becomes operative as soon as it is found on the assessment or re-assessment of the firm or on any reduction or enhancement made in the income of the firm that the share of the partner in the profit or loss of the firm had not been included in the assessment of the partner or if included was not correct. The completion of the assessment of the partner as an individual need not happen after April 1, 1952. The completed assessment of the partner is the subject matter of rectification and this may have preceded the above mentioned date. Such completion does not control the operation of the sub-section. In the result, we find ourselves unable to concur in the decision or the reasoning in Atmala Nagrajs case, 1962-46 ITR 609 (SC). Any opinion of Hidayatullah, J. even with the above qualification merits the highest respect. After giving very anxious consideration to the views expresses by the reamed Judge, we still hold that by sub-s. (5) of S. 35 the legislature intended that rectification should be made on the finding as to the incorrectness of the assessment of the firm after the provision was introduced in the statute book, viz., 1st April, 1952. There would have been nothing unjust or inequitable in the legislature directing that rectification of the assessment of the partner should always follow the assessment or re-assessment of the firm made finally. On the other hand we think rectification of the partners assessment should logically follow the re-assessment or modification of the firms assessment. Otherwise, there would be an unaccounted-for divergence between a persons assessment as an individual and his assessment as a partner of a firm. But the legislature, in our opinion, did not intend to disturb completed assessment of partners except within the period of time indicated earlier in this judgment and unless the finding as to the incorrectness of the firms assessment was made after the terminus a quo above mentioned.

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: (5) includes an assessment which had become final prior to April 1, 1952. 37. I am unable to find out how the firms assessment could have been validly reopened under Section 34, in September 1952. By the time the notice under Sec. 34 was issued the eight years period of limitation prescribed in Section 34 had expired. But the validity of the firms reassesment does not appear to have been challenged at any time before the hearing of these appeals. Hence it is not safe to pursue that question. 38. The concept of a completed assessment was introduced for the first time by the amending Act 25 of 1952. The Act as it stood till then only spoke of assessments, re-assessments and rectification of assessments. What did the legislature mean by saying completed assessment Sec. 35 (5). That expression is not defined in the Act. The legislature must he considered to have deliberately used that expression in place of the expression assessment an expression familiar to courts and the connotation of which is well settled. On the basis of well recognised canons of construction of statutes we must give that expression a meaning different from that given to assessment Evidently, the legislature used the expression completed assessments to distinguish that class of assessments from assessments which are final under the Act. It appears to me, by using that expression, the legislature intended that the assessment of a partner should not be considered as a final assessment till the assessment of the firm becomes final. In other words, the partners assessment would continue to be tentative till the companys assessment becomes final. If that be the true interpretation of the expression completed assessment as I think it is, then that expression can only apply to assessments of partners made on or after April 1, 1952. The respondents assessment as mentioned earlier had become final prior to that date. Hence the respondents assessments cannot be considered as completed assessments within the meaning of that word in Section 35 (5). Consequently those assessments must be held to be outside the scope of that section. 39. Section 35 (5) neither expressly nor by necessary implication empowers the I. T. O. to reopen assessments which had become final. If the legislature wanted to confer such a power it should have said so as it did in Section 35 (6) and in several other provisions in the amending Act, Sections 3 (2), 7 (2) and 30 (2) of the Act. Further, if Section 35 (5) empowers the reopening of all final assessments of partners of firms, where was the need to give that provision a partial retrospectivity. That very circumstance negatives the contention of the department. Even if it is to be held that the expression completed assessment is an ambiguous expression, in that event also, the power conferred under Section 35 (5) could not have teen exercised to rectify the assessments in question. 40. From the foregoing it follows that the decision of this Court in Atmala Nagarajs case 1962-46 ITR 609 (SC) is correct.Even assuming that Section 35 (5) can receive a different interpretation and that interpretation is more reasonable than that adopted by this Court in Atmala Nagarajs case, 1962 46 ITR 609 (SC) In that event also this Court would not be justified in overruling its previous decision, which has the force of law in view of Article 141 of the Constitution.. I am of the opinion that the decisions of this Court should not be overruled excepting under compelling, circumstances. It is only when this Court is fully convinced that public interest of substantial character would he jeopardized by a previous decision of this Court, this Court should overrule that decision Every time this Court overrules its previous decision, the confidence of the public in the soundness of the decision of this Court is bound to be shaken. 41. Re-consideration of the decisions of this Court should be confined to questions of great public importance. In law finality is of utmost importance. Legal problems should not be treated as mere subjects for mental exercise. This Court must overrule its previous decisions only when it comes to the conclusion that it is manifestly wrong not upon a mere suggestion that some or as of the members of the later Court might arrive at a different conclusion if the matter was res integra. 42. In Bengal immunity Co. Ltd. v. State of Bihar, 1955-2 SCR 603 = (AIR 1955 SC 661 ),this Court laid down that there is nothing in the Constitution which prevents the Supreme Court from departing from a previous decision of its own if the Court is satisfied of its error and its baneful effect on the general interest of the public. Das, Acting C. J. speaking for the majority, observed in the course of his judgment (at p. 630 of the report of SCR) = (at p. 673 of AIR) : It is needless for us to say that we should not lightly dissent from a previous pronouncement of this Court. One power of review which undoubtedly exists, must be exercised with due care and caution and only for advancing the public weld being in the light of the surrounding circumstances of each case brought to our notice but we do not consider it right to confine our power within rigidly fixed limits as suggested before us. 43. The question of law with which we are concerned in this case was of minor importance, at all times. It has become all the more so because of the passage of time, as it has relevance only to assessments of partners of firms made before April 1, 1952, and that too in cases where the question of enhancing those assessments arises as a result of the assessment or reassessment of the concerned firms on or after April 1, 1952. Such eases are not likely to be many. 44. For the reasons mentioned above, I dismiss these appeals with costs. Order 45. ### Response: 1 ### Explanation: 7. Applying the above principles, we find that the aim of the legislation was to bring into line the assessment of the individual partner with that of the firm. It was well known that in many cases a firms final assessment dragged on for years while the assessments of the individuals composing of it were completed long before the assessment of the firm itself because in the case of individuals the matter was fairly simple It does not stand to reason that if the assessment of the firm is completed long after that of the individual by reason of proceedings under S. 34 or otherwise, the discrepancy in the income of the partner as shown by the assessment of the firm and as an individual should continue or be deft untouched and the obvious and logical course should be to rectify the assessment of the individual on the basic of the final assessment of the firm. Sub-s. (5) of S. 35 is only a step in that direction but the legislature in its wisdom thought it beet that assessments of individuals which had taken place before the final order in the assessment of the firm should not be disturbed except within four years therefrom. Under tax-Income-tax Act, 1922 a final assessment could not be altered except under proceedings sanctioned by S. 34 or S. 35 of the Act within the limits of time thereby prescribed. Leaving aside for a moment the point of time when sub-s. (5) came into the statute book, on a plain reading of the provision it appears to us that the legislature intended that the finding as to the non-inclusion of the proper share of the partner in the profit or loss of the firm in the assessment of the partner should excite the power of rectificationAs we have already said, sub-section (5) becomes operative as soon as it is found on the assessment or re-assessment of the firm or on any reduction or enhancement made in the income of the firm that the share of the partner in the profit or loss of the firm had not been included in the assessment of the partner or if included was not correct. The completion of the assessment of the partner as an individual need not happen after April 1, 1952. The completed assessment of the partner is the subject matter of rectification and this may have preceded the above mentioned date. Such completion does not control the operation of the sub-section. In the result, we find ourselves unable to concur in the decision or the reasoning in Atmala Nagrajs case, 1962-46 ITR 609 (SC). Any opinion of Hidayatullah, J. even with the above qualification merits the highest respect. After giving very anxious consideration to the views expresses by the reamed Judge, we still hold that by sub-s. (5) of S. 35 the legislature intended that rectification should be made on the finding as to the incorrectness of the assessment of the firm after the provision was introduced in the statute book, viz., 1st April, 1952. There would have been nothing unjust or inequitable in the legislature directing that rectification of the assessment of the partner should always follow the assessment or re-assessment of the firm made finally. On the other hand we think rectification of the partners assessment should logically follow the re-assessment or modification of the firms assessment. Otherwise, there would be an unaccounted-for divergence between a persons assessment as an individual and his assessment as a partner of a firm. But the legislature, in our opinion, did not intend to disturb completed assessment of partners except within the period of time indicated earlier in this judgment and unless the finding as to the incorrectness of the firms assessment was made after the terminus a quo above mentioned.

Kridhan Infrastructure Pvt Ltd (Now known as Krish Steel and Trading Pvt Ltd) Vs. Venkatesan Sankaranarayan & Ors

issued: (i) The operation of the impugned order of the NCLAT dated 8 September 2020, is stayed; (ii) The appellant shall, in order to demonstrate its ability to implement the Resolution Plan and in compliance with the understanding arrived at on 25 February 2020 deposit an amount of Rs 50 crores, on or before 10 January 2021; and (iii) The auction of the properties of the Corporate Debtor shall remain stayed in the meantime. 10 The appeal shall be listed on 12 January 2021. (emphasis supplied) 4. Subsequently, on 25 November 2020, the above order was clarified by this Court and time for making the deposit was extended until 25 February 2021. 5. Though nearly five months have elapsed since the first order, no payment has been made. Even after second order granting the extension of time, three months have elapsed. The appellant took over the Corporate Debtor after the order of stay. Though given charge, the appellant has not fulfilled its reciprocal obligations. IA 22633 of 2021 has been filed in the Civil Appeal, seeking a direction to the Ministry of Corporate Affairs, the Registrar of Companies and the Insolvency and Bankruptcy Board of India(IBBI) to take on record the newly appointed directors and signatories of the Corporate Debtor; to accept the Corporate Debtor as an active company and change its status from under liquidation to active and generally to take all actions in compliance of the previous orders of this Court. 6. Mr K V Vishwanathan, learned Senior Counsel appearing on behalf of the appellant, submits that pursuant to the earlier orders dated 9 October 2020 and 25 November 2020, the appellant had moved the Term Lenders for finance. However, the appellant submits that before finance can be made available to the appellant, the Term Lenders have insisted that the status of the Company must be altered from that of a company under liquidation, to an active company. A copy of the email addressed by the Insolvency and Bankruptcy Board of India on 15 January 2021 has been annexed to the aforesaid IA. Mr Vishwanathan submits that the previous orders of this Court recognize that the appellant was required to deposit an amount of Rs 50 crores in terms of the understanding which was arrived at with the CoC on 25 February 2020. It has been submitted that the appellant would hence raise the funds after securing a mortgage on the assets of the Corporate Debtor. However, the Term Lenders are not ready and willing to make funds available unless the status of the Company is altered. 7. Ms Meenakshi Arora, learned Senior Counsel appearing on behalf of Edelweiss Asset Reconstruction Company Limited(EARC) , submits that EARC has the largest stake in respect of the Corporate Debtor. Ms Arora has submitted that EARC, as recorded in the earlier orders, supported the appellant in its efforts to comply with the Resolution Plan and, accordingly, suitable orders may be passed by this Court so as to facilitate the appellant in raising the necessary funds. 8. On the other hand, Mr Ashish Makhija, learned counsel, who had appeared on behalf of the Liquidator, submits that though the management was handed over to the appellant, the appellant has proceeded to take action towards settling various disputes, including arbitration matters and despite various opportunities having been granted to it, the appellant has been unable to raise funds, as stated before this Court. Hence, Mr Makhija submits that an appropriate view may be taken by this Court on the default by the appellant. 9. The above submission of Mr Makhija has been controverted by Mr Vishwanathan who denies that arbitration claims have been settled. 10. By the order of the court dated 9 October 2020, which was passed on the statement which was made by Senior Counsel, an amount of Rs 50 crores was required to be deposited before 10 January 2021. On 25 November 2020, while clarifying the earlier order by which the order of NCLAT was stayed, time for the deposit of Rs 50 crores was extended until 25 February 2021. The appellant was clearly put on notice that the amount of Rs. 20 crores already deposited would stand forfeited in the event the appellant fails to comply with the terms of the order. 11. The appellant has been unable to raise the funds. The fact of the matter, as it emerges from Mr Vishwanathans submissions, is that the appellant will be unable to raise funds from the Term Lenders who are insisting that the status of the Company should change from a company under liquidation to an active status. The order of liquidation has not been set aside. Ultimately, what the request of the appellant reduces itself to, is that it would raise funds on a mortgage of the assets of the Company and unless the Company is brought out of liquidation, it would not be in a position to raise the funds. This is unacceptable. At this stage, the order of liquidation has only been stayed, but a final view was, thus, to be taken by this Court. Sufficient opportunities were granted to the appellant earlier during the pendency of the proceedings both before the NCLT and NCLAT. The orders of the NCLT and NCLAT make it abundantly clear that despite the grant of sufficient time, the appellant has not been able to comply with the terms of the Resolution Plan. Since 9 October 2020, despite the passage of almost five months, the appellant has not been able to deposit an amount of Rs 50 crores. Time is a crucial facet of the scheme under the IBC.(Innoventive Industries Ltd. v ICICI Bank, (2018) 1 SCC 407, paras 12-16) To allow such proceedings to lapse into an indefinite delay will plainly defeat the object of the statute. A good faith effort to resolve a corporate insolvency is a preferred course. However a resolution applicant must be fair in its dealings as well. The appellant has failed to abide by its obligations.

0[ds]10. By the order of the court dated 9 October 2020, which was passed on the statement which was made by Senior Counsel, an amount of Rs 50 crores was required to be deposited before 10 January 2021. On 25 November 2020, while clarifying the earlier order by which the order of NCLAT was stayed, time for the deposit of Rs 50 crores was extended until 25 February 2021. The appellant was clearly put on notice that the amount of Rs. 20 crores already deposited would stand forfeited in the event the appellant fails to comply with the terms of the order.11. The appellant has been unable to raise the funds. The fact of the matter, as it emerges from Mr Vishwanathans submissions, is that the appellant will be unable to raise funds from the Term Lenders who are insisting that the status of the Company should change from a company under liquidation to an active status. The order of liquidation has not been set aside. Ultimately, what the request of the appellant reduces itself to, is that it would raise funds on a mortgage of the assets of the Company and unless the Company is brought out of liquidation, it would not be in a position to raise the funds. This is unacceptable. At this stage, the order of liquidation has only been stayed, but a final view was, thus, to be taken by this Court. Sufficient opportunities were granted to the appellant earlier during the pendency of the proceedings both before the NCLT and NCLAT. The orders of the NCLT and NCLAT make it abundantly clear that despite the grant of sufficient time, the appellant has not been able to comply with the terms of the Resolution Plan. Since 9 October 2020, despite the passage of almost five months, the appellant has not been able to deposit an amount of Rs 50 crores. Time is a crucial facet of the scheme under the IBC.(Innoventive Industries Ltd. v ICICI Bank, (2018) 1 SCC 407, paras 12-16) To allow such proceedings to lapse into an indefinite delay will plainly defeat the object of the statute. A good faith effort to resolve a corporate insolvency is a preferred course. However a resolution applicant must be fair in its dealings as well. The appellant has failed to abide by its obligations.

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: issued: (i) The operation of the impugned order of the NCLAT dated 8 September 2020, is stayed; (ii) The appellant shall, in order to demonstrate its ability to implement the Resolution Plan and in compliance with the understanding arrived at on 25 February 2020 deposit an amount of Rs 50 crores, on or before 10 January 2021; and (iii) The auction of the properties of the Corporate Debtor shall remain stayed in the meantime. 10 The appeal shall be listed on 12 January 2021. (emphasis supplied) 4. Subsequently, on 25 November 2020, the above order was clarified by this Court and time for making the deposit was extended until 25 February 2021. 5. Though nearly five months have elapsed since the first order, no payment has been made. Even after second order granting the extension of time, three months have elapsed. The appellant took over the Corporate Debtor after the order of stay. Though given charge, the appellant has not fulfilled its reciprocal obligations. IA 22633 of 2021 has been filed in the Civil Appeal, seeking a direction to the Ministry of Corporate Affairs, the Registrar of Companies and the Insolvency and Bankruptcy Board of India(IBBI) to take on record the newly appointed directors and signatories of the Corporate Debtor; to accept the Corporate Debtor as an active company and change its status from under liquidation to active and generally to take all actions in compliance of the previous orders of this Court. 6. Mr K V Vishwanathan, learned Senior Counsel appearing on behalf of the appellant, submits that pursuant to the earlier orders dated 9 October 2020 and 25 November 2020, the appellant had moved the Term Lenders for finance. However, the appellant submits that before finance can be made available to the appellant, the Term Lenders have insisted that the status of the Company must be altered from that of a company under liquidation, to an active company. A copy of the email addressed by the Insolvency and Bankruptcy Board of India on 15 January 2021 has been annexed to the aforesaid IA. Mr Vishwanathan submits that the previous orders of this Court recognize that the appellant was required to deposit an amount of Rs 50 crores in terms of the understanding which was arrived at with the CoC on 25 February 2020. It has been submitted that the appellant would hence raise the funds after securing a mortgage on the assets of the Corporate Debtor. However, the Term Lenders are not ready and willing to make funds available unless the status of the Company is altered. 7. Ms Meenakshi Arora, learned Senior Counsel appearing on behalf of Edelweiss Asset Reconstruction Company Limited(EARC) , submits that EARC has the largest stake in respect of the Corporate Debtor. Ms Arora has submitted that EARC, as recorded in the earlier orders, supported the appellant in its efforts to comply with the Resolution Plan and, accordingly, suitable orders may be passed by this Court so as to facilitate the appellant in raising the necessary funds. 8. On the other hand, Mr Ashish Makhija, learned counsel, who had appeared on behalf of the Liquidator, submits that though the management was handed over to the appellant, the appellant has proceeded to take action towards settling various disputes, including arbitration matters and despite various opportunities having been granted to it, the appellant has been unable to raise funds, as stated before this Court. Hence, Mr Makhija submits that an appropriate view may be taken by this Court on the default by the appellant. 9. The above submission of Mr Makhija has been controverted by Mr Vishwanathan who denies that arbitration claims have been settled. 10. By the order of the court dated 9 October 2020, which was passed on the statement which was made by Senior Counsel, an amount of Rs 50 crores was required to be deposited before 10 January 2021. On 25 November 2020, while clarifying the earlier order by which the order of NCLAT was stayed, time for the deposit of Rs 50 crores was extended until 25 February 2021. The appellant was clearly put on notice that the amount of Rs. 20 crores already deposited would stand forfeited in the event the appellant fails to comply with the terms of the order. 11. The appellant has been unable to raise the funds. The fact of the matter, as it emerges from Mr Vishwanathans submissions, is that the appellant will be unable to raise funds from the Term Lenders who are insisting that the status of the Company should change from a company under liquidation to an active status. The order of liquidation has not been set aside. Ultimately, what the request of the appellant reduces itself to, is that it would raise funds on a mortgage of the assets of the Company and unless the Company is brought out of liquidation, it would not be in a position to raise the funds. This is unacceptable. At this stage, the order of liquidation has only been stayed, but a final view was, thus, to be taken by this Court. Sufficient opportunities were granted to the appellant earlier during the pendency of the proceedings both before the NCLT and NCLAT. The orders of the NCLT and NCLAT make it abundantly clear that despite the grant of sufficient time, the appellant has not been able to comply with the terms of the Resolution Plan. Since 9 October 2020, despite the passage of almost five months, the appellant has not been able to deposit an amount of Rs 50 crores. Time is a crucial facet of the scheme under the IBC.(Innoventive Industries Ltd. v ICICI Bank, (2018) 1 SCC 407, paras 12-16) To allow such proceedings to lapse into an indefinite delay will plainly defeat the object of the statute. A good faith effort to resolve a corporate insolvency is a preferred course. However a resolution applicant must be fair in its dealings as well. The appellant has failed to abide by its obligations. ### Response: 0 ### Explanation: 10. By the order of the court dated 9 October 2020, which was passed on the statement which was made by Senior Counsel, an amount of Rs 50 crores was required to be deposited before 10 January 2021. On 25 November 2020, while clarifying the earlier order by which the order of NCLAT was stayed, time for the deposit of Rs 50 crores was extended until 25 February 2021. The appellant was clearly put on notice that the amount of Rs. 20 crores already deposited would stand forfeited in the event the appellant fails to comply with the terms of the order.11. The appellant has been unable to raise the funds. The fact of the matter, as it emerges from Mr Vishwanathans submissions, is that the appellant will be unable to raise funds from the Term Lenders who are insisting that the status of the Company should change from a company under liquidation to an active status. The order of liquidation has not been set aside. Ultimately, what the request of the appellant reduces itself to, is that it would raise funds on a mortgage of the assets of the Company and unless the Company is brought out of liquidation, it would not be in a position to raise the funds. This is unacceptable. At this stage, the order of liquidation has only been stayed, but a final view was, thus, to be taken by this Court. Sufficient opportunities were granted to the appellant earlier during the pendency of the proceedings both before the NCLT and NCLAT. The orders of the NCLT and NCLAT make it abundantly clear that despite the grant of sufficient time, the appellant has not been able to comply with the terms of the Resolution Plan. Since 9 October 2020, despite the passage of almost five months, the appellant has not been able to deposit an amount of Rs 50 crores. Time is a crucial facet of the scheme under the IBC.(Innoventive Industries Ltd. v ICICI Bank, (2018) 1 SCC 407, paras 12-16) To allow such proceedings to lapse into an indefinite delay will plainly defeat the object of the statute. A good faith effort to resolve a corporate insolvency is a preferred course. However a resolution applicant must be fair in its dealings as well. The appellant has failed to abide by its obligations.

SECUNDERABAD CANTONMENT BOARD Vs. M/S B. RAMACHANDRAIAH & SONS

stage. At the referral stage, the Court can interfere only when it is manifest that the claims are ex facie time barred and dead, or there is no subsisting dispute. Paragraph 148 of the judgment reads as follows : 148. Section 43(1) of the Arbitration Act states that the Limitation Act, 1963 shall apply to arbitrations as it applies to court proceedings. Sub-section (2) states that for the purposes of the Arbitration Act and Limitation Act, arbitration shall be deemed to have commenced on the date referred to in Section 21. Limitation law is procedural and normally disputes, being factual, would be for the arbitrator to decide guided by the facts found and the law applicable. The court at the referral stage can interfere only when it is manifest that the claims are ex facie time-barred and dead, or there is no subsisting dispute. All other cases should be referred to the Arbitral Tribunal for decision on merits. Similar would be the position in case of disputed no-claim certificate or defence on the plea of novation and accord and satisfaction. As observed in Premium Nafta Products Ltd. [Fili Shipping Co. Ltd. v. Premium Nafta Products Ltd., 2007 UKHL 40 : 2007 Bus LR 1719 (HL)] , it is not to be expected that commercial men while entering transactions inter se would knowingly create a system which would require that the court should first decide whether the contract should be rectified or avoided or rescinded, as the case may be, and then if the contract is held to be valid, it would require the arbitrator to resolve the issues that have arisen. In paragraph 154.4, it has been concluded that: 154.4. Rarely as a demurrer the court may interfere at Section 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably non-arbitrable and to cut off the deadwood. The court by default would refer the matter when contentions relating to non arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the Arbitral Tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism. (emphasis supplied) In paragraph 244.4 it was concluded that: 244.4. The court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above i.e. when in doubt, do refer. 37. The upshot of the judgment in Vidya Drolia is affirmation of the position of law expounded in Duro Felguera and Mayavati Trading, which continue to hold the field. It must be understood clearly that Vidya Drolia has not resurrected the pre-amendment position on the scope of power as held in SBP & Co. v. Patel Engineering (supra). It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal. (emphasis in original) 20. Applying the aforesaid judgments to the facts of this case, so far as the applicability of Article 137 of the Limitation Act to the applications under Section 11 of the Arbitration Act is concerned, it is clear that the demand for arbitration in the present case was made by the letter dated 07.11.2006. This demand was reiterated by a letter dated 13.01.2007, which letter itself informed the Appellant that appointment of an arbitrator would have to be made within 30 days. At the very latest, therefore, on the facts of this case, time began to run on and from 12.02.2007. The Appellants laconic letter dated 23.01.2007, which stated that the matter was under consideration, was within the 30-day period. On and from 12.02.2007, when no arbitrator was appointed, the cause of action for appointment of an arbitrator accrued to the Respondent and time began running from that day. Obviously, once time has started running, any final rejection by the Appellant by its letter dated 10.11.2010 would not give any fresh start to a limitation period which has already begun running, following the mandate of Section 9 of the Limitation Act. This being the case, the High Court was clearly in error in stating that since the applications under Section 11 of the Arbitration Act were filed on 06.11.2013, they were within the limitation period of three years starting from 10.11.2020. On this count, the applications under Section 11 of the Arbitration Act, themselves being hopelessly time barred, no arbitrator could have been appointed by the High Court. 21. Even otherwise, the claim made by the Respondent was also ex facie time barred. It is undisputed that final payments were received latest by the end of March 2003 by the Respondent. That apart, even assuming that a demand could have been made on account of price variation, such demand was made on 08.09.2003. Repeated letters were written thereafter by the Respondent, culminating in a legal notice dated 30.01.2010. Vide the reply notice dated 16.02.2010, it was made clear that such demands had been rejected. Even taking 16.02.2010 as the starting point for limitation on merits, a period of three years having elapsed by February 2013, the claim made on merits is also hopelessly time barred.

1[ds]15. Having heard learned counsel appearing for both parties, it is first necessary to refer to the recent judgment of this Court in Geo Miller & Co. (P) Ltd. v. Rajasthan Vidyut Utpadan Nigam Ltd., (2020) 14 SCC 643, which extracts passages from all the earlier relevant judgments, and then lays down as to when time begins to run for the purpose of filing an application under Section 11 of the Arbitration Act. This Court, after referring to the relevant statutory provisions, held:15. In Damodar Das [State of Orissa v. Damodar Das, (1996) 2 SCC 216 ] , this Court observed, relying upon Russell on Arbitration by Anthony Walton (19th Edn.) at pp. 4-5 and an earlier decision of a two-Judge Bench in Panchu Gopal Bose v. Port of Calcutta [Panchu Gopal Bose v. Port of Calcutta, (1993) 4 SCC 338 ] , that the period of limitation for an application for appointment of arbitrator under Sections 8 and 20 of the 1940 Act commences on the date on which the cause of arbitration accrued i.e. from the date when the claimant first acquired either a right of action or a right to require that an arbitration take place upon the dispute concerned.xxx xxx xxx21. Applying the aforementioned principles to the present case, we find ourselves in agreement with the finding of the High Court that the appellants cause of action in respect of Arbitration Applications Nos. 25/2003 and 27/2003, relating to the work orders dated 7-10-1979 and 4-4-1980 arose on 8-2-1983, which is when the final bill handed over to the respondent became due. Mere correspondence of the appellant by way of writing letters/reminders to the respondent subsequent to this date would not extend the time of limitation. Hence the maximum period during which this Court could have allowed the appellants application for appointment of an arbitrator is 3 years from the date on which cause of action arose i.e. 8-2-1986. Similarly, with respect to Arbitration Application No. 28/2003 relating to the work order dated 3-5-1985, the respondent has stated that final bill was handed over and became due on 10-8- 1989. This has not been disputed by the appellant. Hence the limitation period ended on 10-8-1992. Since the appellant served notice for appointment of arbitrator in 2002, and requested the appointment of an arbitrator before a court only by the end of 2003, his claim is clearly barred by limitation.xxx xxx xxx23. Turning to the other decisions, it is true that in Inder Singh Rekhi [Inder Singh Rekhi v. DDA, (1988) 2 SCC 338 ], this Court observed that the existence of a dispute is essential for appointment of an arbitrator. A dispute arises when a claim is asserted by one party and denied by the other. The term dispute entails a positive element and mere inaction to pay does not lead to the inference that dispute exists. In that case, since the respondent failed to finalise the bills due to the applicant, this Court held that cause of action would be treated as arising not from the date on which the payment became due, but on the date when the applicant first wrote to the respondent requesting finalisation of the bills. However, the Court also expressly observed that a party cannot postpone the accrual of cause of action by writing reminders or sending reminders.24. In the present case, the appellant has not disputed the High Courts finding that the appellant itself had handed over the final bill to the respondent on 8-2-1983. Hence, the holding in Inder Singh Rekhi [Inder Singh Rekhi v. DDA, (1988) 2 SCC 338 ] will not apply, as in that case, the applicants claim was delayed on account of the respondents failure to finalise the bills. Therefore the right to apply in the present case accrued from the date on which the final bill was raised (see Union of India v. Momin Construction Co. [Union of India v. Momin Construction Co., (1997) 9 SCC 97 ] ).xxx xxx xxx29. Moreover, in a commercial dispute, while mere failure to pay may not give rise to a cause of action, once the applicant has asserted their claim and the respondent fails to respond to such claim, such failure will be treated as a denial of the applicants claim giving rise to a dispute, and therefore the cause of action for reference to arbitration. It does not lie to the applicant to plead that it waited for an unreasonably long period to refer the dispute to arbitration merely on account of the respondents failure to settle their claim and because they were writing representations and reminders to the respondent in the meanwhile.16. The recent judgment of this Court in Bharat Sanchar Nigam Ltd. & Anr. v. M/s Nortel Networks India Pvt. Ltd., delivered on 10.03.2021 in Civil Appeal Nos. 843-844 of 2021 has also considered the entire law on the subject. The first paragraph of the said judgment reads as follows:1. The present Appeals raise two important issues for our consideration : (i) the period of limitation for filing an application under Section 11 of the Arbitration and Conciliation Act, 1996 (the 1996 Act); and (ii) whether the Court may refuse to make the reference under Section 11 where the claims are ex facie time-barred?17. Insofar as the first issue is concerned, after examining Article 137 of the Limitation Act, this Court held:11. It is now fairly well-settled that the limitation for filing an application under Section 11 would arise upon the failure to make the appointment of the arbitrator within a period of 30 days from issuance of the notice invoking arbitration. In other words, an application under Section 11 can be filed only after a notice of arbitration in respect of the particular claim(s) / dispute(s) to be referred to arbitration [as contemplated by Section 21 of the Act] is made, and there is failure to make the appointment.12. The period of limitation for filing a petition seeking appointment of an arbitrator/s cannot be confused or conflated with the period of limitation applicable to the substantive claims made in the underlying commercial contract. The period of limitation for such claims is prescribed under various Articles of the Limitation Act, 1963. The limitation for deciding the underlying substantive disputes is necessarily distinct from that of filing an application for appointment of an arbitrator. This position was recognized even under Section 20 of the Arbitration Act 1940. Reference may be made to the judgment of this Court in C. Budhraja v. Chairman, Orissa Mining Corporation Ltd. [(2008) 2 SCC 444] wherein it was held that Section 37(3) of the 1940 Act provides that for the purpose of the Limitation Act, an arbitration is deemed to have commenced when one party to the arbitration agreement serves on the other party, a notice requiring the appointment of an arbitrator. Paragraph 26 of this judgment reads as follows :26. Section 37(3) of the Act provides that for the purpose of the Limitation Act, an arbitration is deemed to have been commenced when one party to the arbitration agreement serves on the other party thereto, a notice requiring the appointment of an arbitrator. Such a notice having been served on 4-6-1980, it has to be seen whether the claims were in time as on that date. If the claims were barred on 4-6-1980, it follows that the claims had to be rejected by the arbitrator on the ground that the claims were barred by limitation. The said period has nothing to do with the period of limitation for filing a petition under Section 8(2) of the Act. Insofar as a petition under Section 8(2) is concerned, the cause of action would arise when the other party fails to comply with the notice invoking arbitration. Therefore, the period of limitation for filing a petition under Section 8(2) seeking appointment of an arbitrator cannot be confused with the period of limitation for making a claim. The decisions of this Court in Major (Retd.) Inder Singh Rekhi v. DDA [(1988) 2 SCC 338] , Panchu Gopal Bose v. Board of Trustees for Port of Calcutta [(1993) 4 SCC 338] and Utkal Commercial Corpn. v. Central Coal Fields Ltd. [(1999) 2 SCC 571] also make this position clear.18. Insofar as the second issue is concerned, this Court went into the position prior to the Arbitration and Conciliation (Amendment) Act, 2015 [2015 Amendment] together with the change made by the introduction of Section 11(6A) by the 2015 Amendment, stating:24. Sub-section (6A) came up for consideration in the case of Duro Felguera SA v. Gangavaram Port Ltd. [(2017) 9 SCC 729] , wherein this Court held that the legislative policy was to minimize judicial intervention at the appointment stage. In an application under Section 11, the Court should only look into the existence of the arbitration agreement, before making the reference. Post the 2015 amendments, all that the courts are required to examine is whether an arbitration agreement is in existence —nothing more, nothing less.48. Section 11(6-A) added by the 2015 Amendment, reads as follows:11. (6-A) The Supreme Court or, as the case may be, the High Court, while considering any application under subsection (4) or sub-section (5) or subsection (6), shall, notwithstanding any judgment, decree or order of any court, confine to the examination of the existence of an arbitration agreement.From a reading of Section 11(6-A), the intention of the legislature is crystal clear i.e. the court should and need only look into one aspect—the existence of an arbitration agreement. What are the factors for deciding as to whether there is an arbitration agreement is the next question. The resolution to that is simple—it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement.59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. [SBP and Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 ] and Boghara Polyfab [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117] . This position continued till the amendment brought about in 2015. After the amendment, all that the courts need to see is whether an arbitration agreement exists—nothing more, nothing less. The legislative policy and purpose is essentially to minimise the Courts intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected.25. In Mayavati Trading Company Private Ltd. v. Pradyut Dev Burman [(2019) 8 SCC 714] , a three-judge bench held that the scope of power of the Court under Section 11 (6A) had to be construed in the narrow sense. In paragraph 10, it was opined as under :10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgment [United India Insurance Co. Ltd. v. Antique Art Exports (P) Ltd., (2019) 5 SCC 362 : (2019) 2 SCC (Civ) 785] , as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera, SA [Duro Felguera, SA v. Gangavaram Port Ltd., (2017) 9 SCC 729 26. In Uttarakhand Purv Sainik Kalyan Nigam v. Northern Coal Field Limited [(2020) 2 SCC 455] this Court took note of the recommendations of the Law Commission in its 246th Report, the relevant extract of which reads as :7.6. The Law Commission in the 246th Report [Amendments to the Arbitration and Conciliation Act, 1996, Report No. 246, Law Commission of India (August 2014), p. 20.] recommended that:33. … the Commission has recommended amendments to Sections 8 and 11 of the Arbitration and Conciliation Act, 1996. The scope of the judicial intervention is only restricted to situations where the court/judicial authority finds that the arbitration agreement does not exist or is null and void. Insofar as the nature of intervention is concerned, it is recommended that in the event the court/judicial authority is prima facie satisfied against the argument challenging the arbitration agreement, it shall appoint the arbitrator and/or refer the parties to arbitration, as the case may be. The amendment envisages that the judicial authority shall not refer the parties to arbitration only if it finds that there does not exist an arbitration agreement or that it is null and void. If the judicial authority is of the opinion that prima facie the arbitration agreement exists, then it shall refer the dispute to arbitration, and leave the existence of the arbitration agreement to be finally determined by the Arbitral Tribunal.In view of the legislative mandate contained in the amended Section 11(6A), the Court is now required only to examine the existence of the arbitration agreement. All other preliminary or threshold issues are left to be decided by the arbitrator under Section 16, which enshrines the kompetenz-komptenz principle. The doctrine of kompetenz-komptenz implies that the arbitral tribunal is empowered, and has the competence to rule on its own jurisdiction, including determination of all jurisdictional issues. This was intended to minimise judicial intervention at the pre-reference stage, so that the arbitral process is not thwarted at the threshold when a preliminary objection is raised by the parties.(emphasis in original)19. This Court went on to hold that limitation is not a jurisdictional issue but is an admissibility issue. It then referred to a recent judgment of this Court in Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1 , and stated as follows:36. In a recent judgment delivered by a three-judge bench in Vidya Drolia v. Durga Trading Corporation [(2021) 2 SCC 1] , on the scope of power under Sections 8 and 11, it has been held that the Court must undertake a primary first review to weed out manifestly ex facie non-existent and invalid arbitration agreements, or non-arbitrable disputes. The prima facie review at the reference stage is to cut the deadwood, where dismissal is bare faced and pellucid, and when on the facts and law, the litigation must stop at the first stage. Only when the Court is certain that no valid arbitration agreement exists, or that the subject matter is not arbitrable, that reference may be refused.In paragraph 144, the Court observed that the judgment in Mayavati Trading had rightly held that the judgment in Patel Engineering had been legislatively overruled.Paragraph 144 reads as :144. As observed earlier, Patel Engg. Ltd. explains and holds that Sections 8 and 11 are complementary in nature as both relate to reference to arbitration. Section 8 applies when judicial proceeding is pending and an application is filed for stay of judicial proceeding and for reference to arbitration. Amendments to Section 8 vide Act 3 of 2016 have not been omitted. Section 11 covers the situation where the parties approach a court for appointment of an arbitrator. Mayavati Trading (P) Ltd., in our humble opinion, rightly holds that Patel Engg. Ltd. has been legislatively overruled and hence would not apply even post omission of sub-section (6-A) to Section 11 of the Arbitration Act. Mayavati Trading (P) Ltd. has elaborated upon the object and purposes and history of the amendment to Section 11, with reference to sub-section (6-A) to elucidate that the section, as originally enacted, was facsimile with Article 11 of the Uncitral Model of law of arbitration on which the Arbitration Act was drafted and enacted.While exercising jurisdiction under Section 11 as the judicial forum, the court may exercise the prima facie test to screen and knockdown ex facie meritless, frivolous, and dishonest litigation. Limited jurisdiction of the Courts would ensure expeditious and efficient disposal at the referral stage. At the referral stage, the Court can interfere only when it is manifest that the claims are ex facie time barred and dead, or there is no subsisting dispute.Paragraph 148 of the judgment reads as follows :148. Section 43(1) of the Arbitration Act states that the Limitation Act, 1963 shall apply to arbitrations as it applies to court proceedings. Sub-section (2) states that for the purposes of the Arbitration Act and Limitation Act, arbitration shall be deemed to have commenced on the date referred to in Section 21. Limitation law is procedural and normally disputes, being factual, would be for the arbitrator to decide guided by the facts found and the law applicable. The court at the referral stage can interfere only when it is manifest that the claims are ex facie time-barred and dead, or there is no subsisting dispute. All other cases should be referred to the Arbitral Tribunal for decision on merits. Similar would be the position in case of disputed no-claim certificate or defence on the plea of novation and accord and satisfaction. As observed in Premium Nafta Products Ltd. [Fili Shipping Co. Ltd. v. Premium Nafta Products Ltd., 2007 UKHL 40 : 2007 Bus LR 1719 (HL)] , it is not to be expected that commercial men while entering transactions inter se would knowingly create a system which would require that the court should first decide whether the contract should be rectified or avoided or rescinded, as the case may be, and then if the contract is held to be valid, it would require the arbitrator to resolve the issues that have arisen.In paragraph 154.4, it has been concluded that:154.4. Rarely as a demurrer the court may interfere at Section 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably non-arbitrable and to cut off the deadwood. The court by default would refer the matter when contentions relating to non arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the Arbitral Tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism.In paragraph 244.4 it was concluded that:244.4. The court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above i.e.when in doubt, do refer. 37. The upshot of the judgment in Vidya Drolia is affirmation of the position of law expounded in Duro Felguera and Mayavati Trading, which continue to hold the field. It must be understood clearly that Vidya Drolia has not resurrected the pre-amendment position on the scope of power as held in SBP & Co. v. Patel Engineering (supra).It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal.(emphasis in original)20. Applying the aforesaid judgments to the facts of this case, so far as the applicability of Article 137 of the Limitation Act to the applications under Section 11 of the Arbitration Act is concerned, it is clear that the demand for arbitration in the present case was made by the letter dated 07.11.2006. This demand was reiterated by a letter dated 13.01.2007, which letter itself informed the Appellant that appointment of an arbitrator would have to be made within 30 days. At the very latest, therefore, on the facts of this case, time began to run on and from 12.02.2007. The Appellants laconic letter dated 23.01.2007, which stated that the matter was under consideration, was within the 30-day period. On and from 12.02.2007, when no arbitrator was appointed, the cause of action for appointment of an arbitrator accrued to the Respondent and time began running from that day. Obviously, once time has started running, any final rejection by the Appellant by its letter dated 10.11.2010 would not give any fresh start to a limitation period which has already begun running, following the mandate of Section 9 of the Limitation Act. This being the case, the High Court was clearly in error in stating that since the applications under Section 11 of the Arbitration Act were filed on 06.11.2013, they were within the limitation period of three years starting from 10.11.2020. On this count, the applications under Section 11 of the Arbitration Act, themselves being hopelessly time barred, no arbitrator could have been appointed by the High Court.21. Even otherwise, the claim made by the Respondent was also ex facie time barred. It is undisputed that final payments were received latest by the end of March 2003 by the Respondent. That apart, even assuming that a demand could have been made on account of price variation, such demand was made on 08.09.2003. Repeated letters were written thereafter by the Respondent, culminating in a legal notice dated 30.01.2010. Vide the reply notice dated 16.02.2010, it was made clear that such demands had been rejected. Even taking 16.02.2010 as the starting point for limitation on merits, a period of three years having elapsed by February 2013, the claim made on merits is also hopelessly time barred.

### Instruction: Conjecture the end result of the case (acceptance (1) or non-acceptance (0) of the appeal), followed by a detailed explanation using crucial sentences from the case proceeding. ### Input: stage. At the referral stage, the Court can interfere only when it is manifest that the claims are ex facie time barred and dead, or there is no subsisting dispute. Paragraph 148 of the judgment reads as follows : 148. Section 43(1) of the Arbitration Act states that the Limitation Act, 1963 shall apply to arbitrations as it applies to court proceedings. Sub-section (2) states that for the purposes of the Arbitration Act and Limitation Act, arbitration shall be deemed to have commenced on the date referred to in Section 21. Limitation law is procedural and normally disputes, being factual, would be for the arbitrator to decide guided by the facts found and the law applicable. The court at the referral stage can interfere only when it is manifest that the claims are ex facie time-barred and dead, or there is no subsisting dispute. All other cases should be referred to the Arbitral Tribunal for decision on merits. Similar would be the position in case of disputed no-claim certificate or defence on the plea of novation and accord and satisfaction. As observed in Premium Nafta Products Ltd. [Fili Shipping Co. Ltd. v. Premium Nafta Products Ltd., 2007 UKHL 40 : 2007 Bus LR 1719 (HL)] , it is not to be expected that commercial men while entering transactions inter se would knowingly create a system which would require that the court should first decide whether the contract should be rectified or avoided or rescinded, as the case may be, and then if the contract is held to be valid, it would require the arbitrator to resolve the issues that have arisen. In paragraph 154.4, it has been concluded that: 154.4. Rarely as a demurrer the court may interfere at Section 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably non-arbitrable and to cut off the deadwood. The court by default would refer the matter when contentions relating to non arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the Arbitral Tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism. (emphasis supplied) In paragraph 244.4 it was concluded that: 244.4. The court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above i.e. when in doubt, do refer. 37. The upshot of the judgment in Vidya Drolia is affirmation of the position of law expounded in Duro Felguera and Mayavati Trading, which continue to hold the field. It must be understood clearly that Vidya Drolia has not resurrected the pre-amendment position on the scope of power as held in SBP & Co. v. Patel Engineering (supra). It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal. (emphasis in original) 20. Applying the aforesaid judgments to the facts of this case, so far as the applicability of Article 137 of the Limitation Act to the applications under Section 11 of the Arbitration Act is concerned, it is clear that the demand for arbitration in the present case was made by the letter dated 07.11.2006. This demand was reiterated by a letter dated 13.01.2007, which letter itself informed the Appellant that appointment of an arbitrator would have to be made within 30 days. At the very latest, therefore, on the facts of this case, time began to run on and from 12.02.2007. The Appellants laconic letter dated 23.01.2007, which stated that the matter was under consideration, was within the 30-day period. On and from 12.02.2007, when no arbitrator was appointed, the cause of action for appointment of an arbitrator accrued to the Respondent and time began running from that day. Obviously, once time has started running, any final rejection by the Appellant by its letter dated 10.11.2010 would not give any fresh start to a limitation period which has already begun running, following the mandate of Section 9 of the Limitation Act. This being the case, the High Court was clearly in error in stating that since the applications under Section 11 of the Arbitration Act were filed on 06.11.2013, they were within the limitation period of three years starting from 10.11.2020. On this count, the applications under Section 11 of the Arbitration Act, themselves being hopelessly time barred, no arbitrator could have been appointed by the High Court. 21. Even otherwise, the claim made by the Respondent was also ex facie time barred. It is undisputed that final payments were received latest by the end of March 2003 by the Respondent. That apart, even assuming that a demand could have been made on account of price variation, such demand was made on 08.09.2003. Repeated letters were written thereafter by the Respondent, culminating in a legal notice dated 30.01.2010. Vide the reply notice dated 16.02.2010, it was made clear that such demands had been rejected. Even taking 16.02.2010 as the starting point for limitation on merits, a period of three years having elapsed by February 2013, the claim made on merits is also hopelessly time barred. ### Response: 1 ### Explanation: jurisdiction of the Courts would ensure expeditious and efficient disposal at the referral stage. At the referral stage, the Court can interfere only when it is manifest that the claims are ex facie time barred and dead, or there is no subsisting dispute.Paragraph 148 of the judgment reads as follows :148. Section 43(1) of the Arbitration Act states that the Limitation Act, 1963 shall apply to arbitrations as it applies to court proceedings. Sub-section (2) states that for the purposes of the Arbitration Act and Limitation Act, arbitration shall be deemed to have commenced on the date referred to in Section 21. Limitation law is procedural and normally disputes, being factual, would be for the arbitrator to decide guided by the facts found and the law applicable. The court at the referral stage can interfere only when it is manifest that the claims are ex facie time-barred and dead, or there is no subsisting dispute. All other cases should be referred to the Arbitral Tribunal for decision on merits. Similar would be the position in case of disputed no-claim certificate or defence on the plea of novation and accord and satisfaction. As observed in Premium Nafta Products Ltd. [Fili Shipping Co. Ltd. v. Premium Nafta Products Ltd., 2007 UKHL 40 : 2007 Bus LR 1719 (HL)] , it is not to be expected that commercial men while entering transactions inter se would knowingly create a system which would require that the court should first decide whether the contract should be rectified or avoided or rescinded, as the case may be, and then if the contract is held to be valid, it would require the arbitrator to resolve the issues that have arisen.In paragraph 154.4, it has been concluded that:154.4. Rarely as a demurrer the court may interfere at Section 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably non-arbitrable and to cut off the deadwood. The court by default would refer the matter when contentions relating to non arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the Arbitral Tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism.In paragraph 244.4 it was concluded that:244.4. The court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above i.e.when in doubt, do refer. 37. The upshot of the judgment in Vidya Drolia is affirmation of the position of law expounded in Duro Felguera and Mayavati Trading, which continue to hold the field. It must be understood clearly that Vidya Drolia has not resurrected the pre-amendment position on the scope of power as held in SBP & Co. v. Patel Engineering (supra).It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal.(emphasis in original)20. Applying the aforesaid judgments to the facts of this case, so far as the applicability of Article 137 of the Limitation Act to the applications under Section 11 of the Arbitration Act is concerned, it is clear that the demand for arbitration in the present case was made by the letter dated 07.11.2006. This demand was reiterated by a letter dated 13.01.2007, which letter itself informed the Appellant that appointment of an arbitrator would have to be made within 30 days. At the very latest, therefore, on the facts of this case, time began to run on and from 12.02.2007. The Appellants laconic letter dated 23.01.2007, which stated that the matter was under consideration, was within the 30-day period. On and from 12.02.2007, when no arbitrator was appointed, the cause of action for appointment of an arbitrator accrued to the Respondent and time began running from that day. Obviously, once time has started running, any final rejection by the Appellant by its letter dated 10.11.2010 would not give any fresh start to a limitation period which has already begun running, following the mandate of Section 9 of the Limitation Act. This being the case, the High Court was clearly in error in stating that since the applications under Section 11 of the Arbitration Act were filed on 06.11.2013, they were within the limitation period of three years starting from 10.11.2020. On this count, the applications under Section 11 of the Arbitration Act, themselves being hopelessly time barred, no arbitrator could have been appointed by the High Court.21. Even otherwise, the claim made by the Respondent was also ex facie time barred. It is undisputed that final payments were received latest by the end of March 2003 by the Respondent. That apart, even assuming that a demand could have been made on account of price variation, such demand was made on 08.09.2003. Repeated letters were written thereafter by the Respondent, culminating in a legal notice dated 30.01.2010. Vide the reply notice dated 16.02.2010, it was made clear that such demands had been rejected. Even taking 16.02.2010 as the starting point for limitation on merits, a period of three years having elapsed by February 2013, the claim made on merits is also hopelessly time barred.

State Of Orissa Vs. M. A. Tulloch And Co.(And Connected Appeal)

The learned Attorney General had to concede that it was doubtful whether Section 6 of that Act is applicable where there is a repeal by implication, and there can be no doubt that the law as to the effect of the expiry of a temporary statute still remains as stated in the books, because Section 6 of the General Clauses Act and Section 38(2) of the Interpretation Act have no application except where an Act is repealed."Mr. Setalvad submitted that this was an express decision on the point in his favour. We are, however, not disposed to agree with the submission apart from its being the basis of a dissenting judgment. We might add that this point as to the effect of an implied repeal has risen in a few other cases before this Court but it has been left open (see for instance, the judgment in Trust Mai Lachhmi Sialkoti Bradari v. Chairman, Amritsar Improvement Trust, Civil Appeal No. 331 of 1961 D/- 4-4-1962 (not yet reported) : (now reported in AIR 1963 SC 976 ). The question is res integra and has to be decided on principle.21. We must at the outset point out that there is a difference in principle between the effect of an expiry of a temporary statute and a repeal of a later enactment and the discussion now is confined to cases of the repeal of a statute which until the date of the repeal continues in force. The first question to be considered is the meaning of the expression repeal in S. 6 of the General Clauses Act whether it is confined to cases of express repeal or whether the expression is of sufficient amplitude to cover cases of implied repeals. In this connection there is a passage in Craies on Statute Law. Fifth Edition at pages 323 and 324 which appears to suggest that the provisions of the corresponding S. 38 of the English Interpretation Act were confined to express repeals. On page 323 occurs the following :"In Acts passed in or since 1890 certain savings are implied by statute in all cases of express repeal, unless a contrary intention appears in repealing Act",and on the next page :"It had been usual before 1889 to insert provisions to the effect above stated in all Acts by which express repeals were effected. The result of this enactment is to make into a general rule what had been a common statutory form, and to substitute a general statutory presumption as to the effect of an express repeal for the canons of construction hitherto adopted."There is, however, no express decision either in England or, so far as we have been able to ascertain, in the United States on this point. Untrammelled, as we are, by authority, we have to inquire the principle on which the saying clause in S. 6 is based. It is manifest that the principle underlying it is that every later enactment which supersedes an earlier one or puts an end to an earlier state of the law is presumed to intend the continuance of rights accrued and liabilities incurred under the superseded enactment unless there were sufficient indications express or implied in the later enactment designed to completely obliterate the earlier state of the law. The next question is whether the application of that principle could or ought to be limited to cases where a particular form of words is used to indicate that the earlier law has been repealed. The entire theory underlying implied repeals, is that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word repeal in the later statute. Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which S. 6 presumes where the word repeal is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction of difference between an express provisions and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principle upon which the rule as to implied repeal rests to attribute to that legislature which effect a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in S. 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted. If this were the true position about the effect of the Central Act 67 of 1957 as the liability to pay the fee which was the subject of the notices of the demand had accrued prior to June 1, 1958 it would follow that these notices were valid and the amounts due thereunder could be recovered notwithstanding the disappearance of the Orissa Act by virtue of the superior legislation by the Union Parliament.

1[ds]It is true that no rules have in fact been framed by the Central Government in regard to the levy and collection of any fees; but, in our opinion, that would not make any difference. If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the "declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject-matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union. In such a case the test must be whether the Legislative declaration covers the field or not, Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII ofmaterial words of the Entries are : "Fees in respect of any of the matters in this List". It is, therefore, a prerequisite for the valid imposition of a fee that it is in respect of "a matter in the list". If by reason of the declaration by Parliament the entire subject-matter of "conservation and development of minerals" has been taken over, for being dealt with by Parliament, thus depriving the State of the power which it therefore possessed, it would follow that the "matter" in the State List is, to the extent of the declaration, subtracted from the scope and ambit of Entry 23 of the State List. There would, therefore, after the Central Act of 1957, be "no matter in the List" to which the fee could be related in order to render itdemands for the fee dues for these quarters were served on the respondent on August 1, 1960. It was therefore submitted that even on the footing that the Orissa Act stood repealed, superseded or nullified on the enactment of the Central Act, the right to recover the past arrears of fees which had accrued due previous to the repeal or nullification would not be abrogated.Setalvad submitted that this was an express decision on the point in his favour. We are, however, not disposed to agree with the submission apart from its being the basis of a dissenting judgment. We might add that this point as to the effect of an implied repeal has risen in a few other cases before this Court but it has been left open (see for instance, the judgment in Trust Mai Lachhmi Sialkoti Bradari v. Chairman, Amritsar Improvement Trust, Civil Appeal No. 331 of 1961 D/- 4-4-1962 (not yet reported) : (now reported in AIR 1963 SC 976 ). The question is res integra and has to be decided onentire theory underlying implied repeals, is that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word repeal in the later statute. Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which S. 6 presumes where the word repeal is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction of difference between an express provisions and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principle upon which the rule as to implied repeal rests to attribute to that legislature which effect a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in S. 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted. If this were the true position about the effect of the Central Act 67 of 1957 as the liability to pay the fee which was the subject of the notices of the demand had accrued prior to June 1, 1958 it would follow that these notices were valid and the amounts due thereunder could be recovered notwithstanding the disappearance of the Orissa Act by virtue of the superior legislation by the Union Parliament.

### Instruction: Predict whether the case will result in an affirmative (1) or negative (0) decision for the appeal, and then provide a thorough explanation using key sentences to support your prediction. ### Input: The learned Attorney General had to concede that it was doubtful whether Section 6 of that Act is applicable where there is a repeal by implication, and there can be no doubt that the law as to the effect of the expiry of a temporary statute still remains as stated in the books, because Section 6 of the General Clauses Act and Section 38(2) of the Interpretation Act have no application except where an Act is repealed."Mr. Setalvad submitted that this was an express decision on the point in his favour. We are, however, not disposed to agree with the submission apart from its being the basis of a dissenting judgment. We might add that this point as to the effect of an implied repeal has risen in a few other cases before this Court but it has been left open (see for instance, the judgment in Trust Mai Lachhmi Sialkoti Bradari v. Chairman, Amritsar Improvement Trust, Civil Appeal No. 331 of 1961 D/- 4-4-1962 (not yet reported) : (now reported in AIR 1963 SC 976 ). The question is res integra and has to be decided on principle.21. We must at the outset point out that there is a difference in principle between the effect of an expiry of a temporary statute and a repeal of a later enactment and the discussion now is confined to cases of the repeal of a statute which until the date of the repeal continues in force. The first question to be considered is the meaning of the expression repeal in S. 6 of the General Clauses Act whether it is confined to cases of express repeal or whether the expression is of sufficient amplitude to cover cases of implied repeals. In this connection there is a passage in Craies on Statute Law. Fifth Edition at pages 323 and 324 which appears to suggest that the provisions of the corresponding S. 38 of the English Interpretation Act were confined to express repeals. On page 323 occurs the following :"In Acts passed in or since 1890 certain savings are implied by statute in all cases of express repeal, unless a contrary intention appears in repealing Act",and on the next page :"It had been usual before 1889 to insert provisions to the effect above stated in all Acts by which express repeals were effected. The result of this enactment is to make into a general rule what had been a common statutory form, and to substitute a general statutory presumption as to the effect of an express repeal for the canons of construction hitherto adopted."There is, however, no express decision either in England or, so far as we have been able to ascertain, in the United States on this point. Untrammelled, as we are, by authority, we have to inquire the principle on which the saying clause in S. 6 is based. It is manifest that the principle underlying it is that every later enactment which supersedes an earlier one or puts an end to an earlier state of the law is presumed to intend the continuance of rights accrued and liabilities incurred under the superseded enactment unless there were sufficient indications express or implied in the later enactment designed to completely obliterate the earlier state of the law. The next question is whether the application of that principle could or ought to be limited to cases where a particular form of words is used to indicate that the earlier law has been repealed. The entire theory underlying implied repeals, is that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word repeal in the later statute. Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which S. 6 presumes where the word repeal is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction of difference between an express provisions and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principle upon which the rule as to implied repeal rests to attribute to that legislature which effect a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in S. 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted. If this were the true position about the effect of the Central Act 67 of 1957 as the liability to pay the fee which was the subject of the notices of the demand had accrued prior to June 1, 1958 it would follow that these notices were valid and the amounts due thereunder could be recovered notwithstanding the disappearance of the Orissa Act by virtue of the superior legislation by the Union Parliament. ### Response: 1 ### Explanation: the levy and collection of any fees; but, in our opinion, that would not make any difference. If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the "declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject-matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union. In such a case the test must be whether the Legislative declaration covers the field or not, Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII ofmaterial words of the Entries are : "Fees in respect of any of the matters in this List". It is, therefore, a prerequisite for the valid imposition of a fee that it is in respect of "a matter in the list". If by reason of the declaration by Parliament the entire subject-matter of "conservation and development of minerals" has been taken over, for being dealt with by Parliament, thus depriving the State of the power which it therefore possessed, it would follow that the "matter" in the State List is, to the extent of the declaration, subtracted from the scope and ambit of Entry 23 of the State List. There would, therefore, after the Central Act of 1957, be "no matter in the List" to which the fee could be related in order to render itdemands for the fee dues for these quarters were served on the respondent on August 1, 1960. It was therefore submitted that even on the footing that the Orissa Act stood repealed, superseded or nullified on the enactment of the Central Act, the right to recover the past arrears of fees which had accrued due previous to the repeal or nullification would not be abrogated.Setalvad submitted that this was an express decision on the point in his favour. We are, however, not disposed to agree with the submission apart from its being the basis of a dissenting judgment. We might add that this point as to the effect of an implied repeal has risen in a few other cases before this Court but it has been left open (see for instance, the judgment in Trust Mai Lachhmi Sialkoti Bradari v. Chairman, Amritsar Improvement Trust, Civil Appeal No. 331 of 1961 D/- 4-4-1962 (not yet reported) : (now reported in AIR 1963 SC 976 ). The question is res integra and has to be decided onentire theory underlying implied repeals, is that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word repeal in the later statute. Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which S. 6 presumes where the word repeal is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction of difference between an express provisions and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principle upon which the rule as to implied repeal rests to attribute to that legislature which effect a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in S. 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted. If this were the true position about the effect of the Central Act 67 of 1957 as the liability to pay the fee which was the subject of the notices of the demand had accrued prior to June 1, 1958 it would follow that these notices were valid and the amounts due thereunder could be recovered notwithstanding the disappearance of the Orissa Act by virtue of the superior legislation by the Union Parliament.

Rameshwar Prasad Bagla Vs. Commissioner Of Income-Tax, U.P., Lucknow

upon relevant evidence. If the High Court finds that there is no such evidence to support the finding of fact of the Tribunal, this circumstance would give rise to a question of law and can be agitated in a reference. It is also well established that when a Tribunal acts on material which is irrelevant to the enquiry or considers material which is partly relevant and partly irrelevant or bases its decision partly on conjectures, surmises and suspicions and partly on evidence, then in such a situation an issue of law arises and the finding of the Tribunal can be interfered with. The finding may also be interfered with if it be found to be so unreasonable that no person acting judicially and properly instructed as to the relevant law could have arrived at it. None of the circumstances justifying interference with the finding of fact of the Tribunal has been shown to exist in this case. In the absence of any such circumstance, the High Court in our view was not justified in interfering with the finding of fact of the Tribunal. The fact that the High Court on appreciation of evidence would have arrived at a conclusion of fact different from that of the Tribunal did not warrant interference with the finding of the Tribunal. 11. The Tribunal in arriving at the conclusion that the purchase of the shares in question by the assessee was with a view to obtain the managing agency and control of the India United Mills Ltd. and that those shares were not purchased as stck-in-trade referred to a number of circumstances. It was found by the Tribunal that the shares in question were out of the lot sold by Sassoons to Agarwal and Co. It was also found that the shares had been transferred to the assessee at the original price at which these shares had been sold by the Sassoons and not at the price which was prevailing at the time of transfer. The Tribunal further found that 62,500 shares represented the portion of the assessee in the total number of shares originally purchased by Agarwal and Co. In the light of those findings, the Tribunal recorded its conclusion in the paragraph which has been reproduced earlier. The above conclusion of the Tribunal, in our opinion, was based upon relevant material and could not be interfered with in a reference under S. 66 of the Act. 12. The High Court in arriving at the conclusion that the shares in question had been purchased not with a view to obtain the managing agency but as a stock-in-trade has referred to the fact that the assessee took loan for the purchase of those shares and subsequently transferred 43,700 shares out of 62,500 shares. This circumstance as observed by this Court in the case of Ramnarain Sons (Pr.) Ltd. v. Commr. of Income Tax, (1961) 41 ITR 534 = (AIR 1961 SC 1141 ) would not by itself go to show that the purchase of shares was not to facilitate the acquisition of the managing agency. In that case the appellant company was a dealer in shares and securities and carried on business as managing agents for some companies. In order to acquire the managing agency of a textile-mill, the appellant company purchased from Sassoon David and Co., who were the managing agents thereof, 1,507 shares of the mill at Rs. 2,321-8-0 per share at a time when the market price of the shares was Rs. 1,610. The remaining 1,000 shares of the mill held by Sassoon David and Co. were acquired by the directors of the appellant company. Two months later the appellant company sold 400 of those shares at a loss of Rs. 1,78,438. The said loss was claimed as a trading loss. Question arose in this context whether the purchase of shares could be regarded as acquisition of stock-in-trade. Dealing the above question, this Court observed:"By purchasing the shares which facilitated acquisition of the managing agency, a capital asset was acquired and merely because the managing agency could be utilised for earning profit, the acquisition of the shares which led to the acquisition of the managing agency could not, in the absence of an intention to trade in those shares, be regarded as acquisition of stock-in-trade of the share business. The appellants had undoubtedly purchased the shares of the Dawn Mills with money borrowed at interest, but that circumstance by itself does not evidence an intention to trade in the shares. Nor is the fact that the appellants are dealers in shares and their memorandum of association authorises them to carry on business in shares of any importance in the circumstances of the case." It was further observed :"Subsequent disposal of some out of the shares by appellant could also not convert what was a capital acquisition into an acquisition in the nature of trade." 13. We are, therefore, of the view that the answer given by the High Court to question No. (i) was not correct. In our opinion, there was material for the finding that the shares in question had been purchased by the assessee with a view to acquire the managing agency and control of the India United Mills Ltd. and that the shares did not constitute the stock-in-trade of the assessee. 14.So far as the second question is concerned, we find that it is the common case of the parties that if the shares in question are held to be not stock-in-trade of the assessee, in that case the profits made on the sale of those shares would constitute capital gain chargeable to income tax under Section 12-B of the Act. Indeed, this is what was prayed for by the assessee in his letter dated March 30, 1949. Looking to the facts also, we are of the opinion that the profit made on the sale of those shares constituted capital gain chargeable to income tax under Section 12-B of the Act. We would answer question No. (ii) accordingly.

1[ds]12. The High Court in arriving at the conclusion that the shares in question had been purchased not with a view to obtain the managing agency but as a stock-in-trade has referred to the fact that the assessee took loan for the purchase of those shares and subsequently transferred 43,700 shares out of 62,500 shares. This circumstance as observed by this Court in the case of Ramnarain Sons (Pr.) Ltd. v. Commr. of Income Tax, (1961) 41 ITR 534 = (AIR 1961 SC 1141 ) would not by itself go to show that the purchase of shares was not to facilitate the acquisition of the managing agency. In that case the appellant company was a dealer in shares and securities and carried on business as managing agents for some companies. In order to acquire the managing agency of a textile-mill, the appellant company purchased from Sassoon David and Co., who were the managing agents thereof, 1,507 shares of the mill at Rs. 2,321-8-0 per share at a time when the market price of the shares was Rs. 1,610. The remaining 1,000 shares of the mill held by Sassoon David and Co. were acquired by the directors of the appellant company. Two months later the appellant company sold 400 of those shares at a loss of Rs. 1,78,438. The said loss was claimed as a trading loss. Question arose in this context whether the purchase of shares could be regarded as acquisition of stock-in-trade. Dealing the above question, this Court observed:"By purchasing the shares which facilitated acquisition of the managing agency, a capital asset was acquired and merely because the managing agency could be utilised for earning profit, the acquisition of the shares which led to the acquisition of the managing agency could not, in the absence of an intention to trade in those shares, be regarded as acquisition of stock-in-trade of the share business. The appellants had undoubtedly purchased the shares of the Dawn Mills with money borrowed at interest, but that circumstance by itself does not evidence an intention to trade in the shares. Nor is the fact that the appellants are dealers in shares and their memorandum of association authorises them to carry on business in shares of any importance in the circumstances of the case."It was further observed :"Subsequent disposal of some out of the shares by appellant could also not convert what was a capital acquisition into an acquisition in the nature of trade."13. We are, therefore, of the view that the answer given by the High Court to question No. (i) was not correct. In our opinion, there was material for the finding that the shares in question had been purchased by the assessee with a view to acquire the managing agency and control of the India United Mills Ltd. and that the shares did not constitute the stock-in-trade of the assessee14.So far as the second question is concerned, we find that it is the common case of the parties that if the shares in question are held to be not stock-in-trade of the assessee, in that case the profits made on the sale of those shares would constitute capital gain chargeable to incometaxunder Section12-B of the Act. Indeed, this is what was prayed for by the assessee in his letter dated March 30, 1949. Looking to the facts also, we are of the opinion that the profit made on the sale of those shares constituted capital gain chargeable to incometaxunder Section12-B of the Act. We would answer question No. (ii) accordingly.

