dedol-hf/india-case-legal-rag huggingface dataset:
Ordinance.   It  was  not given for the
(1) (1880) 5 App. cas.214.
733
benefit of any other person including the owner of the  land
sought  to be requisitioned.  when a power is given  to  one
person, here the Provincial Government, for his own benefit,
couched  in  enabling words making  its  exercise  optional,
there  is  no principle or authority that I  know  of  which
enables the Court to make the exercise of the power  compul-
sory by reading the word 'may' as 'must'. Assuming, however,
that  'may' in these sections means 'must,' what  follows  ?
It  is  true that the information could  be  obtained  under
section  10 with a view to carrying out the purposes of  the
Act but what was the nature of the information that might be
gathered under the section ?  It was only information relat-
ing  to the land requisitioned or to be  requisitioned  that
could  be obtained. Information relating to the  land  would
certainly be useful in enabling the Provincial Government to
consider the necessity or expediency of requisitioning  that
land.   Such  information  would also  be  useful   to   the
officer  determining the question of compensation.  But  how
could  any information relating to any particular land  have
any  bearing  on the question of the existence of  a  public
purpose  which was the only matter under section  3,  which,
according to Mr. Seervai, had to be judicially determined by
the  Provincial Government ? I fail to perceive any.   As  I
have  said,  information relating to land  certainly  had  a
bearing on the question whether it was necessary or  expedi-
ent  to acquire that particular land which admittedly was  a
purely administrative act.  Finally, section 10 enabled  the
Provincial  Government to require  'any person'  to  furnish
information  relating  to the land.  The Ordinance  did  not
think fit even to mention the owner or other persons  inter-
ested  in  the  land as a specific  source  of  information.
Assuming that the Provincial Government was obliged to  make
any  enquiry, the owner of the land had no special right  to
be  consulted apart from the general right of "any  person."
No  provision  was made for giving notice  of  the  intended
requisition  by  special notice or by advertisement  or  for
enabling  any  aggrieved person to lodge any  objection  and
nobody
734
was  designated  as authority on whom was cast any  duty  to
hear the objections. Further, it will be noticed that  under
the  section   the information was to be furnished  to  such
authority as might be specified, which means that the infor-
mation  was not to be communicated to the  Provincial   Gov-
ernment direct. Therefore, the information was nothing  more
than  the information obtained for the Minister by  somebody
appointed by him to hold a public enquiry under the statutes
which  were considered in Robinson v. Minister of  Town  and
Country  Planning C) and Franklin v. Minister of  Town   and
Country Planning (2).  The circumstance that by  sub-section
(2) of that section a legal obligation, on pain of  criminal
penalty,  was imposed on persons to furnish information,  so
strongly relied on by Mr. Seervai, appears to me to have  no
bearing  on the character or scope of the inquiry  envisaged
by  sub-section  (1).   The provisions of  section  12  also
carried  the  matter no further.  This section was  also  an
enabling  section.   The  inspection was in  terms  for  the
purpose  of determining whether, and, if so, in what  manner
an order should be made.  It can have no possible bearing on
the  question of the existence of a public purpose which  is
an independent question having no necessary relation to  any
particular  land. Further, presumably, a number of  premises
might have to be requisitioned and, if the contention of the
respondent  were  correct, there would have to  be  as  many
quasi-judicial  determinations of the existence of the  same
public purpose as there might be the number of houses to  be
acquired--a proposition impracticable and absurd on the face
of  it.  Finally, compare the provisions of sections 10  and
12  with those of section 6. The determination of the  ques-
tion  of  compensation and the  apportionment  thereof  were
certainly  judicial  or  quasijudicial acts.   There  was  a
provision  for appeal also. Section 16 provided  for  making
rules for holding the inquiry under sub-sections (1) and (3)
of  section 6. The circumstance that the Ordinance  provided
for  judicial or quasi-judicial inquiry for the purposes  of
section 6
(1) [1947] 1 A.E. R. 851.      (2) [1948] A.C. 87.
735
but was silent as regards section 3 cannot be overlooked.
