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Appeal No. 109 of 1957. Appeal by special leave from the judgment and order dated March 1, 1956, of the Bombay High Court in Appeal No. 20 of 1956. G. section Pathak, K. H. Bhabha, H. M. Vakeel and I. N. Shroff, for the appellants. C. K. Daphtary, Solicitor General of India, B. K. Khanna and P. D. Menon, for the respondents. 724 C. K. Daphtary Solicitor General of India section N. Andley, Rameshwar Nath and P. L. Vohra, for the Interveners. April 11. The Judgment of Sinha C. J., Ayyangar, Madholkar and Aiyar, JJ., was delivered by Ayyangar, J., Subha Rao, J. delivered a separate judgment. AYYANGAR, J. This is an appeal by special leave from the judgment of a Division Bench of the Bombay High Court affirming the judgment of a learned Single Judge whereby a petition filed under Article 226 of the constitution by the appellants was dismissed. By their petition, the appellants challenged the validity of a notification issued by Forward Markets Commission a statutory body created by the Forward Markets Regulation Act 1952 (LXXIV of 1952) (hereinafter referred to as the Act) to the authorities of the East India Cotton Association, Bombay (which will be referred to as the Association) intimating to them that the continuation of trading in certain types of forward contracts in cotton including that known as "hedge contracts" was "detrimental to the interest of the trade and the public interest and to the larger interests of the economy of India" and directed these contracts to be closed out, to be settled at prices fixed in the notification. It is necessary to set out briefly certain facts in order to appreciate the points raised by the appeal. The fast India Cotton Association is an "association" which has been recognised by the Central Government under a. 6 of the Act. The three appellants are members of the Association carrying on business in partnership. The appellants had, prior to December 1955, entered into "hedges contracts" in respect with other members of the Association for settlements in February and May 1956. There was no dispute that these 725 contracts were in accordance with the bye laws of the Association as they stood at the date when the contracts were entered into. The terms and conditions of forward contracts in cotton including "hedge contracts", and the manner of their implementation, were governed by the provisions contained in certain bye laws of the Association and of these that relevant to the consideration of the matters in this appeal was bye law 52AA which on the date when the appellants entered into their contracts ran as follows: "52 A.A. (1) whether or not the prices at which the cotton may be bought or sold are at any time controlled under the provisions of the Essential Commodities Act, 1055, if the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman (of the Board), be of opinion that the continuation of hedge trading is likely to result in a situation detrimental to the larger interests of the economy of India and so informs the Board, the Board shall forthwith cause a notice to be posted on the Notice Board to that effect and on the posting of such notice and notwithstanding anything to be contrary contained in these bye laws or in any hedge or on call contract made subject to these Bye laws, the following provisions shall take effect. (2)Every hedge contract and every on call contract in so far as the cotton is uncalled thereunder or "in so far as the price has not been fixed thereunder entered into between a member and a member or between a member and a non member then outstanding shall be deemed closed out at such rate, appropriate to such contract as shall be fixed by the Textile Commissioner and the provisions 726 of Clauses (3), (4) and (6) of Bye laws 52A in so far as they apply to hedge and on call contracts, shall apply as if they formed part of this Bye law. After the affixation of the said Notice on the Notice Board trading in hedge and on call contracts shall be prohibit ed until the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman, permits resumption". Towards the end of 1955 the Chairman of the Association appears to have apprehended that the forward Market in cotton was heading for a crisis which was in part due to the transacting of unbridled option business, which though prohibited by the Act and also by the bye laws of the Association was ever the less indulged in on a large scale. The hairman brought this situation to the notice of the members of the Board of the Association at a meeting held on December 16, 1955, and suggested that they should give serious thought to this vital problem. It may be mentioned that the government also were anxiously considering the steps to the taken to solve or avert the crisis. The action which the government took in this matter is reflected in a notification issued by them on December 23, 1955, by which in exercise of the powers conferred in them by section 14 of the Act they directed the Association to suspend its business in Indian cotton edge contracts for delivery in February 1956 and May 1956 for a period of 7 days with effect from the date of the notification. The situation did not apparently improve as a result of this temporary suspension so that before the expiry of the work fortnight, action under the same provision was gain taken under a notification dated December 10, 1955, by which the period of 7 days was exten ded by a further period of 7 days i. e. till 6, 1. 56A meeting of the Board of Association was held on 727 January 6, 1956, i. e., the day on which the suspension of forward business expired when the following , resolution was unanimously passed: " 'In view of the suspension of forward trading by government the Board hereby resolves under bye law 52 that an emergency has arisen or exists and prohibits until further notice, subject to the concurrence of the Forward Markets Commission as from Saturday, the 7th January, 1956, trading in hedge contracts for February and May 1956, deliveries above a maximum rate of Rs. 700/ per candy Thereupon a suit (numbered as suit 2/1956) was filed by a member of the Association as representing himself and all other members, on the original side of the High Court, Bombay against the Association and its Board, challenging the validity of the notification of Government suspending forward trading, as also of the resolution of the 'Board, just now extracted. An application for the grant of interim stay was made for restraining the Board from giving effect to its resolution but this was refused by the learned trial Judge and an appeal was filed against the refusal. While things were in this state the Central Government, in exercise of the powers conferred on them by section 12 of the Act, made anew bye law which was published in a Gazette of India Extra. ordinary dated January 21, 1956, in substitution of bye law 52 AA set out earlier. The new bye law ran. "152 AA (1) Whether or not prices at which cotton may be bought or sold are at any time controlled under the provisions of the , if the Forward Markets Commission is of the opinion 728 that continuation of trading in hedge contrac ts for any delivery or deliveries is detrimental to the. interest of the trading or the public interest or to the larger interests of the economy of India and so notifies the Chairman, then notwithstanding anything to the contrary contained in these bye laws or in any hedge or on call contract made subject to these bylaws the following provisions shall take effect. (2)Every hedge contract and every on call contract in so far as the cotton is uncalle d thereunder or in so far as the price has not been fixed thereunder and relating to the delivery or deliveries notified under clause (1) entered into between a member and a member or between a member and a non member then outstanding shall be deemed closed out at such rate appropriate to such contract and with effect from such date as shall be fixed by the Forward Markets Commission and the provisions of clauses (3), (4) and (0) of Byelaws 52 A in so far as they apply to hedge and on call contracts shall apply as if they formed part of this Bye law". This bye law was communicated to the Board of the Association on January 23, 1956. We might here state that the validity of this new bye law has been impugned on various grounds and the alleged invalidity of this We law serves as the main foundation for challenging the validity of the notification of the Forward Markets Commission issued under the powers conferred by it. On January 24, 1956, the appeal from the order refusing the interim injunction in Suit No. 2 of 1956 was settled between the parties on , theme terms : "(1) The impugned resolution dated January 6, 1956, declared to be valid, 729 (2)The Board of Directors to meet on January 25, 1958, and consider under bye laws 52 (2) whether the rate of Rs. 700 fixed under the said resolution should continue or whether it should be waived. 'In considering the same the Board will apply its own mind and exercise its own judgment". On the same day, i.e. January 24, 1956, the Forward Markets Commission took action under the powers vested in them under the new bye law 52 AA which had been made by government three days earlier. By a communication addressed to the Chairman of the Association, the Commission stated : " 'In pursuance of cl. (1) of the bye law 52AA of the Bye laws of the E.I.C.A. Ltd., Bombay I hereby notify to you that the For. ward Markets Commission is of the opinion that continuation of trading in the hedge contracts for February and May 1956 delivery is detrimental to the interests of the trade and the public interest and the larger interest of the economy of India and fixed under cl. (2) of the said bye law; that the rates prevailing at the time at which the trading in the said contracts closed On January 24, 1956, viz., Rs. 700/ for February and Rs. 686/8/ for May delivery as the rates at which and January 25, 1956 as the date with effect from which the hedge contracts and on call contracts in so far as the cotton is uncalled thereunder or in so far as the price has not been fixed thereunder relating to the said delivery shal l be deemed to be closed out". Thereupon the three appellants who are partners carrying on business in cotton under the name and style of Indramani Pyarelal Co. moved the High Court of Bombay by a petition under article 226 of the Constitution on January 27, 1956, for a writ of mandamus or a direction in the nature of 730 mandamus against the members of the Forward Markets Commission who were individually impleaded as respondents to the petition, ordering them to cancel or withdraw the notification dated January 24, 1956, whose validity was impugned on various grounds. The petition was heard by a learned single Judge who dismissed it by his order dated February 23, 1956. An appeal was filed therefrom to a, Bench of the High Court and when this was also dismissed the petitioners moved for a certificate of fitness to appeal to this Court but the same having been rejected, they applied for. and obtained special leave from this Court, and that is bow the matter is now before us. The submissions of Mr. Pathak learned Counsel for the appellant in support of the appeal may be classified under three main heads : (1) The notification dated 24th January, 1956, served on the Board of the Association by the Forward Markets Commission was ultra vires for the reason that bye law 52AA, as amended by the Central Government on January 21, 1956, was invalid. (2) Assuming the byelaw to be valid it could not operate retrospectively or be availed of retrospectively so as to affect rights under existing contracts subsisting on the day the amended bye law was notified in the Gazette but that it could if at all, be validly applied only to Forward hedge contracts entered into thereafter. (3) The notification by the Forward Markets Commission was improper and malafide and was therefore invalid. It would be convenient to deal with these points in that order : (1) The first of the points raised raises the question of the validity of bye law 52 AA as amended by the Central Government on January 21, 1956. Learned Counsel divided his submission on this matter into two sub heads (a) that the Forward Markets Commission could not, on a proper construction of the Act, be validly vested 731 with the power with which it was clothed by the amended bye law, and (b) that it was beyond the power of the Association to have conferred the power which it purported to do under the amended bye law 52AA. Put in other words, the objections were that the Forward Markets Commission could not, having regard to the terms of the statute under which it was created, be a proper recipient of the power 'with which it was vested by the bye law and secondly that the Association was in law incapable of conferring that power on the Forward Markets Commission or on any other body. We shall first take up for consideration the argument that the Forward Markets Commission was in law incapable of being the recipient of the power conferred by the bye law under which it was empowered to issue the impugned notification. For this purpose it is necessary to examine in detail the relevant provisions of the Act. Section 2 (b) defines 'Commission ' as meaning "The Forward Markets Commission" established under section 3. Section 3 (1) enacts : "3. The Central Government may, by notification in the Official Gazette establish a Commission to be called the Forward Markets Commission for the purpose of exercising such functions and discharging such duties as may be assigned to the Commission by or under this Act. " The point urged by learned Counsel was that the function or the duty cast upon it by the amended bye law 52 AA was not such as could be assigned to the Commission "by or under this Act." The meaning of the words by or under ' and the extent and nature of the duties assigned to the Commission by the Act will therefore require careful examination. Section 4 relates to the functions of the Commission and it is the proper construction of this 732 section that has loomed large in the arguments on this point. It is, therefore, necessary to set this out in full : "4. The functions of the Commission shall be (a)to advise the Central Government in respect of the recognition of, or the withdrawal of recognition from any association or in resPect of any other matter arising out of the administration of this Act ; (b)to keep forward markets under observation and to draw the attention of the Central Government or of any other prescribed autho rity to any development taking place, in or in relation to, such markets which, in the opinion of the commission is of sufficient importance to deserve the attention of the Central Government and to make recommendations thereon ; (e)to collect and whenever the Commission thinks it necessary publish information regar ding the trading conditions in respect of goods to which any of the provisions of this Act is made applicable, including information regarding supply, demand and prices, and to submit to the Central Government periodical reports on the operation of this Act and on the working of forward markets relating to such goods ; (d)to make recommendations generally with a view to improving the Organisation and working of forward markets ; (e)to undertake the inspection of the accounts and other documents of any recognished association whenever it considers it necessary ; and 733 (f)to perform such other duties and exercise such other powers as may be assigned to the Commission by or under this Act, or as may be prescribed". Pausing here it is necessary to add that the expression prescribed" found at the end of cl. (f) has been defined by section 2(h) of the Act to mean "Prescribed by rules made under the Act". Before considering the points urged as regards the construction of this section taken in conduction with the terms of s.3(1) we shall refer to a few other provisions which are of some relevance in the present context. Section 3(2) which confers power on the Central Government to call for periodical returns from Recognised Associations and to direct such enquiries as they consider necessary to be made, empowers the government to direct the Commission to inspect the accounts and other documents of any recognised Association or of any of its members and submit its report thereon to the Central Government [vide section 3(2) (c)]. Sub section (4) of this section enacts : "8(4). Every recognised association and every member thereof shall maintain such books of account and other documents as the Commission may specify and the books of account and other documents so specified shall be preserved for such period not exceeding three years as the Commission may specify and shall be subject to inspection at all reasonable times by the Commission". Section 28 reads : "28. (1) The Central Government may, by Notification in the Official Gazette, make rules for the purpose of carrying into effect the objects of this Act. 734 (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for (a) the terms and conditions of service of members of the Commission; (b) the manner in which applications for recognition may be made under section 5 and th e levy of fees in respect thereof ; (c) the manner in which any inquiry for the purpose of recognising any association may be made and the form in which recognition shall be granted ; (d) the particulars to be contained in the annual reports of recognised associations ; (e) the manner in which the bye laws to be made, amended or revised under this Act shall, before being so made, amended or revised be published for criticism ; (f) the constitution of the advisory commit. tees established under section 26, the terms of office of and the manner of filling vacancies among members of the committee ; the interval within which meetings of the advisory committee may be held and the procedure to be followed at such meetings ; and the matters which may be referred by the Central Govern ment to the advisory committee for advice ; (g) any other matter which is to be or may be prescribed. " The argument on this part of the case was briefly this : The Forward Markets Commission is a statutory body specially created for the purposes of the Act. The powers which mat be conferred upon the Commission and the duties which it may be called on to discharge are therefore subject to the provisions of the Act. No more power can be conferred upon this body than what the Act allows 735 and the power under the amended bye law 52AA is not one which is contemplated by the Act as conferable on it. Section 4 defines the functions of the Commission under five general heads (a) to (e) with a residuary clause contained in cl. The powers or duties dealt with in cls. (a) to (e) are in their essence either recommendatory or advisory. In the context therefore #,,the other" duties or ' ,other" powers which may be assigned to the Commission under cl. (f) must be either ejuesdem generis with advisory or recommendatory powers or of a nature similar to those enumerated in the previous subclauses. In support of these submissions learned Counsel invited our attention to several decisions in which ancillary powers which might be implied from the grant of certain express powers were referred to. In particular it was submitted that the Court would not imply a power which it was not absolu tely necessary to effectuate on express grant or was need to prevent the nullification of an express power that was granted. In our opinion, these decisions afford no assistance for resolving the controversy before us. There is no question here of deducing an implied power from the grant of an express one. What we are concerned with is the scope of an express power or rather whether the grant of the power conferred upon the Commission by the bye. law could be held to be a power which could be assigned to the Commission under cl. So far as the terms of el, (f) are concerned, there is no limitation upon the nature of the power that might be conferred except, of course, that which might flow from its having to be one in relation to the regulation of forward trading in goods which the Act is designed to effectuate. Any limitation therefore would have to be deduced from outside cl.(f) of section 4. Taking each of the clauses (a) to (e), it is not possible to put them positively under one genus in order 736 that there might be scope for the application of the ejusdem generis rule of construction. Negatively, no doubt it might be said that none of these five clauses confer an executive power such as has been vested in them by the amended bye law 52AA but this cannot be the foundation for attracting the rule of construction on which learned Counsel relies. On the other hand, if there is no common positive thread running through cls.(a) to (e) such as would bring them under one genus and negatively they do not expressly include any administrative or executive functions, that itself might be a reason why the expression "other" occurring in cl. (f) should receive the construction that it is intended to com prehend such a function. Learned Counsel further suggested that even if the rule of ejusdem generis did not apply, the allied rule referred to at page 76 of the report of Western India Theatres Ltd. vs Municipal Corporation of Poona, that the matters expressly referred to might afford some indication of the kind and nature of the power, might be invoked, but we consider that, in the context, there is no scope for the application of this variant either. What we are here concerned with is whether it is legally competent to vest a particular power in a statutory body, and in regard to this the proper rule of interpretation would be that unless the nature of the power is such as to be incompatible with the purpose for which the body is created, or unless the particular power is contra indicated by any specific provision of the enactment bringing the body into existence, any power which would further the provisions of the Act could be legally conferred on it. Judged by this test it would be obvious that the power conferred by the bye law is one which could be validly vested in the Commission. A more serious argument was advanced by learned Counsel based upon the submission that a 737 power conferred by a bye law framed under section 11 or 12 was not one that was conferred ""by or under the Act or as may be prescribed". Learned Counsel is undoubtedly right in his submission that a power conferred by a bye law is not one conferred "by the Act", for in the context the expression "conferrod by the Act" would mean "conferred expressly or by necessary implication by the Act itself". It is also common ground that a bye law framed under section II or 12 would not fall within the phraseology "as may be prescribed", for the "expression" 'Prescribed ' has been defined to mean " 'by rules under the Act", those framed under section 28 and a bye law is certainly not within that description. The question therefore is whether a power conferred by a bye law could be held to be a power ",conferred under the Act". The meaning of the word ",under the Act" is well known. "By" an Act would mean by a provision directly enacted in the statute in question and which is gatherable from its express language or by necessary implication therefrom. The words under the Act " would, in that context, signify what is not directly to be found in the statute itself but is conferred or imposed by virtue of powers enabling this to be done; in other words, by laws made by a subordinate law making authority which is empowered to do so by the parent Act. This distinction is thus between what is directly done by the enactment and what is done indirectly by rule making authorities which are vested with powers in that behalf by the Act. (vide Hubli Electricity Company Ltd. vs Province of Bombay, and Narayanaswami Naidu vs Krishna Murthi. That in such a sense bye laws would be subordinate legislation " 'under the Act" is clear from terms of sections 11 and 12 themselves. Section 11 (1) enacts: "11. (1) Any recognised association may, subject to the previous approval of the Central (1) 76 I.A. 57, 66. (2) I.L.R. , 547. 