### Instruction: Estimate the outcome of the case (positive (1) or negative (0) for the appellant) and then give a reasoned explanation by examining important sentences within the case documentation. ### Input: upon relevant evidence. If the High Court finds that there is no such evidence to support the finding of fact of the Tribunal, this circumstance would give rise to a question of law and can be agitated in a reference. It is also well established that when a Tribunal acts on material which is irrelevant to the enquiry or considers material which is partly relevant and partly irrelevant or bases its decision partly on conjectures, surmises and suspicions and partly on evidence, then in such a situation an issue of law arises and the finding of the Tribunal can be interfered with. The finding may also be interfered with if it be found to be so unreasonable that no person acting judicially and properly instructed as to the relevant law could have arrived at it. None of the circumstances justifying interference with the finding of fact of the Tribunal has been shown to exist in this case. In the absence of any such circumstance, the High Court in our view was not justified in interfering with the finding of fact of the Tribunal. The fact that the High Court on appreciation of evidence would have arrived at a conclusion of fact different from that of the Tribunal did not warrant interference with the finding of the Tribunal. 11. The Tribunal in arriving at the conclusion that the purchase of the shares in question by the assessee was with a view to obtain the managing agency and control of the India United Mills Ltd. and that those shares were not purchased as stck-in-trade referred to a number of circumstances. It was found by the Tribunal that the shares in question were out of the lot sold by Sassoons to Agarwal and Co. It was also found that the shares had been transferred to the assessee at the original price at which these shares had been sold by the Sassoons and not at the price which was prevailing at the time of transfer. The Tribunal further found that 62,500 shares represented the portion of the assessee in the total number of shares originally purchased by Agarwal and Co. In the light of those findings, the Tribunal recorded its conclusion in the paragraph which has been reproduced earlier. The above conclusion of the Tribunal, in our opinion, was based upon relevant material and could not be interfered with in a reference under S. 66 of the Act. 12. The High Court in arriving at the conclusion that the shares in question had been purchased not with a view to obtain the managing agency but as a stock-in-trade has referred to the fact that the assessee took loan for the purchase of those shares and subsequently transferred 43,700 shares out of 62,500 shares. This circumstance as observed by this Court in the case of Ramnarain Sons (Pr.) Ltd. v. Commr. of Income Tax, (1961) 41 ITR 534 = (AIR 1961 SC 1141 ) would not by itself go to show that the purchase of shares was not to facilitate the acquisition of the managing agency. In that case the appellant company was a dealer in shares and securities and carried on business as managing agents for some companies. In order to acquire the managing agency of a textile-mill, the appellant company purchased from Sassoon David and Co., who were the managing agents thereof, 1,507 shares of the mill at Rs. 2,321-8-0 per share at a time when the market price of the shares was Rs. 1,610. The remaining 1,000 shares of the mill held by Sassoon David and Co. were acquired by the directors of the appellant company. Two months later the appellant company sold 400 of those shares at a loss of Rs. 1,78,438. The said loss was claimed as a trading loss. Question arose in this context whether the purchase of shares could be regarded as acquisition of stock-in-trade. Dealing the above question, this Court observed:"By purchasing the shares which facilitated acquisition of the managing agency, a capital asset was acquired and merely because the managing agency could be utilised for earning profit, the acquisition of the shares which led to the acquisition of the managing agency could not, in the absence of an intention to trade in those shares, be regarded as acquisition of stock-in-trade of the share business. The appellants had undoubtedly purchased the shares of the Dawn Mills with money borrowed at interest, but that circumstance by itself does not evidence an intention to trade in the shares. Nor is the fact that the appellants are dealers in shares and their memorandum of association authorises them to carry on business in shares of any importance in the circumstances of the case." It was further observed :"Subsequent disposal of some out of the shares by appellant could also not convert what was a capital acquisition into an acquisition in the nature of trade." 13. We are, therefore, of the view that the answer given by the High Court to question No. (i) was not correct. In our opinion, there was material for the finding that the shares in question had been purchased by the assessee with a view to acquire the managing agency and control of the India United Mills Ltd. and that the shares did not constitute the stock-in-trade of the assessee. 14.So far as the second question is concerned, we find that it is the common case of the parties that if the shares in question are held to be not stock-in-trade of the assessee, in that case the profits made on the sale of those shares would constitute capital gain chargeable to income tax under Section 12-B of the Act. Indeed, this is what was prayed for by the assessee in his letter dated March 30, 1949. Looking to the facts also, we are of the opinion that the profit made on the sale of those shares constituted capital gain chargeable to income tax under Section 12-B of the Act. We would answer question No. (ii) accordingly. ### Response: 1 ### Explanation: 12. The High Court in arriving at the conclusion that the shares in question had been purchased not with a view to obtain the managing agency but as a stock-in-trade has referred to the fact that the assessee took loan for the purchase of those shares and subsequently transferred 43,700 shares out of 62,500 shares. This circumstance as observed by this Court in the case of Ramnarain Sons (Pr.) Ltd. v. Commr. of Income Tax, (1961) 41 ITR 534 = (AIR 1961 SC 1141 ) would not by itself go to show that the purchase of shares was not to facilitate the acquisition of the managing agency. In that case the appellant company was a dealer in shares and securities and carried on business as managing agents for some companies. In order to acquire the managing agency of a textile-mill, the appellant company purchased from Sassoon David and Co., who were the managing agents thereof, 1,507 shares of the mill at Rs. 2,321-8-0 per share at a time when the market price of the shares was Rs. 1,610. The remaining 1,000 shares of the mill held by Sassoon David and Co. were acquired by the directors of the appellant company. Two months later the appellant company sold 400 of those shares at a loss of Rs. 1,78,438. The said loss was claimed as a trading loss. Question arose in this context whether the purchase of shares could be regarded as acquisition of stock-in-trade. Dealing the above question, this Court observed:"By purchasing the shares which facilitated acquisition of the managing agency, a capital asset was acquired and merely because the managing agency could be utilised for earning profit, the acquisition of the shares which led to the acquisition of the managing agency could not, in the absence of an intention to trade in those shares, be regarded as acquisition of stock-in-trade of the share business. The appellants had undoubtedly purchased the shares of the Dawn Mills with money borrowed at interest, but that circumstance by itself does not evidence an intention to trade in the shares. Nor is the fact that the appellants are dealers in shares and their memorandum of association authorises them to carry on business in shares of any importance in the circumstances of the case."It was further observed :"Subsequent disposal of some out of the shares by appellant could also not convert what was a capital acquisition into an acquisition in the nature of trade."13. We are, therefore, of the view that the answer given by the High Court to question No. (i) was not correct. In our opinion, there was material for the finding that the shares in question had been purchased by the assessee with a view to acquire the managing agency and control of the India United Mills Ltd. and that the shares did not constitute the stock-in-trade of the assessee14.So far as the second question is concerned, we find that it is the common case of the parties that if the shares in question are held to be not stock-in-trade of the assessee, in that case the profits made on the sale of those shares would constitute capital gain chargeable to incometaxunder Section12-B of the Act. Indeed, this is what was prayed for by the assessee in his letter dated March 30, 1949. Looking to the facts also, we are of the opinion that the profit made on the sale of those shares constituted capital gain chargeable to incometaxunder Section12-B of the Act. We would answer question No. (ii) accordingly.

Jindal Stainless Ltd. & Another Vs. State of Haryana & Others

of the operation of the enactment is to impede trade and commerce then Article 301 is violated. Burden on the State: 44. Applying the above tests/parameters, whenever a law is impugned as violative of Article 301 of the Constitution, the Court has to see whether the impugned enactment facially or patently indicates quantifiable data on the basis of which the compensatory tax is sought to be levied. The Act must facially indicate the benefit which is quantifiable or measurable. It must broadly indicate proportionality to the quantifiable benefit. If the provisions are ambiguous or even if the Act does not indicate facially the quantifiable benefit, the burden will be on the State as a service/facility provider to show by placing the material before the Court, that the payment of compensatory tax is a reimbursement/recompense for the quantifiable/measurable benefit provided or to be provided to its payer(s). As soon as it is shown that the Act invades freedom of trade it is necessary to enquire whether the State has proved that the restrictions imposed by it by way of taxation are reasonable and in public interest within the meaning of Article 304(b) [See: para 35 of the decision in the case of Khyerbari Tea Co. Ltd. v. State of Assam, reported in AIR 1964 SC 925 ]. Scope of Articles 301, 302 & 304 vis-a-vis Compensatory Tax: 45. As stated above, taxing laws are not excluded from the operation of Article 301, which means that tax laws can and do amount to restriction on the freedom guaranteed to trade under Part XIII of the Constitution. This principle is well settled in the case of Atiabari Tea Co. (supra). It is equally important to note that in Atiabari Tea Co. (supra), the Supreme Court propounded the doctrine of ?direct and immediate effect?. Therefore, whenever a law is challenged on the ground of violation of Article 301, the Court has not only to examine the pith and substance of the levy but in addition thereto, the Court has to see the effect and the operation of the impugned law on inter-State trade and commerce as well as intra-State trade and commerce. 46. When any legislation, whether it would be a taxation law or a non-taxation law, is challenged before the Court as violating Article 301, the first question to be asked is: what is the scope of the operation of the law? Whether it has chosen an activity like movement of trade, commerce and intercourse throughout India, as the criterion of its operation? If yes, the next question is: what is the effect of operation of the law on the freedom guaranteed under Article 301? If the effect is to facilitate free flow of trade and commerce then it is regulation and if it is to impede or burden the activity, then the law is a restraint. After finding the law to be a restraint/restriction one has to see whether the impugned law is enacted by the Parliament or the State Legislature. Clause (b) of Article 304 confers a power upon the State Legislature similar to that conferred upon Parliament by Article 302 subject to the following differences: (a) While the power of Parliament under Article 302 is subject to the prohibition of preference and discrimination decreed by Article 303(1) unless Parliament makes the declaration under Article 303(2), the State power contained in Article 304(b) is made expressly free from the prohibition contained in Article 303(1) because the opening words of Article 304 contains a non-obstante clause both to Article 301 and Article 303. (b) While the Parliament?s power to impose restrictions under Article 302 is not subject to the requirement of reasonableness, the power of the State to impose restrictions under Article 304 is subject to the condition that they are reasonable. (c) An additional requisite for the exercise of the power under Article 304(b) by the State Legislature is that previous Presidential sanction is required for such legislation. Why was the matter placed before A Bench of Five Judges: 47. The concept of compensatory taxes was propounded in the case of Automobile Transport (supra) in which compensatory taxes were equated with regulatory taxes. In that case, a working test for deciding whether a tax is compensatory or not was laid down. In that judgment, it was observed that one has to enquire whether the trade as a class is having the use of certain facilities for the better conduct of the trade/business. This working test remains unaltered even today. 48. As stated above, in the post-1995 era, the said working test propounded in the Automobile Transport (supra), stood disrupted when in Bhagatram?s case (supra), a Bench of three Judges enunciated the test of ?some connection? saying that even if there is some link between the tax and the facilities extended to the trade directly or indirectly, the levy cannot be impugned as invalid. In our view, this test of ?some connection? enunciated in Bhagatram?s case (supra), is not only contrary to the working test propounded in Automobile Transport?s case (supra) but it obliterates the very basis of compensatory tax. We may reiterate that when a tax is imposed in the regulation or as a part of regulatory measure the controlling factor of the levy shifts from burden to reimbursement/recompense. The working test propounded by a Bench of seven Judges in the case of Automobile Transport (supra) and the test of ?some connection? enunciated by a Bench of three Judges in Bhagatram?s case (supra) cannot stand together. Therefore, in our view, the test of ?some connection? as propounded in Bhagatram?s case (supra) is not applicable to the concept of compensatory tax and accordingly to that extent, the judgments of this Court in Bhagatram Rajeevkumar v. Commissioner of Sales Tax, M.P. (supra) and State of Bihar v. Bihar Chamber of Commerce (supra) stand overruled. 49. Before concluding, we may point out that parties before us have taken more or less extreme positions and, therefore, we have not examined the arguments in seriatim. Conclusion:

1[ds]19. At this stage, we may clarify that we are not required to go into the question as to whether the impugned tax based on ad valorem basis cannot be termed as a compensatory tax. As stated above, we are confining this judgment only to the question as to whether the observations of this Court in the case of Bhagatram (supra) followed by the judgment of this Court in the case of Bihar Chamber of Commerce (supra) needs to be overruled in the light of the judgment of seven-Judge Constitution Bench in the case of Automobile Transport (supra). In the present matter, we are required to lay down the parameters of the concept of compensatory tax vis-a-vis Article 301. All other questions will have to be gone into at the relevant stage before the Division Bench of this Court with regard to the constitutional validity of 2000 Act35. The concept of compensatory tax is not there in the Constitution but is judicially evolved in Automobile Transport (supra) as a part of regulatory charge. Consequently, we have to go into concepts and doctrines of taxing powers vis-a-vis regulatory powers, particularly when the concept of compensatory tax was judicially crafted as an exception to Article 301 in Automobile Transport (supra)40. A tax can be progressive. However, a fee or a compensatory tax has to be broadly proportional and not progressive. In the principle of equivalence, which is the foundation of a compensatory tax as well as a fee, the value of the quantifiable benefit is represented by the costs incurred in procuring the facility/services which costs in turn become the basis of reimbursement/recompense for the provider of the services/facilities. Compensatory tax is based on the principle of ?pay for the value?. It is a sub-class of ?a fee?. From the point of view of the Government, a compensatory tax is a charge for offering trading facilities. It adds to the value of trade and commerce which does not happen in the case of tax as such. A tax may be progressive or proportional to income, property, expenditure or any other test of ability or capacity (principle of ability). Taxes may be progressive rather than proportional. Compensatory taxes, like fees, are always proportional to benefits. They are based on the principle of equivalence. However, a compensatory tax is levied on an individual as a member of a class, whereas a fee is levied on an individual as such. If one keeps in mind the ?principle of ability? vis-a-vis the ?principle of equivalence?, then the difference between a tax on one hand and a fee or a compensatory tax on the other hand can be easily spelt out. Ability or capacity to pay is measurable by property or rental value. Local rates are often charged according to ability to pay. Reimbursement or recompense are the closest equivalence to the cost incurred by the provider of the services/facilities. The theory of compensatory tax is that it rests upon the principle that if the Government by some positive action confers upon individual(s), a particular measurable advantage, it is only fair to the community at large that the beneficiary shall pay for it. The basic difference between a tax on one hand and a fee/compensatory tax on the other hand is that the former is based on the concept of burden whereas compensatory tax/fee is based on the concept of recompense/reimbursement. For a tax to be compensatory, there must be some link between the quantum of tax and the facility/services. Every benefit is measured in terms of cost which has to be reimbursed by compensatory tax or in the form of compensatory tax. In other words, compensatory tax is a recompense/reimbursement41. In the context of Article 301, therefore, compensatory tax is a compulsory contribution levied broadly in proportion to the special benefits derived to defray the costs of regulation or to meet the outlay incurred for some special advantage to trade, commerce and intercourse. It may incidentally bring in net-revenue to the Government but that circumstance is not an essential ingredient of compensatory tax42. Since compensatory tax is a judicially evolved concept, understanding of the concept, as discussed above, indicates its parameters43. To sum up, the basis of every levy is the controlling factor. In the case of ?a tax?, the levy is a part of common burden based on the principle of ability or capacity to pay. In the case of ?a fee?, the basis is the special benefit to the payer (individual as such) based on the principle of equivalence. When the tax is imposed as a part of regulation or as a part of regulatory measure, its basis shifts from the concept of ?burden? to the concept of measurable/quantifiable benefit and then it becomes ?a compensatory tax? and its payment is then not for revenue but as reimbursement/recompense to the service/facility provider. It is then a tax on recompense. Compensatory tax is by nature hybrid but it is more closer to fees than to tax as both fees and compensatory taxes are based on the principle of equivalence and on the basis of reimbursement/recompense. If the impugned law chooses an activity like trade and commerce as the criterion of its operation and if the effect of the operation of the enactment is to impede trade and commerce then Article 301 is violated44. Applying the above tests/parameters, whenever a law is impugned as violative of Article 301 of the Constitution, the Court has to see whether the impugned enactment facially or patently indicates quantifiable data on the basis of which the compensatory tax is sought to be levied. The Act must facially indicate the benefit which is quantifiable or measurable. It must broadly indicate proportionality to the quantifiable benefit. If the provisions are ambiguous or even if the Act does not indicate facially the quantifiable benefit, the burden will be on the State as a service/facility provider to show by placing the material before the Court, that the payment of compensatory tax is a reimbursement/recompense for the quantifiable/measurable benefit provided or to be provided to its payer(s). As soon as it is shown that the Act invades freedom of trade it is necessary to enquire whether the State has proved that the restrictions imposed by it by way of taxation are reasonable and in public interest within the meaning of Article 304(b46. When any legislation, whether it would be a taxation law or a non-taxation law, is challenged before the Court as violating Article 301, the first question to be asked is: what is the scope of the operation of the law? Whether it has chosen an activity like movement of trade, commerce and intercourse throughout India, as the criterion of its operation? If yes, the next question is: what is the effect of operation of the law on the freedom guaranteed under Article 301? If the effect is to facilitate free flow of trade and commerce then it is regulation and if it is to impede or burden the activity, then the law is a restraint. After finding the law to be a restraint/restriction one has to see whether the impugned law is enacted by the Parliament or the State Legislature. Clause (b) of Article 304 confers a power upon the State Legislature similar to that conferred upon Parliament by Article 302 subject to the following differences:(a) While the power of Parliament under Article 302 is subject to the prohibition of preference and discrimination decreed by Article 303(1) unless Parliament makes the declaration under Article 303(2), the State power contained in Article 304(b) is made expressly free from the prohibition contained in Article 303(1) because the opening words of Article 304 contains a non-obstante clause both to Article 301 and Article 303(b) While the Parliament?s power to impose restrictions under Article 302 is not subject to the requirement of reasonableness, the power of the State to impose restrictions under Article 304 is subject to the condition that they are reasonable(c) An additional requisite for the exercise of the power under Article 304(b) by the State Legislature is that previous Presidential sanction is required for such legislation

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: of the operation of the enactment is to impede trade and commerce then Article 301 is violated. Burden on the State: 44. Applying the above tests/parameters, whenever a law is impugned as violative of Article 301 of the Constitution, the Court has to see whether the impugned enactment facially or patently indicates quantifiable data on the basis of which the compensatory tax is sought to be levied. The Act must facially indicate the benefit which is quantifiable or measurable. It must broadly indicate proportionality to the quantifiable benefit. If the provisions are ambiguous or even if the Act does not indicate facially the quantifiable benefit, the burden will be on the State as a service/facility provider to show by placing the material before the Court, that the payment of compensatory tax is a reimbursement/recompense for the quantifiable/measurable benefit provided or to be provided to its payer(s). As soon as it is shown that the Act invades freedom of trade it is necessary to enquire whether the State has proved that the restrictions imposed by it by way of taxation are reasonable and in public interest within the meaning of Article 304(b) [See: para 35 of the decision in the case of Khyerbari Tea Co. Ltd. v. State of Assam, reported in AIR 1964 SC 925 ]. Scope of Articles 301, 302 & 304 vis-a-vis Compensatory Tax: 45. As stated above, taxing laws are not excluded from the operation of Article 301, which means that tax laws can and do amount to restriction on the freedom guaranteed to trade under Part XIII of the Constitution. This principle is well settled in the case of Atiabari Tea Co. (supra). It is equally important to note that in Atiabari Tea Co. (supra), the Supreme Court propounded the doctrine of ?direct and immediate effect?. Therefore, whenever a law is challenged on the ground of violation of Article 301, the Court has not only to examine the pith and substance of the levy but in addition thereto, the Court has to see the effect and the operation of the impugned law on inter-State trade and commerce as well as intra-State trade and commerce. 46. When any legislation, whether it would be a taxation law or a non-taxation law, is challenged before the Court as violating Article 301, the first question to be asked is: what is the scope of the operation of the law? Whether it has chosen an activity like movement of trade, commerce and intercourse throughout India, as the criterion of its operation? If yes, the next question is: what is the effect of operation of the law on the freedom guaranteed under Article 301? If the effect is to facilitate free flow of trade and commerce then it is regulation and if it is to impede or burden the activity, then the law is a restraint. After finding the law to be a restraint/restriction one has to see whether the impugned law is enacted by the Parliament or the State Legislature. Clause (b) of Article 304 confers a power upon the State Legislature similar to that conferred upon Parliament by Article 302 subject to the following differences: (a) While the power of Parliament under Article 302 is subject to the prohibition of preference and discrimination decreed by Article 303(1) unless Parliament makes the declaration under Article 303(2), the State power contained in Article 304(b) is made expressly free from the prohibition contained in Article 303(1) because the opening words of Article 304 contains a non-obstante clause both to Article 301 and Article 303. (b) While the Parliament?s power to impose restrictions under Article 302 is not subject to the requirement of reasonableness, the power of the State to impose restrictions under Article 304 is subject to the condition that they are reasonable. (c) An additional requisite for the exercise of the power under Article 304(b) by the State Legislature is that previous Presidential sanction is required for such legislation. Why was the matter placed before A Bench of Five Judges: 47. The concept of compensatory taxes was propounded in the case of Automobile Transport (supra) in which compensatory taxes were equated with regulatory taxes. In that case, a working test for deciding whether a tax is compensatory or not was laid down. In that judgment, it was observed that one has to enquire whether the trade as a class is having the use of certain facilities for the better conduct of the trade/business. This working test remains unaltered even today. 48. As stated above, in the post-1995 era, the said working test propounded in the Automobile Transport (supra), stood disrupted when in Bhagatram?s case (supra), a Bench of three Judges enunciated the test of ?some connection? saying that even if there is some link between the tax and the facilities extended to the trade directly or indirectly, the levy cannot be impugned as invalid. In our view, this test of ?some connection? enunciated in Bhagatram?s case (supra), is not only contrary to the working test propounded in Automobile Transport?s case (supra) but it obliterates the very basis of compensatory tax. We may reiterate that when a tax is imposed in the regulation or as a part of regulatory measure the controlling factor of the levy shifts from burden to reimbursement/recompense. The working test propounded by a Bench of seven Judges in the case of Automobile Transport (supra) and the test of ?some connection? enunciated by a Bench of three Judges in Bhagatram?s case (supra) cannot stand together. Therefore, in our view, the test of ?some connection? as propounded in Bhagatram?s case (supra) is not applicable to the concept of compensatory tax and accordingly to that extent, the judgments of this Court in Bhagatram Rajeevkumar v. Commissioner of Sales Tax, M.P. (supra) and State of Bihar v. Bihar Chamber of Commerce (supra) stand overruled. 49. Before concluding, we may point out that parties before us have taken more or less extreme positions and, therefore, we have not examined the arguments in seriatim. Conclusion: ### Response: 1 ### Explanation: capacity (principle of ability). Taxes may be progressive rather than proportional. Compensatory taxes, like fees, are always proportional to benefits. They are based on the principle of equivalence. However, a compensatory tax is levied on an individual as a member of a class, whereas a fee is levied on an individual as such. If one keeps in mind the ?principle of ability? vis-a-vis the ?principle of equivalence?, then the difference between a tax on one hand and a fee or a compensatory tax on the other hand can be easily spelt out. Ability or capacity to pay is measurable by property or rental value. Local rates are often charged according to ability to pay. Reimbursement or recompense are the closest equivalence to the cost incurred by the provider of the services/facilities. The theory of compensatory tax is that it rests upon the principle that if the Government by some positive action confers upon individual(s), a particular measurable advantage, it is only fair to the community at large that the beneficiary shall pay for it. The basic difference between a tax on one hand and a fee/compensatory tax on the other hand is that the former is based on the concept of burden whereas compensatory tax/fee is based on the concept of recompense/reimbursement. For a tax to be compensatory, there must be some link between the quantum of tax and the facility/services. Every benefit is measured in terms of cost which has to be reimbursed by compensatory tax or in the form of compensatory tax. In other words, compensatory tax is a recompense/reimbursement41. In the context of Article 301, therefore, compensatory tax is a compulsory contribution levied broadly in proportion to the special benefits derived to defray the costs of regulation or to meet the outlay incurred for some special advantage to trade, commerce and intercourse. It may incidentally bring in net-revenue to the Government but that circumstance is not an essential ingredient of compensatory tax42. Since compensatory tax is a judicially evolved concept, understanding of the concept, as discussed above, indicates its parameters43. To sum up, the basis of every levy is the controlling factor. In the case of ?a tax?, the levy is a part of common burden based on the principle of ability or capacity to pay. In the case of ?a fee?, the basis is the special benefit to the payer (individual as such) based on the principle of equivalence. When the tax is imposed as a part of regulation or as a part of regulatory measure, its basis shifts from the concept of ?burden? to the concept of measurable/quantifiable benefit and then it becomes ?a compensatory tax? and its payment is then not for revenue but as reimbursement/recompense to the service/facility provider. It is then a tax on recompense. Compensatory tax is by nature hybrid but it is more closer to fees than to tax as both fees and compensatory taxes are based on the principle of equivalence and on the basis of reimbursement/recompense. If the impugned law chooses an activity like trade and commerce as the criterion of its operation and if the effect of the operation of the enactment is to impede trade and commerce then Article 301 is violated44. Applying the above tests/parameters, whenever a law is impugned as violative of Article 301 of the Constitution, the Court has to see whether the impugned enactment facially or patently indicates quantifiable data on the basis of which the compensatory tax is sought to be levied. The Act must facially indicate the benefit which is quantifiable or measurable. It must broadly indicate proportionality to the quantifiable benefit. If the provisions are ambiguous or even if the Act does not indicate facially the quantifiable benefit, the burden will be on the State as a service/facility provider to show by placing the material before the Court, that the payment of compensatory tax is a reimbursement/recompense for the quantifiable/measurable benefit provided or to be provided to its payer(s). As soon as it is shown that the Act invades freedom of trade it is necessary to enquire whether the State has proved that the restrictions imposed by it by way of taxation are reasonable and in public interest within the meaning of Article 304(b46. When any legislation, whether it would be a taxation law or a non-taxation law, is challenged before the Court as violating Article 301, the first question to be asked is: what is the scope of the operation of the law? Whether it has chosen an activity like movement of trade, commerce and intercourse throughout India, as the criterion of its operation? If yes, the next question is: what is the effect of operation of the law on the freedom guaranteed under Article 301? If the effect is to facilitate free flow of trade and commerce then it is regulation and if it is to impede or burden the activity, then the law is a restraint. After finding the law to be a restraint/restriction one has to see whether the impugned law is enacted by the Parliament or the State Legislature. Clause (b) of Article 304 confers a power upon the State Legislature similar to that conferred upon Parliament by Article 302 subject to the following differences:(a) While the power of Parliament under Article 302 is subject to the prohibition of preference and discrimination decreed by Article 303(1) unless Parliament makes the declaration under Article 303(2), the State power contained in Article 304(b) is made expressly free from the prohibition contained in Article 303(1) because the opening words of Article 304 contains a non-obstante clause both to Article 301 and Article 303(b) While the Parliament?s power to impose restrictions under Article 302 is not subject to the requirement of reasonableness, the power of the State to impose restrictions under Article 304 is subject to the condition that they are reasonable(c) An additional requisite for the exercise of the power under Article 304(b) by the State Legislature is that previous Presidential sanction is required for such legislation

Commissioner of Income Tax Vs. Paharpur Cooling Towers Private Limited

by the assessee was in respect of only one assessment year, viz., 1975-76. This is clear from the particulars mentioned in his application for settlement dated June 24, 1977, referred to hereinbefore. In his response/report to the said application, the Commissioner had stated that he had no objection to the application for settlement being processed with in respect of the assessment year 1975-76 vide Commissioners report dated July 6, 1977. Thereafter, the assessee filed, what he called, "a brief statement of facts". In this statement, he requested that the enhanced value of the opening stock disclosed by him should not be added in the assessment of the assessment year 1975-76 alone but should be appropriately spread over all the six assessment years, viz., assessment years 1970-71 to 1975-76. This he requested because, doing so would have reduced his overall tax liability. It is for this purpose that he gave his consent/concurrence for reopening the assessments of the earlier assessment years. It was, therefore, not a situation contemplated by section 245E. This was not a case where the commission wanted to reopen the concluded assessments because it was found necessary or expedient to do so for the proper disposal of the case pending before it ; it was a case where the assessee was requesting for a benefit and for the purpose of obtaining that benefit, he was requesting the reopening of the earlier assessments. Even this request of the assessee was for a limited purpose, viz., for spreading over the enhanced value of opening stock disclosed by him over the said six assessment years. It was not a request or concurrence to reopen the entire assessment and penalty proceedings relating to the said earlier assessment years. [As a matter of fact, penalty proceedings for the said earlier assessment years were pending on the date of filing of the application for settlement and its admission. As pointed out by the chairman in his opinion, the said proceedings were in respect of certain concealments already discovered by the Income-tax Officer, i.e., concealments established or likely to be established by the Income-tax Officer within the meaning of the second proviso to section 245D(1)--another limiting factor on the power of the commission.] It, therefore, follows that the commission could reopen the assessment proceedings for the said earlier assessment years only for the aforesaid limited purpose, i.e., for spreading over the said enhanced value. Under the guise of reopening the said assessments for the aforementioned limited purpose, the commission could not have reopened or for that matter, settled the matters relating to the said earlier assessment years. It is not permissible for the commission to say that since it has reopened the assessments of earlier assessment year for the limited purpose of giving relief for the assessment year before it, it gets full command and total jurisdiction over all the said earlier assessment years and that it can pass such orders as it thinks fit in respect of all the matters relating to the said assessment years including the penalty proceedings. This would amount to doing indirectly what cannot be done directly. The ultimate orders passed by the commission should relate to the case before it ; it is only for the purpose of effectively settling the case before it that the commission can reopen concluded proceedings subject to the four conditions set out hereinabove. We fail to see how the penalty proceedings (which have now been dropped) fall within the ambit of the power conferred by section 245E. The penalty proceedings not only relate to assessment years not before the commission but they relate to alleged concealments during those earlier assessment years which concealments were not before the commission. The disclosures before the commission related to two other concealments [disclosed for the assessment year 1975-76 but which amounts the assessee wanted to be spread over all the six assessment years 1970-71 to 1975-76] wholly different and distinct from the concealments on account of which the said penalty proceedings were initiated. We are, therefore, of the opinion that the commission exceeded its jurisdiction in directing that the said penalty proceedings [relating to the assessment years 1970-71 to 1974-75] should be dropped or that penalties be waived in respect of the said assessment years. The interpretation placed by the chairman upon section 245E is the correct one and not the interpretation placed by the majorityWe are also not impressed by the argument of Sri Poddar, learned counsel for the assessee, that inasmuch as the quantum of penalty depends upon the quantum of the income assessed and because the income assessed for the said earlier assessment years was bound to undergo a change on account of the "spreading over" aforesaid, the earlier penalty proceedings fall to the ground automatically and that, thereafter penalties, if any, can be levied only by the Settlement Commission. There is a clear fallacy in the said submission. The penalty proceedings related to certain other concealments, i.e., other than the two concealments disclosed in the assessees application for settlement and which were sought to be spread over backwards. The said penalty proceedings could not, therefore, have been affected or rendered nugatory by the addition to the total income resulting from the aforesaid "spreading over". It is difficult to see any connection, much less an intimate connection, between the said "spreading over" and the consequent enhancement of the income assessed for the said assessment years and the penalty proceedings. 13. Lastly, we may refer to Sri Poddars submission based upon section 245F(1). According to him, sub-section (1) confers the powers of an income-tax authority upon the Settlement Commission including the power to reopen the assessments as contemplated by section 147. We do not know whether the power under section 147 can also be claimed by the commission. But assuming it can, the said power has to be exercised in accordance with the provisions contained in sections 147 to 150 including sections 148 and 149. Admittedly, they were not complied with in this case. 14.

1[ds]We are not concerned with the other directions made by the Commissioner. They were not argued before us and we express no opinion thereonSection 245C(1) provides that an application for settlement shall be filed in the prescribed form containing prescribed particulars ; in this case, the application filed by the assessee pertained only to one assessment year, viz., 1975-76, and to no other assessment year. According to the second proviso to section 245D(1), as in force at the relevant time, no such application can be proceeded with by the commission if the Commissioner objects to the application being proceeded with on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax or other sum chargeable has been established or is likely to be established by any income-tax authority in relation to the case ; in this case, the Commissioner objected to the commission passing any orders with respect to the assessment years other than the assessment year 1975-76 ; so far as the assessment year 1975-76 is concerned, the Commissioner put forward no objection. Sub-section (4) of section 245D says that after examining the entire material, the commission shall "pass such order as it thinks fit on the matters covered by the application and any other material relating to the case not covered by the application", "in accordance with the provisions of the Act" ; in other words, the commission has not only to act in accordance with the provisions of the Act but that its jurisdiction is confined to the matters covered by the application before it. The further words "and any other material relating to the case hot covered by the application" show that the commission can take into consideration any other material not covered by the application but it must be one relating to the case before it. It must be remembered that this Chapter [XIX-A] prescribes a procedure which is a departure from the normal procedure provided by the Act. Once an application is admitted--an application can be made only in respect of a pending case--the commission takes over all the proceedings relating to that case which may be pending before any authori ty under the Act. But this power is confined to the case before the commission, which means the case relating to the assessment year for which the application for settlement is filed and admitted for settlement--to wit, assessment year 1975-76 in this case. Section 245E, which is the sheet anchor of the majority opinion, empowers the commission to reopen any completed proceedings connected with the case before it but this power is circumscribed by the requirement expressly stated in the section that such reopening of completed proceedings should be necessary or expedient for the proper disposal of the case pending before it. There are two other limitations upon this power, viz., that this reopening of the completed proceedings can be done, even for the aforesaid limited purpose, only with the concurrence of the assessee and secondly that this power cannot extend to a period beyond eight years from the end of the assessment year to which such proceeding relates. These two features make it abundantly clear that the section contemplates reopening of the completed proceedings not for the benefit of the assessee but in the interests of the Revenue. It contemplates a situation where the case before the commission cannot be satisfactorily settled unless some previously concluded proceedings are reopened which would normally be to the prejudice of the assessee. It is precisely for this reason that the section says that it can be done only with the concurrence of the assessee and that too for a period within eight yearsThis rule is, however, relaxed by section 245E to a limited extent and for a limited purpose. The concluded proceedings can be reopened by the commission provided (a) such reopening is necessary or expedient for the proper disposal of the case before it, (b) the reasons for such opinion are recorded in writing by the commission, (c) the applicant-assessee must give his concurrence therefor, and (d) the proceeding which is being reopened must relate to an assessment year which is within eight years from the end of the assessment year to which the case before the commission relates. The power conferred by section 245E is thus a circumscribed and a conditional power. It can be exercised only in accordance with and subject to the conditions aforementioned and in no other manner. Now, let us see whether section 245E availed the commission to direct the dropping of penalty proceedings relating to the assessment years 1970-71 to 1974-75 while settling the case relating to the assessment year 1975-76n the present case, the application filed by the assessee was in respect of only one assessment year, viz., 1975-76. This is clear from the particulars mentioned in his application for settlement dated June 24, 1977, referred to hereinbefore. In his response/report to the said application, the Commissioner had stated that he had no objection to the application for settlement being processed with in respect of the assessment year 1975-76 vide Commissioners report dated July 6, 1977. Thereafter, the assessee filed, what he called, "a brief statement of facts". In this statement, he requested that the enhanced value of the opening stock disclosed by him should not be added in the assessment of the assessment year 1975-76 alone but should be appropriately spread over all the six assessment years, viz., assessment years 1970-71 to 1975-76. This he requested because, doing so would have reduced his overall tax liability. It is for this purpose that he gave his consent/concurrence for reopening the assessments of the earlier assessment years. It was, therefore, not a situation contemplated by section 245E. This was not a case where the commission wanted to reopen the concluded assessments because it was found necessary or expedient to do so for the proper disposal of the case pending before it ; it was a case where the assessee was requesting for a benefit and for the purpose of obtaining that benefit, he was requesting the reopening of the earlier assessments. Even this request of the assessee was for a limited purpose, viz., for spreading over the enhanced value of opening stock disclosed by him over the said six assessment years. It was not a request or concurrence to reopen the entire assessment and penalty proceedings relating to the said earlier assessment yearsIt is not permissible for the commission to say that since it has reopened the assessments of earlier assessment year for the limited purpose of giving relief for the assessment year before it, it gets full command and total jurisdiction over all the said earlier assessment years and that it can pass such orders as it thinks fit in respect of all the matters relating to the said assessment years including the penalty proceedings. This would amount to doing indirectly what cannot be done directly. The ultimate orders passed by the commission should relate to the case before it ; it is only for the purpose of effectively settling the case before it that the commission can reopen concluded proceedings subject to the four conditions set out hereinabove. We fail to see how the penalty proceedings (which have now been dropped) fall within the ambit of the power conferred by section 245E. The penalty proceedings not only relate to assessment years not before the commission but they relate to alleged concealments during those earlier assessment years which concealments were not before the commission. The disclosures before the commission related to two other concealments [disclosed for the assessment year 1975-76 but which amounts the assessee wanted to be spread over all the six assessment years 1970-71 to 1975-76] wholly different and distinct from the concealments on account of which the said penalty proceedings were initiated. We are, therefore, of the opinion that the commission exceeded its jurisdiction in directing that the said penalty proceedings [relating to the assessment years 1970-71 to 1974-75] should be dropped or that penalties be waived in respect of the said assessment years. The interpretation placed by the chairman upon section 245E is the correct one and not the interpretation placed by the majoritye are also not impressed by the argument of Sri Poddar, learned counsel for the assessee, that inasmuch as the quantum of penalty depends upon the quantum of the income assessed and because the income assessed for the said earlier assessment years was bound to undergo a change on account of the "spreading over" aforesaid, the earlier penalty proceedings fall to the ground automatically and that, thereafter penalties, if any, can be levied only by the Settlement Commission. There is a clear fallacy in the said submission. The penalty proceedings related to certain other concealments, i.e., other than the two concealments disclosed in the assessees application for settlement and which were sought to be spread over backwards. The said penalty proceedings could not, therefore, have been affected or rendered nugatory by the addition to the total income resulting from the aforesaid "spreading over". It is difficult to see any connection, much less an intimate connection, between the said "spreading over" and the consequent enhancement of the income assessed for the said assessment years and the penalty proceedingsLastly, we may refer to Sri Poddars submission based upon section 245F(1). According to him, sub-section (1) confers the powers of an income-tax authority upon the Settlement Commission including the power to reopen the assessments as contemplated by section 147. We do not know whether the power under section 147 can also be claimed by the commission. But assuming it can, the said power has to be exercised in accordance with the provisions contained in sections 147 to 150 including sections 148 and 149. Admittedly, they were not complied with in this case

### Instruction: Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding. ### Input: by the assessee was in respect of only one assessment year, viz., 1975-76. This is clear from the particulars mentioned in his application for settlement dated June 24, 1977, referred to hereinbefore. In his response/report to the said application, the Commissioner had stated that he had no objection to the application for settlement being processed with in respect of the assessment year 1975-76 vide Commissioners report dated July 6, 1977. Thereafter, the assessee filed, what he called, "a brief statement of facts". In this statement, he requested that the enhanced value of the opening stock disclosed by him should not be added in the assessment of the assessment year 1975-76 alone but should be appropriately spread over all the six assessment years, viz., assessment years 1970-71 to 1975-76. This he requested because, doing so would have reduced his overall tax liability. It is for this purpose that he gave his consent/concurrence for reopening the assessments of the earlier assessment years. It was, therefore, not a situation contemplated by section 245E. This was not a case where the commission wanted to reopen the concluded assessments because it was found necessary or expedient to do so for the proper disposal of the case pending before it ; it was a case where the assessee was requesting for a benefit and for the purpose of obtaining that benefit, he was requesting the reopening of the earlier assessments. Even this request of the assessee was for a limited purpose, viz., for spreading over the enhanced value of opening stock disclosed by him over the said six assessment years. It was not a request or concurrence to reopen the entire assessment and penalty proceedings relating to the said earlier assessment years. [As a matter of fact, penalty proceedings for the said earlier assessment years were pending on the date of filing of the application for settlement and its admission. As pointed out by the chairman in his opinion, the said proceedings were in respect of certain concealments already discovered by the Income-tax Officer, i.e., concealments established or likely to be established by the Income-tax Officer within the meaning of the second proviso to section 245D(1)--another limiting factor on the power of the commission.] It, therefore, follows that the commission could reopen the assessment proceedings for the said earlier assessment years only for the aforesaid limited purpose, i.e., for spreading over the said enhanced value. Under the guise of reopening the said assessments for the aforementioned limited purpose, the commission could not have reopened or for that matter, settled the matters relating to the said earlier assessment years. It is not permissible for the commission to say that since it has reopened the assessments of earlier assessment year for the limited purpose of giving relief for the assessment year before it, it gets full command and total jurisdiction over all the said earlier assessment years and that it can pass such orders as it thinks fit in respect of all the matters relating to the said assessment years including the penalty proceedings. This would amount to doing indirectly what cannot be done directly. The ultimate orders passed by the commission should relate to the case before it ; it is only for the purpose of effectively settling the case before it that the commission can reopen concluded proceedings subject to the four conditions set out hereinabove. We fail to see how the penalty proceedings (which have now been dropped) fall within the ambit of the power conferred by section 245E. The penalty proceedings not only relate to assessment years not before the commission but they relate to alleged concealments during those earlier assessment years which concealments were not before the commission. The disclosures before the commission related to two other concealments [disclosed for the assessment year 1975-76 but which amounts the assessee wanted to be spread over all the six assessment years 1970-71 to 1975-76] wholly different and distinct from the concealments on account of which the said penalty proceedings were initiated. We are, therefore, of the opinion that the commission exceeded its jurisdiction in directing that the said penalty proceedings [relating to the assessment years 1970-71 to 1974-75] should be dropped or that penalties be waived in respect of the said assessment years. The interpretation placed by the chairman upon section 245E is the correct one and not the interpretation placed by the majorityWe are also not impressed by the argument of Sri Poddar, learned counsel for the assessee, that inasmuch as the quantum of penalty depends upon the quantum of the income assessed and because the income assessed for the said earlier assessment years was bound to undergo a change on account of the "spreading over" aforesaid, the earlier penalty proceedings fall to the ground automatically and that, thereafter penalties, if any, can be levied only by the Settlement Commission. There is a clear fallacy in the said submission. The penalty proceedings related to certain other concealments, i.e., other than the two concealments disclosed in the assessees application for settlement and which were sought to be spread over backwards. The said penalty proceedings could not, therefore, have been affected or rendered nugatory by the addition to the total income resulting from the aforesaid "spreading over". It is difficult to see any connection, much less an intimate connection, between the said "spreading over" and the consequent enhancement of the income assessed for the said assessment years and the penalty proceedings. 13. Lastly, we may refer to Sri Poddars submission based upon section 245F(1). According to him, sub-section (1) confers the powers of an income-tax authority upon the Settlement Commission including the power to reopen the assessments as contemplated by section 147. We do not know whether the power under section 147 can also be claimed by the commission. But assuming it can, the said power has to be exercised in accordance with the provisions contained in sections 147 to 150 including sections 148 and 149. Admittedly, they were not complied with in this case. 14. ### Response: 1 ### Explanation: reopened by the commission provided (a) such reopening is necessary or expedient for the proper disposal of the case before it, (b) the reasons for such opinion are recorded in writing by the commission, (c) the applicant-assessee must give his concurrence therefor, and (d) the proceeding which is being reopened must relate to an assessment year which is within eight years from the end of the assessment year to which the case before the commission relates. The power conferred by section 245E is thus a circumscribed and a conditional power. It can be exercised only in accordance with and subject to the conditions aforementioned and in no other manner. Now, let us see whether section 245E availed the commission to direct the dropping of penalty proceedings relating to the assessment years 1970-71 to 1974-75 while settling the case relating to the assessment year 1975-76n the present case, the application filed by the assessee was in respect of only one assessment year, viz., 1975-76. This is clear from the particulars mentioned in his application for settlement dated June 24, 1977, referred to hereinbefore. In his response/report to the said application, the Commissioner had stated that he had no objection to the application for settlement being processed with in respect of the assessment year 1975-76 vide Commissioners report dated July 6, 1977. Thereafter, the assessee filed, what he called, "a brief statement of facts". In this statement, he requested that the enhanced value of the opening stock disclosed by him should not be added in the assessment of the assessment year 1975-76 alone but should be appropriately spread over all the six assessment years, viz., assessment years 1970-71 to 1975-76. This he requested because, doing so would have reduced his overall tax liability. It is for this purpose that he gave his consent/concurrence for reopening the assessments of the earlier assessment years. It was, therefore, not a situation contemplated by section 245E. This was not a case where the commission wanted to reopen the concluded assessments because it was found necessary or expedient to do so for the proper disposal of the case pending before it ; it was a case where the assessee was requesting for a benefit and for the purpose of obtaining that benefit, he was requesting the reopening of the earlier assessments. Even this request of the assessee was for a limited purpose, viz., for spreading over the enhanced value of opening stock disclosed by him over the said six assessment years. It was not a request or concurrence to reopen the entire assessment and penalty proceedings relating to the said earlier assessment yearsIt is not permissible for the commission to say that since it has reopened the assessments of earlier assessment year for the limited purpose of giving relief for the assessment year before it, it gets full command and total jurisdiction over all the said earlier assessment years and that it can pass such orders as it thinks fit in respect of all the matters relating to the said assessment years including the penalty proceedings. This would amount to doing indirectly what cannot be done directly. The ultimate orders passed by the commission should relate to the case before it ; it is only for the purpose of effectively settling the case before it that the commission can reopen concluded proceedings subject to the four conditions set out hereinabove. We fail to see how the penalty proceedings (which have now been dropped) fall within the ambit of the power conferred by section 245E. The penalty proceedings not only relate to assessment years not before the commission but they relate to alleged concealments during those earlier assessment years which concealments were not before the commission. The disclosures before the commission related to two other concealments [disclosed for the assessment year 1975-76 but which amounts the assessee wanted to be spread over all the six assessment years 1970-71 to 1975-76] wholly different and distinct from the concealments on account of which the said penalty proceedings were initiated. We are, therefore, of the opinion that the commission exceeded its jurisdiction in directing that the said penalty proceedings [relating to the assessment years 1970-71 to 1974-75] should be dropped or that penalties be waived in respect of the said assessment years. The interpretation placed by the chairman upon section 245E is the correct one and not the interpretation placed by the majoritye are also not impressed by the argument of Sri Poddar, learned counsel for the assessee, that inasmuch as the quantum of penalty depends upon the quantum of the income assessed and because the income assessed for the said earlier assessment years was bound to undergo a change on account of the "spreading over" aforesaid, the earlier penalty proceedings fall to the ground automatically and that, thereafter penalties, if any, can be levied only by the Settlement Commission. There is a clear fallacy in the said submission. The penalty proceedings related to certain other concealments, i.e., other than the two concealments disclosed in the assessees application for settlement and which were sought to be spread over backwards. The said penalty proceedings could not, therefore, have been affected or rendered nugatory by the addition to the total income resulting from the aforesaid "spreading over". It is difficult to see any connection, much less an intimate connection, between the said "spreading over" and the consequent enhancement of the income assessed for the said assessment years and the penalty proceedingsLastly, we may refer to Sri Poddars submission based upon section 245F(1). According to him, sub-section (1) confers the powers of an income-tax authority upon the Settlement Commission including the power to reopen the assessments as contemplated by section 147. We do not know whether the power under section 147 can also be claimed by the commission. But assuming it can, the said power has to be exercised in accordance with the provisions contained in sections 147 to 150 including sections 148 and 149. Admittedly, they were not complied with in this case

Suchet Singh Yadav & Others Vs. Union of India & Others

the objects sought to be achieved. We have set out the objects underlying the payment of pension. If the State considered it necessary to liberalise the pension scheme, we find no rational principle behind it for granting these benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date. If the liberalisation was considered necessary for augmenting social security in old age to government servants then those who, retired earlier cannot be worst off than those who retire later. Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory. To illustrate, take two persons, one retired just a day prior and another a day just succeeding the specified date. Both were in the same pay bracket, the average emolument was the same and both had put in equal number of years of service. How does a fortuitous circumstance of retiring a day earlier or a day later will permit totally unequal treatment in the matter of pension? One retiring a day earlier will have to be subject to ceiling of Rs. 8100 p.a. and average emolument to be worked out on 36 months salary while the other will have a ceiling of Rs. 12,000 p.a. and average emolument will be computed on the basis of last 10 months average. The artificial division stares into face and is unrelated to any principle and whatever principle, if there be any, has absolutely no nexus to the objects sought to be achieved by liberalising the pension scheme. In fact this arbitrary division has not only no nexus to the liberalised pension scheme but it is counter-productive and runs counter to the whole gamut of pension scheme. The equal treatment guaranteed in Article 14 is wholly violated inasmuch as the pension rules being statutory in character, since the specified date, the rules accord differential and discriminatory treatment to equals in the matter of commutation of pension. A 48 hours difference in matter of retirement would have a traumatic effect. Division is thus both arbitrary and unprincipled. Therefore, the classification does not stand the test of Article 14."32. In a judgment of this Court in Col. B.J. Akkara (Retd.) v. Government of India and Others., (2006) 11 SCC 709 the circular dated 07.06.1999 was considered and it was observed that circular puts those who retired on or after 01.01.1986 and Pre-1986 retirees on a par. Paragraph 11 is to the following effect:-"11. We may first refer to the intent and purport of the circular dated 7-6-1999. The circular dated 7-6-1999 neither prescribes the requirements/qualifications for entitlement to pension nor the method of determination of pension. It only effectuates the Presidents decision that the pension (which has already been determined in accordance with the applicable rules/orders) irrespective of the date of retirement, shall not be less than 50% of the minimum pay in the revised scales of pay introduced with effect from 1-1-1996. Pension is determined as per relevant rules/orders, by calculating the average of reckonable emoluments (basic pay, rank pay and NPA) drawn during the last 10 months of service and then taking 50% thereof as the retiring pension applicable to retirees with 33 years of qualifying service, with proportionate reduction for retirees with lesser period of qualifying service. The basis for calculating the pension in respect of those who retired prior to 1-1-1996, and those who retired on or after 1-1-1996 happens to be the same. The retiring pension is 50% of the average reckonable emoluments for retirees with 33 years of qualifying service, with proportionate reduction for those with lesser years of qualifying service. The Presidents decision given effect by the circular dated 7-6-1999 only extends to all pre-1996 retirees, who did not have the benefit of fixation of pension with reference to the revised pay scales which came into effect on 1-1-1996, the benefit of the said revised pay scales, albeit in a limited manner. In so doing, it also puts those who retired on or after 1-1-1986 and pre-1986 retirees on a par and on a common platform, removing the disparity, if any, in their pensions."33. Learned counsel for the appellant has also referred to judgments of this Court in K.C. Bajaj & ors. v. Union of India & Ors., 2014(2) S.C.T. 57 : (2014) 3 SCC 777 ; V. Kasturi v. Managing Director, State Bank of India, 1998(4) S.C.T. 662 : (1998) 8 SCC 30 ; Union of India & Anr. v. SPS Vains (Retd.) & Ors., 2008(4) S.C.T. 453 : (2008) 12 SCALE 360. 34. There cannot be any dispute to propositions laid down in above mentioned cases of this Court where this Court has laid down that the State cannot arbitrarily pick and choose from amongst similarly situated persons, a cut off date for extension of benefits especially pensionery benefits, there has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit. As noted above, present is not a case where there is any discrimination in pensionery benefits of pre 01.01.1996 and post 01.01.1996 retirees. The applicants, base their claims on the order of the Government of India dated 21.11.1997 and we have already held that those who were not in service on 01.01.1996 could not claim any benefit of the order dated 21.11.1997. Thus, present is not a case of any kind of discrimination and differentiation in pensionery benefits of pre and post 01.01.1996 retirees. We have already noticed above that order dated 21.11.1997 was issued in reference to pay and allowances of Armed Forces Officers, which pre-supposes that these officers were in the establishment on 01.01.1996. We thus are of the view that applicants were clearly not entitled for grant of benefit of higher pay scale under the order dated 21.11.1997. Th

1[ds]This Court clearly had mentioned in its order dated 06.02.2015 that order of the Armed Forces Tribunal shall be limited to the facts of the said case, since according to the Union of India, full facts were not brought to the notice of the Tribunal. Further, this Court clarified that it will be open to the Union of India to bring the full facts to the notice of the Armed Forces Tribunal in appropriate cases. The order of this Court dated 06.02.2015 thus cannot be read as laying down any ratio in favour of the applicants, which can be relied by them in the present case. In the case of Sqn. Ldr. Suchet Singh Yadav and others, all materials were brought on the record including filing of counter affidavit by the Union of India. As noted above, the Armed Forces Tribunal in case of Lt. Cdr. Gurmukh Singh and V.K. Mehta has rejected their claim accepting the case of the Union of India.We thus are of the opinion that order of the Armed Forces Tribunal in Maj. K.G. Thomas case is confined to that case alone and cannot be read as any precedent, as clarified by this Court itself in its order dated 06.02.2015. Thus, reliance by the learned counsel for the applicants on the case of Maj. K.G. Thomas (supra) and order of this Court dated 06.02.2015 is misplaced.As noted above, present is not a case where any discrimination has been made by Union of India in payment of pension to those, who retired prior to 01.01.1996 and those, who retired after 01.01.1996.There cannot be any dispute to propositions laid down in above mentioned cases of this Court where this Court has laid down that the State cannot arbitrarily pick and choose from amongst similarly situated persons, a cut off date for extension of benefits especially pensionery benefits, there has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit. As noted above, present is not a case where there is any discrimination in pensionery benefits of pre 01.01.1996 and post 01.01.1996 retirees. The applicants, base their claims on the order of the Government of India dated 21.11.1997 and we have already held that those who were not in service on 01.01.1996 could not claim any benefit of the order dated 21.11.1997. Thus, present is not a case of any kind of discrimination and differentiation in pensionery benefits of pre and post 01.01.1996 retirees. We have already noticed above that order dated 21.11.1997 was issued in reference to pay and allowances of Armed Forces Officers, whichthat these officers were in the establishment on 01.01.1996. We thus are of the view that applicants were clearly not entitled for grant of benefit of higher pay scale under the order dated 21.11.1997.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: the objects sought to be achieved. We have set out the objects underlying the payment of pension. If the State considered it necessary to liberalise the pension scheme, we find no rational principle behind it for granting these benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date. If the liberalisation was considered necessary for augmenting social security in old age to government servants then those who, retired earlier cannot be worst off than those who retire later. Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory. To illustrate, take two persons, one retired just a day prior and another a day just succeeding the specified date. Both were in the same pay bracket, the average emolument was the same and both had put in equal number of years of service. How does a fortuitous circumstance of retiring a day earlier or a day later will permit totally unequal treatment in the matter of pension? One retiring a day earlier will have to be subject to ceiling of Rs. 8100 p.a. and average emolument to be worked out on 36 months salary while the other will have a ceiling of Rs. 12,000 p.a. and average emolument will be computed on the basis of last 10 months average. The artificial division stares into face and is unrelated to any principle and whatever principle, if there be any, has absolutely no nexus to the objects sought to be achieved by liberalising the pension scheme. In fact this arbitrary division has not only no nexus to the liberalised pension scheme but it is counter-productive and runs counter to the whole gamut of pension scheme. The equal treatment guaranteed in Article 14 is wholly violated inasmuch as the pension rules being statutory in character, since the specified date, the rules accord differential and discriminatory treatment to equals in the matter of commutation of pension. A 48 hours difference in matter of retirement would have a traumatic effect. Division is thus both arbitrary and unprincipled. Therefore, the classification does not stand the test of Article 14."32. In a judgment of this Court in Col. B.J. Akkara (Retd.) v. Government of India and Others., (2006) 11 SCC 709 the circular dated 07.06.1999 was considered and it was observed that circular puts those who retired on or after 01.01.1986 and Pre-1986 retirees on a par. Paragraph 11 is to the following effect:-"11. We may first refer to the intent and purport of the circular dated 7-6-1999. The circular dated 7-6-1999 neither prescribes the requirements/qualifications for entitlement to pension nor the method of determination of pension. It only effectuates the Presidents decision that the pension (which has already been determined in accordance with the applicable rules/orders) irrespective of the date of retirement, shall not be less than 50% of the minimum pay in the revised scales of pay introduced with effect from 1-1-1996. Pension is determined as per relevant rules/orders, by calculating the average of reckonable emoluments (basic pay, rank pay and NPA) drawn during the last 10 months of service and then taking 50% thereof as the retiring pension applicable to retirees with 33 years of qualifying service, with proportionate reduction for retirees with lesser period of qualifying service. The basis for calculating the pension in respect of those who retired prior to 1-1-1996, and those who retired on or after 1-1-1996 happens to be the same. The retiring pension is 50% of the average reckonable emoluments for retirees with 33 years of qualifying service, with proportionate reduction for those with lesser years of qualifying service. The Presidents decision given effect by the circular dated 7-6-1999 only extends to all pre-1996 retirees, who did not have the benefit of fixation of pension with reference to the revised pay scales which came into effect on 1-1-1996, the benefit of the said revised pay scales, albeit in a limited manner. In so doing, it also puts those who retired on or after 1-1-1986 and pre-1986 retirees on a par and on a common platform, removing the disparity, if any, in their pensions."33. Learned counsel for the appellant has also referred to judgments of this Court in K.C. Bajaj & ors. v. Union of India & Ors., 2014(2) S.C.T. 57 : (2014) 3 SCC 777 ; V. Kasturi v. Managing Director, State Bank of India, 1998(4) S.C.T. 662 : (1998) 8 SCC 30 ; Union of India & Anr. v. SPS Vains (Retd.) & Ors., 2008(4) S.C.T. 453 : (2008) 12 SCALE 360. 34. There cannot be any dispute to propositions laid down in above mentioned cases of this Court where this Court has laid down that the State cannot arbitrarily pick and choose from amongst similarly situated persons, a cut off date for extension of benefits especially pensionery benefits, there has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit. As noted above, present is not a case where there is any discrimination in pensionery benefits of pre 01.01.1996 and post 01.01.1996 retirees. The applicants, base their claims on the order of the Government of India dated 21.11.1997 and we have already held that those who were not in service on 01.01.1996 could not claim any benefit of the order dated 21.11.1997. Thus, present is not a case of any kind of discrimination and differentiation in pensionery benefits of pre and post 01.01.1996 retirees. We have already noticed above that order dated 21.11.1997 was issued in reference to pay and allowances of Armed Forces Officers, which pre-supposes that these officers were in the establishment on 01.01.1996. We thus are of the view that applicants were clearly not entitled for grant of benefit of higher pay scale under the order dated 21.11.1997. Th ### Response: 1 ### Explanation: This Court clearly had mentioned in its order dated 06.02.2015 that order of the Armed Forces Tribunal shall be limited to the facts of the said case, since according to the Union of India, full facts were not brought to the notice of the Tribunal. Further, this Court clarified that it will be open to the Union of India to bring the full facts to the notice of the Armed Forces Tribunal in appropriate cases. The order of this Court dated 06.02.2015 thus cannot be read as laying down any ratio in favour of the applicants, which can be relied by them in the present case. In the case of Sqn. Ldr. Suchet Singh Yadav and others, all materials were brought on the record including filing of counter affidavit by the Union of India. As noted above, the Armed Forces Tribunal in case of Lt. Cdr. Gurmukh Singh and V.K. Mehta has rejected their claim accepting the case of the Union of India.We thus are of the opinion that order of the Armed Forces Tribunal in Maj. K.G. Thomas case is confined to that case alone and cannot be read as any precedent, as clarified by this Court itself in its order dated 06.02.2015. Thus, reliance by the learned counsel for the applicants on the case of Maj. K.G. Thomas (supra) and order of this Court dated 06.02.2015 is misplaced.As noted above, present is not a case where any discrimination has been made by Union of India in payment of pension to those, who retired prior to 01.01.1996 and those, who retired after 01.01.1996.There cannot be any dispute to propositions laid down in above mentioned cases of this Court where this Court has laid down that the State cannot arbitrarily pick and choose from amongst similarly situated persons, a cut off date for extension of benefits especially pensionery benefits, there has to be a classification founded on some rational principle when similarly situated class is differentiated for grant of any benefit. As noted above, present is not a case where there is any discrimination in pensionery benefits of pre 01.01.1996 and post 01.01.1996 retirees. The applicants, base their claims on the order of the Government of India dated 21.11.1997 and we have already held that those who were not in service on 01.01.1996 could not claim any benefit of the order dated 21.11.1997. Thus, present is not a case of any kind of discrimination and differentiation in pensionery benefits of pre and post 01.01.1996 retirees. We have already noticed above that order dated 21.11.1997 was issued in reference to pay and allowances of Armed Forces Officers, whichthat these officers were in the establishment on 01.01.1996. We thus are of the view that applicants were clearly not entitled for grant of benefit of higher pay scale under the order dated 21.11.1997.

Kshetra Mohan-Sannyasicharan Sadhukhan Vs. Commissioner Of Excess Profits Tax,West Bangal

prevent the individual members of one Hindu undivided family from entering into a partnership with the individual members of another Hindu undivided family and in such a case it is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu undivided families.We need not pursue this matter further, for in the case now before us there is no evidence whatever to prove that all the members of the two families had individually become partners in the business at any time before 14-4-1943. The documents to which reference will presently be made do not support the case now sought to be made by learned counsel for the assessee.7. Section 26-A permits an application to be made to the Income-tax Officer on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of the Indian Income-tax Act. Sub-section (2) of that section provides that the application shall be made by such person or persons and shall be in such form and be verified in such manner as may be prescribed. Rule 2, Income-tax Rules, requires that such application shall be signed by all the partners personally. Rule 3 enjoins that the application shall be made in the form annexed to that rule.It appears that on 19-l0-1943 an application was made on behalf of Kshetra Mohan Sadhukhan and sons and Bijan Kumar Sadukhan and brothers for the renewal of the registration of the firm under S. 26-A, Income-tax Act for the assessment for the Income-tax year 1942-43. It was alleged in that application that the constitution of the firm and the individual shares of the partners as specified in the instrument of partnership remained unaltered. In the schedule to the application were set out the required particulars. The last column showed that in the balance of profits or loss the share of Kshetra Mohan Sadhukhan and sons was Rs. 4,370 and that of Bijan Kumar Sadhukhan and brothers was also Rs. 4,370/.The instrument of partnership dated 19-9-1943 referred to in the application appears to be one made between Gosta Behari Sadhukhan and Bros. called the first party and Bijan Kumar Sadhukhan and Bros. called the second party Clause 6 of that deed provided that the profits of the partnership should belong to "the partners equally, i.e., eight-annas share each". Clause 7 of the deed referred to "either partner" and clause 8 to "either of the partners". These expressions clearly indicate that the partners were two only and an equal share of eight annas also indicates the same.It further appears that on 28-12-1944 another deed of partnership was drawn up. In this deed there are eight parties. Learned counsel for the appellant relies on the first four recitals as clearly indicating that even before 13-4-1943 the eight individual members of the two families carried on business in partnership. This construction of those clauses is clearly inconsistent with the fifth recital which says that on and from the 1st Baisak 1350 B. S, i.e. 14-4-1943 the said firm was reconstituted as constituted of eight partners. If the firm was before 1st Baisak 1350 B. S. constituted of eight partners then there could be no occasion for reciting that "the firm was reconstituted as constituted of eight partners".Further, the statement of case drawn up by the Appellate Tribunal, which is binding on the assessee, clearly indicates that up to 13-4-1943 the business was a partnership concern carried on by two Dayabhaga Hindu undivided famlies and that it was after that date that the eight members of the two families constituted themselves into a partnership. The returns in the firms files up to 1943-44 also show only two partners Kshetra Mohan Sadhukhan and sons and Sannyasi Charan Sadhukhan and sons-each having an eight-annas share. It is from 1944-45 that eight partners are being shown. As already stated, the application dated 19-10-1943 also indicates that the parties themselves considered that the business was carried on by two partners.Further, the very question referred by the Appellate Tribunal implies, as pointed out by the High Court, that a business was carried on by a partnership composed of two partners each of which was a Hindu undivided family, that there was a disruption of both the families and that on and after such disruption the business was carried on by a partnership entered into by and between the separated male members of the two families.We also agree with the High Court that if the case of the assessee was that even before 14-4-43 there was a partnership of eight persons and if that case was accepted by the Appellate Tribunal then no question of law could have arisen on those facts, it is only because the fact found was that prior to 13-4-1943 the business was carried on by a partnership of two Hindu undivided families which prima facie means a partnership between two Kartas representing two Hindu undivided families and that from 14-4-1943 it became a business of eight individual members of two disrupted families that the question of law could arise. If, as we hold, the assessee is not entitled to go behind the facts so found by the Appellate Tribunal in the statement of the case and as is implicit in the question itself, then there can be no doubt that there had been a change in the persons carrying on the business within the meaning of S. 8, Excess profits Tax Act and it has not been argued otherwise. In our opinion. therefore, the answer given by the High Court to the referred question was correct.8. In this view of the matter it is not necessary to consider whether the fact of Nandodulal, the youngest son of Sannyasi Charan, being a minor before 13-4-1943 and of his attaining majority on I8-7-1943, as stated by the learned counsel for the assessee, will bring the case within the meaning of S. 8, Excess Profits Tax Act.

0[ds]A Hindu undivided family is no doubt included in the expression "person" as defined in the Indian Income-tax Act as well as in the Excess Profits Tax Act but it is not a juristic person for all purposes. The affairs of the Hindu undivided family are looked after and managed by its Karta. When two Kartas of two Hindu undivided families enter into it partnership agreement the partnership is popularly described as one between the two Hindu undivided families but in the eye of the law it is a partnership between the two Kartas and the other members of the families do not ipso facto become partners. There is, however, nothing to prevent the individual members of one Hindu undivided family from entering into a partnership with the individual members of another Hindu undivided family and in such a case it is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu undivided families.We need not pursue this matter further, for in the case now before us there is no evidence whatever to prove that all the members of the two families had individually become partners in the business at any time before 14-4-1943. The documents to which reference will presently be made do not support the case now sought to be made by learned counsel for thealso agree with the High Court that if the case of the assessee was that even before 14-4-43 there was a partnership of eight persons and if that case was accepted by the Appellate Tribunal then no question of law could have arisen on those facts, it is only because the fact found was that prior to 13-4-1943 the business was carried on by a partnership of two Hindu undivided families which prima facie means a partnership between two Kartas representing two Hindu undivided families and that from 14-4-1943 it became a business of eight individual members of two disrupted families that the question of law could arise. If, as we hold, the assessee is not entitled to go behind the facts so found by the Appellate Tribunal in the statement of the case and as is implicit in the question itself, then there can be no doubt that there had been a change in the persons carrying on the business within the meaning of S. 8, Excess profits Tax Act and it has not been argued otherwise. In our opinion. therefore, the answer given by the High Court to the referred question was correct.In this view of the matter it is not necessary to consider whether the fact of Nandodulal, the youngest son of Sannyasi Charan, being a minor before 13-4-1943 and of his attaining majority on I8-7-1943, as stated by the learned counsel for the assessee, will bring the case within the meaning of S. 8, Excess Profits Tax Act.

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: prevent the individual members of one Hindu undivided family from entering into a partnership with the individual members of another Hindu undivided family and in such a case it is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu undivided families.We need not pursue this matter further, for in the case now before us there is no evidence whatever to prove that all the members of the two families had individually become partners in the business at any time before 14-4-1943. The documents to which reference will presently be made do not support the case now sought to be made by learned counsel for the assessee.7. Section 26-A permits an application to be made to the Income-tax Officer on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of the Indian Income-tax Act. Sub-section (2) of that section provides that the application shall be made by such person or persons and shall be in such form and be verified in such manner as may be prescribed. Rule 2, Income-tax Rules, requires that such application shall be signed by all the partners personally. Rule 3 enjoins that the application shall be made in the form annexed to that rule.It appears that on 19-l0-1943 an application was made on behalf of Kshetra Mohan Sadhukhan and sons and Bijan Kumar Sadukhan and brothers for the renewal of the registration of the firm under S. 26-A, Income-tax Act for the assessment for the Income-tax year 1942-43. It was alleged in that application that the constitution of the firm and the individual shares of the partners as specified in the instrument of partnership remained unaltered. In the schedule to the application were set out the required particulars. The last column showed that in the balance of profits or loss the share of Kshetra Mohan Sadhukhan and sons was Rs. 4,370 and that of Bijan Kumar Sadhukhan and brothers was also Rs. 4,370/.The instrument of partnership dated 19-9-1943 referred to in the application appears to be one made between Gosta Behari Sadhukhan and Bros. called the first party and Bijan Kumar Sadhukhan and Bros. called the second party Clause 6 of that deed provided that the profits of the partnership should belong to "the partners equally, i.e., eight-annas share each". Clause 7 of the deed referred to "either partner" and clause 8 to "either of the partners". These expressions clearly indicate that the partners were two only and an equal share of eight annas also indicates the same.It further appears that on 28-12-1944 another deed of partnership was drawn up. In this deed there are eight parties. Learned counsel for the appellant relies on the first four recitals as clearly indicating that even before 13-4-1943 the eight individual members of the two families carried on business in partnership. This construction of those clauses is clearly inconsistent with the fifth recital which says that on and from the 1st Baisak 1350 B. S, i.e. 14-4-1943 the said firm was reconstituted as constituted of eight partners. If the firm was before 1st Baisak 1350 B. S. constituted of eight partners then there could be no occasion for reciting that "the firm was reconstituted as constituted of eight partners".Further, the statement of case drawn up by the Appellate Tribunal, which is binding on the assessee, clearly indicates that up to 13-4-1943 the business was a partnership concern carried on by two Dayabhaga Hindu undivided famlies and that it was after that date that the eight members of the two families constituted themselves into a partnership. The returns in the firms files up to 1943-44 also show only two partners Kshetra Mohan Sadhukhan and sons and Sannyasi Charan Sadhukhan and sons-each having an eight-annas share. It is from 1944-45 that eight partners are being shown. As already stated, the application dated 19-10-1943 also indicates that the parties themselves considered that the business was carried on by two partners.Further, the very question referred by the Appellate Tribunal implies, as pointed out by the High Court, that a business was carried on by a partnership composed of two partners each of which was a Hindu undivided family, that there was a disruption of both the families and that on and after such disruption the business was carried on by a partnership entered into by and between the separated male members of the two families.We also agree with the High Court that if the case of the assessee was that even before 14-4-43 there was a partnership of eight persons and if that case was accepted by the Appellate Tribunal then no question of law could have arisen on those facts, it is only because the fact found was that prior to 13-4-1943 the business was carried on by a partnership of two Hindu undivided families which prima facie means a partnership between two Kartas representing two Hindu undivided families and that from 14-4-1943 it became a business of eight individual members of two disrupted families that the question of law could arise. If, as we hold, the assessee is not entitled to go behind the facts so found by the Appellate Tribunal in the statement of the case and as is implicit in the question itself, then there can be no doubt that there had been a change in the persons carrying on the business within the meaning of S. 8, Excess profits Tax Act and it has not been argued otherwise. In our opinion. therefore, the answer given by the High Court to the referred question was correct.8. In this view of the matter it is not necessary to consider whether the fact of Nandodulal, the youngest son of Sannyasi Charan, being a minor before 13-4-1943 and of his attaining majority on I8-7-1943, as stated by the learned counsel for the assessee, will bring the case within the meaning of S. 8, Excess Profits Tax Act. ### Response: 0 ### Explanation: A Hindu undivided family is no doubt included in the expression "person" as defined in the Indian Income-tax Act as well as in the Excess Profits Tax Act but it is not a juristic person for all purposes. The affairs of the Hindu undivided family are looked after and managed by its Karta. When two Kartas of two Hindu undivided families enter into it partnership agreement the partnership is popularly described as one between the two Hindu undivided families but in the eye of the law it is a partnership between the two Kartas and the other members of the families do not ipso facto become partners. There is, however, nothing to prevent the individual members of one Hindu undivided family from entering into a partnership with the individual members of another Hindu undivided family and in such a case it is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu undivided families.We need not pursue this matter further, for in the case now before us there is no evidence whatever to prove that all the members of the two families had individually become partners in the business at any time before 14-4-1943. The documents to which reference will presently be made do not support the case now sought to be made by learned counsel for thealso agree with the High Court that if the case of the assessee was that even before 14-4-43 there was a partnership of eight persons and if that case was accepted by the Appellate Tribunal then no question of law could have arisen on those facts, it is only because the fact found was that prior to 13-4-1943 the business was carried on by a partnership of two Hindu undivided families which prima facie means a partnership between two Kartas representing two Hindu undivided families and that from 14-4-1943 it became a business of eight individual members of two disrupted families that the question of law could arise. If, as we hold, the assessee is not entitled to go behind the facts so found by the Appellate Tribunal in the statement of the case and as is implicit in the question itself, then there can be no doubt that there had been a change in the persons carrying on the business within the meaning of S. 8, Excess profits Tax Act and it has not been argued otherwise. In our opinion. therefore, the answer given by the High Court to the referred question was correct.In this view of the matter it is not necessary to consider whether the fact of Nandodulal, the youngest son of Sannyasi Charan, being a minor before 13-4-1943 and of his attaining majority on I8-7-1943, as stated by the learned counsel for the assessee, will bring the case within the meaning of S. 8, Excess Profits Tax Act.