    In  my judgment, the Ordinance did not require the  Pro-
vincial Government to act judicially at all in the matter of
making  a requisition order under section 3. The  provisions
for  obtaining information and for getting inspection  under
sections 10 and 12 respectively cannot be read as provisions
for  a  judicial or quasijudicial inquiry, nor was  such  so
called inquiry obligatory at all. Those sections served  and
were intended to serve the purpose of obtaining  information
which would enable the Provincial Government to exercise its
administrative, i.e., executive function of making an  order
for requisition.  The conclusions I have arrived at are  (i)
that  on a true construction of section 3 of  the  Ordinance
the  determination  of the  existence of a  public   purpose
and   the  necessity or expediency  for  requisitioning  any
particular   land for that purpose was a purely  administra-
tive act, for  the  entire  composite matter was left to the
opinion  of  the Provincial  Government,  and  its decision,
if  made in good faith, could not be questioned; (ii)  that,
apart  from the question of construction and  assuming  that
the matter had not been left to its opinion,  the   determi-
nation   of   the  existence  of a  public  purpose  or  the
necessity or  expediency for making the order  could not  be
regarded  as a quasi-judicial act, because (a)there  was  no
lis  in the  sense  of  dispute  between   two    contesting
parties to be decided by the Provincial Government; and  (b)
the Provincial Government was not required by the  Ordinance
to  hold any judicial inquiry or to act judicially and  that
the  determination of the existence of a public purpose  was
only  a step in the process of the exercise of the  adminis-
trative  power and, if erroneous the decision could at  best
be  challenged  by an action, but a certiorari  would  be  a
wholly  inappropriate remedy.  The second head  of  argument
must therefore, be rejected.
There  is the last head of argument which requires  con-
sideration before I conclude.  The argument is that
736
the existence of a public purpose was a condition  precedent
to the exercise of the power and, therefore, the  fulfilment
of  the condition precedent had to be determined  judicially
by  the Provincial Government as an objective fact  but  the
provincial  Government  could not, by wrongly  deciding  the
preliminary  point,  assume  jurisdiction  to  exercise  the
power.
In Bunbury v. Fuller (1) Coleridge J. laid down:
    "Now  it  is a general rule, that no  Court  of  limited
jurisdiction  can give itself jurisdiction by a wrong  deci-
sion  on a point collateral to the merits of the  case  upon
which the limit to its jurisdiction depends and however  its
decisions may be final on all particulars making up together
that subject matter which, if true, is within its  jurisdic-
tion,  and however necessary in many cases it may be for  it
to make a preliminary inquiry whether some collateral matter
be  or be not within the limits, yet upon these  preliminary
questions,  its decision must always be open to  enquiry  in
the superior Court."
    This   was  cited by  Blackburn J. in Pease  v.  Chaytor
(2).   The  same principle was also laid down by  the  Privy
Council  in Colonial Bank of Australia v. Willan  (3).   The
principle is quite plain but as Lord Esher M.R. pointed  out
in  Reg. v. Commissioner of Income-tax (4) "its  application
is often misleading." The learned Master of the Rolls  clas-
sified the cases in two categories thus:
     "When an inferior Court or tribunal or body, which  has
to  exercise  the power of deciding facts, is  first  estab-
lished by Act of Parliament, the legislature has to consider
what  powers it will give that tribunal or body.  It may  in
effect say  that, if a certain state of facts exists and  is
shown  to  such tribunal or body before  it proceeds  to  do
certain things it shall have  jurisdiction to do such things
but not otherwise.  There  it  is not for them  conclusively
to  decide whether that state of facts exists
(1) 9 Ex. 111 at p- 140.        (3) [1874] L.R. 5 P.C. 417.
(2) 3 B. & S. 620.              (4) (1888) 21 Q.B.D. 313.
737
and,  if they exercise the jurisdiction without  its  exist-
ence,  what they do may be questioned, and it will  be  held
that  they  have acted without jurisdiction.  But  there  is
another state of things which may exist. The legislature may
entrust  the  tribunal  or body with  a  jurisdiction  which
includes the jurisdiction to determine whether the  prelimi-
nary state of facts exists, as well as the jurisdiction,  on
finding   that   it  does exist, to proceed  further  or  do
something   more.When the legislature are establishing  such
a   tribunal  or  body  with  limited   jurisdiction,   they
also  have  to  consider whatever  jurisdiction   they  give
them,  whether  there shall be any appeal from  their  deci-
sions,  for otherwise there will be none.  In the second  of
the  two cases I have mentioned it is erroneous  application
of  the formula to say that  the tribunal cannot give  them-
selves  jurisdiction  by wrongly deciding certain  facts  to
exist,  because  the legislature gave them  jurisdiction  to
determine  all  the facts, including the  existence  of  the
preliminary  facts  on which the further exercise  of  their
jurisdiction depends; and if they were given jurisdiction so
to  decide,  without  any appeal being given,  there  is  no
appeal from such exercise of their jurisdiction."
    Mr. Seervai contends that the present case falls  within
the  first  class  of cases and strongly relies  on  Rex  v.