738 Government. make bye laws for the regulation and control of forward contracts", and sub section (2) enumerates the matters in respect of which bye laws might make provision. Sub section (3) refers to the bye laws as the se made under this section and the provisions of sub section (4) puts this matter beyond doubt by enacting: "11 (4) Any bye laws made under this section shall be subject to such conditions in regard to previous publication as may be prescribed, and when approved by the Central Government, shall be published in the Gazette of India and also in the Official Gazette of State in which the principal office of the recognised association is situate ; Section 12 under which the impugned bye law was made states in sub section (2) : "12 (2) where, in pursuance of this section, any bye laws have been made or amended, the bye laws so made or amended shall be published in the Gazette of India and also in the Official Gazette of the State in which the principal office of the recognized association is situate, and on the publication thereof in the Gazette of India the bye laws so made or amended shall have effect as if they had been made or amended by the recognised associations, and in sub section (4): "12. The making or the amendment or revision of any bye laws under this section shall in all cases be subject to the condition of previous publication", Having regard to these provisions it would not be 739 possible to contend that notwithstanding that the bye laws are rules made by an Association under section 11 or compulsorily made by the Central Government for the Association as its bye laws under section 18, they are not in either case Subordinate legislation under section 11 or 12 as the case may be, of the Act and they would therefore squarely fall within the words , under the Act" in s 4(f). Indeed, we did not understand Mr. Pathak to dispute this proposition. His contention however was that when cl. (f) specifically made provision for powers conferred by "rules" by the employment of the pbrase "or as may be prescribed" and, so to speak, took the "rules" out of the reach of the words " 'under the Act" it must necessarily follow that every power confered by Subordinate law making body must be deemed to have been excepted from the content of that expression and that consequently in the Content the word ,, 'by the Act" should be held to mean ,,directly by the Act" i.e., by virtue of positive enactment, of the words "under the Act" should be held to be a reference to powers gatherable by necessary implication from the provisions of the Act. As an instance learned Counsel referred us to the power of the Central Government to direct the Commission to inspect the accounts and other documents of any recognised association or of any of its members and submit its report thereon to the Central Government under section 8 (2)(c) and suggested that this would be a case of a power or duty which would be covered by the words "under the Act". We find ourselves wholly unable co accept this. If without the reference to the phrase "as may be prescribed" the words " 'under the Act" would comprehend powers which might be conferred under "bye laws" as well as those under "rules" we are unable to appreciate the line of reasoning by which powers conferred by bye laws have to be excluded, because of the specific reference to powers conferred by rules". 740 Undoubtedly, there is some little tautology in the use of the expression "as may be prescribed" after the comprehensive reference to the powers conferred "under the Act", but in order merely to avoid redundancy you cannot adopt a rule of construction which cuts down the amplitude of the words used except, of course to avoid the redundancy. Thus the utmost that could be that though normally and in their ordinary signification the words ,under the Act" would include both "rules" framed under s.28 as well as "bye laws" under section 11 or 12, the reference to "rules" might be eliminated as tautlogous since they have been specifically provided by the words that follow. But beyond that to claim that for the reason that it is redundant as to a part, the whole content of the words "under the Act" should be discarded, and the words "by the Act" should be read in a very restricted and, if one may add, in an unnatural sense as excluding a power confered by necessary implication, when such a power would squarely fall within the reach of these words would not, in our opinion, be any reasonable con struction of the provision We need only add that the construction we have reached of s.4 (f) is reinforood by the language of section 3 (1) which is free from the ambiguity created by the occurrence of the expression " 'as may be prescribed" in the former. We have therefore no hesitation in holding that there was no incompetency in the Forward Markets Commission being the recipient of the power which was conferred upon them by bye law 52AA as amended. The next part of the submission in relation to this matter was that it was not competent for the Association to have framed this bye law and that the powers of the Central Government under section 12 and of the Association under section 11 in regard to the framing of bye law being co extensive, the bye law framed was not competent to confer any power on the commission. 741 This contention was urged with reference to two considerations: (a) that a bye law of the type now in controversy was not within section II of the Act, and (b) that having regard to the provision contained in the Articles of Association of the Association the bye law was beyond the powers of the Association to frame. These we should deal in that order. The first objection naturally turns upon whe ther the bye law is one which could be comprehended with section 11 of the Act. Its first sub section enacts; " 11 (1) any recognised association may, subject to the previous approval of the Central Government, make bye laws for the regulation and control of forward contract. " That the impugned bye law is one for the regulation and control of forward contracts cannot be disputed, and the terms being very general would include a bye law of the type now impugned. In this connection reference may be made to byelaw 52AA which the impugned bye law amended, under which power was vested in the Textile Commissioner with the concurrence of the Forward Markets Commission, (though after consultation with the Chairman of the Board) to direct the enclosure of hedge contracts and fix the rates at which such contracts might be closed out a provision whose validity was not impugned in the present proceedings. Mr. Pathak no doubt submitted that he was not precluded from challenging before us even the earlier bye law for the purpose of sus taining his argument that the amended bye law was ultra vires. Nevertheless it must be apparent that it was always assumed that bye laws which vest in authorities external to the Association the 742 power to interfere with forward dealing was within the scope of the bye law making powers under This general provision apart, sub section (2) of section 11 enact: "11(2). In particular, and without prejudice to the generality of the foregoing power, such bye laws may provide for (a). . . . . . (b). . . . . . (c). . . . . . (d)fixing, altering or postponing days for settlement; (e)determining and declaring market rates, including opening, closing, highest and lowest rates for goods; (f). . . . . (g). . . . . . . (h). . . . . . . (i). . . . . . . . (j). . . . . . . (k). . . . . . . . (1). . . . . . . . (m). . . . . . . . (n) the regulation of fluctuations in rates and prices; (o) the emergencies in trade which may arise and the exercise of powers in such eme regencies including the power to fix maximum prices; 743 As the power of the Central Government to make bye laws under section 12 is admittedly co extensive with the power of the Associations to frame byelaws, it is not necessary to refer to the terms of the latter sections Before considering in detail the argument on this part of the case we consider it useful to set out a few of the bye laws of the Association whose validity has not been challenged and which would show the manner in which the Association has been functioning in emergencies such as that for which the impugned bye law provides, Bye law 52 which still exists: "52.(1) If in the opinion of the Board an emergency has arised or exists, the Board may, by a resolution, (i) passed by a majority of not less than and (ii) confirmed prohibit, as from the date of such confirmation or from such later date as maybe fixed by the Board in the resolution referred to in sub clause (1), (a)trading in the Hedge Contract for any delivery or deliveries or (b) all trading in such contracts as are referred to in clause (a) for a specified period "52A. If the Board, at a meeting specially convened in this behalf, resolve that a state of emergency exists or is likely to occur such as shall in the opinion of the Board make free trading in forward contracts extremely difficult, the Board shall so inform the Forward Markets Commission and upon the 744 Forward Markets Commission intimating to the Board its agreement with such resolution, then notwithstanding anything to the contrary contained in these bye laws or in any forward contract made subject to these Byelaws, the following provisions shall take effect (1)The Board shall at a meeting specially convened in this behalf, (a)fix a date for the purpose hereinafter contained, (b)fix settlement process for forward con tracts, (c)fix a special Settlement Day. (2). . . Every hedge contract entered into between a member and a member or between a member and a non member outstanding on the date fixed under clause (1)(a) hereof shall be demand closed out at the rate appropriate to such contracts fixed under clause (1)(b) hereof. " 3 6 and then follows Bye law 52AAA. Apart for the amended bye law occurring in the group of existing bye laws making provision for emergencies to which sub clause (o)of s.11(2) refers, there is no dispute that there was an emergency in the forward market and that the impugned bye law was framed to meet such a contingency. It was not contended before us that the method by which the emergency was resolved by the impugned bye law viz., by closing out subsisting contract was not the usual method employed for the purpose. If therefore the bye law was provision for an emergency within s.11 (2)(o) then it would seem to follow that for the resolution of that emergency, 745 every one of the matters which could be included in such bye laws would be attracted to it, and so we find it impossible to accept Mr. Pathaks submission regarding the invalidity of the bye Law. An analysis of the impugned bye law 52AA and comparison of it with that which it replaced would show that the main point of difference is that whereas formerly action to stop forward trading and for closing out contracts and to fix the rate at which contracts were to be closed out was vested in the Textile Commissioner, acting with the concurrence of the Forward Markets Commission, under the amended bye law the power is directly vested in the Forward Markets Commission itself. The arguments addressed to us on this point are concerned not so much with the propriety as with the vires of a provisions by which the power to close out contracts by the issue of a notification is vested in the Commission. Apart from an argument immediately to be noticed, we do not see how, if such a power could validly be conferred upon a Textile Commissioner or even exercised by the Board of the Association under a bye law framed under section 11, the same would be beyond the power to make bye laws under section 11 by the mere fact that the authority vested with the power is the Forward Markets Commission. We are clearly of the opinion that bye law 52AA is well within the bye law making power under section 11 of the Act and therefore within 12. It was then said that the amended bye law 52AA wag invalid as in violation of the Articles of Association of the Association being an impermissible delegation of the powers vested in the board of the Association by its Memorandum of Articles. In this context Mr. Pathak placed reliance on cl. 64 of the Articles as laying down the limits within which 746 the Board might delegate their powers. He contended that the conferment of the power to take action on the Forward Markets Commission was thus contrary to and inconsistent with the powers of the Association under this Article. It would be seen that if learned Counsel is right, this would render invalid not merely bye law 52AA as now amended but even the bye law as it originally stood, but as already stated learned Counsel urged that he was not precluded from raising this contention. This point was not raised in the Court below but having beard arguments on it we shall pronounce upon it. We consider that there is no substance in this objection. Article 64 on which reliance was placed runs in these terms: "The Board may delegate any of their powers, authorities and duties to committees consisting of such members or member, of their body or consisting of such other members or members Associate Members, Special Associate Members or Temporary Special Associate Members of the Association not being Directors, or partly of Directors and partly of such other members and/or Associate Members, Special Associate Members or Temporary Special Asso ciate Members as the Directors may think fit. Any Committee so formed shall in the exercise of the powers so delegated conforms to any regulation that may from time to time be imposed on it by the Directors". In so far as the Memorandum is concerned, its paragraph III states the objects for which the Association was established, as being, inter alia " " (e) To make from time to time bye laws for opening and closing of markets in cotton and the 747 times during which they shall open or closed; the making performance and determination the prohibition of specified classes of dealings and the time during which such prohibition shall operate; the provision of an dealing with 'Croners ' or ,Bear Raids ' in any and every kind of cotton and cotton transactions so as to prevent or stop or mitigate undue speculation inimical to the trade as a whole; the course of business between Original Members inter be or between any of them on the one hand, and their constituents on the other hand, the forms of contracts between them and their rights and liabilities to each other in respect of dealings in The Articles dealing with bye laws, the manner in which they are to be made as well as the subject to which they might relate is to be found in Articles 73 and 74. The relevant portion of Article 73 runs: ""Under and in conformity with any Statutory provisions for the time being in force, the Board may pass and bring into effect such bye laws as may be considered in the interest of or conducive to the objects of the and Article 74 runs: "Without prejudice to the generality of the powers to make bye laws conferred by the Memorandum of Association and by these Articles and under or in the absence or any statute or statutes in force in that behalf, it is hereby expressly declared that the said powers to make, alter, add to, or rescined Bye laws including power to do so in regard to all or any of the following matters " Sub para (7) repeats inter alia the contents of 748 Paragraph III (e) of the Memorandum of Association which we have extracted, The entire argument of Mr. Pathak on Article 64 was based on the footing that the power to make a bye law was vested solely in the Board, because it is only the powers of the Board that are subject to the limitation imposed by Article 64. If however the power to make a bye law was not confined to the Board but bye laws might be framed by the Association itself, the argument based on Article 64 would be seen to have no validity. That the later is the true position is clear from Article 73 which reads: "The Board 's powers as aforesaid in relation to bye laws shall not derogate from the powers hereby conferred upon the Association who may also in the same way and for the same purpose from time to time pass and bring into effect new bye laws and rescind or alter or add to any existing bye law by resolution passed by a majority of two thirds at the least of the Members present and voting at the General Meeting previous to which at least fourteen day 's notice has been given that a Member intends at such meeting to propose the making of such bye law or the decision, alteration of or addition to a bye law or bye laws". If therefore a bye law could be made, by the Association it is manifest that there is no limitation upon its powers such as is to be found in Article 64 which applies only to the Board. The validity of the bye law therefore cannot be challenge by reference merely to the powers of the Board, because what is contemplated by section I I is the power of the "recognised Association" to frame the bye law. We have therefore no hesitation in rejecting the contention that the bye law as framed contravenes the rules of the Association. 749 Mr. Pathak next contended that the impugned bye law was invalid because it operated retrospectively. This argument he presented under two heads His first submission was that consistently with the rule that an, enactment 'would not be construed as. retrospective unless the same were to have that effect by express language or by necessary intendment, the impugned bye law should, be held to affect and close out only those contracts which were entered into after the date on which the byelaw came into operation and that if he was right in this construction the impugned notification had gone beyond the powers conferred on the Commission by the new bye law. We are wholly unable to accept this submission as to the construction of the bye law. The first paragraph of the ])ye .law by its list words points out the consequence of a notification by the Forward Markets Commision. It provides that if the Chairman were notiified that the continuation of trading in hedge contracts for any delivery etc. "was detrimental to the interests of the general public or the larger interests of the economy of rndia," then, notwithstanding, anything to the contrary contained the bye laws of the Association or in any hedge etc. contract the provisions contained in the second paragraph should have effect. , If one had regard only to paragraph and nothing more there might be ' some room for a plausible argument that subsisting contracts were not to be affected, though the expression "notwithstanding anything to the contrary contained in any bedge etc. contract" would undoubtedly militate against any such contention. But such ambiguity if any is cleared by the provision in paragraph 2 which has effect on the notification under paragraph 1, for by express terms it refers to "every hedde contract" and "every on call contract" "in so far as cotton is uncalled thereunder or in so far as the pride has not been fixed thereunder". This therefore places it beyond doubt that executory contracts 750 which were subsisting on the date of the notification were within its scope and were intended to be affected by it. And this, if anything more needed, is made more certain by the I reference in parts (2) to the provisions of old. (3), (4) and (6) of bye law 52A. Bye law 62A deals with cases where the Board of the Association resolves repeat its terms "that a state of emergency exists or is likely to occur which makes free trading in forward con. tracts difficult and on obtaining the concurrence of the Forward Markets Commission, then notwithstanding anything to the contrary contained in these Bye laws subject to these Bye laws. The following provision %hall have effect "(1) The Board shall at a meeting specially convened in this behalf, (a)fixa date for the purposes herein. after contained, (b)fix settlement prices for forward contracts, (c) fix a special Settlement Day. " Clause (3) of bye law 52A runs : "52A (3) All differences arising out of every such contract between members shall be paid through the Clearing House on the Settlement Day fixed under clause (1) (c) her Clause (4) "52A (4) All differences arising out of every such contract between a member and a non member shall become immediately due and payable." and Clause (6) "52A (6 In hedge and on call contracts entered into between a member and a non. member and in contracts to which clause (5) 751 applies, any margin received shall be adjusted and the whole or the balance thereof, as the case may be, shall be immediately refundable. It is thus clear that the entire machinery for resolving emergencies such as is contemplated by byelaw 52A includes the suspension of forward businow together with the closing out of forward contracts of hedge and on call types whose volume or nature had led to the emergency. It proceeds on the basis that the crisis could not be met unless subsisting contracts were closed out and, so to speak a new chapter begun. That is the ratio underlying the combined effect of bye laws 52AA and 52 A and in view of this circumstance the argument that on a reasonable construction of the amended bye law it would apply to contracts to be entered into in future and not to subsisting contracts must be rejected. If he was wrong in his argument that the byelaw on its proper construction did not affect subsisting contracts such as these of the Appellants, Mr. Pathak 's further submission was that the impugned bye law was invalid and ultra vires of the Act because it purported to operate retrospectively affecting vested rights under contracts which were subsisting on the day on which the bye law came into force. Mr. Pathak invited our attention to a passage in Craies ' Statute Law, 5th Ed. p. 366 reading: "Sometimes a statute, although not intended to he retrospective, will in fact have a retrospective operation. For instance if two persons enter into a contract, and afterwards a statute is passed which, as Cockburn, C. J., said in Duke of Devonshire vs Barrow, etc. , Co. , 289) "engrafts an enactment upon existing contracts ' and 752 thus operates so as to produce a result which is something quite different from the original intention of the contracting parties, such a statute has, in effect a retrospective operation. " The bye law in so far as it affects executors contracts requiring such contracts to be closed out on a (lay not originally: contracted for and at a price fixed by law is in the above sense undoubtedly retrospective. The submission of learned 'Counsel was that though a legislature which bad plenary power in this regard could enact a, havind a retrospective operation, Subordinate legislation, be it a rule, a bye law or a notification, could not be made so as to have retrospective operation and that to that extent the rule, bye law or notification would be ultra vires and would have to be struck down, relying for this position on the decision of the Mysore High Court reported in AIR 1960 Mys, 326. 