State of Gujarat Vs. Vivekanand Mills

assessee mean business or business activity incidental to the business in respect of which the assessee is a registered dealer or a dealer liable to be registered.Now, the fact that the Memorandum of Association of the petitioner-mills or article 87 of the Articles of Association, gave power to the petitioners to deal in cotton-seeds, cotton, silk, wool etc., does not mean, as the Tribunal itself has observed, that the petitioners have been dealing in those commodities and, therefore, that fact by itself would not be a determinative factor. Similarly, the fact that the petitioners have effected sales of cotton during the years prior to the assessment year, though an indication, is not a conclusive criterion, as the determination of the question before us depends upon the cumulative effect of the facts and circumstances due to which the sales were effected by the petitioners. As we have held in our main judgment in Reference No. 34 of 1963 in the case of Ambica Mills Ltd. v. State of Gujarat ([1964] 15 S.T.C. 367.), frequency and volume of sales, though a relevant factor, do not amount to a conclusive factor.6. The Tribunal however has held that there was always a possibility of there being surplus cotton which the petitioners had to sell and that this possibility must have been present in the mind of the petitioners and, therefore, it could be said that whenever necessity or occasion for disposing of surplus cotton arose, the petitioners sold it as a matter of business, either with the expectation of profit or avoidance of loss and not with the idea or the motive suggesting that the sales were not of the nature of business. This conclusion, in our view, is not correct. It is an undisputed fact that the petitioners have been purchasing year in and out cotton for the business of manufacturing cotton fabrics and the sales effected by them were only in respect of cotton which was either surplus or redundant or, as in the present case, where they had owing to certain circumstances, purchased it in duplicate transactions. It is not the case of the department that the petitioners deliberately purchased cotton in excess of their necessity with the ultimate intention to sell such excess as and when they could obtain a higher price. The sales effected by the petitioners fall mainly into two categories, sales either to their sister concern or to the other mills, whenever there was surplus cotton. But in both the kinds of transactions, the initial intention with which cotton was purchased, was to use it for the purpose of manufacturing goods, which is their business. The department has not been able to show that there were any circumstances in this case which would offset this circumstance and show that the cotton was purchased with any idea of selling it as and when the petitioners could get a higher price, in other words, with profit motive. As held by us in the case of Ambica Mills Ltd. ([1964] 15 S.T.C. 367.), the mere fact of volume and degree of frequency of sales is not a conclusive factor which can be said to be inconsistent with the conclusion that the sales were not business or business activity.So far as the cotton in question is concerned, the sales have been only two and the petitioners have explained the circumstances in which they had to sell 411 bales in question. These bales had to be sold as the petitioners found that as cotton first purchased by them arrived earlier than anticipated, their purchase of these bales remained in their hand as surplus and which, if retained, would unnecessarily mean blocking up of their capital. It would not, therefore, be right to say as the Tribunal has held, that the sales were made either with the anticipation of profit or for the purpose of avoiding loss, that is to say, loss in the business of manufacturing textile goods. The facts in the case clearly disclose that the petitioners purchased the cotton for the purpose of using it in their business of manufacturing cotton textiles, that they sold the surplus cotton, not with the object of making profit, but because it was redundant, and if not sold, would mean unnecessarily blocking up of their finance which no businessman with any reasonable prudence would do. Merely because there was a possibility in a manufacturing business of there being some surplus of raw materials left over, even if coupled with the circumstance that the businessman was aware of such possibility, would not render the disposal of such surplus as part of or incidental to his business. If such a conclusion were to be arrived at, it would make a manufacturing business almost impossible, or in any event, extremely difficult, for, no manufacturer can ever anticipate the exact and precise quantity of raw materials, such as cotton in this case, which he would require during a particular period, and there is therefore bound to be some surplus left over or likely to be left over which, unless disposed of, would result in unnecessarily blocking up of investment. If there is such a surplus and it is sold, even at profit, that would not make the disposal thereof either a part of the business or an incident to his business. Such a conclusion can never be said to be in the contemplation of the Legislature when it enacted the definition of "dealer". In the present case, the sales have been only two and the sales have resulted in fact in a loss. Considering these facts and the other circumstances of the case, it is impossible to say that the cotton was purchased with the intention to sell it at profit at any subsequent stage or that the initial intention with which it was purchased, namely, to use it for the purpose of manufacturing textile goods, has been counter-balanced by other circumstances offseting that initial intention or that the sales were incidental to the business of the assessee.

0[ds]5. In our judgment, which we delivered on the 14/15th of November, 1963, wherein we disposed of Reference No. 34 of 1963 and three others (Reported as Ambica Mills Ltd. and Others v. The State of Gujarat and Another [1964] 15 S.T.C. 367.), we had to consider the question as to when a person can be said to be a dealer and we had also to consider a number of decisions of different High Courts dealing with that question and several different tests applied in those cases, and we ultimately came to the conclusion that though these tests furnished indications as to whether particular dealings amounted to the business of selling goods or not, none of them can be said to supply a uniform or a universal determinative factor and that each case would have to be determined according to its own facts. Nevertheless, there is to a certain extent consensus of opinion in those decided cases that the word "business" has to be construed in a commercial sense and that the initial intention or object with which the goods in question are purchased is a relevant factor in deciding whether the sale thereof was a part of the business or a business activity of the assessee and that if the initial intention in purchasing the goods in question was to use the goods in the business of the assessee, such as manufacturing goods or articles, then, unless that factor was offset by circumstances showing that the assessee intended to indulge in a business activity by entering into transactions of sale, the mere fact that the assessee sold the goods so purchased would not render him a dealer. Those decided cases also lay down that the burden of establishing those circumstances offsetting the initial intention or object, is on the taxing authority. They also show that profit motive was an equally relevant factor in considering the question whether the sales effected by an assessee mean business or business activity incidental to the business in respect of which the assessee is a registered dealer or a dealer liable to be registered.Now, the fact that the Memorandum of Association of thes or article 87 of the Articles of Association, gave power to the petitioners to deal in, cotton, silk, wool etc., does not mean, as the Tribunal itself has observed, that the petitioners have been dealing in those commodities and, therefore, that fact by itself would not be a determinative factor. Similarly, the fact that the petitioners have effected sales of cotton during the years prior to the assessment year, though an indication, is not a conclusive criterion, as the determination of the question before us depends upon the cumulative effect of the facts and circumstances due to which the sales were effected by the petitioners. As we have held in our main judgment in Reference No. 34 of 1963 in the case of Ambica Mills Ltd. v. State of Gujarat ([1964] 15 S.T.C. 367.), frequency and volume of sales, though a relevant factor, do not amount to a conclusive factor6. The Tribunal however has held that there was always a possibility of there being surplus cotton which the petitioners had to sell and that this possibility must have been present in the mind of the petitioners and, therefore, it could be said that whenever necessity or occasion for disposing of surplus cotton arose, the petitioners sold it as a matter of business, either with the expectation of profit or avoidance of loss and not with the idea or the motive suggesting that the sales were not of the nature of business. This conclusion, in our view, is not correct. It is an undisputed fact that the petitioners have been purchasing year in and out cotton for the business of manufacturing cotton fabrics and the sales effected by them were only in respect of cotton which was either surplus or redundant or, as in the present case, where they had owing to certain circumstances, purchased it in duplicate transactions. It is not the case of the department that the petitioners deliberately purchased cotton in excess of their necessity with the ultimate intention to sell such excess as and when they could obtain a higher price. The sales effected by the petitioners fall mainly into two categories, sales either to their sister concern or to the other mills, whenever there was surplus cotton. But in both the kinds of transactions, the initial intention with which cotton was purchased, was to use it for the purpose of manufacturing goods, which is their business. The department has not been able to show that there were any circumstances in this case which would offset this circumstance and show that the cotton was purchased with any idea of selling it as and when the petitioners could get a higher price, in other words, with profit motive. As held by us in the case of Ambica Mills Ltd. ([1964] 15 S.T.C. 367.), the mere fact of volume and degree of frequency of sales is not a conclusive factor which can be said to be inconsistent with the conclusion that the sales were not business or business activity.So far as the cotton in question is concerned, the sales have been only two and the petitioners have explained the circumstances in which they had to sell 411 bales in question. These bales had to be sold as the petitioners found that as cotton first purchased by them arrived earlier than anticipated, their purchase of these bales remained in their hand as surplus and which, if retained, would unnecessarily mean blocking up of their capital. It would not, therefore, be right to say as the Tribunal has held, that the sales were made either with the anticipation of profit or for the purpose of avoiding loss, that is to say, loss in the business of manufacturing textile goods. The facts in the case clearly disclose that the petitioners purchased the cotton for the purpose of using it in their business of manufacturing cotton textiles, that they sold the surplus cotton, not with the object of making profit, but because it was redundant, and if not sold, would mean unnecessarily blocking up of their finance which no businessman with any reasonable prudence would do. Merely because there was a possibility in a manufacturing business of there being some surplus of raw materials left over, even if coupled with the circumstance that the businessman was aware of such possibility, would not render the disposal of such surplus as part of or incidental to his business. If such a conclusion were to be arrived at, it would make a manufacturing business almost impossible, or in any event, extremely difficult, for, no manufacturer can ever anticipate the exact and precise quantity of raw materials, such as cotton in this case, which he would require during a particular period, and there is therefore bound to be some surplus left over or likely to be left over which, unless disposed of, would result in unnecessarily blocking up of investment. If there is such a surplus and it is sold, even at profit, that would not make the disposal thereof either a part of the business or an incident to his business. Such a conclusion can never be said to be in the contemplation of the Legislature when it enacted the definition of "dealer". In the present case, the sales have been only two and the sales have resulted in fact in a loss. Considering these facts and the other circumstances of the case, it is impossible to say that the cotton was purchased with the intention to sell it at profit at any subsequent stage or that the initial intention with which it was purchased, namely, to use it for the purpose of manufacturing textile goods, has beend by other circumstances offseting that initial intention or that the sales were incidental to the business of the assesseeIt is true that by one of the clauses of its Memorandum of Association the respondents are authorized to carry on the business of buying and selling cotton, silk, wool etc. But that in our judgment cannot be decisive of the intention to carry on business of selling cotton. Here is a case in which bales of cotton were agreed to be purchased, because they were needed for the purpose of the business of the respondents. When they were received, in pursuance of the agreement the respondents had a large quantity of similar goods which they had purchased from another source. Holding up of the bales of cotton obtained would have meant locking up a large amount of money. If in those circumstances the respondents sold the cotton bales, it cannot be inferred that the sale was with the intention to carry on business of selling cotton11. The Tribunal held that there was always a possibility of there being surplus cotton which the respondents had to sell and this possibility must have been present in the mind of the respondents and therefore it could be said that whenever occasion or necessity for disposal of surplus cotton arose and the respondents sold it as a matter of business, either in the expectation of profit or avoidance of loss, they intended to carry on business. But the respondents had been purchasing large quantities of cotton every year for the purpose of their business of manufacturing cotton fabrics. The sales effected by them were either "to their sister concern or such as were found to be surplus or redundant". It was not the case of the State that the respondents had deliberately purchased a large quantity of cotton in excess of their normal requirements and had then sold the quantity not required of its manufacturing schedule. The previous dealings in cotton in the earlier years do not indicate that there was on the part of the respondents any intention to carry on the business of selling cotton; nor does the transaction of purchase and sale of Californian cotton in the year of assessment indicate any such intention.Having considered all the circumstances, we think that there was no intention on the part of the respondents to carry on business of selling cotton, and that the High Court was right in its conclusion.

### Instruction: Predict the outcome of the case proceeding (1 for acceptance, 0 for rejection) and subsequently provide an explanation based on significant sentences in the proceeding. ### Input: assessee mean business or business activity incidental to the business in respect of which the assessee is a registered dealer or a dealer liable to be registered.Now, the fact that the Memorandum of Association of the petitioner-mills or article 87 of the Articles of Association, gave power to the petitioners to deal in cotton-seeds, cotton, silk, wool etc., does not mean, as the Tribunal itself has observed, that the petitioners have been dealing in those commodities and, therefore, that fact by itself would not be a determinative factor. Similarly, the fact that the petitioners have effected sales of cotton during the years prior to the assessment year, though an indication, is not a conclusive criterion, as the determination of the question before us depends upon the cumulative effect of the facts and circumstances due to which the sales were effected by the petitioners. As we have held in our main judgment in Reference No. 34 of 1963 in the case of Ambica Mills Ltd. v. State of Gujarat ([1964] 15 S.T.C. 367.), frequency and volume of sales, though a relevant factor, do not amount to a conclusive factor.6. The Tribunal however has held that there was always a possibility of there being surplus cotton which the petitioners had to sell and that this possibility must have been present in the mind of the petitioners and, therefore, it could be said that whenever necessity or occasion for disposing of surplus cotton arose, the petitioners sold it as a matter of business, either with the expectation of profit or avoidance of loss and not with the idea or the motive suggesting that the sales were not of the nature of business. This conclusion, in our view, is not correct. It is an undisputed fact that the petitioners have been purchasing year in and out cotton for the business of manufacturing cotton fabrics and the sales effected by them were only in respect of cotton which was either surplus or redundant or, as in the present case, where they had owing to certain circumstances, purchased it in duplicate transactions. It is not the case of the department that the petitioners deliberately purchased cotton in excess of their necessity with the ultimate intention to sell such excess as and when they could obtain a higher price. The sales effected by the petitioners fall mainly into two categories, sales either to their sister concern or to the other mills, whenever there was surplus cotton. But in both the kinds of transactions, the initial intention with which cotton was purchased, was to use it for the purpose of manufacturing goods, which is their business. The department has not been able to show that there were any circumstances in this case which would offset this circumstance and show that the cotton was purchased with any idea of selling it as and when the petitioners could get a higher price, in other words, with profit motive. As held by us in the case of Ambica Mills Ltd. ([1964] 15 S.T.C. 367.), the mere fact of volume and degree of frequency of sales is not a conclusive factor which can be said to be inconsistent with the conclusion that the sales were not business or business activity.So far as the cotton in question is concerned, the sales have been only two and the petitioners have explained the circumstances in which they had to sell 411 bales in question. These bales had to be sold as the petitioners found that as cotton first purchased by them arrived earlier than anticipated, their purchase of these bales remained in their hand as surplus and which, if retained, would unnecessarily mean blocking up of their capital. It would not, therefore, be right to say as the Tribunal has held, that the sales were made either with the anticipation of profit or for the purpose of avoiding loss, that is to say, loss in the business of manufacturing textile goods. The facts in the case clearly disclose that the petitioners purchased the cotton for the purpose of using it in their business of manufacturing cotton textiles, that they sold the surplus cotton, not with the object of making profit, but because it was redundant, and if not sold, would mean unnecessarily blocking up of their finance which no businessman with any reasonable prudence would do. Merely because there was a possibility in a manufacturing business of there being some surplus of raw materials left over, even if coupled with the circumstance that the businessman was aware of such possibility, would not render the disposal of such surplus as part of or incidental to his business. If such a conclusion were to be arrived at, it would make a manufacturing business almost impossible, or in any event, extremely difficult, for, no manufacturer can ever anticipate the exact and precise quantity of raw materials, such as cotton in this case, which he would require during a particular period, and there is therefore bound to be some surplus left over or likely to be left over which, unless disposed of, would result in unnecessarily blocking up of investment. If there is such a surplus and it is sold, even at profit, that would not make the disposal thereof either a part of the business or an incident to his business. Such a conclusion can never be said to be in the contemplation of the Legislature when it enacted the definition of "dealer". In the present case, the sales have been only two and the sales have resulted in fact in a loss. Considering these facts and the other circumstances of the case, it is impossible to say that the cotton was purchased with the intention to sell it at profit at any subsequent stage or that the initial intention with which it was purchased, namely, to use it for the purpose of manufacturing textile goods, has been counter-balanced by other circumstances offseting that initial intention or that the sales were incidental to the business of the assessee. ### Response: 0 ### Explanation: the petitioners fall mainly into two categories, sales either to their sister concern or to the other mills, whenever there was surplus cotton. But in both the kinds of transactions, the initial intention with which cotton was purchased, was to use it for the purpose of manufacturing goods, which is their business. The department has not been able to show that there were any circumstances in this case which would offset this circumstance and show that the cotton was purchased with any idea of selling it as and when the petitioners could get a higher price, in other words, with profit motive. As held by us in the case of Ambica Mills Ltd. ([1964] 15 S.T.C. 367.), the mere fact of volume and degree of frequency of sales is not a conclusive factor which can be said to be inconsistent with the conclusion that the sales were not business or business activity.So far as the cotton in question is concerned, the sales have been only two and the petitioners have explained the circumstances in which they had to sell 411 bales in question. These bales had to be sold as the petitioners found that as cotton first purchased by them arrived earlier than anticipated, their purchase of these bales remained in their hand as surplus and which, if retained, would unnecessarily mean blocking up of their capital. It would not, therefore, be right to say as the Tribunal has held, that the sales were made either with the anticipation of profit or for the purpose of avoiding loss, that is to say, loss in the business of manufacturing textile goods. The facts in the case clearly disclose that the petitioners purchased the cotton for the purpose of using it in their business of manufacturing cotton textiles, that they sold the surplus cotton, not with the object of making profit, but because it was redundant, and if not sold, would mean unnecessarily blocking up of their finance which no businessman with any reasonable prudence would do. Merely because there was a possibility in a manufacturing business of there being some surplus of raw materials left over, even if coupled with the circumstance that the businessman was aware of such possibility, would not render the disposal of such surplus as part of or incidental to his business. If such a conclusion were to be arrived at, it would make a manufacturing business almost impossible, or in any event, extremely difficult, for, no manufacturer can ever anticipate the exact and precise quantity of raw materials, such as cotton in this case, which he would require during a particular period, and there is therefore bound to be some surplus left over or likely to be left over which, unless disposed of, would result in unnecessarily blocking up of investment. If there is such a surplus and it is sold, even at profit, that would not make the disposal thereof either a part of the business or an incident to his business. Such a conclusion can never be said to be in the contemplation of the Legislature when it enacted the definition of "dealer". In the present case, the sales have been only two and the sales have resulted in fact in a loss. Considering these facts and the other circumstances of the case, it is impossible to say that the cotton was purchased with the intention to sell it at profit at any subsequent stage or that the initial intention with which it was purchased, namely, to use it for the purpose of manufacturing textile goods, has beend by other circumstances offseting that initial intention or that the sales were incidental to the business of the assesseeIt is true that by one of the clauses of its Memorandum of Association the respondents are authorized to carry on the business of buying and selling cotton, silk, wool etc. But that in our judgment cannot be decisive of the intention to carry on business of selling cotton. Here is a case in which bales of cotton were agreed to be purchased, because they were needed for the purpose of the business of the respondents. When they were received, in pursuance of the agreement the respondents had a large quantity of similar goods which they had purchased from another source. Holding up of the bales of cotton obtained would have meant locking up a large amount of money. If in those circumstances the respondents sold the cotton bales, it cannot be inferred that the sale was with the intention to carry on business of selling cotton11. The Tribunal held that there was always a possibility of there being surplus cotton which the respondents had to sell and this possibility must have been present in the mind of the respondents and therefore it could be said that whenever occasion or necessity for disposal of surplus cotton arose and the respondents sold it as a matter of business, either in the expectation of profit or avoidance of loss, they intended to carry on business. But the respondents had been purchasing large quantities of cotton every year for the purpose of their business of manufacturing cotton fabrics. The sales effected by them were either "to their sister concern or such as were found to be surplus or redundant". It was not the case of the State that the respondents had deliberately purchased a large quantity of cotton in excess of their normal requirements and had then sold the quantity not required of its manufacturing schedule. The previous dealings in cotton in the earlier years do not indicate that there was on the part of the respondents any intention to carry on the business of selling cotton; nor does the transaction of purchase and sale of Californian cotton in the year of assessment indicate any such intention.Having considered all the circumstances, we think that there was no intention on the part of the respondents to carry on business of selling cotton, and that the High Court was right in its conclusion.

Raymond Synthetics Ltd. And Ors Vs. Union Of India And Ors

the premises during the first fortnight to each calendar year must be deposited in the government treasury by the twenty second day of that month and the cess due for the remainder of the month must be deposited before the seventh day of the next following month. If the cess is not paid by the specified date, then by virtue of s. 3(3) the arrear of cess will carry interest at the rate of six per cent per annum from the specified date to the date of payment. Section 3(5) is a very different provision. It does not deal with the interest paid on the arrears of cess but provides for an additional sum recoverable by way of penalty from a person who default in making payment of cess. It is a thing apart from an arrear of cess and the interest due thereon. 45. Now, the interest payable on an arrear of cess under s. 3(3) is in reality part and parcel of the liability to pay cess. It is an accretion to the cess. The arrear of cess "carries" interest; if the cess is not paid within the prescribed period a larger sum will become payable as cess. The enlargement of the cess liability is automatic under section 3(3). No specific order is necessary in order that the obligation to pay interest is as certain as the liability to pay cess. As soon as the prescribed date is crossed without payment of the cess, interest begins to accrue. It is not a penalty for which provisions has been separately made by s. 3(5). Nor is it a penalty within the meaning of s. 4, which provides for a criminal liability and a criminal prosecution. The penalty payable under s. 3(5) lies in the discretion of the collecting officer or authority. In the case of the penalty under s. 4, no prosecution can be instituted unless, under s. 5(1), a complaint is made by or under the authority of the Cane Commissioner of the District Magistrate. There is another consideration distinguishing the interest payable under s. 3(3) from the penalty imposed under s. 3(5). Section 3(6) provides that the officer or authority empowered to collect the cess may forward to the Collector a certificate under his signature specifying the amount of arrears including interest due from any person, and on receipt of such certificate the Collector is required to proceed to recover the amount specified from such person as if it were an arrear of land revenue. The words used in s. 3(6) are "specifying the amount of arrears including interest", that is to say that the interest is part of the arrear of cess. In the case of a penalty imposed under s. 3(5), a separate provision for recovery has been made under s. 3(7). Although the manner of recovery of a penalty provided by s. 3(7) is the same as the manner of recovery provided by s. 3(6) of the arrears of cess, the Legislature dealt with it as something distinct from the recovery of the arrears of cess including interest. In truth, the interest provided for under s.3(3) is in the nature of compensation paid to the Government for delay in the payment of cess. It is not by way of penalty. The provision for penalty as a civil liability has been made under s. 3(5) and for penalty as a criminal offence under s.4. The Delhi High Court proceeded entirely on the basis that the interest bore the character of a penalty. It was according to the learned Judges "penal interest". The learned Judge failed to notice s. 3(5) and s.4 and the other provisions of the Cess Act". 46. The last question will be that in view of the clear terms of the statute whether the administrative inconvenience could be pleaded. This could be decided with reference to the case in Sanjeev Coke Manufacturing Co. v. Bharat Coking Coal Ltd. & Another, [1983] 1 SCR 1000 @ 1029, as follows:- "...But in the ultimate analysis, we are not really to concern ourselves with the hollowness or the self-condemnatory nature of the statements made in the affidavits filed by the respondents to justify and sustain the legislation. The deponents of the affidavits filed into Court may speak for the parties on whose behalf they swear to the statement. They do not speak for the Parliament. No one may speak for the Parliament and Parliament has said what it intends to say, only the Court may say what it the Parliament meant to say. None else. Once a statute leaves Parliament House, the Courts is the only authentic voice which may echo (interpret) the Parliament. This the court will do with reference to the language of the statute and other permissible aids. The executive Government may place before the court their understanding or misunderstanding of what Parliament has said or intended to say or what they think was Parliaments object and all the facts and circumstances which in their view led to the legislation. When they do so, they do not speak for Parliament. No Act of Parliament may be struck down because of the understanding of Parliamentary intention by the executive government or because their (the Governments) spokesmen do not bring out relevant circumstances but indulge in empty and self- defeating affidavits. They do not and they cannot bind Parliament. Validity of legislation is not to be judged merely by affidavits filed on behalf of the State, but by all the relevant circumstances which the court may ultimately find and more especially by what may be gathered from what the legislature has itself said..." Therefore, it has to be held that administrative inconvenience can hardly be any ground. 47. Viewing the statutory provisions form the above perspective, I agree with my learned brother that the liability to repay the excess amount arose on November 1, 1990 and the liability to pay interest arose on the expiry of eight days from November 1, 1990. ORDER: 48.

1[ds]In the present case, counsel points out, time for refund had been extended by the Madhya Pradesh Stock Exchange till 19th December, 1990. Accordingly the liability of the company to repay the excess amount did not arise until then. In the circumstances, interest became payable only after 8 days from the expiry of the period as extended by the Madhya Pradesh StockMr. Dewans argument were to be accepted, the company would have incurred no liability to pay interest, for time had been extended by the Madhya Pradesh Stock Exchange. But this argument is clearly contrary to the provisions contained in sub-section (4) of section 73 of the Act which reads:_ "S. 73(4). Any condition purporting to require or bind any applicant for shares or debentures to waive compliance with any of the requirements of this section shall be void".In the teeth of that sub-section, Mr. Dewans argument on the point is totally without merit. Even if sub-section (4) had not been inserted in section 73, Mr. Dewans argument in this respect would have been equally unsustainable, for no agreement can defeat or circumvent a mandatory requirement of the statute. This is all the more so in view of section 9 which specifically provides that the provisions of the Act override the memorandum or articles of association of the company or any agreement executed or resolution passed by it. The statute requires the company to pay interest in terms of sub-section (2A). That provision says that the company should pay excess money forthwith, failing which interest becomes payable at the end of 8 days therefrom. Any inconsistent provision in the prospectus is unenforceable and it can be of no avail to theis no substance in this contention. As stated earlier, sub-section (2A) provides for the accrual of interest and the rates thereof. Unlike sub-section (2B) provides for punishment by imposition of fine or imprisonment, sub-section (2A) speaks only of interest which is in contradiction to punishment and is not penal in character. It merely provides a mode of calculation of the amounts payable. Any consideration with reference to a penal provision is of no relevance to the liability of the company or its directors to pay interest in terms of sub-sectionthe date of allotment, as found by the High Court, nor the date specified in the prospectus, as contended by the company, is relevant to the commencement of liability for payment of interest on the excessliability of a company to repay the excess money under section 73(2A) of the Act arises on the expiry of 10 weeks from the date of the closing of the subscription lists, and the interest begins to accrue thereon at the end of 8 daysthe liability to repay the excess money in the present case arose on 1.11.1990 which was admittedly the date of expiry of 10 weeks from the date of the closing of the subscription lists, and consequently the liability to pay interest at the rate specified in sub-section (2A) arose on the expiry of 8 days from 1.11.1990.

### Instruction: Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding. ### Input: the premises during the first fortnight to each calendar year must be deposited in the government treasury by the twenty second day of that month and the cess due for the remainder of the month must be deposited before the seventh day of the next following month. If the cess is not paid by the specified date, then by virtue of s. 3(3) the arrear of cess will carry interest at the rate of six per cent per annum from the specified date to the date of payment. Section 3(5) is a very different provision. It does not deal with the interest paid on the arrears of cess but provides for an additional sum recoverable by way of penalty from a person who default in making payment of cess. It is a thing apart from an arrear of cess and the interest due thereon. 45. Now, the interest payable on an arrear of cess under s. 3(3) is in reality part and parcel of the liability to pay cess. It is an accretion to the cess. The arrear of cess "carries" interest; if the cess is not paid within the prescribed period a larger sum will become payable as cess. The enlargement of the cess liability is automatic under section 3(3). No specific order is necessary in order that the obligation to pay interest is as certain as the liability to pay cess. As soon as the prescribed date is crossed without payment of the cess, interest begins to accrue. It is not a penalty for which provisions has been separately made by s. 3(5). Nor is it a penalty within the meaning of s. 4, which provides for a criminal liability and a criminal prosecution. The penalty payable under s. 3(5) lies in the discretion of the collecting officer or authority. In the case of the penalty under s. 4, no prosecution can be instituted unless, under s. 5(1), a complaint is made by or under the authority of the Cane Commissioner of the District Magistrate. There is another consideration distinguishing the interest payable under s. 3(3) from the penalty imposed under s. 3(5). Section 3(6) provides that the officer or authority empowered to collect the cess may forward to the Collector a certificate under his signature specifying the amount of arrears including interest due from any person, and on receipt of such certificate the Collector is required to proceed to recover the amount specified from such person as if it were an arrear of land revenue. The words used in s. 3(6) are "specifying the amount of arrears including interest", that is to say that the interest is part of the arrear of cess. In the case of a penalty imposed under s. 3(5), a separate provision for recovery has been made under s. 3(7). Although the manner of recovery of a penalty provided by s. 3(7) is the same as the manner of recovery provided by s. 3(6) of the arrears of cess, the Legislature dealt with it as something distinct from the recovery of the arrears of cess including interest. In truth, the interest provided for under s.3(3) is in the nature of compensation paid to the Government for delay in the payment of cess. It is not by way of penalty. The provision for penalty as a civil liability has been made under s. 3(5) and for penalty as a criminal offence under s.4. The Delhi High Court proceeded entirely on the basis that the interest bore the character of a penalty. It was according to the learned Judges "penal interest". The learned Judge failed to notice s. 3(5) and s.4 and the other provisions of the Cess Act". 46. The last question will be that in view of the clear terms of the statute whether the administrative inconvenience could be pleaded. This could be decided with reference to the case in Sanjeev Coke Manufacturing Co. v. Bharat Coking Coal Ltd. & Another, [1983] 1 SCR 1000 @ 1029, as follows:- "...But in the ultimate analysis, we are not really to concern ourselves with the hollowness or the self-condemnatory nature of the statements made in the affidavits filed by the respondents to justify and sustain the legislation. The deponents of the affidavits filed into Court may speak for the parties on whose behalf they swear to the statement. They do not speak for the Parliament. No one may speak for the Parliament and Parliament has said what it intends to say, only the Court may say what it the Parliament meant to say. None else. Once a statute leaves Parliament House, the Courts is the only authentic voice which may echo (interpret) the Parliament. This the court will do with reference to the language of the statute and other permissible aids. The executive Government may place before the court their understanding or misunderstanding of what Parliament has said or intended to say or what they think was Parliaments object and all the facts and circumstances which in their view led to the legislation. When they do so, they do not speak for Parliament. No Act of Parliament may be struck down because of the understanding of Parliamentary intention by the executive government or because their (the Governments) spokesmen do not bring out relevant circumstances but indulge in empty and self- defeating affidavits. They do not and they cannot bind Parliament. Validity of legislation is not to be judged merely by affidavits filed on behalf of the State, but by all the relevant circumstances which the court may ultimately find and more especially by what may be gathered from what the legislature has itself said..." Therefore, it has to be held that administrative inconvenience can hardly be any ground. 47. Viewing the statutory provisions form the above perspective, I agree with my learned brother that the liability to repay the excess amount arose on November 1, 1990 and the liability to pay interest arose on the expiry of eight days from November 1, 1990. ORDER: 48. ### Response: 1 ### Explanation: In the present case, counsel points out, time for refund had been extended by the Madhya Pradesh Stock Exchange till 19th December, 1990. Accordingly the liability of the company to repay the excess amount did not arise until then. In the circumstances, interest became payable only after 8 days from the expiry of the period as extended by the Madhya Pradesh StockMr. Dewans argument were to be accepted, the company would have incurred no liability to pay interest, for time had been extended by the Madhya Pradesh Stock Exchange. But this argument is clearly contrary to the provisions contained in sub-section (4) of section 73 of the Act which reads:_ "S. 73(4). Any condition purporting to require or bind any applicant for shares or debentures to waive compliance with any of the requirements of this section shall be void".In the teeth of that sub-section, Mr. Dewans argument on the point is totally without merit. Even if sub-section (4) had not been inserted in section 73, Mr. Dewans argument in this respect would have been equally unsustainable, for no agreement can defeat or circumvent a mandatory requirement of the statute. This is all the more so in view of section 9 which specifically provides that the provisions of the Act override the memorandum or articles of association of the company or any agreement executed or resolution passed by it. The statute requires the company to pay interest in terms of sub-section (2A). That provision says that the company should pay excess money forthwith, failing which interest becomes payable at the end of 8 days therefrom. Any inconsistent provision in the prospectus is unenforceable and it can be of no avail to theis no substance in this contention. As stated earlier, sub-section (2A) provides for the accrual of interest and the rates thereof. Unlike sub-section (2B) provides for punishment by imposition of fine or imprisonment, sub-section (2A) speaks only of interest which is in contradiction to punishment and is not penal in character. It merely provides a mode of calculation of the amounts payable. Any consideration with reference to a penal provision is of no relevance to the liability of the company or its directors to pay interest in terms of sub-sectionthe date of allotment, as found by the High Court, nor the date specified in the prospectus, as contended by the company, is relevant to the commencement of liability for payment of interest on the excessliability of a company to repay the excess money under section 73(2A) of the Act arises on the expiry of 10 weeks from the date of the closing of the subscription lists, and the interest begins to accrue thereon at the end of 8 daysthe liability to repay the excess money in the present case arose on 1.11.1990 which was admittedly the date of expiry of 10 weeks from the date of the closing of the subscription lists, and consequently the liability to pay interest at the rate specified in sub-section (2A) arose on the expiry of 8 days from 1.11.1990.

Mrinal Roy Vs. State of West Bengal & Others

Khanna, J. 1. This is a petition for the issuance of a writ of habeas corpus by Mrinal Roy, who has been ordered by the Commissioner of Police Calcutta to be detained under Section 3 of the Maintenance of Internal Security Act. 2. An order for the detention of the petitioner under Section 3 of the Maintenance of Internal Security Act was made by the Commissioner of Police Calcutta on December 6, 1971. The grounds on which the said order was passed related to the activities of the petitioner on December 27, 1970 and January 23, 1971. The petitioner in pursuance of the aforesaid order was arrested and was kept under detention. While the petitioner was under detention, this Court gave its judgment in the case of Shambhu Nath v. State of West Bengal, Writ Petn. No. 266 of 1972 D/-19-4-1973 = (reported in AIR 1973 SC 1425 ). In view of that judgment, the petitioner was released on April 23, 1973 under the orders of the State Government. The same day a fresh order for the detention of the petitioner was made by the Commissioner of Police Calcutta under Section 3 of the Maintenance of Internal Security Act. This subsequent order of the detention was made precisely on the same grounds on which the earlier order of detention dated December 6, 1971 had been made. 3. We have heard Mr. Puri who has argued the case amicus curiae on behalf of the petitioner and Mr. D. N. Mukherjee on behalf of the respondents, and find that this case is covered directly by our decision in the case of Chotka Hembram v. State of West Bengal, Writ Petn. No. 481 of 1973, D/- 29-8-1973 = (reported in AIR 1974 SC 432 ) wherein upon similar facts we quashed the detention of the detenu. 4. It has been argued by Mr. Mukherjee that at the time the writ petition was sent from jail by the petitioner, the only order of detention which was in force against the petitioner, was one dated December 6, 1971. The subsequent order of detention was made during the pendency of the petition, and as the aforesaid order has not been assailed by the petitioner, the petition, according to Mr. Mukherjee, should be dismissed on that ground. There is, in our opinion, no force in this contention. What has been challenged by the petitioner in his detention. If fresh facts come into existence during the pendency of the petition and these facts also reveal that the detention of the petitioner is not in accordance with law, this Court would not say its hand in directing the release of the petitioner. It has to be borne in mind that the relief sought by the petitioner is for the issuance of a writ of habeas corpus. The petition has been sent by him from jail. We would not normally allow a technical plea to prevail in a matter which affects the liberty of the subject, more so when on consideration of the circumstances in their entirety, we find that the detention of the petitioner is not in accordance with law.

1[ds]4. It has been argued by Mr. Mukherjee that at the time the writ petition was sent from jail by the petitioner, the only order of detention which was in force against the petitioner, was one dated December 6, 1971. The subsequent order of detention was made during the pendency of the petition, and as the aforesaid order has not been assailed by the petitioner, the petition, according to Mr. Mukherjee, should be dismissed on that ground. There is, in our opinion, no force in this contention. What has been challenged by the petitioner in his detention. If fresh facts come into existence during the pendency of the petition and these facts also reveal that the detention of the petitioner is not in accordance with law, this Court would not say its hand in directing the release of the petitioner. It has to be borne in mind that the relief sought by the petitioner is for the issuance of a writ of habeas corpus. The petition has been sent by him from jail. We would not normally allow a technical plea to prevail in a matter which affects the liberty of the subject, more so when on consideration of the circumstances in their entirety, we find that the detention of the petitioner is not in accordance with law.

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: Khanna, J. 1. This is a petition for the issuance of a writ of habeas corpus by Mrinal Roy, who has been ordered by the Commissioner of Police Calcutta to be detained under Section 3 of the Maintenance of Internal Security Act. 2. An order for the detention of the petitioner under Section 3 of the Maintenance of Internal Security Act was made by the Commissioner of Police Calcutta on December 6, 1971. The grounds on which the said order was passed related to the activities of the petitioner on December 27, 1970 and January 23, 1971. The petitioner in pursuance of the aforesaid order was arrested and was kept under detention. While the petitioner was under detention, this Court gave its judgment in the case of Shambhu Nath v. State of West Bengal, Writ Petn. No. 266 of 1972 D/-19-4-1973 = (reported in AIR 1973 SC 1425 ). In view of that judgment, the petitioner was released on April 23, 1973 under the orders of the State Government. The same day a fresh order for the detention of the petitioner was made by the Commissioner of Police Calcutta under Section 3 of the Maintenance of Internal Security Act. This subsequent order of the detention was made precisely on the same grounds on which the earlier order of detention dated December 6, 1971 had been made. 3. We have heard Mr. Puri who has argued the case amicus curiae on behalf of the petitioner and Mr. D. N. Mukherjee on behalf of the respondents, and find that this case is covered directly by our decision in the case of Chotka Hembram v. State of West Bengal, Writ Petn. No. 481 of 1973, D/- 29-8-1973 = (reported in AIR 1974 SC 432 ) wherein upon similar facts we quashed the detention of the detenu. 4. It has been argued by Mr. Mukherjee that at the time the writ petition was sent from jail by the petitioner, the only order of detention which was in force against the petitioner, was one dated December 6, 1971. The subsequent order of detention was made during the pendency of the petition, and as the aforesaid order has not been assailed by the petitioner, the petition, according to Mr. Mukherjee, should be dismissed on that ground. There is, in our opinion, no force in this contention. What has been challenged by the petitioner in his detention. If fresh facts come into existence during the pendency of the petition and these facts also reveal that the detention of the petitioner is not in accordance with law, this Court would not say its hand in directing the release of the petitioner. It has to be borne in mind that the relief sought by the petitioner is for the issuance of a writ of habeas corpus. The petition has been sent by him from jail. We would not normally allow a technical plea to prevail in a matter which affects the liberty of the subject, more so when on consideration of the circumstances in their entirety, we find that the detention of the petitioner is not in accordance with law. ### Response: 1 ### Explanation: 4. It has been argued by Mr. Mukherjee that at the time the writ petition was sent from jail by the petitioner, the only order of detention which was in force against the petitioner, was one dated December 6, 1971. The subsequent order of detention was made during the pendency of the petition, and as the aforesaid order has not been assailed by the petitioner, the petition, according to Mr. Mukherjee, should be dismissed on that ground. There is, in our opinion, no force in this contention. What has been challenged by the petitioner in his detention. If fresh facts come into existence during the pendency of the petition and these facts also reveal that the detention of the petitioner is not in accordance with law, this Court would not say its hand in directing the release of the petitioner. It has to be borne in mind that the relief sought by the petitioner is for the issuance of a writ of habeas corpus. The petition has been sent by him from jail. We would not normally allow a technical plea to prevail in a matter which affects the liberty of the subject, more so when on consideration of the circumstances in their entirety, we find that the detention of the petitioner is not in accordance with law.

Killick Nixon Limited Vs. Dcit, Central Circle (3)

January 2012) is concerned, the Court considered its decisions in the matters of McDowell reported in (1985) 3 SCC 230 , Azadi Bachao reported in (2004) 10 SCC 1 and the MathuramAgarwal reported in (1999) 8 SCC 667 and concluded that where the transaction is not genuine but a colourable device there could be no question of tax planning. The Supreme Court in the aforesaid case after considering the aforesaid two decisions concluded as follows:The majority judgment in McDowell held that tax planning may be legitimate provided it is within the framework of law (para-45). In the latter part of para 45, it held that colourable device cannot be a part of tax planning and it is wrong to encourage the belief that it is honourable to avoid payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes without resorting to subterfuges. The above observations should be read with para 46 where the majority holds on this aspect one of us, Chinappa Reddy, J. has proposed a separate opinion with which we agree.The words this aspect express the majoritys agreement with the judgment of Reddy, J. only in relation to tax evasion through the use of colourable devices and by resorting to dubious methods and subterfuges. Thus, it cannot be said that all tax planning is illegal/illegitimate/impermissible. Moreover, Reddy, J. himself says that he agrees with the majority. In the judgment of Reddy, J. there are repeated references to schemes and devices in contradistinction to legitimate avoidance of tax liability (Paras 7-10, 17 and 18). In our view, although Chinnappa Reddy, J. makes a number of observations regarding the need to depart from the Westminster and tax avoidance- these are clearly only in the context of artificial and colourable devices. Reading McDowell, in the manner indicated hereinabove, in cases of treaty shopping and/or tax avoidance, there is no conflict between McDowell and Azadi Bachao or between Mcdowell and Mathuram Agarwal.15 The aforesaid observations of the Supreme Court makes it very clear that a colourable device cannot be a part of tax planning. Therefore where a transaction is sham and not genuine as in the present case then it cannot be considered to be a part of tax planning or legitimate avoidance of tax liability. The Supreme Court in fact concluded that there is no conflict between its decisions in the matter of McDowell (supra), Azadi Bachao (supra) and Mathuram Agarwal (supra). In the present case the purchase and sale of shares, so as to take long term and short term capital loss was found as a matter of fact by all the three authorities to be a sham. Therefore authorities came to a finding that the same was not genuine. So far as the question Nos.(ii), (iii) (iv) and (v) are concerned, we hold that these are pure questions of facts and as there are concurrent finding of the authorities below, no question of law arises for this Court to interfere.16 So far as Question No.(vi) is concerned, the issue of guarantee loss was raised for the first time in appeal before CIT (Appeal) and both the CIT (Appeal) and the Tribunal also found that the claim for loss is not genuine. However, the Appellant is correct in contending that even a single transaction could be in the nature of trade. However, on examination of surrounding circumstances and the parties involved viz. the G.K. Rathi group and its close relationship with the Appellant, it was concluded that the transaction was not genuine. The Tribunal is entitled to look at the surrounding circumstances and to human probabilities to test the evidence led before it. However, while testing the evidence the Tribunal must correctly look at all the evidence and the surrounding circumstances to decide the issue. We find that the Tribunal has considered the fact that for the earlier year Rs.6/- crores was assessed to tax but held that there is no evidence to show that any attempt was made to recover the amounts from Geekay Exim (India) ltd. when in fact evidence was placed before the Tribunal by the Appellant of suits being filed by the Appellant against Geekay Exim (India) Ltd. However what is the nature of suits and for what amounts etc is something which has not been examined. The Tribunal in its order amongst other factors has also taken into account the fact that ever since 1947 when the Appellant company was incorporated it had never issued any Guarantee and therefore, the deduction of business loss of Rs. 105/- crores for providing guarantees by the CIT (Appeal) was upheld by the Tribunal. To our mind, the fact that the Appellant did not do the business of providing guarantees earlier will not prohibit the assessee from providing guarantees during the relevant assessment year. The Memorandum of Association of the Appellant company does provide as one of its objects for providing guarantees in respect of loans advanced to other parties. There were other reasons for which the Tribunal and the CIT did not accept the business loss of Rs.105/- crores emerging from the Appellants business from providing guarantees. The surrounding circumstances can be looked at, but not without considering the evidence led by the party in support of its stand. In this case, the Tribunal has not considered the evidence of suit etc. being filed by the Appellant before rejecting its claim for loss only on the basis of surrounding circumstances. In view of the above, so far as the question No.(vi) is concerned, it would be proper to remand the matter to the Tribunal to reconsider the issue and pass an appropriate orders thereon.17. So far as the Question No.(vii) is concerned, we are of the view the same does not arise as all the authorities including the Tribunal have considered all the evidence produced before them and on appreciation of facts have come to a conclusion which is a possible conclusion. Therefore, question No.(vii) also does not arise.

0[ds]The proviso to the Rule 11 would have no application to the present facts, as the Tribunal has not based its decision on a ground which had not been urged by the parties before it. The decision of the Supreme Court supports a statement of a well settled position in law. Counsel for the Appellant thereafter relied upon a decision of this Court in Inventure Growth Vs. ITAT reported in 324 ITR 319 to submit that in similar facts, this Court set aside the order of the Tribunal. In Inventure Growth and Securities Ltd. (supra) a petition under Article 226 of the Constitution of India had been filed challenging an order of the Tribunal passed on a rectification application filed by the party. The Tribunal had disposed of the appeal on merits by relying upon another decision of the Tribunal, without furnishing an opportunity of hearing to the party to deal with the decision. Consequent thereto, the party in the above case filed a rectification application before the Tribunal under Section 254(2) and sought to bring on record the fact that the decision of thebench on merits of the matter was not available to the party as it had not been published in a law journal at the date of the hearing and consequently they were not in a position to deal with the same. The Tribunal by its order dated 20 November 2009 dismissed the rectification application after recording the fact that the decision of the coordinate Bench of the Tribunal was not placed before the Tribunal either by the assessee or by the Revenue and the Tribunal decided to follow it on its own. It was in the aforesaid facts that this Court allowed the Misc. Application and restored the appeal before the Tribunal for reconsideration. However, while doing so, the Court clarified that It cannot be laid down asproposition of law that an Order of remand on a miscellaneous application under Section 254(2) would be warranted merely because the Tribunal relied upon a judgment which was not cited by either party before it.. In the present facts, the decision of the Supreme Court in Sumati Dayal (supra) was cited only for the purpose of reiterating the well settled/established position of law. Surrounding circumstances and human probabilities are to be taken into account while considering the evidence produced before the Tribunal to examine the genuineness of the case. Counsel for the Appellant also relied upon a decision of this court in CIT Vs. Jamnadevi Agarwal reported in 328 ITR 656 to contend that this Court has not applied the decision of the Supreme Court in the matter of Sumati Dayal (supra) in the above case as the documentary evidence produced before the authorities, conclusively proved that there was no question of introducing unaccounted money, as the transaction of sales took place at the rates prevailing on that date in the stock market. The aforesaid decision in the matter of Jamnadevi (supra) proceeded on its own facts and the decision of the Supreme Court was held to be inapplicable in the factual context existing in that case. However, the decision of the Supreme Court in the matter of Sumati Dayal (supra) would be applicable, when ever there are reasons to believe that the apparent is not real; then the taxing authorities are entitled to look into surrounding circumstances to find out the reality by looking at the surrounding circumstance and applying the test of human probabilities. A reference to the decision in Sumati Dayals case on a principle of law cannot be said to have caused prejudice to the Appellant. This conclusion is based while proceeding on an assumption that the aforesaid decision of the Supreme Court was not cited and/or referred to during the course of the hearing leading to the order dated 6 April 2010. In view of the above, no substantial question as framed at (i) above arises in the presentSo far as the principle laid down in the matter of Omar Salay Mohamed Sait (supra) is concerned there can be no dispute about the proposition laid down therein. However we have not been shown how the Tribunal was in breach of the same. We find that the Tribunal has considered the evidence of purchase and sale of shares to book long term and short term losses and taking all the evidence together including the surrounding circumstances reached a finding that the purchase and sale of shares is not genuine. So far as the decision of the Supreme Court in Vodafone International (dated 20 January 2012) is concerned, the Court considered its decisions in the matters of McDowell reported in (1985) 3 SCC 230 , Azadi Bachao reported in (2004) 10 SCC 1 and the MathuramAgarwal reported in (1999) 8 SCC 667 and concluded that where the transaction is not genuine but a colourable device there could be no question of tax planning. The Supreme Court in the aforesaid case after considering the aforesaid two decisions concluded as follows:The majority judgment in McDowell held that tax planning may be legitimate provided it is within the framework of lawIn the latter part of para 45, it held that colourable device cannot be a part of tax planning and it is wrong to encourage the belief that it is honourable to avoid payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes without resorting to subterfuges. The above observations should be read with para 46 where the majority holds on this aspect one of us, Chinappa Reddy, J. has proposed a separate opinion with which we agree.The words this aspect express the majoritys agreement with the judgment of Reddy, J. only in relation to tax evasion through the use of colourable devices and by resorting to dubious methods and subterfuges. Thus, it cannot be said that all tax planning is illegal/illegitimate/impermissible. Moreover, Reddy, J. himself says that he agrees with the majority. In the judgment of Reddy, J. there are repeated references to schemes and devices in contradistinction to legitimate avoidance of tax liability (Paras17 and 18). In our view, although Chinnappa Reddy, J. makes a number of observations regarding the need to depart from the Westminster and tax avoidancethese are clearly only in the context of artificial and colourable devices. Reading McDowell, in the manner indicated hereinabove, in cases of treaty shopping and/or tax avoidance, there is no conflict between McDowell and Azadi Bachao or between Mcdowell and Mathuram Agarwal.15 The aforesaid observations of the Supreme Court makes it very clear that a colourable device cannot be a part of tax planning. Therefore where a transaction is sham and not genuine as in the present case then it cannot be considered to be a part of tax planning or legitimate avoidance of tax liability. The Supreme Court in fact concluded that there is no conflict between its decisions in the matter of McDowell (supra), Azadi Bachao (supra) and Mathuram Agarwal (supra). In the present case the purchase and sale of shares, so as to take long term and short term capital loss was found as a matter of fact by all the three authorities to be a sham. Therefore authorities came to a finding that the same was not genuine. So far as the question Nos.(ii), (iii) (iv) and (v) are concerned, we hold that these are pure questions of facts and as there are concurrent finding of the authorities below, no question of law arises for this Court to interfere.16 So far as Question No.(vi) is concerned, the issue of guarantee loss was raised for the first time in appeal before CIT (Appeal) and both the CIT (Appeal) and the Tribunal also found that the claim for loss is not genuine. However, the Appellant is correct in contending that even a single transaction could be in the nature of trade. However, on examination of surrounding circumstances and the parties involved viz. the G.K. Rathi group and its close relationship with the Appellant, it was concluded that the transaction was not genuine. The Tribunal is entitled to look at the surrounding circumstances and to human probabilities to test the evidence led before it. However, while testing the evidence the Tribunal must correctly look at all the evidence and the surrounding circumstances to decide the issue. We find that the Tribunal has considered the fact that for the earlier year Rs.6/crores was assessed to tax but held that there is no evidence to show that any attempt was made to recover the amounts from Geekay Exim (India) ltd. when in fact evidence was placed before the Tribunal by the Appellant of suits being filed by the Appellant against Geekay Exim (India) Ltd. However what is the nature of suits and for what amounts etc is something which has not been examined. The Tribunal in its order amongst other factors has also taken into account the fact that ever since 1947 when the Appellant company was incorporated it had never issued any Guarantee and therefore, the deduction of business loss of Rs. 105/crores for providing guarantees by the CIT (Appeal) was upheld by the Tribunal. To our mind, the fact that the Appellant did not do the business of providing guarantees earlier will not prohibit the assessee from providing guarantees during the relevant assessment year. The Memorandum of Association of the Appellant company does provide as one of its objects for providing guarantees in respect of loans advanced to other parties. There were other reasons for which the Tribunal and the CIT did not accept the business loss of Rs.105/crores emerging from the Appellants business from providing guarantees. The surrounding circumstances can be looked at, but not without considering the evidence led by the party in support of its stand. In this case, the Tribunal has not considered the evidence of suit etc. being filed by the Appellant before rejecting its claim for loss only on the basis of surrounding circumstances. In view of the above, so far as the question No.(vi) is concerned, it would be proper to remand the matter to the Tribunal to reconsider the issue and pass an appropriate orders thereon.17. So far as the Question No.(vii) is concerned, we are of the view the same does not arise as all the authorities including the Tribunal have considered all the evidence produced before them and on appreciation of facts have come to a conclusion which is a possible conclusion. Therefore, question No.(vii) also does not arise.

### Instruction: Ascertain if the court will uphold (1) or dismiss (0) the appeal in the case proceeding, and then clarify this prediction by discussing critical sentences from the text. ### Input: January 2012) is concerned, the Court considered its decisions in the matters of McDowell reported in (1985) 3 SCC 230 , Azadi Bachao reported in (2004) 10 SCC 1 and the MathuramAgarwal reported in (1999) 8 SCC 667 and concluded that where the transaction is not genuine but a colourable device there could be no question of tax planning. The Supreme Court in the aforesaid case after considering the aforesaid two decisions concluded as follows:The majority judgment in McDowell held that tax planning may be legitimate provided it is within the framework of law (para-45). In the latter part of para 45, it held that colourable device cannot be a part of tax planning and it is wrong to encourage the belief that it is honourable to avoid payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes without resorting to subterfuges. The above observations should be read with para 46 where the majority holds on this aspect one of us, Chinappa Reddy, J. has proposed a separate opinion with which we agree.The words this aspect express the majoritys agreement with the judgment of Reddy, J. only in relation to tax evasion through the use of colourable devices and by resorting to dubious methods and subterfuges. Thus, it cannot be said that all tax planning is illegal/illegitimate/impermissible. Moreover, Reddy, J. himself says that he agrees with the majority. In the judgment of Reddy, J. there are repeated references to schemes and devices in contradistinction to legitimate avoidance of tax liability (Paras 7-10, 17 and 18). In our view, although Chinnappa Reddy, J. makes a number of observations regarding the need to depart from the Westminster and tax avoidance- these are clearly only in the context of artificial and colourable devices. Reading McDowell, in the manner indicated hereinabove, in cases of treaty shopping and/or tax avoidance, there is no conflict between McDowell and Azadi Bachao or between Mcdowell and Mathuram Agarwal.15 The aforesaid observations of the Supreme Court makes it very clear that a colourable device cannot be a part of tax planning. Therefore where a transaction is sham and not genuine as in the present case then it cannot be considered to be a part of tax planning or legitimate avoidance of tax liability. The Supreme Court in fact concluded that there is no conflict between its decisions in the matter of McDowell (supra), Azadi Bachao (supra) and Mathuram Agarwal (supra). In the present case the purchase and sale of shares, so as to take long term and short term capital loss was found as a matter of fact by all the three authorities to be a sham. Therefore authorities came to a finding that the same was not genuine. So far as the question Nos.(ii), (iii) (iv) and (v) are concerned, we hold that these are pure questions of facts and as there are concurrent finding of the authorities below, no question of law arises for this Court to interfere.16 So far as Question No.(vi) is concerned, the issue of guarantee loss was raised for the first time in appeal before CIT (Appeal) and both the CIT (Appeal) and the Tribunal also found that the claim for loss is not genuine. However, the Appellant is correct in contending that even a single transaction could be in the nature of trade. However, on examination of surrounding circumstances and the parties involved viz. the G.K. Rathi group and its close relationship with the Appellant, it was concluded that the transaction was not genuine. The Tribunal is entitled to look at the surrounding circumstances and to human probabilities to test the evidence led before it. However, while testing the evidence the Tribunal must correctly look at all the evidence and the surrounding circumstances to decide the issue. We find that the Tribunal has considered the fact that for the earlier year Rs.6/- crores was assessed to tax but held that there is no evidence to show that any attempt was made to recover the amounts from Geekay Exim (India) ltd. when in fact evidence was placed before the Tribunal by the Appellant of suits being filed by the Appellant against Geekay Exim (India) Ltd. However what is the nature of suits and for what amounts etc is something which has not been examined. The Tribunal in its order amongst other factors has also taken into account the fact that ever since 1947 when the Appellant company was incorporated it had never issued any Guarantee and therefore, the deduction of business loss of Rs. 105/- crores for providing guarantees by the CIT (Appeal) was upheld by the Tribunal. To our mind, the fact that the Appellant did not do the business of providing guarantees earlier will not prohibit the assessee from providing guarantees during the relevant assessment year. The Memorandum of Association of the Appellant company does provide as one of its objects for providing guarantees in respect of loans advanced to other parties. There were other reasons for which the Tribunal and the CIT did not accept the business loss of Rs.105/- crores emerging from the Appellants business from providing guarantees. The surrounding circumstances can be looked at, but not without considering the evidence led by the party in support of its stand. In this case, the Tribunal has not considered the evidence of suit etc. being filed by the Appellant before rejecting its claim for loss only on the basis of surrounding circumstances. In view of the above, so far as the question No.(vi) is concerned, it would be proper to remand the matter to the Tribunal to reconsider the issue and pass an appropriate orders thereon.17. So far as the Question No.(vii) is concerned, we are of the view the same does not arise as all the authorities including the Tribunal have considered all the evidence produced before them and on appreciation of facts have come to a conclusion which is a possible conclusion. Therefore, question No.(vii) also does not arise. ### Response: 0 ### Explanation: 2012) is concerned, the Court considered its decisions in the matters of McDowell reported in (1985) 3 SCC 230 , Azadi Bachao reported in (2004) 10 SCC 1 and the MathuramAgarwal reported in (1999) 8 SCC 667 and concluded that where the transaction is not genuine but a colourable device there could be no question of tax planning. The Supreme Court in the aforesaid case after considering the aforesaid two decisions concluded as follows:The majority judgment in McDowell held that tax planning may be legitimate provided it is within the framework of lawIn the latter part of para 45, it held that colourable device cannot be a part of tax planning and it is wrong to encourage the belief that it is honourable to avoid payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes without resorting to subterfuges. The above observations should be read with para 46 where the majority holds on this aspect one of us, Chinappa Reddy, J. has proposed a separate opinion with which we agree.The words this aspect express the majoritys agreement with the judgment of Reddy, J. only in relation to tax evasion through the use of colourable devices and by resorting to dubious methods and subterfuges. Thus, it cannot be said that all tax planning is illegal/illegitimate/impermissible. Moreover, Reddy, J. himself says that he agrees with the majority. In the judgment of Reddy, J. there are repeated references to schemes and devices in contradistinction to legitimate avoidance of tax liability (Paras17 and 18). In our view, although Chinnappa Reddy, J. makes a number of observations regarding the need to depart from the Westminster and tax avoidancethese are clearly only in the context of artificial and colourable devices. Reading McDowell, in the manner indicated hereinabove, in cases of treaty shopping and/or tax avoidance, there is no conflict between McDowell and Azadi Bachao or between Mcdowell and Mathuram Agarwal.15 The aforesaid observations of the Supreme Court makes it very clear that a colourable device cannot be a part of tax planning. Therefore where a transaction is sham and not genuine as in the present case then it cannot be considered to be a part of tax planning or legitimate avoidance of tax liability. The Supreme Court in fact concluded that there is no conflict between its decisions in the matter of McDowell (supra), Azadi Bachao (supra) and Mathuram Agarwal (supra). In the present case the purchase and sale of shares, so as to take long term and short term capital loss was found as a matter of fact by all the three authorities to be a sham. Therefore authorities came to a finding that the same was not genuine. So far as the question Nos.(ii), (iii) (iv) and (v) are concerned, we hold that these are pure questions of facts and as there are concurrent finding of the authorities below, no question of law arises for this Court to interfere.16 So far as Question No.(vi) is concerned, the issue of guarantee loss was raised for the first time in appeal before CIT (Appeal) and both the CIT (Appeal) and the Tribunal also found that the claim for loss is not genuine. However, the Appellant is correct in contending that even a single transaction could be in the nature of trade. However, on examination of surrounding circumstances and the parties involved viz. the G.K. Rathi group and its close relationship with the Appellant, it was concluded that the transaction was not genuine. The Tribunal is entitled to look at the surrounding circumstances and to human probabilities to test the evidence led before it. However, while testing the evidence the Tribunal must correctly look at all the evidence and the surrounding circumstances to decide the issue. We find that the Tribunal has considered the fact that for the earlier year Rs.6/crores was assessed to tax but held that there is no evidence to show that any attempt was made to recover the amounts from Geekay Exim (India) ltd. when in fact evidence was placed before the Tribunal by the Appellant of suits being filed by the Appellant against Geekay Exim (India) Ltd. However what is the nature of suits and for what amounts etc is something which has not been examined. The Tribunal in its order amongst other factors has also taken into account the fact that ever since 1947 when the Appellant company was incorporated it had never issued any Guarantee and therefore, the deduction of business loss of Rs. 105/crores for providing guarantees by the CIT (Appeal) was upheld by the Tribunal. To our mind, the fact that the Appellant did not do the business of providing guarantees earlier will not prohibit the assessee from providing guarantees during the relevant assessment year. The Memorandum of Association of the Appellant company does provide as one of its objects for providing guarantees in respect of loans advanced to other parties. There were other reasons for which the Tribunal and the CIT did not accept the business loss of Rs.105/crores emerging from the Appellants business from providing guarantees. The surrounding circumstances can be looked at, but not without considering the evidence led by the party in support of its stand. In this case, the Tribunal has not considered the evidence of suit etc. being filed by the Appellant before rejecting its claim for loss only on the basis of surrounding circumstances. In view of the above, so far as the question No.(vi) is concerned, it would be proper to remand the matter to the Tribunal to reconsider the issue and pass an appropriate orders thereon.17. So far as the Question No.(vii) is concerned, we are of the view the same does not arise as all the authorities including the Tribunal have considered all the evidence produced before them and on appreciation of facts have come to a conclusion which is a possible conclusion. Therefore, question No.(vii) also does not arise.

Joshbhai Chunibhai Patel Vs. Anwar Beg A. Mirza

of the law on the subject of corrupt practice we must hold in favour of the returned candidate that the requirements of the Section have not been met.10. This brings us to the examination of Section 123 (5) with a view to finding out what are its requirements. We have already indicated that in our opinion the election petitioner must prove in addition to the other ingredients of the Section that the vehicle was used for free conveyance of voters which ingredient we have stated was not attempted to be established in the case. Section 123 (5) of the Representation of People Act reads as follows:"The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the consent of a candidate of his election agent, or the use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under Section 25 or a place fixed under sub-section (1) of Section 29 for the poll:Provided that the hiring of a vehicle or vessel by an elector or by several electors at their joint costs for the purpose of conveying him or them to and from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause if the vehicle or vessel so hired is a vehicle or vessel not propelled by mechanical power:Provided further that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost for the purpose of going to or coming from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause.Explanation: In this clause, the expression "vehicle" means any vehicle used or capable of being used for the purpose of road transport whether propelled by mechanical power or otherwise and whether used for drawing other vehicles or otherwise." .The Section defines one of the corrupt practices and it consists of the hiring and procuring whether on payment or otherwise of any vehicle. This hiring and procuring must be by a candidate or his agent or by any other person with the consent of the candidate or his election agent and the hiring according to the Section must be for the free conveyance of any elector other than the candidate himself or members of his family or his agent to and from any polling station. It will, therefore, appear that the Section requires three things, (1) hiring or procuring of a vehicle; (2) by a candidate or his agent etc. and (3) for the free conveyance of an elector. It will be noticed that the Section also speaks of the use but it speaks of the use of such vehicle which connects the two parts, namely, hiring or procuring of vehicle and the use. The requirement of the law therefore is that in addition to proving the hiring or procuring and the carriage of electors to and from any polling station, it should also be proved that the electors used the vehicle free of cost to themselves.The contention of Mr. Bishan Narain that the requirement of free conveyance is not necessary is therefore not borne out by the words of the Section. The two provisos also prove the same thing. The first proviso provides that it would not be a corrupt practice for any elector to hire a vehicle for himself or even a group of electors to join in hiring a vehicle and the second proviso lays down that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost is not a corrupt practice. In other words the electors, if they have to perform the journey by hired vehicle must pay for its hire themselves.They cannot be taken in a hired vehicle free of costs to themselves. In the same way if a procured vehicle is used, it must not be used for free conveyance of voters. The journey of the elector must be paid for by him. If a candidate hires or procures a vehicle for free conveyance of the electors that also is perhaps a corrupt practice but that aspect need not be considered here. The language seems capable of that interpretation though we express no final opinion.11. In the present case there is proof that the vehices were procured; whether they were supplied by the Congress Party or were procured from private parties makes no difference. There is also proof that the vehicle numbered 108 was, in fact, used for the conveyance of three lady voters. What is not proved is that there was free conveyance of the ladies in that vehicle. Mr. Bishan Narain contends that this is very difficult of proof but as we stated earlier it is not impossible of proof because the owner of the car or the driver or the ladies could have been examined to show that the ladies had travelled free in the vehicle.This not proved and therefore the ingredients of the Section have not been established. In our opinion therefore there is no room for interference although, our reasons are slightly different from those of the High Court.12. It was next contended that a general recount was demanded in the case and has been wrong refused. We have scrutinized the pleadings on this point carefully and we find that no plea on which it could be rested was made although in the relief clause there is mention of a general recount. The pleas concerned the votes cast by impersonators and rejected votes. These have been considered already and therefore there is no room for further count. On the whole therefore we are of opinion that the judgment under appeal cannot be interfered with.