Woodhouse (1) and Rex v. Bradford (2) as establishing that a
certiorari  lies  to  correct the error  of  the  Provincial
Government.  There are two answers to this argument. In  the
first place, it is not disputed that the formation of  opin-
ion as to the necessity or expediency of requisitioning  any
land  is  a purely subjective matter and that the  order  of
requisition  founded  on that opinion is  an  administrative
act.   What is contended is that the existence of  a  public
purpose  must  be judicially determined  by  the  Provincial
Government before it could proceed to exercise its  adminis-
trative powers.  In short qua that issue only the Provincial
Government   was  to  act  judicially.  The  consequence  of
this argument is that the decision of the Provincial Govern-
ment on this issue was not a decision
[1906] 2 K.B. 501.           (2) [1908] 1 K.B. 365,
738
on  a collateral matter but a decision on the  issue  itself
which,  according to the argument, had been left within  the
jurisdiction  of  the provincial Government  to  decide.  It
must, therefore, follow that the case fell within the second
class  of cases mentioned by Lord Esher M.R. The  fact  that
there is no right of appeal from this decision, although the
Ordinance   provided for an appeal under section 6, is  also
significant.   Before coming to the decision on  this  issue
the  Government had sent an Inspector to gather  information
under  section 10 and the Respondent's father, the  original
applicant, furnished all necessary information and  produced
the  original  Deed of Assignment on which  he  founded  his
title and gave a written statement. The requirements of  the
Statute  had been complied with and the petitioner  had  his
say.   The  decision  of the Provincial  Government  that  a
public  purpose existed given in such circumstances  became,
in the absence of bad faith, binding and, in the absence  of
any  right of appeal, was conclusive, however erroneous  the
decision  might have been.  The second answer to  Mr.  Seer-
vai's  contention  is  that, assuming that   the  case  fell
within  the first class of cases and the erroneous  decision
could  be  corrected,  it might have been  corrected  by  an
action but certainly not by certiorari. The two cases relied
on  by  Mr. Seervai, when properly understood, can  have  no
application  to the facts of the case before us.  In Rex  v.
Woodhouse (1) the Court of Appeal accepted the position that
the licensing Justices in granting or refusing to grant  the
licence had to perform a quasi-judicial act, for they had to
decide the matter as between two contending parties, namely,
the  applicant  for  licence and the  persons  opposing  the
grant. There the Justices granted a provisional licence  and
referred the matter to Quarter Sessions.  Three points  were
taken,  namely,  (i) that the Justices did not  apply  their
mind to the issue and failed to decide the matter judicially
but made the order in pursuance of a pre-existing  agreement
between  them  and the Corporation, (ii) that  the  Justices
were biased and (iii) that
(1) [1906] 2 K.B. 501.
739
the  power of the Justices being limited to  granting  licen
ces  to persons who had some specified qualifications,  they
could  not,  by wrongly  deciding  that  the applicants  had
the necessary qualifications, assume jurisdiction to do  the
quasi-judicial  act of granting the licence.  This  decision
of the Court of Appeal was reversed by the House of Lords in
Lord Mayor etc. of Leeds v. Ryder (1) on the ground that the
Justices  had to act according to their own  discretion  and
that  they  were not guilty of any bad faith in  doing  what
they did.  The point to note, however, is that the  decision
of  the Court of Appeal proceeded  on the footing  that  the
Justices  were  a quasi-judicial body and that   by  wrongly
deciding a preliminary fact they assumed to discharge  their
quasi-judicial  function of granting the licence and it  was
the  quasi-judicial  act of granting the  licence  that  was
brought up and  quashed by certiorari.   The case of Rex  v.
Bradford(2)   also   proceeded   on  the  footing   that  in
granting  the licence to the District Council to  take  away
stones  etc. the Justices were exercising  a  quasi-judicial
function  and  they assumed jurisdiction  to  exercise  that
quasi-judicial  function by wrongly deciding the  collateral
fact  that  the land in question was not a park.   The  same
remarks  apply  to Rex (Greenaway) v.  Justices   of  Armagh
(3).   All these cases in the appeal Court were cases  where
a  quasijudicial body purported  to assume  jurisdiction  to
discharge its quasi-judicial function by an erroneous  deci-
sion  of  a collateral fact and, therefore,  certiorari  was
granted    to correct the error of jurisdiction by  quashing
the   order itself which was a quasi-judicial act.   In  the
case now before us the Provincial Government was   function-
ing  as an administrative body doing an administrative  act,
namely, forming its opinion as to the necessity or expedien-
cy of requisitioning land and making an order of requisition
based on that opinion.  If the existence of a public purpose
was a collateral fact, then at best it was a case of an
(1)  [1907] A.C. 420.   (2) [1908] 1 K.B. 365.   (3)  {1934]
2, Ir. R. 55.