'We do not however consider it necessary to canvass the correctness of this decision or the broad propositions laid down in it. It is clear law that a Statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule making, authority a power to make a rule or frame a: bye law having retrospective operation and we would add that we did not understand Mr. Pathak to dispute this position. If this were so the same result, would follow where the power to enact a rule or,a byelaw with "retrospective effect" so as to Affect PendinG transactions, is conferred not by express words but where the necessary intendment of I the Act confers such A power. If in the present case the power to make a byelaw so as to operate on contracts subsisting on the day the same was framed, would follow as; a necessary implication from the term of section 1 1, it would not be necessary to discuss the larger question as to whether and the 753 circumstances in which Subordinate legislation with retrospective effect could be validly made. Before proceeding further it is necessary to notice a submission that under the Act, far from there being a conferment of power to make a bye law, so as to affect rights under subsisting contracts, there was a contra indication of such a power being conferred. In, this connection Mr. Pathak invited, our attention to the: terms of sections 16 and 17 and 19 of the Act under which the Act has itself made special provision for affecting rights such as those, if the appellants in the present case. Detailing the conseqences of a notification under section 15, s.16 (a:) enacts "16 (a,,) Every forward contract for the sale or purchase of any goods specified in the notification, entered into before the date of the notification and remaining to be performed after the said, date and which is not in conformity with the provision of section 15, shall be deemed to be closed out at such rate as the Central Government may fix in this behalf. S.17 (3) enacts "17. (3) Where a notification has been issued under sub section (1), the provisions of section 16 shall, in the absence of anything to the contrary in the notification, apple to all forward contracts for the sale or purchase of any goods specified in the notification entered into before the date of the notification and remaining to be performed after the said date as they apply to all forward contracts for the sale or purchase, of any goods specified in the notification under section 15." and f 19 (2) runs: "19 (2). Any option in good which has been entered into ' before the date on which 754 this section comes into force and which re mains to be performed, whether wholly or in part, after the said date shall, to that extent, becomes void. " Based on these provisions the submission was that Act had made special provisions for retrospective operation of certain notifications so as to affect rights under subsisting contracts and that in cases where there was no such specific provision it was not intended that a bye law or a notification could have that effect. We see no force in this argument. The fact that the Act itself makes provision for subsisting contracts being affected, would in our opinion far from supporting the appellants indicate that in the context of a crisis in forward trading the closing out of contracts was a necessary method of exercising control and was the mechanism by which the enactment contemplated that normalcy could be restored and healthy trading resumed. If therefore we eliminate the provisions in as. 16, 17 and 19 as not containing any indication that a power to frame a bye law with retrospective effect was withheld from the Association, the question whether such bye law making power was conferred has to be gathered from the terms of section II itself. Thus considered we are clearly of the opinion that a power to frame a bye law for emergencies such as those for which a bye law like 52 AA is intended includes a power to frame one so as to affect subsisting contracts for resolving crisis in Forward Markets. We have already referred to the terms of bye law 52A which shows that when an emergency of the type referred to a. It (2) (a) arises it is not practicable to rescue a forward market from a crisis without (1) putting an end to forward trading, and (2) closing out subsisting contracts so as to start with a clean slate for the 755 future. When therefore under section 11 (2) power is conferred to frame a bye law to provide for: " (O) the emergencies in trade which may &rise and the exercise of power in such emergencies including the power to fix maximum and minimum prices;" & ad this is read in conunction with clause (g) reading: "regulating the entering into, making, per formance, rescission and termination of contra eta. . . If It is manifest that the section contemplates the making of a bye law regulating the performance of contracts, the rescission and termination of contracts and this could obviously refer only to the bye law affeding rights under contracts which are subsisting on the day the action is taken. It is therefore manifest that section 11 authorises the framing of a byelaw which would operate retrospectively in the sense that it affects rights of parties under subsisting contracts. Finally it should be borne in mind is that ultimately what we are concerned in a. 1 1 of the Act is the power of the Association to frame the bye law ' for if the Association could validly frame such a bye law the Central Government could under section 12 have a similar power. We did not hear any argument to establish that the Association had no such power. There is one other aspect in which the same problem might be viewed and it is this : The contract entered into by the respondents purported to be one under the bye laws for the time being in force and any change in the bye laws therefore would in to be contemplated and provided for by the contract itself, so that it might not be correct to speak of the new bye law as affecting any accrued 756 rights under a contract. For when those by laws were altered the changes would get incorporated into the contracts themselves, so as to afford no scope for the argument that there has been an infringement of a vested right. In the view however which we have taken about the validity of the bye law on the ground that it was well within the terms of as. ' 'II and 12 we do not consider it necessary to pursue this aspect further or to rest our decision on it. What remains to consider is the challenge to the notification based on the ground that it was vitiated by having been issued malafide. The ground of malafides alleged was that the impugned notification was issued in order to prevent the Board of Directors of the Association. from applying their minds and exercising their judgment which they were directed to do by the terms of the Consent Memo filed on which the appeal from the judgment in C.S. 2 of 1956 was disposed of on January 24, 195 . To the allegation made in this form in the petition the first respondent, the, Chairman: of the Forward Markets Commission, filed an affidavit in the course of which he pointed out that the continuance of trading in futures was in the circumstances then prevailing in the market detrimental to the interests of the trade and that a conclusion on this matter had,been reached by the Commission even before by law 52 AA was amended, that the question of closing out existing contracts was engaging the attention of even the Board of the Association from as early as the beginning of January 1956 and it was for the purpose of enabling the Commission to take action to set right matters that bye law 52AA was amended and that immediately the amended bye law came into force the Commission took action and issued: the notification now manugned. He also pointed out that the liberty given to the Association to consider the matter 757 under ' the terms of the Compromise Memo was a factor which had also boon taken into account before the notification had been issued. The learned Judges of the High Court accepted this explanation of the circumstances in which the notification came to be issued and considered that on the allegation in the petition no mala fides could be inferred. We are in entire agreement with the learned Judges of the High Court on this point. No personal motive or mala fided in that sense has been attributed to the members of the Commission and in these circumstances we consider that there is no basis for impugning the notification on the ground that it was not issued bonafide. This completes all the points urged by the learned Counsel for the appellants. We consider that there is no merit in the appeal which fails and is dismissed with costs. SUBBA RAO, J. I regret my inability to agree with the judgment prepared by my learned brother Rajagopala Ayyangar, J. As the fact, ; have been fully stated in the judgment of my learned brother, I need not repeat them except to the extent necessary to appreciate the two points on which I propose to express my opinion. The appellants carry on business in cotton under, the name and style of Indramani Pyarelal Gupta & Co. The said firm is a member of the East India Cotton Association Limited, which is a recognized Association within the meaning of the Forward Contracts (Regulation) Act, 1952, hereinafter called "the Act". The Association has been formed for the purpose of, inter alia, promoting and regulating trade in cotton and providing a cotton Exchange and a Clearing House. Under the Act a formed by the Central Government and respondent is its man and respondents 2 and 3 are its Members. 758 Prior to January 21, 1956, on behalf of themselves and their constituents, the appellants entered into hedge contracts in cotton for February 1956 and May, 1956 Settlements with other members of the Association in accordance with its bye laws. When the said contracts were effected, bye law 52 AA ran as follows : "(I) Whether or not the prices at which cotton may be bought or sold are at any time controlled under the provisions of the , if the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman, be of opinion that the continuation of hedge trading is likely to result in a situation detrimental to the larger interests of the economy of India and so informs the Board, the Board shall forthwith cause a notice to be posted on the Notice Board to that effect and on the posting of such notice and notwithstanding anything to the contrary contained in these Bye laws or in any hedge or on call contract made subject to these Bye law, the following provision shall take effect. (2)Every hedge contract and every on call contract in so far as the cotton is uncalled thereunder, or in so far as the price has not been fixed thereunder, entered into between a member and a member or between a member and a non member then outstanding shall be deemed closed out at such rate, appropriate to such contract, as shall be fixed by the Textile Commissioner and the provisions of clauses (3), (4) and (6) of Bye law 52 A, in so far as they apply to hedge and on call contracts shallapply as if the formed part of this Bye law. After the affixation of the said notice onthe Notice Board, trading in hedge 759 and on call contracts shall be prohibited until the Textile Commissioner with the concurrence of the Forward Markets Commission and after consultation with the Chairman, permits resumption". On January 21, 1956, the Central Government, in exercise of power conferred upon it by sub section (1) of section 12 of the Act, notified a new bye law 52 AA to be substituted in place of the earlier bye law 52 AA. The new bye law reads as follows : "(1) Whether or not prices at which cotton may be bought or sold are at any time controlled under the provisions of the , if the Forward Markets Commission is of the opinion that continuation of trading in hedge contract for any delivery or deliveries is detrimental to the interest of the trading or the public interest or the larger interests of the economy of India and so notified the Chairman, then notwithstanding anything to the contrary contained in these Bye laws or in any hedge or on call contract made subject to these Bye laws the following provisions shall take effect. (2) Every hedge contract and every on call contract in so far as cotton is uncalled thereunder and relating to the delivery or deliveries notified under clause (1) entered into between a member and a member or between a member and non member then outstanding shall be deemed closed out at such rate appropriate to such contract and with effect from such date as shall be fixed by the Forward Markets Commission and the provisions of Clauses (3), (4) and (6) of Bye law 52A in so far as they apply to hedge and on call contract" shall apply as if they formed part of this Bye law." 760 On January 24, 1956, the Forward Markets Commission, in exercise of the power conferred on it under the new bye law, issued a notification closing out all contracts of February 1956 and May 1956 Settlements at the rates mentioned in the said notification. The, petition for a writ of mandamus filed by the appellants in the High Court of Judi cature at Bombay for ordering the respondents to cancel or withdraw the said notification dated January 24, 1956, was dismissed in the first instance by Coyajee, J., and, the appeal preferred against the judgment of Coyajee, J., was also dismissed by a division Bench consisting of Chagla, C.J., and Tendolkar, T. Hence the appeal. I purpose, as I have already indicated, to consider the following two questions, as in the view I will be taking on those questions, the appeal will have to be allowed, and no other question, therefore, will arise for consideration. The said questions are : (1) Whether under section 12 (i) of the Act the Central Government. has power to make a bye law with retropective effect; and (21 whether under section 4 (f) of the Act, the Forward Markets Commission can exercise a, power assigned to it under a bye law made by the Government under section 12 of the Act. Before considering the scope of the power of the Central Government under section 12 (1) of the Act, it is necessary to consider whether the new byelaw notified on January 21, 1956, has retrospective There are material differences between the old bye law 52 AA and the new one substituted in its place Under the now bye law the important provision is that all hedge Contracts outstainding at the time it came into force shall be deemed to be closed out at such rates as shall be fixed by the Textile Commissioner. Whereas under the old by law the, Textile Commissioner had to form his opinion with the concurrence of the Forward Markets Commission and after consultation with 761 the Chairman, under the new bye law the said power of forming an opinion is conferred solely on the For ward Markets Commission where as under the old, bye law the opinion and was in regard to the question whether hedge trading was likely to result in a situation detrimental 'to the larger interests of the economy of; India under the new bye law the opinion is in respect of the question whether the continuation of trading in hedge contracts will be detrimental to the interests of trading or the public interest or the larger interests of the economy of India. While under the old byelaw the question to he considered was in regard to hedge trading as such, under the new bye law it is in respect of the continuation of trading in hedge contracts for any delivery or deliveries. While under the old bye, law the, said opinion was Communicated to the Board for action, under the new bye law it is notified to the Chairman. While under the old bye law trading, in hedge and on call contracts could be resumed if the Textile Commissioner, with the concurrence of the Forward Markets Commission and after consultation with the Chairman, permitted the resumption, under the now bye law the said provision for resumption is omitted. It is, therefore, manifest that the power of closing out a contract under the new bye law differs from that Under the old bye law in respect of the purpose of closing out, the authority empowered to order the close out and the consequences of such closing out. It is idle to contend that the new bye law makes only inconsequential changes in the old bye law. The new bye law operates upon an important term of a contract entered into before it came into force, namely, the mode of performance: it carries oil its face the vice of retroactivity. In Craies on Statutes, 5th Edn '. p, 366, the following passage appropriate to the question now raised is found. 762 renders the performance of a contract impo ssible, the rule of law is that the contract to frustrated by supervening impossibility, consequently in this case also the statute operates retrospectively. " The learned author proceeds to state at p. 367: "The principle of this case has been applied in later cases to contracts the performance of which in manner contemplated by the parties has been rendered impossible by reason of some change in the law. " It is, therefore, clear that the said bye law, in so far as it purports to effect the mode of performance of the preexisting contracts, is certainly retrospective in operation. I am assuming for the purpose of the present question that the bye law cannot be construed in such a way as to confine its operation only to contracts that are entered into after it came into force. If so, the question arises whether the Central Government had power to make a bye law under section 12 (1) of the Act with retrospective effect Section 12 (1) of the Act reads "The Central Government may, either on a request in writing received by it in this behalf from the governing body of a recognized association, or if in its opinion it is expedient so to do, make bye laws for all or any of the matters specified in section II or amend any bye laws made by such association under that section. ' Section 11 enumerates the matters in respect of which the recognized associations can make bye. laws for the regulation and control of forward contracts. Neither section 12 nor a. 11 expressly states that a bye law with retrospective operation can be made under either of those two sections. Full effect 763 can be given to both the sections by recognizing a power only to make bye laws prospective in operation, that is, bye laws that would not affect any vested rights. In the circumstances, can it be held that the Central Government to which the power to make bye laws is delegated by the Legislature without expressly conferring on it a power to give them retrospective operation can exercise a power thereunder to make such bye laws. Learned counsel for the respondents contends that, as the Legislature can make a law with retrospective operation, so too a delegated authority can make a bye law with the same effect. This argument ignores the essential distinction between a Legislature functioning in exercise of the powers conferred on it under the Constitution and a body entrusted by the said Legislature with power to make subordinate Legislation. In the case of the Legislature, article 246 of the Constitution confers a plenary power of Legislation subject to the limitations mentioned therein and in other provisions of the Constitution in respect of appropriate entries in the Seventh Schedule. This Court, in Union of India vs Madan Gopal Kabra (1), held that the Legislature can always Legislate retrospectively; unless there is any prohibition under the Constitution which has created it. But the same rule cannot obviously be applied to the Central Government exercising delegated Legislative power for the scope of their power is not co extensive with that of Parliament. This distinction is clearly brought out by the learned Judges of the Allahabad High Court in Modi Food Products Ltd. vs Commission of sales Tax, U. P. (2), wherein the learned Judges observed: "A Legislature can certainly give retrosp ective effect to pieces of Legislation passed by it but an executive Government exercising subordinate and delegated legislative (1) ; (2) A. T. R. 1956 All. 764 powers, cannot make legislation retrospective in effect unless that power is expressly conferred." In Strawboard Manufacturing Co. Ltd. vs Gutta Mill Workers Union (1) a question arose whether the Governor of U. P., who referred an industrial dispute to a person nominated by him with a direction that he should submit the award not later than a particular date could extend the date for a making of the award so as to validate the award made after the prescribed date. Reliance was placed upon section 21 of the U. P. General Clauses Act, 1904, in support of the contention that the power of amendment and modification conferred on the State Government under that section might be so exercised as to have retrospective operation. In rejecting that contention, Das, J., as he then was, observed : "It is true that the order of April 26, 1950, does not ex facie purport to modify the order of February 18, 1950, but, in view of the absence of any distinct provision in section 21 that the power of amendment and modification conferred on the State Government may be so exercised as to have retrospective operation the order of April 26, 1950, viewed merely as an order of amendment or modification cannot, by virtue of section 21, have that effect." This decision is, therefore, an authority for the position that unless a statute confers on the Government an express power to make an order with retrospective effect, it cannot exercise such a power. The Mysore High Court in a considered judgment in India Sugar & Refineries Ltd. vs State of Mysore (2) dealt with the question that now arises for consideration. There, the Government issued (1) ; 447 448. (2) A. 1. R. 1960 Mys. 3 765 there notifications dated 9 4 1956, 15 10 1957 and 13 2 1958 purporting to act under section 14 (1) of the Madras Sugar Factories Control Act, 1949, whereby cess was imposed on sugarcane brought and crushed in Petitioner 's factory for the crushing season 1955. 