0[ds]9. As regards the finding of the High Court that the ladies must have travelled free, we can only say that it is a mere surmise because there is no evidence whatever on this part of the case. Mr.Bishan Narain stated that the best evidence could come from the returned candidate and that his client was not required to prove a negative.In our opinion, the burden was upon the election petitioner to establish this fact, if it was a requirement of law. We do not think that it was an utter impossibility because the owner of the car, the driver or one of the ladies could have been questioned about it and something would have then come in evidence. Since no such attempt was made there is nothing on which we can say whether the ladies were brought free or on payment and regard being had to the strictness of the law on the subject of corrupt practice we must hold in favour of the returned candidate that the requirements of the Section have not been met.10. This brings us to the examination of Section 123 (5) with a view to finding out what are its requirements. We have already indicated that in our opinion the election petitioner must prove in addition to the other ingredients of the Section that the vehicle was used for free conveyance of voters which ingredient we have stated was not attempted to be established in theSection defines one of the corrupt practices and it consists of the hiring and procuring whether on payment or otherwise of any vehicle. This hiring and procuring must be by a candidate or his agent or by any other person with the consent of the candidate or his election agent and the hiring according to the Section must be for the free conveyance of any elector other than the candidate himself or members of his family or his agent to and from any polling station. It will, therefore, appear that the Section requires three things, (1) hiring or procuring of a vehicle; (2) by a candidate or his agent etc. and (3) for the free conveyance of an elector. It will be noticed that the Section also speaks of the use but it speaks of the use of such vehicle which connects the two parts, namely, hiring or procuring of vehicle and the use. The requirement of the law therefore is that in addition to proving the hiring or procuring and the carriage of electors to and from any polling station, it should also be proved that the electors used the vehicle free of cost to themselves.The contention of Mr. Bishan Narain that the requirement of free conveyance is not necessary is therefore not borne out by the words of the Section. The two provisos also prove the same thing. The first proviso provides that it would not be a corrupt practice for any elector to hire a vehicle for himself or even a group of electors to join in hiring a vehicle and the second proviso lays down that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost is not a corrupt practice. In other words the electors, if they have to perform the journey by hired vehicle must pay for its hire themselves.They cannot be taken in a hired vehicle free of costs to themselves. In the same way if a procured vehicle is used, it must not be used for free conveyance of voters. The journey of the elector must be paid for by him. If a candidate hires or procures a vehicle for free conveyance of the electors that also is perhaps a corrupt practice but that aspect need not be considered here. The language seems capable of that interpretation though we express no final opinion.11. In the present case there is proof that the vehices were procured; whether they were supplied by the Congress Party or were procured from private parties makes no difference. There is also proof that the vehicle numbered 108 was, in fact, used for the conveyance of three lady voters. What is not proved is that there was free conveyance of the ladies in that vehicle. Mr. Bishan Narain contends that this is very difficult of proof but as we stated earlier it is not impossible of proof because the owner of the car or the driver or the ladies could have been examined to show that the ladies had travelled free in the vehicle.This not proved and therefore the ingredients of the Section have not been established. In our opinion therefore there is no room for interference although, our reasons are slightly different from those of the High Court.12. It was next contended that a general recount was demanded in the case and has been wrong refused. We have scrutinized the pleadings on this point carefully and we find that no plea on which it could be rested was made although in the relief clause there is mention of a general recount. The pleas concerned the votes cast by impersonators and rejected votes. These have been considered already and therefore there is no room for further count. On the whole therefore we are of opinion that the judgment under appeal cannot be interferedour opinion, the burden was upon the election petitioner to establish this fact, if it was a requirement of law. We do not think that it was an utter impossibility because the owner of the car, the driver or one of the ladies could have been questioned about it and something would have then come in evidence. Since no such attempt was made there is nothing on which we can say whether the ladies were brought free or on payment and regard being had to the strictness of the law on the subject of corrupt practice we must hold in favour of the returned candidate that the requirements of the Section have not been met.

### Instruction: Evaluate the case proceeding to forecast the court's decision (1 for yes, 0 for no), and elucidate the reasoning behind this prediction with important textual evidence from the case. ### Input: of the law on the subject of corrupt practice we must hold in favour of the returned candidate that the requirements of the Section have not been met.10. This brings us to the examination of Section 123 (5) with a view to finding out what are its requirements. We have already indicated that in our opinion the election petitioner must prove in addition to the other ingredients of the Section that the vehicle was used for free conveyance of voters which ingredient we have stated was not attempted to be established in the case. Section 123 (5) of the Representation of People Act reads as follows:"The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the consent of a candidate of his election agent, or the use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under Section 25 or a place fixed under sub-section (1) of Section 29 for the poll:Provided that the hiring of a vehicle or vessel by an elector or by several electors at their joint costs for the purpose of conveying him or them to and from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause if the vehicle or vessel so hired is a vehicle or vessel not propelled by mechanical power:Provided further that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost for the purpose of going to or coming from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause.Explanation: In this clause, the expression "vehicle" means any vehicle used or capable of being used for the purpose of road transport whether propelled by mechanical power or otherwise and whether used for drawing other vehicles or otherwise." .The Section defines one of the corrupt practices and it consists of the hiring and procuring whether on payment or otherwise of any vehicle. This hiring and procuring must be by a candidate or his agent or by any other person with the consent of the candidate or his election agent and the hiring according to the Section must be for the free conveyance of any elector other than the candidate himself or members of his family or his agent to and from any polling station. It will, therefore, appear that the Section requires three things, (1) hiring or procuring of a vehicle; (2) by a candidate or his agent etc. and (3) for the free conveyance of an elector. It will be noticed that the Section also speaks of the use but it speaks of the use of such vehicle which connects the two parts, namely, hiring or procuring of vehicle and the use. The requirement of the law therefore is that in addition to proving the hiring or procuring and the carriage of electors to and from any polling station, it should also be proved that the electors used the vehicle free of cost to themselves.The contention of Mr. Bishan Narain that the requirement of free conveyance is not necessary is therefore not borne out by the words of the Section. The two provisos also prove the same thing. The first proviso provides that it would not be a corrupt practice for any elector to hire a vehicle for himself or even a group of electors to join in hiring a vehicle and the second proviso lays down that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost is not a corrupt practice. In other words the electors, if they have to perform the journey by hired vehicle must pay for its hire themselves.They cannot be taken in a hired vehicle free of costs to themselves. In the same way if a procured vehicle is used, it must not be used for free conveyance of voters. The journey of the elector must be paid for by him. If a candidate hires or procures a vehicle for free conveyance of the electors that also is perhaps a corrupt practice but that aspect need not be considered here. The language seems capable of that interpretation though we express no final opinion.11. In the present case there is proof that the vehices were procured; whether they were supplied by the Congress Party or were procured from private parties makes no difference. There is also proof that the vehicle numbered 108 was, in fact, used for the conveyance of three lady voters. What is not proved is that there was free conveyance of the ladies in that vehicle. Mr. Bishan Narain contends that this is very difficult of proof but as we stated earlier it is not impossible of proof because the owner of the car or the driver or the ladies could have been examined to show that the ladies had travelled free in the vehicle.This not proved and therefore the ingredients of the Section have not been established. In our opinion therefore there is no room for interference although, our reasons are slightly different from those of the High Court.12. It was next contended that a general recount was demanded in the case and has been wrong refused. We have scrutinized the pleadings on this point carefully and we find that no plea on which it could be rested was made although in the relief clause there is mention of a general recount. The pleas concerned the votes cast by impersonators and rejected votes. These have been considered already and therefore there is no room for further count. On the whole therefore we are of opinion that the judgment under appeal cannot be interfered with. ### Response: 0 ### Explanation: As regards the finding of the High Court that the ladies must have travelled free, we can only say that it is a mere surmise because there is no evidence whatever on this part of the case. Mr.Bishan Narain stated that the best evidence could come from the returned candidate and that his client was not required to prove a negative.In our opinion, the burden was upon the election petitioner to establish this fact, if it was a requirement of law. We do not think that it was an utter impossibility because the owner of the car, the driver or one of the ladies could have been questioned about it and something would have then come in evidence. Since no such attempt was made there is nothing on which we can say whether the ladies were brought free or on payment and regard being had to the strictness of the law on the subject of corrupt practice we must hold in favour of the returned candidate that the requirements of the Section have not been met.10. This brings us to the examination of Section 123 (5) with a view to finding out what are its requirements. We have already indicated that in our opinion the election petitioner must prove in addition to the other ingredients of the Section that the vehicle was used for free conveyance of voters which ingredient we have stated was not attempted to be established in theSection defines one of the corrupt practices and it consists of the hiring and procuring whether on payment or otherwise of any vehicle. This hiring and procuring must be by a candidate or his agent or by any other person with the consent of the candidate or his election agent and the hiring according to the Section must be for the free conveyance of any elector other than the candidate himself or members of his family or his agent to and from any polling station. It will, therefore, appear that the Section requires three things, (1) hiring or procuring of a vehicle; (2) by a candidate or his agent etc. and (3) for the free conveyance of an elector. It will be noticed that the Section also speaks of the use but it speaks of the use of such vehicle which connects the two parts, namely, hiring or procuring of vehicle and the use. The requirement of the law therefore is that in addition to proving the hiring or procuring and the carriage of electors to and from any polling station, it should also be proved that the electors used the vehicle free of cost to themselves.The contention of Mr. Bishan Narain that the requirement of free conveyance is not necessary is therefore not borne out by the words of the Section. The two provisos also prove the same thing. The first proviso provides that it would not be a corrupt practice for any elector to hire a vehicle for himself or even a group of electors to join in hiring a vehicle and the second proviso lays down that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost is not a corrupt practice. In other words the electors, if they have to perform the journey by hired vehicle must pay for its hire themselves.They cannot be taken in a hired vehicle free of costs to themselves. In the same way if a procured vehicle is used, it must not be used for free conveyance of voters. The journey of the elector must be paid for by him. If a candidate hires or procures a vehicle for free conveyance of the electors that also is perhaps a corrupt practice but that aspect need not be considered here. The language seems capable of that interpretation though we express no final opinion.11. In the present case there is proof that the vehices were procured; whether they were supplied by the Congress Party or were procured from private parties makes no difference. There is also proof that the vehicle numbered 108 was, in fact, used for the conveyance of three lady voters. What is not proved is that there was free conveyance of the ladies in that vehicle. Mr. Bishan Narain contends that this is very difficult of proof but as we stated earlier it is not impossible of proof because the owner of the car or the driver or the ladies could have been examined to show that the ladies had travelled free in the vehicle.This not proved and therefore the ingredients of the Section have not been established. In our opinion therefore there is no room for interference although, our reasons are slightly different from those of the High Court.12. It was next contended that a general recount was demanded in the case and has been wrong refused. We have scrutinized the pleadings on this point carefully and we find that no plea on which it could be rested was made although in the relief clause there is mention of a general recount. The pleas concerned the votes cast by impersonators and rejected votes. These have been considered already and therefore there is no room for further count. On the whole therefore we are of opinion that the judgment under appeal cannot be interferedour opinion, the burden was upon the election petitioner to establish this fact, if it was a requirement of law. We do not think that it was an utter impossibility because the owner of the car, the driver or one of the ladies could have been questioned about it and something would have then come in evidence. Since no such attempt was made there is nothing on which we can say whether the ladies were brought free or on payment and regard being had to the strictness of the law on the subject of corrupt practice we must hold in favour of the returned candidate that the requirements of the Section have not been met.

Board Of Revenue, Uttar Pradesh Vs. Rai Saheb Sidhnath Mehrotra

altogether frustrated and defeated. A proprietor has an estate worth? 20,000. There is a bond upon it for? 10,000. He sells that estate, and the purchaser pays to him a difference between the amount of the bond and the value of the estate, so that the bond being for? 10,000 he pays? 10,000. The day after he obtains infeftment he pays off the bond. Well the practice results of that is that he has paid? 20,000 as the purchase money of this estate, and he has obtained a conveyance with an ad valorem stamp of the value of? 10,000. That is a simple defeating of the purpose and intention of the Legislature, as expressed in this clause, and therefore, I think, upon the plain meaning of this section, that there was no intention whatever to go back upon the enactment of the 16 and 17 Vic., and to restore the enactment of the 55 Gen. III, which is what the liquidators are contending for. On the contrary, it seems to me that the 73rd Section plainly intended to continue the provision of the statute 16 and 17 Vict."9. The next point that needs determination is : What does the phrase "sale of property subject to a mortgage" mean? Does this phrase mean that whenever mortgaged property is sold the explanation applies or does it imply that if mortgaged property is sold subject to the mortgage then and then only the explanation applies? In our view, the correct meaning is the latter meaning. Let us see what would be the position if A, instead of selling property as in illustration 2, adopts the following mode of selling. A sells property to B for Rs. 1700, which is subject to mortgage to C for Rs. 1,000 and unpaid interest Rs. 200. A agrees that Rs. 1200 be paid to C and Rs. 500 to him. If the first meaning is adopted, the consideration on which the stamp duty would be leviable would be Rs. 1700, which is the consideration expressed in terms of Art. 23, and Rs. 1200 deemed to be consideration within S. 24; the total amounting to Rs. 2900. In our opinion this result could never have been intended. We agree with the decision of the Calcutta High Court in ILR 58 Cal 33 : (AIR 1931 Cal 193 FB) and of the Bombay High Court in Waman Martand Bhalerao v. Commissioner Central Division, ILR 49 Bom 73 : (AIR 1924 Bom 524 ) that the phrase "subject to a mortgage or other encumbrance" in the explanation to S. 24 qualifies the word sale and not the word property. We need hardly say that the Stamp Act is a taxing statute and must be construed strictly, and if two meanings are equally possible, the meaning in favour of the subject must be given effect to.10. Before we considered the facts of this case, we may mention that it is plain from the explanation that it is only the unpaid mortgage money that is deemed to be part of the consideration. If the mortgage money has been paid off by the date of the conveyance the explanation does not require it to be added to the consideration. If the mortgage money has been paid off by the vendee before the date of the sale, as part of the consideration, it would be included in the amount leviable with stamp duty under Art. 23, but not under the explanation. The conveyance deed would, in the above eventuality, recite the fact that so much money has been paid to the mortgagee and it would be the consideration expressed in the deed.11. Let us now apply the law as explained above to the facts of this case. On December 15, 1952, the date when the deed was executed Rs. 3,89,000 had already been paid by the vendees to the Bank. Mr. Aggarwal contends that this amount should be included because it was consideration moving from the vendees. He says that stamp duty cannot be avoided by the simple: device of paying money before a conveyance is executed. He is right in this but he must show that Rs. 3,89,000 was an advance payment for the immovable property conveyed by the deed dated December 15, 1952. It is quite clear from the terms of the deed that Rs. 4,55,000 was to be paid for items other than the immoveable property conveyed by the said deed and the sum of Rs. 3,89,000 had nothing to do with the immoveable property. The payment of Rs. 3,89,000 to the Bank left outstanding Rs. 1, 11,000 as mortgage money. Rs. 1,00,000 is expressed to be the consideration for the conveyance of the immovable property, and therefore, falls within Art. 23. This leaves Rs. 11,000, and the question arises whether this sum should be taken into consideration for the purpose of levying stamp duty. Regarding this item, the High Court held as follows :"It is true that till the date of sale the sum of Rs. 11,000 had not been paid and there was a charge on the property in respect of that amount. The vendors themselves had, however, taken liability for that amount and had agreed to pay it. It had been expressly provided in the sale deed that property was being sold free from the charge. The vendees were in no way liable for the amount and had not undertaken to pay it. In these circumstances the property cannot be said to have been sold subject to the charge of Rs. 11,000 and if it was not being sold subject to that charge, the Explanation to section 24 becomes inapplicable. "12. It has already been noticed that this sum of Rs. 11,000 forms part of the price for items other than the immoveable property. Mr. Aggarwala has not seriously controverted the finding of the High Court on this point. Accordingly, we hold that this sum of Rs. 11,000 cannot be included for the purpose of levying stamp duty.13.

0[ds]Does this phrase mean that whenever mortgaged property is sold the explanation applies or does it imply that if mortgaged property is sold subject to the mortgage then and then only the explanation applies? In our view, the correct meaning is the latter meaning. Let us see what would be the position if A, instead of selling property as in illustration 2, adopts the following mode of selling. A sells property to B for Rs. 1700, which is subject to mortgage to C for Rs. 1,000 and unpaid interest Rs. 200. A agrees that Rs. 1200 be paid to C and Rs. 500 to him. If the first meaning is adopted, the consideration on which the stamp duty would be leviable would be Rs. 1700, which is the consideration expressed in terms of Art. 23, and Rs. 1200 deemed to be consideration within S. 24; the total amounting to Rs. 2900. In our opinion this result could never have been intended. We agree with the decision of the Calcutta High Court in ILR 58 Cal 33 : (AIR 1931 Cal 193 FB) and of the Bombay High Court in Waman Martand Bhalerao v. Commissioner Central Division, ILR 49 Bom 73 : (AIR 1924 Bom 524 ) that the phrase "subject to a mortgage or other encumbrance" in the explanation to S. 24 qualifies the word sale and not the word property. We need hardly say that the Stamp Act is a taxing statute and must be construed strictly, and if two meanings are equally possible, the meaning in favour of the subject must be given effect to.Before we considered the facts of this case, we may mention that it is plain from the explanation that it is only the unpaid mortgage money that is deemed to be part of the consideration. If the mortgage money has been paid off by the date of the conveyance the explanation does not require it to be added to the consideration. If the mortgage money has been paid off by the vendee before the date of the sale, as part of the consideration, it would be included in the amount leviable with stamp duty under Art. 23, but not under the explanation. The conveyance deed would, in the above eventuality, recite the fact that so much money has been paid to the mortgagee and it would be the consideration expressed in thehas already been noticed that this sum of Rs. 11,000 forms part of the price for items other than the immoveable property. Mr. Aggarwala has not seriously controverted the finding of the High Court on this point. Accordingly, we hold that this sum of Rs. 11,000 cannot be included for the purpose of levying stamp duty.

### Instruction: Determine the likely decision of the case (acceptance (1) or rejection (0)) and follow up with an explanation highlighting key sentences that support this prediction. ### Input: altogether frustrated and defeated. A proprietor has an estate worth? 20,000. There is a bond upon it for? 10,000. He sells that estate, and the purchaser pays to him a difference between the amount of the bond and the value of the estate, so that the bond being for? 10,000 he pays? 10,000. The day after he obtains infeftment he pays off the bond. Well the practice results of that is that he has paid? 20,000 as the purchase money of this estate, and he has obtained a conveyance with an ad valorem stamp of the value of? 10,000. That is a simple defeating of the purpose and intention of the Legislature, as expressed in this clause, and therefore, I think, upon the plain meaning of this section, that there was no intention whatever to go back upon the enactment of the 16 and 17 Vic., and to restore the enactment of the 55 Gen. III, which is what the liquidators are contending for. On the contrary, it seems to me that the 73rd Section plainly intended to continue the provision of the statute 16 and 17 Vict."9. The next point that needs determination is : What does the phrase "sale of property subject to a mortgage" mean? Does this phrase mean that whenever mortgaged property is sold the explanation applies or does it imply that if mortgaged property is sold subject to the mortgage then and then only the explanation applies? In our view, the correct meaning is the latter meaning. Let us see what would be the position if A, instead of selling property as in illustration 2, adopts the following mode of selling. A sells property to B for Rs. 1700, which is subject to mortgage to C for Rs. 1,000 and unpaid interest Rs. 200. A agrees that Rs. 1200 be paid to C and Rs. 500 to him. If the first meaning is adopted, the consideration on which the stamp duty would be leviable would be Rs. 1700, which is the consideration expressed in terms of Art. 23, and Rs. 1200 deemed to be consideration within S. 24; the total amounting to Rs. 2900. In our opinion this result could never have been intended. We agree with the decision of the Calcutta High Court in ILR 58 Cal 33 : (AIR 1931 Cal 193 FB) and of the Bombay High Court in Waman Martand Bhalerao v. Commissioner Central Division, ILR 49 Bom 73 : (AIR 1924 Bom 524 ) that the phrase "subject to a mortgage or other encumbrance" in the explanation to S. 24 qualifies the word sale and not the word property. We need hardly say that the Stamp Act is a taxing statute and must be construed strictly, and if two meanings are equally possible, the meaning in favour of the subject must be given effect to.10. Before we considered the facts of this case, we may mention that it is plain from the explanation that it is only the unpaid mortgage money that is deemed to be part of the consideration. If the mortgage money has been paid off by the date of the conveyance the explanation does not require it to be added to the consideration. If the mortgage money has been paid off by the vendee before the date of the sale, as part of the consideration, it would be included in the amount leviable with stamp duty under Art. 23, but not under the explanation. The conveyance deed would, in the above eventuality, recite the fact that so much money has been paid to the mortgagee and it would be the consideration expressed in the deed.11. Let us now apply the law as explained above to the facts of this case. On December 15, 1952, the date when the deed was executed Rs. 3,89,000 had already been paid by the vendees to the Bank. Mr. Aggarwal contends that this amount should be included because it was consideration moving from the vendees. He says that stamp duty cannot be avoided by the simple: device of paying money before a conveyance is executed. He is right in this but he must show that Rs. 3,89,000 was an advance payment for the immovable property conveyed by the deed dated December 15, 1952. It is quite clear from the terms of the deed that Rs. 4,55,000 was to be paid for items other than the immoveable property conveyed by the said deed and the sum of Rs. 3,89,000 had nothing to do with the immoveable property. The payment of Rs. 3,89,000 to the Bank left outstanding Rs. 1, 11,000 as mortgage money. Rs. 1,00,000 is expressed to be the consideration for the conveyance of the immovable property, and therefore, falls within Art. 23. This leaves Rs. 11,000, and the question arises whether this sum should be taken into consideration for the purpose of levying stamp duty. Regarding this item, the High Court held as follows :"It is true that till the date of sale the sum of Rs. 11,000 had not been paid and there was a charge on the property in respect of that amount. The vendors themselves had, however, taken liability for that amount and had agreed to pay it. It had been expressly provided in the sale deed that property was being sold free from the charge. The vendees were in no way liable for the amount and had not undertaken to pay it. In these circumstances the property cannot be said to have been sold subject to the charge of Rs. 11,000 and if it was not being sold subject to that charge, the Explanation to section 24 becomes inapplicable. "12. It has already been noticed that this sum of Rs. 11,000 forms part of the price for items other than the immoveable property. Mr. Aggarwala has not seriously controverted the finding of the High Court on this point. Accordingly, we hold that this sum of Rs. 11,000 cannot be included for the purpose of levying stamp duty.13. ### Response: 0 ### Explanation: Does this phrase mean that whenever mortgaged property is sold the explanation applies or does it imply that if mortgaged property is sold subject to the mortgage then and then only the explanation applies? In our view, the correct meaning is the latter meaning. Let us see what would be the position if A, instead of selling property as in illustration 2, adopts the following mode of selling. A sells property to B for Rs. 1700, which is subject to mortgage to C for Rs. 1,000 and unpaid interest Rs. 200. A agrees that Rs. 1200 be paid to C and Rs. 500 to him. If the first meaning is adopted, the consideration on which the stamp duty would be leviable would be Rs. 1700, which is the consideration expressed in terms of Art. 23, and Rs. 1200 deemed to be consideration within S. 24; the total amounting to Rs. 2900. In our opinion this result could never have been intended. We agree with the decision of the Calcutta High Court in ILR 58 Cal 33 : (AIR 1931 Cal 193 FB) and of the Bombay High Court in Waman Martand Bhalerao v. Commissioner Central Division, ILR 49 Bom 73 : (AIR 1924 Bom 524 ) that the phrase "subject to a mortgage or other encumbrance" in the explanation to S. 24 qualifies the word sale and not the word property. We need hardly say that the Stamp Act is a taxing statute and must be construed strictly, and if two meanings are equally possible, the meaning in favour of the subject must be given effect to.Before we considered the facts of this case, we may mention that it is plain from the explanation that it is only the unpaid mortgage money that is deemed to be part of the consideration. If the mortgage money has been paid off by the date of the conveyance the explanation does not require it to be added to the consideration. If the mortgage money has been paid off by the vendee before the date of the sale, as part of the consideration, it would be included in the amount leviable with stamp duty under Art. 23, but not under the explanation. The conveyance deed would, in the above eventuality, recite the fact that so much money has been paid to the mortgagee and it would be the consideration expressed in thehas already been noticed that this sum of Rs. 11,000 forms part of the price for items other than the immoveable property. Mr. Aggarwala has not seriously controverted the finding of the High Court on this point. Accordingly, we hold that this sum of Rs. 11,000 cannot be included for the purpose of levying stamp duty.

Commr. of Income Tax, Dibrugarh Vs. Doom Dooma India Ltd

years in which it was assessed as a non-resident under Income-tax Act, 1922, only that part of its profits attributable to the sale proceeds of goods received in British India were brought to tax. For the assessment years in question, in ascertaining the "written down value" of the building, machinery and plant, under paragraph 2 of the Taxation Laws Order, 1950, only the greater of the two depreciations "actually allowed" in British India and in Indore could be taken into account. The ITO took into account the depreciation allowances for the years up to 1944 as computed under Income-tax Act, 1922 for the purposes of ascertaining the world income of the assessee, and for the years 1945 to 1948, he took into account the income as computed under Indore Industrial Tax Rules 1927; and on that basis the ITO arrived at the "written down value" as on January 1, 1949. The assessee contended, inter alia, that in regard to the years up to 1944 only the proportionate depreciation attributable to the taxable income came within the meaning of the words "actually allowed" in the old section corresponding to Section 43(6)(b) of the 1961 Act. This contention of the assessee was accepted by the majority judgment which held that in fixing the depreciation allowances for the years in which the assessee was assessed as a non-resident under the Income-tax Act, 1922, the ITO had "actually allowed" only a portion of the amount towards depreciation allowable in assessing its world income. It was further held that the mere fact that in the matter of calculation, the total amount of depreciation was first deducted from the world income (composite income) and thereafter a proportion was struck did not amount to an actual allowance of the entire depreciation in ascertaining the taxable income that accrued in British India. Therefore, it was held, that, the depreciation deducted in arriving at the taxable income alone could be taken into account and not the depreciation taken into account for arriving at the world income (composite income).11. In our view the above judgment of the Supreme Court squarely applies to the present case. Assessee is engaged in the business of growing and manufacturing of tea. As per the provisions of Section 10(1) of the 1961 Act read with Rule 8, 40 per cent of the business income derived from the sale of tea grown and manufactured in India by the assessee was liable to tax. In the above judgment of the Supreme Court, the Court was concerned with the world income, in this case we are concerned with the composite income. Therefore, in our view the judgment of the Supreme Court, above referred to, is squarely applicable to the present case. Therefore, we do not see any infirmity in the impugned judgment of the High Court. 12. Be that as it may, we can give the following illustration(s) which will give an example of how the "written down value" needs to be computed: TABLE 13. Analysing the above two charts, we find that at the end of computation the income chargeable to tax by applying Rule 8 comes to Rs.240. Under Illustration ‘A, the normal depreciation is Rs.100 which is deductible from Rs.1000 being the income from sale of tea. On the other hand, under Illustration ‘B, we have taken 40 per cent of each of the items, namely, income from sale of tea, depreciation and other expenses. Accordingly, on comparison it may be noted that whereas income from sale of tea is Rs.1000 under Illustration ‘A, proportionately it comes to Rs.400 under Illustration ‘B. Similarly, depreciation under Illustration ‘A which is normal depreciation is Rs.100 whereas in Illustration ‘B at 40 per cent the pro rata depreciation is 40. What is important to be noted is that at the end of computation under both the Illustrations, the income taxable by applying Rule 8 comes to Rs.240 in both the cases. The only difference is that in Illustration ‘B we have gone by pro rata basis.14. The important thing to be noted is that according to the Department, in the succeeding year, the opening "written down value" of the assets would be Rs.900 (Rs.1000 for the cost of the assets less Rs.100) as indicated in Illustration ‘A whereas, if one goes by Illustration ‘B the "written down value" comes to Rs.960 (Rs.1000 for the cost of the asset(s) minus 40), being the depreciation in Illustration ‘B.15. According to the assessee, in view of the law laid down by the judgment of this Court in the case of Madeva Upendra Sinai (supra), the "written down value" should be computed at Rs.960 and not at Rs.900 as claimed by the Department.16. In our view, in cases where Rule 8 applies, the income which is brought to tax as "business income" is only 40 per cent of the composite income and consequently proportionate depreciation is required to be taken into account because that is the depreciation "actually allowed". Hence we find no merit in the civil appeals filed by the Department.17. Before concluding, we may state that the judgment of this Court in Commissioner of Income Tax v. Willamson Financial Services and Others - (2008) 297 ITR 17 , has no application to the present cases. Willamson Financial Services case (supra) was rendered in the context of deduction under Section 80-HHC of the 1961 Act. Section 80-HHC comes under Chapter VIA. Chapter VIA refers to special deductions. It is a separate Code by itself. There is a distinction between "deductions/allowances in Section 30 to Section 43D" and "deductions admissible under Chapter VIA". Deductions/allowances provided in Sections 30 to 43D are allowed in determining Gross Total Income and are not chargeable to tax because the same constitute charge on profit, whereas, deductions under Chapter VIA are allowed from Gross Total Income chargeable to tax. Therefore, the judgments rendered in the context of Section 80-HHC of the 1961 Act, both by this Court and by the Kerala High Court, stand on different footing.

0[ds]Answer to Question No.(1) - meaning of the expression "depreciation actually allowed" in Section 43(6)(b) of the 1961 Act7. Deductions by way of depreciation allowance have been specifically recognized and dealt with in Sections 32, 34 and 43(6) of the 1961 Act (which deals with the definition of the words "written down value"). Section 32 adopts two methods in allowing depreciation. In the case of ocean-going ships, depreciation is allowed, year after year, at the fixed percentage on the original cost of the asset [See: Section 32(1)(i)]. This is called the straight-line method. In the case of non-ocean-going ships and buildings, machinery, plant or furniture, the prescribed percentage of depreciation is to be computed on the basis of "written down value" of the asset [See: Section 32(1)(ii)]. This is known as "written-down value" method. Both these methods seek to ensure that the total depreciation allowance(s) granted, year after year, does not exceed 100 per cent, of the original cost of the asset. In the straight-line method, the entire depreciation is written off sooner than in the "written down value" method, if the figures of the actual cost and the prescribed percentage are the same in either case. Section 32 (2) allows the carry forward and unabsorbed depreciation allowances to any subsequent year, without any time limit, where such non-absorption is "owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains being less than the allowance". Depreciation loss under Section 32 (2) stands on the same footing as any other business losses. An assessee claiming depreciation of assets has to show that such assets are owned by him and are used by him in the accounting year for the purpose of his business, the profits of which are being charged [See: Section 32(1)(i)]. Further, the total of all deductions in respect of depreciation under Section 32(1)(i), made year after year, should not, in any event, exceed the actual cost of the assets to the assessee [See: Section 34(2)(i)]. The definition of "actual cost" is to be found in Section 43(1) and the definition of "written down value" is to be found in Section 43(6) of the 1961 Act. The latter defines "written down value" under Section 43(6) to meanin the case of assets acquired in the previous year, the actual cost to the assessee;(b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation(s) actually allowed under the 1961 Act.The key word in Section 43(6)(b) of the 1961 Act is "actually". We quote herein below an important observation, made by this Court on the meaning of the words "actually allowed" in Section 43 (6)(b) in the case of Madeva Upendra Sinai v. Union of India and Others - (1975) 98 ITR 209 at pages 223 & 224, which reads aspivot of the definition of "written-down value" is the "actual cost" of the assets. Where the asset was acquired and also used for the business in the previous year, such value would be its full actual cost and depreciation for that year would be allowed at the prescribed rate on such cost. In subsequent year, depreciation would be calculated on the basis of actual cost less depreciation actually allowed. The key word in clause (b) is "actually". It is the antithesis of that which is merely speculative, theoretical or imaginary. "Actually" contra-indicates a deeming construction of the word "allowed" which it qualifies. The connotation of the phrase "actually allowed" is thus limited to depreciation actually taken into account or granted and given effect to, i.e. debited by the Income-tax Officer against the incomings of the business in computing the taxable income of the assessee; it cannot be stretched to mean "notionally allowed" or merely allowable on a notionalthe above conspectus, it is clear that the essence of the scheme of the Indian Income-tax Act is that depreciation is allowed, year after year, on the actual cost of the assets as reduced by the depreciation actually allowed in earlier years. It follows, therefore, that even in the case of assets acquired before the previous year, where in the past no depreciation was computed, actually allowed or carried forward, for no fault of the assessee, the "written-down value" may, under clause (b) of Section 43(6), also, be the actual cost of the assets to the assessee.Therefore, this Court has clearly laid down the meaning of the words "actually allowed" in Section 43(6)(b) to mean - "limited to depreciation actually taken into account or granted and given effect to, i.e. debited by the Income-tax Officer against the incomings of the business in computing the taxable income of the assessee".Answer to Question No.(2) - computation of depreciation in cases covered by Rule 8 which deals with taxability of composite income10. In the case of Commr. of Income-tax, Madhya Pradesh, Nagpur and Bhandara v. Nandlal Bhandari Mills Ltd. - (1966) 60 ITR 173 , which judgment was in the context of composite income, the question inter alia arose whether depreciation "actually allowed" would mean depreciation deducted in arriving at the taxable income or the depreciation deducted in arriving at the world income (composite income). In that case the assessee was a company incorporated in Indore. It owned and ran a textile mill. Until 1.4.1950, when Income-tax Act, 1922 was extended to Part B States including Madhya Bharat of which Indore became a part, the assessee was assessed at Bombay under the Income-tax Act, 1922 as a non-resident and for some years as resident. The assessee was also assessed in Indore under the Indore Industrial Tax Rules, 1927. For those years in which it was assessed as a non-resident under Income-tax Act, 1922, only that part of its profits attributable to the sale proceeds of goods received in British India were brought to tax. For the assessment years in question, in ascertaining the "written down value" of the building, machinery and plant, under paragraph 2 of the Taxation Laws Order, 1950, only the greater of the two depreciations "actually allowed" in British India and in Indore could be taken into account. The ITO took into account the depreciation allowances for the years up to 1944 as computed under Income-tax Act, 1922 for the purposes of ascertaining the world income of the assessee, and for the years 1945 to 1948, he took into account the income as computed under Indore Industrial Tax Rules 1927; and on that basis the ITO arrived at the "written down value" as on January 1, 1949. The assessee contended, inter alia, that in regard to the years up to 1944 only the proportionate depreciation attributable to the taxable income came within the meaning of the words "actually allowed" in the old section corresponding to Section 43(6)(b) of the 1961 Act. This contention of the assessee was accepted by the majority judgment which held that in fixing the depreciation allowances for the years in which the assessee was assessed as a non-resident under the Income-tax Act, 1922, the ITO had "actually allowed" only a portion of the amount towards depreciation allowable in assessing its world income. It was further held that the mere fact that in the matter of calculation, the total amount of depreciation was first deducted from the world income (composite income) and thereafter a proportion was struck did not amount to an actual allowance of the entire depreciation in ascertaining the taxable income that accrued in British India. Therefore, it was held, that, the depreciation deducted in arriving at the taxable income alone could be taken into account and not the depreciation taken into account for arriving at the world income (composite income).11. In our view the above judgment of the Supreme Court squarely applies to the present case. Assessee is engaged in the business of growing and manufacturing of tea. As per the provisions of Section 10(1) of the 1961 Act read with Rule 8, 40 per cent of the business income derived from the sale of tea grown and manufactured in India by the assessee was liable to tax. In the above judgment of the Supreme Court, the Court was concerned with the world income, in this case we are concerned with the composite income. Therefore, in our view the judgment of the Supreme Court, above referred to, is squarely applicable to the present case. Therefore, we do not see any infirmity in the impugned judgment of the High Court.Analysing the above two charts, we find that at the end of computation the income chargeable to tax by applying Rule 8 comes to Rs.240. Under Illustration ‘A, the normal depreciation is Rs.100 which is deductible from Rs.1000 being the income from sale of tea. On the other hand, under Illustration ‘B, we have taken 40 per cent of each of the items, namely, income from sale of tea, depreciation and other expenses. Accordingly, on comparison it may be noted that whereas income from sale of tea is Rs.1000 under Illustration ‘A, proportionately it comes to Rs.400 under Illustration ‘B. Similarly, depreciation under Illustration ‘A which is normal depreciation is Rs.100 whereas in Illustration ‘B at 40 per cent the pro rata depreciation is 40. What is important to be noted is that at the end of computation under both the Illustrations, the income taxable by applying Rule 8 comes to Rs.240 in both the cases. The only difference is that in Illustration ‘B we have gone by pro rata basis.14. The important thing to be noted is that according to the Department, in the succeeding year, the opening "written down value" of the assets would be Rs.900 (Rs.1000 for the cost of the assets less Rs.100) as indicated in Illustration ‘A whereas, if one goes by Illustration ‘B the "written down value" comes to Rs.960 (Rs.1000 for the cost of the asset(s) minus 40), being the depreciation in Illustration ‘B.15. According to the assessee, in view of the law laid down by the judgment of this Court in the case of Madeva Upendra Sinai (supra), the "written down value" should be computed at Rs.960 and not at Rs.900 as claimed by the Department.16. In our view, in cases where Rule 8 applies, the income which is brought to tax as "business income" is only 40 per cent of the composite income and consequently proportionate depreciation is required to be taken into account because that is the depreciation "actually allowed". Hence we find no merit in the civil appeals filed by the Department.17. Before concluding, we may state that the judgment of this Court in Commissioner of Income Tax v. Willamson Financial Services and Others - (2008) 297 ITR 17 , has no application to the present cases. Willamson Financial Services case (supra) was rendered in the context of deduction under Section 80-HHC of the 1961 Act. Section 80-HHC comes under Chapter VIA. Chapter VIA refers to special deductions. It is a separate Code by itself. There is a distinction between "deductions/allowances in Section 30 to Section 43D" and "deductions admissible under Chapter VIA". Deductions/allowances provided in Sections 30 to 43D are allowed in determining Gross Total Income and are not chargeable to tax because the same constitute charge on profit, whereas, deductions under Chapter VIA are allowed from Gross Total Income chargeable to tax. Therefore, the judgments rendered in the context of Section 80-HHC of the 1961 Act, both by this Court and by the Kerala High Court, stand on different footing.

### Instruction: Predict the outcome of the case proceeding (1 for acceptance, 0 for rejection) and subsequently provide an explanation based on significant sentences in the proceeding. ### Input: years in which it was assessed as a non-resident under Income-tax Act, 1922, only that part of its profits attributable to the sale proceeds of goods received in British India were brought to tax. For the assessment years in question, in ascertaining the "written down value" of the building, machinery and plant, under paragraph 2 of the Taxation Laws Order, 1950, only the greater of the two depreciations "actually allowed" in British India and in Indore could be taken into account. The ITO took into account the depreciation allowances for the years up to 1944 as computed under Income-tax Act, 1922 for the purposes of ascertaining the world income of the assessee, and for the years 1945 to 1948, he took into account the income as computed under Indore Industrial Tax Rules 1927; and on that basis the ITO arrived at the "written down value" as on January 1, 1949. The assessee contended, inter alia, that in regard to the years up to 1944 only the proportionate depreciation attributable to the taxable income came within the meaning of the words "actually allowed" in the old section corresponding to Section 43(6)(b) of the 1961 Act. This contention of the assessee was accepted by the majority judgment which held that in fixing the depreciation allowances for the years in which the assessee was assessed as a non-resident under the Income-tax Act, 1922, the ITO had "actually allowed" only a portion of the amount towards depreciation allowable in assessing its world income. It was further held that the mere fact that in the matter of calculation, the total amount of depreciation was first deducted from the world income (composite income) and thereafter a proportion was struck did not amount to an actual allowance of the entire depreciation in ascertaining the taxable income that accrued in British India. Therefore, it was held, that, the depreciation deducted in arriving at the taxable income alone could be taken into account and not the depreciation taken into account for arriving at the world income (composite income).11. In our view the above judgment of the Supreme Court squarely applies to the present case. Assessee is engaged in the business of growing and manufacturing of tea. As per the provisions of Section 10(1) of the 1961 Act read with Rule 8, 40 per cent of the business income derived from the sale of tea grown and manufactured in India by the assessee was liable to tax. In the above judgment of the Supreme Court, the Court was concerned with the world income, in this case we are concerned with the composite income. Therefore, in our view the judgment of the Supreme Court, above referred to, is squarely applicable to the present case. Therefore, we do not see any infirmity in the impugned judgment of the High Court. 12. Be that as it may, we can give the following illustration(s) which will give an example of how the "written down value" needs to be computed: TABLE 13. Analysing the above two charts, we find that at the end of computation the income chargeable to tax by applying Rule 8 comes to Rs.240. Under Illustration ‘A, the normal depreciation is Rs.100 which is deductible from Rs.1000 being the income from sale of tea. On the other hand, under Illustration ‘B, we have taken 40 per cent of each of the items, namely, income from sale of tea, depreciation and other expenses. Accordingly, on comparison it may be noted that whereas income from sale of tea is Rs.1000 under Illustration ‘A, proportionately it comes to Rs.400 under Illustration ‘B. Similarly, depreciation under Illustration ‘A which is normal depreciation is Rs.100 whereas in Illustration ‘B at 40 per cent the pro rata depreciation is 40. What is important to be noted is that at the end of computation under both the Illustrations, the income taxable by applying Rule 8 comes to Rs.240 in both the cases. The only difference is that in Illustration ‘B we have gone by pro rata basis.14. The important thing to be noted is that according to the Department, in the succeeding year, the opening "written down value" of the assets would be Rs.900 (Rs.1000 for the cost of the assets less Rs.100) as indicated in Illustration ‘A whereas, if one goes by Illustration ‘B the "written down value" comes to Rs.960 (Rs.1000 for the cost of the asset(s) minus 40), being the depreciation in Illustration ‘B.15. According to the assessee, in view of the law laid down by the judgment of this Court in the case of Madeva Upendra Sinai (supra), the "written down value" should be computed at Rs.960 and not at Rs.900 as claimed by the Department.16. In our view, in cases where Rule 8 applies, the income which is brought to tax as "business income" is only 40 per cent of the composite income and consequently proportionate depreciation is required to be taken into account because that is the depreciation "actually allowed". Hence we find no merit in the civil appeals filed by the Department.17. Before concluding, we may state that the judgment of this Court in Commissioner of Income Tax v. Willamson Financial Services and Others - (2008) 297 ITR 17 , has no application to the present cases. Willamson Financial Services case (supra) was rendered in the context of deduction under Section 80-HHC of the 1961 Act. Section 80-HHC comes under Chapter VIA. Chapter VIA refers to special deductions. It is a separate Code by itself. There is a distinction between "deductions/allowances in Section 30 to Section 43D" and "deductions admissible under Chapter VIA". Deductions/allowances provided in Sections 30 to 43D are allowed in determining Gross Total Income and are not chargeable to tax because the same constitute charge on profit, whereas, deductions under Chapter VIA are allowed from Gross Total Income chargeable to tax. Therefore, the judgments rendered in the context of Section 80-HHC of the 1961 Act, both by this Court and by the Kerala High Court, stand on different footing. ### Response: 0 ### Explanation: under the Income-tax Act, 1922 as a non-resident and for some years as resident. The assessee was also assessed in Indore under the Indore Industrial Tax Rules, 1927. For those years in which it was assessed as a non-resident under Income-tax Act, 1922, only that part of its profits attributable to the sale proceeds of goods received in British India were brought to tax. For the assessment years in question, in ascertaining the "written down value" of the building, machinery and plant, under paragraph 2 of the Taxation Laws Order, 1950, only the greater of the two depreciations "actually allowed" in British India and in Indore could be taken into account. The ITO took into account the depreciation allowances for the years up to 1944 as computed under Income-tax Act, 1922 for the purposes of ascertaining the world income of the assessee, and for the years 1945 to 1948, he took into account the income as computed under Indore Industrial Tax Rules 1927; and on that basis the ITO arrived at the "written down value" as on January 1, 1949. The assessee contended, inter alia, that in regard to the years up to 1944 only the proportionate depreciation attributable to the taxable income came within the meaning of the words "actually allowed" in the old section corresponding to Section 43(6)(b) of the 1961 Act. This contention of the assessee was accepted by the majority judgment which held that in fixing the depreciation allowances for the years in which the assessee was assessed as a non-resident under the Income-tax Act, 1922, the ITO had "actually allowed" only a portion of the amount towards depreciation allowable in assessing its world income. It was further held that the mere fact that in the matter of calculation, the total amount of depreciation was first deducted from the world income (composite income) and thereafter a proportion was struck did not amount to an actual allowance of the entire depreciation in ascertaining the taxable income that accrued in British India. Therefore, it was held, that, the depreciation deducted in arriving at the taxable income alone could be taken into account and not the depreciation taken into account for arriving at the world income (composite income).11. In our view the above judgment of the Supreme Court squarely applies to the present case. Assessee is engaged in the business of growing and manufacturing of tea. As per the provisions of Section 10(1) of the 1961 Act read with Rule 8, 40 per cent of the business income derived from the sale of tea grown and manufactured in India by the assessee was liable to tax. In the above judgment of the Supreme Court, the Court was concerned with the world income, in this case we are concerned with the composite income. Therefore, in our view the judgment of the Supreme Court, above referred to, is squarely applicable to the present case. Therefore, we do not see any infirmity in the impugned judgment of the High Court.Analysing the above two charts, we find that at the end of computation the income chargeable to tax by applying Rule 8 comes to Rs.240. Under Illustration ‘A, the normal depreciation is Rs.100 which is deductible from Rs.1000 being the income from sale of tea. On the other hand, under Illustration ‘B, we have taken 40 per cent of each of the items, namely, income from sale of tea, depreciation and other expenses. Accordingly, on comparison it may be noted that whereas income from sale of tea is Rs.1000 under Illustration ‘A, proportionately it comes to Rs.400 under Illustration ‘B. Similarly, depreciation under Illustration ‘A which is normal depreciation is Rs.100 whereas in Illustration ‘B at 40 per cent the pro rata depreciation is 40. What is important to be noted is that at the end of computation under both the Illustrations, the income taxable by applying Rule 8 comes to Rs.240 in both the cases. The only difference is that in Illustration ‘B we have gone by pro rata basis.14. The important thing to be noted is that according to the Department, in the succeeding year, the opening "written down value" of the assets would be Rs.900 (Rs.1000 for the cost of the assets less Rs.100) as indicated in Illustration ‘A whereas, if one goes by Illustration ‘B the "written down value" comes to Rs.960 (Rs.1000 for the cost of the asset(s) minus 40), being the depreciation in Illustration ‘B.15. According to the assessee, in view of the law laid down by the judgment of this Court in the case of Madeva Upendra Sinai (supra), the "written down value" should be computed at Rs.960 and not at Rs.900 as claimed by the Department.16. In our view, in cases where Rule 8 applies, the income which is brought to tax as "business income" is only 40 per cent of the composite income and consequently proportionate depreciation is required to be taken into account because that is the depreciation "actually allowed". Hence we find no merit in the civil appeals filed by the Department.17. Before concluding, we may state that the judgment of this Court in Commissioner of Income Tax v. Willamson Financial Services and Others - (2008) 297 ITR 17 , has no application to the present cases. Willamson Financial Services case (supra) was rendered in the context of deduction under Section 80-HHC of the 1961 Act. Section 80-HHC comes under Chapter VIA. Chapter VIA refers to special deductions. It is a separate Code by itself. There is a distinction between "deductions/allowances in Section 30 to Section 43D" and "deductions admissible under Chapter VIA". Deductions/allowances provided in Sections 30 to 43D are allowed in determining Gross Total Income and are not chargeable to tax because the same constitute charge on profit, whereas, deductions under Chapter VIA are allowed from Gross Total Income chargeable to tax. Therefore, the judgments rendered in the context of Section 80-HHC of the 1961 Act, both by this Court and by the Kerala High Court, stand on different footing.

Idbi Trusteeship Services Ltd Vs. Hubtown Ltd

on the one hand, and arbitrariness on the other, are sworn enemies. The discretion that a Judge exercises under Order XXXVII to refuse leave to defend or to grant conditional or unconditional leave to defend is a discretion akin to Josephs multi-coloured coat - a large number of baffling alternatives present themselves. The life of the law not being logic but the experience of the trial Judge, is what comes to the rescue in these cases; but at the same time informed by guidelines or principles that we propose to lay down to obviate exercise of judicial discretion in an arbitrary manner. At one end of the spectrum is unconditional leave to defend, granted in all cases which present a substantial defence. At the other end of the spectrum are frivolous or vexatious defences, leading to refusal of leave to defend. In between these two extremes are various kinds of defences raised which yield conditional leave to defend in most cases. It is these defences that have to be guided by broad principles which are ultimately applied by the trial Judge so that justice is done on the facts of each given case.18. Accordingly, the principles stated in paragraph 8 of Mechelecs case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhirams case, as follows: a. If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit;b. if the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend;c. even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendants good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security;d. if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.e. if the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith;f. if any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court. 19. Coming to the facts of the present case: a. It is clear that a sum of L 418 crores has been paid by FMO, the Dutch company, to Vinca for purchase of shares as well as compulsorily convertible debentures. This transaction by itself is not alleged to be violative of the FEMA regulations.b. The suit is filed only on invocation of the Corporate Guarantee which on its terms is unconditional. It may be added that it is not the defendants case that the said Corporate Guarantee is wrongly invoked.c. Payment under the said Guarantee is to the debenture trustee, an Indian company, for and on behalf of Vinca, another Indian company, so that prima facie again there is no infraction of the FEMA Regulations.d. Since FMO becomes a 99% holder of Vinca after the requisite time period has elapsed, FMO may at that stage utilise the funds received pursuant to the overall structure agreements in India. If this is so, again prima facie there is no breach of FEMA Regulations.e. At the stage that FMO wishes to repatriate such funds, RBI permission would be necessary. If RBI permission is not granted, then again there would be no infraction of FEMA Regulations.f. The judgment in Immami Appa Raos case would be attracted only if the illegal purpose is fully carried out, and not otherwise. 20. Based on the aforesaid, it cannot be said that the defendant has raised a substantial defence to the claim made in the suit. Arguably at the highest, as held by the learned Single Judge, even if a triable issue may be said to arise on the application of the FEMA Regulations, nevertheless, we are left with a real doubt about the Defendants good faith and the genuineness of such a triable issue. L 418 crores has been stated to be utilized and submerged in a building construction project, with payments under the structured arrangement mentioned above admittedly being made by the concerned parties until 2011, after which payments stopped being made by them. The defence thus raised appears to us to be in the realm of being `plausible but improbable. This being the case, the plaintiff needs to be protected. In our opinion, the defendant will be granted leave to defend the suit only if it deposits in the Bombay High Court the principal sum of L 418 crores invested by FMO, or gives security for the said amount of L 418 crores, to the satisfaction of the Prothonotary and Senior Master, Bombay High Court within a period of three months from today.

1[ds]12. We find that Milkhirams case is in fact an important judgment on the scope of O.XXXVII of the CPC, and is not a judgment on principles to be applied under Section 115. This judgment, being a judgment of four learned judges of this court, set out, in paragraph 1, O.XXXVII, Rule 3 sub-rules (2) and (3) as amended by the Bombay High Court at the relevant time, asIf the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment returnable not less than ten clear days from the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit.(3) The defendant may at any time within ten days from the service of such summons for judgment by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend the suit. Leave to defend may be granted to him unconditionally or upon such terms as to the Judge appear just.It is thus clear that O.XXXVII has suffered a change in 1976, and that change has made a difference in the law laid down. First and foremost, it is important to remember that Milkhirams case is a direct authority on the amended O.XXXVII provision, as the amended provision in O.XXXVII Rule 3 is the same as the Bombay amendment which this Court was considering in the aforesaid judgment. We must hasten to add that the two provisos to sub-rule (3) were not, however, there in the Bombay amendment. These are new, and the effect to be given to them is something that we will have to decide. The position in law now is that the trial Judge is vested with a discretion which has to result in justice being done on the facts of each case. But Justice, like Equality, another cardinal constitutional value, on the one hand, and arbitrariness on the other, are sworn enemies. The discretion that a Judge exercises under Order XXXVII to refuse leave to defend or to grant conditional or unconditional leave to defend is a discretion akin to Josephs multi-coloured coat - a large number of baffling alternatives present themselves. The life of the law not being logic but the experience of the trial Judge, is what comes to the rescue in these cases; but at the same time informed by guidelines or principles that we propose to lay down to obviate exercise of judicial discretion in an arbitrary manner. At one end of the spectrum is unconditional leave to defend, granted in all cases which present a substantial defence. At the other end of the spectrum are frivolous or vexatious defences, leading to refusal of leave to defend. In between these two extremes are various kinds of defences raised which yield conditional leave to defend in most cases. It is these defences that have to be guided by broad principles which are ultimately applied by the trial Judge so that justice is done on the facts of each given case.18. Accordingly, the principles stated in paragraph 8 of Mechelecs case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhirams case, asIf the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit;b. if the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend;c. even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendants good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security;d. if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.e. if the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith;f. if any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant incannot be said that the defendant has raised a substantial defence to the claim made in the suit. Arguably at the highest, as held by the learned Single Judge, even if a triable issue may be said to arise on the application of the FEMA Regulations, nevertheless, we are left with a real doubt about the Defendants good faith and the genuineness of such a triable issue. L 418 crores has been stated to be utilized and submerged in a building construction project, with payments under the structured arrangement mentioned above admittedly being made by the concerned parties until 2011, after which payments stopped being made by them. The defence thus raised appears to us to be in the realm of being `plausible but improbable. This being the case, the plaintiff needs to be protected. In our opinion, the defendant will be granted leave to defend the suit only if it deposits in the Bombay High Court the principal sum of L 418 crores invested by FMO, or gives security for the said amount of L 418 crores, to the satisfaction of the Prothonotary and Senior Master, Bombay High Court within a period of three months from today.

### Instruction: Determine the likely decision of the case (acceptance (1) or rejection (0)) and follow up with an explanation highlighting key sentences that support this prediction. ### Input: on the one hand, and arbitrariness on the other, are sworn enemies. The discretion that a Judge exercises under Order XXXVII to refuse leave to defend or to grant conditional or unconditional leave to defend is a discretion akin to Josephs multi-coloured coat - a large number of baffling alternatives present themselves. The life of the law not being logic but the experience of the trial Judge, is what comes to the rescue in these cases; but at the same time informed by guidelines or principles that we propose to lay down to obviate exercise of judicial discretion in an arbitrary manner. At one end of the spectrum is unconditional leave to defend, granted in all cases which present a substantial defence. At the other end of the spectrum are frivolous or vexatious defences, leading to refusal of leave to defend. In between these two extremes are various kinds of defences raised which yield conditional leave to defend in most cases. It is these defences that have to be guided by broad principles which are ultimately applied by the trial Judge so that justice is done on the facts of each given case.18. Accordingly, the principles stated in paragraph 8 of Mechelecs case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhirams case, as follows: a. If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit;b. if the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend;c. even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendants good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security;d. if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.e. if the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith;f. if any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court. 19. Coming to the facts of the present case: a. It is clear that a sum of L 418 crores has been paid by FMO, the Dutch company, to Vinca for purchase of shares as well as compulsorily convertible debentures. This transaction by itself is not alleged to be violative of the FEMA regulations.b. The suit is filed only on invocation of the Corporate Guarantee which on its terms is unconditional. It may be added that it is not the defendants case that the said Corporate Guarantee is wrongly invoked.c. Payment under the said Guarantee is to the debenture trustee, an Indian company, for and on behalf of Vinca, another Indian company, so that prima facie again there is no infraction of the FEMA Regulations.d. Since FMO becomes a 99% holder of Vinca after the requisite time period has elapsed, FMO may at that stage utilise the funds received pursuant to the overall structure agreements in India. If this is so, again prima facie there is no breach of FEMA Regulations.e. At the stage that FMO wishes to repatriate such funds, RBI permission would be necessary. If RBI permission is not granted, then again there would be no infraction of FEMA Regulations.f. The judgment in Immami Appa Raos case would be attracted only if the illegal purpose is fully carried out, and not otherwise. 20. Based on the aforesaid, it cannot be said that the defendant has raised a substantial defence to the claim made in the suit. Arguably at the highest, as held by the learned Single Judge, even if a triable issue may be said to arise on the application of the FEMA Regulations, nevertheless, we are left with a real doubt about the Defendants good faith and the genuineness of such a triable issue. L 418 crores has been stated to be utilized and submerged in a building construction project, with payments under the structured arrangement mentioned above admittedly being made by the concerned parties until 2011, after which payments stopped being made by them. The defence thus raised appears to us to be in the realm of being `plausible but improbable. This being the case, the plaintiff needs to be protected. In our opinion, the defendant will be granted leave to defend the suit only if it deposits in the Bombay High Court the principal sum of L 418 crores invested by FMO, or gives security for the said amount of L 418 crores, to the satisfaction of the Prothonotary and Senior Master, Bombay High Court within a period of three months from today. ### Response: 1 ### Explanation: date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit.(3) The defendant may at any time within ten days from the service of such summons for judgment by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend the suit. Leave to defend may be granted to him unconditionally or upon such terms as to the Judge appear just.It is thus clear that O.XXXVII has suffered a change in 1976, and that change has made a difference in the law laid down. First and foremost, it is important to remember that Milkhirams case is a direct authority on the amended O.XXXVII provision, as the amended provision in O.XXXVII Rule 3 is the same as the Bombay amendment which this Court was considering in the aforesaid judgment. We must hasten to add that the two provisos to sub-rule (3) were not, however, there in the Bombay amendment. These are new, and the effect to be given to them is something that we will have to decide. The position in law now is that the trial Judge is vested with a discretion which has to result in justice being done on the facts of each case. But Justice, like Equality, another cardinal constitutional value, on the one hand, and arbitrariness on the other, are sworn enemies. The discretion that a Judge exercises under Order XXXVII to refuse leave to defend or to grant conditional or unconditional leave to defend is a discretion akin to Josephs multi-coloured coat - a large number of baffling alternatives present themselves. The life of the law not being logic but the experience of the trial Judge, is what comes to the rescue in these cases; but at the same time informed by guidelines or principles that we propose to lay down to obviate exercise of judicial discretion in an arbitrary manner. At one end of the spectrum is unconditional leave to defend, granted in all cases which present a substantial defence. At the other end of the spectrum are frivolous or vexatious defences, leading to refusal of leave to defend. In between these two extremes are various kinds of defences raised which yield conditional leave to defend in most cases. It is these defences that have to be guided by broad principles which are ultimately applied by the trial Judge so that justice is done on the facts of each given case.18. Accordingly, the principles stated in paragraph 8 of Mechelecs case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhirams case, asIf the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit;b. if the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend;c. even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendants good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security;d. if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.e. if the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith;f. if any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant incannot be said that the defendant has raised a substantial defence to the claim made in the suit. Arguably at the highest, as held by the learned Single Judge, even if a triable issue may be said to arise on the application of the FEMA Regulations, nevertheless, we are left with a real doubt about the Defendants good faith and the genuineness of such a triable issue. L 418 crores has been stated to be utilized and submerged in a building construction project, with payments under the structured arrangement mentioned above admittedly being made by the concerned parties until 2011, after which payments stopped being made by them. The defence thus raised appears to us to be in the realm of being `plausible but improbable. This being the case, the plaintiff needs to be protected. In our opinion, the defendant will be granted leave to defend the suit only if it deposits in the Bombay High Court the principal sum of L 418 crores invested by FMO, or gives security for the said amount of L 418 crores, to the satisfaction of the Prothonotary and Senior Master, Bombay High Court within a period of three months from today.

Naresh Kumar Vs. Vith Additional Distt. Judge, Varanasi & Others

for films for the entertainment of railway officers and employees. The management of the club building including auditorium, machinery etc. had been entrusted by the 5th respondent (Eastern Railway Administration) to the 3rd respondent (the Railway Cinema Club) in the year 1982. The auditorium of railway cinema was hired to in favour of the appellant for a period of 5 years for screening feature films. On expiry of this period the 2nd respondent, the estate officer, Eastern Railway, Mughal Sarai initiated proceedings for the eviction of the appellant that on expiry of the contract period he had become an unauthorised occupant. The proceedings were taken under the Public Premises (Eviction of Unauthorised Occupants) Act of 1971, hereinafter referred to as the Act. The estate officer directed eviction after observing due procedure under Section 5 of the Act. Aggrieved by that order of eviction an appeal was preferred to the first respondent (6th Additional District Judge, Varanasi). That appeal was dismissed. Thereafter the appellant challenged the same in Civil Misc. WP No. 15313 of 1988 before the High Court of Allahabad. The learned Single Judge dismissed the petition and upheld the order of eviction. Questioning the correctness of the said judgment the present civil appeal has been preferred. The learned counsel for the appellant raises the following points for our consideration(1) Insofar as the privity of contract is between the appellant and the Railway Cinema Club it will be a contract between two private individuals. In such a case, for evicting the appellant the provisions of the Act cannot be invoked(2) Section 2(e) of the Act defines public premises. When it says "belonging to" it should mean the Central Government must have control over the property. Where it has handed over the property to the Railway Cinema Club which alone had licensed the appellant, it cannot be said that the Government of India (the Railway administration) has control over the property. The meaning of the words "belonging to" had come up for discussion in Raja Mahammad Amir Ahmad Khan v. Municipal Board of Sitapur 1965 AIR(SC) 1923). Even though these words may not convey the meaning of ownership, yet Government must have effective control. This is fortified when the definition under Section 2(ii) in relation to company is looked at2. In All India Rly. Institute Employees Assn. v. Union of India ( 1990 (2) SCC 542 : 1990 SCC(L&S) 323 : 1990 (13) ATC 691 : 1990 AIR(SC) 952) this Court held the employees of such cinema houses are not employees of the Railway. It should follow that the Central Government will have nothing to do with the license in favour of the appellant3. In Ashoka Mktg. Ltd. v. Punjab National Bank ( 1990 (4) SCC 406 ) (On SCC pp. 415 and 417, paras 6 and 9) in upholding the validity of these Acts this Court took the view that the Central Government will not behave as a private landlord. This is one of the ground on which the validity was upheld4. Hence the judgment under appeal amount be sustained. It is true that the appellant had been evicted pursuant to the impugned judgment. Nevertheless these questions need to be gone into because there are proceedings against the appellant questions need to be gone into because there are proceedings against the appellant instituted by the Railway Club under Section 7 of the Act. Should the appellant succeed, the same will be rendered otiose5. We have given our careful consideration to each of the submission made above. We find not one of them tenable. We have already narrated the facts. If admittedly the property belongs to the Union of India, the Railway Cinema Club had been entrusted with the running of the cinema house together with the equipments. It found its running was not a profitable venture. Therefore, by inviting tenders, the offer of the appellant came to be accepted and that was how he became the licensee for a period of five years from 1982 from the Railway Club. After the expiry of the period, the estate invoked the provisions of the Act for evicting the appellant. We are clearly of the view that merely because the Railway Club invited tenders the property did not cease to belong to the Union of India (the Eastern Railway Department). It still had dominion over the property. Advisedly under Section 2(e) Parliament has used the words "belonging to" and not ownership. If, therefore, the Union of India has dominion over the property and if the said property had been entrusted to the Railway Club, by such mere entrustment it does not case to belong to the Union of India. Therefore, the definition under Section 2(e) will apply 6. Raja Mohd. Amir Ahmed Khan v. Municipal Board of Sitapur 1965 AIR(SC) 1923) construed the words "belonging to" in a document while deciding the question whether the lessee had denied the title of the landlord. The construction of a document is wholly different from construing a statutory definition as under Section 2(e). Therefore, that case has no application 7. Merely because in All India Rly. Institute Employees Assn. v. Union of India ( 1990 (2) SCC 542 : 1990 SCC(L&S) 323 : 1990 (13) ATC 691 : 1990 AIR(SC) 952) it was held by a Division Bench of this Court that the employees of railways institute and clubs are not railway employees, it does not follow that the property in dispute here does not belong to the Railways. That ruling again does not advance the case of the appellant 8. We are unable to see as to how the appellant could derive any assistance from Ashoka Mktg. Ltd. v. Punjab National Bank ( 1990 (4) SCC 406 ). This is not a case of the Union of India invoking the provisions as a private landlord would do. On the contrary, it is invoking the provisions of the Act to evict the appellant who is an unauthorised occupant from a public premises which belongs to it.

0[ds]It is true that the appellant had been evicted pursuant to the impugned judgment. Nevertheless these questions need to be gone into because there are proceedings against the appellant questions need to be gone into because there are proceedings against the appellant instituted by the Railway Club under Section 7 of the Act. Should the appellant succeed, the same will be rendered otiose5. We have given our careful consideration to each of the submission made above. We find not one of them tenable. We have already narrated the facts. If admittedly the property belongs to the Union of India, the Railway Cinema Club had been entrusted with the running of the cinema house together with the equipments. It found its running was not a profitable venture. Therefore, by inviting tenders, the offer of the appellant came to be accepted and that was how he became the licensee for a period of five years from 1982 from the Railway Club. After the expiry of the period, the estate invoked the provisions of the Act for evicting the appellant. We are clearly of the view that merely because the Railway Club invited tenders the property did not cease to belong to the Union of India (the Eastern Railway Department). It still had dominion over the property. Advisedly under Section 2(e) Parliament has used the words "belonging to" and not ownership. If, therefore, the Union of India has dominion over the property and if the said property had been entrusted to the Railway Club, by such mere entrustment it does not case to belong to the Union of India. Therefore, the definition under Section 2(e) willWe are unable to see as to how the appellant could derive any assistance from Ashoka Mktg. Ltd. v. Punjab National Bank ( 1990 (4) SCC 406 ). This is not a case of the Union of India invoking the provisions as a private landlord would do. On the contrary, it is invoking the provisions of the Act to evict the appellant who is an unauthorised occupant from a public premises which belongs to it.