740
administrative  body  assuming jurisdiction to  perform  its
administrative powers by erroneously deciding the collateral
fact  as to the existence of a public purpose. In such  cir-
cumstances  the two cases relied on by Mr. Seervai can  have
no  possible  application.   Assuming that  this  case  fell
within  the  first class mentioned by Lord Esher  M.R.  this
erroneous assumption of jurisdiction to do an administrative
act  might have been corrected by an action  but  certiorari
cannot  possibly  be the  appropriate remedy.   It  is  said
that in deciding the collateral fact the Provincial  Govern-
ment  was  acting  judicially   and,  therefore,  certiorari
might  go.  The argument will take the respondents  nowhere,
for, assuming that the decision on the question of existence
of a public purpose was a quasi-judicial act, that decision,
at  the most, might be quashed but the  administrative  act,
namely, the formation of opinion and the order based thereon
would remain unaffected, for certiorari would not affect it.
The  passage I have quoted from the judgment of Lord  Greene
M.R.  in Robinson v. Minister of Town and Country  Planning,
clearly  establishes that although the  preliminary  enquiry
had  to be done in a quasijudicial manner, that  fact  could
not  alter the nature or character of the ultimate  adminis-
trative act. That administrative act would remain an  admin-
istrative  act and could not be touched by  certiorari.  The
third  head of arguments advanced on behalf of the  respond-
ents must, therefore, also fail.
    In my judgment the first of the two points raised by the
learned  Attorney-General  on behalf of the  appellant  must
prevail  for  reasons stated above. This  is  sufficient  to
dispose of this appeal and the second point, namely, whether
a writ of this nature can lie against the Provincial Govern-
ment, does not arise.  In view of the fact that the  Govern-
ment  of India Act, 1935, has been repealed and  the  provi-
sions  of our Constitution on this point are different  from
those of the Government of India Act, the question has  also
become academic for future purposes and I express no opinion
on it.
741
    I, therefore, agree with my Lord the Chief Justice  that
this  appeal should be allowed and the judgments and  orders
of  the  Courts below should be set aside and  the  petition
should stand dismissed. I also agree to the order for  costs
made by my Lord the Chief Justice.
                               Appeal allowed.
      Agent for the appellant: Ranjit Singh Narula.
      Agent  for the respondents Nos. 1 (a) and 1  (b)  :
Rajinder Narain.
PETITIONER:
COMMISSIONER OF INCOME-TAX, U.P.
        Vs.
RESPONDENT:
GAPPUMAL KANHAIYA LAL
DATE OF JUDGMENT:
26/05/1950
BENCH:
FAZAL ALI, SAIYID
BENCH:
FAZAL ALI, SAIYID
SASTRI, M. PATANJALI
MAHAJAN, MEHR CHAND
MUKHERJEA, B.K.
CITATION:
 1951 AIR    5            1950 SCR  563
ACT:
    Indian Income-tax Act (XI of 1922), s.9 (1) (iv)--income
from  property--Computation  of annual  value--Deduction  of
"annual   charges  not  being  capital   charges"--Municipal
house-tax  and watertax--Whether deductible--Nature of  such
charges--U.P. Municipalities Act (II of 1916), ss. 128, 149,
177.
HEADNOTE:
    The  amount  of house-tax and the  amount  of  water-tax
imposed by the municipal board of Allahabad under s. 128  of
the  United Provinces Municipalities Act, 1916, and paid  by
the  owner  as  a lessor under s. 149 of the  said  Act  are
"annual  charges  not  being capital charges  to  which  the
property is subject," within the meaning of s. 9 (1) (iv) of
the  Indian Income-tax Act, 199.2, and should  therefore  be
deducted  from  the bona fide annual value of  the  property
determined  under  sub-sections (1) and 12) of s. 9  of  the
Indian Income-tax Act.
Judgment of the Allahabad High Court affirmed.
    New  Piecegoods  Bazar  Co,  Ltd.  v.  Commissioner   of
Income-tax, Bombay ([1950] S.C.R. 553) followed.
 (1)  I.L,R. 1943 Bom. 628. 73
564
JUDGMENT:
APPEAL from the High Court of Judicature at
Allahabad (Civil Appeal No. VI of 1949).