56, 1956 57 and 1957 58 respectively. One of the question raised was whether under the said section the Government had power to issue the notifications imposing a cess on sugarcane brought and crushed in petitioner 's factory for a period prior to the date of the said notifications. Das Gupta, C. J., deliver ing the judgment of the division Bench, held that it could not. The learned Advocate General, who appeared for the State, argued, as it is now argued before us, that in a case where power to make rules is conferred on the Government and if the provision conferring such a power does not expressly prohibit the making of rules with retrospective operation, the Government in exercise of that power can make rules with retrospective operation. In rejecting that argument, the learned Chief Justice, delivering the judgement of the division Bench, observed at p. 332: "In my opinion a different principle would apply to the case of an executive Government exercising subordinate and delegated legislative powers. In such oases, unless the power to act retrospectively is expressly conferred by the Legislature on the Government, the Government cannot act retrospectively. " With respect, I entirely agree with the said observations. The same question was again raised and the same view was expressed by the Kerala High Court in C. W. Motor Service (P) Ltd. vs State of Kerala (1). There the Regional Transport Authority, Kozhikode, granted a stage carriage permit to the third respondent therein in respect of a proposed (1) A. 1. R. (195) Ker. 347, 348. 766 Ghat route. The grant of the permit was challenged on the ground that when that order was passed there was no constituted Regional Transport Authority for the district. It was contended on behalf of the contesting respondent that the said defect was cured by a subsequent notification issued by the Government whereby Government ordered the continuance of the Road Transport Authority from the date of the expiry of the term of the said 'Authority till its successor was appointed. The High Court held that the notification with retrospective operation was bad. In that context, Varadaraja lyengar, J., observed : "The rule is well settled that even in a case where the executive Government acts as a delegate of a legislative authority, it has no plenary power to provide for retrospective operation unless and until that power is expressly conferred by the parent enactment." The House of Lords in Howell vs Folmouth Boat Construction Co. Ltd. (1) expressed the same opinion and also pointed cut the danger of conceding such a power to a delegated authority. There, a licence was issued to operate retrospectively and to cover works already done under the oral sanction of the authority. Their Lordships observed: "It would be a dangerous power to place in the hands of Ministers; and their subordinate officials to allow them, when. ever they had power to license, to grant the licence ex post facto; and a statutory power to license should not be construed as a power to authorise or ratify what has been done unless the special terms of the statutory provisions clearly warrant the construction. " It is true that this is a case of a licence issued by an (1) 767 authority in exercise of a statutory power conferred on it, but the same principle must apply to a byelaw made by an authority in exercise of a power conferred under a statute. Our Constitution promises to usher in a welfare State. It involves conferment of powers of subordinate legislation on government and governmental agencies affecting every aspect of human activity. The regulatory process is fast becoming an ubiquitouselement in our life. In a welfare State, perhaps,it is inevitable, for the simple reason that Parliament or Legislature cannot be expected to provide for all possible contingencies. But there is no effective machinery to control the rule making powers, or to prevent its diversion through authoritarian channels. If the conferment of power to make delegated Legislation proportion vigor carried with it to make a rule or bye law with retrospective operation, it may become an instrument of oppression. In these circumstances, it has been rightly held that the provision conferring such a power must be strictly construed and unless a statute expressly confers a powers to make a rule or bye law retrospectively, it must be held that it has not conferred any such power. It is said that such a strict construction may prevent a rule making authority from making a rule in an emergency, though the occasion demands or justifies a rule with retrospective effect. The simple answer to this alleged difficulty is that if the Legislature contemplates or visualizes such emergencies, calling for the making of such rules or bylaws with retrospective effect, it should expressly confer such power. It is also said that the Government can be relied upon to make such rules only on appropriate occasions. This Court cannot recognize implied powers pregnant with potentialities for mischief on such assumptions. That apart, the scope or ambit of a rule cannot be made to depend upon the status of a functionary entrusted with a 768 rule making power. In public interest the least the court can do is to construe provisions conferring such a power strictly and to confine its scope to that clearly expressed therein. Applying that rule of strict construction, I would hold that section 12 (1) does not confer a power on the Central Government to make a bye law with retrospective effect and, therefore, the new bye law made on January 21, 1956, in so far as it purports to operate retrospectively is invalid. Assuming that it is permissible to infer such a power by necessary implication, can it be said that it is possible to so imply under section 12 of the Act ? The phrase "necessary implication", as applied in the law of statutory construction means an implication that is absolutely necessary and unavoidable; that is to say, a court must come to the conclusion that unless such an implication is made, the provisions of the section could not be given full effect on the wording as expressed therein. Under section 12 of the Act, the Central Government may either on a request in writing received by it from the governing body of a recognized association, or if in its opinion it is expedient so to do, make byelaws for all or any of the matters specified in section 11 or amend any bye law made by such association under that section. Now section 11 says that any recognized association may, subject to the previous approval of the Central Government, make bye laws for the regulation and control of forward contracts; under sub a. (2) thereof, the association is authorized to make laws providing for any of the matters mentioned therein. A glance at those matters shows that all the bye laws providing for those matters could be framed without giving section 12 any retrospective effect. It is said that section II (o) gives an indication that a bye law contemplated by that sub clause must necessarily provide for its retrospective operation. It reads: 769 "the emergencies in trade which may arise and the exercise of powers in such emergencies including the power to fix maximum and minimum prices;" The learned Solicitor General contends that an occasion may arise when by a determined action of a "bear" or a "bull" the rates may about up beyond a reasonable level or fall down steeply below a particular point creating an emergency in the market and in that emergency it would be necessary for the authorities concerned to step in and close out the contracts, and unless the bye law is made retrospective such an emergency cannot be met and, therefore, the power to make a by law to meet an emergency contemplated in section 11(o) of the Act must necessarily imply a power to make a bye law retrospectively. There is an underlying fallacy in this argument. The conferment of a power on the Government to make a bye law with retrospective operation must be abso lutely necessary and unavoidable to provide for the matter mentioned in sub cl. (o) of section 11 or any other clause of sub section (2) of section 11. A bye law could certainly be made to provide for an emergency visualized by the learned Solicitor General or for any other emergency contemplated by that clause with only prospective operation. It cannot, there fore, be said that unless retrospective operation was given to the provisions of section 12, the objects of the legislation would be defeated or the purposes for which the power was conferred could not be fulfilled. therefore, hold that section 12(1) of the Act does not confer any such power on the Central Government by necessary implication. The second question turns upon the interpretation of a. 4 of the Act. It reads: "The function of the Commission shall be (a) to advise the Central Government in. 770 respect of the recognition of, or the with drawal of recognition from, any association or in respect of any other matter arising out of the administration of this Act; (b) to keep forward markets under observa tion and to take such action in relation to them as it may consider necessary, in exercise of the powers assigned to it by or under this Act; (c) to collect and whenever the Commission thinks it necessary publish information regarding the trading conditions in respect of goods to which any of the provisions of this Act is made applicable, including information regarding supply, demand and prices, and to submit to the Central Government periodical reports on the operation of this Act and on the working of forward markets relating to such goods; (d) to make recommendation generally with a view to improving the Organisation and working of forward markets; (e) to undertake the inspection of the acco unts and other documents of any recognized association or registered association or any member of such association when. ever it considers it necessary; and (f) to perform such other duties and exercise such other powers as may be assigned to the Commission by or under this Act, or as may be prescribed. " Two questions arise under this section, namely, (i) whether the duties imposed and the powers conferred on the Commission under cl. (f) of section 4 shall 771 be read ejusdem generis with those imposed or conferred under cls. (a) to (e), and (ii) whether the powers assigned to the Commission by or under a bye law can be performed by the Commission under cl. To appreciate the first question it would be necessary to know the constitution of the Commission and its rule in the scheme of control pro vided by the Act. Under a. 2(b), ",Commission ' means the Forward Markets Commission established under section 3. Section 3 empowers the Central Government to "establish a Commission to be called the Forward Markets Commission for the purpose of exercising such functions and discharging such duties as may be assigned to the Commission by or under this Act". Clauses (a) to (e) of section 4 show that the function of the Commission are wholly supervisory and advisory in nature. It keeps the forward markets under observation, collects and publishes information, undertakes the inspection of the accounts and other documents, and makes recommendations to the Central Government in respect of matters mentioned in that section. Under section 8(2)(c), the Central Government may also direct the Commission to inspect the accounts and other documents of any recognized association or any of its member,% and submit its report thereon to the Central Government. It is, therefore, manifest that the Commission has no administrative functions or powers of management or powers of interference in the internal management of the registered associations on the other hand, section 11 and the bye laws framed thereunder it is not necessary to go into them in detail show that the regulation and control of the business of forward contracts and other businesses is entirely in the hands of the Association. The doctrine of ejusdem generis is very well settled. The expression of ejusdem generis" means of the same kind ', and "it is only an illustration of specific application of the broader maxim noscuntur a sociia i. e., general and specific 772 words which are capable of an analogous meaning, being associated together, take colour from each other, so that the general words are restricted to a sense, analogous, to the less general". While to invoke the application of the doctrine of ejusdem generis there must be a distinct genus or category. , that is to say, the specific words preceding the general word must belong to the same class, the maxim noscuntur a sociis is of wider application. This Court in The Western India The acres Ltd. vs Municipal Corporation of the City of Poona, though did not expressly say so, in my view was dealing with the said two doctrines, and it observed therein: ". . . although the rule of construction based on the principle of ejusdem generis cannot be invoked in this case, for items (i) to (x) do not, strictly speaking, belong to the same genus, but they do indicate, to our mind the kind and nature of tax which the municipalties are authorized to impose." So, in the present case, it way be said that cls. (a) to (f) may not belong to the same class, but they indicate that the functions described in the said clauses, being supervisory and advisory in character, are so analogous to each other that they take colour from each other and therefore the general words following must be restricted to a sense ana logous to the said functions. It is said that cl.(f) provides for duties and powers, whereas cls. (a) to (e) only deal with functions and, therefore, cl. (f) must be deemed to provide for altogether a different subject matter. I cannot agree with this contention, for the heading of s.4 is "Function of the Commission", and the action opens out with the words "The functions of the Commission shall be" and the functions are mentioned in cls. (&) to 773 (f). It is, therefore, manifest that the duties and powers mentioned in cl.(f) are also functions. To put it differently, all the clauses deal with functions of the Commission. That apart, a power and a duty are, the two facts of the same concept. Clauses (a) to (e) also, though ex facto they read as if they impose only duties, on a closer scrutiny indicate that the duties cannot be exercised without the corresponding powers for the discharge of those duties. I would, therefore, hold that the duties and powers that may be assigned to the Commission under cl. (f) can be only supervisory or advisory functions other than those mentioned in cls.(a) to (e). The power conferred on the Commission under the bye law made by the Government to close out contracts and thus terminate the contracts is neither an advisory nor a supervisory power, and, therefore, the Commission cannot legally exercise the same. The second question turns upon the interpretation of the provisions of cl. (f) of s.4. The said clause reads: "to perform such duties and exercise such other powers as may be assigned to the Commission by or under this Act, or as may be prescribed. " The crucial words are ,by or under this Act, or as may be prescribed". Under section 2(h) of the Act "Prescribed" means "prescribed by rules made under this Act" ; an( a. 2 (k) defines "rules" thus ; "rules", with reference to the rules relating in general to the constitution and managemen t of an association, includes in the case of an incorporated association its memorandum and articles of association. " If read with the definition of the word "Prescribed" 774 cl. (f) indicates that the commission can perform the functions assigned to it by or under the Act, or as may be prescribed by the rules made under the Act. The specific mention of the rules made under the Act in the clause makes it abundantly clear that the phrase " 'under the Act" excludes a rule made in exercise of the power conferred under the Act, for if the said phrase takes in a rule, the word "Prescribed" becomes redundant. Such ineptitude and went of precision in drafting shall not be attributed to the Legislature, except for compelling reasons. If a rule was not comprehended by the phrase "Under the Act", it would be illogical to hold that it would take in a bye law. It would mean that the Legislature specially provided for a rule, which has certainly a higher status than a bye law in legislative practice, while it treated a bye law as a provision of Act: that cannot be. The other reason that may be suggested is that the word "Prescribed" was used in superabundant caution or by mistake. If superabundant caution was required to mention separately the rules, greater caution would have been necessary to provide separately for a bye law. A court ordinarily shall attempt to give meaning to every word used by the Legislature, unless it is impossible to do so. Here there is not only no such impossibility, but there is also a good reason for the Legislature in excluding the bye laws from the operation of cl.(f) of section 4 of the Act. Subordinate or delegated legislation takes different forms. Subordinate legislation is divided into two main classes, namely, (i) statutory rules, and (ii) bye laws or regulations made, (a) by authorities concerned with local government, and (b) by persons, societies, or corporations. The Act itself recognizes this distinction and provides both for making of the rules as well as bye laws. A comparative study of sections 11 and 12 whereunder 775 power is conferred on the Central Government and the recognized associations to make bye laws on the one hand, and section 28, whereunder the Central Government is empowered to make rules on the other, indicate that the former are intended for conducting the business of the association and the letter for the purpose of carrying into effect the objects of the Act. In considering the question raised in this case in this distinction will have to be borne in mind. It would be unreasonable to assume that a private association, though registered under the Act, could confer powers on a statutory authority ,under the Act. That is why under section 4(f), the Legislature did not think fit to provide for the assignment of a function to the commission in exercise of a power under a bye law. The nonmention of bye law in cl. (f) is not because of any accidental omission but a deliberate one, because of the incongruity of an assignment of a function to the Commission under a bye law. I would, therefore, construe the words "by or under this Act, or as may be prescribed" as follows : (by this Act" applies to powers assigned proportion vigor by the provisions of the Act ; 'under this Act" applies to an assignment made in exercise of an express power conferred under the provisions of the Act; and 'may be prescribed" takes in an assignment made in exercise of a power conferred under a rule. This construction gives a natural meaning to the plain words used in the section and avoids stretching, the language of a statutory provision to save an illegal bye law. In this context two decisions are cited at the Bar. The first is that of the Judicial Committee in Hubli Electricity Company Ltd. vs Province of Bombay (1). There, under section 3(2)(f) of the Indian Electricity Act (No. TX of 1910) "the provisions contained in (1)(1948) 26 I.A. 57. 776 the Schedule shall be deemed to be incorporated with, and to form part of, every licence granted under this Part". Under section 4(1)(a) of the said Act, ",The Provincial Government may, if in its opinion the public interest so requires, revoke a licence", inter alia, if "the licensee in the opinion of the Provincial Government makes wailful and unreasonably prolonged default in doing anything required of him by or under this Act". Under sub cl. (6) of the Schedule, a licensee had to comply with certain conditions. The Government revoked the licence on the ground that the licensee did not comply with the conditions laid down in Schedule VI, which were deemed to be incorporated in the licence by virtue of section 3(2), and therefore he did not do the thing required of him within the meaning of section 4 of that Act. The Privy Council held that the performance by the licensee of the conditions of the Schedule to the Act was clearly required to be made under the Act. This decision does not help us very much in the present case, as the question of bye law did not arise therein '. Nor the decision of the Madras High Court in Narayanaswamy vs Krishnamurthi (1) is of any assistance. There the question was whether the regulations framed by the Life Insurance Corporation by virtue of the powers vested in it by Act 31 of 1956 prohibiting the employees from standing for election fell within the meaning of the words ,under any law" in article 191 (1) (e) of the Constitution. The High Court held that the regulations were law made under the Act of Parliament. The conclusion was based on the principle that the rule made in pursuance of the delegated power has the same validity and has the same characteristic as a law made directly by the Parliament. Apart from the fact that the words to be construed there were different and in a sense wider than the words to be construed in the present case, the principle accepted in the decision is only (1) I.L.R. 777 of a general application and does not help to construe the specific words of cl. (f) of section 4 ; their meaning can be gathered only by interpreting the said words, having regard to the setting and the context in which they are used. For the foregoing reasons, I would hold that the Government had no power under section 12 of the Act to make a bye law assigning any function to the Commission. It follows that notification dated January 24, 1956, by the Forward Markets Commission was illegal and the appellants would be entitled to the issue of a writ of mandamus in the terms prayed for. In the result, the appeal is allowed with costs. ORDER In view of the Judgment of the majority, the appeal stands dismissed with costs.