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: for films for the entertainment of railway officers and employees. The management of the club building including auditorium, machinery etc. had been entrusted by the 5th respondent (Eastern Railway Administration) to the 3rd respondent (the Railway Cinema Club) in the year 1982. The auditorium of railway cinema was hired to in favour of the appellant for a period of 5 years for screening feature films. On expiry of this period the 2nd respondent, the estate officer, Eastern Railway, Mughal Sarai initiated proceedings for the eviction of the appellant that on expiry of the contract period he had become an unauthorised occupant. The proceedings were taken under the Public Premises (Eviction of Unauthorised Occupants) Act of 1971, hereinafter referred to as the Act. The estate officer directed eviction after observing due procedure under Section 5 of the Act. Aggrieved by that order of eviction an appeal was preferred to the first respondent (6th Additional District Judge, Varanasi). That appeal was dismissed. Thereafter the appellant challenged the same in Civil Misc. WP No. 15313 of 1988 before the High Court of Allahabad. The learned Single Judge dismissed the petition and upheld the order of eviction. Questioning the correctness of the said judgment the present civil appeal has been preferred. The learned counsel for the appellant raises the following points for our consideration(1) Insofar as the privity of contract is between the appellant and the Railway Cinema Club it will be a contract between two private individuals. In such a case, for evicting the appellant the provisions of the Act cannot be invoked(2) Section 2(e) of the Act defines public premises. When it says "belonging to" it should mean the Central Government must have control over the property. Where it has handed over the property to the Railway Cinema Club which alone had licensed the appellant, it cannot be said that the Government of India (the Railway administration) has control over the property. The meaning of the words "belonging to" had come up for discussion in Raja Mahammad Amir Ahmad Khan v. Municipal Board of Sitapur 1965 AIR(SC) 1923). Even though these words may not convey the meaning of ownership, yet Government must have effective control. This is fortified when the definition under Section 2(ii) in relation to company is looked at2. In All India Rly. Institute Employees Assn. v. Union of India ( 1990 (2) SCC 542 : 1990 SCC(L&S) 323 : 1990 (13) ATC 691 : 1990 AIR(SC) 952) this Court held the employees of such cinema houses are not employees of the Railway. It should follow that the Central Government will have nothing to do with the license in favour of the appellant3. In Ashoka Mktg. Ltd. v. Punjab National Bank ( 1990 (4) SCC 406 ) (On SCC pp. 415 and 417, paras 6 and 9) in upholding the validity of these Acts this Court took the view that the Central Government will not behave as a private landlord. This is one of the ground on which the validity was upheld4. Hence the judgment under appeal amount be sustained. It is true that the appellant had been evicted pursuant to the impugned judgment. Nevertheless these questions need to be gone into because there are proceedings against the appellant questions need to be gone into because there are proceedings against the appellant instituted by the Railway Club under Section 7 of the Act. Should the appellant succeed, the same will be rendered otiose5. We have given our careful consideration to each of the submission made above. We find not one of them tenable. We have already narrated the facts. If admittedly the property belongs to the Union of India, the Railway Cinema Club had been entrusted with the running of the cinema house together with the equipments. It found its running was not a profitable venture. Therefore, by inviting tenders, the offer of the appellant came to be accepted and that was how he became the licensee for a period of five years from 1982 from the Railway Club. After the expiry of the period, the estate invoked the provisions of the Act for evicting the appellant. We are clearly of the view that merely because the Railway Club invited tenders the property did not cease to belong to the Union of India (the Eastern Railway Department). It still had dominion over the property. Advisedly under Section 2(e) Parliament has used the words "belonging to" and not ownership. If, therefore, the Union of India has dominion over the property and if the said property had been entrusted to the Railway Club, by such mere entrustment it does not case to belong to the Union of India. Therefore, the definition under Section 2(e) will apply 6. Raja Mohd. Amir Ahmed Khan v. Municipal Board of Sitapur 1965 AIR(SC) 1923) construed the words "belonging to" in a document while deciding the question whether the lessee had denied the title of the landlord. The construction of a document is wholly different from construing a statutory definition as under Section 2(e). Therefore, that case has no application 7. Merely because in All India Rly. Institute Employees Assn. v. Union of India ( 1990 (2) SCC 542 : 1990 SCC(L&S) 323 : 1990 (13) ATC 691 : 1990 AIR(SC) 952) it was held by a Division Bench of this Court that the employees of railways institute and clubs are not railway employees, it does not follow that the property in dispute here does not belong to the Railways. That ruling again does not advance the case of the appellant 8. We are unable to see as to how the appellant could derive any assistance from Ashoka Mktg. Ltd. v. Punjab National Bank ( 1990 (4) SCC 406 ). This is not a case of the Union of India invoking the provisions as a private landlord would do. On the contrary, it is invoking the provisions of the Act to evict the appellant who is an unauthorised occupant from a public premises which belongs to it. ### Response: 0 ### Explanation: It is true that the appellant had been evicted pursuant to the impugned judgment. Nevertheless these questions need to be gone into because there are proceedings against the appellant questions need to be gone into because there are proceedings against the appellant instituted by the Railway Club under Section 7 of the Act. Should the appellant succeed, the same will be rendered otiose5. We have given our careful consideration to each of the submission made above. We find not one of them tenable. We have already narrated the facts. If admittedly the property belongs to the Union of India, the Railway Cinema Club had been entrusted with the running of the cinema house together with the equipments. It found its running was not a profitable venture. Therefore, by inviting tenders, the offer of the appellant came to be accepted and that was how he became the licensee for a period of five years from 1982 from the Railway Club. After the expiry of the period, the estate invoked the provisions of the Act for evicting the appellant. We are clearly of the view that merely because the Railway Club invited tenders the property did not cease to belong to the Union of India (the Eastern Railway Department). It still had dominion over the property. Advisedly under Section 2(e) Parliament has used the words "belonging to" and not ownership. If, therefore, the Union of India has dominion over the property and if the said property had been entrusted to the Railway Club, by such mere entrustment it does not case to belong to the Union of India. Therefore, the definition under Section 2(e) willWe are unable to see as to how the appellant could derive any assistance from Ashoka Mktg. Ltd. v. Punjab National Bank ( 1990 (4) SCC 406 ). This is not a case of the Union of India invoking the provisions as a private landlord would do. On the contrary, it is invoking the provisions of the Act to evict the appellant who is an unauthorised occupant from a public premises which belongs to it.

Mukund Singh Vs. Wazir Singh

Shah, C.J. 1. By the deed dated January 4, 1961 one Harnam Singh made a gift of agricultural land measuring 76 acres 3 bighas in favour of the appellant in appeal. Wazir Singh, respondent to this appeal claiming that he was adopted on July 11, 1947 by Harnam Singh according to Hindu rites and ceremonies challenged the gift of the land which he asserted belonged to the Hindu Joint family of Harnam Singh and himself. The suit filed by Wazir Singh was dismissed by the trial Court. The Court held that Wazir Singh was appointed as heir under the customary law of the Punjab and that he was not adopted according to Hindu rites and ceremonies and on that account Wazir Singh was not competent to challenge the alienation of the gift by Harnam Singh. On appeal, the District Court upheld the claim of Wazir Singh that he was adopted by Harnam Singh according to the Hindu rites and ceremonies and the property which was gifted was part of the coparcenary property and on that account the gift was void. The High Court of Punjab confirmed the decree passed by the District Court. With certificate granted by the High Court, this appeal has been preferred by the appellant. 2. Two contentions are raised in support of the appeal : (i) In reaching his conclusion that the adoption of Wazir Singh was according to Hindu rites and ceremonies, the District Judge misread documentary evidence and ignored the pleadings of the party. (ii) That in any case by virtue of Section 30 of the Hindu Succession Act, 1956 it was not open to Wazir Singh to challenge the gift made by his adoptive father Harnam Singh. 3. The deed of adoption which is executed by Harnam Singh in 1947 states that : "After my death it is necessary that I should have a son to perform any ritual ceremonies. The name of a sonless person vanishes from the mortal world. I have brought up a Wazir son of Mangal, a minor aged 16 years, as a son since his childhood, for the last ten years. Wazirs marriage was also arranged by me and Wazir aforesaid is also looking after me as a natural son. I have adopted Wazir aforesaid, minor son of Mangal, as my son in the presence of the Panchayat, after performing the religious ceremonies. Wazir will be the owner of my property of every kind as my natural son." 4. The recitals in the deed of adoption corroborate the case of Wazir Singh that he was adopted according to Hindu rites and ceremonies in the presence of the Panchayat, and that he was treated as an adopted son. The recitals in the deed are supported by the witnesses examined in the Court of First Instance on behalf of Wazir Singh. Mr. Bishan Narain contended that the District Judge misread the written statement filed by appellant in the Court of first instance and assumed that no plea was raised that the adoption was merely a customary adoption. Granting that a contention was raised that Harnam Singh did not adopt Wazir Singh according to the Hindu rites and ceremonies, the conclusion of the District Judge on appreciation of evidence that the ceremonies of adoption according to Hindu rites were performed, was binding upon the High Court in second appeal. It is conceded, and in our judgment rightly, that a Hindu governed by the customary law in the Punjab is not disentitled to make a formal adoption according to Hindu rites and ceremonies. Harnam Singh could make a customary adoption, he could also make a formal adoption according to Hindu rites and ceremonies. In the present case, the District Judge has found that there was a formal adoption of Wazir Singh according to Hindu rites and ceremonies. That finding was binding upon the High Court sitting in Second appeal. The first contention must, therefore, fail. 5. Section 30 of the Hindu Succession Act provides : "Any Hindu may dispose of by will or other testamentary disposition any property, which is capable of being so disposed of by him, in accordance with the provisions of the Indian Succession Act, 1925, or any other law for the time being in force and applicable to Hindus." "Explanation. - The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a member of a tarwad, tavashi, illom, kutumba or kavaru in the property of the tarwad, tavashi, illom, kutumba or kavaru shall, notwithstanding anything contained in this Act or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this sub-section." 6. Mr. Bishan Narain contended that Section 30 applied not only to disposition by will or other testamentary instruments but also to instruments inter vivos. On the plain terms of Section 30 it is impossible to read Section 30 as applying to disposition inter vivos. Mr. Bishan Narain relied upon Section 13 of the Hindu Adoptions and Maintenance Act of 1964 which reads : "Subject to any agreement to the contrary, an adoption does not deprive the adoptive father or mother of the power to dispose of his or her property by transfer inter vivos or by will."

0[ds]4. The recitals in the deed of adoption corroborate the case of Wazir Singh that he was adopted according to Hindu rites and ceremonies in the presence of the Panchayat, and that he was treated as an adopted son. The recitals in the deed are supported by the witnesses examined in the Court of First Instance on behalf of Wazir SinghIt is conceded, and in our judgment rightly, that a Hindu governed by the customary law in the Punjab is not disentitled to make a formal adoption according to Hindu rites and ceremonies. Harnam Singh could make a customary adoption, he could also make a formal adoption according to Hindu rites and ceremonies. In the present case, the District Judge has found that there was a formal adoption of Wazir Singh according to Hindu rites and ceremonies. That finding was binding upon the High Court sitting in Second appeal. The first contention must, therefore, fail.

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: Shah, C.J. 1. By the deed dated January 4, 1961 one Harnam Singh made a gift of agricultural land measuring 76 acres 3 bighas in favour of the appellant in appeal. Wazir Singh, respondent to this appeal claiming that he was adopted on July 11, 1947 by Harnam Singh according to Hindu rites and ceremonies challenged the gift of the land which he asserted belonged to the Hindu Joint family of Harnam Singh and himself. The suit filed by Wazir Singh was dismissed by the trial Court. The Court held that Wazir Singh was appointed as heir under the customary law of the Punjab and that he was not adopted according to Hindu rites and ceremonies and on that account Wazir Singh was not competent to challenge the alienation of the gift by Harnam Singh. On appeal, the District Court upheld the claim of Wazir Singh that he was adopted by Harnam Singh according to the Hindu rites and ceremonies and the property which was gifted was part of the coparcenary property and on that account the gift was void. The High Court of Punjab confirmed the decree passed by the District Court. With certificate granted by the High Court, this appeal has been preferred by the appellant. 2. Two contentions are raised in support of the appeal : (i) In reaching his conclusion that the adoption of Wazir Singh was according to Hindu rites and ceremonies, the District Judge misread documentary evidence and ignored the pleadings of the party. (ii) That in any case by virtue of Section 30 of the Hindu Succession Act, 1956 it was not open to Wazir Singh to challenge the gift made by his adoptive father Harnam Singh. 3. The deed of adoption which is executed by Harnam Singh in 1947 states that : "After my death it is necessary that I should have a son to perform any ritual ceremonies. The name of a sonless person vanishes from the mortal world. I have brought up a Wazir son of Mangal, a minor aged 16 years, as a son since his childhood, for the last ten years. Wazirs marriage was also arranged by me and Wazir aforesaid is also looking after me as a natural son. I have adopted Wazir aforesaid, minor son of Mangal, as my son in the presence of the Panchayat, after performing the religious ceremonies. Wazir will be the owner of my property of every kind as my natural son." 4. The recitals in the deed of adoption corroborate the case of Wazir Singh that he was adopted according to Hindu rites and ceremonies in the presence of the Panchayat, and that he was treated as an adopted son. The recitals in the deed are supported by the witnesses examined in the Court of First Instance on behalf of Wazir Singh. Mr. Bishan Narain contended that the District Judge misread the written statement filed by appellant in the Court of first instance and assumed that no plea was raised that the adoption was merely a customary adoption. Granting that a contention was raised that Harnam Singh did not adopt Wazir Singh according to the Hindu rites and ceremonies, the conclusion of the District Judge on appreciation of evidence that the ceremonies of adoption according to Hindu rites were performed, was binding upon the High Court in second appeal. It is conceded, and in our judgment rightly, that a Hindu governed by the customary law in the Punjab is not disentitled to make a formal adoption according to Hindu rites and ceremonies. Harnam Singh could make a customary adoption, he could also make a formal adoption according to Hindu rites and ceremonies. In the present case, the District Judge has found that there was a formal adoption of Wazir Singh according to Hindu rites and ceremonies. That finding was binding upon the High Court sitting in Second appeal. The first contention must, therefore, fail. 5. Section 30 of the Hindu Succession Act provides : "Any Hindu may dispose of by will or other testamentary disposition any property, which is capable of being so disposed of by him, in accordance with the provisions of the Indian Succession Act, 1925, or any other law for the time being in force and applicable to Hindus." "Explanation. - The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a member of a tarwad, tavashi, illom, kutumba or kavaru in the property of the tarwad, tavashi, illom, kutumba or kavaru shall, notwithstanding anything contained in this Act or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this sub-section." 6. Mr. Bishan Narain contended that Section 30 applied not only to disposition by will or other testamentary instruments but also to instruments inter vivos. On the plain terms of Section 30 it is impossible to read Section 30 as applying to disposition inter vivos. Mr. Bishan Narain relied upon Section 13 of the Hindu Adoptions and Maintenance Act of 1964 which reads : "Subject to any agreement to the contrary, an adoption does not deprive the adoptive father or mother of the power to dispose of his or her property by transfer inter vivos or by will." ### Response: 0 ### Explanation: 4. The recitals in the deed of adoption corroborate the case of Wazir Singh that he was adopted according to Hindu rites and ceremonies in the presence of the Panchayat, and that he was treated as an adopted son. The recitals in the deed are supported by the witnesses examined in the Court of First Instance on behalf of Wazir SinghIt is conceded, and in our judgment rightly, that a Hindu governed by the customary law in the Punjab is not disentitled to make a formal adoption according to Hindu rites and ceremonies. Harnam Singh could make a customary adoption, he could also make a formal adoption according to Hindu rites and ceremonies. In the present case, the District Judge has found that there was a formal adoption of Wazir Singh according to Hindu rites and ceremonies. That finding was binding upon the High Court sitting in Second appeal. The first contention must, therefore, fail.

M.K. Krishnaswamy Etc Vs. Union Of India & Ors

to class I, grade II post. But in the competitive examination his rank was 122 and since the Government recruited only 33 Income-tax Officers directly that year he could not be accommodated. The Central Government, however, offered him a post in class II, grade III which as we have already stated, he accepted and he joined that post in 1950. In 1951 he made a representation to the Government that he ought to have been appointed in class I, grade II and not in class II grade III. In the reply dated 15-10-1951 he was informed by the Government as follows :".............appointments to Class I service are offered strictly in order of merit upto the number of vacancies available to candidates declared eligible for such appointments by the Union Public Service Commission on the results of the annual combined competitive examinations. As the number of vacancies to be filled on the results of the 1948 examination was less than the number declared eligible on the results of that examination, candidates who though eligible ranked below the number required were not offered appointments to class I Services. In the circumstances, the Government of India are of opinion that there is no ground for legitimate grievance at all."So far as the respondents are concerned the matter was closed in 1951.4. Some 10 years later a direct recruit named Jaisinghani challenged the correctness of the seniority list of Income-tax Officers prepared by the Government. His complaint was that more vacancies were given to the promotees than what they were entitled to under the rules and that by an artificial rule which gave the promotees weightage in seniority his own seniority in the seniority list had been considerably affected. He filed his Writ Petition before the Circuit Bench at Delhi in 1962 and in the course of that litigation the appellant Krishnaswamy learnt that the vacancies in class I, grade II for the year 1950 had been wrongly calculated by the Government and that posts to which the direct recruits ought to have been appointed had been illegally filled by the promotees. He, therefore, made another representation to the Government complaining that he had been wrongly deprived of a post in class I grade II service and that it should now be considered as if he had been appointed in that service from 1950 and given consequential benefits. On this representation also being rejected, Krishnaswamy and the other six appellants who had the same grievance filed separate Writ Petitions in the High Court.5. The respondents raised several contentions including the contention that the claim was stale and belated and that the petitions should be rejected on that ground alone.6. The High Court did not deal with these petitions separately on merits. Jaisinghanis case, (1965-67 Pun LR 981 (FB) ) was before it. It had dismissed Jaisinghanis petition and since it was thought that the appellants cases were cognate cases, the High Court dismissed these petitions also. However, certificates of fitness were given to all, including Jaisinghani, and that is how the appellants are before this Court. It may be stated here that Jaisinghanis case was heard by this Court and disposed of in 1967 (S. G. Jaisinghani v. Union of India, (1967) 2 SCR 703 = (AIR 1967 SC 1427 ).)7. The case of the appellants, as already seen, was not similar to the case of Jaisinghani. Jaisinghani was a direct recruit to class I, grade II service and his complaint was against the seniority list in which he was shown as junior to officers promoted to class I grade II from class II grade III on dates much after his appointment. The appellants had not been recruited to class I, grade II posts. They had been recruited to class II, grade III posts which they need not have accepted. It appears that since some of these persons who had appeared in the competitive examination had failed to obtain an appointment in class I, grade II, Government, out of consideration for them, offered them posts in the lower cadre of class II, grade III and since they accepted the same, there was really an end of the matter. Having entered the service in the lower grade, the appellants are now contending that from facts which came to their notice in 1962 they feel that they ought to have been accommodated in class I, grade II posts and, therefore, they had a right now to be regarded as having been recruited to that class in 1950 and to consequential benefits arising therefrom.8. We do not believe that if the High Court had applied its mind to the facts of these petitions it would have ever entertained such stale claims in service matters. The appellants had accepted the lower grade posts in 1950 and made their representation to the Government in 1951 and that representation had been rejected. Thereafter they served in class II, grade III posts. It may be that in due course they have been promoted to class I, grade II posts and they still continue in the service. We asked learned counsel for the appellants what would have been the position of the appellants if they had not accepted the posts in the lower cadre then? It would have been impossible for them in 1963 to come forward with a claim that they should be deemed to have served in the posts denied to them in 1950. The mere accident that they are in the Income-tax service does not given them a better right. Even for a suit, the cause of action, if any, would have arisen in 1950 and the suit would have been hopelessly time barred in 1963 when the petitions were filed. The plea that they came to know about certain facts in 1962 would have been of no avail in such a suit. We do not, therefore, think that these are fit cases for interference by this Court nearly 22 years after the alleged cause of action had arisen.

0[ds]7. The case of the appellants, as already seen, was not similar to the case of Jaisinghani. Jaisinghani was a direct recruit to class I, grade II service and his complaint was against the seniority list in which he was shown as junior to officers promoted to class I grade II from class II grade III on dates much after his appointment. The appellants had not been recruited to class I, grade II posts. They had been recruited to class II, grade III posts which they need not have accepted. It appears that since some of these persons who had appeared in the competitive examination had failed to obtain an appointment in class I, grade II, Government, out of consideration for them, offered them posts in the lower cadre of class II, grade III and since they accepted the same, there was really an end of the matter. Having entered the service in the lower grade, the appellants are now contending that from facts which came to their notice in 1962 they feel that they ought to have been accommodated in class I, grade II posts and, therefore, they had a right now to be regarded as having been recruited to that class in 1950 and to consequential benefits arising therefrom.8. We do not believe that if the High Court had applied its mind to the facts of these petitions it would have ever entertained such stale claims in service matters. The appellants had accepted the lower grade posts in 1950 and made their representation to the Government in 1951 and that representation had been rejected. Thereafter they served in class II, grade III posts. It may be that in due course they have been promoted to class I, grade II posts and they still continue in the service. We asked learned counsel for the appellants what would have been the position of the appellants if they had not accepted the posts in the lower cadre then? It would have been impossible for them in 1963 to come forward with a claim that they should be deemed to have served in the posts denied to them in 1950. The mere accident that they are in the Income-tax service does not given them a better right. Even for a suit, the cause of action, if any, would have arisen in 1950 and the suit would have been hopelessly time barred in 1963 when the petitions were filed. The plea that they came to know about certain facts in 1962 would have been of no avail in such a suit. We do not, therefore, think that these are fit cases for interference by this Court nearly 22 years after the alleged cause of action had arisen.

### Instruction: Ascertain if the court will uphold (1) or dismiss (0) the appeal in the case proceeding, and then clarify this prediction by discussing critical sentences from the text. ### Input: to class I, grade II post. But in the competitive examination his rank was 122 and since the Government recruited only 33 Income-tax Officers directly that year he could not be accommodated. The Central Government, however, offered him a post in class II, grade III which as we have already stated, he accepted and he joined that post in 1950. In 1951 he made a representation to the Government that he ought to have been appointed in class I, grade II and not in class II grade III. In the reply dated 15-10-1951 he was informed by the Government as follows :".............appointments to Class I service are offered strictly in order of merit upto the number of vacancies available to candidates declared eligible for such appointments by the Union Public Service Commission on the results of the annual combined competitive examinations. As the number of vacancies to be filled on the results of the 1948 examination was less than the number declared eligible on the results of that examination, candidates who though eligible ranked below the number required were not offered appointments to class I Services. In the circumstances, the Government of India are of opinion that there is no ground for legitimate grievance at all."So far as the respondents are concerned the matter was closed in 1951.4. Some 10 years later a direct recruit named Jaisinghani challenged the correctness of the seniority list of Income-tax Officers prepared by the Government. His complaint was that more vacancies were given to the promotees than what they were entitled to under the rules and that by an artificial rule which gave the promotees weightage in seniority his own seniority in the seniority list had been considerably affected. He filed his Writ Petition before the Circuit Bench at Delhi in 1962 and in the course of that litigation the appellant Krishnaswamy learnt that the vacancies in class I, grade II for the year 1950 had been wrongly calculated by the Government and that posts to which the direct recruits ought to have been appointed had been illegally filled by the promotees. He, therefore, made another representation to the Government complaining that he had been wrongly deprived of a post in class I grade II service and that it should now be considered as if he had been appointed in that service from 1950 and given consequential benefits. On this representation also being rejected, Krishnaswamy and the other six appellants who had the same grievance filed separate Writ Petitions in the High Court.5. The respondents raised several contentions including the contention that the claim was stale and belated and that the petitions should be rejected on that ground alone.6. The High Court did not deal with these petitions separately on merits. Jaisinghanis case, (1965-67 Pun LR 981 (FB) ) was before it. It had dismissed Jaisinghanis petition and since it was thought that the appellants cases were cognate cases, the High Court dismissed these petitions also. However, certificates of fitness were given to all, including Jaisinghani, and that is how the appellants are before this Court. It may be stated here that Jaisinghanis case was heard by this Court and disposed of in 1967 (S. G. Jaisinghani v. Union of India, (1967) 2 SCR 703 = (AIR 1967 SC 1427 ).)7. The case of the appellants, as already seen, was not similar to the case of Jaisinghani. Jaisinghani was a direct recruit to class I, grade II service and his complaint was against the seniority list in which he was shown as junior to officers promoted to class I grade II from class II grade III on dates much after his appointment. The appellants had not been recruited to class I, grade II posts. They had been recruited to class II, grade III posts which they need not have accepted. It appears that since some of these persons who had appeared in the competitive examination had failed to obtain an appointment in class I, grade II, Government, out of consideration for them, offered them posts in the lower cadre of class II, grade III and since they accepted the same, there was really an end of the matter. Having entered the service in the lower grade, the appellants are now contending that from facts which came to their notice in 1962 they feel that they ought to have been accommodated in class I, grade II posts and, therefore, they had a right now to be regarded as having been recruited to that class in 1950 and to consequential benefits arising therefrom.8. We do not believe that if the High Court had applied its mind to the facts of these petitions it would have ever entertained such stale claims in service matters. The appellants had accepted the lower grade posts in 1950 and made their representation to the Government in 1951 and that representation had been rejected. Thereafter they served in class II, grade III posts. It may be that in due course they have been promoted to class I, grade II posts and they still continue in the service. We asked learned counsel for the appellants what would have been the position of the appellants if they had not accepted the posts in the lower cadre then? It would have been impossible for them in 1963 to come forward with a claim that they should be deemed to have served in the posts denied to them in 1950. The mere accident that they are in the Income-tax service does not given them a better right. Even for a suit, the cause of action, if any, would have arisen in 1950 and the suit would have been hopelessly time barred in 1963 when the petitions were filed. The plea that they came to know about certain facts in 1962 would have been of no avail in such a suit. We do not, therefore, think that these are fit cases for interference by this Court nearly 22 years after the alleged cause of action had arisen. ### Response: 0 ### Explanation: 7. The case of the appellants, as already seen, was not similar to the case of Jaisinghani. Jaisinghani was a direct recruit to class I, grade II service and his complaint was against the seniority list in which he was shown as junior to officers promoted to class I grade II from class II grade III on dates much after his appointment. The appellants had not been recruited to class I, grade II posts. They had been recruited to class II, grade III posts which they need not have accepted. It appears that since some of these persons who had appeared in the competitive examination had failed to obtain an appointment in class I, grade II, Government, out of consideration for them, offered them posts in the lower cadre of class II, grade III and since they accepted the same, there was really an end of the matter. Having entered the service in the lower grade, the appellants are now contending that from facts which came to their notice in 1962 they feel that they ought to have been accommodated in class I, grade II posts and, therefore, they had a right now to be regarded as having been recruited to that class in 1950 and to consequential benefits arising therefrom.8. We do not believe that if the High Court had applied its mind to the facts of these petitions it would have ever entertained such stale claims in service matters. The appellants had accepted the lower grade posts in 1950 and made their representation to the Government in 1951 and that representation had been rejected. Thereafter they served in class II, grade III posts. It may be that in due course they have been promoted to class I, grade II posts and they still continue in the service. We asked learned counsel for the appellants what would have been the position of the appellants if they had not accepted the posts in the lower cadre then? It would have been impossible for them in 1963 to come forward with a claim that they should be deemed to have served in the posts denied to them in 1950. The mere accident that they are in the Income-tax service does not given them a better right. Even for a suit, the cause of action, if any, would have arisen in 1950 and the suit would have been hopelessly time barred in 1963 when the petitions were filed. The plea that they came to know about certain facts in 1962 would have been of no avail in such a suit. We do not, therefore, think that these are fit cases for interference by this Court nearly 22 years after the alleged cause of action had arisen.

Sambudamurthi Mudaliar Vs. State Of Madras And Anr

succession is regulated by usage. It was said that according to the usage of the temple the trustees were elected for a period of one year each at a meeting of the members of the Sengunatha Mudaliar Community and so the appellant must be held to be a trustee within the meaning of S. 6 (9) of Act 19 of 1951. In our opinion, there is no. warrant for this argument. The phrase regulated by usage in S. 6 (9) of the Act must be construed along with the phrase succession to this office and when so construed that part of the definition would only apply where the ordinary rules of succession under the Hindu Law are moditied by usage and succession has to be determined in accordance with the modified rules. The word succession in relation to property and rights and interests in property generally implies passing of an interest from one person to another (vide in Re. Hindu Womens Right to Property Act 1937, 1941 FCR 12 =(AIR 1941 FC 72). It is now well established that the office of a hereditary trustee is in the nature of property. This is so whether the trustee has a beneficial interest of some sort or not. (see Ganesh Chunder Dhur v. Lal Behary, 63 Ind App 448 = (AIR 1936 PC 318 ) and Bhabatarini v. Ashalata, 70 Ind App 57 = (AIR 1943 PC 89 ). Ordinarily a shebaitship or the office of dharmakarta is vested in the heirs of the founder unless the founder has laid down a special scheme of succession or except when usage or custom to the contrary is proved to exist Mukherjea J., in Angurbala Mullick v. Debabrata Mullick, 1951 SCR 1125 = (AIR 1951 SC 293 ) delivering the judgment of this Court observed : Unless, therefore the founder has disposed of the shebaitship in any particular manner - and this right of disposition is inherent in the founder - or except when usage or custom of a different nature is proved to exist, shebaitship like any other species of heritable property follows the line of inheritance from the founder. In the case of mutts, whose heads are often celibates and sometimes sanyasis, special rules of succession obtain by custom and usage. In Sital Das v. Sort Ram, AIR 1954 SC 606 the law was taken as well settled that succession to mahantship of a mutt or religious institution is regulated by custom or usage of the particular institution except where the rule of succession is laid down by the founder himself who created the endowment In that case the custom in matters of succession to mahantship was that the assembly of bairagis and worshippers of the temple appointed the successor; but the appointment had to be made from the disciples of the deceased mahant if he left any, and failing disciples, any of his spiritual kindred. Such a succession was described as not hereditary in the sense that on the death of an existing mahant, his chela does not succeed to the office as a matter of course, because the successor acquires a right only by appointment and the authority to appoint is vested in the assembly of the bairagis and the worshippers. In Sri Mahant Paramananda Das Goswami v. Radha.krishna Das, 51 MLJ 258 - (AIR 1926 Mad 1012 ), the Madras High Court took the view that where succession to the mahantship is by nomination by the holder in office, it is not a hereditary succession. In that case Venkatasubba Rao, J., said : If the successor owes his title to nomination or appointment, that is, his succession depends on the volition of the last incumbent and does not rest upon independent title. I am inclined to the view that the office cannot be said to be hereditary. Krishnan, J., stated as follows : - Where succession is by nomination by the holder in office of his successor it seems to be impossible to contend that it is a hereditary succession. Hereditary succession is succession by the heir to the deceased under the law, the office must be transmitted to the successor according to some definite rules of descent which by their own force designate the person to succeed. There need be no. blood relationship between the deceased and his successor but the right of the latter should not depend upon the choice of any individual. It is true that the artificial definition of hereditary trustee in Section 6 (9) of the Act would include even such cases. 4. But the election to the office of trustee in the present case is for fixed period of one year and not for life. It is, therefore, difficult to hold that the office of the appellant is hereditary within the meaning of Section 6 (9) of the Act. It is not to say that there is a succession of As office to another when on the efflux of the period for which A was appointed there is a vacancy and B is elected to that vacancy. It is quite possible that for that vacancy A himself might be re-elected because a retiring trustee is eligible for re-election. The possibility of A being the successor of A himself is not merely an anomaly, it is an impossible legal position. No. man can succeed to his own office. In Blacks Law Dictionary the word succession is defined as follows : - The devolution of title to property under the law of descent and distribution. The right by which one set of men may, by succeeding another set, acquire a property in all the goods, movables, and other chattles of a corporation. The fact of the transmission of the rights estates, obligations and charges of a deceased person to his heir or heirs. The view we have taken is borne out by the reasoning of the Madras High Court in state of Madras v. Ramakrishna, ILR (1957) Mad 1084 = (AIR 1957 Mad 758 ).

0[ds]The definition includes three types of cases :(1) succession to the office of trusteeship devolving by hereditary right;(2) succession to such office being regulated by usage; and(3) succession being specifically provided for by the founder on condition that the scheme of such succession is still in force.It is not the case of the appellant that the trustees of the temple of the Kumaran Koil are hereditary trustees because their office devolves by hereditary right or because succession to that office is specifically provided for by the founderIn our opinion, there is no. warrant for this argument. The phrase regulated by usage in S. 6 (9) of the Act must be construed along with the phrase succession to this office and when so construed that part of the definition would only apply where the ordinary rules of succession under the Hindu Law are moditied by usage and succession has to be determined in accordance with the modified rules. The word succession in relation to property and rights and interests in property generally implies passing of an interest from one person to another (vide in Re. Hindu Womens Right to Property Act 1937, 1941 FCR 12 =(AIR 1941 FC 72). It is now well established that the office of a hereditary trustee is in the nature of property. This is so whether the trustee has a beneficial interest of some sort or not. (see Ganesh Chunder Dhur v. Lal Behary, 63 Ind App 448 = (AIR 1936 PC 318 ) and Bhabatarini v. Ashalata, 70 Ind App 57 = (AIR 1943 PC 89 ). Ordinarily a shebaitship or the office of dharmakarta is vested in the heirs of the founder unless the founder has laid down a special scheme of succession or except when usage or custom to the contrary is proved to existIt is true that the artificial definition of hereditary trustee in Section 6 (9) of the Act would include even such cases4. But the election to the office of trustee in the present case is for fixed period of one year and not for life. It is, therefore, difficult to hold that the office of the appellant is hereditary within the meaning of Section 6 (9) of the Act. It is not to say that there is a succession of As office to another when on the efflux of the period for which A was appointed there is a vacancy and B is elected to that vacancy. It is quite possible that for that vacancy A himself might be re-elected because a retiring trustee is eligible for re-election. The possibility of A being the successor of A himself is not merely an anomaly, it is an impossible legal position. No. man can succeed to his own officeThe view we have taken is borne out by the reasoning of the Madras High Court in state of Madras v. Ramakrishna, ILR (1957) Mad 1084 = (AIR 1957 Mad 758 ).

### Instruction: Forecast the likely verdict of the case (granting (1) or denying (0) the appeal) and then rationalize your prediction by pinpointing and explaining pivotal sentences in the case document. ### Input: succession is regulated by usage. It was said that according to the usage of the temple the trustees were elected for a period of one year each at a meeting of the members of the Sengunatha Mudaliar Community and so the appellant must be held to be a trustee within the meaning of S. 6 (9) of Act 19 of 1951. In our opinion, there is no. warrant for this argument. The phrase regulated by usage in S. 6 (9) of the Act must be construed along with the phrase succession to this office and when so construed that part of the definition would only apply where the ordinary rules of succession under the Hindu Law are moditied by usage and succession has to be determined in accordance with the modified rules. The word succession in relation to property and rights and interests in property generally implies passing of an interest from one person to another (vide in Re. Hindu Womens Right to Property Act 1937, 1941 FCR 12 =(AIR 1941 FC 72). It is now well established that the office of a hereditary trustee is in the nature of property. This is so whether the trustee has a beneficial interest of some sort or not. (see Ganesh Chunder Dhur v. Lal Behary, 63 Ind App 448 = (AIR 1936 PC 318 ) and Bhabatarini v. Ashalata, 70 Ind App 57 = (AIR 1943 PC 89 ). Ordinarily a shebaitship or the office of dharmakarta is vested in the heirs of the founder unless the founder has laid down a special scheme of succession or except when usage or custom to the contrary is proved to exist Mukherjea J., in Angurbala Mullick v. Debabrata Mullick, 1951 SCR 1125 = (AIR 1951 SC 293 ) delivering the judgment of this Court observed : Unless, therefore the founder has disposed of the shebaitship in any particular manner - and this right of disposition is inherent in the founder - or except when usage or custom of a different nature is proved to exist, shebaitship like any other species of heritable property follows the line of inheritance from the founder. In the case of mutts, whose heads are often celibates and sometimes sanyasis, special rules of succession obtain by custom and usage. In Sital Das v. Sort Ram, AIR 1954 SC 606 the law was taken as well settled that succession to mahantship of a mutt or religious institution is regulated by custom or usage of the particular institution except where the rule of succession is laid down by the founder himself who created the endowment In that case the custom in matters of succession to mahantship was that the assembly of bairagis and worshippers of the temple appointed the successor; but the appointment had to be made from the disciples of the deceased mahant if he left any, and failing disciples, any of his spiritual kindred. Such a succession was described as not hereditary in the sense that on the death of an existing mahant, his chela does not succeed to the office as a matter of course, because the successor acquires a right only by appointment and the authority to appoint is vested in the assembly of the bairagis and the worshippers. In Sri Mahant Paramananda Das Goswami v. Radha.krishna Das, 51 MLJ 258 - (AIR 1926 Mad 1012 ), the Madras High Court took the view that where succession to the mahantship is by nomination by the holder in office, it is not a hereditary succession. In that case Venkatasubba Rao, J., said : If the successor owes his title to nomination or appointment, that is, his succession depends on the volition of the last incumbent and does not rest upon independent title. I am inclined to the view that the office cannot be said to be hereditary. Krishnan, J., stated as follows : - Where succession is by nomination by the holder in office of his successor it seems to be impossible to contend that it is a hereditary succession. Hereditary succession is succession by the heir to the deceased under the law, the office must be transmitted to the successor according to some definite rules of descent which by their own force designate the person to succeed. There need be no. blood relationship between the deceased and his successor but the right of the latter should not depend upon the choice of any individual. It is true that the artificial definition of hereditary trustee in Section 6 (9) of the Act would include even such cases. 4. But the election to the office of trustee in the present case is for fixed period of one year and not for life. It is, therefore, difficult to hold that the office of the appellant is hereditary within the meaning of Section 6 (9) of the Act. It is not to say that there is a succession of As office to another when on the efflux of the period for which A was appointed there is a vacancy and B is elected to that vacancy. It is quite possible that for that vacancy A himself might be re-elected because a retiring trustee is eligible for re-election. The possibility of A being the successor of A himself is not merely an anomaly, it is an impossible legal position. No. man can succeed to his own office. In Blacks Law Dictionary the word succession is defined as follows : - The devolution of title to property under the law of descent and distribution. The right by which one set of men may, by succeeding another set, acquire a property in all the goods, movables, and other chattles of a corporation. The fact of the transmission of the rights estates, obligations and charges of a deceased person to his heir or heirs. The view we have taken is borne out by the reasoning of the Madras High Court in state of Madras v. Ramakrishna, ILR (1957) Mad 1084 = (AIR 1957 Mad 758 ). ### Response: 0 ### Explanation: The definition includes three types of cases :(1) succession to the office of trusteeship devolving by hereditary right;(2) succession to such office being regulated by usage; and(3) succession being specifically provided for by the founder on condition that the scheme of such succession is still in force.It is not the case of the appellant that the trustees of the temple of the Kumaran Koil are hereditary trustees because their office devolves by hereditary right or because succession to that office is specifically provided for by the founderIn our opinion, there is no. warrant for this argument. The phrase regulated by usage in S. 6 (9) of the Act must be construed along with the phrase succession to this office and when so construed that part of the definition would only apply where the ordinary rules of succession under the Hindu Law are moditied by usage and succession has to be determined in accordance with the modified rules. The word succession in relation to property and rights and interests in property generally implies passing of an interest from one person to another (vide in Re. Hindu Womens Right to Property Act 1937, 1941 FCR 12 =(AIR 1941 FC 72). It is now well established that the office of a hereditary trustee is in the nature of property. This is so whether the trustee has a beneficial interest of some sort or not. (see Ganesh Chunder Dhur v. Lal Behary, 63 Ind App 448 = (AIR 1936 PC 318 ) and Bhabatarini v. Ashalata, 70 Ind App 57 = (AIR 1943 PC 89 ). Ordinarily a shebaitship or the office of dharmakarta is vested in the heirs of the founder unless the founder has laid down a special scheme of succession or except when usage or custom to the contrary is proved to existIt is true that the artificial definition of hereditary trustee in Section 6 (9) of the Act would include even such cases4. But the election to the office of trustee in the present case is for fixed period of one year and not for life. It is, therefore, difficult to hold that the office of the appellant is hereditary within the meaning of Section 6 (9) of the Act. It is not to say that there is a succession of As office to another when on the efflux of the period for which A was appointed there is a vacancy and B is elected to that vacancy. It is quite possible that for that vacancy A himself might be re-elected because a retiring trustee is eligible for re-election. The possibility of A being the successor of A himself is not merely an anomaly, it is an impossible legal position. No. man can succeed to his own officeThe view we have taken is borne out by the reasoning of the Madras High Court in state of Madras v. Ramakrishna, ILR (1957) Mad 1084 = (AIR 1957 Mad 758 ).

J.Samuel Vs. Gattu Mhesh

11) As stated earlier, in the present case, the amendment application itself was filed only on 24.09.2010 after the arguments were completed and the matter was posted for judgment on 04.10.2010. On proper interpretation of proviso to Rule 17 of Order VI, the party has to satisfy the Court that he could not have discovered that ground which was pleaded by amendment, in spite of due diligence. No doubt, Rule 17 confers power on the court to amend the pleadings at any stage of the proceedings. However, proviso restricts that power once the trial has commenced. Unless the Court satisfies that there is a reasonable cause for allowing the amendment normally the court has to reject such request. An argument was advanced that since in the legal notice sent before filing of the suit, there is reference to readiness and willingness and the plaintiff has also led in evidence, nothing precluded the court from entertaining the said application with which we are unable to accept in the light of Section 16(c) of the Specific Relief Act as well as proviso to Order VI Rule 17. The only reason stated so in the form of an affidavit is omission by “type mistake”. Admittedly, it is not an omission to mention a word or an arithmetical number. The omission is with reference to specific plea which is mandated in terms of Section 16(c) of the Specific Relief Act. 12) The primary aim of the court is to try the case on its merits and ensure that the rule of justice prevails. For this the need is for the true facts of the case to be placed before the court so that the court has access to all the relevant information in coming to its decision. Therefore, at times it is required to permit parties to amend their plaints. The Courts discretion to grant permission for a party to amend his pleading lies on two conditions, firstly, no injustice must be done to the other side and secondly, the amendment must be necessary for the purpose of determining the real question in controversy between the parties. However to balance the interests of the parties in pursuit of doing justice, the proviso has been added which clearly states that: no application for amendment shall be allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial. 13) Due diligence is the idea that reasonable investigation is necessary before certain kinds of relief are requested. Duly diligent efforts are a requirement for a party seeking to use the adjudicatory mechanism to attain an anticipated relief. An advocate representing someone must engage in due diligence to determine that the representations made are factually accurate and sufficient. The term `Due diligence is specifically used in the Code so as to provide a test for determining whether to exercise the discretion in situations of requested amendment after the commencement of trial. 14) A party requesting a relief stemming out of a claim is required to exercise due diligence and is a requirement which cannot be dispensed with. The term “due diligence” determines the scope of a partys constructive knowledge, claim and is very critical to the outcome of the suit. 15) In the given facts, there is a clear lack of `due diligence and the mistake committed certainly does not come within the preview of a typographical error. The term typographical error is defined as a mistake made in the printed/typed material during a printing/typing process. The term includes errors due to mechanical failure or slips of the hand or finger, but usually excludes errors of ignorance. Therefore the act of neglecting to perform an action which one has an obligation to do cannot be called as a typographical error. As a consequence the plea of typographical error cannot be entertained in this regard since the situation is of lack of due diligence wherein such amendment is impliedly barred under the Code.16) The claim of typographical error/mistake is baseless and cannot be accepted. In fact, had the person who prepared the plaint, signed and verified the plaint showed some attention, this omission could have been noticed and rectified there itself. In such circumstances, it cannot be construed that due diligence was adhered to and in any event, omission of mandatory requirement running into 3 to 4 sentences cannot be a typographical error as claimed by the plaintiffs. All these aspects have been rightly considered and concluded by the trial court and the High Court has committed an error in accepting the explanation that it was a typographical error to mention and it was an accidental slip. Though the counsel for the appellants have cited many decisions, on perusal, we are of the view that some of those cases have been decided prior to the insertion of Order VI Rule 17 with proviso or on the peculiar facts of that case. This Court in various decisions upheld the power that in deserving cases, the Court can allow delayed amendment by compensating the other side by awarding costs. The entire object of the amendment to Order VI Rule 17 as introduced in 2002 is to stall filing of application for amending a pleading subsequent to the commencement of trial, to avoid surprises and that the parties had sufficient knowledge of others case. It also helps checking the delays in filing the applications. [vide Aniglase Yohannan vs. Ramlatha and Others, (2005) 7 SCC 534 , Ajendraprasadji N. Pandey and Another vs. Swami Keshavprakeshdasji N. and Others, Chander Kanta Bansal vs. Rajinder Singh Anand, (2008) 5 SCC 117 , Rajkumar Guraward (dead) through LRS. vs. S.K.Sarwagi and Company Private Limited and Another, (2008) 14 SCC 364 , Vidyabai and Others vs. Padmalatha and Another, (2009) 2 SCC 409 , Man Kaur (dead) By LRS vs. Hartar Singh Sangha, (2010) 10 SCC 512. 17) In the light of the above discussion, we

1[ds]15) In the given facts, there is a clear lack of `due diligence and the mistake committed certainly does not come within the preview of a typographical error. The term typographical error is defined as a mistake made in the printed/typed material during a printing/typing process. The term includes errors due to mechanical failure or slips of the hand or finger, but usually excludes errors of ignorance. Therefore the act of neglecting to perform an action which one has an obligation to do cannot be called as a typographical error. As a consequence the plea of typographical error cannot be entertained in this regard since the situation is of lack of due diligence wherein such amendment is impliedly barred under the Code.16) The claim of typographical error/mistake is baseless and cannot be accepted. In fact, had the person who prepared the plaint, signed and verified the plaint showed some attention, this omission could have been noticed and rectified there itself. In such circumstances, it cannot be construed that due diligence was adhered to and in any event, omission of mandatory requirement running into 3 to 4 sentences cannot be a typographical error as claimed by the plaintiffs. All these aspects have been rightly considered and concluded by the trial court and the High Court has committed an error in accepting the explanation that it was a typographical error to mention and it was an accidental slip. Though the counsel for the appellants have cited many decisions, on perusal, we are of the view that some of those cases have been decided prior to the insertion of Order VI Rule 17 with proviso or on the peculiar facts of that case. This Court in various decisions upheld the power that in deserving cases, the Court can allow delayed amendment by compensating the other side by awarding costs. The entire object of the amendment to Order VI Rule 17 as introduced in 2002 is to stall filing of application for amending a pleading subsequent to the commencement of trial, to avoid surprises and that the parties had sufficient knowledge of others case. It also helps checking the delays in filing the applications.

### Instruction: Predict the outcome of the case proceeding (1 for acceptance, 0 for rejection) and subsequently provide an explanation based on significant sentences in the proceeding. ### Input: 11) As stated earlier, in the present case, the amendment application itself was filed only on 24.09.2010 after the arguments were completed and the matter was posted for judgment on 04.10.2010. On proper interpretation of proviso to Rule 17 of Order VI, the party has to satisfy the Court that he could not have discovered that ground which was pleaded by amendment, in spite of due diligence. No doubt, Rule 17 confers power on the court to amend the pleadings at any stage of the proceedings. However, proviso restricts that power once the trial has commenced. Unless the Court satisfies that there is a reasonable cause for allowing the amendment normally the court has to reject such request. An argument was advanced that since in the legal notice sent before filing of the suit, there is reference to readiness and willingness and the plaintiff has also led in evidence, nothing precluded the court from entertaining the said application with which we are unable to accept in the light of Section 16(c) of the Specific Relief Act as well as proviso to Order VI Rule 17. The only reason stated so in the form of an affidavit is omission by “type mistake”. Admittedly, it is not an omission to mention a word or an arithmetical number. The omission is with reference to specific plea which is mandated in terms of Section 16(c) of the Specific Relief Act. 12) The primary aim of the court is to try the case on its merits and ensure that the rule of justice prevails. For this the need is for the true facts of the case to be placed before the court so that the court has access to all the relevant information in coming to its decision. Therefore, at times it is required to permit parties to amend their plaints. The Courts discretion to grant permission for a party to amend his pleading lies on two conditions, firstly, no injustice must be done to the other side and secondly, the amendment must be necessary for the purpose of determining the real question in controversy between the parties. However to balance the interests of the parties in pursuit of doing justice, the proviso has been added which clearly states that: no application for amendment shall be allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial. 13) Due diligence is the idea that reasonable investigation is necessary before certain kinds of relief are requested. Duly diligent efforts are a requirement for a party seeking to use the adjudicatory mechanism to attain an anticipated relief. An advocate representing someone must engage in due diligence to determine that the representations made are factually accurate and sufficient. The term `Due diligence is specifically used in the Code so as to provide a test for determining whether to exercise the discretion in situations of requested amendment after the commencement of trial. 14) A party requesting a relief stemming out of a claim is required to exercise due diligence and is a requirement which cannot be dispensed with. The term “due diligence” determines the scope of a partys constructive knowledge, claim and is very critical to the outcome of the suit. 15) In the given facts, there is a clear lack of `due diligence and the mistake committed certainly does not come within the preview of a typographical error. The term typographical error is defined as a mistake made in the printed/typed material during a printing/typing process. The term includes errors due to mechanical failure or slips of the hand or finger, but usually excludes errors of ignorance. Therefore the act of neglecting to perform an action which one has an obligation to do cannot be called as a typographical error. As a consequence the plea of typographical error cannot be entertained in this regard since the situation is of lack of due diligence wherein such amendment is impliedly barred under the Code.16) The claim of typographical error/mistake is baseless and cannot be accepted. In fact, had the person who prepared the plaint, signed and verified the plaint showed some attention, this omission could have been noticed and rectified there itself. In such circumstances, it cannot be construed that due diligence was adhered to and in any event, omission of mandatory requirement running into 3 to 4 sentences cannot be a typographical error as claimed by the plaintiffs. All these aspects have been rightly considered and concluded by the trial court and the High Court has committed an error in accepting the explanation that it was a typographical error to mention and it was an accidental slip. Though the counsel for the appellants have cited many decisions, on perusal, we are of the view that some of those cases have been decided prior to the insertion of Order VI Rule 17 with proviso or on the peculiar facts of that case. This Court in various decisions upheld the power that in deserving cases, the Court can allow delayed amendment by compensating the other side by awarding costs. The entire object of the amendment to Order VI Rule 17 as introduced in 2002 is to stall filing of application for amending a pleading subsequent to the commencement of trial, to avoid surprises and that the parties had sufficient knowledge of others case. It also helps checking the delays in filing the applications. [vide Aniglase Yohannan vs. Ramlatha and Others, (2005) 7 SCC 534 , Ajendraprasadji N. Pandey and Another vs. Swami Keshavprakeshdasji N. and Others, Chander Kanta Bansal vs. Rajinder Singh Anand, (2008) 5 SCC 117 , Rajkumar Guraward (dead) through LRS. vs. S.K.Sarwagi and Company Private Limited and Another, (2008) 14 SCC 364 , Vidyabai and Others vs. Padmalatha and Another, (2009) 2 SCC 409 , Man Kaur (dead) By LRS vs. Hartar Singh Sangha, (2010) 10 SCC 512. 17) In the light of the above discussion, we ### Response: 1 ### Explanation: 15) In the given facts, there is a clear lack of `due diligence and the mistake committed certainly does not come within the preview of a typographical error. The term typographical error is defined as a mistake made in the printed/typed material during a printing/typing process. The term includes errors due to mechanical failure or slips of the hand or finger, but usually excludes errors of ignorance. Therefore the act of neglecting to perform an action which one has an obligation to do cannot be called as a typographical error. As a consequence the plea of typographical error cannot be entertained in this regard since the situation is of lack of due diligence wherein such amendment is impliedly barred under the Code.16) The claim of typographical error/mistake is baseless and cannot be accepted. In fact, had the person who prepared the plaint, signed and verified the plaint showed some attention, this omission could have been noticed and rectified there itself. In such circumstances, it cannot be construed that due diligence was adhered to and in any event, omission of mandatory requirement running into 3 to 4 sentences cannot be a typographical error as claimed by the plaintiffs. All these aspects have been rightly considered and concluded by the trial court and the High Court has committed an error in accepting the explanation that it was a typographical error to mention and it was an accidental slip. Though the counsel for the appellants have cited many decisions, on perusal, we are of the view that some of those cases have been decided prior to the insertion of Order VI Rule 17 with proviso or on the peculiar facts of that case. This Court in various decisions upheld the power that in deserving cases, the Court can allow delayed amendment by compensating the other side by awarding costs. The entire object of the amendment to Order VI Rule 17 as introduced in 2002 is to stall filing of application for amending a pleading subsequent to the commencement of trial, to avoid surprises and that the parties had sufficient knowledge of others case. It also helps checking the delays in filing the applications.

SOMESH THAPLIYAL & ANR. ETC Vs. VICE CHANCELLOR, H.N.B. GARHWAL UNIVERSITY & ANR

been prescribed by the PCI are not being fulfilled or the procedure of selection contemplated under the Act 2009 vary from the provision of the Act 1973 or either of them is ineligible in holding the teaching post. 40. The solitary objection of the learned counsel for the respondents throughout is that the Department of Pharmaceutical Sciences in the first instance was a self-finance scheme as provided under Section 2(18) of the Act 1973 and all the teaching posts although being created with the approval of the Government but was financed by the University and that being so, no right could be conferred to the appellants and that was the reason the appointments were made on contractual basis for a limited period. 41. It counters by a recent communication made by the respondent University by its letter dated 14th August, 2020, University Grants Commission has been informed that the faculty members of the Department of Pharmaceutical Sciences are working against the sanctioned posts from time to time in compliance to the norms of AICTE/PCI and are appointed as per the required qualification and procedure of selection as provided under the Act 1973 have recommended that they may be treated as the filled up positions with the aforesaid incumbents not only in accordance with the provisions of the Act 1973 but also as per the Act 2009. 42. The submissions of the learned counsel for the respondents that the appellants have accepted the terms and conditions contained in the letter of appointment deserves rejection for the reason that it is not open for a person appointed in public employment to ordinary choose the terms and conditions of which he is required to serve. It goes without saying that employer is always in a dominating position and it is open to the employer to dictate the terms of employment. The employee who is at the receiving end can hardly complain of arbitrariness in the terms and conditions of employment. This Court can take judicial notice of the fact that if an employee takes initiation in questioning the terms and conditions of employment, that would cost his/her job itself. 43. The bargaining power is vested with the employer itself and the employee is left with no option but to accept the conditions dictated by the authority. If that being the reason, it is open for the employee to challenge the conditions if it is not being in conformity with the statutory requirement under the law and he is not estopped from questioning at a stage where he finds himself aggrieved. 44. In the instant case, they lodged the protest petition and brought their grievance to the notice of the respondents but were unable to question except to pray the almighty to consider their grievance sympathetically. 45. The term substantive appointment is not so defined in the legal dictionary but has been referred in the service jurisprudence by the recruiting authority while framing Rules under Article 309 of the Constitution and what being termed as substantive appointment can be gathered from U.P. Sales tax Officers (Grade II) Service Rules, 1983. The relevant extract is as under:- Substantive appointment means an appointment, not being an ad hoc appointment, on a post in the cadre of the service made after selection in accordance with the rules and, if there are no rules in accordance with the procedure prescribed for the time being by executive instructions, issued by the Government. 46. The definition of substantive appointment can further be noticed under Rajasthan Administrative Service Rules, 1954 as under:- 4(n)- Substantive Appointment means an appointment made under the provisions of these Rules to a substantive vacancy after due selection by any of the methods of recruitment prescribed under these Rules and includes an appointment on probation or as a probationer followed by confirmation on the completion of the probationary period. 47. Almost similar nature of rule is available in the services where the recruiting authority has defined what is held as substantive appointment under the Recruitment Rules framed under Article 309 of the Constitution and this clearly defines that an appointment made in accordance with the scheme of Rules are held to be substantive appointment. 48. Adverting to the facts of the case, undisputedly, the appellants were appointed pursuant to an advertisement dated 4th February, 2004 and 19th May, 2006 held for regular selection and after going through the process of selection as being provided under Chapter VI of the Act 1973 and on the recommendations been made by the statutory selection committee, constituted under Section 31(1) and (4) of the Act and approved by the executive council, which is a statutory authority, appointments were made in the year 2004 and 2007 respectively. 49. In our considered view, once the appellants have gone through the process of selection provided under the scheme of the Act 1973 regardless of the fact whether the post is temporary or permanent in nature, at least their appointment is substantive in character and could be made permanent as and when the post is permanently sanctioned by the competent authority. 50. In the instant case, after the teaching posts in the Department of Pharmaceutical Sciences have been duly sanctioned and approved by the University Grants Commission of which a detailed reference has been made, supported by the letter sent to the University Grants Commission dated 14th August, 2020 indicating the fact that the present appellants are working against the teaching posts of Associate Professor/Assistant Professor sanctioned in compliance of the norms of the AICTE/PCI and are appointed as per the requirements, qualifications and selection procedure in accordance with the Act 1973 and proposed by the University, such incumbents shall be treated to be appointed against the sanctioned posts for all practical purposes. 51. Thus, it can safely be held that the appellants became entitled to claim their appointment to be in substantive capacity against the permanent sanctioned post and become a member of the teaching faculty of the Central University under the Act 2009.

1[ds]37. From the narration of facts as being referred to supra, it clearly manifests that the appellants were appointed after going through the process of selection as contemplated under Part VI of the Act 1973 which indeed was an appointment on substantive basis and since the appellants were not in an equal bargaining position and were in the need of employment when the offer of appointment was made, left with no option but to accept such arbitrary conditions incorporated in the letter of appointment in treating it to be contractual for a limited period still recorded their protest while joining but no heed was paid. When they were allowed to continue by extending their services, they remained under the bonafide belief that as their appointment is being substantive in character, they will be made permanent/confirmed immediately after the permanent posts are sanctioned in the Department of Pharmaceutical Sciences but to their dismay, after an advertisement dated 29th August, 2011 came to be notified by the respondent Central University, no option was left with them but to approach the High Court by filing of a writ petition.38. If we look at the scheme of the Act 2009 which came into force from 15th January, 2009, HNB Garhwal University is converted to a Central University under the Act 2009 and it took over the assets and liabilities of the University created under the Act 1973, protecting the rights and interests of the persons employed in the University before the creation of a Central University in terms of Section 4(d) of the Act.39. It is not the case of the respondents that the appellants who were appointed pursuant to an advertisement dated 4th February, 2004/19th May, 2006 have not gone through the procedure prescribed under Chapter VI of the Act or the appointments were made in contravention to the provisions of the Act, 1973. At the same time, it is also not the case of the respondents that any of the appellant either do not fulfil the conditions of eligibility as being prescribed for holding the teaching post in the Central University created under the Act 2009 or the conditions which have been prescribed by the PCI are not being fulfilled or the procedure of selection contemplated under the Act 2009 vary from the provision of the Act 1973 or either of them is ineligible in holding the teaching post.41. It counters by a recent communication made by the respondent University by its letter dated 14th August, 2020,has been informed that the faculty members of the Department of Pharmaceutical Sciences are working against the sanctioned posts from time to time in compliance to the norms of AICTE/PCI and are appointed as per the required qualification and procedure of selection as provided under the Act 1973 have recommended that they may be treated as the filled up positions with the aforesaid incumbents not only in accordance with the provisions of the Act 1973 but also as per the Act 2009.42. The submissions of the learned counsel for the respondents that the appellants have accepted the terms and conditions contained in the letter of appointment deserves rejection for the reason that it is not open for a person appointed in public employment to ordinary choose the terms and conditions of which he is required to serve. It goes without saying that employer is always in a dominating position and it is open to the employer to dictate the terms of employment. The employee who is at the receiving end can hardly complain of arbitrariness in the terms and conditions of employment. This Court can take judicial notice of the fact that if an employee takes initiation in questioning the terms and conditions of employment, that would cost his/her job itself.44. In the instant case, they lodged the protest petition and brought their grievance to the notice of the respondents but were unable to question except to pray the almighty to consider their grievance sympathetically.47. Almost similar nature of rule is available in the services where the recruiting authority has defined what is held as substantive appointment under the Recruitment Rules framed under Article 309 of the Constitution and this clearly defines that an appointment made in accordance with the scheme of Rules are held to be substantive appointment.48. Adverting to the facts of the case, undisputedly, the appellants were appointed pursuant to an advertisement dated 4th February, 2004 and 19th May, 2006 held for regular selection and after going through the process of selection as being provided under Chapter VI of the Act 1973 and on the recommendations been made by the statutory selection committee, constituted under(4) of the Act and approved by the executive council, which is a statutory authority, appointments were made in the year 2004 and 2007 respectively.49. In our considered view, once the appellants have gone through the process of selection provided under the scheme of the Act 1973 regardless of the fact whether the post is temporary or permanent in nature, at least their appointment is substantive in character and could be made permanent as and when the post is permanently sanctioned by the competent authority.50. In the instant case, after the teaching posts in the Department of Pharmaceutical Sciences have been duly sanctioned and approved by theof which a detailed reference has been made, supported by the letter sent to thedated 14th August, 2020 indicating the fact that the present appellants are working against the teaching posts of Associate Professor/Assistant Professor sanctioned in compliance of the norms of the AICTE/PCI and are appointed as per the requirements, qualifications and selection procedure in accordance with the Act 1973 and proposed by the University, such incumbents shall be treated to be appointed against the sanctioned posts for all practical purposes.51. Thus, it can safely be held that the appellants became entitled to claim their appointment to be in substantive capacity against the permanent sanctioned post and become a member of the teaching faculty of the Central University under the Act 2009.

### Instruction: Ascertain if the court will uphold (1) or dismiss (0) the appeal in the case proceeding, and then clarify this prediction by discussing critical sentences from the text. ### Input: been prescribed by the PCI are not being fulfilled or the procedure of selection contemplated under the Act 2009 vary from the provision of the Act 1973 or either of them is ineligible in holding the teaching post. 40. The solitary objection of the learned counsel for the respondents throughout is that the Department of Pharmaceutical Sciences in the first instance was a self-finance scheme as provided under Section 2(18) of the Act 1973 and all the teaching posts although being created with the approval of the Government but was financed by the University and that being so, no right could be conferred to the appellants and that was the reason the appointments were made on contractual basis for a limited period. 41. It counters by a recent communication made by the respondent University by its letter dated 14th August, 2020, University Grants Commission has been informed that the faculty members of the Department of Pharmaceutical Sciences are working against the sanctioned posts from time to time in compliance to the norms of AICTE/PCI and are appointed as per the required qualification and procedure of selection as provided under the Act 1973 have recommended that they may be treated as the filled up positions with the aforesaid incumbents not only in accordance with the provisions of the Act 1973 but also as per the Act 2009. 42. The submissions of the learned counsel for the respondents that the appellants have accepted the terms and conditions contained in the letter of appointment deserves rejection for the reason that it is not open for a person appointed in public employment to ordinary choose the terms and conditions of which he is required to serve. It goes without saying that employer is always in a dominating position and it is open to the employer to dictate the terms of employment. The employee who is at the receiving end can hardly complain of arbitrariness in the terms and conditions of employment. This Court can take judicial notice of the fact that if an employee takes initiation in questioning the terms and conditions of employment, that would cost his/her job itself. 43. The bargaining power is vested with the employer itself and the employee is left with no option but to accept the conditions dictated by the authority. If that being the reason, it is open for the employee to challenge the conditions if it is not being in conformity with the statutory requirement under the law and he is not estopped from questioning at a stage where he finds himself aggrieved. 44. In the instant case, they lodged the protest petition and brought their grievance to the notice of the respondents but were unable to question except to pray the almighty to consider their grievance sympathetically. 45. The term substantive appointment is not so defined in the legal dictionary but has been referred in the service jurisprudence by the recruiting authority while framing Rules under Article 309 of the Constitution and what being termed as substantive appointment can be gathered from U.P. Sales tax Officers (Grade II) Service Rules, 1983. The relevant extract is as under:- Substantive appointment means an appointment, not being an ad hoc appointment, on a post in the cadre of the service made after selection in accordance with the rules and, if there are no rules in accordance with the procedure prescribed for the time being by executive instructions, issued by the Government. 46. The definition of substantive appointment can further be noticed under Rajasthan Administrative Service Rules, 1954 as under:- 4(n)- Substantive Appointment means an appointment made under the provisions of these Rules to a substantive vacancy after due selection by any of the methods of recruitment prescribed under these Rules and includes an appointment on probation or as a probationer followed by confirmation on the completion of the probationary period. 47. Almost similar nature of rule is available in the services where the recruiting authority has defined what is held as substantive appointment under the Recruitment Rules framed under Article 309 of the Constitution and this clearly defines that an appointment made in accordance with the scheme of Rules are held to be substantive appointment. 48. Adverting to the facts of the case, undisputedly, the appellants were appointed pursuant to an advertisement dated 4th February, 2004 and 19th May, 2006 held for regular selection and after going through the process of selection as being provided under Chapter VI of the Act 1973 and on the recommendations been made by the statutory selection committee, constituted under Section 31(1) and (4) of the Act and approved by the executive council, which is a statutory authority, appointments were made in the year 2004 and 2007 respectively. 49. In our considered view, once the appellants have gone through the process of selection provided under the scheme of the Act 1973 regardless of the fact whether the post is temporary or permanent in nature, at least their appointment is substantive in character and could be made permanent as and when the post is permanently sanctioned by the competent authority. 50. In the instant case, after the teaching posts in the Department of Pharmaceutical Sciences have been duly sanctioned and approved by the University Grants Commission of which a detailed reference has been made, supported by the letter sent to the University Grants Commission dated 14th August, 2020 indicating the fact that the present appellants are working against the teaching posts of Associate Professor/Assistant Professor sanctioned in compliance of the norms of the AICTE/PCI and are appointed as per the requirements, qualifications and selection procedure in accordance with the Act 1973 and proposed by the University, such incumbents shall be treated to be appointed against the sanctioned posts for all practical purposes. 51. Thus, it can safely be held that the appellants became entitled to claim their appointment to be in substantive capacity against the permanent sanctioned post and become a member of the teaching faculty of the Central University under the Act 2009. ### Response: 1 ### Explanation: 37. From the narration of facts as being referred to supra, it clearly manifests that the appellants were appointed after going through the process of selection as contemplated under Part VI of the Act 1973 which indeed was an appointment on substantive basis and since the appellants were not in an equal bargaining position and were in the need of employment when the offer of appointment was made, left with no option but to accept such arbitrary conditions incorporated in the letter of appointment in treating it to be contractual for a limited period still recorded their protest while joining but no heed was paid. When they were allowed to continue by extending their services, they remained under the bonafide belief that as their appointment is being substantive in character, they will be made permanent/confirmed immediately after the permanent posts are sanctioned in the Department of Pharmaceutical Sciences but to their dismay, after an advertisement dated 29th August, 2011 came to be notified by the respondent Central University, no option was left with them but to approach the High Court by filing of a writ petition.38. If we look at the scheme of the Act 2009 which came into force from 15th January, 2009, HNB Garhwal University is converted to a Central University under the Act 2009 and it took over the assets and liabilities of the University created under the Act 1973, protecting the rights and interests of the persons employed in the University before the creation of a Central University in terms of Section 4(d) of the Act.39. It is not the case of the respondents that the appellants who were appointed pursuant to an advertisement dated 4th February, 2004/19th May, 2006 have not gone through the procedure prescribed under Chapter VI of the Act or the appointments were made in contravention to the provisions of the Act, 1973. At the same time, it is also not the case of the respondents that any of the appellant either do not fulfil the conditions of eligibility as being prescribed for holding the teaching post in the Central University created under the Act 2009 or the conditions which have been prescribed by the PCI are not being fulfilled or the procedure of selection contemplated under the Act 2009 vary from the provision of the Act 1973 or either of them is ineligible in holding the teaching post.41. It counters by a recent communication made by the respondent University by its letter dated 14th August, 2020,has been informed that the faculty members of the Department of Pharmaceutical Sciences are working against the sanctioned posts from time to time in compliance to the norms of AICTE/PCI and are appointed as per the required qualification and procedure of selection as provided under the Act 1973 have recommended that they may be treated as the filled up positions with the aforesaid incumbents not only in accordance with the provisions of the Act 1973 but also as per the Act 2009.42. The submissions of the learned counsel for the respondents that the appellants have accepted the terms and conditions contained in the letter of appointment deserves rejection for the reason that it is not open for a person appointed in public employment to ordinary choose the terms and conditions of which he is required to serve. It goes without saying that employer is always in a dominating position and it is open to the employer to dictate the terms of employment. The employee who is at the receiving end can hardly complain of arbitrariness in the terms and conditions of employment. This Court can take judicial notice of the fact that if an employee takes initiation in questioning the terms and conditions of employment, that would cost his/her job itself.44. In the instant case, they lodged the protest petition and brought their grievance to the notice of the respondents but were unable to question except to pray the almighty to consider their grievance sympathetically.47. Almost similar nature of rule is available in the services where the recruiting authority has defined what is held as substantive appointment under the Recruitment Rules framed under Article 309 of the Constitution and this clearly defines that an appointment made in accordance with the scheme of Rules are held to be substantive appointment.48. Adverting to the facts of the case, undisputedly, the appellants were appointed pursuant to an advertisement dated 4th February, 2004 and 19th May, 2006 held for regular selection and after going through the process of selection as being provided under Chapter VI of the Act 1973 and on the recommendations been made by the statutory selection committee, constituted under(4) of the Act and approved by the executive council, which is a statutory authority, appointments were made in the year 2004 and 2007 respectively.49. In our considered view, once the appellants have gone through the process of selection provided under the scheme of the Act 1973 regardless of the fact whether the post is temporary or permanent in nature, at least their appointment is substantive in character and could be made permanent as and when the post is permanently sanctioned by the competent authority.50. In the instant case, after the teaching posts in the Department of Pharmaceutical Sciences have been duly sanctioned and approved by theof which a detailed reference has been made, supported by the letter sent to thedated 14th August, 2020 indicating the fact that the present appellants are working against the teaching posts of Associate Professor/Assistant Professor sanctioned in compliance of the norms of the AICTE/PCI and are appointed as per the requirements, qualifications and selection procedure in accordance with the Act 1973 and proposed by the University, such incumbents shall be treated to be appointed against the sanctioned posts for all practical purposes.51. Thus, it can safely be held that the appellants became entitled to claim their appointment to be in substantive capacity against the permanent sanctioned post and become a member of the teaching faculty of the Central University under the Act 2009.