    This was an appeal from the High Court, Allahabad (lqbal
Ahmad  C.J.  and Allsop J.) dated 31st August,  1944,  in  a
reference  under  section 66 of the Indian  Income-tax  Act,
1922. The facts are set out in the judgment.
    M.  C. Setalvad, Attorney-General  for India
(H. J. Umrigar, with him), for the appellant.
   Gopi  Nath Kunzru (K. B. Asthana, with him),  for  the
respondent.
1950.  May 26.  The judgment of the Court was  delivered
by
MEHR CHAND MAHAJAN J.--This appeal from a judgment of  the
High  Court  of Judicature at Allahabad.dated  31st  August,
1944, raises the same points as have been discussed in Civil
Appeal No. 66 of 1940 (1).  The Income-tax Appellate  Tribu-
nal referred four questions to the High Court of  Judicature
at Allahabad under section 66 ( 1 ) of the Indian Income.tax
Act.  These  questions  related to the  year  of  assessment
1930-40.   The High Court answered two of the  questions  in
the affirmative and two in the negative.  The two  questions
relating  to the appeal are those that were answered in  the
affirmative and are as follows :--
    "Whether (1) the amount of house-tax and (2) the  amount
of  water-tax, imposed by the Municipal Board  of  Allahabad
under  section  128, sub-section (1) clauses  (i)  and  (x),
respectively  of  the United provinces  Municipalities  Act,
1916, and paid by the owner as a lessor under section 149 of
that  Act should be deducted as an allowance from  the  bona
fide  annual  value of the property  determined  under  sub-
section  (1) read with sub-section (2) of section 9  of  the
Act,  on  the ground that such amount is an  annual  charge,
which  is  not  a capital charge to which  the  property  is
subject within the meaning of clause (iv) of sub-section (1)
of section 9 of the Act."
(1)  New  piecegoods  Bazar  Co.  Ltd.  v.  Commissioner  of
Income-tax, Bombay [1950] S.C.R. 553.
565
    Under section 128 of the United Provinces Municipalities
Act, 1916, the municipality can impose a tax in the whole or
any  part of the municipality on the annual value of  build-
ings or land or of both, and a water-tax on the annual value
of  buildings  or land or of both.  Every such  tax  on  the
annual value of buildings or land or both is leviable on the
actual  occupier of the property upon which the  said  taxes
are  assessed, if he is the owner of the buildings or  lands
or holds them on a building or other lease from the Crown or
from the Board, or on a building lease from any person.   In
any  other case the tax is leviable from the lessor, if  the
property is let (vide section 149).  Section 177 enacts that
all sums due on account of a tax imposed on the annual value
of  buildings or lands or both shall, subject to  the  prior
payment  of  the land revenue, i.f any, due to  His  Majesty
thereupon, be a first charge upon such buildings or lands.
    It  is  apparent therefore that the  provisions  of  the
United Provinces Act in respect of the levy of the taxes are
substantially  similar to the provisions of the  Bombay  Act
discussed  in Civil Appeal No. 66 of 1949 (1). For the  rea-
sons  given in that appeal and as a result of that  decision
this appeal stands dismissed with costs and we consider that
the High Court of Allahabad has answered the questions above
mentioned correctly.
Appeal dismissed.
Agent for the appellant:  P.A. Mehta.
Agent for the respondent:  S.P. Varma.
(1) [1950] S.C.R. 553.
566
PETITIONER:
THE NEW PIECEGOODS BAZAR CO., LTD.,BOMBAY
        Vs.
RESPONDENT:
THE COMMISSIONER OF INCOME-TAX,BOMBAY
DATE OF JUDGMENT:
26/05/1950
BENCH:
MAHAJAN, MEHR CHAND
BENCH:
MAHAJAN, MEHR CHAND
FAZAL ALI, SAIYID
SASTRI, M. PATANJALI
MUKHERJEA, B.K.
CITATION:
 1950 AIR  165            1950 SCR  553
ACT:
    Indian Income-tax Act (XI of 1922),s. 9 (1) (iv)--Income
from property--Computation--Deduction--" Annual charge,  not
being   capital   charge"--"Annual  charge"   and   'capital
charge", meanings of-- Charge for municipal property tax and
urban immoveable property tax--Wheather deductible--City  of
Bomabay  Municipal Act, 1888, s. 212-- Bombay  Finance  Act,
1932, s. 22.
HEADNOTE:
    The charge created in respect of municipal property  tax
by  s. 212 of the City of Bombay Municipal Act, 1888, is  an
"annual charge not being a capital charge" within the  mean-
ing  of s. 9 (1) (iv) of the Indian Income-tax  Act,  199.2,