IN-Abs

The appellants were members of the East India Cotton Association which was an association recognised by the Cen tral Government under the Forward Markets Regulation Act, 1952. Prioi to December 1955, they had entered into "hedge contracts" in respect of cotton for settlements in February and May 1956 in accordance with the bye laws of the Associa tion. Towards the end of 1955 it was apprehended that the forward market in cotton was heading for a crisis and the Central Government issued notifications directing the Asso ciation to suspend business in hedge contracts for February and May 1955 deliveries for short periods this did not improve the situation. On January 21, 1956, the Central Government, acting under section 12 of the Act, made a new bye law in substitution of bye law 52AA of the Association which empowered the Forward Markets Commission, constituted under, the Act, to issue a notification closing out all hedge contracts at rates fixed by the Commission. On January 24, 1956, the Commission issued a notification closing out all hedge contracts including those subsisting on that date, and fixed the rates for the settlement of such contracts. The appellants contended that the amended bye.law 52AA was invalid as the power to close out hedge contracts could not be conferred upon the Commission and as the Association was in law incapable of conferring such a power on the Commission or on any other body and that in any cases the bye law could not operate retrospectively so as to affect existing contracts. Held, (per Sinha, C. J., Ayyangar, Mudholkar and Aiyar, JJ. Subba Rao, J. contra), that the amended bye law 52AA was not ultra vires the Central Government and validly empowered the Commission to close all hedge contracts in cotton including existing contracts. Clause (f) of section 4 of the Act provided that one of the functions of the Commission 722 shall be to perform such other duties and exercise such other powers as may be assigned to the Commission "by or under the Act, as may be prescribed". There was no limitation upon the nature of the power that may be conferred under cl. (f) except that it must be in relation to the regulation of forward trading in goods. It was not possible to place any limitation on this power by invoking the rule of ejusdem genesis as there was no common positive thread running through cls. (a) to (e) of section 4. To judge whether legally a power could be rested in a statutory body the proper rule of interpretation was that unless the nature of the power was such as to be inconsistent with the purpose for which the body was created or unless the particular power was contra indicated by any specific provisions of the Act, any power which furthered the provisions of the Act could be legally conferred. judge by this test the power conferred by the bye law could be validly vested in the Commission. The power was one conferred "under the Act". The words "under the Act" signified a power conferred by laws made by a subordinate law making authority which was empowered to do so by the Act. The impugned bye law was clearly well within the bye law making power under sections II and 12. The bye law did not contravene articles 64 of the Articles of Association of the Association as articles 64 applied only to the Board and placed no restrictions on the power of the Association, Western India Theaters Ltd. vs Municipal Corporation of Poona, [1959] Supp. 2 S.C.R. 71, Hubli Electricity Co. Ltd. vs Province of Bombay, 76 I.A. 57 and Narayanaswamy Naidu vs Krishnamurthi, I.L.R. , referred to, Further, upon a proper construction of the amended bye law it applied not only to contracts to be entered into in future but also to subsisting contracts. A statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule making authority a power to make a rule or frame a bye law having retrospective operation. In the present case the power to make bye laws so as to operate on subsisting contracts followed as a necessary implication from the terms of section 11. There was no contra indication in the other provisions of the Act. Per Subba Rao, J. Under section 12 (1) of the Act the Central Government had no power to make a bye law with retrospective effect. The provision conferring rule making power must be strictly construed and unless it expressly conferred a power to make a bye law with retrospective effect, it must be held that it was not conferred any such power. Evey if it was permissible to inter such a power by necessary 723 implication, it could not be inferred in the present case. It could not be said that unless retrospective operation was given to the provisions of section 12, the object of the legis lature would be defeated or the purposes for which the power was conferred could not be fulfilled. Further, the powers conferred on the Commission under the impugned bye law could not be performed by the Commission under c1. (f) of section 4. Clauses (a) to (e) of section 4 showed that the functions of the Commission were wholly supervisory and advisory in nature; the functions described in cl. (f) were analogous to these and could only be supervisory or advisory. The Commission had no administrative functions or powers of management or powers of interference in the internal management of registered association which were vested in the Association. The power conferred upon the Commission was not conferred "under the Act". The words did not include a rule or a bye law, and applied only to an assignment made in the exercise of an express power conferred under the Act. The Central Government had no power tinder section 12 to make a bye,law assigning any function to the Commission. Union of India vs Madan Gopal Kabra ; , Modi Food Products Ltd. vs Commissioner of Sale 's Tax, U.P., A. I.R. 1956 All. 35, Strawboard Manufacturing Co. Ltd. vs Gupta Hill Workers ' Union; , , India Sugar & Belineries Ltd. vs State of Mysore, A.I.R. 1960 Mys. 326, C.W. Motor Service (P) Ltd. vs State of Kerala, A.I.R. 1959 Kerala 347, Howell vs Falmouth Boat Construction Co. Ltd. ; The Western India Theatres Ltd. vs Municipal Crporation of the City of Poona, (1959) Supp. 2 S.C.R. 71 and Hubli Electricity Co. Ltd. vs Province of Bombay ( 1948) 76 I.A. 57, referred to.

Appeal No. 52 of 60. Appeal from the judgment and decree dated April 15, 1958, of the Bombay High Court in Appeal ' No. 25 of 1957. B. R. L. lyengar, for the appellants. M. C. Setalvad, Attorney General of India, section R. Vakil, K. H. Bhabha, J. B. Dadachanji, O. C. Mathur and Ravindra Narain, for the respondent, 170 1962. April 12. The Judgment of the Court was delivered by section K. DAS, J. This is an appeal on a certificate granted by the High Court of Bombay under section 110 of the Code of Civil Procedure, and arises put of a suit which the appellants had brought for recovery of Rs. 9,99,940/ with interest and cost from Mir Nawab Himayatalikban Azamjah, who was then known as the Prince of Berar, being the eldest son of the Nizam of Hyderabad. The circumstances in which the appeal has arisen are these. On or about January 31, 1937 Baboo Mull and Co. sold and delivered to the Prince of Berar in Bombay various articles of jewellery the aggregate value of which was Rs. 13,20,750/ . Lala Kapurchand Godha, who was the first plaintiff in the action and Lala Heeralal Godha, the original second plaintiff, carried on business in jewellery in partnership with their father and one Lala Baboo Mull (since deceased) in the name and style of Baboo Mull and Co. It is not disputed that the appellants now before us own the entire interest in the Subject matter of the suit and instead of using the name of Baboo Mull and Co. we shall same the appellants as the persons who sold the jewellery to the Prince of Berar on January 31, 1937. A writing dated January 31, 1937 was executed by the Prince Of Berar, respondent before us, by which be declared and acknowledged having purchased the jewellery specified in a schedule from the ' appellants at the aggregate price of Rs. 13,20,750/ . In that writing (exhibit A) the respondent stated: "I promise on behalf of myself and my heirs, executors, administrators and successors to pay to you or to your order at my option and leisure at your abovementioned 171 address the said sum of rupees thirteen lacs twenty thousand seven hundred and fifty only together with simple interest thereon @ 10% ten per cent. per annum. " It is not disputed that the jewellery was in fact delivered by the appellants to the respondent, and after January 31, 1937 the respondent passed various acknowledgements in respect of the debt due at the time of the passing of the respective acknowledgments. These documents consisted of an acknowledgement of liability and a promise to pay on behalf of the respondent and the last of such acknowledgments was passed on February 15/16, 1948. By that time the debt of Rs.13,20, 750/ with ten per cent. interest thereon had in oreased to about Rs.27,79,000/ . By that last document the respondent admitted his liability for the amount of Rs. 27,79,078 2 0 and promised to pay the amount, again at his option and leisure. On April 30, 1948, the appellants presented their bill and some time in January, 1949, one of the appellants had an interview with the respondent and was told that the Nizam had passed the bill. In 1949 when Hyderabad was under military occupation after the Police Action, a Committee was set up on February 8, 1949, by the Military Governor known as the Princes Debts Settlement Committee. The report of this Committee shows that it was set up in accordance with a resolution made by the Military Governor in order to scrutinize all debts of the Prince of Berar and his younger brother. On February 19, 1949, the appellants presented a petition to the Military Governor with regard to their claim and asked for payment of the amount due to them or in the at ternative for the return of the jewellery. The claim of the appellants was considered by the Committee in para 11 of their report. The Committee recommended that the appellants should 172 be paid a sum of Rs. 20 lacs in full satisfaction of their claim. The Committee further stated that they did not recommend the return of the jewellery. It may be here stated that the Committee consisted of two persons, namely, Zaheruddin Ahmed, who was the Controller of Accounts to the Nizam and A. N. Shah, a member of the Indian Civil Service. It may also be stated that the report of the Committee shows that it made a reduction of about ten per cent. In the case of all suppliers of goods to the two Princes because the Committee thought that in most of the cases the suppliers inflated the price for the supply of goods to the two Princes. The Committee also thought that the reasonable rate of interest would be six per cent. in the case of creditors who had to wait for a number of years for payment of their dues. On September 27, 1949, a sum of Rs.1 1,25,000/ was paid to the appellants. At that time there was a dispute going on as to whether the appellants were entitled to the entire amount of Rs.20 lacs or to only 9/16th share there. That dispute having been finally settled in favour of the appellant , the appellants received a second payment of Rs.8,75,000/ on February 14, 1950. This amount along with the earlier amount paid to the appellants came to the total of Rs.20 lacs. which the Committee had recommended should be paid to the appellants in full satisfaction of their claim. On February 14, 1950, a receipt was passed by the appellants for the sum of Rs.8,75,000/(Ex. C) and this receipt ran in the following terms: "Received from the Controller General of Accounts and Audit, Hyderabad Government, the sum of Rs.8,75,000/ (Rupees eight lacs and seventy five thousand) only in full and final payment of the balance of rupees twenty lacs allowed by the Government in respect of my claims under the pronote dated 15 February 1948 passed by the Prince 173 of Berar in my fovour, reserving however my right to recover the balance amount due to me under the said pronote from the Prince of Berar. " The relevant authorities refused, however, to make payment on the receipt exhibit C in which the appellants reserved their right to recover the balance amount due from the Prince of Berar. Thereupon, the appellants discharged all the previous promotes and on each one of them recorded a satisfaction of full payment. We may refer to the last of them, namely, the one dated February 15/16, 1948. This was for a sum of Rs.27,79,078 2 0 and on this document Kapurch and Godha, one of the appellants recorded "received payment in full". Then, on August 14, 1950, the appellants served through their solicitors a notice on the respondent asking him to make payment of the balance of Rs.9,99,940/ with interest at ten per cent. The respondent not having paid the amount a suit was instituted on February 5, 1951, in the High Court of Bombay for recovery of the amount. The suit was tried by Coyajee, J. The principal issue for trial was issue No. 6, namely, whether the appellants had accepted payment of Rs. 20 lacs in full satisfaction of their claim against the respondent and surrendered all the writings duly discharged and there was absolute release of the debt as stated in paras. 7, 8 and 11 of the written statement. On a consideration of the oral and documentary evidence given in the case and relying particularly on exhibit C, Coyajee, J. came to the conclusion that the appellants did not take the sum of Rs. 20 lacs in full satisfaction of their claim. The learned Judge said "Ordinarily, a plaintiff would have been in a most difficult and unenviable position to 174 enforce this claim after having endorsed those documents namely exhibit No. 1 as payment in full satisfaction. But evidently "payment in full satisfaction" there meant full satisfaction as regards the liability of the Hyderabad State and that would naturally be the meaning if taken in conjunction with exhibit C where, he reserved liberty to proceed personally against the Prince of Berar. I have therefore come to the conclusion on the main issue in the suit namely, that there was no accord and satisfaction when the plaintiff received the second cheque from the Accountant General of Hyderabad State. " Then there was an appeal by the respondent which was heard by the appellate court (Chagla, C. J. and Mody, J.) By its judgment dated April 15,1958, the appellate court came to a contrary conclusion and held that on the evidence, oral and documentary, given in the case it was clearly established that the appellants accepted the sum of Rs. 20 lacs in full satisfaction of their claim and duly discharged the promissory notes by endorsing full satisfaction thereon; therefore, section 63 of the , applied and the suit of the appellants was liable to be dismissed. It accordingly allowed the appeal and dismissed the suit with costs. In the appeal before us Mr. B. R. L. Iyengar appearing on behalf of the appellants has very strongly contended that the view of Coyajee, J. is the correct view on the evidence given in the case. He has emphasised two points in connection therewith: (1) the crucial question is what does the evidence show as to the intention of the creditor in accepting Rs. 20 lacs? and '2) what is the effect of exhibit C, a receipt executed contemporaneously with the payment of the second instalment of Rs. 8, 75,000 ? Mr. Iyengar has argued that the appellate 175 court did not attach sufficient importance to these two points and the conclusion which it reached is vitiated for that reason. As the judgment of the appellate court is a judgment in reversal and the question raised are essentially questions of fact on which there are conflicting findings, we allowed counsel for the parties to place before us the relevant evidence along with the pleadings of the parties. Two of the witnesses whose evidence appears to be decisive of the questions raised were, Putta Madhava Rao who was examined on behalf of the appellants and Kapurchand Godha, one of the appellants. Putta Madhava Rao was at the relevant time, Assistant Accountant General,. Hyderabad and he was present before the Committee on more than one occasion when the claim of the appellants was considered. Before Coyajee, J. a question was raised whether the statements of this witness as to what transpired before the Committee were admissible in evidence, when none of the two members of the Committee was called for examination. Madhava Rao was undoubtedly competent to prove what he himself heard or saw if such hearing or seeing was a fact in issue, and we consider it unnecessary to determine the further question as to whether be was competent to prove the statements alleged to have been made by one or other of the two members of the Committee. Therefore, we confine ourselves to the statements of Madhava Rao as to what happened before him. Madhava Rao said that before the Committee the appellants insisted on payment of their full claim, but the Committee decided that the appellants must take Rs. 20 lacs in full satisfaction of their claim; on this Kaparchand Godha protested and said that he would have to reserve his right for the balance. The Committee thereupon made it clear that they could not recommend payment of anything more, because a specific amount for distribution had been allotted to them. The reference to "a specific 176 amount" was to a sum of rupees two crores earmarked for the liquidation of the debts of the two 'Princes out of a fund known as Sarf e Khan. What happened after the Committee had made its recommendation is very important. The first instalment of Rs. 11,25,000/ was paid on September 27, 1949. At that time a dispute was going on about the share of the appellants to the money. The receipt which was passed for the payment of Rs. 11,25,000/ is marked exhibit B. That receipt does not show whether the appellants had agreed to accept Rs. 20 lacs in full satisfaction of their claim. As to the second instalment of Rs.,8,75,000/ which was paid on February 14, 1950, Madhava Rao give the following evidence. He said that when exhibit C was brought to him by Kapurchand Godha, the witness told the latter that he could not make payment against that receipt as the receipt recited, reservation of the right of the appellants for the balance. The witness took the document, exhibit C, to Zaheruddin Ahmed who was the Accountant General then. Zaheruddin Ahmed suggested that the claimant should endorse full satisfaction and payment of all the promissory notes and then only the payment would be made. The witness then said: "Thereupon I obtained these endorsements (on the promissory notes) from Kapurchand. Kapurchand whilst endorsing these documents protested that he had been forced to endorse these and he was not at all satisfied. This happened on the 14th of February, 1950. " We may here state that no plea was raised by the appellants to the effect that the endorsements on the promissory notes had been obtained by coercion, and no issue was struck between the parties as to the endorsements on the promissory notes having been obtained by coercion. That 177 being the position, what is the effect of Madhava Rao 's evidence ? The clear effect is that the authorities who were paying the money in discharge of the debt of the respondent made it clear that they would pay the money only if a full satisfaction of the claim was given by the appellants. The appellants after some initial protests agreed and duly discharged all the promissory notes by endorsing thereon full payment and satisfaction. The question of coercion was introduced as and by way of after thought. Two facts seem to be clearly established by the evidence of Madhava Rao. One is that the authorities refused to pay the second instalment unless full satisfaction of the claim was endorsed in accordance with the recommendation of the Committee; the second is that the appellants did record full payment in satisfaction of the promissory notes before they received the money. In our opinion, these twofactsclearly established the case of the respondent that the appellants had given a full discharge when they received the second instalment. Indeed, the evidence of Madhava Rao is supported by the evidence of Kapurchand Godha. Kapurchand Godha said that when he presented the receipt, exhibit C, to Madhava Rao the latter said that he would not accept the receipt in that form. Madhava Rao then took Kapurchand to the Accountant General. Kapurchand was asked to produce the promissory notes and was told that unless the promissory notes were endorsed with full satisfaction, no payment would be made. Kapurechand then said "I was told that unless I signed the receipt for full payment, no cheque would be issued to me. Thereupon I endorsed the receipt for full payment. By that I mean I was asked to endorse full payment on the vouchers and I did so. I protested and said that as I was asked to endorse full payment, I 178 was doing so despite the fact that I was not receiving full payment. Thereafter I signed the receipt as the vouchers and handed ever the documents to the Accountant General. " This evidence is in accord with the evidence of Madhava Rao and again establishes that appellants when they received the second and the last instalment of Rs. 8,75,000/ gave a full discharge of their claim and the plea of coercion was later introduced as and by way of an after thought. There was some difference of evidence as to whether exhibit C bore the signature of Kapurchand when it was first presented to Madbava Rao or whether the signature was later put on it. With that difference we are not now concerned. Nor are we concerned with certain minor discrepancies between the evidence of the two witnesses referred to above. The substantial result of the evidence of the two witnesses to whom we have referred is that whatever, reluctance Kapurchand might have had in accepting Rs. 20 lacs in full satification of the claim of the appellants, he ultimately agreed to do so, Not; only did he agree, but he actually en dorsed full satisfaction and payment on all the promissory notes and thereafter be receive payment of the second instalment of Rs. 8,75,000/which along with the first instalment of Rs. 11,25,000/ made up the sum of Rs. 20 lacs. On these facts which are established by the evidence given on behalf of the appellants themselves, the only conclusion is that there was full satisfaction of the claim of the appellants. The legal position is clear enough. Section 63 of the reads : "Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance or may accept 179 instead of it any satisfaction which he thinks fit. " Illustration (c) to the section says "A owes B 5000 rupees. C pays to B 1000 rupees, and B accepts them in satisfaction of his claim on A. This Payment is a discharge of the whole claim. ,, It seems to us that this case is completely covered by section 63 and illustration (c) thereof. The appellants having accepted payment in full satisfaction of their claim, are not now entitled to sue the respondent for the balance. A reference may 'also be made in this connection to section 41 of the Contract Act under which when a promisee accepts performance of the promise from a third person. he cannot afterwards enforce it against the promiser. There is some English authority to the effect that discharge of a contract by a third person is effectual only if authorised or ratified by the debtor. ID India, however, the words of section 41 of the Contract Act leave no room for doubt, and when the appellants have accepted performance of the promise from a third person, they cannot afterwards enforce it against the promisor, namely, the respondent. When a statute clearly covers a case, it is hardly necessary to refer to decisions. In deference however, to the arguments advanced on behalf of the appellants, we refer to the two decisions on which learned counsel for the appellant has relied. One is the decision in Day vs Mc Lea (1). In that case the plaintiffs made a claim against the defendants for a sum of money as damages for breach of contract; the defendants sent a cheque for a less amount stating that it was in full payment of all demands. The plaintiffs kept the cheque stating they did so on account and brought an action for (1) 180 the balance of their claim. It was held that keeping, the cheque was not as a matter of law conclusive that there was an accord and satisfaction of the claim ; but that it was a question of fact on what terms the cheque was kept. We do not think that that decision is of any help to the appellants As Lord Justice Bowen said in Day vs Mc Lea (1) : "If a person sends a sum of money on the terms that it is to be taken, if at all, in satis faction of a larger claim ; and if the money X X is kept, it is a question of fact as to the terms upon which it is so kept. Accord and satisfaction imply an agreement to take the money in satisfaction of the claim in respect of which it; is sent. If accord is a question of agreement there must be either two minds agreeing or one of the two persons acting in such a way as to induce the other to think. that the money is taken in satisfaction of the claim, and to cause him to act upon that view. In either case it is a question of fact. " We have already referred to the facts which are clearly established by the evidence in this case. Those facts clearly established that the appellants took the second instalment in full satisfaction of their claim. The second decision relied on on behalf of the appellants Neuchatel Asphalte Co. Ltd. vs Barnett (2) also proceded on a similar ground. In that case the claim of the plaintiff company amounted to pound 259, but the defendant raised some minor question which might reduce it by E14 or pound 15. The defendant then sent a cheque for pound 125 and stated in covering letter that this sum was "on account" pending the receipt of the plaintiffs reply to outstanding queries in connection with the work done. Some time later the defendant enclosed a further cheque for pound 75 and on the back of the (1) (1899) 32 Q.D. D.610, 613. (2) [1957] 1 All. R.R. 362. 181 cheque was endorsed ,in full and final settlement of the account". The cheque was accepted by the plaintiff company, which later sued for the balance of the amount of the claim. It was held that having regard to the correspondence and the surrounding circumstances, there was no intention on the part of the plaintiff company to accept the cheque for pound 75 in full satisfaction of the plaintiff 's claim, because the words "in full and final settlement of the account" typed on the back of the cheque were inconsistent with the main object and intention of the transaction, particularly since (a) the covering letter sent by this defendants plainly imported that the cheque was sent only on account and riot in full and final settlement, and (b) it could not reasonably be supposed that. in the circumstances, the plaintiff company had agreed to a reduction of the amount claimed. The facts of the case before us are entirely different. The appellants were clearly and unambiguously told that unless they gave a full satisfaction of their claim, they would not be paid the amount. The appellants were left in no doubt as to the condition on which payment would be made to them. The appellants clearly accepted the condition and recorded full satisfaction on all the pro missory notes. It is now impossible to accept the 'position that the appellants reserved their right to sue the respondent for the balance of the amount. In Hirachand Punam chand vs Temple (1) the father of a debtor wrote to the creditor offering an amount less than that of the debt in full settlement of the debt and enclosing a draft for that amount. The creditor cashed and retained the proceeds of the draft and afterwards brought an action against the debtor for the balance of the debt. It was held that the creditor must be takan to have accepted the amount received by him on the terms upon which it was offered and therefore he could not (1) [1911]2 K. B. 330. 182 maintain the action. The case was considered under the English law and it was observed that assuming that there was no accord and satisfaction in the strict sense of the law in England, it could still be held that the creditor had ceased really to beholder of the negotiable instrument on which he sued. With the niceties of English law in the matter of accord and satisfaction we are not concerned. The position in the present case is that the appellants must have known that they could receive the second instalment and retain the first instalment by accepting the condition on which the sum of Rs. 20 lacs was offered to them, namely that they must record a full satisfaction of their claim. They accepted the money on the condition on which it was offered and it is not now open to them to Jay, either in fact or in law, that they accepted the money but not the condition. For these reasons we are satisfied that the appellate court was right in the view which it took. Therefore, thus appeal fails and is dismissed with costs. Appeal dismissed.