M/S. M.R.F. Ltd Vs. Manohar Parrikar

the powers of a managing director in the transaction of the companys affairs. It is, I think, clear that the transaction there would not have been supported had it not been in this ordinary course or had the agent been acting merely as one of the ordinary directors of the company. I know of no case in which an ordinary director, acting without authority in fact, has been held capable of binding a company by a contract with a third party, merely on the ground that that third party assumed that the director had been given authority by the Board to make the contract. A limitation of the right to make such an assumption is expressed in Buckley on the Companies Acts, 10th Edition, at p. 175, in the following concise words: -- And the principle does not apply to the case where an agent of the company has done something beyond any authority which was given to him, or which he was held out as having." 73) This exception to the doctrine of indoor management has been subsequently adopted in many Indian cases. They are B. Anand Behari Lal v. Dinshaw and Co. (Bankers) Ltd, AIR 1942 Oudh 417 and Abdul Rehman Khan & Anr. v. Muffasal Bank Ltd. and Ors, AIR 1926 All 497 . Applying the exception to the present scenario, there is sufficient doubt with regard to the conduct of the Power Minister in issuing the Notifications dated 15.5.1996 and 01.08.1996. Therefore there is definite suspicion of irregularity which renders the doctrine of indoor management inapplicable to the present case. 74) It was also argued by the learned senior counsel for the appellant, that the Notification dated 01.08.1996 was rescinded by Notification dated 24.07.1998 and, therefore, there was no need for the High Court to adjudicate upon the impugned Notification dated 01.08.1996 and, should have dismissed the writ petition filed by way of public interest as having become infructuous. This issue need not detain us for long in view of our answer to the issue of "Doctrine of Merger" canvassed by learned senior counsel. 75) Arguments have been advanced before us based on the principles of res judicata, Doctrine of Estoppel and the principles underlining the provisions of Order II Rule 2 of the Code of Civil Procedure that the High Court in earlier batch of writ petitions has gone into and given findings with regard to the Notifications dated 30.9.1991; 31.3.1995; 15.5.1996; 1.8.1996 and 24.7.1998 and the judgment of the High Court dated 21.1.1999 rendered therein had merged with the order of the Supreme Court dated 13.2.2001 and the Notifications questioned in the present round of litigation are Notifications dated 15.5.1996 and 1.8.1996 and the State at no point of time before any Court having raised the issue of these two Notifications being void ab initio for want of compliance with the provisions of the Business Rules framed under Article 166(3) of the Constitution of India, the High Court ought to have rejected the plea of the State Government that the Notifications were illegal or were in violation of the Rules of Business and dismissed the Writ Petition on the principles of res judicata, Doctrine of Estoppel and the principles embodied in Order II Rule 2 of the Code of Civil Procedure. It was urged that the State not having raised this at any point of time before any court should not be allowed to do so. We do not find any merit in these contentions. As noticed by us earlier in the judgment, the issue regarding the validity or legality of the Notifications dated 15.5.1996 and 1.8.1996 was never raised in the earlier batch of writ petitions before the High Court and the High Court never had an opportunity or occasion to look into, consider and pronounce upon the validity of the same with reference to the Business Rules framed under Article 166 (3) of the Constitution. These principles pressed into service by the appellants cannot operate against the State Government merely because the State did not agitate either before the High Court or this Court the legality or validity of these notification in the earlier round of litigation when it had an occasion to do so and the State Government cannot be deemed to have accepted the legality of the Notification and waived its objection or challenge thereto. The Doctrine of Estoppel therefore has no application at all more so, in view of the illegality the notifications dated 15.05.1996 and 01.08.1996 suffer from in view of their non-compliance with the provisions of the Business Rules. In our opinion the fact that the State Government did not raise these objections in the earlier batch of Writ Ptitions does not disentitle it to such a stand or prevents it from raising its objections based on legal provisions. This contention of the appellants requires to be turned down for yet another reason in that the 1st respondent herein was not a party to the earlier batch of Writ Petitions before the High Court or this Court. Therefore the principles of res judicata or for that matter even the Doctrine of Estoppel will not apply to or operate against him. Further the contention that the Notification dated 1.8.1996 did not create any additional financial liability on the State Government warranting approval by the Cabinet or the compliance of the Business Rules before it was brought into effect deserves to be rejected having regard to the figures placed on record which the High Court has noticed in its judgment. These figures of additional liability likely to be brought on the State by Notification dated 1.8.1996 falsify the statement of the appellants. Therefore the same deserves to be rejected. 76) Before parting with these appeals, we make it clear that the observations made by us in the course of our judgment is only for the purpose of disposing of these appeals and shall not be treated as an expression on the conduct of the then the Power Minister. 77)

0[ds]In our view, the principle of merger essentially refers to the merging of the orders passed by the superior courts withthat of theorders passed by a subordinate court. This Court in the case of Shankar Ramachandra Abhyankar Vs. Krishnaji Dattatreya Bapat (AIR 1970 SC 1 ) has laid down the condition as to when there can be a merger of the orders of the superior court withthat of theorders passed by the lower court. This Court stated, that, if any judgment pronounced by the superior court in the exercise of its appellate or revisional jurisdiction after issue of a notice and a full hearing in the presence of both the parties, then it would replace the judgment of the lower court. Thus, constituting the judgment of the superior court the only final judgment to be executed in accordance with law by the Court below. The merger is essentially of the operative part of the order and the principle of merger of the order of the subordinate Court with the order of the superior Court cannot be applied when there is no order made by the superior Court on merits and the controversy between the parties has not been looked into by the superiorissue of merger has no bearing in the facts and circumstances of the present petitions, since, the issue that was decided by the High Court in the earlier batch of Writ Petitions and the issue that was raised and considered in the subsequent public interest litigation is entirely different. Secondly, in our view, the principles of res judicata is also not attracted since the issue raised and considered in the subsequent public interest litigation had not been raised and considered in the earlier round of litigation. It would be worthwhile to recall the observations made by this Court in the case of Madhvi Amma Bhawani Amma and Ors. Vs. Kunjikutty Pillai Meenakshi Pillai and Ors. (2000) 6 SCC 301 , wherein the Court has observed that in order to apply general principle of res judicata, Court must find, whether an issue in a subsequent suit, was directly and substantially in issue in the earlier suit or proceedings, was it between the same parties, and was it decided by such Court. Thus, there should be an issue raised and decided, not merely a finding on any incidental question for reaching such a decision. So, if such issue is not raised and if on any other issue, if, incidentally any finding is recorded, it would not come within the periphery of principle of resis clear that a decision to be the decision of the Government must satisfy the requirements of the Business Rules framed by the State Government under the provisions of Article 166(3) of the Constitution of India. In the case on hand, as have been noticed by us and the High Court, the decisions leading to the notifications do not comply with the requirements of Business Rules framed by the Government of Goa under the provisions of Article 166(3) of the Constitution and the Notifications are the result of the decision taken by the Power Minister at his level. The decision of the individualcannot be treated asthe decision of the State Government and the Notifications issued as a result of the decision of the individual Minister which are in violation of the Business Rules are void ab initio and all actions consequent thereto are null andhave been advanced before us based on the principles of res judicata, Doctrine of Estoppel and the principles underlining the provisions of Order II Rule 2 of the Code of Civil Procedure that the High Court in earlier batch of writ petitions has gone into and given findings with regard to the Notifications dated 30.9.1991; 31.3.1995; 15.5.1996; 1.8.1996 and 24.7.1998 and the judgment of the High Court dated 21.1.1999 rendered therein had merged with the order of the Supreme Court dated 13.2.2001 and the Notifications questioned in the present round of litigation are Notifications dated 15.5.1996 and 1.8.1996 and the State at no point of time before any Court having raised the issue of these two Notifications being void ab initio for want of compliance with the provisions of the Business Rules framed under Article 166(3) of the Constitution of India, the High Court ought to have rejected the plea of the State Government that the Notifications were illegal or were in violation of the Rules of Business and dismissed the Writ Petition on the principles of res judicata, Doctrine of Estoppel and the principles embodied in Order II Rule 2 of the Code of Civil Procedure. It was urged that the State not having raised this at any point of time before any court should not be allowed to do so. We do not find any merit in these contentions. As noticed by us earlier in the judgment, the issue regarding the validity or legality of the Notifications dated 15.5.1996 and 1.8.1996 was never raised in the earlier batch of writ petitions before the High Court and the High Court never had an opportunity or occasion to look into, consider and pronounce upon the validity of the same with reference to the Business Rules framed under Article 166 (3) of the Constitution. These principles pressed into service by the appellants cannot operate against the State Government merely because the State did not agitate either before the High Court or this Court the legality or validity of these notification in the earlier round of litigation when it had an occasion to do so and the State Government cannot be deemed to have accepted the legality of the Notification and waived its objection or challenge thereto. The Doctrine of Estoppel therefore has no application at all more so, in view of the illegality the notifications dated 15.05.1996 and 01.08.1996 suffer from in view of their non-compliance with the provisions of the Business Rules. In our opinion the fact that the State Government did not raise these objections in the earlier batch of Writdoes not disentitle it to such a stand or prevents it from raising its objections based on legal provisions. This contention of the appellants requires to be turned down for yet another reason in that the 1st respondent herein was not a party to the earlier batch of Writ Petitions before the High Court or this Court. Therefore the principles of res judicata or for that matter even the Doctrine of Estoppel will not apply to or operate against him. Further the contention that the Notification dated 1.8.1996 did not create any additional financial liability on the State Government warranting approval by the Cabinet or the compliance of the Business Rules before it was brought into effect deserves to be rejected having regard to the figures placed on record which the High Court has noticed in its judgment. These figures of additional liability likely to be brought on the State by Notification dated 1.8.1996 falsify the statement of the appellants. Therefore the same deserves to be rejected.

### Instruction: Determine the likely decision of the case (acceptance (1) or rejection (0)) and follow up with an explanation highlighting key sentences that support this prediction. ### Input: the powers of a managing director in the transaction of the companys affairs. It is, I think, clear that the transaction there would not have been supported had it not been in this ordinary course or had the agent been acting merely as one of the ordinary directors of the company. I know of no case in which an ordinary director, acting without authority in fact, has been held capable of binding a company by a contract with a third party, merely on the ground that that third party assumed that the director had been given authority by the Board to make the contract. A limitation of the right to make such an assumption is expressed in Buckley on the Companies Acts, 10th Edition, at p. 175, in the following concise words: -- And the principle does not apply to the case where an agent of the company has done something beyond any authority which was given to him, or which he was held out as having." 73) This exception to the doctrine of indoor management has been subsequently adopted in many Indian cases. They are B. Anand Behari Lal v. Dinshaw and Co. (Bankers) Ltd, AIR 1942 Oudh 417 and Abdul Rehman Khan & Anr. v. Muffasal Bank Ltd. and Ors, AIR 1926 All 497 . Applying the exception to the present scenario, there is sufficient doubt with regard to the conduct of the Power Minister in issuing the Notifications dated 15.5.1996 and 01.08.1996. Therefore there is definite suspicion of irregularity which renders the doctrine of indoor management inapplicable to the present case. 74) It was also argued by the learned senior counsel for the appellant, that the Notification dated 01.08.1996 was rescinded by Notification dated 24.07.1998 and, therefore, there was no need for the High Court to adjudicate upon the impugned Notification dated 01.08.1996 and, should have dismissed the writ petition filed by way of public interest as having become infructuous. This issue need not detain us for long in view of our answer to the issue of "Doctrine of Merger" canvassed by learned senior counsel. 75) Arguments have been advanced before us based on the principles of res judicata, Doctrine of Estoppel and the principles underlining the provisions of Order II Rule 2 of the Code of Civil Procedure that the High Court in earlier batch of writ petitions has gone into and given findings with regard to the Notifications dated 30.9.1991; 31.3.1995; 15.5.1996; 1.8.1996 and 24.7.1998 and the judgment of the High Court dated 21.1.1999 rendered therein had merged with the order of the Supreme Court dated 13.2.2001 and the Notifications questioned in the present round of litigation are Notifications dated 15.5.1996 and 1.8.1996 and the State at no point of time before any Court having raised the issue of these two Notifications being void ab initio for want of compliance with the provisions of the Business Rules framed under Article 166(3) of the Constitution of India, the High Court ought to have rejected the plea of the State Government that the Notifications were illegal or were in violation of the Rules of Business and dismissed the Writ Petition on the principles of res judicata, Doctrine of Estoppel and the principles embodied in Order II Rule 2 of the Code of Civil Procedure. It was urged that the State not having raised this at any point of time before any court should not be allowed to do so. We do not find any merit in these contentions. As noticed by us earlier in the judgment, the issue regarding the validity or legality of the Notifications dated 15.5.1996 and 1.8.1996 was never raised in the earlier batch of writ petitions before the High Court and the High Court never had an opportunity or occasion to look into, consider and pronounce upon the validity of the same with reference to the Business Rules framed under Article 166 (3) of the Constitution. These principles pressed into service by the appellants cannot operate against the State Government merely because the State did not agitate either before the High Court or this Court the legality or validity of these notification in the earlier round of litigation when it had an occasion to do so and the State Government cannot be deemed to have accepted the legality of the Notification and waived its objection or challenge thereto. The Doctrine of Estoppel therefore has no application at all more so, in view of the illegality the notifications dated 15.05.1996 and 01.08.1996 suffer from in view of their non-compliance with the provisions of the Business Rules. In our opinion the fact that the State Government did not raise these objections in the earlier batch of Writ Ptitions does not disentitle it to such a stand or prevents it from raising its objections based on legal provisions. This contention of the appellants requires to be turned down for yet another reason in that the 1st respondent herein was not a party to the earlier batch of Writ Petitions before the High Court or this Court. Therefore the principles of res judicata or for that matter even the Doctrine of Estoppel will not apply to or operate against him. Further the contention that the Notification dated 1.8.1996 did not create any additional financial liability on the State Government warranting approval by the Cabinet or the compliance of the Business Rules before it was brought into effect deserves to be rejected having regard to the figures placed on record which the High Court has noticed in its judgment. These figures of additional liability likely to be brought on the State by Notification dated 1.8.1996 falsify the statement of the appellants. Therefore the same deserves to be rejected. 76) Before parting with these appeals, we make it clear that the observations made by us in the course of our judgment is only for the purpose of disposing of these appeals and shall not be treated as an expression on the conduct of the then the Power Minister. 77) ### Response: 0 ### Explanation: subordinate Court with the order of the superior Court cannot be applied when there is no order made by the superior Court on merits and the controversy between the parties has not been looked into by the superiorissue of merger has no bearing in the facts and circumstances of the present petitions, since, the issue that was decided by the High Court in the earlier batch of Writ Petitions and the issue that was raised and considered in the subsequent public interest litigation is entirely different. Secondly, in our view, the principles of res judicata is also not attracted since the issue raised and considered in the subsequent public interest litigation had not been raised and considered in the earlier round of litigation. It would be worthwhile to recall the observations made by this Court in the case of Madhvi Amma Bhawani Amma and Ors. Vs. Kunjikutty Pillai Meenakshi Pillai and Ors. (2000) 6 SCC 301 , wherein the Court has observed that in order to apply general principle of res judicata, Court must find, whether an issue in a subsequent suit, was directly and substantially in issue in the earlier suit or proceedings, was it between the same parties, and was it decided by such Court. Thus, there should be an issue raised and decided, not merely a finding on any incidental question for reaching such a decision. So, if such issue is not raised and if on any other issue, if, incidentally any finding is recorded, it would not come within the periphery of principle of resis clear that a decision to be the decision of the Government must satisfy the requirements of the Business Rules framed by the State Government under the provisions of Article 166(3) of the Constitution of India. In the case on hand, as have been noticed by us and the High Court, the decisions leading to the notifications do not comply with the requirements of Business Rules framed by the Government of Goa under the provisions of Article 166(3) of the Constitution and the Notifications are the result of the decision taken by the Power Minister at his level. The decision of the individualcannot be treated asthe decision of the State Government and the Notifications issued as a result of the decision of the individual Minister which are in violation of the Business Rules are void ab initio and all actions consequent thereto are null andhave been advanced before us based on the principles of res judicata, Doctrine of Estoppel and the principles underlining the provisions of Order II Rule 2 of the Code of Civil Procedure that the High Court in earlier batch of writ petitions has gone into and given findings with regard to the Notifications dated 30.9.1991; 31.3.1995; 15.5.1996; 1.8.1996 and 24.7.1998 and the judgment of the High Court dated 21.1.1999 rendered therein had merged with the order of the Supreme Court dated 13.2.2001 and the Notifications questioned in the present round of litigation are Notifications dated 15.5.1996 and 1.8.1996 and the State at no point of time before any Court having raised the issue of these two Notifications being void ab initio for want of compliance with the provisions of the Business Rules framed under Article 166(3) of the Constitution of India, the High Court ought to have rejected the plea of the State Government that the Notifications were illegal or were in violation of the Rules of Business and dismissed the Writ Petition on the principles of res judicata, Doctrine of Estoppel and the principles embodied in Order II Rule 2 of the Code of Civil Procedure. It was urged that the State not having raised this at any point of time before any court should not be allowed to do so. We do not find any merit in these contentions. As noticed by us earlier in the judgment, the issue regarding the validity or legality of the Notifications dated 15.5.1996 and 1.8.1996 was never raised in the earlier batch of writ petitions before the High Court and the High Court never had an opportunity or occasion to look into, consider and pronounce upon the validity of the same with reference to the Business Rules framed under Article 166 (3) of the Constitution. These principles pressed into service by the appellants cannot operate against the State Government merely because the State did not agitate either before the High Court or this Court the legality or validity of these notification in the earlier round of litigation when it had an occasion to do so and the State Government cannot be deemed to have accepted the legality of the Notification and waived its objection or challenge thereto. The Doctrine of Estoppel therefore has no application at all more so, in view of the illegality the notifications dated 15.05.1996 and 01.08.1996 suffer from in view of their non-compliance with the provisions of the Business Rules. In our opinion the fact that the State Government did not raise these objections in the earlier batch of Writdoes not disentitle it to such a stand or prevents it from raising its objections based on legal provisions. This contention of the appellants requires to be turned down for yet another reason in that the 1st respondent herein was not a party to the earlier batch of Writ Petitions before the High Court or this Court. Therefore the principles of res judicata or for that matter even the Doctrine of Estoppel will not apply to or operate against him. Further the contention that the Notification dated 1.8.1996 did not create any additional financial liability on the State Government warranting approval by the Cabinet or the compliance of the Business Rules before it was brought into effect deserves to be rejected having regard to the figures placed on record which the High Court has noticed in its judgment. These figures of additional liability likely to be brought on the State by Notification dated 1.8.1996 falsify the statement of the appellants. Therefore the same deserves to be rejected.

Muir Mills Co., Ltd Vs. Suti Mills Mazdoor Union, Kanpur

years. On the accounts of each year being made up and the profits of the industrial concern being ascertained the workers during the particular year have their demand for bonus fully satisfied out of the surplus profits and the balance of profits is allocated and carried over in the accounts. No further claim for payment of bonus out of those reserves or undistributed profits can therefore survive. To admit the claim for bonus out of the reserves transferred to the profit and loss account would tantamount to allowing a second bonus on the same profits in respect of which the workers had already received their full bonus in the previous year. The labour force which earns the profits of particular year by collaborating with the employers is distinct from the one which contributed to the profits of the previous years and there is no continuity between the labour forces which are employed in the industrial concern during the several year. The ratio which applies in the case of the shareholders who acquire the right, title and interest of their predecessors-in-interest does not apply to the labour force and the fact that the shareholders get a dividend by transfer of funds from the reserves and undistributed profits of the previous years would not entitle the workers to demand bonus out of those funds if the working of the industrial concern during the particular year has resulted in a trading loss.6. The considerations of social justice imported by the Labour Appellate Tribunal in arriving at the decision in favour of the respondent were not only irrelevant but untenable. Social justice is a very vague and indeterminate expression and no clear-cut definition can be laid down which will cover all the situations. Mr. Isaacs, the learned counsel for the respondent, attempted to give definition in the following terms :-"social justice connotes the balance of adjustments of the various interests concerned in the social and economic structure of the State, in order to promote harmony upon an ethical and economic basis, " and he stated that there were three parties concerned here, viz., the employers, the labour and the State itself, and the conception of social justice had to be worked out in this context. Without embarking upon a discussion as to the exact connotation of the expression "social justice" we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation. Indeed the Full Bench of Labour Appellate Tribunal evolved the abovequoted formula with a view to dispensing social justice between the various parties concerned. It adopted the following method of approach at page 1258 of that judgment :-"Our approach to this problem is motivated by the requirement that we should ensure and achieve industrial peace which is essential for the development and expansion of industry. This can be achieved by having a contented labour force on the one hand, and on the other hand an investing public who would be attracted to the industry by a steady and progressive return on capital which the industry may be able to offer."7. This formula was reiterated in Textile Mills, M.P. v. Their Workmen ((1952) 2 L.L.J. 625), and Famous Cine Laboratory v. Their Workmen ((1953) 1 L.L.J. 466), and in the latter case it deprecated the idea of adjudicators importing considerations of social justice which were not comprised in that formula :-"And what is social justice ? Social justice is not the fancy of any individual adjudicator; if it were so then ideas of social justice might vary from adjudicator to adjudicator over all parts of India. In our Full Bench decision (see 1950, 2 L.L.J., p. 1247), we carefully considered the question of social justice in relation to bonus, and there we equated the rights and liabilities of employers and workman with a view to achieving a just formula for the computation of bonus. That Full Bench decision stands, and this tribunal and all other tribunals are bound by it."8. Without committing ourselves to the acceptance of the above formula in its entirety we may point out that the Labour Appellate Tribunal did not apply its own formula to the facts of the present case. It is also significant to the note that even while importing considerations of social justice the Labour Appellate Tribunal was oblivious of the fact that it was by their own acts of indiscipline and strike that the workers of the appellant company themselves contributed to the trading losses incurred by the appellant and it hardly lay in their mouth then to contend that they were none the less entitled to payment of bonus commensurate with the dividend paid to the shareholders out of the undistributed profits of the previous years. The Labour Appellate Tribunal also overlooked the fact that put for the Public Companies (Limitation of Dividend) Ordinance of 1948 the whole of the profits of 1948 could have been distributed after paying the workers bonus in that year of four annas in the rupee.9. We may before concluding refer to an argument which was addressed to us by Mr. Isaacs, the learned counsel for the respondent, that this Court under article 136 should not interfere with the decisions of the tribunals set up by the Industrial Disputes Act, 1947. This contention can be shortly answered by referring to our decision in Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi ([1950] S.C.R. 459), where we held that the Industrial Tribunals were tribunals within the meaning of Article 136 and further that article 136 and further that article 136 has vested in this Court exceptional and overriding power to interfere where it reaches the conclusion that a person has been dealt with arbitrarily or that a Court or tribunal within the territory of India has not given a fair deal to litigant. (Vide Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal ([1955] 1 S.C.R. 941).

1[ds]4. It is therefore clear that the claim for bonus can be made by the employees only if as a result of the joint contribution of capital and labour the industrial concern has earned profits. If in any particular year the working of the industrial concern has resulted in loss there is no basis nor justification for a demand for bonus. Bonus is not a deferred wage. Because, if it were so it would necessarily rank for precedence before dividends. The dividends can only be paid out of profits and unless and until profits are made no occasion or question can also arise for distribution of any sum as bonus amongst the employees. If the industrial concern has resulted in a trading loss, there would be no profits of the particular year available for distribution of dividends, much less could the employees claim the distribution of bonus during that year. This has been clearly recognised even in the various decisions of Labour Appellate Tribunal, e.g., Nizam Sugar Factory, Ltd., Hyderabad v. Their Workmen ((1952) 1 L.L.J. 386), Textile Mills, Madhya Pradesh v. Their Workmen ((1952) 2 L.L.J. 625) and Famous Cine Laboratory v. Their Workmen ((1953) 1 L.L.J. 466).The considerations of social justice imported by the Labour Appellate Tribunal in arriving at the decision in favour of the respondent were not only irrelevant but untenable. Social justice is a very vague and indeterminate expression and nodefinition can be laid down which will cover all the situations., the learned counsel for the respondent, attempted to give definition in the following termse connotes the balance of adjustments of the various interests concerned in the social and economic structure of the State, in order to promote harmony upon an ethical and economic basis, " and he stated that there were three parties concerned here, viz., the employers, the labour and the State itself, and the conception of social justice had to be worked out in this context.Without embarking upon a discussion as to the exact connotation of the expression "social justice" we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation.Without committing ourselves to the acceptance of the above formula in its entirety we may point out that the Labour Appellate Tribunal did not apply its own formula to the facts of the present case. It is also significant to the note that even while importing considerations of social justice the Labour Appellate Tribunal was oblivious of the fact that it was by their own acts of indiscipline and strike that the workers of the appellant company themselves contributed to the trading losses incurred by the appellant and it hardly lay in their mouth then to contend that they were none the less entitled to payment of bonus commensurate with the dividend paid to the shareholders out of the undistributed profits of the previous years. The Labour Appellate Tribunal also overlooked the fact that put for the Public Companies (Limitation of Dividend) Ordinance of 1948 the whole of the profits of 1948 could have been distributed after paying the workers bonus in that year of four annas in the rupee.9. We may before concluding refer to an argument which was addressed to us by Mr.Isaacs, the learned counsel for the respondent, that this Court under article 136 should not interfere with the decisions of the tribunals set up by the Industrial Disputes Act, 1947.This contention can be shortly answered by referring to our decision in Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi ([1950] S.C.R. 459), where we held that the Industrial Tribunals were tribunals within the meaning of Article 136 and further that article 136 and further that article 136 has vested in this Court exceptional and overriding power to interfere where it reaches the conclusion that a person has been dealt with arbitrarily or that a Court or tribunal within the territory of India has not given a fair deal to litigant. (Vide Dhakeswari Cotton Mills Ltd. v. Commissioner ofWest Bengal ([1955] 1 S.C.R. 941).The result therefore is that the decision of the Labour Appellate Tribunal appealed against must be reversed and that of the Industrial Court (Textiles and Hosiery), Kanpur, restored.

### Instruction: Estimate the outcome of the case (positive (1) or negative (0) for the appellant) and then give a reasoned explanation by examining important sentences within the case documentation. ### Input: years. On the accounts of each year being made up and the profits of the industrial concern being ascertained the workers during the particular year have their demand for bonus fully satisfied out of the surplus profits and the balance of profits is allocated and carried over in the accounts. No further claim for payment of bonus out of those reserves or undistributed profits can therefore survive. To admit the claim for bonus out of the reserves transferred to the profit and loss account would tantamount to allowing a second bonus on the same profits in respect of which the workers had already received their full bonus in the previous year. The labour force which earns the profits of particular year by collaborating with the employers is distinct from the one which contributed to the profits of the previous years and there is no continuity between the labour forces which are employed in the industrial concern during the several year. The ratio which applies in the case of the shareholders who acquire the right, title and interest of their predecessors-in-interest does not apply to the labour force and the fact that the shareholders get a dividend by transfer of funds from the reserves and undistributed profits of the previous years would not entitle the workers to demand bonus out of those funds if the working of the industrial concern during the particular year has resulted in a trading loss.6. The considerations of social justice imported by the Labour Appellate Tribunal in arriving at the decision in favour of the respondent were not only irrelevant but untenable. Social justice is a very vague and indeterminate expression and no clear-cut definition can be laid down which will cover all the situations. Mr. Isaacs, the learned counsel for the respondent, attempted to give definition in the following terms :-"social justice connotes the balance of adjustments of the various interests concerned in the social and economic structure of the State, in order to promote harmony upon an ethical and economic basis, " and he stated that there were three parties concerned here, viz., the employers, the labour and the State itself, and the conception of social justice had to be worked out in this context. Without embarking upon a discussion as to the exact connotation of the expression "social justice" we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation. Indeed the Full Bench of Labour Appellate Tribunal evolved the abovequoted formula with a view to dispensing social justice between the various parties concerned. It adopted the following method of approach at page 1258 of that judgment :-"Our approach to this problem is motivated by the requirement that we should ensure and achieve industrial peace which is essential for the development and expansion of industry. This can be achieved by having a contented labour force on the one hand, and on the other hand an investing public who would be attracted to the industry by a steady and progressive return on capital which the industry may be able to offer."7. This formula was reiterated in Textile Mills, M.P. v. Their Workmen ((1952) 2 L.L.J. 625), and Famous Cine Laboratory v. Their Workmen ((1953) 1 L.L.J. 466), and in the latter case it deprecated the idea of adjudicators importing considerations of social justice which were not comprised in that formula :-"And what is social justice ? Social justice is not the fancy of any individual adjudicator; if it were so then ideas of social justice might vary from adjudicator to adjudicator over all parts of India. In our Full Bench decision (see 1950, 2 L.L.J., p. 1247), we carefully considered the question of social justice in relation to bonus, and there we equated the rights and liabilities of employers and workman with a view to achieving a just formula for the computation of bonus. That Full Bench decision stands, and this tribunal and all other tribunals are bound by it."8. Without committing ourselves to the acceptance of the above formula in its entirety we may point out that the Labour Appellate Tribunal did not apply its own formula to the facts of the present case. It is also significant to the note that even while importing considerations of social justice the Labour Appellate Tribunal was oblivious of the fact that it was by their own acts of indiscipline and strike that the workers of the appellant company themselves contributed to the trading losses incurred by the appellant and it hardly lay in their mouth then to contend that they were none the less entitled to payment of bonus commensurate with the dividend paid to the shareholders out of the undistributed profits of the previous years. The Labour Appellate Tribunal also overlooked the fact that put for the Public Companies (Limitation of Dividend) Ordinance of 1948 the whole of the profits of 1948 could have been distributed after paying the workers bonus in that year of four annas in the rupee.9. We may before concluding refer to an argument which was addressed to us by Mr. Isaacs, the learned counsel for the respondent, that this Court under article 136 should not interfere with the decisions of the tribunals set up by the Industrial Disputes Act, 1947. This contention can be shortly answered by referring to our decision in Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi ([1950] S.C.R. 459), where we held that the Industrial Tribunals were tribunals within the meaning of Article 136 and further that article 136 and further that article 136 has vested in this Court exceptional and overriding power to interfere where it reaches the conclusion that a person has been dealt with arbitrarily or that a Court or tribunal within the territory of India has not given a fair deal to litigant. (Vide Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal ([1955] 1 S.C.R. 941). ### Response: 1 ### Explanation: 4. It is therefore clear that the claim for bonus can be made by the employees only if as a result of the joint contribution of capital and labour the industrial concern has earned profits. If in any particular year the working of the industrial concern has resulted in loss there is no basis nor justification for a demand for bonus. Bonus is not a deferred wage. Because, if it were so it would necessarily rank for precedence before dividends. The dividends can only be paid out of profits and unless and until profits are made no occasion or question can also arise for distribution of any sum as bonus amongst the employees. If the industrial concern has resulted in a trading loss, there would be no profits of the particular year available for distribution of dividends, much less could the employees claim the distribution of bonus during that year. This has been clearly recognised even in the various decisions of Labour Appellate Tribunal, e.g., Nizam Sugar Factory, Ltd., Hyderabad v. Their Workmen ((1952) 1 L.L.J. 386), Textile Mills, Madhya Pradesh v. Their Workmen ((1952) 2 L.L.J. 625) and Famous Cine Laboratory v. Their Workmen ((1953) 1 L.L.J. 466).The considerations of social justice imported by the Labour Appellate Tribunal in arriving at the decision in favour of the respondent were not only irrelevant but untenable. Social justice is a very vague and indeterminate expression and nodefinition can be laid down which will cover all the situations., the learned counsel for the respondent, attempted to give definition in the following termse connotes the balance of adjustments of the various interests concerned in the social and economic structure of the State, in order to promote harmony upon an ethical and economic basis, " and he stated that there were three parties concerned here, viz., the employers, the labour and the State itself, and the conception of social justice had to be worked out in this context.Without embarking upon a discussion as to the exact connotation of the expression "social justice" we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation.Without committing ourselves to the acceptance of the above formula in its entirety we may point out that the Labour Appellate Tribunal did not apply its own formula to the facts of the present case. It is also significant to the note that even while importing considerations of social justice the Labour Appellate Tribunal was oblivious of the fact that it was by their own acts of indiscipline and strike that the workers of the appellant company themselves contributed to the trading losses incurred by the appellant and it hardly lay in their mouth then to contend that they were none the less entitled to payment of bonus commensurate with the dividend paid to the shareholders out of the undistributed profits of the previous years. The Labour Appellate Tribunal also overlooked the fact that put for the Public Companies (Limitation of Dividend) Ordinance of 1948 the whole of the profits of 1948 could have been distributed after paying the workers bonus in that year of four annas in the rupee.9. We may before concluding refer to an argument which was addressed to us by Mr.Isaacs, the learned counsel for the respondent, that this Court under article 136 should not interfere with the decisions of the tribunals set up by the Industrial Disputes Act, 1947.This contention can be shortly answered by referring to our decision in Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi ([1950] S.C.R. 459), where we held that the Industrial Tribunals were tribunals within the meaning of Article 136 and further that article 136 and further that article 136 has vested in this Court exceptional and overriding power to interfere where it reaches the conclusion that a person has been dealt with arbitrarily or that a Court or tribunal within the territory of India has not given a fair deal to litigant. (Vide Dhakeswari Cotton Mills Ltd. v. Commissioner ofWest Bengal ([1955] 1 S.C.R. 941).The result therefore is that the decision of the Labour Appellate Tribunal appealed against must be reversed and that of the Industrial Court (Textiles and Hosiery), Kanpur, restored.

Muramlal Vs. Dev Karan

be decided in the light of the position of the Hindu law as well as the principles enunciated by the Privy Council in the cases of Pattabhiramier, 13 Moo Ind App 560 (PC) and Thumbusawmy Modelly, ILR 1 mad 1 (PC).15. In dealing with this argument, it would be relevant to observe that traditionally, courts in India have been consistently enforcing the principles of equity which prevent the enforcement of stipulations in mortgage deeds which unreasonably restrain or restrict the mortagors right to redeem. We may, in this connection, refer to some of the statutes which were in force in India. The old Bengal Regulation III of 1793 by S. 21 directed to Judges of the District and City Courts in cases where no specific rule existed to act according to justice, equity and good conscience. Similar provision occurs in S. 17 of the Madras Regulation II of 1802. The Bengal Civil Courts Act, 1887 and the Madras Civil Courts Act, 1873 contain similar provisions in Ss. 37 and 16 respectively. Likewise, in regard to Courts in the Mufassal of Bombay, Bombay Regulation IV of 1827 by S. 26 provides that the law to be observed in the trial off suits shall be Acts of Parliament and Regulations of Government applicable to the case; in the absence of such Acts and Regulations, the usage of the country is which the suit arose; if none such appears, the law of the defendant, and in the absence of specific law and usage, equity and good conscience. In fact, in Namdeo Lokman Lodhi v. Narmadabai, 1953 SCR 1009 : (AIR 1953 SC 228 ) this Court has emphatically observed that it is axiomatic that the courts must apply the principles of justice, equity and good conscience to transactions which come before them for determination even though the statutory provisions of the Transfer of Property Act are not made applicable to these transactions. These observations, in substance, represent the same traditional judicial approach in dealing with oppressive, unjust and unreasonable restrictions imposed by the mortgagees on needy mortgagors when mortgage documents are executed.16. There is one other circumstance to which we ought to refer. We do not know what the true position of the Hindu law was in the State of Alwar at the relevant time. In fact, we do not know what the provisions of the Contract Act were in the State of Alwar. Even so, we think it would be reasonable to assume that civil courts established in the State of Alwar were like civil courts all over the country, required to administer justice and equity where there was no specific statutory provision to deal with the question raised before them. Whether or not the Hindu law which prevailed in Alwar was similar to that prescribed by ancient Hindu Sanskrit texts, is a point on which no material is produced before us. It may, well be that just as in Bombay and Madras, notwithstanding the ancient provisions of Hindu Law which seems to entitle the mortgagee to insist upon the performance of a stipulation as to time within which the mortgage debt has to be paid, the High Courts had consistently refused to enforce such stipulations, the Courts in the State of Alwar also may have adopted the same approach. In the absence of any, material on the record on the point, i .e., are reluctant to accept Mr. Sarjoo Prasads argument that the doctrine of equity and justice should be treated as irrelevant in dealing with the present dispute.17. In this connection, it is material to refer to the recent decisions pronounced by the Rajasthan High Court in which this position has been upheld either because it was conceded, or because the High Court took the view that the principles of equity were enforceable in dealing with mortgage transactions in Rajasthan. In Amba Lal v. Amba Lal, ILR (1957) 7 Raj 964 : (AIR 1957 Raj 321 ) the Rajasthan High Court held that S. 60 and its proviso contained a general principle of law applicable to mortgages in this country, which would be applicable even in those places where the Transfer of Property Act may not be in force as such, but where its principles may be in force. The property in question which was the subject-matter of the mortgage was situated in the State of Udaipur.18. Similarly, in the case of Saleh Raj v. Chandan Mal, ILR (1960) 10 Raj 88 : (AIR 1960 Raj 47 ) the Rajasthan High Court held that the principle underlying S. 60 may well be regarded to be a salutary one and in accordance with the principles of equity, justice and good conscience. According it took the view that though the Transfer of Property Act may not be in force in the territory in question, it would not be unreasonable to decide a case in accordance with the principles underlying thd said section. The property with which the Court was concerned in this case was situated in the State of Jodhpur.19. The same principle has been applied in Himachal Pradesh, vide Nainu v. Kishan Singh, AIR 1957 Him Pra 46.20. Thus it is clear that the equitable principle of justice, equity and good conscience has been consistently applied by Civil Courts in dealing with mortgages in a substantial part of Rajasthan and that lands support to the contention of the respondent that it was recognised even in Alwar that if a mortgage deed contains a stipulation which unreasonably restrains or restricts the mortgagors equity of redemption courts were empowered to ignore that stipulation and enforce the mortgagors right to redeem, Subject, of course, to the general law of limitation prescribed in that behalf. We are, therefore, satisfied that no case has been made out by the appellant to justify our interference with the conclusion of the Rajasthan High Court that the relevant stipulation on which the appellant relies ought to be enforced even though it creates a clog on the equity of redemption.

0[ds]12. These decisions show that the High Courts in India conformed to the view that whether or not there is a statutory provision directing the Judges to give effect to the principles of justice, equity and good conscience, it is their duty to enforce that principle where they are dealing with stipulations introduced in mortgage transactions which appear to them to be unreasonable, oppressive or unjust.13. It is true that according to the strict letter of the ancient Hindu law, a stipulation that the mortgagor shall pay the amount advanced to him by the mortgagee within a specified period, was intended to be enforced. The ancient Hindu law texts use the word "Adhi" to denote pledge o a movable or mortgage of immovable property. Nar. IV 124 divides Adhi into two sorts, viz., one that is to be redeemed within a certain time fixed(by agreement at the time off contracting the debt) or to be retained till the debt is paid off. In regard to the first category of mortgages, if the money is not paid at the time fixed, the thing pledged or mortgaged would belong to the creditor (Vide Yaj. II. 58 and as explained by (Mitakshara.*) It also appears that if the mortgage is not redeemed even when the debt has grown to double off the principal by non-payment of the interest agreed upon, the mortgagor lost his title over the mortgaged property; so that it must be conceded that under the strict letter of the Hindu law texts, if a mortgage deed contains a stipulation for the repayment of the mortgage amount within a specified period, at the expiration of the said period the mortgagor may lose his title over the mortgaged property. The principle underlying this provision appears to be that Hindu law as enunciated by the ancient texts, attached considerable importance to a person keeping his promise. Though that is so, we ought also to add that according to Sir R.B. Ghose, ordinarily, time was not of the essence of the contract of mortgage in Hindu Law+and in support of this opinion the learned author quotes with approval Colebrookesdo not know what the true position of the Hindu law was in the State of Alwar at the relevant time. In fact, we do not know what the provisions of the Contract Act were in the State of Alwar. Even so, we think it would be reasonable to assume that civil courts established in the State of Alwar were like civil courts all over the country, required to administer justice and equity where there was no specific statutory provision to deal with the question raised before them. Whether or not the Hindu law which prevailed in Alwar was similar to that prescribed by ancient Hindu Sanskrit texts, is a point on which no material is produced before us. It may, well be that just as in Bombay and Madras, notwithstanding the ancient provisions of Hindu Law which seems to entitle the mortgagee to insist upon the performance of a stipulation as to time within which the mortgage debt has to be paid, the High Courts had consistently refused to enforce such stipulations, the Courts in the State of Alwar also may have adopted the same approach. In the absence of any, material on the record on the point, i .e., are reluctant to accept Mr. Sarjoo Prasads argument that the doctrine of equity and justice should be treated as irrelevant in dealing with the present dispute.Thus it is clear that the equitable principle of justice, equity and good conscience has been consistently applied by Civil Courts in dealing with mortgages in a substantial part of Rajasthan and that lands support to the contention of the respondent that it was recognised even in Alwar that if a mortgage deed contains a stipulation which unreasonably restrains or restricts the mortgagors equity of redemption courts were empowered to ignore that stipulation and enforce the mortgagors right to redeem, Subject, of course, to the general law of limitation prescribed in that behalf. We are, therefore, satisfied that no case has been made out by the appellant to justify our interference with the conclusion of the Rajasthan High Court that the relevant stipulation on which the appellant relies ought to be enforced even though it creates a clog on the equity of redemption.

### Instruction: Decide if the appeal in the case proceeding is more likely to be successful (1) or unsuccessful (0), and then justify your decision by focusing on essential sentences in the document. ### Input: be decided in the light of the position of the Hindu law as well as the principles enunciated by the Privy Council in the cases of Pattabhiramier, 13 Moo Ind App 560 (PC) and Thumbusawmy Modelly, ILR 1 mad 1 (PC).15. In dealing with this argument, it would be relevant to observe that traditionally, courts in India have been consistently enforcing the principles of equity which prevent the enforcement of stipulations in mortgage deeds which unreasonably restrain or restrict the mortagors right to redeem. We may, in this connection, refer to some of the statutes which were in force in India. The old Bengal Regulation III of 1793 by S. 21 directed to Judges of the District and City Courts in cases where no specific rule existed to act according to justice, equity and good conscience. Similar provision occurs in S. 17 of the Madras Regulation II of 1802. The Bengal Civil Courts Act, 1887 and the Madras Civil Courts Act, 1873 contain similar provisions in Ss. 37 and 16 respectively. Likewise, in regard to Courts in the Mufassal of Bombay, Bombay Regulation IV of 1827 by S. 26 provides that the law to be observed in the trial off suits shall be Acts of Parliament and Regulations of Government applicable to the case; in the absence of such Acts and Regulations, the usage of the country is which the suit arose; if none such appears, the law of the defendant, and in the absence of specific law and usage, equity and good conscience. In fact, in Namdeo Lokman Lodhi v. Narmadabai, 1953 SCR 1009 : (AIR 1953 SC 228 ) this Court has emphatically observed that it is axiomatic that the courts must apply the principles of justice, equity and good conscience to transactions which come before them for determination even though the statutory provisions of the Transfer of Property Act are not made applicable to these transactions. These observations, in substance, represent the same traditional judicial approach in dealing with oppressive, unjust and unreasonable restrictions imposed by the mortgagees on needy mortgagors when mortgage documents are executed.16. There is one other circumstance to which we ought to refer. We do not know what the true position of the Hindu law was in the State of Alwar at the relevant time. In fact, we do not know what the provisions of the Contract Act were in the State of Alwar. Even so, we think it would be reasonable to assume that civil courts established in the State of Alwar were like civil courts all over the country, required to administer justice and equity where there was no specific statutory provision to deal with the question raised before them. Whether or not the Hindu law which prevailed in Alwar was similar to that prescribed by ancient Hindu Sanskrit texts, is a point on which no material is produced before us. It may, well be that just as in Bombay and Madras, notwithstanding the ancient provisions of Hindu Law which seems to entitle the mortgagee to insist upon the performance of a stipulation as to time within which the mortgage debt has to be paid, the High Courts had consistently refused to enforce such stipulations, the Courts in the State of Alwar also may have adopted the same approach. In the absence of any, material on the record on the point, i .e., are reluctant to accept Mr. Sarjoo Prasads argument that the doctrine of equity and justice should be treated as irrelevant in dealing with the present dispute.17. In this connection, it is material to refer to the recent decisions pronounced by the Rajasthan High Court in which this position has been upheld either because it was conceded, or because the High Court took the view that the principles of equity were enforceable in dealing with mortgage transactions in Rajasthan. In Amba Lal v. Amba Lal, ILR (1957) 7 Raj 964 : (AIR 1957 Raj 321 ) the Rajasthan High Court held that S. 60 and its proviso contained a general principle of law applicable to mortgages in this country, which would be applicable even in those places where the Transfer of Property Act may not be in force as such, but where its principles may be in force. The property in question which was the subject-matter of the mortgage was situated in the State of Udaipur.18. Similarly, in the case of Saleh Raj v. Chandan Mal, ILR (1960) 10 Raj 88 : (AIR 1960 Raj 47 ) the Rajasthan High Court held that the principle underlying S. 60 may well be regarded to be a salutary one and in accordance with the principles of equity, justice and good conscience. According it took the view that though the Transfer of Property Act may not be in force in the territory in question, it would not be unreasonable to decide a case in accordance with the principles underlying thd said section. The property with which the Court was concerned in this case was situated in the State of Jodhpur.19. The same principle has been applied in Himachal Pradesh, vide Nainu v. Kishan Singh, AIR 1957 Him Pra 46.20. Thus it is clear that the equitable principle of justice, equity and good conscience has been consistently applied by Civil Courts in dealing with mortgages in a substantial part of Rajasthan and that lands support to the contention of the respondent that it was recognised even in Alwar that if a mortgage deed contains a stipulation which unreasonably restrains or restricts the mortgagors equity of redemption courts were empowered to ignore that stipulation and enforce the mortgagors right to redeem, Subject, of course, to the general law of limitation prescribed in that behalf. We are, therefore, satisfied that no case has been made out by the appellant to justify our interference with the conclusion of the Rajasthan High Court that the relevant stipulation on which the appellant relies ought to be enforced even though it creates a clog on the equity of redemption. ### Response: 0 ### Explanation: 12. These decisions show that the High Courts in India conformed to the view that whether or not there is a statutory provision directing the Judges to give effect to the principles of justice, equity and good conscience, it is their duty to enforce that principle where they are dealing with stipulations introduced in mortgage transactions which appear to them to be unreasonable, oppressive or unjust.13. It is true that according to the strict letter of the ancient Hindu law, a stipulation that the mortgagor shall pay the amount advanced to him by the mortgagee within a specified period, was intended to be enforced. The ancient Hindu law texts use the word "Adhi" to denote pledge o a movable or mortgage of immovable property. Nar. IV 124 divides Adhi into two sorts, viz., one that is to be redeemed within a certain time fixed(by agreement at the time off contracting the debt) or to be retained till the debt is paid off. In regard to the first category of mortgages, if the money is not paid at the time fixed, the thing pledged or mortgaged would belong to the creditor (Vide Yaj. II. 58 and as explained by (Mitakshara.*) It also appears that if the mortgage is not redeemed even when the debt has grown to double off the principal by non-payment of the interest agreed upon, the mortgagor lost his title over the mortgaged property; so that it must be conceded that under the strict letter of the Hindu law texts, if a mortgage deed contains a stipulation for the repayment of the mortgage amount within a specified period, at the expiration of the said period the mortgagor may lose his title over the mortgaged property. The principle underlying this provision appears to be that Hindu law as enunciated by the ancient texts, attached considerable importance to a person keeping his promise. Though that is so, we ought also to add that according to Sir R.B. Ghose, ordinarily, time was not of the essence of the contract of mortgage in Hindu Law+and in support of this opinion the learned author quotes with approval Colebrookesdo not know what the true position of the Hindu law was in the State of Alwar at the relevant time. In fact, we do not know what the provisions of the Contract Act were in the State of Alwar. Even so, we think it would be reasonable to assume that civil courts established in the State of Alwar were like civil courts all over the country, required to administer justice and equity where there was no specific statutory provision to deal with the question raised before them. Whether or not the Hindu law which prevailed in Alwar was similar to that prescribed by ancient Hindu Sanskrit texts, is a point on which no material is produced before us. It may, well be that just as in Bombay and Madras, notwithstanding the ancient provisions of Hindu Law which seems to entitle the mortgagee to insist upon the performance of a stipulation as to time within which the mortgage debt has to be paid, the High Courts had consistently refused to enforce such stipulations, the Courts in the State of Alwar also may have adopted the same approach. In the absence of any, material on the record on the point, i .e., are reluctant to accept Mr. Sarjoo Prasads argument that the doctrine of equity and justice should be treated as irrelevant in dealing with the present dispute.Thus it is clear that the equitable principle of justice, equity and good conscience has been consistently applied by Civil Courts in dealing with mortgages in a substantial part of Rajasthan and that lands support to the contention of the respondent that it was recognised even in Alwar that if a mortgage deed contains a stipulation which unreasonably restrains or restricts the mortgagors equity of redemption courts were empowered to ignore that stipulation and enforce the mortgagors right to redeem, Subject, of course, to the general law of limitation prescribed in that behalf. We are, therefore, satisfied that no case has been made out by the appellant to justify our interference with the conclusion of the Rajasthan High Court that the relevant stipulation on which the appellant relies ought to be enforced even though it creates a clog on the equity of redemption.

RAM PRATAP Vs. ANAND KANWAR

was posted on different dates and it was continuously adjourned for determination of rent. The case set up by the Plaintiff was that the rent had been enhanced to Rs. 15/- per month, whereas the Defendant has contended that the rent was Rs. 10/- per month. The Appellants counsel remained absent on 24.04.1993 and on that date the court proceeded matter ex parte and fixed the next date on 24.07.1993. On the following date, the case was adjourned as the presiding officer was on leave and the next date was fixed on 22.09.1993 and, thereafter, the court proceeded with the suit. The court did not frame any issues and decreed the suit on 20.07.1995.9. The claim of the Plaintiff is that the Defendant had committed default in payment of rent for the period from 01.07.1981 till 30.06.1984. There was a dispute between the Respondent and Onkar Singh as to title, for which suit was filed by him against the said Onkar Singh. The said suit was decreed on 07.11.1983 and during the said litigation the Defendant was depositing rent in court Under Section 19A of the Act.10. It is evident that the trial court without determination of provisional rent Under Section 13(3) of the Act decreed the suit. The question which has been raised by the Defendant is as to whether fixation of provisional rent by the trial court Under Section 13(3) where eviction of a tenant is sought Under Section 13(1)(a) is mandatory or directory.11. Section 13(1)(a) provides for eviction of as tenant for default in payment of rents which is as under:13. Eviction of tenants.-(1) Notwithstanding anything contained in any law or contract, no Court shall pass any decrees or make any order, in favour of a landlord, whether in execution of a decree or otherwise, evicting the tenant so long as he is ready and willing to pay rent therefor to the full extent allowable by this Act, unless it is satisfied.(a) that the tenant has neither paid nor tendered the amount of rent due from him for six months.12. Section 13(3) as amended by Section 8(i) of Rajasthan Act No. 14 of 1976, dated 13-02-1976 reads as under:"In a suit for eviction on the ground set forth in Clause (a) of Sub-section (1), with or without any of the other grounds referred to in that Sub-section, the court shall, on the first date of hearing or on any other date as the court may fix in this behalf which shall not be more than three months after filing of the written statement and shall be before the framing of the issues, after hearing the parties and on the basis of material on record provisionally determine the amount of rent to be deposited in court or paid to the landlord by the tenant. Such amount shall be calculated at the rate of rent at which it was last paid or was payable for the period for which the tenant may have made default including the period subsequent thereto up to the end of the month previous to that in which such determination is made together with interest on such amount calculated at the rate of six per cent per annum from the date when any such amount was payable up to the date of determination:Provided that while determining the amount under this Sub-section, the court shall not take into account the amount of rent which was barred by limitation on the date of the filing of the suit."13. It is also necessary to notice Section 13(4), (5) and (6) of the Rent Act, which are as under:"13(4) The tenant shall deposit in court or pay to the landlord the amount determined by the court Under Sub-section (3) within fifteen days from the date of such determination, or within such further time, not exceeding three months, as may be extended by the court. The tenant shall also continue to deposit in court or pay to the landlord, month by month, the monthly rent subsequent to the period up to which determination has been made, by the fifteenth of each succeeding month or within such further time, not exceeding fifteen days, as may be extended by the court, at the monthly rate at which the rent was determined by the court Under Sub-section (3).13(5) If a tenant fails to deposit or pay any amount referred to in Sub-section (4), on the date or within the time specified therein, the court shall order the defence against eviction to be struck out and shall proceed with the hearing of the suit.13(6) If a tenant makes deposit or payment as required by Sub-section (4), no decree for eviction on the ground specified in Clause (a) of Sub-section (1) shall be passed by the court against him:Provided that a tenant shall not be entitled to any relief under this subsection, if having obtained such benefit or benefit Under Section 13-A in respect of any such accommodation if he again makes a default in the payment of rent of that accommodation for six months."14. It is evident from Section 13(3) of the Rent Act that the use of the word shall puts a mandatory obligation on the court to fix provisional rent within three months of the filing of the written statement but before framing of the issues. The language of the Section is mandatory and places a duty on the court to determine the provisional rent irrespective of any application or not. If the rent so determined by the court is paid by the tenant as provided Under Section 13(4), no decree for eviction of the tenant can be passed on the ground of default Under Section 13(1)(a) in view of Section 13(6) of the Act. It is thus clear that unless the determination Under Section 13(3) takes place, Section 13(6) cannot be complied with and a valuable right given to a tenant would be lost. The High Court, in our view, has rightly held Section 13(3) of the Act to be mandatory.

0[ds]8. The material facts are not in dispute. Thesuit for eviction was filedSection 13(1)(a) on the ground of default in payment of rent for the period from 01.07.1981 till 30.06.1984. Thefiled the written statement on 08.08.1989. Thereafter, the matter was posted on different dates and it was continuously adjourned for determination of rent. The case set up by thewas that the rent had been enhanced toper month, whereas thehas contended that the rent wasper month. Thecounsel remained absent on 24.04.1993 and on that date the court proceeded matter ex parte and fixed the next date on 24.07.1993. On the following date, the case was adjourned as the presiding officer was on leave and the next date was fixed on 22.09.1993 and, thereafter, the court proceeded with the suit. The court did not frame any issues and decreed the suit on 20.07.1995.9. The claim of theis that thehad committed default in payment of rent for the period from 01.07.1981 till 30.06.1984. There was a dispute between theand Onkar Singh as to title, for which suit was filed by him against the said Onkar Singh. The said suit was decreed on 07.11.1983 and during the said litigation thewas depositing rent in courtSection 19A of the Act.10. It is evident that the trial court without determination of provisional rentSection 13(3) of the Act decreed the suit. The question which has been raised by theis as to whether fixation of provisional rent by the trial courtSection 13(3) where eviction of a tenant is soughtSection 13(1)(a) is mandatory or directory.It is also necessary to notice Section 13(4), (5) and (6) of the Rent Act, which are as) The tenant shall deposit in court or pay to the landlord the amount determined by the courton (3) within fifteen days from the date of such determination, or within such further time, not exceeding three months, as may be extended by the court. The tenant shall also continue to deposit in court or pay to the landlord, month by month, the monthly rent subsequent to the period up to which determination has been made, by the fifteenth of each succeeding month or within such further time, not exceeding fifteen days, as may be extended by the court, at the monthly rate at which the rent was determined by the court5) If a tenant fails to deposit or pay any amount referred to in(4), on the date or within the time specified therein, the court shall order the defence against eviction to be struck out and shall proceed with the hearing of the suit.13(6) If a tenant makes deposit or payment as required by(4), no decree for eviction on the ground specified inion (1) shall be passed by the court against him:Provided that a tenant shall not be entitled to any relief under this, if having obtained such benefit or benefitn 13-A in respect of any such accommodation if he again makes a default in the payment of rent of that accommodation for six months.It is evident from Section 13(3) of the Rent Act that the use of the word shall puts a mandatory obligation on the court to fix provisional rent within three months of the filing of the written statement but before framing of the issues. The language of the Section is mandatory and places a duty on the court to determine the provisional rent irrespective of any application or not. If the rent so determined by the court is paid by the tenant as providedSection 13(4), no decree for eviction of the tenant can be passed on the ground of defaultSection 13(1)(a) in view of Section 13(6) of the Act. It is thus clear that unless the determinationSection 13(3) takes place, Section 13(6) cannot be complied with and a valuable right given to a tenant would be lost. The High Court, in our view, has rightly held Section 13(3) of the Act to be mandatory.

### Instruction: Determine the likely decision of the case (acceptance (1) or rejection (0)) and follow up with an explanation highlighting key sentences that support this prediction. ### Input: was posted on different dates and it was continuously adjourned for determination of rent. The case set up by the Plaintiff was that the rent had been enhanced to Rs. 15/- per month, whereas the Defendant has contended that the rent was Rs. 10/- per month. The Appellants counsel remained absent on 24.04.1993 and on that date the court proceeded matter ex parte and fixed the next date on 24.07.1993. On the following date, the case was adjourned as the presiding officer was on leave and the next date was fixed on 22.09.1993 and, thereafter, the court proceeded with the suit. The court did not frame any issues and decreed the suit on 20.07.1995.9. The claim of the Plaintiff is that the Defendant had committed default in payment of rent for the period from 01.07.1981 till 30.06.1984. There was a dispute between the Respondent and Onkar Singh as to title, for which suit was filed by him against the said Onkar Singh. The said suit was decreed on 07.11.1983 and during the said litigation the Defendant was depositing rent in court Under Section 19A of the Act.10. It is evident that the trial court without determination of provisional rent Under Section 13(3) of the Act decreed the suit. The question which has been raised by the Defendant is as to whether fixation of provisional rent by the trial court Under Section 13(3) where eviction of a tenant is sought Under Section 13(1)(a) is mandatory or directory.11. Section 13(1)(a) provides for eviction of as tenant for default in payment of rents which is as under:13. Eviction of tenants.-(1) Notwithstanding anything contained in any law or contract, no Court shall pass any decrees or make any order, in favour of a landlord, whether in execution of a decree or otherwise, evicting the tenant so long as he is ready and willing to pay rent therefor to the full extent allowable by this Act, unless it is satisfied.(a) that the tenant has neither paid nor tendered the amount of rent due from him for six months.12. Section 13(3) as amended by Section 8(i) of Rajasthan Act No. 14 of 1976, dated 13-02-1976 reads as under:"In a suit for eviction on the ground set forth in Clause (a) of Sub-section (1), with or without any of the other grounds referred to in that Sub-section, the court shall, on the first date of hearing or on any other date as the court may fix in this behalf which shall not be more than three months after filing of the written statement and shall be before the framing of the issues, after hearing the parties and on the basis of material on record provisionally determine the amount of rent to be deposited in court or paid to the landlord by the tenant. Such amount shall be calculated at the rate of rent at which it was last paid or was payable for the period for which the tenant may have made default including the period subsequent thereto up to the end of the month previous to that in which such determination is made together with interest on such amount calculated at the rate of six per cent per annum from the date when any such amount was payable up to the date of determination:Provided that while determining the amount under this Sub-section, the court shall not take into account the amount of rent which was barred by limitation on the date of the filing of the suit."13. It is also necessary to notice Section 13(4), (5) and (6) of the Rent Act, which are as under:"13(4) The tenant shall deposit in court or pay to the landlord the amount determined by the court Under Sub-section (3) within fifteen days from the date of such determination, or within such further time, not exceeding three months, as may be extended by the court. The tenant shall also continue to deposit in court or pay to the landlord, month by month, the monthly rent subsequent to the period up to which determination has been made, by the fifteenth of each succeeding month or within such further time, not exceeding fifteen days, as may be extended by the court, at the monthly rate at which the rent was determined by the court Under Sub-section (3).13(5) If a tenant fails to deposit or pay any amount referred to in Sub-section (4), on the date or within the time specified therein, the court shall order the defence against eviction to be struck out and shall proceed with the hearing of the suit.13(6) If a tenant makes deposit or payment as required by Sub-section (4), no decree for eviction on the ground specified in Clause (a) of Sub-section (1) shall be passed by the court against him:Provided that a tenant shall not be entitled to any relief under this subsection, if having obtained such benefit or benefit Under Section 13-A in respect of any such accommodation if he again makes a default in the payment of rent of that accommodation for six months."14. It is evident from Section 13(3) of the Rent Act that the use of the word shall puts a mandatory obligation on the court to fix provisional rent within three months of the filing of the written statement but before framing of the issues. The language of the Section is mandatory and places a duty on the court to determine the provisional rent irrespective of any application or not. If the rent so determined by the court is paid by the tenant as provided Under Section 13(4), no decree for eviction of the tenant can be passed on the ground of default Under Section 13(1)(a) in view of Section 13(6) of the Act. It is thus clear that unless the determination Under Section 13(3) takes place, Section 13(6) cannot be complied with and a valuable right given to a tenant would be lost. The High Court, in our view, has rightly held Section 13(3) of the Act to be mandatory. ### Response: 0 ### Explanation: 8. The material facts are not in dispute. Thesuit for eviction was filedSection 13(1)(a) on the ground of default in payment of rent for the period from 01.07.1981 till 30.06.1984. Thefiled the written statement on 08.08.1989. Thereafter, the matter was posted on different dates and it was continuously adjourned for determination of rent. The case set up by thewas that the rent had been enhanced toper month, whereas thehas contended that the rent wasper month. Thecounsel remained absent on 24.04.1993 and on that date the court proceeded matter ex parte and fixed the next date on 24.07.1993. On the following date, the case was adjourned as the presiding officer was on leave and the next date was fixed on 22.09.1993 and, thereafter, the court proceeded with the suit. The court did not frame any issues and decreed the suit on 20.07.1995.9. The claim of theis that thehad committed default in payment of rent for the period from 01.07.1981 till 30.06.1984. There was a dispute between theand Onkar Singh as to title, for which suit was filed by him against the said Onkar Singh. The said suit was decreed on 07.11.1983 and during the said litigation thewas depositing rent in courtSection 19A of the Act.10. It is evident that the trial court without determination of provisional rentSection 13(3) of the Act decreed the suit. The question which has been raised by theis as to whether fixation of provisional rent by the trial courtSection 13(3) where eviction of a tenant is soughtSection 13(1)(a) is mandatory or directory.It is also necessary to notice Section 13(4), (5) and (6) of the Rent Act, which are as) The tenant shall deposit in court or pay to the landlord the amount determined by the courton (3) within fifteen days from the date of such determination, or within such further time, not exceeding three months, as may be extended by the court. The tenant shall also continue to deposit in court or pay to the landlord, month by month, the monthly rent subsequent to the period up to which determination has been made, by the fifteenth of each succeeding month or within such further time, not exceeding fifteen days, as may be extended by the court, at the monthly rate at which the rent was determined by the court5) If a tenant fails to deposit or pay any amount referred to in(4), on the date or within the time specified therein, the court shall order the defence against eviction to be struck out and shall proceed with the hearing of the suit.13(6) If a tenant makes deposit or payment as required by(4), no decree for eviction on the ground specified inion (1) shall be passed by the court against him:Provided that a tenant shall not be entitled to any relief under this, if having obtained such benefit or benefitn 13-A in respect of any such accommodation if he again makes a default in the payment of rent of that accommodation for six months.It is evident from Section 13(3) of the Rent Act that the use of the word shall puts a mandatory obligation on the court to fix provisional rent within three months of the filing of the written statement but before framing of the issues. The language of the Section is mandatory and places a duty on the court to determine the provisional rent irrespective of any application or not. If the rent so determined by the court is paid by the tenant as providedSection 13(4), no decree for eviction of the tenant can be passed on the ground of defaultSection 13(1)(a) in view of Section 13(6) of the Act. It is thus clear that unless the determinationSection 13(3) takes place, Section 13(6) cannot be complied with and a valuable right given to a tenant would be lost. The High Court, in our view, has rightly held Section 13(3) of the Act to be mandatory.

Karanpura Development Co., Ltd Vs. The Commissioner Of Income-Tax, West Bengal

taxed under Sch. A could not be taxed under Sch. D. The company demanded a case. Rowlatt, J. held against the company, but his decision was reversed by the Court of Appeal. On further appeal to the House of Lords, it was held that the rents were profits from ownership of land and assessment under Sch. A was the proper made and they could not be treated as trade receipts of the company for purposes of Sch. D. The assessee company has relied upon certain passages in the speeches of the learned and noble Law Lords, one of which from the speech of Lord Warrington of Clyffe has already been quoted. It is not necessary to quote the other passages except one from the speech of Lord Tomlin because the purport is the same. Says Lord Tomlin:"Further in my view the perception of rents as land owner is not an operation of trade within the meaning of the Act, If this be so. I am unable to appreciate how the existence of ancillary activities which produce profits taxable under Schedule D can affect the nature of the operation or how the legal significance of the perception is altered for the purpose of income-tax if the recipient is a limited company rather than an individual".As has been already pointed out in connection with the other two cases where there is a letting out of premises and collection of rents the assessment on property basis may be correct but not so, where the letting or sub-letting is part of a trading operation. The dividing line is difficult to find; but in the case of a company with its professed objects and the manner of its activities and the nature of its dealing with its property, it is possible to say on which side the operations fall and to what head the income is to be assigned.22. Ownership of property and leasing it out may be done as a part of business, or it may be done as land owner. Whether it is the one or the other must necessarily depend upon the object with which the act is done. It is not that no company can own property and enjoy it as property, whether by itself or by giving the use of it to another on rent. Where this happens, the appropriate head to apply is "income from property" (S. 9), even though the company may be doing extensive business otherwise. But a company formed with the specific object of acquiring properties not with the view to leasing them as property but to selling them or turning them to account even by way of leasing them out as an integral part of its business, cannot be said to treat them as landowner but as trader. The cases which have been cited in this case both for and against the assessee Company must be applied with this distinction properly borne in mind. In deciding whether a company dealt with its properties as owner, one must see not to the form which it gave to the transaction but to the substance of the matter. Californian Copper Syndicate case, (1904) 5 Tax Cas 159 illustrates vividly dealings with mineral rights and concessions by a company as part of the objects of its business, or, in other words, in the doing of the business. The Calcutta cases and the case of 1930 AC 432 illustrate the contrary proposition. There, the property, though dealt with by a company intending to do business, was dealt with as landowner. The intention in those cases was not to derive profit by business done with those properties but to derive income by renting them out. Where a company acquires properties which it sells or leases out with a view to acquiring other properties to be dealt with in the same manner, the company is not treating them as properties to be enjoyed in the shape of rents which they yield but as a kind of circulating capital leading to profits of business, which profits may be either enjoyed or put back into the business to acquire more properties for further profitable exploitation.23. We shall now turn to the present case, because it remains to consider what the assessee Company was doing with the head leases. The relevant clauses of the Memorandum of Association of the assessee Company have already been quoted. They show the various objects for which the assessee Company was incorporated. Though power was taken under cls. (2), (3), (6) and (34) to do business of coal-raising, etc., the assessee Company did not do the sort of business authorised there. It restricted its business to cls. (1) and (52). Under cl. (1), power was taken to purchase and acquire underground coal-mining and relative rights. Under cl. (52), power was taken to sell improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account or otherwise deal with all or any part of the property and rights of the Company. Business was done extensively within these two clauses. Annexure F shows the areas which were sub-leased. A glance at the chart shows the large number of sub-leases and the different companies to which the subleases were granted. These sub-leases were granted because the, assessee Company wanted as a matter of business, to turn its rights to account. The assessee Company opened out, and developed the areas, and then granted these sub-leases with an eye to profit. It is clear from these operations that the assessee Company having secured a large tract of coal-bearing land parcelled and developed it into a kind of stock-in-trade to be profitably dealt with. The assessee company extended its business along these lines acquiring fresh fields. In the circumstances the nature of the business was trading within the objects of the Company and not enjoyment of property a land owner. There was also no sale of its fixed capital at a profit. In our opinion, the High Court rightly answered the question against the assessee Company.

0[ds]5. The Income-tax Act puts the tax on income, profits and gains irrespective of the source from which they are derived. Sec. 3 of the Act provides, inter alia, that income-tax shall be charged on the total income of every company. Under S. 4(l) total income includes all income, profits or gains from whatever source derived, subject to certain conditions about residence, etc., with which we are not concerned. Section.6 then enumerates six heads of income chargeable to income-tax. Two of these heads are (a) income from property and (b) profits gains of business, etc. The several heads into which income is divided under the Income-tax Act do not make different kinds of taxes. The tax is always one; but it may arise from different sources to which the different rules of computation have to be applied. The manner of this computation is indicated in the sections that follow. Before income, profits or gains can be brought to computation, they have to be assigned to one or more heads. These heads are in a sense exclusive of one another, and income which falls within one head cannot be assigned to, or taxed under another head.The profits of a business are calculated under S. 10 of the Act. Under that section, tax is payable by a company under the head "profits and gains of business...." in respect of the profits or gains of any business carried on by the company. In Section 2 (4) of the Indian Income-tax Act, "business" has been defined to include any trade, commerce or any manufacture or any adventure or concern in the nature of trade, commerce or manufacture. In all cases where an assessee questions the finding that assessable profits or gains have been made in a business, it is customary to find the assessee questioning that a business has at all been carried on, and further that the return is on the capital account and not revenue. This well-trodden path was also followed in this case, and the assessee Company has raised 3 contentions. It contends that the return to it as salami represented merely a capital return because in acquiring the mining lease the assessee Company acquired two distinct rights, (a) the general right to the benefits under the leases for which consideration was the salami, and (b) the right to carry on business in coal. According to the assessee Company, it never exercised the second right, and when it parted with the first right, it only realised its capital. This is the first contention. The assessee Company next contends that there is no difference between an individual owning properties and selling them, on the one hand, and a company owning mining leases and issuing sub-leases, on the other, because in either case there are no profits or gains of business, if no business is done. Lastly, it contends that even if the assessee Company was carrying on business, it was not carrying on a trading activity but its activities consisted in merely collecting rents or royalties which taken with the performance of other necessary and allied activities could not amount to the carrying on of a business resulting in increased salami as profits of the business.The case, of course, is one to when the warning often given that it is not desirable to rely upon decisions under different taxing statutes would seem applicable; but in the judgment of the Privy Council, it is made clear that the Rhodesian Act was not different from the British law. The decision also rests, not upon the provisions of any special enactment but upon the more general consideration whether such receipts can be considered in a business sense as belonging to capital account or revenue and in what circumstances.Ownership of property and leasing it out may be done as a part of business, or it may be done as land owner. Whether it is the one or the other must necessarily depend upon the object with which the act is done. It is not that no company can own property and enjoy it as property, whether by itself or by giving the use of it to another on rent. Where this happens, the appropriate head to apply is "income from property" (S. 9), even though the company may be doing extensive business otherwise. But a company formed with the specific object of acquiring properties not with the view to leasing them as property but to selling them or turning them to account even by way of leasing them out as an integral part of its business, cannot be said to treat them as landowner but as trader. The cases which have been cited in this case both for and against the assessee Company must be applied with this distinction properly borne in mind. In deciding whether a company dealt with its properties as owner, one must see not to the form which it gave to the transaction but to the substance of theWe shall now turn to the present case, because it remains to consider what the assessee Company was doing with the head leases. The relevant clauses of the Memorandum of Association of the assessee Company have already been quoted. They show the various objects for which the assessee Company was incorporated. Though power was taken under cls. (2), (3), (6) and (34) to do business of coal-raising, etc., the assessee Company did not do the sort of business authorised there. It restricted its business to cls. (1) and (52). Under cl. (1), power was taken to purchase and acquire underground coal-mining and relative rights. Under cl. (52), power was taken to sell improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account or otherwise deal with all or any part of the property and rights of the Company. Business was done extensively within these two clauses. Annexure F shows the areas which were sub-leased. A glance at the chart shows the large number of sub-leases and the different companies to which the subleases were granted. These sub-leases were granted because the, assessee Company wanted as a matter of business, to turn its rights to account. The assessee Company opened out, and developed the areas, and then granted these sub-leases with an eye to profit. It is clear from these operations that the assessee Company having secured a large tract of coal-bearing land parcelled and developed it into a kind of stock-in-trade to be profitably dealt with. The assessee company extended its business along these lines acquiring fresh fields. In the circumstances the nature of the business was trading within the objects of the Company and not enjoyment of property a land owner. There was also no sale of its fixed capital at a profit. In our opinion, the High Court rightly answered the question against the assessee Company.

### Instruction: Speculate on the likely judgment (yes (1) or no (0) to the appeal) and then delve into the case proceeding to elucidate your prediction, focusing on critical sentences. ### Input: taxed under Sch. A could not be taxed under Sch. D. The company demanded a case. Rowlatt, J. held against the company, but his decision was reversed by the Court of Appeal. On further appeal to the House of Lords, it was held that the rents were profits from ownership of land and assessment under Sch. A was the proper made and they could not be treated as trade receipts of the company for purposes of Sch. D. The assessee company has relied upon certain passages in the speeches of the learned and noble Law Lords, one of which from the speech of Lord Warrington of Clyffe has already been quoted. It is not necessary to quote the other passages except one from the speech of Lord Tomlin because the purport is the same. Says Lord Tomlin:"Further in my view the perception of rents as land owner is not an operation of trade within the meaning of the Act, If this be so. I am unable to appreciate how the existence of ancillary activities which produce profits taxable under Schedule D can affect the nature of the operation or how the legal significance of the perception is altered for the purpose of income-tax if the recipient is a limited company rather than an individual".As has been already pointed out in connection with the other two cases where there is a letting out of premises and collection of rents the assessment on property basis may be correct but not so, where the letting or sub-letting is part of a trading operation. The dividing line is difficult to find; but in the case of a company with its professed objects and the manner of its activities and the nature of its dealing with its property, it is possible to say on which side the operations fall and to what head the income is to be assigned.22. Ownership of property and leasing it out may be done as a part of business, or it may be done as land owner. Whether it is the one or the other must necessarily depend upon the object with which the act is done. It is not that no company can own property and enjoy it as property, whether by itself or by giving the use of it to another on rent. Where this happens, the appropriate head to apply is "income from property" (S. 9), even though the company may be doing extensive business otherwise. But a company formed with the specific object of acquiring properties not with the view to leasing them as property but to selling them or turning them to account even by way of leasing them out as an integral part of its business, cannot be said to treat them as landowner but as trader. The cases which have been cited in this case both for and against the assessee Company must be applied with this distinction properly borne in mind. In deciding whether a company dealt with its properties as owner, one must see not to the form which it gave to the transaction but to the substance of the matter. Californian Copper Syndicate case, (1904) 5 Tax Cas 159 illustrates vividly dealings with mineral rights and concessions by a company as part of the objects of its business, or, in other words, in the doing of the business. The Calcutta cases and the case of 1930 AC 432 illustrate the contrary proposition. There, the property, though dealt with by a company intending to do business, was dealt with as landowner. The intention in those cases was not to derive profit by business done with those properties but to derive income by renting them out. Where a company acquires properties which it sells or leases out with a view to acquiring other properties to be dealt with in the same manner, the company is not treating them as properties to be enjoyed in the shape of rents which they yield but as a kind of circulating capital leading to profits of business, which profits may be either enjoyed or put back into the business to acquire more properties for further profitable exploitation.23. We shall now turn to the present case, because it remains to consider what the assessee Company was doing with the head leases. The relevant clauses of the Memorandum of Association of the assessee Company have already been quoted. They show the various objects for which the assessee Company was incorporated. Though power was taken under cls. (2), (3), (6) and (34) to do business of coal-raising, etc., the assessee Company did not do the sort of business authorised there. It restricted its business to cls. (1) and (52). Under cl. (1), power was taken to purchase and acquire underground coal-mining and relative rights. Under cl. (52), power was taken to sell improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account or otherwise deal with all or any part of the property and rights of the Company. Business was done extensively within these two clauses. Annexure F shows the areas which were sub-leased. A glance at the chart shows the large number of sub-leases and the different companies to which the subleases were granted. These sub-leases were granted because the, assessee Company wanted as a matter of business, to turn its rights to account. The assessee Company opened out, and developed the areas, and then granted these sub-leases with an eye to profit. It is clear from these operations that the assessee Company having secured a large tract of coal-bearing land parcelled and developed it into a kind of stock-in-trade to be profitably dealt with. The assessee company extended its business along these lines acquiring fresh fields. In the circumstances the nature of the business was trading within the objects of the Company and not enjoyment of property a land owner. There was also no sale of its fixed capital at a profit. In our opinion, the High Court rightly answered the question against the assessee Company. ### Response: 0 ### Explanation: be applied. The manner of this computation is indicated in the sections that follow. Before income, profits or gains can be brought to computation, they have to be assigned to one or more heads. These heads are in a sense exclusive of one another, and income which falls within one head cannot be assigned to, or taxed under another head.The profits of a business are calculated under S. 10 of the Act. Under that section, tax is payable by a company under the head "profits and gains of business...." in respect of the profits or gains of any business carried on by the company. In Section 2 (4) of the Indian Income-tax Act, "business" has been defined to include any trade, commerce or any manufacture or any adventure or concern in the nature of trade, commerce or manufacture. In all cases where an assessee questions the finding that assessable profits or gains have been made in a business, it is customary to find the assessee questioning that a business has at all been carried on, and further that the return is on the capital account and not revenue. This well-trodden path was also followed in this case, and the assessee Company has raised 3 contentions. It contends that the return to it as salami represented merely a capital return because in acquiring the mining lease the assessee Company acquired two distinct rights, (a) the general right to the benefits under the leases for which consideration was the salami, and (b) the right to carry on business in coal. According to the assessee Company, it never exercised the second right, and when it parted with the first right, it only realised its capital. This is the first contention. The assessee Company next contends that there is no difference between an individual owning properties and selling them, on the one hand, and a company owning mining leases and issuing sub-leases, on the other, because in either case there are no profits or gains of business, if no business is done. Lastly, it contends that even if the assessee Company was carrying on business, it was not carrying on a trading activity but its activities consisted in merely collecting rents or royalties which taken with the performance of other necessary and allied activities could not amount to the carrying on of a business resulting in increased salami as profits of the business.The case, of course, is one to when the warning often given that it is not desirable to rely upon decisions under different taxing statutes would seem applicable; but in the judgment of the Privy Council, it is made clear that the Rhodesian Act was not different from the British law. The decision also rests, not upon the provisions of any special enactment but upon the more general consideration whether such receipts can be considered in a business sense as belonging to capital account or revenue and in what circumstances.Ownership of property and leasing it out may be done as a part of business, or it may be done as land owner. Whether it is the one or the other must necessarily depend upon the object with which the act is done. It is not that no company can own property and enjoy it as property, whether by itself or by giving the use of it to another on rent. Where this happens, the appropriate head to apply is "income from property" (S. 9), even though the company may be doing extensive business otherwise. But a company formed with the specific object of acquiring properties not with the view to leasing them as property but to selling them or turning them to account even by way of leasing them out as an integral part of its business, cannot be said to treat them as landowner but as trader. The cases which have been cited in this case both for and against the assessee Company must be applied with this distinction properly borne in mind. In deciding whether a company dealt with its properties as owner, one must see not to the form which it gave to the transaction but to the substance of theWe shall now turn to the present case, because it remains to consider what the assessee Company was doing with the head leases. The relevant clauses of the Memorandum of Association of the assessee Company have already been quoted. They show the various objects for which the assessee Company was incorporated. Though power was taken under cls. (2), (3), (6) and (34) to do business of coal-raising, etc., the assessee Company did not do the sort of business authorised there. It restricted its business to cls. (1) and (52). Under cl. (1), power was taken to purchase and acquire underground coal-mining and relative rights. Under cl. (52), power was taken to sell improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account or otherwise deal with all or any part of the property and rights of the Company. Business was done extensively within these two clauses. Annexure F shows the areas which were sub-leased. A glance at the chart shows the large number of sub-leases and the different companies to which the subleases were granted. These sub-leases were granted because the, assessee Company wanted as a matter of business, to turn its rights to account. The assessee Company opened out, and developed the areas, and then granted these sub-leases with an eye to profit. It is clear from these operations that the assessee Company having secured a large tract of coal-bearing land parcelled and developed it into a kind of stock-in-trade to be profitably dealt with. The assessee company extended its business along these lines acquiring fresh fields. In the circumstances the nature of the business was trading within the objects of the Company and not enjoyment of property a land owner. There was also no sale of its fixed capital at a profit. In our opinion, the High Court rightly answered the question against the assessee Company.

Sahu Rajeshwar Nath Vs. Income Tax Officer, C-Ward, Meerut, & Another

being liable for the assessment of the joint Hindu family (S. 25A); (2) a firm being liable for the partners tax [second proviso to Section 26 (1) ] ; (3) the executor, administrator, or other legal representative being liable in respect of the tax payable by a deceased person (S. 24B); (4) a company in respect of the tax levied upon a shareholder [S. 28-A (3)] and (5) a person failing to deduct tax at source under Section 18 [S. 18(7)]. It is true that under the Partnership Act the liability of the partners of a firm is joint and several and it is open to a creditor of the firm to recover the debt of the firm from any one or more of the partners. But a partner of an unregistered firm does not fall within the language of Section 29 of the Act, for the liability of the partner is not imposed on account of any provision of the Income Tax Act itself.We are therefore of the opinion that a notice under Section 29 of the Act is not necessary to be served upon the partner of an unregistered firm before proceedings are taken for recovery of the tax under Section 46 (2) of the Act. We accordingly hold that Mr. Karkhanis is unable to make good his argument on this aspect of the case.5. Mr. Karkhanis then put forward the argument that it was not open to the Collector on receipt of a certificate under Section 46 (2) of the Act to recover from the appellant the amount of tax due from the unregistered partnership. It was pointed out that the certificate only mentioned the amount of arrears of tax due from the assessee i.e., the unregistered partnership and the Collector was empowered under that section to recover the amount specified in the certificate "from such assessee". It was however, conceded by Mr. Karkhanis that under S. 25 of the Partnership Act the partners are liable jointly and severally for satisfying all liabilities of the partnership firm and the appellant would have been liable for the income-tax dues of the partnership if proper proceedings, for instance a suit, had been brought in a Civil Court against him by the Income Tax authorities. The point taken by Mr. Karkhanis is that it was not open to the Collector in a proceeding under Section 46 (2) of the Act to recover from the appellant the income-tax dues from the partnership. We are unable to accede to this argument. The proviso to Section 46 (2) of the Act states that the Collector shall, without prejudice to any other powers in that behalf "for the purpose of recovering the said amount, have the powers which under the Code of Civil Procedure, 1908 (V of 1908), a Civil Court has for the purpose of the recovery of an amount due under a decree." Reference should be made in this context to Order 21, Rule 50 of the Civil Procedure Code which states:"50 (1) Where a decree has been passed against a firm execution may be granted"-(a) against any property of the partnership;(b) against any person who has appeared in is own name under Rule 6 or Rule 7 of Order XXX or who has admitted on the pleadings that he is, or who has been adjudged to be, a partner;(c) against any person who has been individually served as a partner with a summons and has failed to appear:Provided that nothing in this sub-rule shall be deemed to limit or otherwise affect the provisions of Section 247 of the Indian Contract Act, 1872.(2) Where the decree-holder claims to be entitled to cause the decree to be executed against any person other than such a person as is referred to in sub-rule (1). clauses (b) and (c) as being a partner in the firm, he may apply to the Court which passed the decree for leave, and where the liability is not disputed, such Court may grant such leave, or, where such liability is disputed, may order that the liability of such person be tried and determined in any manner in which any issue in a suit may be tried and determined.. . . . . .: . . . . . . ... .. ................"6. In the present case we see no real son why the Collector should not execute the certificate for demand of income-tax against the appellant who admits that he was a partner of the unregistered firm for the relevant accounting year.In the return filed by the unregistered firm on January 19, 1945 at page 33 of the Paper Book also the appellant is shown as one of the partners. It is maniest that the provisions of Order 21, Rule 50 (2) apply to the present case mutatis mutandis and since the appellant does not dispute that he was a partner of the unregistered firm for the relevant accounting year, the Collector could lawfully proceed to execute the certificate under Section 46 (2) of the Act against the appellant and recover the income-tax arrears from him. It follows therefore that the proceedings taken for recovery of the tax by the respondents against the appellant were legally valid and the appellant is not entitled to the grant of a writ under Article 226 of the Constitution.7. The view that we have expressed is borne out by the decisions of the Calcutta High Court in Union of India v. Satyanarayan Khan, 1961-42 ITR 42 (Cal) and in Ramgopal Khemka v. Union of India, 1966-60 ITR 659 (Cal). A contrary view has been taken by the Mysore High Court in T. Govindaswamy v. Income Tax Officer, Special Survey Circle, Bangalore, 1960-38 ITR 197 (Mys) and by the Allahabad High Court in Moti Lal Purshotam Das v. Income Tax Officer, Kanpur, (1960) 39 ITR 497 = (AIR 1961 All 133 ). But for the reasons already stated we hold that the latter two decisions do not correctly state the law on the point.

0[ds]In our opinion, there is no warrant or justification or this argument.The phrase "other person liable to pay" in Section 29 should be construed as "other person liable to pay under the Income Tax Act" and the liability cannot therefore be construed with reference to the Partnership Act or any other statute. In the Income Tax Act it self the liability is imposed on other persons to pay the tax apart from the assessee by several sections. For example "the other person apart from the assessee" in the language of Section 29 of the Act would include: (1) a member of a divided family being liable for the assessment of the joint Hindu family (S. 25A); (2) a firm being liable for the partners tax [second proviso to Section 26 (1) ] ; (3) the executor, administrator, or other legal representative being liable in respect of the tax payable by a deceased person (S. 24B); (4) a company in respect of the tax levied upon a shareholder [S.(3)] and (5) a person failing to deduct tax at source under Section 18 [S. 18(7)]. It is true that under the Partnership Act the liability of the partners of a firm is joint and several and it is open to a creditor of the firm to recover the debt of the firm from any one or more of the partners. But a partner of an unregistered firm does not fall within the language of Section 29 of the Act, for the liability of the partner is not imposed on account of any provision of the Income Tax Act itself.We are therefore of the opinion that a notice under Section 29 of the Act is not necessary to be served upon the partner of an unregistered firm before proceedings are taken for recovery of the tax under Section 46 (2) of the Act. We accordingly hold that Mr. Karkhanis is unable to make good his argument on this aspect of theare unable to accede to this argument. The proviso to Section 46 (2) of the Act states that the Collector shall, without prejudice to any other powers in that behalf "for the purpose of recovering the said amount, have the powers which under the Code of Civil Procedure, 1908 (V of 1908), a Civil Court has for the purpose of the recovery of an amount due under a decree.In the present case we see no real son why the Collector should not execute the certificate for demand ofagainst the appellant who admits that he was a partner of the unregistered firm for the relevant accounting year.In the return filed by the unregistered firm on January 19, 1945 at page 33 of the Paper Book also the appellant is shown as one of the partners. It is maniest that the provisions of Order 21, Rule 50 (2) apply to the present case mutatis mutandis and since the appellant does not dispute that he was a partner of the unregistered firm for the relevant accounting year, the Collector could lawfully proceed to execute the certificate under Section 46 (2) of the Act against the appellant and recover thearrears from him. It follows therefore that the proceedings taken for recovery of the tax by the respondents against the appellant were legally valid and the appellant is not entitled to the grant of a writ under Article 226 of the Constitution.7. The view that we have expressed is borne out by the decisions of the Calcutta High Court in Union of India v. Satyanarayan Khan,ITR 42 (Cal) and in Ramgopal Khemka v. Union of India,ITR 659 (Cal). A contrary view has been taken by the Mysore High Court in T. Govindaswamy v. Income Tax Officer, Special Survey Circle, Bangalore,ITR 197 (Mys) and by the Allahabad High Court in Moti Lal Purshotam Das v. Income Tax Officer, Kanpur, (1960) 39 ITR 497 = (AIR 1961 All 133 ). But for the reasons already stated we hold that the latter two decisions do not correctly state the law on the point.

### Instruction: First, predict whether the appeal in case proceeding will be accepted (1) or not (0), and then explain the decision by identifying crucial sentences from the document. ### Input: being liable for the assessment of the joint Hindu family (S. 25A); (2) a firm being liable for the partners tax [second proviso to Section 26 (1) ] ; (3) the executor, administrator, or other legal representative being liable in respect of the tax payable by a deceased person (S. 24B); (4) a company in respect of the tax levied upon a shareholder [S. 28-A (3)] and (5) a person failing to deduct tax at source under Section 18 [S. 18(7)]. It is true that under the Partnership Act the liability of the partners of a firm is joint and several and it is open to a creditor of the firm to recover the debt of the firm from any one or more of the partners. But a partner of an unregistered firm does not fall within the language of Section 29 of the Act, for the liability of the partner is not imposed on account of any provision of the Income Tax Act itself.We are therefore of the opinion that a notice under Section 29 of the Act is not necessary to be served upon the partner of an unregistered firm before proceedings are taken for recovery of the tax under Section 46 (2) of the Act. We accordingly hold that Mr. Karkhanis is unable to make good his argument on this aspect of the case.5. Mr. Karkhanis then put forward the argument that it was not open to the Collector on receipt of a certificate under Section 46 (2) of the Act to recover from the appellant the amount of tax due from the unregistered partnership. It was pointed out that the certificate only mentioned the amount of arrears of tax due from the assessee i.e., the unregistered partnership and the Collector was empowered under that section to recover the amount specified in the certificate "from such assessee". It was however, conceded by Mr. Karkhanis that under S. 25 of the Partnership Act the partners are liable jointly and severally for satisfying all liabilities of the partnership firm and the appellant would have been liable for the income-tax dues of the partnership if proper proceedings, for instance a suit, had been brought in a Civil Court against him by the Income Tax authorities. The point taken by Mr. Karkhanis is that it was not open to the Collector in a proceeding under Section 46 (2) of the Act to recover from the appellant the income-tax dues from the partnership. We are unable to accede to this argument. The proviso to Section 46 (2) of the Act states that the Collector shall, without prejudice to any other powers in that behalf "for the purpose of recovering the said amount, have the powers which under the Code of Civil Procedure, 1908 (V of 1908), a Civil Court has for the purpose of the recovery of an amount due under a decree." Reference should be made in this context to Order 21, Rule 50 of the Civil Procedure Code which states:"50 (1) Where a decree has been passed against a firm execution may be granted"-(a) against any property of the partnership;(b) against any person who has appeared in is own name under Rule 6 or Rule 7 of Order XXX or who has admitted on the pleadings that he is, or who has been adjudged to be, a partner;(c) against any person who has been individually served as a partner with a summons and has failed to appear:Provided that nothing in this sub-rule shall be deemed to limit or otherwise affect the provisions of Section 247 of the Indian Contract Act, 1872.(2) Where the decree-holder claims to be entitled to cause the decree to be executed against any person other than such a person as is referred to in sub-rule (1). clauses (b) and (c) as being a partner in the firm, he may apply to the Court which passed the decree for leave, and where the liability is not disputed, such Court may grant such leave, or, where such liability is disputed, may order that the liability of such person be tried and determined in any manner in which any issue in a suit may be tried and determined.. . . . . .: . . . . . . ... .. ................"6. In the present case we see no real son why the Collector should not execute the certificate for demand of income-tax against the appellant who admits that he was a partner of the unregistered firm for the relevant accounting year.In the return filed by the unregistered firm on January 19, 1945 at page 33 of the Paper Book also the appellant is shown as one of the partners. It is maniest that the provisions of Order 21, Rule 50 (2) apply to the present case mutatis mutandis and since the appellant does not dispute that he was a partner of the unregistered firm for the relevant accounting year, the Collector could lawfully proceed to execute the certificate under Section 46 (2) of the Act against the appellant and recover the income-tax arrears from him. It follows therefore that the proceedings taken for recovery of the tax by the respondents against the appellant were legally valid and the appellant is not entitled to the grant of a writ under Article 226 of the Constitution.7. The view that we have expressed is borne out by the decisions of the Calcutta High Court in Union of India v. Satyanarayan Khan, 1961-42 ITR 42 (Cal) and in Ramgopal Khemka v. Union of India, 1966-60 ITR 659 (Cal). A contrary view has been taken by the Mysore High Court in T. Govindaswamy v. Income Tax Officer, Special Survey Circle, Bangalore, 1960-38 ITR 197 (Mys) and by the Allahabad High Court in Moti Lal Purshotam Das v. Income Tax Officer, Kanpur, (1960) 39 ITR 497 = (AIR 1961 All 133 ). But for the reasons already stated we hold that the latter two decisions do not correctly state the law on the point. ### Response: 0 ### Explanation: In our opinion, there is no warrant or justification or this argument.The phrase "other person liable to pay" in Section 29 should be construed as "other person liable to pay under the Income Tax Act" and the liability cannot therefore be construed with reference to the Partnership Act or any other statute. In the Income Tax Act it self the liability is imposed on other persons to pay the tax apart from the assessee by several sections. For example "the other person apart from the assessee" in the language of Section 29 of the Act would include: (1) a member of a divided family being liable for the assessment of the joint Hindu family (S. 25A); (2) a firm being liable for the partners tax [second proviso to Section 26 (1) ] ; (3) the executor, administrator, or other legal representative being liable in respect of the tax payable by a deceased person (S. 24B); (4) a company in respect of the tax levied upon a shareholder [S.(3)] and (5) a person failing to deduct tax at source under Section 18 [S. 18(7)]. It is true that under the Partnership Act the liability of the partners of a firm is joint and several and it is open to a creditor of the firm to recover the debt of the firm from any one or more of the partners. But a partner of an unregistered firm does not fall within the language of Section 29 of the Act, for the liability of the partner is not imposed on account of any provision of the Income Tax Act itself.We are therefore of the opinion that a notice under Section 29 of the Act is not necessary to be served upon the partner of an unregistered firm before proceedings are taken for recovery of the tax under Section 46 (2) of the Act. We accordingly hold that Mr. Karkhanis is unable to make good his argument on this aspect of theare unable to accede to this argument. The proviso to Section 46 (2) of the Act states that the Collector shall, without prejudice to any other powers in that behalf "for the purpose of recovering the said amount, have the powers which under the Code of Civil Procedure, 1908 (V of 1908), a Civil Court has for the purpose of the recovery of an amount due under a decree.In the present case we see no real son why the Collector should not execute the certificate for demand ofagainst the appellant who admits that he was a partner of the unregistered firm for the relevant accounting year.In the return filed by the unregistered firm on January 19, 1945 at page 33 of the Paper Book also the appellant is shown as one of the partners. It is maniest that the provisions of Order 21, Rule 50 (2) apply to the present case mutatis mutandis and since the appellant does not dispute that he was a partner of the unregistered firm for the relevant accounting year, the Collector could lawfully proceed to execute the certificate under Section 46 (2) of the Act against the appellant and recover thearrears from him. It follows therefore that the proceedings taken for recovery of the tax by the respondents against the appellant were legally valid and the appellant is not entitled to the grant of a writ under Article 226 of the Constitution.7. The view that we have expressed is borne out by the decisions of the Calcutta High Court in Union of India v. Satyanarayan Khan,ITR 42 (Cal) and in Ramgopal Khemka v. Union of India,ITR 659 (Cal). A contrary view has been taken by the Mysore High Court in T. Govindaswamy v. Income Tax Officer, Special Survey Circle, Bangalore,ITR 197 (Mys) and by the Allahabad High Court in Moti Lal Purshotam Das v. Income Tax Officer, Kanpur, (1960) 39 ITR 497 = (AIR 1961 All 133 ). But for the reasons already stated we hold that the latter two decisions do not correctly state the law on the point.

Satish Kumar Gupta And Etc. Etc Vs. State Of Haryana And Ors. Etc

directed to produce the relevant records in respect of the proceedings relating to land acquisition involved in these matters. There shall be stay of the effect and operation of the impugned order during the pendency of these petitions. List the matters after four weeks. In the meanwhile, all the respondents are at liberty to file written statements, if any."][15* Peerappa Hanmantha Harijan v. State of Karnataka, SLP(C)No. 19819 of 2013, order dated 24-3-2015(SC), wherein it was directed: "Heard Ms. Kiran Suri, learned Senior Counsel for the petitioners in SLPS(C)Nos. 31624-25 of 2014 in part. List all the matters as part for further hearing. Vide order dated 17-11-2014, learned counsel for the State as well as the learned counsel for KIADB were directed to produce the relevant records in respect of the proceedings relating to land acquisition involved in these matters, record as well as the records relating to allotment of land. However, as per office records, nothing has been produced so far. In this view of the matter, the learned counsel for the State as well as the learned counsel for KIADB are directed to comply with the order dated 17-11-2014 and produce the relevant records in respect of the proceedings relating to land acquisition and the allotment of land involved in these matters before the next date of hearing. List the matters on 15-4-2015."]14. We are in respectful agreement with the above view in Hindu Kanya Maha Vidyalaya (supra) and Peerappa Hanmantha (supra). No contrary view of this Court has been brought to our notice. The judgments relied upon by the respondents are distinguishable as already held by this Court.15. In Himalayan Tiles (supra) the acquisition was under Part-VII of the Act. In Santosh Kumar (supra) the question was whether award of the Collector could be challenged, to which this Court answered in the negative except on the ground of fraud, corruption or collusion. In Neyvely Lignite (supra) again the acquisition was under Part-VII of the Act and in that context this Court held that the expression "person interested" could include a company or local authority for whose benefit the land was acquired. The post-acquisition allottee cannot by any stretch of imagination be treated at par with beneficiary for whom the land was acquired. In U.P. Awas Evam Vikas Parishad (supra), the matter dealt with was in the context of statutory authority for whom the land was acquired. Delhi Development Authority v. Bhola Nath Sharma (dead) by Lrs. and ors., 2011(1) R.C.R.(Civil) 820 : 2011(1) Recent Apex Judgments (R.A.J.) 296 : (2011) 2 SCC 54 was a case in the context of beneficiary for whom the land was acquired.16. The only other justification in the impugned judgment which has been relied upon by the respondents is lack of sincerity on the part of the State authority for whose benefit the acquisition has been made viz. HSIDC, which by itself cannot be a valid ground to permit post-acquisition allottee to be treated as a necessary or proper authority under Order I Rule 10 of CPC to proceedings for determination of compensation. The view taken in the impugned judgment cannot be sustained on any principle or precedent.17. We may now refer to an order of this Court dated 15th July, 2004 which has been relied upon in the impugned judgment in para 31. There is no consideration of the principle of law and thus, the said order without there being contest on the principle of law could not be treated as a precedent for deciding the legal issue at hand.18. Accordingly, we hold that the post-acquisition allottee has no locus to be heard in the matter and is neither a necessary nor a proper party.19. The other part of the impugned order permitting additional evidence and remanding the case for fresh decision is uncalled for. No case was made out for permitting additional evidence on settled principles under Order XLI Rule 27 of CPC. The provision is reproduced below:-"27. Production of additional evidence in Appellate Court.-(1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if -(a) the court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or(aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or(b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause,The Appellate Court may allow such evidence or document to be produced, or witness to be examined.(2) Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission."20. It is clear that neither the Trial Court has refused to receive the evidence nor it could be said that the evidence sought to be adduced was not available despite the exercise of due diligence nor it could be held to necessary to pronounce the judgment. Additional evidence cannot be permitted to fill-in the lacunae or to patch-up the weak points in the case N. Kamalam v. Ayyaswami, 2001(4) R.C.R.(Civil) 193 : (2001) 7 SCC 503 : para 19. There was no ground for remand in these circumstances.21. We may also refer to the argument that this Court, while remanding the matter in the earlier round, had given liberty to the MSIL to file an application for impleadment or to act as an intervenor which implied that such application was to be accepted. We do not find any merit in this contention also. It cannot be held that any right was crystalised by the said observation and such prayer had to be considered according to law. We have already held that the post-acquisition allottee had no right in the matter.

1[ds]9. To determine the question whether the post-acquisition allottee of land is necessary or proper party or has any locus to be heard in the matter of determination of compensation, we may refer to the scheme of the Act. The acquisition may either be for a "public purpose" as defined under Section 3(f) or for a company under Part-VII of the Act. If the acquisition is for a public purpose (as the present case), the land vests in the State after the Collector makes an award and the possession is taken. Till the award is made, no person other than State comes into the picture. Once the land vests in the State, the acquisition is complete. Any transferee from the State is not concerned with the process of acquisition. The State may transfer the land by public auction or by allotment at any price with which the person whose land is acquired has no concern. The mere fact that the Government chooses to determine the allotment price with reference to compensation price determined by the Court does not provide any locus to an allottee to contest the claim for enhancement of compensation.We are in respectful agreement with the above view in Hindu Kanya Maha Vidyalaya (supra) and Peerappa Hanmantha (supra). No contrary view of this Court has been brought to our notice. The judgments relied upon by the respondents are distinguishable as already held by this Court.The only other justification in the impugned judgment which has been relied upon by the respondents is lack of sincerity on the part of the State authority for whose benefit the acquisition has been made viz. HSIDC, which by itself cannot be a valid ground to permit post-acquisition allottee to be treated as a necessary or proper authority under Order I Rule 10 of CPC to proceedings for determination of compensation. The view taken in the impugned judgment cannot be sustained on any principle or precedent.17. We may now refer to an order of this Court dated 15th July, 2004 which has been relied upon in the impugned judgment in para 31. There is no consideration of the principle of law and thus, the said order without there being contest on the principle of law could not be treated as a precedent for deciding the legal issue at hand.18. Accordingly, we hold that the post-acquisition allottee has no locus to be heard in the matter and is neither a necessary nor a proper party.It is clear that neither the Trial Court has refused to receive the evidence nor it could be said that the evidence sought to be adduced was not available despite the exercise of due diligence nor it could be held to necessary to pronounce the judgment. Additional evidence cannot be permitted to fill-in the lacunae or to patch-up the weak points in the case N. Kamalam v. Ayyaswami, 2001(4) R.C.R.(Civil) 193 : (2001) 7 SCC 503 : para 19. There was no ground for remand in these circumstances.21. We may also refer to the argument that this Court, while remanding the matter in the earlier round, had given liberty to the MSIL to file an application for impleadment or to act as an intervenor which implied that such application was to be accepted. We do not find any merit in this contention also. It cannot be held that any right was crystalised by the said observation and such prayer had to be considered according to law. We have already held that the post-acquisition allottee had no right in the matter.

### Instruction: First, predict whether the appeal in case proceeding will be accepted (1) or not (0), and then explain the decision by identifying crucial sentences from the document. ### Input: directed to produce the relevant records in respect of the proceedings relating to land acquisition involved in these matters. There shall be stay of the effect and operation of the impugned order during the pendency of these petitions. List the matters after four weeks. In the meanwhile, all the respondents are at liberty to file written statements, if any."][15* Peerappa Hanmantha Harijan v. State of Karnataka, SLP(C)No. 19819 of 2013, order dated 24-3-2015(SC), wherein it was directed: "Heard Ms. Kiran Suri, learned Senior Counsel for the petitioners in SLPS(C)Nos. 31624-25 of 2014 in part. List all the matters as part for further hearing. Vide order dated 17-11-2014, learned counsel for the State as well as the learned counsel for KIADB were directed to produce the relevant records in respect of the proceedings relating to land acquisition involved in these matters, record as well as the records relating to allotment of land. However, as per office records, nothing has been produced so far. In this view of the matter, the learned counsel for the State as well as the learned counsel for KIADB are directed to comply with the order dated 17-11-2014 and produce the relevant records in respect of the proceedings relating to land acquisition and the allotment of land involved in these matters before the next date of hearing. List the matters on 15-4-2015."]14. We are in respectful agreement with the above view in Hindu Kanya Maha Vidyalaya (supra) and Peerappa Hanmantha (supra). No contrary view of this Court has been brought to our notice. The judgments relied upon by the respondents are distinguishable as already held by this Court.15. In Himalayan Tiles (supra) the acquisition was under Part-VII of the Act. In Santosh Kumar (supra) the question was whether award of the Collector could be challenged, to which this Court answered in the negative except on the ground of fraud, corruption or collusion. In Neyvely Lignite (supra) again the acquisition was under Part-VII of the Act and in that context this Court held that the expression "person interested" could include a company or local authority for whose benefit the land was acquired. The post-acquisition allottee cannot by any stretch of imagination be treated at par with beneficiary for whom the land was acquired. In U.P. Awas Evam Vikas Parishad (supra), the matter dealt with was in the context of statutory authority for whom the land was acquired. Delhi Development Authority v. Bhola Nath Sharma (dead) by Lrs. and ors., 2011(1) R.C.R.(Civil) 820 : 2011(1) Recent Apex Judgments (R.A.J.) 296 : (2011) 2 SCC 54 was a case in the context of beneficiary for whom the land was acquired.16. The only other justification in the impugned judgment which has been relied upon by the respondents is lack of sincerity on the part of the State authority for whose benefit the acquisition has been made viz. HSIDC, which by itself cannot be a valid ground to permit post-acquisition allottee to be treated as a necessary or proper authority under Order I Rule 10 of CPC to proceedings for determination of compensation. The view taken in the impugned judgment cannot be sustained on any principle or precedent.17. We may now refer to an order of this Court dated 15th July, 2004 which has been relied upon in the impugned judgment in para 31. There is no consideration of the principle of law and thus, the said order without there being contest on the principle of law could not be treated as a precedent for deciding the legal issue at hand.18. Accordingly, we hold that the post-acquisition allottee has no locus to be heard in the matter and is neither a necessary nor a proper party.19. The other part of the impugned order permitting additional evidence and remanding the case for fresh decision is uncalled for. No case was made out for permitting additional evidence on settled principles under Order XLI Rule 27 of CPC. The provision is reproduced below:-"27. Production of additional evidence in Appellate Court.-(1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if -(a) the court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or(aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or(b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause,The Appellate Court may allow such evidence or document to be produced, or witness to be examined.(2) Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission."20. It is clear that neither the Trial Court has refused to receive the evidence nor it could be said that the evidence sought to be adduced was not available despite the exercise of due diligence nor it could be held to necessary to pronounce the judgment. Additional evidence cannot be permitted to fill-in the lacunae or to patch-up the weak points in the case N. Kamalam v. Ayyaswami, 2001(4) R.C.R.(Civil) 193 : (2001) 7 SCC 503 : para 19. There was no ground for remand in these circumstances.21. We may also refer to the argument that this Court, while remanding the matter in the earlier round, had given liberty to the MSIL to file an application for impleadment or to act as an intervenor which implied that such application was to be accepted. We do not find any merit in this contention also. It cannot be held that any right was crystalised by the said observation and such prayer had to be considered according to law. We have already held that the post-acquisition allottee had no right in the matter. ### Response: 1 ### Explanation: 9. To determine the question whether the post-acquisition allottee of land is necessary or proper party or has any locus to be heard in the matter of determination of compensation, we may refer to the scheme of the Act. The acquisition may either be for a "public purpose" as defined under Section 3(f) or for a company under Part-VII of the Act. If the acquisition is for a public purpose (as the present case), the land vests in the State after the Collector makes an award and the possession is taken. Till the award is made, no person other than State comes into the picture. Once the land vests in the State, the acquisition is complete. Any transferee from the State is not concerned with the process of acquisition. The State may transfer the land by public auction or by allotment at any price with which the person whose land is acquired has no concern. The mere fact that the Government chooses to determine the allotment price with reference to compensation price determined by the Court does not provide any locus to an allottee to contest the claim for enhancement of compensation.We are in respectful agreement with the above view in Hindu Kanya Maha Vidyalaya (supra) and Peerappa Hanmantha (supra). No contrary view of this Court has been brought to our notice. The judgments relied upon by the respondents are distinguishable as already held by this Court.The only other justification in the impugned judgment which has been relied upon by the respondents is lack of sincerity on the part of the State authority for whose benefit the acquisition has been made viz. HSIDC, which by itself cannot be a valid ground to permit post-acquisition allottee to be treated as a necessary or proper authority under Order I Rule 10 of CPC to proceedings for determination of compensation. The view taken in the impugned judgment cannot be sustained on any principle or precedent.17. We may now refer to an order of this Court dated 15th July, 2004 which has been relied upon in the impugned judgment in para 31. There is no consideration of the principle of law and thus, the said order without there being contest on the principle of law could not be treated as a precedent for deciding the legal issue at hand.18. Accordingly, we hold that the post-acquisition allottee has no locus to be heard in the matter and is neither a necessary nor a proper party.It is clear that neither the Trial Court has refused to receive the evidence nor it could be said that the evidence sought to be adduced was not available despite the exercise of due diligence nor it could be held to necessary to pronounce the judgment. Additional evidence cannot be permitted to fill-in the lacunae or to patch-up the weak points in the case N. Kamalam v. Ayyaswami, 2001(4) R.C.R.(Civil) 193 : (2001) 7 SCC 503 : para 19. There was no ground for remand in these circumstances.21. We may also refer to the argument that this Court, while remanding the matter in the earlier round, had given liberty to the MSIL to file an application for impleadment or to act as an intervenor which implied that such application was to be accepted. We do not find any merit in this contention also. It cannot be held that any right was crystalised by the said observation and such prayer had to be considered according to law. We have already held that the post-acquisition allottee had no right in the matter.

Maharaja Chintamani Saran Nath Sah Deo Vs. The Commissioner Of Income-Tax, Bihar & Orissa

In Sindhuranis case, 1957 SCR 1019 : ( (S) Air 1957 SC 729 ) salami was a lump sum payment as consideration for what the landlord was transferring to the tenant, i.e., parting with his right, under the lease of a holding. In the instant case the terms of the covenant quoted above show that the payment has a close analogy to the payment in Sinduranis case, 1957 SCR 1019 : ( (S) AIR 1957 SC 729 ). That case was sought to be distinguished by the respondent on the ground that there was a transfer of a tenancy which was capable of ripening into an occupancy holding but that was not the ground on which this court decided the case of salami. The definition of salami was a general one in that it was a consideration paid by a tenant for being let into possession for the purpose of creating a new tenancy. In Kamakshya Narain Singhs case 70 Ind App 180 : (AIR 1943 PC 153 ) also the Privy Council laid the definition of salami in general terms and described the characteristics of a payment by way of salami without any reference to the nature of the lease.8. In reply to the argument of counsel for the appellant, Mr. Rajagopala Sastri for the respondent argued that the question was whether the licensor had allowed the licensee to take his capital or he had allowed him to use the capital. If it was the former, the receipts were in the nature of capital receipts and if latter they were in the nature of revenue. His contention was that it was really the latter because all that the licensee was allowed to do was to enter on the lands and make use of the assets belonging to the appellant. This, in our opinion, is not a correct approach to the question. What the license gave to the licensee was the right to enter upon the land to prospect, search and mine quarry, bore, dig and prove all Bauxite lying in or within the land and for that purpose the licensee had the right to dig pits, shafts, borings and to remove, take away and appropriate samples and specimens of Bauxites in reasonable quantities not exceeding 100 tons in the aggregate. It cannot be said that this amounts merely to a grant of the use of the capital of the licensor but it was really a grant of a right to a portion of the capital in the shape of a general right to the capital asset.9. In support of this distinction between the use of capital and the taking away of capital, counsel relied upon the following observation of Lawrence J. in Greyhound Racing Assocn. (Liverpol) Ltd. v. Cooper, (1936) 20 Tax Cas 373 :"The question as to what receipts are revenue and what are capital has given rise to much difference of opinion; but it is clear, in my opinion that, if the sum in question is received for what is in truth the user of capital assets and not for their realisation it is a revenue receipt, not capital;"That may be so but the question has to be decided on the nature of the grant. The terms of the covenant in the present case which have been quoted above show that the transaction was not one merely of the user of capital assets but of their realisation By this test therefore the receipts were on capital account and not revenue. Counsel then referred to a judgment of the Patna High Court in H. P. Bannerji v. Commissioner of Income-tax B. and O., 1951-19 ITR 596 : (AIR 1951 Pat 565) where it was held that compensation received by the assessee for use by the military of his lands for a short period was a revenue receipt. In that case the assessee purchased 13 bighas of land for purposes of settling up a market. That plot was requisitioned by the military authorities under the Defence of India Rules and the assessee received compensation for the use of the land. It was held to be a revenue receipt because it was really profits derived from the land for the use of a capital asset.10. Another case upon which counsel for the respondent placed reliance is Smethurst v. Davy, (1957) 37 tax Cas 593. That was a case which was decided on the wording of S. 31(10) (d) of the Finance Act of 1948, and therefore is not of much assistance.11. Reference was also made to Stow Bardolph Gravel Co. Ltd. v. Pool, (1955) 35 Tax Case 459. There the assessee company, which carried on business in sand and gravel, purchased two unworked deposits. The company contended that the payments made to acquire the deposits were deductible being expenditure which was incurred in the acquisition of trading stock or otherwise of revenue character. It was held that the company had acquired a capital asset and not stock-in-trade. The case turned upon a finding by the special commissioners and is not helpful. Reliance was also placed on Meenakshamma v. Commr. of Income-tax, Hyderabad, 1956-30 ITR 286 : (AIR 1956 Andhra 229). In that case certain fixed sums of money were paid as royalty for the whole period of the lease which were held to be revenue receipts as consolidated advance payments of the amount which would otherwise have been payable periodically.12. None of these cases is of any assistance to the respondents case. The question which has to be decided is what was the nature of the transaction. The covenants in the licence show that the licensee had a right to enter upon the land and take away and appropriate samples of all Bauxite of every kind up to 100 tons and therefore there was a transfer of the right the consideration for which would be a capital payment.13. In our opinion the High Court was in error and the question referred should have been decided in favour of the appellant.

1[ds]This, in our opinion, is not a correct approach to the question. What the license gave to the licensee was the right to enter upon the land to prospect, search and mine quarry, bore, dig and prove all Bauxite lying in or within the land and for that purpose the licensee had the right to dig pits, shafts, borings and to remove, take away and appropriate samples and specimens of Bauxites in reasonable quantities not exceeding 100 tons in the aggregate. It cannot be said that this amounts merely to a grant of the use of the capital of the licensor but it was really a grant of a right to a portion of the capital in the shape of a general right to the capital asset.The periods of the licences were comparatively short 6 months in two cases and a year each in the other two. Under the covenants the licensees were to cause as little damage as possible to the surface of the land. They were to give full information regarding the progress of the operations and true copies of all borings to the licensor. The licensees were also required to plug all holes made by them. The licensor covenanted to give a reasonable right of passage through and over the adjoining lands and properties and in consideration of the premium paid, the licensees could, at their option, after giving necessary notice and on payment of a further sum, get a mining lease for a term of thirty years on the terms and conditions set out in the indenture attached as schedule 2 to the licence. The Income-tax Appellate Tribunal found that the licensees were not granted any interest in land and the amounts received were revenue receipts and therefore, assessable to income-tax.There the assessee company, which carried on business in sand and gravel, purchased two unworked deposits. The company contended that the payments made to acquire the deposits were deductible being expenditure which was incurred in the acquisition of trading stock or otherwise of revenue character. It was held that the company had acquired a capital asset and not stock-in-trade. The case turned upon a finding by the special commissioners and is not helpful.In our opinion the High Court was in error and the question referred should have been decided in favour of the appellant

### Instruction: Speculate on the likely judgment (yes (1) or no (0) to the appeal) and then delve into the case proceeding to elucidate your prediction, focusing on critical sentences. ### Input: In Sindhuranis case, 1957 SCR 1019 : ( (S) Air 1957 SC 729 ) salami was a lump sum payment as consideration for what the landlord was transferring to the tenant, i.e., parting with his right, under the lease of a holding. In the instant case the terms of the covenant quoted above show that the payment has a close analogy to the payment in Sinduranis case, 1957 SCR 1019 : ( (S) AIR 1957 SC 729 ). That case was sought to be distinguished by the respondent on the ground that there was a transfer of a tenancy which was capable of ripening into an occupancy holding but that was not the ground on which this court decided the case of salami. The definition of salami was a general one in that it was a consideration paid by a tenant for being let into possession for the purpose of creating a new tenancy. In Kamakshya Narain Singhs case 70 Ind App 180 : (AIR 1943 PC 153 ) also the Privy Council laid the definition of salami in general terms and described the characteristics of a payment by way of salami without any reference to the nature of the lease.8. In reply to the argument of counsel for the appellant, Mr. Rajagopala Sastri for the respondent argued that the question was whether the licensor had allowed the licensee to take his capital or he had allowed him to use the capital. If it was the former, the receipts were in the nature of capital receipts and if latter they were in the nature of revenue. His contention was that it was really the latter because all that the licensee was allowed to do was to enter on the lands and make use of the assets belonging to the appellant. This, in our opinion, is not a correct approach to the question. What the license gave to the licensee was the right to enter upon the land to prospect, search and mine quarry, bore, dig and prove all Bauxite lying in or within the land and for that purpose the licensee had the right to dig pits, shafts, borings and to remove, take away and appropriate samples and specimens of Bauxites in reasonable quantities not exceeding 100 tons in the aggregate. It cannot be said that this amounts merely to a grant of the use of the capital of the licensor but it was really a grant of a right to a portion of the capital in the shape of a general right to the capital asset.9. In support of this distinction between the use of capital and the taking away of capital, counsel relied upon the following observation of Lawrence J. in Greyhound Racing Assocn. (Liverpol) Ltd. v. Cooper, (1936) 20 Tax Cas 373 :"The question as to what receipts are revenue and what are capital has given rise to much difference of opinion; but it is clear, in my opinion that, if the sum in question is received for what is in truth the user of capital assets and not for their realisation it is a revenue receipt, not capital;"That may be so but the question has to be decided on the nature of the grant. The terms of the covenant in the present case which have been quoted above show that the transaction was not one merely of the user of capital assets but of their realisation By this test therefore the receipts were on capital account and not revenue. Counsel then referred to a judgment of the Patna High Court in H. P. Bannerji v. Commissioner of Income-tax B. and O., 1951-19 ITR 596 : (AIR 1951 Pat 565) where it was held that compensation received by the assessee for use by the military of his lands for a short period was a revenue receipt. In that case the assessee purchased 13 bighas of land for purposes of settling up a market. That plot was requisitioned by the military authorities under the Defence of India Rules and the assessee received compensation for the use of the land. It was held to be a revenue receipt because it was really profits derived from the land for the use of a capital asset.10. Another case upon which counsel for the respondent placed reliance is Smethurst v. Davy, (1957) 37 tax Cas 593. That was a case which was decided on the wording of S. 31(10) (d) of the Finance Act of 1948, and therefore is not of much assistance.11. Reference was also made to Stow Bardolph Gravel Co. Ltd. v. Pool, (1955) 35 Tax Case 459. There the assessee company, which carried on business in sand and gravel, purchased two unworked deposits. The company contended that the payments made to acquire the deposits were deductible being expenditure which was incurred in the acquisition of trading stock or otherwise of revenue character. It was held that the company had acquired a capital asset and not stock-in-trade. The case turned upon a finding by the special commissioners and is not helpful. Reliance was also placed on Meenakshamma v. Commr. of Income-tax, Hyderabad, 1956-30 ITR 286 : (AIR 1956 Andhra 229). In that case certain fixed sums of money were paid as royalty for the whole period of the lease which were held to be revenue receipts as consolidated advance payments of the amount which would otherwise have been payable periodically.12. None of these cases is of any assistance to the respondents case. The question which has to be decided is what was the nature of the transaction. The covenants in the licence show that the licensee had a right to enter upon the land and take away and appropriate samples of all Bauxite of every kind up to 100 tons and therefore there was a transfer of the right the consideration for which would be a capital payment.13. In our opinion the High Court was in error and the question referred should have been decided in favour of the appellant. ### Response: 1 ### Explanation: This, in our opinion, is not a correct approach to the question. What the license gave to the licensee was the right to enter upon the land to prospect, search and mine quarry, bore, dig and prove all Bauxite lying in or within the land and for that purpose the licensee had the right to dig pits, shafts, borings and to remove, take away and appropriate samples and specimens of Bauxites in reasonable quantities not exceeding 100 tons in the aggregate. It cannot be said that this amounts merely to a grant of the use of the capital of the licensor but it was really a grant of a right to a portion of the capital in the shape of a general right to the capital asset.The periods of the licences were comparatively short 6 months in two cases and a year each in the other two. Under the covenants the licensees were to cause as little damage as possible to the surface of the land. They were to give full information regarding the progress of the operations and true copies of all borings to the licensor. The licensees were also required to plug all holes made by them. The licensor covenanted to give a reasonable right of passage through and over the adjoining lands and properties and in consideration of the premium paid, the licensees could, at their option, after giving necessary notice and on payment of a further sum, get a mining lease for a term of thirty years on the terms and conditions set out in the indenture attached as schedule 2 to the licence. The Income-tax Appellate Tribunal found that the licensees were not granted any interest in land and the amounts received were revenue receipts and therefore, assessable to income-tax.There the assessee company, which carried on business in sand and gravel, purchased two unworked deposits. The company contended that the payments made to acquire the deposits were deductible being expenditure which was incurred in the acquisition of trading stock or otherwise of revenue character. It was held that the company had acquired a capital asset and not stock-in-trade. The case turned upon a finding by the special commissioners and is not helpful.In our opinion the High Court was in error and the question referred should have been decided in favour of the appellant

Commissioner For Hindu Religious & Charitableendowments, My Vs. Ratnavarma Heggade (Deceased) By His L.Rs

and is so inseparably connected with it that it is its integral part. It cannot therefore be held that the Manjunatha temple is an "endowment" within the meaning of clause (11) of Section 9 of the Act for it has not been proved that any property belongs to it, or has been given or endowed for its support or for the performance of any service or charity connected therewith, or that it has any such premises of its own as could be said to form its own endowment.21. It would follow from what has been said above that even if the Manjunatha temple is assumed to be a place used, as of right, for public religious worship by Hindus, it could come under the purview of the Act only if it could be established that it was a religious endowment within the meaning of Section 2, but this has not been proved to be so. On the other hand it appears that the present institution of Dharmasthal was originally a Jain religious and charitable institution to which property was endowed by the ancestors of the present Heggade who was himself a Jain. It was that endowment which spread and gained more and more importance over the years because of the offerings made largely by Hindu and Jain devotees and worshipers. But it has not been established that there is any endowment which could be said to belong exclusively to Manjunatha temple. Even if any such endowment was made by someone in the name of Manjunatha temple (as stated by K. C. Nambayar RW 3), it was taken to be an endowment for the entire institution known as Dharmasthal and was treated as such. The Manjunatha temple cannot therefore be said to be a Hindu religious endowment within the meaning of Section 2. The provisions of the Act are not applicable to it, and the Board clearly erred in holding otherwise.22. It has been argued by Mr. Chowdhary for the appellant that generally speaking Hindus include Jains. According to him, the underlying assumptions in the Act is that Jains are also Hindus, and that the fact that Jains also worship in a Hindu temple will not detract from the fact that it is a Hindu temple as it is not necessary that a Hindu temple should be a place exclusively for Hindu public religious worship. Reference in this connection has been made to All India Sai Samaj (Registered) by its President D. Bhima Rao, Mylapore v. Deputy Commissioner for Hindu Religious and Charitable Endowments (Administration) Department, Madras-34, [(1967) 2 MLJ 618 (Mad)]; State of Madras by the Secretary, Revenue Department, Madras v. Urumu Seshachalam Chettiar Charities, Tiruchirapalli, by its Board of Trustees [(1960) 2 MLJ 591 (Mad) and S. Kannan v. All India Sai Samaj (Registered) by its President, D. Bhima Rao, Mylapore [(1974) 1 MLJ 174 (Mad)]. It will be sufficient to say that what Section 9(12) of the Act requires by way of definition of a temple is that for purposes of the Act a temple should be dedicated for public religious worship, as of right, and it would not detract from its character as such if Jains also worship there. The argument of Mr. Chowdhary is, however, futile because, as has been mentioned, the provisions of the Act will not be attracted to the Manjunatha temple in the absence of any evidence to prove the existence of an endowment for it.23. It has next been argued by Mr. Chowdhary that unless the temple of Manjunatha could be shown to be a Jain endowment, it would come within the definition of temple in the Act. This argument has only to be stated to be rejected because, as has been shown, there is no evidence to show that there is any endowment for the Manjunatha temple as such, and the temple is a part and parcel of Dharmasthal which came to be endowed in the facts and circumstances mentioned above.24. An ancillary argument has been made that an inference of Hindu endowment for the benefit of the public should be drawn from the facts that the deity belongs to the Hindu Trinity, the architecture of the temple is that of a Hindu temple, the rituals are performed by brahmins according to Hindu form of worship and honey is used for "abhisheka" which is contrary to the Jain form of worship. We have already assumed that the temple possesses the characteristics which make it a Hindu temple, but even so there is no justification for the argument that there is any endowment for it as such.25. Then it has been argued by Mr. Chowdhary that Manjunatha temple is not an "adjunct" to the composite institution of Dharmasthal for it is the most important temple in the campus. It has been urged that mere common management and control cannot justify the argument that Manjunatha temple is an inseparable part of the Dharmasthal. It is not necessary to examine this argument once again, for we have given our reasons for taking a contrary view.26. Another argument of Mr. Chowdhary is that formal dedication of the endowment to the temple of Manjunatha was not necessary and that its user by the Hindus as of right would be enough to prove the initial dedication. Reliance for the argument has been placed on B. K. Mukherjea on the Hindu Law of Religious and Charitable Trusts, third edition, page 27, which makes a mention of the rituals to be observed when a donor wants to consecrate a temple and establish a deity in it. It may be that, in a given case, it may be difficult to prove the original dedication because of the lapse of considerable time but, in the present case it would not be possible to conclude that there was any such dedication because there is nothing to show how Vadiraja Swamiar, who installed the lingam in Manjunatha temple, could be said to be a donor when the property did not belong to him.

0[ds]It will be sufficient to say that what Section 9(12) of the Act requires by way of definition of a temple is that for purposes of the Act a temple should be dedicated for public religious worship, as of right, and it would not detract from its character as such if Jains also worship there. The argument of Mr. Chowdhary is, however, futile because, as has been mentioned, the provisions of the Act will not be attracted to the Manjunatha temple in the absence of any evidence to prove the existence of an endowment forfor the argument has been placed on B. K. Mukherjea on the Hindu Law of Religious and Charitable Trusts, third edition, page 27, which makes a mention of the rituals to be observed when a donor wants to consecrate a temple and establish a deity in it. It may be that, in a given case, it may be difficult to prove the original dedication because of the lapse of considerable time but, in the present case it would not be possible to conclude that there was any such dedication because there is nothing to show how Vadiraja Swamiar, who installed the lingam in Manjunatha temple, could be said to be a donor when the property did not belong to him.It therefore appears that the High Court was justified in taking the view that Manjunatha temple is part and parcel of the composite institution known as Dharmasthal and is so inseparably connected with it that it is its integral part. It cannot therefore be held that the Manjunatha temple is an "endowment" within the meaning of clause (11) of Section 9 of the Act for it has not been proved that any property belongs to it, or has been given or endowed for its support or for the performance of any service or charity connected therewith, or that it has any such premises of its own as could be said to form its own endowment.21. It would follow from what has been said above that even if the Manjunatha temple is assumed to be a place used, as of right, for public religious worship by Hindus, it could come under the purview of the Act only if it could be established that it was a religious endowment within the meaning of Section 2, but this has not been proved to be so. On the other hand it appears that the present institution of Dharmasthal was originally a Jain religious and charitable institution to which property was endowed by the ancestors of the present Heggade who was himself a Jain. It was that endowment which spread and gained more and more importance over the years because of the offerings made largely by Hindu and Jain devotees and worshipers. But it has not been established that there is any endowment which could be said to belong exclusively to Manjunatha temple. Even if any such endowment was made by someone in the name of Manjunatha temple (as stated by K. C. Nambayar RW 3), it was taken to be an endowment for the entire institution known as Dharmasthal and was treated as such. The Manjunatha temple cannot therefore be said to be a Hindu religious endowment within the meaning of Section 2. The provisions of the Act are not applicable to it, and the Board clearly erred in holding otherwise.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: and is so inseparably connected with it that it is its integral part. It cannot therefore be held that the Manjunatha temple is an "endowment" within the meaning of clause (11) of Section 9 of the Act for it has not been proved that any property belongs to it, or has been given or endowed for its support or for the performance of any service or charity connected therewith, or that it has any such premises of its own as could be said to form its own endowment.21. It would follow from what has been said above that even if the Manjunatha temple is assumed to be a place used, as of right, for public religious worship by Hindus, it could come under the purview of the Act only if it could be established that it was a religious endowment within the meaning of Section 2, but this has not been proved to be so. On the other hand it appears that the present institution of Dharmasthal was originally a Jain religious and charitable institution to which property was endowed by the ancestors of the present Heggade who was himself a Jain. It was that endowment which spread and gained more and more importance over the years because of the offerings made largely by Hindu and Jain devotees and worshipers. But it has not been established that there is any endowment which could be said to belong exclusively to Manjunatha temple. Even if any such endowment was made by someone in the name of Manjunatha temple (as stated by K. C. Nambayar RW 3), it was taken to be an endowment for the entire institution known as Dharmasthal and was treated as such. The Manjunatha temple cannot therefore be said to be a Hindu religious endowment within the meaning of Section 2. The provisions of the Act are not applicable to it, and the Board clearly erred in holding otherwise.22. It has been argued by Mr. Chowdhary for the appellant that generally speaking Hindus include Jains. According to him, the underlying assumptions in the Act is that Jains are also Hindus, and that the fact that Jains also worship in a Hindu temple will not detract from the fact that it is a Hindu temple as it is not necessary that a Hindu temple should be a place exclusively for Hindu public religious worship. Reference in this connection has been made to All India Sai Samaj (Registered) by its President D. Bhima Rao, Mylapore v. Deputy Commissioner for Hindu Religious and Charitable Endowments (Administration) Department, Madras-34, [(1967) 2 MLJ 618 (Mad)]; State of Madras by the Secretary, Revenue Department, Madras v. Urumu Seshachalam Chettiar Charities, Tiruchirapalli, by its Board of Trustees [(1960) 2 MLJ 591 (Mad) and S. Kannan v. All India Sai Samaj (Registered) by its President, D. Bhima Rao, Mylapore [(1974) 1 MLJ 174 (Mad)]. It will be sufficient to say that what Section 9(12) of the Act requires by way of definition of a temple is that for purposes of the Act a temple should be dedicated for public religious worship, as of right, and it would not detract from its character as such if Jains also worship there. The argument of Mr. Chowdhary is, however, futile because, as has been mentioned, the provisions of the Act will not be attracted to the Manjunatha temple in the absence of any evidence to prove the existence of an endowment for it.23. It has next been argued by Mr. Chowdhary that unless the temple of Manjunatha could be shown to be a Jain endowment, it would come within the definition of temple in the Act. This argument has only to be stated to be rejected because, as has been shown, there is no evidence to show that there is any endowment for the Manjunatha temple as such, and the temple is a part and parcel of Dharmasthal which came to be endowed in the facts and circumstances mentioned above.24. An ancillary argument has been made that an inference of Hindu endowment for the benefit of the public should be drawn from the facts that the deity belongs to the Hindu Trinity, the architecture of the temple is that of a Hindu temple, the rituals are performed by brahmins according to Hindu form of worship and honey is used for "abhisheka" which is contrary to the Jain form of worship. We have already assumed that the temple possesses the characteristics which make it a Hindu temple, but even so there is no justification for the argument that there is any endowment for it as such.25. Then it has been argued by Mr. Chowdhary that Manjunatha temple is not an "adjunct" to the composite institution of Dharmasthal for it is the most important temple in the campus. It has been urged that mere common management and control cannot justify the argument that Manjunatha temple is an inseparable part of the Dharmasthal. It is not necessary to examine this argument once again, for we have given our reasons for taking a contrary view.26. Another argument of Mr. Chowdhary is that formal dedication of the endowment to the temple of Manjunatha was not necessary and that its user by the Hindus as of right would be enough to prove the initial dedication. Reliance for the argument has been placed on B. K. Mukherjea on the Hindu Law of Religious and Charitable Trusts, third edition, page 27, which makes a mention of the rituals to be observed when a donor wants to consecrate a temple and establish a deity in it. It may be that, in a given case, it may be difficult to prove the original dedication because of the lapse of considerable time but, in the present case it would not be possible to conclude that there was any such dedication because there is nothing to show how Vadiraja Swamiar, who installed the lingam in Manjunatha temple, could be said to be a donor when the property did not belong to him. ### Response: 0 ### Explanation: It will be sufficient to say that what Section 9(12) of the Act requires by way of definition of a temple is that for purposes of the Act a temple should be dedicated for public religious worship, as of right, and it would not detract from its character as such if Jains also worship there. The argument of Mr. Chowdhary is, however, futile because, as has been mentioned, the provisions of the Act will not be attracted to the Manjunatha temple in the absence of any evidence to prove the existence of an endowment forfor the argument has been placed on B. K. Mukherjea on the Hindu Law of Religious and Charitable Trusts, third edition, page 27, which makes a mention of the rituals to be observed when a donor wants to consecrate a temple and establish a deity in it. It may be that, in a given case, it may be difficult to prove the original dedication because of the lapse of considerable time but, in the present case it would not be possible to conclude that there was any such dedication because there is nothing to show how Vadiraja Swamiar, who installed the lingam in Manjunatha temple, could be said to be a donor when the property did not belong to him.It therefore appears that the High Court was justified in taking the view that Manjunatha temple is part and parcel of the composite institution known as Dharmasthal and is so inseparably connected with it that it is its integral part. It cannot therefore be held that the Manjunatha temple is an "endowment" within the meaning of clause (11) of Section 9 of the Act for it has not been proved that any property belongs to it, or has been given or endowed for its support or for the performance of any service or charity connected therewith, or that it has any such premises of its own as could be said to form its own endowment.21. It would follow from what has been said above that even if the Manjunatha temple is assumed to be a place used, as of right, for public religious worship by Hindus, it could come under the purview of the Act only if it could be established that it was a religious endowment within the meaning of Section 2, but this has not been proved to be so. On the other hand it appears that the present institution of Dharmasthal was originally a Jain religious and charitable institution to which property was endowed by the ancestors of the present Heggade who was himself a Jain. It was that endowment which spread and gained more and more importance over the years because of the offerings made largely by Hindu and Jain devotees and worshipers. But it has not been established that there is any endowment which could be said to belong exclusively to Manjunatha temple. Even if any such endowment was made by someone in the name of Manjunatha temple (as stated by K. C. Nambayar RW 3), it was taken to be an endowment for the entire institution known as Dharmasthal and was treated as such. The Manjunatha temple cannot therefore be said to be a Hindu religious endowment within the meaning of Section 2. The provisions of the Act are not applicable to it, and the Board clearly erred in holding otherwise.

Paresh Chandra Nandi Vs. Controller of Stores, N.F. Railway, Pandu & Others

according to him, there were no permanent vacancies in the Stores Department over which their liens could be transferred. According to him, therefore, the transfer effected under the said memorandum was invalid and inoperative. 7. Having unsuccessfully exhausted his departmental remedies through representations, the appellant filed the writ petition in the High Court challenging the validity of the said memorandum and, as aforesaid, the High Court dismissed the writ petition. Hence this appeal. 8. In our view, the High Court rightly rejected the appellants challenge to the validity of the said memorandum as he was not able to show that the said memorandum was in any manner contrary to the statutory rules governing the employment of the railway employees. 9. Rule 2003 of the Railway Fundamental Rules defines in cls. 3 and 14 the terms cadre and lien. Lien, as defined in cl. 14 means the title of a railway employee to hold substantively a permanent post to which he has been permanently appointed. According to this definition, therefore, the appellant and respondents 4 to 8 were entitled to, with effect from August 15, 1947 (when all of them were made permanent), a lien on the respective posts to which, as from that day, they were confirmed and made permanent. So far as respondents 4 to 8 were concerned, this was done, as explained earlier, as a result of the closure of the Food Supply Organisation which necessitated the absorption of those employed therein during the War period in the different departments of the railways in Assam. Accordingly, the authorities had published the said list in 1951 showing how and where the absorbed staff was fixed up in accordance with the reservation of 10 per cent vacancies in the various departments. 10. The question is, could the railway authorities, under the rules, transfer or not any one or more of the said staff so absorbed from the posts where they were allotted to any other department or departments where such transfer or transfers became administratively necessary. We may note that the transfer of lien enjoyed by respondents 4 to 8 in the Head Office was not a mere paper transfer, for, respondents 4 to 8 were actually transferred from the Head Office Wing to the Stores Department. Since they were permanent employees, enjoying liens in their respective posts to which they were confirmed since August 15, 1947, ordinarily their conditions of service, e.g., salary and seniority, could not be affected to their prejudice as a result of their transfer to any other department or wing. Once, therefore, they were transferred from one permanent post to another permanent post they would be entitled to hold substantively the permanent posts to which they were transferred bringing along with them the seniority which they had in the posts from which they were transferred. If that were not so, the result of a transfer from one post to another would mean that a transferred employee would have to start de novo, from a scratch and would consequently stand last in the department to which he is transferred. In actual practice, therefore, no transfer can be effected from one department to another without materially affecting the chances of promotion of such an employee. As we shall presently show, the rules do not contemplate such a position. 11. Rule 2007 provides that unless the lien of a permanent employee is suspended under R. 2008 or transferred under R. 2010, a railway servant holding substantively a permanent post retains a lien on that post while performing the duties of that post, or while on foreign service or holding a temporary post or officiating in another post, or during joining time or transfer to another post, or while on leave, or lastly, while under suspension. Under R. 2010, the power to transfer lien is confined to any other permanent post in the same cadre. But R. 2010 is subject to the provisions of R. 2011 which confers power to transfer a railway servant from one post to another post. Rule 2011 reads as follows:"Transfer of Railway servant: (a) A competent authority may transfer a railway servant from one post to another; provided that, except - (1) on account of inefficiency or misbehaviour; or (2) on his written request, a railway servant shall not be transferred substantively to, or, except in a case covered by Rule 2038, appointed to officiate in a post carrying less pay than the pay of the permanent post on which be holds a lien and his lien has not been suspended under Rule 2008." Thus, the only limitation to the power conferred on the competent authority to transfer a railway servant from on post to another is that such transfer cannot be to a post carrying less pay than the transferred employee had a lien. 12. Two things are thus clear, (1) that the competent authority has the power to transfer a railway employee even though he holds a permanent post from one such post to another under R. 2011, and (2) that once such an employee is transferred from one permanent post to another permanent post, he is entitled to a lien in respect of that another post to which he is permanently posted as a result of the transfer. This is the effect of R. 2007. That being so, the appellant could not possibly contend that the transfers of respondents 4 to 8 to the Stores Department were contrary to the Fundamental Rules or that the transfer of their liens from the posts to which they were posted in 1947 to the posts in the Stores Department was in any manner contrary to the rules. 13. The other point raised by the appellant was also without substance as he failed to show before the High Court that these transfers were made without there being vacancies in the respective posts to which respondents 4 to 8 were transferred. That being the position, the High Court was right in dismissing the appellants write petition.