IN-Abs

In January 1937 one M & Co. sold and delivered jewellery valued at about 13 lakhs to the respondent Prince of Berar. The Prince acknowledged in writing the purchase of the jewellery and the price thereof and passed various acknowledgments in respect of the debts due and the last of such acknowledgments was made for sum of Rs. 27,79,000. In April 1948, the appellants presented their bill and were informed in January, 1949, that the Nizam had passed the bill. In February, 1949, when Hyderabad was under military occupation, a Committee was set up by the Military Governor to scrutinise all debts of the Prince of Berar and his younger brother. The claim of the appellants was considered by the Committee which recommended that the appellants should be paid a sum of Rs. 20 lakhs in full satisfaction of their claim. The appellants were paid the sum of Rs. 20 lakhs in two instalments. The appellants tried to pass a receipt when they received the second instalment reserving their right to recover the balance under the pronote from the 169 Prince of Berar. The relevant authorities refused to make payment on the said receipt. Thereupon the appellants dis charged all the previous pronotes and on each one of them recorded a satisfaction of the full amount. The appellants thereafter sued the respondent for the recovery of the balance of the monies due to them on the pronote. The trial court decreed the suit on the ground that there was no accord and satisfaction when the plaintiff received the second cheque from the Accountant General, Hyderabad. In appeal by the respondent the Appellate Court set aside the decree holding that the appellants had accepted the sum of Rs. 20 lakhs in full satisfaction of their claim and duly discharged the promisory notes by endorsing full satisfaction thereon. The appellants came up to the Supreme Court in appeal by certificate granted by the High Court. Held, that when payment is accepted on the condition on which it is offered, it is not open to the person receiving the payment to say, either in fact or in law, that they have accepeted the money but not the condition. A promisee accepting performance of the promise from a third person, can not afterwards enforce it against the promiser. In the present case the appellants had given a full discharge when they received the second instalment; and as they accepted the money in full satisfaction of their claim, they were not entitled to sue the respondent for the balance. Obiter : When a statute clearly covers the case it is hardly necessary to refer to a decision.

iminal Appeal No. 30 of 1961. Appeal from the judgment and order dated September 6, 1960 of the Calcutta High Court in Cr. Revision No. 647 of 1960. B. Sen, P. K. Chatterjee and P. K. Bose, for the appellant. D. C. Roy and P. K. Mukherjee, for the respondent. April 12. The Judgment of the Court was delivered by KAPUR, J. This is an appeal against the judgment and order of the High Court of Calcutta quashing the investigation started against the respondent in regard to offences under section 420, Indian Penal Code, and section 120B read with section 420 of the Indian Penal Code. On March 26, 1960, Sub Inspector. B. L. Gbose of Police Inforcement Branch filed a written report before the Officer in charge Chakdha P. section, alleging that the respondent in conspiracy with three others 54 had cheated the Government of West Bengal of a sum of Rs. 20,000. The respondent at the time was an Assistant cum Executive Engineer, Kancbrapara Development Area, Kalyani Division. On the basis of this report a First Information Report was drawn up and the police started investigation. On April 4, 1960, the respondent surrendered in the court of the Judicial Magistrate at Ranaghat and was released on bail for a sum of Rs. 1,000/ . The respondent then on May 9, 1960, filed a petition under sections 439 and 561A of the Criminal Procedure Code and prayed for a rule against the District Magistrate, Nadia, to show cause why the judicial case pending in the court of the Senior Magistrate Ranagaghat arising out of the Chakdah Police Station Case No. 33 dated March 26, 1960, be not quashed. The High Court held : "In our view, the statutory power of investigation given to the police under Chapter XIV is not available in respect of an offence triable under the West Bengal Criminal Law Amendment (Special Courts) Act 1949, and that being so, the investigation concerned is without jurisdiction. In so saying, we are consicious of the observations of their Lord ships of the Privy Council in Nazir Ahmad 's case, 71 Indian Appeals, 203". and therefore quashed the police investigation of the case holding it to be without jurisdiction. It is against this judgment and order that the state has come in appeal to this Court on a certificate granted by the High Court under article 134 (1) (c) At the time the respondent filed the petition in the High Court only a written report was made to the police by the Sub Inspector of police Enforcement Branch and on the basis of that report a :First Information Report was recorded by the 55 Officer in charge of the Police Station and investigation had started. There was no case pending at the time excepting that the respondent had appeared before the Court, had surrendered and had ' been admitted to bail. The powers of investigation into cognizable offences are contained in Chapter XIV of the Code of Criminal Procedure. Section 154 which is in that Chapter deals with information in cognizable offences and section 156 with investigation into such offences and under these sections the police has the statutory right to investigate into the circumstances of any alleged cognizable offence without authority from a Magi strate and this statutory power of the police to investigate cannot be interfered with by the exercise of power under section 439 or under the inherent power of the court under section 561A of Criminal Procedure Code. As to the powers of the Judiciary in regard to statutory right of the police to investigate, the Privy Council in King Emperor vs Khwaja Nazir Ahmad (1) observed as follows: "The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, a course, subject to the right of the court to intervene in an appropriate case when moved under section 491 of the Criminal Procedure Code to give directions in the nature of habeas, corpus. In such a case as the present, however, the court 's functions begin when a charge is preferred before it, and not until then. It has sometimes been thought that a. 561A has given increased powers to the Court which it did not possess before that section was enacted. But this is not so, the section gives no now powers, it (1)(1944),L. R. 71. 1. A. 203, 212. 56 only provides that those which the court already inherently possesses shall be preserved and is inserted as their Lordships think, lest it should be considered that the only powers possessed by the court are those expressly conferred by the Criminal Procedure Code and that no inherent powers had survived the passing of that Act". With this interpretation, which has been put on the statutory duties and. powers of the police and of the powers of the Court, we are in accord. The High Court was in error therefore in interfering with the powers of the police in investigating into the offence which was alleged in the information sent to the Officer in charge of the police station. We therefore allow this appeal and set aside the order of the High Court. The investigation will now proceed in accordance with law. Appeal allowed.

IN-Abs

A Sub Inspcctor of Police, Enforcement Branch, filed a report before the Police Officer in charge of a Police Station alleging that the respondent along with three others committed offences under ss.420, 120B read with s.420 Indian Penal Code. Thereupon a First Information Report was drawn up and investigation was started. The respondent surrendered before the judicial Magistrate and he was released on bail. Subsequently he filed an application in the High Court under sections 439 and 561 A of the Criminal Procedure Code to get the case pending before the judicial Magistrate arising out of the 53 case registered in the Police Station quashed. This appli cation was granted by the High Court. The appellant the State of West Bengal then filed an appeal before the Supreme Court by certificate granted by the High Court under article 134 (1) (c) of the Constitution. Held, that the statutory powers given to the Police under sections 154 and 156 of the Code of Criminal Procedure to investigate into the circumstances of an alleged cognizable offence without authority from a Magistrate cannot be interfered with by the exercise of powers under s.439 of the Code of Criminal Procedure or under the inherent powers conferred by section 561A of the Code of Criminal Procedure. The High Court was therefore in error in allowing the respondent 's application. King Emperor vs Khwaja Nazir Ahmad, (1944) L.R. 71 I.A. 203 allowed.