0[ds]8. In our view, the High Court rightly rejected the appellants challenge to the validity of the said memorandum as he was not able to show that the said memorandum was in any manner contrary to the statutory rules governing the employment of the railway employees10. The question is, could the railway authorities, under the rules, transfer or not any one or more of the said staff so absorbed from the posts where they were allotted to any other department or departments where such transfer or transfers became administratively necessary.12. Two things are thus clear, (1) that the competent authority has the power to transfer a railway employee even though he holds a permanent post from one such post to another under R. 2011, and (2) that once such an employee is transferred from one permanent post to another permanent post, he is entitled to a lien in respect of that another post to which he is permanently posted as a result of the transfer. This is the effect of R. 2007. That being so, the appellant could not possibly contend that the transfers of respondents 4 to 8 to the Stores Department were contrary to the Fundamental Rules or that the transfer of their liens from the posts to which they were posted in 1947 to the posts in the Stores Department was in any manner contrary to the rules13. The other point raised by the appellant was also without substance as he failed to show before the High Court that these transfers were made without there being vacancies in the respective posts to which respondents 4 to 8 were transferred. That being the position, the High Court was right in dismissing the appellants write petition.

### Instruction: Ascertain if the court will uphold (1) or dismiss (0) the appeal in the case proceeding, and then clarify this prediction by discussing critical sentences from the text. ### Input: according to him, there were no permanent vacancies in the Stores Department over which their liens could be transferred. According to him, therefore, the transfer effected under the said memorandum was invalid and inoperative. 7. Having unsuccessfully exhausted his departmental remedies through representations, the appellant filed the writ petition in the High Court challenging the validity of the said memorandum and, as aforesaid, the High Court dismissed the writ petition. Hence this appeal. 8. In our view, the High Court rightly rejected the appellants challenge to the validity of the said memorandum as he was not able to show that the said memorandum was in any manner contrary to the statutory rules governing the employment of the railway employees. 9. Rule 2003 of the Railway Fundamental Rules defines in cls. 3 and 14 the terms cadre and lien. Lien, as defined in cl. 14 means the title of a railway employee to hold substantively a permanent post to which he has been permanently appointed. According to this definition, therefore, the appellant and respondents 4 to 8 were entitled to, with effect from August 15, 1947 (when all of them were made permanent), a lien on the respective posts to which, as from that day, they were confirmed and made permanent. So far as respondents 4 to 8 were concerned, this was done, as explained earlier, as a result of the closure of the Food Supply Organisation which necessitated the absorption of those employed therein during the War period in the different departments of the railways in Assam. Accordingly, the authorities had published the said list in 1951 showing how and where the absorbed staff was fixed up in accordance with the reservation of 10 per cent vacancies in the various departments. 10. The question is, could the railway authorities, under the rules, transfer or not any one or more of the said staff so absorbed from the posts where they were allotted to any other department or departments where such transfer or transfers became administratively necessary. We may note that the transfer of lien enjoyed by respondents 4 to 8 in the Head Office was not a mere paper transfer, for, respondents 4 to 8 were actually transferred from the Head Office Wing to the Stores Department. Since they were permanent employees, enjoying liens in their respective posts to which they were confirmed since August 15, 1947, ordinarily their conditions of service, e.g., salary and seniority, could not be affected to their prejudice as a result of their transfer to any other department or wing. Once, therefore, they were transferred from one permanent post to another permanent post they would be entitled to hold substantively the permanent posts to which they were transferred bringing along with them the seniority which they had in the posts from which they were transferred. If that were not so, the result of a transfer from one post to another would mean that a transferred employee would have to start de novo, from a scratch and would consequently stand last in the department to which he is transferred. In actual practice, therefore, no transfer can be effected from one department to another without materially affecting the chances of promotion of such an employee. As we shall presently show, the rules do not contemplate such a position. 11. Rule 2007 provides that unless the lien of a permanent employee is suspended under R. 2008 or transferred under R. 2010, a railway servant holding substantively a permanent post retains a lien on that post while performing the duties of that post, or while on foreign service or holding a temporary post or officiating in another post, or during joining time or transfer to another post, or while on leave, or lastly, while under suspension. Under R. 2010, the power to transfer lien is confined to any other permanent post in the same cadre. But R. 2010 is subject to the provisions of R. 2011 which confers power to transfer a railway servant from one post to another post. Rule 2011 reads as follows:"Transfer of Railway servant: (a) A competent authority may transfer a railway servant from one post to another; provided that, except - (1) on account of inefficiency or misbehaviour; or (2) on his written request, a railway servant shall not be transferred substantively to, or, except in a case covered by Rule 2038, appointed to officiate in a post carrying less pay than the pay of the permanent post on which be holds a lien and his lien has not been suspended under Rule 2008." Thus, the only limitation to the power conferred on the competent authority to transfer a railway servant from on post to another is that such transfer cannot be to a post carrying less pay than the transferred employee had a lien. 12. Two things are thus clear, (1) that the competent authority has the power to transfer a railway employee even though he holds a permanent post from one such post to another under R. 2011, and (2) that once such an employee is transferred from one permanent post to another permanent post, he is entitled to a lien in respect of that another post to which he is permanently posted as a result of the transfer. This is the effect of R. 2007. That being so, the appellant could not possibly contend that the transfers of respondents 4 to 8 to the Stores Department were contrary to the Fundamental Rules or that the transfer of their liens from the posts to which they were posted in 1947 to the posts in the Stores Department was in any manner contrary to the rules. 13. The other point raised by the appellant was also without substance as he failed to show before the High Court that these transfers were made without there being vacancies in the respective posts to which respondents 4 to 8 were transferred. That being the position, the High Court was right in dismissing the appellants write petition. ### Response: 0 ### Explanation: 8. In our view, the High Court rightly rejected the appellants challenge to the validity of the said memorandum as he was not able to show that the said memorandum was in any manner contrary to the statutory rules governing the employment of the railway employees10. The question is, could the railway authorities, under the rules, transfer or not any one or more of the said staff so absorbed from the posts where they were allotted to any other department or departments where such transfer or transfers became administratively necessary.12. Two things are thus clear, (1) that the competent authority has the power to transfer a railway employee even though he holds a permanent post from one such post to another under R. 2011, and (2) that once such an employee is transferred from one permanent post to another permanent post, he is entitled to a lien in respect of that another post to which he is permanently posted as a result of the transfer. This is the effect of R. 2007. That being so, the appellant could not possibly contend that the transfers of respondents 4 to 8 to the Stores Department were contrary to the Fundamental Rules or that the transfer of their liens from the posts to which they were posted in 1947 to the posts in the Stores Department was in any manner contrary to the rules13. The other point raised by the appellant was also without substance as he failed to show before the High Court that these transfers were made without there being vacancies in the respective posts to which respondents 4 to 8 were transferred. That being the position, the High Court was right in dismissing the appellants write petition.

Oriental Insurance Co. Ltd Vs. Jhuma Saha

compensation if he drives the vehicle and falls in an accident- As the Insurance Policy is a third party in nature - The contract between the insured and insurer is that if any accident occurred out of the use of Motor Vehicle then only third party is entitled to get compensation. The insurer and insured is the first and second party and other than the all are third party. But in this case as per the version of the petition the deceased was the owner of the vehicle and was driving the vehicle and he met with an accident. Though the deceased had valid driving licence still he is not the third party as per Rules and Acts. Hence the petitioners are not entitled to get any compensation....." 6. The said contention of the appellant, however did not find favour with the Motor Vehicle Accident Claims Tribunal which, inter alia, held that the vehicle being insured and an additional premium for the death of the driver or conductor having been paid, the liability was covered by the Insurance Policy. 7. In the appeal preferred by the appellant before the High Court, however, the contention of the respondents herein that in view of the decision of this Court in National Insurance Co. Ltd. Chandigarh vs. Nicolletta Rohtagi and Ors. (2002) 7 SCC 456 , the appeal was not maintainable, was accepted. 8. Before us a short question has been raised by the learned counsel appearing on behalf of the appellant stating that in view of Section 147 of the Motor Vehicles Act, 1988, the jurisdiction of the Tribunal was confined to a third party claim and, thus, the impugned judgment cannot be sustained. 9. Section 147(1) (b) of the Motor Vehicles Act, with which we are concerned, reads as under: "147. Requirements of policies and limits of liability:(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)-(i) against any liability which may be incurred by him in respect of the death of or bodily (injury to any person, including owner of the goods or his authorised representative carried in the vehicle) or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;" (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place" Provided that a policy shall not be required- (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmens Compensation Act, 1923(8 of 1923) in respect of the death of, or bodily injury to, any such employee- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. Explanation - For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place." 10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which he was driving, the question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable. 11. Liability of the insurer-Company is to the extent of indemnification of the insured against the respondent or a injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of Motor Vehicle Act, the question of the insurer being liable to indemnify insured, therefore, does not arise.12. In Dhanraj vs. New India Assurance Co. Ltd. & Anr. - 2004(8) SCC 553, it is stated as follows: "8. thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.10. In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs. 4989 paid under the heading "Own damage" is for covering liability towards personal injury. Under the heading "Own damage", the words "premium on vehicle and non-electrical accessories" appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out. In this case there is no such insurance."

1[ds]10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident.The accident did not involve motor vehicle other than the one which he was driving, the question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable.Liability of the insurer-Company is to the extent of indemnification of the insured against the respondent or a injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of Motor Vehicle Act, the question of the insurer being liable to indemnify insured, therefore, does not arise.12. In Dhanraj vs. New India Assurance Co. Ltd. & Anr. - 2004(8) SCC 553, it is stated asthus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.10. In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs. 4989 paid under the heading "Own damage" is for covering liability towards personal injury. Under the heading "Own damage", the words "premium on vehicle and non-electrical accessories" appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out. In this case there is no such

### Instruction: Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding. ### Input: compensation if he drives the vehicle and falls in an accident- As the Insurance Policy is a third party in nature - The contract between the insured and insurer is that if any accident occurred out of the use of Motor Vehicle then only third party is entitled to get compensation. The insurer and insured is the first and second party and other than the all are third party. But in this case as per the version of the petition the deceased was the owner of the vehicle and was driving the vehicle and he met with an accident. Though the deceased had valid driving licence still he is not the third party as per Rules and Acts. Hence the petitioners are not entitled to get any compensation....." 6. The said contention of the appellant, however did not find favour with the Motor Vehicle Accident Claims Tribunal which, inter alia, held that the vehicle being insured and an additional premium for the death of the driver or conductor having been paid, the liability was covered by the Insurance Policy. 7. In the appeal preferred by the appellant before the High Court, however, the contention of the respondents herein that in view of the decision of this Court in National Insurance Co. Ltd. Chandigarh vs. Nicolletta Rohtagi and Ors. (2002) 7 SCC 456 , the appeal was not maintainable, was accepted. 8. Before us a short question has been raised by the learned counsel appearing on behalf of the appellant stating that in view of Section 147 of the Motor Vehicles Act, 1988, the jurisdiction of the Tribunal was confined to a third party claim and, thus, the impugned judgment cannot be sustained. 9. Section 147(1) (b) of the Motor Vehicles Act, with which we are concerned, reads as under: "147. Requirements of policies and limits of liability:(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)-(i) against any liability which may be incurred by him in respect of the death of or bodily (injury to any person, including owner of the goods or his authorised representative carried in the vehicle) or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;" (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place" Provided that a policy shall not be required- (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmens Compensation Act, 1923(8 of 1923) in respect of the death of, or bodily injury to, any such employee- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. Explanation - For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place." 10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which he was driving, the question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable. 11. Liability of the insurer-Company is to the extent of indemnification of the insured against the respondent or a injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of Motor Vehicle Act, the question of the insurer being liable to indemnify insured, therefore, does not arise.12. In Dhanraj vs. New India Assurance Co. Ltd. & Anr. - 2004(8) SCC 553, it is stated as follows: "8. thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.10. In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs. 4989 paid under the heading "Own damage" is for covering liability towards personal injury. Under the heading "Own damage", the words "premium on vehicle and non-electrical accessories" appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out. In this case there is no such insurance." ### Response: 1 ### Explanation: 10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident.The accident did not involve motor vehicle other than the one which he was driving, the question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable.Liability of the insurer-Company is to the extent of indemnification of the insured against the respondent or a injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of Motor Vehicle Act, the question of the insurer being liable to indemnify insured, therefore, does not arise.12. In Dhanraj vs. New India Assurance Co. Ltd. & Anr. - 2004(8) SCC 553, it is stated asthus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.10. In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs. 4989 paid under the heading "Own damage" is for covering liability towards personal injury. Under the heading "Own damage", the words "premium on vehicle and non-electrical accessories" appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out. In this case there is no such

Commissioner of Income Tax Vs. Indian Oxygen Limited

3.1. These appeals are preferred against the judgment of the Calcutta High Court [reported as CIT vs. Indian Oxygen Ltd. 1978 (112) ITR 1025 (Cal) answering the question referred to it in the affirmative, i.e., in favour of the assessee and against the Revenue. The question referred was "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 2, 97, 480 paid by the assessee to the British Oxygen Co. Ltd., London, in pursuance of the agreement dt. 1st Oct., 1959, was a permissible deduction under s. 37(1) of the IT Act, 1961 ?" * 2. After examining the various clauses in the agreement between the assessee and the British Oxygen Co. Ltd., the High Court found as follows "The English company did not sell any information, processes and inventions to the Indian company. Under cl. 22 of the agreement, the Indian company is not entitled to use them after the termination of this agreement. The Indian company is prohibited from disclosing these information, processes and inventions during the currency and also after the determination of this agreement in view of its cl. 11. Though this agreement is for a period of ten years, it can be terminated earlier as provided in cl. 23. Therefore, it cannot be said that the Indian company has incurred the expenditure for the purposes of bringing into existence any asset or advantage of an enduring nature. It must also be held that this expenditure is not a capital but a revenue expenditure, for it was incurred by the Indian company for running its business or working it with a view to produce profits." * 3. We are of the opinion that the said understanding of the agreement is correct. Once it is so, the amount paid by the assessee to the British company cannot be treated as capital expenditure. It is nothing but revenue expenditure and has been rightly held so by the High Court

0[ds]We are of the opinion that the said understanding of the agreement is correct. Once it is so, the amount paid by the assessee to the British company cannot be treated as capital expenditure. It is nothing but revenue expenditure and has been rightly held so by the High Court

### Instruction: Project the court's decision (favor (1) or against (0) the appeal) based on the case proceeding, and subsequently give an in-depth explanation by analyzing relevant sentences from the document. ### Input: 3.1. These appeals are preferred against the judgment of the Calcutta High Court [reported as CIT vs. Indian Oxygen Ltd. 1978 (112) ITR 1025 (Cal) answering the question referred to it in the affirmative, i.e., in favour of the assessee and against the Revenue. The question referred was "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 2, 97, 480 paid by the assessee to the British Oxygen Co. Ltd., London, in pursuance of the agreement dt. 1st Oct., 1959, was a permissible deduction under s. 37(1) of the IT Act, 1961 ?" * 2. After examining the various clauses in the agreement between the assessee and the British Oxygen Co. Ltd., the High Court found as follows "The English company did not sell any information, processes and inventions to the Indian company. Under cl. 22 of the agreement, the Indian company is not entitled to use them after the termination of this agreement. The Indian company is prohibited from disclosing these information, processes and inventions during the currency and also after the determination of this agreement in view of its cl. 11. Though this agreement is for a period of ten years, it can be terminated earlier as provided in cl. 23. Therefore, it cannot be said that the Indian company has incurred the expenditure for the purposes of bringing into existence any asset or advantage of an enduring nature. It must also be held that this expenditure is not a capital but a revenue expenditure, for it was incurred by the Indian company for running its business or working it with a view to produce profits." * 3. We are of the opinion that the said understanding of the agreement is correct. Once it is so, the amount paid by the assessee to the British company cannot be treated as capital expenditure. It is nothing but revenue expenditure and has been rightly held so by the High Court ### Response: 0 ### Explanation: We are of the opinion that the said understanding of the agreement is correct. Once it is so, the amount paid by the assessee to the British company cannot be treated as capital expenditure. It is nothing but revenue expenditure and has been rightly held so by the High Court

Mir Fakir Mohd Vs. State Of West Bengal

SARKARIA, J.1. The principal question that has been mooted before us in this petition for special leave to appeal under Article 136 of the Constitution, against an appellate judgment dated 21st July, 1976 of the High Court at Calcutta, is, whether a bamboo garden or banana plantation is an Orchard within the meaning of Section 6(1) (f), of the West Bengal Estate Acquisition Act, 1954 (hereinafter referred to as the Act). The material portion of Section 6 of the Act reads as under:"6(1) Notwithstanding anything contained in Section 4 and 5, an intermediary shall except in the cases mentioned in the proviso to sub-section (2) but subject to other provisions of that sub-section, be entitled to retain with effect from the date of vesting-(f) subject to the provisions of subsection (3) Land comprised in tea garden or orchard or land used for the purpose of live stock breeding, poultry farming or dairy."The petitioner claims himself to be an intermediary. The High Court has held (reversing the judgments of the courts below) that a cultivated bamboo garden would fall within the definition of Agricultural land in Section 2(b) of the Act and cannot in any view be called an orchard with in the purview of Section 6(1) (f) of the Act. It further held that a banana plantation is not an orchard because banana plants are not fruit trees.Mr. Purshotham Chatterjee, appearing for the petitioner contends that orchard has not been defined in the Act, and we must, therefore, interpret the expression orchard, in its popular sense and not in the strict botanical sense, as the High Court has done. An orchard, it is argued; in the broad Dictionary sense, means a garden of fruit plants, or fruit trees, and a banana plant, according to the Concise Oxford Dictionary, is a "fruit-tree."2. As against this, Mr. Majumdar, appearing for the Respondent State, submits that a banana plant is not a tree but a herbacious plant. We are unable to accept the contention canvassed on behalf of the petitioner.3. Section 2(p) of the Act provides:" (p) Expressions used in this Act and not otherwise defined have in relation to the areas to which the Bengal Tenancy Act, 1885, applies, the same meaning as in that Act and in relation to other areas meaning as similar there to as the existing law relating to land tenures applying to such areas, permits."4. Now, Section 14K(e) of the West Bengal Land Reforms Act (as amended) defines an Orchard to mean:"A compact area of land having fruit bearing trees grown thereon in such number that they preclude; or when fully grown would preclude, a substantial part of such land from being used for any agricultural purpose."5. In view of clause (p) of Section 2 of the Act, it will not be wrong to look to this definition in the Land Reforms Act, for guidance. This definition, it will be seen, substantially conforms to the dictionary meaning of the term orchard. According to the Oxford Dictionary, the modern connotation of orchard is "an enclosure with fruit trees", or "an enclosure for the cultivation of fruit trees". Websters New World Dictionary, also, gives its meaning as "an area of land, generally enclosed, devoted to the cultivation of fruit trees, nut trees, ". Thus, the existence of cultivated fruit trees on a compact area, is central to the connotation of orchard. The question before us, therefore, resolves into the issue, whether a banana plant is a tree ? A tree, according to the Shorter Oxford Dictionary, is "a perennial plant having a self-supporting woody main stem or trunk (which usually develops wood branches at some distance from the ground), and growing to a considerable height.Thus, for a plant to come within the connotation of tree, it must have two essential characteristics: (a) It must be perennial and not seasonal; and (b) Its main stem must be woody and not herbacious or pulpy.6. A banana plant lacks both these characteristics. It is not a perennial plant, but is more in the nature of a seasonal crop lasting for one or one and a quarter years. Once the plant yields fruit, it becomes useless and does not yield any further fruit. Further, its stem is not woody but fleshy or herbacious.7. Banana plant, according to Websters Dictionary, is "a tree-like perennial herb of the genus Musa plant with soft herbacious stalk". Oxford Dictionary, no doubt, loosely describes it as a fruit-tree belonging to the genus Musa sapientum, but it also concedes that it has no woody stem or trunk but only a soft herbacious stalk. The Websters Dictionary appears to be more correct w hen it uses the word tree-like for a banana plant.8. Thus considered, a banana plant cannot be regarded as a fruit tree. Therefore, a banana plantation is not an orchard within the contemplation of Section 6(1) (f) of the Act.9.

0[ds]We are unable to accept the contention canvassed on behalf of theview of clause (p) of Section 2 of the Act, it will not be wrong to look to this definition in the Land Reforms Act, for guidance. This definition, it will be seen, substantially conforms to the dictionary meaning of the term orchard. According to the Oxford Dictionary, the modern connotation of orchard is "an enclosure with fruit trees", or "an enclosure for the cultivation of fruit trees". Websters New World Dictionary, also, gives its meaning as "an area of land, generally enclosed, devoted to the cultivation of fruit trees, nut trees, ". Thus, the existence of cultivated fruit trees on a compact area, is central to the connotation of orchard. The question before us, therefore, resolves into the issue, whether a banana plant is a tree ? A tree, according to the Shorter Oxford Dictionary, is "a perennial plant having awoody main stem or trunk (which usually develops wood branches at some distance from the ground), and growing to a considerable height.Thus, for a plant to come within the connotation of tree, it must have two essential characteristics: (a) It must be perennial and not seasonal; and (b) Its main stem must be woody and not herbacious orbanana plant lacks both these characteristics. It is not a perennial plant, but is more in the nature of a seasonal crop lasting for one or one and a quarter years. Once the plant yields fruit, it becomes useless and does not yield any further fruit. Further, its stem is not woody but fleshy orplant, according to Websters Dictionary, is "aperennial herb of the genus Musa plant with soft herbacious stalk". Oxford Dictionary, no doubt, loosely describes it as abelonging to the genus Musa sapientum, but it also concedes that it has no woody stem or trunk but only a soft herbacious stalk. The Websters Dictionary appears to be more correct w hen it uses the wordfor a bananaconsidered, a banana plant cannot be regarded as a fruit tree. Therefore, a banana plantation is not an orchard within the contemplation of Section 6(1) (f) of the Act.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: SARKARIA, J.1. The principal question that has been mooted before us in this petition for special leave to appeal under Article 136 of the Constitution, against an appellate judgment dated 21st July, 1976 of the High Court at Calcutta, is, whether a bamboo garden or banana plantation is an Orchard within the meaning of Section 6(1) (f), of the West Bengal Estate Acquisition Act, 1954 (hereinafter referred to as the Act). The material portion of Section 6 of the Act reads as under:"6(1) Notwithstanding anything contained in Section 4 and 5, an intermediary shall except in the cases mentioned in the proviso to sub-section (2) but subject to other provisions of that sub-section, be entitled to retain with effect from the date of vesting-(f) subject to the provisions of subsection (3) Land comprised in tea garden or orchard or land used for the purpose of live stock breeding, poultry farming or dairy."The petitioner claims himself to be an intermediary. The High Court has held (reversing the judgments of the courts below) that a cultivated bamboo garden would fall within the definition of Agricultural land in Section 2(b) of the Act and cannot in any view be called an orchard with in the purview of Section 6(1) (f) of the Act. It further held that a banana plantation is not an orchard because banana plants are not fruit trees.Mr. Purshotham Chatterjee, appearing for the petitioner contends that orchard has not been defined in the Act, and we must, therefore, interpret the expression orchard, in its popular sense and not in the strict botanical sense, as the High Court has done. An orchard, it is argued; in the broad Dictionary sense, means a garden of fruit plants, or fruit trees, and a banana plant, according to the Concise Oxford Dictionary, is a "fruit-tree."2. As against this, Mr. Majumdar, appearing for the Respondent State, submits that a banana plant is not a tree but a herbacious plant. We are unable to accept the contention canvassed on behalf of the petitioner.3. Section 2(p) of the Act provides:" (p) Expressions used in this Act and not otherwise defined have in relation to the areas to which the Bengal Tenancy Act, 1885, applies, the same meaning as in that Act and in relation to other areas meaning as similar there to as the existing law relating to land tenures applying to such areas, permits."4. Now, Section 14K(e) of the West Bengal Land Reforms Act (as amended) defines an Orchard to mean:"A compact area of land having fruit bearing trees grown thereon in such number that they preclude; or when fully grown would preclude, a substantial part of such land from being used for any agricultural purpose."5. In view of clause (p) of Section 2 of the Act, it will not be wrong to look to this definition in the Land Reforms Act, for guidance. This definition, it will be seen, substantially conforms to the dictionary meaning of the term orchard. According to the Oxford Dictionary, the modern connotation of orchard is "an enclosure with fruit trees", or "an enclosure for the cultivation of fruit trees". Websters New World Dictionary, also, gives its meaning as "an area of land, generally enclosed, devoted to the cultivation of fruit trees, nut trees, ". Thus, the existence of cultivated fruit trees on a compact area, is central to the connotation of orchard. The question before us, therefore, resolves into the issue, whether a banana plant is a tree ? A tree, according to the Shorter Oxford Dictionary, is "a perennial plant having a self-supporting woody main stem or trunk (which usually develops wood branches at some distance from the ground), and growing to a considerable height.Thus, for a plant to come within the connotation of tree, it must have two essential characteristics: (a) It must be perennial and not seasonal; and (b) Its main stem must be woody and not herbacious or pulpy.6. A banana plant lacks both these characteristics. It is not a perennial plant, but is more in the nature of a seasonal crop lasting for one or one and a quarter years. Once the plant yields fruit, it becomes useless and does not yield any further fruit. Further, its stem is not woody but fleshy or herbacious.7. Banana plant, according to Websters Dictionary, is "a tree-like perennial herb of the genus Musa plant with soft herbacious stalk". Oxford Dictionary, no doubt, loosely describes it as a fruit-tree belonging to the genus Musa sapientum, but it also concedes that it has no woody stem or trunk but only a soft herbacious stalk. The Websters Dictionary appears to be more correct w hen it uses the word tree-like for a banana plant.8. Thus considered, a banana plant cannot be regarded as a fruit tree. Therefore, a banana plantation is not an orchard within the contemplation of Section 6(1) (f) of the Act.9. ### Response: 0 ### Explanation: We are unable to accept the contention canvassed on behalf of theview of clause (p) of Section 2 of the Act, it will not be wrong to look to this definition in the Land Reforms Act, for guidance. This definition, it will be seen, substantially conforms to the dictionary meaning of the term orchard. According to the Oxford Dictionary, the modern connotation of orchard is "an enclosure with fruit trees", or "an enclosure for the cultivation of fruit trees". Websters New World Dictionary, also, gives its meaning as "an area of land, generally enclosed, devoted to the cultivation of fruit trees, nut trees, ". Thus, the existence of cultivated fruit trees on a compact area, is central to the connotation of orchard. The question before us, therefore, resolves into the issue, whether a banana plant is a tree ? A tree, according to the Shorter Oxford Dictionary, is "a perennial plant having awoody main stem or trunk (which usually develops wood branches at some distance from the ground), and growing to a considerable height.Thus, for a plant to come within the connotation of tree, it must have two essential characteristics: (a) It must be perennial and not seasonal; and (b) Its main stem must be woody and not herbacious orbanana plant lacks both these characteristics. It is not a perennial plant, but is more in the nature of a seasonal crop lasting for one or one and a quarter years. Once the plant yields fruit, it becomes useless and does not yield any further fruit. Further, its stem is not woody but fleshy orplant, according to Websters Dictionary, is "aperennial herb of the genus Musa plant with soft herbacious stalk". Oxford Dictionary, no doubt, loosely describes it as abelonging to the genus Musa sapientum, but it also concedes that it has no woody stem or trunk but only a soft herbacious stalk. The Websters Dictionary appears to be more correct w hen it uses the wordfor a bananaconsidered, a banana plant cannot be regarded as a fruit tree. Therefore, a banana plantation is not an orchard within the contemplation of Section 6(1) (f) of the Act.

Cambay Electric Supply Industrial Co. Ltd Vs. The Commissioner Of Income Tax, Gujarat-Iiahmedabad (And Vi

two decisions. In the case of Bipinchandra Maganlal & Co. Ltd. [1961] 41 ITR 290 (SC), the question that arose for determination was whether a balancing charge which was brought to tax on the basis of deemed income and was, therefore, included in the assessable income of an assessee under the second proviso to clause (vii) of sub-section (2) of section 10 of the 1922 Act (equivalent to section 41(2) of the 1961 Act), could be taken into account while considering "smallness of profit" for purposes of deciding whether the case attracted the applicability of section 23A of the Act and this court took the view that the balancing charge was not real income but was made taxable income for the purpose of computation of the assessable income by legal fiction but on that account it did not become commercial profit and was not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable ; in that context this court observed that what in truth was a capital return was by a fiction regarded for the purposes of the Act as income and was made chargeable to income-tax but because of that its character was not altered and it was not converted into the assessees business profits and that smallness of profit in section 23A had to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional. In the subsequent decision in Express Newspapers case [1964] 53 ITR 250 (SC) this court has regarded a balancing charge as being the "escaped profits" of the business for which the assessee is made liable to tax. At page 254 of the report, the court explained the nature of the balancing charge by way of illustration thus :" assume that the original cost of a machinery or plant is Rs. 100 and depreciation allowed is Rs. 25; the written down value is Rs. 75. If the machinery is sold for Rs. 100, it is obvious that depreciation of Rs. 25 was wrongly allowed. If it had not been allowed, that amount would have swelled the profits to that extent. When it is found that it was wrongly allowed, that profit is brought to charge. The second proviso, therefore, in substance, brings to charge an escaped profit or gain of the business carried on by the assessee".6. These apparently divergent views have given rise to two rival contentions urged before us by counsel on the other side. It is unnecessary in this case to go into the question whether the divergence is real or merely apparent, for, as we have said above, the answer to the question raised before us does not depend upon the real nature or true character of the balancing charge but upon proper construction of the sub-section (1) which contains the legislative mandate with regard to the manner in which three steps indicated therein are required to be taken for computing the deduction of 8% contemplated by that provision. It is true that by a legal fiction created under section 41(2) a balancing charge arising from sale of old machinery or building is treated as deemed income and the same is brought to tax ; in other words, the legal fiction enables the revenue to take back what it had given by way of depreciation allowance in the preceding years since what was given in the preceding years was in excess of that which ought to have been given. This shows that the fiction has been created for the purpose of computation of the assessable income of the asssessee under the head "Business income". It was rightly pointed out by the learned Solicitor-General that legal fictions are created only for a definite purpose and they should be limited to the purpose for which they are created and should not be extended beyond their legislative field. But, as indicated earlier, the fiction under section 41(2) is created for the purpose of computation of assessable income of the assessee under the head "Business income" and under section 80E(1), in order to compute and allow the permissible special deduction, computation of total income in accordance with the other provisions of the Act is required to be done and after allowing such deduction the net assessable income chargeable to tax is to be determined; in other words, the legal fiction under section 41(2) and the grant of special deduction in case of specified industries are so closely connected with each other that taking into account the balancing charge (i.e., deemed profits) before computing the 8% deduction under section 80E(1) would amount to extending the legal fiction within the limits of the purpose for which the said fiction had been createdAs regards the aspect emerging from the expression "attributable to" occurring in the phrase "profits and gains attributable to the business of" the specified industry (here generation and distribution of electricity) on which the learned Solicitor-General relied, it will be pertinent to observe that the legislature has deliberately used the expression "attributable to" and not the expression "derived from". It cannot be disputed that the expression attributable to "is certainly wider in import than the expression derived from". Had the expression "derived from" been used, it could have with some force been contended that a balancing charge arising from the sale of old machinery and buildings cannot be regarded as profits and gains derived from the conduct of the business of generation and distribution of electricity. In this connection, it may be pointed out that whenever the legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor-General, it has used the expression " derived from", as, for instance, in section 80J. In our view, since the expression of wider import, namely, "attributable to", has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. 7.

0[ds]Here again the answer to the question must depend upon the construction of sub-section (1) of section 80E and the construction which we have placed on the said provision while disposing of the revenues appeal will furnish the correct answer to the question posed. As indicated earlier, sub-section (1) contemplates three steps being taken for computing the special deduction permissible thereunder and arriving at the net income exigible to tax and the first two steps read together contain the leglislative mandate as to how the total income-of which the profits and gains attributable to the business of the specified industry forms a part-of the concerned assessee is to be computed and according to the parenthetical clause, which contains the key words, the same is to be computed in accordance with the provisions of the Act except section 80E and since in this case it is income from business the same will have to be computed in accordance with sections 30 to 43A which would include section 32(2) (which provides for carry forward of depreciation) and section 33(2) (which provides for carry forward of development rebate for eight years). In other words, in computing the total income of the concerned assessee, items of unabsorbed depreciation and unabsorbed development rebate will have to be deducted before arriving at the figure that will become exigible to the deduction of 8% contemplated by section 80E(1). On this construction, therefore, the High Court, in our view, was right in deducting unabsorbed depreciation and development rebate aggregating to Rs. 2, 54, 613 from Rs. 8, 02, 126 and holding the balance of Rs. 5, 47, 513 being exigible to the 8% deductionThe assessee attempted to challenge the aforesaid view by raising a couple of contentions. In the first place before the High Court it was strenuously urged, though not seriously before us, that the expression "total income" appearing in section 80E(1) has been used in its commercial sense and since neither the unabsorbed depreciation nor the unabsorbed development rebate has anything to do with commercial profits attributable to the business, the said two items would not be deductible before arriving at the figure that would be exigible to the 8% deduction. It is not possible to accept this contention for more than one reason. First, in sub-section (1) of section 80E, the expression "total income" is followed by the words "as computed in accordance with the other provisions of this Act" in parenthesis and the mandate of these words clearly negatives the argument that the expression "total income" has been used in the sense of commercial profits. Secondly, the expression "total income" has been defined in section 2(45) of the Act as meaning "the total amount of income referred to in section 5, computed in the manner laid down in this Act" and when this definition has been furnished by the Act itself the expression as appearing in section 80E(1) must, in the absence of anything in the context suggesting to the contrary, be construed in accordance with such definition. Since the words in the parenthesis occurring in sub-section (1) lay down the manner in which the total income of the concerned assessee is to be computed there would be no scope for excluding items like unabsorbed depreciation and unabsorbed development rebate while computing the total income on the basis that the total income spoken of by sub-section (1) means commercialwas not disputed before us that the aforesaid provision contained in section 80E(1) has been enacted for the purpose of providing for certain special deduction to be made in computing the total income in the case of specified industries, over and above the other general deductions contemplated by the Act. It was further not disputed before us that the assessee being an Indian company engaged in the business of generation and distribution of electricity is a company to which the section applies and is entitled to claim the deduction of 8% contemplated by that provision and the only question is how and in what manner the said deduction should be computed. On reading sub-section (1) it will become clear that three important steps are required to be taken before the special deduction permissible thereunder is allowed and the net total income exigible to tax is determined. First, compute the total income of the concerned assessee in accordance with the other provisions of the Act, i.e., in accordance with all the provisions except section 80E ; secondly, ascertain what part of the total income so computed represents the profits and gains attributable to the business of the specified industry (here generation and distribution of electricity); and, thirdly, if there be profits and gains so attributable, deduct 8% thereof from such profits and gains and then arrive at the net total income exigible to tax. As regards the first step mentioned above, the important words in sub-section (1) are those that appear in parenthesis, namely, "as computed in accordance with the other provisions of this Act" and these words clearly contain a mandate that the total income of the concerned assessee must be computed in accordance with the other provisions of the Act without reference to section 80E and since in the instant case it is income from business the same as per section 29 will have to be computed in accordance with sections 30 to 43A which would include section 41(2). It is also clear that under the second step the profits and gains attributable to the business of the specified industry (here generation and distribution of electricity) forms a component of the total income spoken of in the first step. Reading these two steps together, therefore, it is obvious that in computing the total income of the concerned assessee the balancing charge arising as a result of the sale of old machinery and buildings and worked out as per section 41(2), irrespective of its real character, will have to be taken into account and included as income of the business. In other words, the balancing charge as worked out under section 41(2) will have to be taken into account before computing the deduction of 8% under the third step. On proper construction of sub-section (1) and having regard to the legislative mandate contained in the three steps that are required to be taken in the manner indicated above we are clearly of the view that the item of Rs. 7, 55, 807 will have to be taken into account before computing the 8% deduction contemplated by the said provisionThe learned Solicitor-General has argued to the contrary by laying considerable emphasis on two aspects, first, the real nature of the balancing charge under section 41(2), which according to him is a return of capital and not a return of revenue and, secondly, under the second and third steps the 8% deduction is to be made from "profits and gains attributable to the business of" the specified industry (here generation and distribution of electricity). As regards the first aspect, on the question of real nature or true character of a balancing charge, two apparently divergent views would appear to have been taken by this court in two decisions. In the case of Bipinchandra Maganlal & Co. Ltd. [1961] 41 ITR 290 (SC), the question that arose for determination was whether a balancing charge which was brought to tax on the basis of deemed income and was, therefore, included in the assessable income of an assessee under the second proviso to clause (vii) of sub-section (2) of section 10 of the 1922 Act (equivalent to section 41(2) of the 1961 Act), could be taken into account while considering "smallness of profit" for purposes of deciding whether the case attracted the applicability of section 23A of the Act and this court took the view that the balancing charge was not real income but was made taxable income for the purpose of computation of the assessable income by legal fiction but on that account it did not become commercial profit and was not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable ; in that context this court observed that what in truth was a capital return was by a fiction regarded for the purposes of the Act as income and was made chargeable to income-tax but because of that its character was not altered and it was not converted into the assessees business profits and that smallness of profit in section 23A had to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional. In the subsequent decision in Express Newspapers case [1964] 53 ITR 250 (SC) this court has regarded a balancing charge as being the "escaped profits" of the business for which the assessee is made liable to tax. At page 254 of the report, the court explained the nature of the balancing charge by way of illustration thus :" assume that the original cost of a machinery or plant is Rs. 100 and depreciation allowed is Rs. 25; the written down value is Rs. 75. If the machinery is sold for Rs. 100, it is obvious that depreciation of Rs. 25 was wrongly allowed. If it had not been allowed, that amount would have swelled the profits to that extent. When it is found that it was wrongly allowed, that profit is brought to charge. The second proviso, therefore, in substance, brings to charge an escaped profit or gain of the business carried on by the assessee".These apparently divergent views have given rise to two rival contentions urged before us by counsel on the other side. It is unnecessary in this case to go into the question whether the divergence is real or merely apparent, for, as we have said above, the answer to the question raised before us does not depend upon the real nature or true character of the balancing charge but upon proper construction of the sub-section (1) which contains the legislative mandate with regard to the manner in which three steps indicated therein are required to be taken for computing the deduction of 8% contemplated by that provision. It is true that by a legal fiction created under section 41(2) a balancing charge arising from sale of old machinery or building is treated as deemed income and the same is brought to tax ; in other words, the legal fiction enables the revenue to take back what it had given by way of depreciation allowance in the preceding years since what was given in the preceding years was in excess of that which ought to have been given. This shows that the fiction has been created for the purpose of computation of the assessable income of the asssessee under the head "Business income". It was rightly pointed out by the learned Solicitor-General that legal fictions are created only for a definite purpose and they should be limited to the purpose for which they are created and should not be extended beyond their legislative field. But, as indicated earlier, the fiction under section 41(2) is created for the purpose of computation of assessable income of the assessee under the head "Business income" and under section 80E(1), in order to compute and allow the permissible special deduction, computation of total income in accordance with the other provisions of the Act is required to be done and after allowing such deduction the net assessable income chargeable to tax is to be determined; in other words, the legal fiction under section 41(2) and the grant of special deduction in case of specified industries are so closely connected with each other that taking into account the balancing charge (i.e., deemed profits) before computing the 8% deduction under section 80E(1) would amount to extending the legal fiction within the limits of the purpose for which the said fiction had been createdAs regards the aspect emerging from the expression "attributable to" occurring in the phrase "profits and gains attributable to the business of" the specified industry (here generation and distribution of electricity) on which the learned Solicitor-General relied, it will be pertinent to observe that the legislature has deliberately used the expression "attributable to" and not the expression "derived from". It cannot be disputed that the expression attributable to "is certainly wider in import than the expression derived from". Had the expression "derived from" been used, it could have with some force been contended that a balancing charge arising from the sale of old machinery and buildings cannot be regarded as profits and gains derived from the conduct of the business of generation and distribution of electricity. In this connection, it may be pointed out that whenever the legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor-General, it has used the expression " derived from", as, for instance, in section 80J. In our view, since the expression of wider import, namely, "attributable to", has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution ofIt may be stated that the first two decisions did not deal with the question of unabsorbed depreciation or unabsorbed rebate but merely dealt with the question of carried forward losses in the context of section 80E(1), while the third decision dealt with all the three things, carried forward loss, carried forward depreciation and carried forward development rebate in the context of section 80E(1) and it was held that the deduction under section 80E(1) will have to be worked out before setting off or adjusting each of the three things. In that case, the Madras High Court held that as regards carried forward loss the point was covered by its earlier decision in L. M. Van Moppes case [1977] 107 ITR 386 (Mad) , that unabsorbed development rebate stood on the same footing as unabsorbed losses and as regards unabsorbed depreciation it took the view that since section 32(2) itself postponed the adjustment of unabsorbed depreciation to a stage subsequent to the set-off of business losses under section 72(2) and set-off of the losses in speculation business under section 73(3), the unabsorbed depreciation cannot be adjusted or deducted because if for the purpose of section 80E the previous years losses could not be set off it will be a fortiori that the unabsorbed depreciation could not be adjusted inasmuch as from the very sequence the adjustment of unabsorbed depreciation could come only after the adjustment of the unabsorbed losses of the previous years. It will thus appear clear that in the last mentioned case unabsorbed development rebate was held to be non-deductible for the same reasons for which unabsorbed loss could not be deducted under the earlier decision and the unabsorbed depreciation was held to be non-deductible on the basis of a priori reasoning. The question that arises for consideration, therefore, is whether the view taken in regard to non-deductibility of carried forward losses while computing the total income for the purpose of granting the 8% deduction under section 80E in the first two decisions is correct. It is true that in the instant case the question of deductibility or otherwise of carried forward losses of earlier years in the context of section 80E has not directly arisen before us but since counsel for the assessee has raised a contention about non-deductibility of unabsorbed depreciation and unabsorbed development rebate on the basis of the view taken by the Kerala High Court in Indian Transformers case [1972] 86 ITR 192 and the Madras High Court in L. M. Van Moppes case [1977] 107 ITR 386 , in regard to non-deductibility of unabsorbed losses of earlier years, we are constrained to express our opinion on the validity of the view taken in those two cases. In our opinion, the view taken in Indian Transformers case and L. M. Van Moppes case in regard to the non-deductibility of unabsorbed losses of the earlier years in the context of computing the deduction under section 80E of the Act is open to grave doubts. In the first place, such a view runs counter to the legislative mandate contained in the three steps required to be taken under sub-section (1) of section 80E as discussed earlier. Secondly, the main reasoning given by the Kerala High Court for taking such a view in Indian Transformers case the Madras High Court in L. M. Van Moppes case has merely followed the Kerala decision-does not bear scrutiny. After pointing out that Chapter IV of the 1961 Act deals with the computation of income falling under the various heads mentioned in section 14 of the Act, that Chapter VI in which section 72 occurs deals with the aggregation of income and set-off or carry forward of loss and that section 80E deals with deduction to be made in computing total income, the Kerala High Court has proceeded to observe thus-See [1971] 86 ITR 192,Computation as such is used only in the heading in Chapter IV. Section 66 also provides that in computing the total income of an assessee there shall be included all income on which no income-tax is payable under Chapter VII, etc. What is provided in section 66 is also relating to computation. Similarly, the same words are used in section 67. But, there are no such words in section 72. Section 72 speaks of the net result of the computation under the head Profits and gains of business or profession . We consider that the set-off permitted under section 72 is from an amount arrived at after applying the provisions of Chapter IV along with other sections of the Act such as sections 66 and 67, etc., dealing with computation of income and after permitting the deductions under section 80E.court has further observed that in its opinion the deduction under section 80E, is a special benefit given to a company which satisfies the conditions under section 80E and the deduction permissible thereunder is only from profits and gains attributable to the specified activities and this benefit should not be diminished by the other benefits conferred by the Act, such is the right to have the previous losses set off, that the two serve different purposes and the benefit of both must be available to an assessee, without the one impinging on the other. It will thus appear that the Kerala High Court has regarded section 72 appearing in Chapter VI as a provision unconnected with the computation of the total income of an assessee and a provision which comes into operation at a stage subsequent to the computation of the total income arising from business done in accordance with sections 30 to 43A occurring in Chapter IV of the Act and, therefore, the unabsorbed losses cannot be set off before calculating the deduction under section 80E. It is not possible to accept the view that section 72 has no bearing on, or is unconnected with, the computation of the total income of an assessee under the head "Profits and gains of business or profession". Actually, section 72(1) provides that where the net result of computation under the head "Profits and gains of business or profession" is a loss and such loss cannot be or is not wholly set off against the income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off, subject to the other provisions of the Chapter, shall be carried forward to the following assessment year and shall be set off against the profits and gains, if any, of any business or profession for that assessment year. Therefore, section 72(1) his a direct impact upon the computation under the head "Profits and gains of business or profession". In other words, the correct figure of total income, which is otherwise taxable under other provisions of the Act, cannot be arrived it without working out the net result of computation under the head " Profits and gains of business or profession ". Further, the question whether special benefit under section 80E as well as the normal or usual benefit of carry forward of losses of previous years should both be available to an assessee, without one impinging on the other must depend upon the intention of the legislature and such intention has to be gathered from the language employed. In this view of the matter it is extremely doubtful whether in spite of the legislative mandate contained in the three steps provided for by sub-section (1) of section 80E, the carried forward losses would not be deductible before working out the 8% deduction contemplated by section 80E and, therefore, the contention that by parity of reasoning or on a priori reasoning unabsorbed development rebate and unabsorbed depreciation should be held to be non-deductible before working out the 8% deduction under section 80E(1) cannot be accepted. As observed earlier, on a proper construction of the provision contained in sub-section (1) of section 80E, items like unabsorbed depreciation and unabsorbed development rebate will have to be deducted in arriving at the figure which would be exigible to deduction of 8% under section 80E(1)Reference was also made by counsel for the assessee to the decision of the Mysore High Court in the case of Commissioner of Income-tax v. Balanoor Tea and Rubber Co. Ltd. [1974] 93 ITR 115. In our view that decision has nothing whatever to do with the question posed before us. In that case the question was whether the loss incurred by an assessee in non-priority business could be set off against the profits and gains made by the assessee in the priority business while computing the 8% deduction under section 80E and the High Court upheld the Tribunals view that, for the purpose of allowing a deduction under section 80E, the words "such profits" occurring in that section mean "the profits and gains attributable to an activity is specified in the 5th Schedule of the Act" and, therefore, the deduction was required to be worked out without reference to the loss incurred in non-priority business. The decision was rendered on the language of section 80E(1) but it cannot avail the assessee on the point raised in the appeal.

### Instruction: Assess the case to predict the court's ruling (favorably (1) or unfavorably (0)), and then expound on this prediction by highlighting and analyzing key textual elements from the proceeding. ### Input: two decisions. In the case of Bipinchandra Maganlal & Co. Ltd. [1961] 41 ITR 290 (SC), the question that arose for determination was whether a balancing charge which was brought to tax on the basis of deemed income and was, therefore, included in the assessable income of an assessee under the second proviso to clause (vii) of sub-section (2) of section 10 of the 1922 Act (equivalent to section 41(2) of the 1961 Act), could be taken into account while considering "smallness of profit" for purposes of deciding whether the case attracted the applicability of section 23A of the Act and this court took the view that the balancing charge was not real income but was made taxable income for the purpose of computation of the assessable income by legal fiction but on that account it did not become commercial profit and was not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable ; in that context this court observed that what in truth was a capital return was by a fiction regarded for the purposes of the Act as income and was made chargeable to income-tax but because of that its character was not altered and it was not converted into the assessees business profits and that smallness of profit in section 23A had to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional. In the subsequent decision in Express Newspapers case [1964] 53 ITR 250 (SC) this court has regarded a balancing charge as being the "escaped profits" of the business for which the assessee is made liable to tax. At page 254 of the report, the court explained the nature of the balancing charge by way of illustration thus :" assume that the original cost of a machinery or plant is Rs. 100 and depreciation allowed is Rs. 25; the written down value is Rs. 75. If the machinery is sold for Rs. 100, it is obvious that depreciation of Rs. 25 was wrongly allowed. If it had not been allowed, that amount would have swelled the profits to that extent. When it is found that it was wrongly allowed, that profit is brought to charge. The second proviso, therefore, in substance, brings to charge an escaped profit or gain of the business carried on by the assessee".6. These apparently divergent views have given rise to two rival contentions urged before us by counsel on the other side. It is unnecessary in this case to go into the question whether the divergence is real or merely apparent, for, as we have said above, the answer to the question raised before us does not depend upon the real nature or true character of the balancing charge but upon proper construction of the sub-section (1) which contains the legislative mandate with regard to the manner in which three steps indicated therein are required to be taken for computing the deduction of 8% contemplated by that provision. It is true that by a legal fiction created under section 41(2) a balancing charge arising from sale of old machinery or building is treated as deemed income and the same is brought to tax ; in other words, the legal fiction enables the revenue to take back what it had given by way of depreciation allowance in the preceding years since what was given in the preceding years was in excess of that which ought to have been given. This shows that the fiction has been created for the purpose of computation of the assessable income of the asssessee under the head "Business income". It was rightly pointed out by the learned Solicitor-General that legal fictions are created only for a definite purpose and they should be limited to the purpose for which they are created and should not be extended beyond their legislative field. But, as indicated earlier, the fiction under section 41(2) is created for the purpose of computation of assessable income of the assessee under the head "Business income" and under section 80E(1), in order to compute and allow the permissible special deduction, computation of total income in accordance with the other provisions of the Act is required to be done and after allowing such deduction the net assessable income chargeable to tax is to be determined; in other words, the legal fiction under section 41(2) and the grant of special deduction in case of specified industries are so closely connected with each other that taking into account the balancing charge (i.e., deemed profits) before computing the 8% deduction under section 80E(1) would amount to extending the legal fiction within the limits of the purpose for which the said fiction had been createdAs regards the aspect emerging from the expression "attributable to" occurring in the phrase "profits and gains attributable to the business of" the specified industry (here generation and distribution of electricity) on which the learned Solicitor-General relied, it will be pertinent to observe that the legislature has deliberately used the expression "attributable to" and not the expression "derived from". It cannot be disputed that the expression attributable to "is certainly wider in import than the expression derived from". Had the expression "derived from" been used, it could have with some force been contended that a balancing charge arising from the sale of old machinery and buildings cannot be regarded as profits and gains derived from the conduct of the business of generation and distribution of electricity. In this connection, it may be pointed out that whenever the legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor-General, it has used the expression " derived from", as, for instance, in section 80J. In our view, since the expression of wider import, namely, "attributable to", has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. 7. ### Response: 0 ### Explanation: the main reasoning given by the Kerala High Court for taking such a view in Indian Transformers case the Madras High Court in L. M. Van Moppes case has merely followed the Kerala decision-does not bear scrutiny. After pointing out that Chapter IV of the 1961 Act deals with the computation of income falling under the various heads mentioned in section 14 of the Act, that Chapter VI in which section 72 occurs deals with the aggregation of income and set-off or carry forward of loss and that section 80E deals with deduction to be made in computing total income, the Kerala High Court has proceeded to observe thus-See [1971] 86 ITR 192,Computation as such is used only in the heading in Chapter IV. Section 66 also provides that in computing the total income of an assessee there shall be included all income on which no income-tax is payable under Chapter VII, etc. What is provided in section 66 is also relating to computation. Similarly, the same words are used in section 67. But, there are no such words in section 72. Section 72 speaks of the net result of the computation under the head Profits and gains of business or profession . We consider that the set-off permitted under section 72 is from an amount arrived at after applying the provisions of Chapter IV along with other sections of the Act such as sections 66 and 67, etc., dealing with computation of income and after permitting the deductions under section 80E.court has further observed that in its opinion the deduction under section 80E, is a special benefit given to a company which satisfies the conditions under section 80E and the deduction permissible thereunder is only from profits and gains attributable to the specified activities and this benefit should not be diminished by the other benefits conferred by the Act, such is the right to have the previous losses set off, that the two serve different purposes and the benefit of both must be available to an assessee, without the one impinging on the other. It will thus appear that the Kerala High Court has regarded section 72 appearing in Chapter VI as a provision unconnected with the computation of the total income of an assessee and a provision which comes into operation at a stage subsequent to the computation of the total income arising from business done in accordance with sections 30 to 43A occurring in Chapter IV of the Act and, therefore, the unabsorbed losses cannot be set off before calculating the deduction under section 80E. It is not possible to accept the view that section 72 has no bearing on, or is unconnected with, the computation of the total income of an assessee under the head "Profits and gains of business or profession". Actually, section 72(1) provides that where the net result of computation under the head "Profits and gains of business or profession" is a loss and such loss cannot be or is not wholly set off against the income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off, subject to the other provisions of the Chapter, shall be carried forward to the following assessment year and shall be set off against the profits and gains, if any, of any business or profession for that assessment year. Therefore, section 72(1) his a direct impact upon the computation under the head "Profits and gains of business or profession". In other words, the correct figure of total income, which is otherwise taxable under other provisions of the Act, cannot be arrived it without working out the net result of computation under the head " Profits and gains of business or profession ". Further, the question whether special benefit under section 80E as well as the normal or usual benefit of carry forward of losses of previous years should both be available to an assessee, without one impinging on the other must depend upon the intention of the legislature and such intention has to be gathered from the language employed. In this view of the matter it is extremely doubtful whether in spite of the legislative mandate contained in the three steps provided for by sub-section (1) of section 80E, the carried forward losses would not be deductible before working out the 8% deduction contemplated by section 80E and, therefore, the contention that by parity of reasoning or on a priori reasoning unabsorbed development rebate and unabsorbed depreciation should be held to be non-deductible before working out the 8% deduction under section 80E(1) cannot be accepted. As observed earlier, on a proper construction of the provision contained in sub-section (1) of section 80E, items like unabsorbed depreciation and unabsorbed development rebate will have to be deducted in arriving at the figure which would be exigible to deduction of 8% under section 80E(1)Reference was also made by counsel for the assessee to the decision of the Mysore High Court in the case of Commissioner of Income-tax v. Balanoor Tea and Rubber Co. Ltd. [1974] 93 ITR 115. In our view that decision has nothing whatever to do with the question posed before us. In that case the question was whether the loss incurred by an assessee in non-priority business could be set off against the profits and gains made by the assessee in the priority business while computing the 8% deduction under section 80E and the High Court upheld the Tribunals view that, for the purpose of allowing a deduction under section 80E, the words "such profits" occurring in that section mean "the profits and gains attributable to an activity is specified in the 5th Schedule of the Act" and, therefore, the deduction was required to be worked out without reference to the loss incurred in non-priority business. The decision was rendered on the language of section 80E(1) but it cannot avail the assessee on the point raised in the appeal.

K.S.RAJAN (DEAD) THROUGH L.RS Vs. THE STATE OF KERALA

against the final judgment and order dated 05.03.2003 passed by the High Court of Kerala at Ernakulam in LAA No.905 of 1995 whereby the Division Bench of the High Court dismissed the appeal filed by the original appellant herein. Against the said order, the appellant filed review petition being R.P. No.205 of 2004 which was also dismissed. 2. In order to appreciate the short controversy involved in these appeals, it is necessary to set out few relevant facts herein below. 3. During the pendency of the appeals in this Court, the appellant died and his legal representatives were brought on record. 4. The original appellant is the owner of the land measuring around 4.30 acres situated in the District of Kottyam (Kerala). The State of Kerala issued a notification dated 25.11.1980 under Section 4 of the Land Acquisition Act, 1894 (for short called the Act) and acquired total land measuring around 30 acres in Kottayam Municipality for implementation of multipurpose development scheme at Kodimatha on the acquired land. It was followed by declaration under Section 2 6 of the Act. The appellants land (4.30 acres) was also acquired in these acquisition proceedings by notification issued under Section 4 of the Act. 5. The Land Acquisition Officer (LAO) then held an enquiry, as contemplated under Section 11 of the Act, for payment of compensation to the landowners and by his award dated 06.08.1984 determined the compensation as under: For Dry land : Rs.4631/per cent For Chira land : Rs.1725/per cent For Wet land : Rs.203/per cent 6. The appellants felt aggrieved by the determination made by the LAO and sought reference to the Civil Court. By award dated 28.02.1990, the Reference Court redetermined the compensation as under: For Dry land : Rs.7500/per cent For Chira land : Rs.2000/per cent For Wet land : Rs.2000/per cent 7. Felt aggrieved by the award of the Reference Court, the State filed an appeal in the High Court of Kerala. The High Court, by order dated 23.06.1992 allowed the appeal and remanded the case to the Reference Court for fresh determination. After the remand, the Reference Court by award 07.01.1995 redetermined the compensation as under : For Dry land : Rs.5000/per cent For Chira land : Rs.2500/per cent For Wet land : Rs.450/per cent 8. By the aforesaid award passed by the Reference Court, the appellant felt aggrieved and filed appeal in the High Court. By impugned order, the High Court made partial modification in the compensation and determined the compensation as under: For Dry land : Rs.5000/per cent For Chira land : Rs.2500/per cent For Wet land : Rs.500/per cent 9. The appellant felt aggrieved by the order passed by the High Court and filed review petition in the High Court. By order dated 02.09.2003, the High Court disposed of the review petition and made partial modification in the compensation as under: For Dry land : Rs.8000/per cent For Chira land : No increase For Wet land : No increase 10. The original appellant (landowner) felt aggrieved by the order of the High Court passed in main appeal as well as in the review petition, filed the present appeals by way of special leave in this Court. 11. So far as the appellants are concerned, they are mainly concerned with the determination made by the Courts below for the wet land and chira land. 12. Therefore, the short question, which arises for consideration in these appeals, is whether the 5 determination made by the Courts below in relation to wet land and chira land is just and proper or it requires any modification by way of enhancement as claimed by the appellants (landowners) in these appeals. 13. Heard learned counsel for the parties. 14. At the outset, learned counsel appearing for the appellants brought to our notice that the Reference Court in another case of the landowners, whose lands were also acquired in these very acquisition proceedings, determined the compensation at the rate of Rs. 2000/per cent for the wet land. 15. It was his submission that the determination made by the Reference Court was not challenged by the State and hence it became final. Learned counsel, therefore, contended that since the appellants land and the other landowners land, who were awarded compensation in these very acquisition proceedings, are identical in all respects, therefore, they are also entitled to claim the compensation at the same rate, i.e., Rs. 2000/per cent which was awarded to other landowners for their wet land. 16. We find force in the submission of learned counsel for the appellants. It is more so when the learned counsel for the respondents could not dispute this factual statement except to support the reasoning and the conclusion arrived at by the High Court in the impugned order. 17. Even otherwise on perusal of the entire record of the case and the findings of all the Courts below, we are of the opinion that the findings recorded by the Reference Court in the earlier round of litigation awarding Rs. 2000/per cent for the wet land though set aside by the High Court in the earlier round yet it deserves to be restored again. 18. In other words, in our view, the award of Rs.2000/per cent for the wet land appears to be just, proper and reasonable keeping in view the nature of the land, its surroundings and location and similarity with the land owned by other landowners to whom compensation was awarded at the rate of Rs.2000/per cent. In our opinion, it represents correct market value of the wet land on the date of acquisition (25.11.1980) and was, therefore, rightly determined by the Reference Court in cases of other landowners in relation to their lands acquired in these proceedings. 19. So far as the rates of other two nature of lands are concerned, namely, dry and chira, their rates do not call for any interference and nor any attempt was made by the appellants to question its legality and, in our view, rightly. 20.

1[ds]We find force in the submission of learned counsel for the appellants. It is more so when the learned counsel for the respondents could not dispute this factual statement except to support the reasoning and the conclusion arrived at by the High Court in the impugned orderEven otherwise on perusal of the entire record of the case and the findings of all the Courts below, we are of the opinion that the findings recorded by the Reference Court in the earlier round of litigation awarding Rs.per cent for the wet landthough set aside by the High Court in the earlier round yet it deserves to be restored againIn other words, in our view, the award ofper cent for the wet landappears to be just, proper and reasonable keeping in view the nature of the land, its surroundings and location and similarity with the land owned by other landowners to whom compensation was awarded at the rate ofper cent. In our opinion, it represents correct market value of the wet land on the date of acquisition (25.11.1980) and was, therefore, rightly determined by the Reference Court in cases of other landowners in relation to their lands acquired in these proceedingsSo far as the rates of other two nature of lands are concerned, namely, dry and chira, their rates do not call for any interference and nor any attempt was made by the appellants to question its legality and, in our view, rightly.

### Instruction: Make a prediction on the court's ruling (acceptance (1) or rejection (0) of the petition), and then dissect the proceeding to provide a detailed explanation using key textual passages. ### Input: against the final judgment and order dated 05.03.2003 passed by the High Court of Kerala at Ernakulam in LAA No.905 of 1995 whereby the Division Bench of the High Court dismissed the appeal filed by the original appellant herein. Against the said order, the appellant filed review petition being R.P. No.205 of 2004 which was also dismissed. 2. In order to appreciate the short controversy involved in these appeals, it is necessary to set out few relevant facts herein below. 3. During the pendency of the appeals in this Court, the appellant died and his legal representatives were brought on record. 4. The original appellant is the owner of the land measuring around 4.30 acres situated in the District of Kottyam (Kerala). The State of Kerala issued a notification dated 25.11.1980 under Section 4 of the Land Acquisition Act, 1894 (for short called the Act) and acquired total land measuring around 30 acres in Kottayam Municipality for implementation of multipurpose development scheme at Kodimatha on the acquired land. It was followed by declaration under Section 2 6 of the Act. The appellants land (4.30 acres) was also acquired in these acquisition proceedings by notification issued under Section 4 of the Act. 5. The Land Acquisition Officer (LAO) then held an enquiry, as contemplated under Section 11 of the Act, for payment of compensation to the landowners and by his award dated 06.08.1984 determined the compensation as under: For Dry land : Rs.4631/per cent For Chira land : Rs.1725/per cent For Wet land : Rs.203/per cent 6. The appellants felt aggrieved by the determination made by the LAO and sought reference to the Civil Court. By award dated 28.02.1990, the Reference Court redetermined the compensation as under: For Dry land : Rs.7500/per cent For Chira land : Rs.2000/per cent For Wet land : Rs.2000/per cent 7. Felt aggrieved by the award of the Reference Court, the State filed an appeal in the High Court of Kerala. The High Court, by order dated 23.06.1992 allowed the appeal and remanded the case to the Reference Court for fresh determination. After the remand, the Reference Court by award 07.01.1995 redetermined the compensation as under : For Dry land : Rs.5000/per cent For Chira land : Rs.2500/per cent For Wet land : Rs.450/per cent 8. By the aforesaid award passed by the Reference Court, the appellant felt aggrieved and filed appeal in the High Court. By impugned order, the High Court made partial modification in the compensation and determined the compensation as under: For Dry land : Rs.5000/per cent For Chira land : Rs.2500/per cent For Wet land : Rs.500/per cent 9. The appellant felt aggrieved by the order passed by the High Court and filed review petition in the High Court. By order dated 02.09.2003, the High Court disposed of the review petition and made partial modification in the compensation as under: For Dry land : Rs.8000/per cent For Chira land : No increase For Wet land : No increase 10. The original appellant (landowner) felt aggrieved by the order of the High Court passed in main appeal as well as in the review petition, filed the present appeals by way of special leave in this Court. 11. So far as the appellants are concerned, they are mainly concerned with the determination made by the Courts below for the wet land and chira land. 12. Therefore, the short question, which arises for consideration in these appeals, is whether the 5 determination made by the Courts below in relation to wet land and chira land is just and proper or it requires any modification by way of enhancement as claimed by the appellants (landowners) in these appeals. 13. Heard learned counsel for the parties. 14. At the outset, learned counsel appearing for the appellants brought to our notice that the Reference Court in another case of the landowners, whose lands were also acquired in these very acquisition proceedings, determined the compensation at the rate of Rs. 2000/per cent for the wet land. 15. It was his submission that the determination made by the Reference Court was not challenged by the State and hence it became final. Learned counsel, therefore, contended that since the appellants land and the other landowners land, who were awarded compensation in these very acquisition proceedings, are identical in all respects, therefore, they are also entitled to claim the compensation at the same rate, i.e., Rs. 2000/per cent which was awarded to other landowners for their wet land. 16. We find force in the submission of learned counsel for the appellants. It is more so when the learned counsel for the respondents could not dispute this factual statement except to support the reasoning and the conclusion arrived at by the High Court in the impugned order. 17. Even otherwise on perusal of the entire record of the case and the findings of all the Courts below, we are of the opinion that the findings recorded by the Reference Court in the earlier round of litigation awarding Rs. 2000/per cent for the wet land though set aside by the High Court in the earlier round yet it deserves to be restored again. 18. In other words, in our view, the award of Rs.2000/per cent for the wet land appears to be just, proper and reasonable keeping in view the nature of the land, its surroundings and location and similarity with the land owned by other landowners to whom compensation was awarded at the rate of Rs.2000/per cent. In our opinion, it represents correct market value of the wet land on the date of acquisition (25.11.1980) and was, therefore, rightly determined by the Reference Court in cases of other landowners in relation to their lands acquired in these proceedings. 19. So far as the rates of other two nature of lands are concerned, namely, dry and chira, their rates do not call for any interference and nor any attempt was made by the appellants to question its legality and, in our view, rightly. 20. ### Response: 1 ### Explanation: We find force in the submission of learned counsel for the appellants. It is more so when the learned counsel for the respondents could not dispute this factual statement except to support the reasoning and the conclusion arrived at by the High Court in the impugned orderEven otherwise on perusal of the entire record of the case and the findings of all the Courts below, we are of the opinion that the findings recorded by the Reference Court in the earlier round of litigation awarding Rs.per cent for the wet landthough set aside by the High Court in the earlier round yet it deserves to be restored againIn other words, in our view, the award ofper cent for the wet landappears to be just, proper and reasonable keeping in view the nature of the land, its surroundings and location and similarity with the land owned by other landowners to whom compensation was awarded at the rate ofper cent. In our opinion, it represents correct market value of the wet land on the date of acquisition (25.11.1980) and was, therefore, rightly determined by the Reference Court in cases of other landowners in relation to their lands acquired in these proceedingsSo far as the rates of other two nature of lands are concerned, namely, dry and chira, their rates do not call for any interference and nor any attempt was made by the appellants to question its legality and, in our view, rightly.