Civil Appeal No. 309 and 525 of 59. Appeals by special leave from the judgment and orders and decree dated August 27, 1958, November 24, 1958, and March 10, 1958 of the Calcutta High Court, in Award Case No. 103 of 1955 and Appeal from Original order No. 26 of 1956 respectively. N. C. Chatterjee and B. P. Maheshwari, for the appellant (in C. A. No. 309 of 59). H.N. Sanyal, Additional Solicitor General of India, section K. Gupta and D. N. Mukherjee, for respondent (in C A. No. 309 of 59). N. C. Chatterjee, M. G. Poddar. and S.N. Mukerji, for the appellant (in C. A. No. 525 of 59). H. N. Sanyal, Additional Solicitor General of India A N. Sinha and P.K. Mukherjee, for the respondent (in C. A. No. 525 of 59). December 12. The Judgment of the Court was delivered by WANCHOO J. These two appeals by special leave from the judgments of the Calcutta High Court raise a common question of law and will be dealt with together. It will be convenient to set out the facts of appeal 309 and deal with them in connection with the point raised on behalf of the appellant. These facts are that a contract was entered into between the parties for supply of cornsacks on August 29, 1951. The contract contained an arbitration clause in the following terms: "All matters, questions, disputes, difference and/or claims arising out of and/or concerning and/or in connection with and/or in consequence of or relating to this contract whether or not the obligation of either or both 103 parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or completed shall be referred to the arbitration of the Bengal Chamber of Commerce under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted. " Disputes arose with respect to carrying out of the contract and on October 25, 1951, the respondent referred these disputes to the arbitration of the Bengal Chamber of Commerce (hereinafter referred to as the Chamber). That case was numbered 217 of 1951 in the Chamber 's records. On April 17, 1952, the tribunal of Arbitration made an award disallowing the claim of the respondent. This award was filed in the High Court. On May 25, 1953, the award was set aside on the ground of misconduct on the part of the arbitrators by a learned Single Judge. That order was taken in appeal and on July 8, 1954 L the appeal was dismissed. Later, leave to appeal to this Court was refused and thus the order of the learned Single Judge setting aside the award finally stood. Soon after the award had been set aside by the learned Single Judge, the respondent addressed a letter to the Chamber on September 7, 1953. It was said in this letter that as the award in case No. 217 G of 1951 had been set aside by the High Court, the respondent begged to refer the matter for arbitration de novo and enclosed its statement of the case. Thereupon another tribunal was constituted under the rules of the Chamber to decide the dispute afresh. The appellant appeared before the tribunal and contended that it had no jurisdiction to make an award on a second references in the same dispute. The tribunal, however, proceeded to decide the reference and made the award on 104 March 15, 1955. This time the award was in favour of the respondent. Thereupon on August 4, 1955, the appellant made an application to the High Court praying that the award be set aside. In the alternative, the appellant prayed that the award be declared null and void and the arbitration agreement between the parties be superseded on the ground that the second reference was incompetent. The application was opposed by the respondent and its contention was that this was not a second reference, and what the respondent wanted was that the Chamber should in the event that had happened take up the dispute again and make a proper award. Reliance in support of the plea that such a course was permissible was placed on behalf of the respondent on the decision of the Calcutta High Court in The Barangore Jute Factory Co. Ltd. vs Messrs. Hulas Chand Rupchand (1). The learned Single Judge relied on the decision in The Barangore Jute Factory (1) and held that from what that respondent said to the Chamber its letter of September 7, 1953, it was reasonably clear that all that it wanted was that the Chamber should in the event that had happened take up the dispute again and make a proper award. It could not therefore be held because of some language used in the letter that the respondent was making a fresh reference. Consequently, it was held that the Chamber had jurisdiction to decide the dispute after the earlier award had been set aside and what the respondent had asked for was for the continuance of the original reference, which had not been superseded. The learned Single Judge then went into the question whether there was such misconduct as would justify setting aside the award and held that there were no grounds made out which would justify the setting aside of the award. Consequently, the application for setting aside the award was dismissed. Thereafter the appellant came to this Court for special 105 leave, which was granted; and that is how the matter has come up before us. The main question that has been argued before us is that the first award was set aside on May 25, 1953, the reference was exhausted and the arbitrator had become functus officio and it was therefore not possible without a fresh arbitration agreement to have the same dispute decided again by the arbitrator, irrespective of whether the letter of September 7, 1953, amounted to a second reference or was a mere request for continuation of the proceedings in the original reference, which had proved abortive as the award originally made had been set aside. Reliance in this connection is placed on what are called certain fundamental principles governing all arbitrations. It is urged that once an award is wholly set aside, the arbitrator is functus offico and thereafter he cannot function again to decide the same dispute. This is said to be a fundamental principle of all arbitrations, and reliance is placed on a passage in "Russel on Arbitration" (15th Edn., p. 298), where the effect of setting aside an award is stated thus "If an award is wholly set aside, the arbitrator is functus officio. " Reliance is also placed on Morduse vs Palmer (1), where it was held "An arbitrator having signed his award is functus officio and cannot alter the slightest error in it, even though such error has arisen from the mistake of the clerk in copying the draft. The proper course in such a case is to obtain an order to refer the award back to the arbitrator. " Reliance is also placed on Sutherland and Company vs Hannevig Brothers Limited(2). That was a case under the English Arbitration Act of 1889 which provided that an arbitrator could correct in an award any clerical mistake or error from any 106 accidental slip or omission and had thus varied the rule laid down in Mordue 's case(1). It was however held in that case that the correction made by the arbitrator was not justified under the Arbitration Act. These cases in our opinion have not much bearing on the question before us. It is true that generally speaking, an arbitrator is functus officio after he has made the award; but this only means that no power is left in the arbitrator to make any change of substance in the award that he had made (except in certain circumstances which have been provided in the law). What we have to see however are the scheme and the provisions of the Arbitration Act, No. X of 1940 (hereinafter called the Act), which govern the proceedings in arbitration in this case. These provisions are to be found in Chap. II of the Act which deal with "arbitration without intervention of Court. " Sections 3 to 7 deal with various aspects of arbitration agreements with which we are not concerned in the present case. Sections, 8, 11 and 12 deal with the power of a court to appoint or remove arbitrators or umpire. Sections 9 and 10 deal with the right of a party to appoint a new arbitrator or sole arbitrator and also with the appointment of an umpire. Section 13 deals with the power of the arbitrator and section 14 provides for the signing of the award and giving notice in writing to the parties of the making and signing of the award and filing the same in court. Section 15 gives power to the court to modify the award in the circumstances mentioned therein. Section 16 gives power to the court to remit the award for reconsideration under certain circumstances. Section 17 provides for delivery of judgment in terms of the award where the court sees no cause to remit the award or to set it aside. Section 18 provides for making interim orders. Section 30 which is in Chap. V sets out the grounds on which an award may be set aside. 107 Finally, we come to section 19, which is the section on the interpretation of which the decision of this case depends. Section 19 reads as follows: "Where an award has become void under sub section(3) of section 16 or has been set aside, the court may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred. " Before we consider what section 19; provides we might advert to two matters. In the first place, it is not disputed before us that the English Arbitration Act does not contain a provision similar to section 19; the consequence of this is that the decisions on English Courts may not be of much assistance on this particular aspect of the matter before us. Secondly, there was a parallel provision in para. 15(2) of Sch. II of the Code of Civil Procedure before 1940 as to the order to be passed by the court when setting aside an award, which was in these terms: "(2) Where an award becomes void or is set aside under clause (1), the court shall make an order superseding the arbitration and in such case shall proceed with the suit. " It will be seen from this provision that when a court set aside an award under Sch. II the reference had to be superseded also, and the court was enjoined to proceed with the suit, the provision being contained in that part of Sch. II which dealt with arbitration in suits. But the provision also applied to cases covered by para. 17 read with para. 19 and also by implication to arbitrations outside court under para 21. But section 19 of the Act has clearly made a departure from the parallel provision contained in Sch. II, para. 15 (2) and we have therefore to see what is the extent of the departure made by it. It is clear from section 19 that there are three matters which have to be borne in mind in arbitration 108 proceedings. There is first the arbitration agreement. Next comes the reference to arbitration and lastly the award. Section 19 provides inter alia that where an award has been set aside, the court may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred. The section therefore leaves it to the discretion of the court when it decides to set aside an award, whether to supersede the reference or not. It may not supersede the reference at all in which case though the award may be set aside the reference will continue. But if it supersedes the reference it has also inconsequence to order that the arbitration agreement on the basis of which the reference was made would cease to have effect with respect to the difference referred. It is only therefore when the court orders supersession of the reference that the consequence follows that the arbitration agreement ceases to have effect with respect to the subject matter of the reference. The intention of the legislature in making this change in the consequences to follow the setting aside of an award is clear in as much as the provision recognises that there may be different kinds of arbitration agreements, some of which might be exhausted by the reference already made and the award following thereon which has been set aside while others may be of a more comprehensive nature and may contemplate continuation of the reference relating to the same dispute or successive references relating to different disputes covered by the arbitration agreement. The legislature has therefore given discretion to the court under section 19 to decide when it sets aside an award what the consequences of its order setting aside the award will be. If the court finds that the arbitration agreement is of the kind which exhausts itself after the first reference is made or if it finds on account of the reasons 109 which have impelled it to set aside the award that there should be no further reference of the dispute to arbitration, the court has the power to supersede the reference and thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred. On the other hand if the court finds that the arbitration agreement is of a general nature and contemplates continuation of the reference with respect to the same dispute or successive references with respect to different disputes arising under the terms of the arbitration agreement it may not supersedes the reference with the result that the reference as well as the arbitration agreement on which it is based survives. In such a case there can in our opinion be no doubt that there the reference and the arbitration agreement survive the same dispute may go before the arbitrators again provided there is machinery provided in the arbitration agreement which makes this possible. It will thus be seen that the discretion vested in the court under section 19 depends upon the nature of the arbitration agreement in particular cases and it is on a consideration of those terms that the court may decide in one case to supersede the reference and order the arbitration agreement to cease to have effect after taking into account the reasons which have impelled it to set aside the award and another not to set aside the reference with the result that the reference and the arbitration agreement subsist; and if the arbitration agreement provides for machinery to have further arbitration on the same dispute or other disputes arising under the arbitration agreement it is permissible to have further arbitration on the same dispute or other disputes. The same discretion is given to the court with respect to arbitration under Chap. III of the Act dealing with "arbitration with intervention of a court where there is no suit pending," as section 20(5) provides that after the arbitration agreement has been ordered to be filed, the arbitration shall proceed 110 in accordance with, and shall be governed by, the other provisions of the Act so far as they can be made applicable. Further we find that the same discretion has been given to the court in the matter of arbitration in suits provided under Chap. IV, was section 25 provides that "the provisions of the others Chapters shall, so far as they can be made applicable, apply to arbitration under this Chapter. " The proviso to section 25 gives discretion to the court in any of the circumstances mentioned in sections 8, 10, 11 and 12, instead of filling up the vacancies or making the appointments, to make an order superseding the arbitration and proceed with the suit, and where the court supersedes the arbitration under section 19 it shall proceed with the suit. The scheme of the Act therefore is whether the arbitration is under Chap. II, Chap. III or Chap. IV, to give discretion to the court to decide whether to supersede the reference or not. Where it decides to supersede the reference it has to order that the arbitration agreement shall cease to have effect with respect to the difference referred; but where it decides not to supersede the reference and the reference and the arbitration agreement subsist and if there is machinery provided in the arbitration agreement for making a further reference or for continuing the same reference, further arbitration can take place. The contention therefore urged on behalf of the appellant that once the award is set aside the arbitrator becomes functus officio and consequently there can be no further reference with respect to the dispute decided by the award which is set aside, must fail in view of the specific provisions of section 19 of the Act. We have already said that generally speaking, the arbitrator becomes functus officio after he has given the award; but that does not in our opinion mean that in no circumstances can there be further arbitration proceedings where an award 111 is set aside or that the same arbitrator can never have anything to do with the award with respect to the same dispute. Section 13 (d), for example, gives power to the arbitrator to correct in an award any clerical mistake or error arising from any accidental slip or omission. Further section 16 gives power to the court; to remit the award to the arbitrator for reconsideration. Therefore, when it is said that the arbitrator is generally functus officio after he has made the award, it only means that he cannot change that award in any matter of substance himself. But that does not take away the court 's power to remit the award for reconsideration under section 16 or to refuse to supersede the reference even though the award is set aside leaving it to the parties to take such further action under the arbitration agreement for further arbitration if it is possible so to do under the terms of a particular arbitration agreement. We are therefore of opinion that whatever may be the position in the absence of a provision similar to section 19 of the Act there can be no doubt that section 19 gives power to the court not to supersede the reference and so leave the arbitration agreement effective even when it sets aside award and thereupon, it will depend upon the terms of the arbitration agreement whether arbitration proceedings can go on with respect to the same dispute or with respect to some other disputes arising under the arbitration agreement. This was the view taken in the Barangore Jute Factory case(1). Similar view has been taken in Rallis India Ltd. vs B.V. Manickam Chetti & Co.(2) and in Firm Gulab Rai Girdhari Lal vs Firm, Bansi Lal Hansraj(3). We think that this view is correct. It is not in dispute that the reference was not superseded in this case when the award was set aside in May 1953. It will therefore depend upon 112 the terms of the arbitration agreement in this case whether it was possible to have further arbitration with respect to the same dispute. We have already set out the term in the contract relating to arbitration and it is clear that term is very wide in its amplitude and contemplates reference of disputes as and when they arise between the parties to the Chamber. Further as the Chamber is constituted the arbitrator in this term of the contract and as the Chamber consists of a large number of members and has its own rules for constituting arbitral tribunals. It is in our opinion quite possible on the terms of such an arbitration agreement to constitute another tribunal to decide the same dispute, where the reference remains pending and has not been set aside under section 19, provided there is machinery for appointing different persons as arbitrators under the rules of the Chamber. It is however urged that this is a second reference of the same dispute and this at any rate is not contemplated by the term relating to arbitration in the contract. We are not impressed by this argument. Stress in this connection has been laid on the letter of September 7, 1953, in which the respondent said that it begged to refer the matter for arbitration de novo. Those words do not in our opinion show that a second reference was being made of the dispute. The letter begins by saying that the Chamber was aware that the previous award had been set aside. It was in those circumstances that the respondent told the Chamber that it begged to refer the matter for arbitration de novo. In the context this can only mean that the respondent was asking the Chamber to take up the reference again as the reference had not been superseded and arrange to continue the arbitration proceedings further. The only question therefore 113 that will arise is whether under the rules of the Chamber it was possible to constitute another tribunal to consider this dispute again. If that is possible, we fail to see why the arbitration proceedings should not go on further as the reference was not superseded in this case, and the arbitration agreement subsisted. This brings us to the rules of the Chamber relating to the appointment of arbitral tribunal. It is urged on behalf of the appellant that there is no provision in these rules for appointment of an arbitral tribunal where an award made by an earlier tribunal is set aside say, for misconduct. If this contention is a justified it will certainly not be possible to appoint another arbitral tribunal to decide the reference after the award made on it by the earlier tribunal set aside. Reliance however is placed on behalf of the respondent on rr. V, VII and X made by the Chamber for the appointment of arbitral tribunals. It appears that no reliance was placed on r. V in the High Court; reliance however was placed on rr. VII and X in the High Court. The High Court held that r. VII justified the appointment of the tribunal in the present case, though it was of the view that r. X would not justify it. The appellant on the other hand contends that none of the three rules authorises the appointment of a fresh tribunal after an award is set aside and therefore there is no machinery under the terms of the arbitration agreement by which the arbitration can be further carried on, it being not disputed that the earlier tribunal whose award had been set aside on account of misconduct could not be again appointed. Rule V(1) provides for an application for arbitration. Rule V(2) lays down that "on receipt of such application the Registrar shall constitute a court for the adjudication of the dispute. " It is urged on 114 behalf of the respondents that a fresh tribunal could be constituted under r. V (2) after the award of the earlier tribunal had been set aside, as the Registrar is authorised to constitute a court on receipt of an application by the Chamber under r. V (1). We are of opinion that this contention is not well founded. Rule V(2) applies to the first appointment after the receipt of the application and that appointment was made in this case and the award of the tribunal appointed under r. V (2) was set aside. Rule V (2) does not in our opinion contemplate a second appointment after the award of the court appointed under it on receipt of the application has been set aside. The respondent cannot sustain the appointment of a fresh tribunal under r. V(2). Rule VII has been pressed into service by the High Court in this connection and it has been held on the basis of the Barangore Jute Factory 's case (1) that r. VII justified the appointment of a fresh tribunal in a case where an award made by the earlier tribunal is set aside. In that case the High Court was conscious that it was stretching the rule in applying it to the situation where an award is set aside. Rule VII says that "if the Court have allowed the time or extended time to expire without making any award, and without having signified to the Registrar that they cannot agree, the Registrar shall constitute in manner aforesaid another Court which shall proceed with the arbitration and shall be at liberty to act upon the record or the proceedings as then existing and on the evidence, if any, then taken in the arbitration or to commence the arbitration de novo. " Rule XXV makes provision that the award shall be made within four months or within such extended time as may be agreed to between the parties to the reference. Rule VII obviously refers to a case where the time or the extended time 115 allowed to the tribunal has been allowed to expire; it cannot refer to a case where the tribunal has made the award within the time fixed but later that award is set aside by court. It would in our opinion be stretching the language of r. VII too far to make it applicable to a case like the present. We cannot therefore agree with the High Court that r. VII justified the appointment of a fresh tribunal in the present case. This brings us to r. X. The High Court thought that this rule could not apply. Rule X is in these terms: "If any appointed arbitrator or umpire neglects or refuses to act or dies or become incapable of acting the Registrar shall substitute and appoint a new arbitrator or umpire as the case may be in manner aforesaid and the Court so reconstituted shall proceed with the arbitration with liberty to act on the record of the proceedings as then existing and on the evidence, if any then taken in the arbitration, or to commence the proceedings de novo. " We are of opinion that it was open to the Registrar under this rule to appoint a fresh tribunal because the earlier tribunal had become incapable of acting in view of the fact that its award had been set aside on the ground of misconduct. It has been urged on behalf of the appellant that the words "becomes incapable of acting" apply only to physical inability to act and in particular stress is laid on the collocation of words where these words follow the word "dies". We are however of opinion that these words cannot take their colour from the word "dies" and are a separate category by themselves and must be interpreted on their own. Now there is no doubt that generally speaking an arbitrator may become incapable of acting because of some physical cause, for example, he may fell ill or may go mad and so 116 on. But we do not think that these words only refer to physical incapacity; in our opinion, they refer to any kind of incapacity, which may supervene after the appointment of the arbitrators, even to an incapacity from before but which was not known to the parties, or in this case to the Chamber before they are appointed. We may in this connection refer to the opinion of Russel ("Russel on Arbitration", 15th Edn, p.7), where dealing with similar words in section 10(b) of the English Arbitration Act of 1950, it has been said as follows: "It would appear that the word 'incapable ' in section 10(b) must refer to some incapacity arising after the date of the appointment, or not known to the parties at that date. " Clearly therefore, the words "becomes incapable of acting" do not merely refer to physical incapacity but to any kind of incapacity which arises after the appointment or which was there before the appointment but was not known to the parties or to the Chamber in this case. Take, for example, the case of persons appointed by the Chamber to decide a dispute; after the appointment, one arbitratior acquires an interest in the subject matter of the dispute. Obviously such a person must be held to have become incapable of acting even though there is no question of any physical incapacity on his part. We are therefore of opinion that the words "becomes incapable of acting" in r. X are of wide amplitude and do not refer to cases only of physical incapacity but to any kind of incapacity arising after the appointment or even before the appointment provided it was not known to the parties, or to the Chamber in the present case. We cannot therefore agree with the High Court that r. X will not apply to the present case. What has happened in this case is that the previous tribunal made an award. That award has 117 been set aside on account of misconduct. In the circumstances we are of opinion that the previous tribunal has become incapable of acting as arbitrator to decide this dispute because of its misconduct. Further as the reference has not been superseded and the arbitration agreement subsists, it was in our opinion open to the Chamber, on the request of the respondent, to appoint another arbitral tribunal under r. X. Therefore, as there is a machinery by which fresh arbitrators can be appointed according to the terms of the arbitration agreement read with the rules of the Chamber and as the reference has not been superseded, the appointment of a fresh tribunal and the carrying on of the arbitration further were within the terms of the arbitration agreement. No other point has been urged on behalf of the appellant in this appeal to challenge the correctness of the decision of the High Court. Therefore, appeal No. 309 must fail. Turning now to appeal No. 525, it is enough to say that it is similar to appeal No. 309 in all respects except one. The difference is that in this case the appellant objected to the appointment of a fresh tribunal and an application was made under section 33 of the Act paying for the relief that no arbitration agreement existed after the earlier award had been set aside and therefore there could be no further arbitration. For reasons which we have already given this contention must fail, for it is not in dispute that this appeal also when the earlier award was set aside there was no supersession of the reference and the arbitration agreement is in the same terms as in the other appeal. What happened in this case was that the learned Single Judge allowed the application and revoked the authority of the Chamber to arbitrate. There was then an appeal by the present respondent 118 which was allowed on the basis of the Barangore Jute Factory case (1). Thereupon the present appeal has been brought to this Court by special leave. It has been contended on behalf of the appellant that the order under section 33 was not appealable in view of the provisions of section 39 of the Act and therefore the High Court had no jurisdiction in appeal to set aside the order of the learned Single Judge. This point as to jurisdiction was not taken before the appeal court nor has it been taken in the special leave petition to this Court or in the statement of case. It seems that the appeal was entertained in the High Court on the view that an appeal lay under the Letters Patent from an order of a Single Judge. Even if we were to entertain this argument the respondent will be entitled to ask for special leave to appeal against the order of the Single Judge and we will be justified having regard to the course of events and the view expressed in the companion appeal in granting leave after condoning the delay and in passing the same order which has been passed by the High Court in appeal. Technical requirements of procedure may of course be fulfilled by following the course suggested but no useful purpose will be served thereby. For reasons which we have already given the order of the appeal court is right. There is no reason to interfere with it and this appeal will also have to be dismissed. We therefore dismiss the appeals with costs one set of hearing costs. Appeal dismissed.

IN-Abs

Disputes which arose between the parties with respect to carrying out a contract were referred to the arbitration of the Bengal Chamber of Commerce in accordance with an agreement to refer disputes as and when they arose to the arbitration of the Chamber. The award of the Tribunal of Arbitration was set aside by the High Court. On an application for referring the matter for arbitration de novo another tribunal was constituted which made a fresh award. The questions which arose for decision were whether after the first award was set aside the reference to arbitration was exhausted and the arbitrator had become functus offcio and whether without a fresh arbitration agreement it was not possible to have the same dispute decided again by the arbitrator. ^ HELD, that the arbitrator became functus officio after he gave the award but that did not mean that in no circumstances could there be further arbitration proceedings where an award was set aside or that the same arbitrator could never have anything to do with the award with respect to the same dispute. Section 19 of the Arbitration Act empowered the Court not to supersede the reference and to leave the arbitration agreement effective even when it set aside the award and thereupon it would depend upon the terms of the arbitration agreement whether the arbitration proceedings could go on with respect to the same dispute or with respect to some other dispute arising under the arbitration agreement. Barangore Jute Factory vs Hulas Chand Rupchand. , Rallis India Ltd. vs B. V. Manickam Chetty, A.I.R. 1956 Mad. 369, and Firm Gulab Rai Girdhari Lal vs Firm Bansi Lal Hansraj, A.I.R. 1959 Punj. 102, approved. Morder vs Paimer, and Sutherland and Co . vs Hannevig Bros. Ltd. , referred to. In the present case the first award was set aside but as the reference had not been superseded and the arbitration 102 agreement subsisted it was open to the Chamber to appoint another tribunal under r. X of the Chamber Rules.

minal Appeal No. 115 of 1960. Appeal from the judgment and order dated September 18, 1.959, of the Calcutta High Court in Government Appeal No. 14 of 1956. 48 B. L. Anand, Ganganarayan Chandra and D. N. Mukherjee and P. K. Bose, for the appellant. K. B. Bagchi, section N. Mukherjee and P. K. BOSE for the respondent. April 12. The Judgment of the Court was delivered by KAPUR, J. This is an appeal against the judgment and order of the High Court of Calcutta in which a preliminary objection has been taken that the certificate under article 134 (1) (e) is not a proper certificate and should therefore be cancelled. A further question would arise as to whether it is a case in which special leave to appeal should be granted under article 136 if we find that the preliminary objection is well founded. The appellant was tried for murder under section 302 of the lndian Penal Code in the court of the Additional Sessions Judge at Alipore sitting with a jury. The jury returned a verdict of not guilty and the appellant was acquitted. Against that order the State took an appeal to the High Court and the Division Bench found that there was mis direction in the charge to the jury and therefore after consideration of the evidence it set aside the verdict of the jury, allowed the appeal and sentenced the appellant to imprisonment for life. The appellant then applied to the High Court for a certificate under article 134 (1) (c) which was granted by another Division Bench of the Court which had not heard the appeal. Three points were urged before the Bench hearing the applioation for certificate; (1) that there was unusual delay in delivering the judgment and the Division Bench hearing the appeal forget to consider many of the question of fact which were raised and argued before it. (2) that the High Court had no power to substitute its own estimate 49 of the evidence in an appeal against the order of acquittal in a trial by jury and (3) that as a matter of fact there were no such misdirection as caused a failure of justice or a mistrial and therefore the High Court was not entitled to examine the evidence. The learned Judges were of the opinion that there was no substance in points Nos. 2 and 3 but the first points did raise a question of importance. The learned Chief Justice observed: "The delay in delivering judgment is certainly a very unusual fact, and it may lead to the result that some of the points which were argued on behalf of the petitioner before the Division Bench were lost sight of by that learned judges while delivering their judgment. As already stated, these points have been summarised by the petitioner in that paragraph 18 of the petition. The points raised in that paragraph may or may not be good points, but if these points were advanced on behalf of the petitioner, the learned Judges of the Division Bench owed it to themselves to come to a decision on those points. In the arguments before us, it is not denied on behalf of the State that the points which have been summarised in paragraph 18 of the petition were canvassed by the defence Counsel at the hearing of the appeal and having regard to that fact, I am inclined to hold that the petitioner is entitled to a certificate under Article 134 (1) (c) of the Constitution on that ground". This is the ground on which the certificate was granted. This Court has had occasion to consider the grounds on which a certificate can be granted under Art.134 (1) (c) of the Constitution. hi Haripada Dey vs The State of West Bengal(1) it was held that the High Court has no jurisdiction to grant (1) ; , 641. 50 a certificate under article 134 (1) (c) on a mere question of fact and it is not justified in passing on such a question to the Supreme Court for further consideration thus converting the Supreme Court into a Court of Appeal on facts. Bbagwati J., there said: "Whatover may have been the misgiving" of the Learned Chief Justice. in the matter of a full and fair trial not having been held we are of the opinion that he had no jurisdiction to grant a certificate under article 134(1) (c) in a case where admittedly in his opinion the question involved was one of fact where in spite of a full and fair trial not having been vouchsafed to the appellant, the question was merely one of a further consideration of the case of the Appellant on facts". In a later case Sidheswar Granguly vs The State of West Bengal(1) the High Court of Calcutta granted a certificate on the ground that because of the summary dismissal of the appeal the appellant did not have the satisfaction of having been fully heard and it was held by this Court that was no ground for the grant of a certificate and that no certificate should be granted on a mere question of fact. In that case Sinha J., (as he then was) said ; "This Court has repeatedly called the attention of the High Courts to the legal pos ition that under article 134 (1) (c) of the Constitution, it is not a case of "granting leave" but of "certifying" that the case is a fit one for appeal to this Court. "Certifying" is a strong word and therefore, it has been repeatedly pointed out that a High Court is in error in granting a certificate on a mere question of fact, and that the High Court is not justified in passing on an appeal for determination by this Court when there are no (1) ; 51 complexities of law involved in the case, requiring the authoritative interpretation by this Court. " In the present case the High Court has granted leave on the mere ground that there was delay in delivering the judgment of the court and it may have led to the result that some of the points urged by counsel were lost sight of while delivering judgment. Those points 'were all questions of fact. The High Court observed that the questions which were sought to be raised in the petition might or might not be good points but if those points were advanced the judges " 'owed it to themselves to come to a decision on those points". After the pronouncements of this Court in two judgments it is some what surprising that the High Court should have granted a certificate on the mere ground of delay in pronouncing a judgment and the equally slender ground that some of the questions which were raised were forgotten at the time of the judgment. If the appellant did have any such real grievance it was open to him to apply to this Court under article ' 136 but the mere ground of delay is not a ground on which the High Court can certify a case to be fit one for appeal to this Court. In Banarsi Parshad vs Kashi Krishna Narain (1) and Radhakrishna Ayyar vs Swaminatha Ayyer(2) the Privy Council in construing section 109 (c) of the Code of Civil Procedure pointed out that under that clause for a certificate to be granted a case had to be of great or wide public importance. A mere ground of delay in giving a judgment does not, in our opinion, fall within the words "fit one for appeal to the Supreme Court" even if it is felt by the High Court that the delay might have led to omission to consider arguments on questions of fact and law. It is not open to a High Court to give certificates of fitness under this clause merely (1) [1900] L.R. 28 1 A. 11 (2) (1920) L.R. 48 I. A. 31. 52 because in its opinion the judgment of the court delivered by another Bench suffers from an error in regard to certain facts. In our view the certificate granted by the Calcutta High Court was not a proper certificate and must be cancelled. It was then urged that special leave should be granted under article 136 and the appeal be beard as the record had been printed and on that material if leave were to be granted the appeal could be properly argued. We have heard counsel for the appellant and we see no reason to grant special leave in this case. The appeal is therefore dismissed. Appeal dismissed.

IN-Abs

The appellant. was tried by the Sessions judge and acquitted of the charge of murder. On appeal the High Court convicted him and sentenced him to imprisonment for life. The appellant applied for and was granted a certificate under Art 134 (1) (c) of the Constitution for appeal to the Supreme Court on the ground that there was unusual delay in delivering the judgment of the High Court and that the judg ment failed to deal with certain questions of fact which were raised at the hearing of the appeal. Held, that the certificate granted by the High Court was not a proper certificate. The mere ground of delay in giving judgment did not fall within the words "fit one for appeal to the Supreme Court" in article 134 (1) (c). The points raised in the appeal before the High Court were questions of fact and the High Court was not justified in passing such questions on to the Supreme Court for further consideration thus converting the Supreme Court into a court of appeal on facts. Haripada Dev vs State of. West Bengal; , and Sidheswar Ganguly vs State of West Bengal, [1958] section C. R. 749, followed. Banaswmi Parshed vs Kashi Krishna Narain, (1900) L. R. 23 1. A I I and Radhakrishna Ayyar vs Swaminathna Ayyar, (1920) L. R. 48 I. A. 31, referred to.

Appeal No. 212 of 1962. Appeal by special leave from the judgment and order dated February 3, 1961, of the Madhya Pradesh High Court in M. P. No. 139 of 1960. N. C. Chatterjee and D. N. Mukherjee, for appellants. B. Sen and 1. N. Shroff, for respondent No. 1. B. P. Maheshwari, for respondent No. 2. 1962. April 16. The Judgment of the Court was delivered by AYYANGAR, J. By a communication dated April 5, 1930, from the Secretary to the Government of the Central Provinces addressed to the Commissioner Jabalpur Division, certain Nazul land was made available to the Municipal Committee of Jabalpur. In this letter the Secretary Stated "I am directed by the Governor in Council with the previous sanction of the Government of India to communicate the following orders of the Government of the Central Provinces : Under Section 38(1)(f) of the Central Provinces Municipalities Act, 1922, Government is pleased to transfer to the Municipal Committee, Jubbiilpore, free of premium and ground rent nazul land measuring. . . of the Jabbulpore town. The land shall vest in the Municipal Committee subject to the following conditions : (1) The land shall be used only for the purpose of a garden and no part of it 137 shall be used for any other purpose without the previous sanction of the Local Government. (2) If condition 1 is broken the land shall be liable to be divested under section 38(2) and resumed by Government .and no compensation whatsoever shall be payable to the Municipal Committee upon such resumption. (3) If the land. is resumed by Government for any Government purpose the provisions of Section 38(3) will apply. " Sub sections (2)& (3) of section 38 referred to ran: "38.(2) The State Government may, by notification, direct that any property which has vested in the committee shall cease to be so vested, and thereupon the property speci fied in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property. (3) Where any immovable property is transferred, otherwise than by sales, by the State Government to a committee, for public purpose, it shall be deemed to be a condition of such transfer, unless specially provided to the contrary, that, should the property be at any time resumed by the Government, the compensation payable therefor shall notwith standing any thing to the contrary in the Land Acquisition Act, 1894 (1 of 1894), in no case exceed the amount, if any, paid to the Govern ment for the transfer, together with the cost or the present value, whichever shall be less, of any buildings created or other works executed on the land by the committee. " 138 The land thus obtained was being used by the Municipal Committee in accordance with the condition of the transfer as a public garden. The Central Provinces & Berar Municipalities Act, 1922 was repealed by the City of Jabalpur Corporation Act, 1948 (M. P. III of 1950). Under this later enactment the Municipal Committee was substituted by the Jabalpur Corporation, the appellant before us and all properties movable and immovable which were previously vested in the Municipal Committee were transferred to and vested in the Corporation (vide section 71 of the Jabalpur Corporation Act), and by reason of the vesting, the appellant was in enjoyment of the transferred property. A hostel or boarding house of a public institution the Hitkarni Mahavidyalaya had been located in a building constructed to the north of the Public Garden maintained by the Corporation. A public road ran to the south of the Public Garden and as there was not a proper and convenient access from the Boarding house to the public road, the authorities of the Mahavidyalaya approached the State Government to obtain for them a narrow strip of land about 20 ft. wide at the eastern extremity of the Public Garden for the purpose of laying a public road which would provide this access. The Government considered this request reasonable and forwarded this request of the Mahavidyalaya, with a covering letter of their own dated April 28, 1959, to the Corporation for being complied with. The request however was not acceded to and thereafter on February 11, 1960, the Government of Madhya Pradesh issued a notification under section 81 of the Jabalpur Corporation Act notifying that the strip of land needed for making a road measuring 3, 940 sq. "stood divested" from the Corporation. , .Section 81 runs in these terms 139 "81. The Provincial Government may resume any immovable property, transferred to the Corporation by itself or by any local authority, where such property is required for a public purpose, without payment of any compensation other than the amount paid by the Corporation for such transfer and the market value at the date of resumption of any buildings or works subsequently reacted or executed thereon by the Corporation with the intention that such buildings or works should be permanent : Provided that compensation need not be paid for buildings or works constructed or erected in contravention of the terms of the transfer." (The expression 'Provincial Government ' was amended so as to read 'State Government ' by the Adaptation of Laws Order). Complaining that this notification was illegal and beyond the jurisdiction of the State Government the Jabalpur Corporation moved the High Court of Madhya Pradesh for relief under Art . 826 of the Constitution praying for the issue of the writ of mandamus quashing the notification of the government as without jurisdiction and forbidding the enforcement of that order. This was opposed both by the State of Madhya Pradesh as well as the Hitkarini Sabha and the learned Judges dismissed this petition. An application for a certificate of fitness for appeal to this Court filed by the Corporation was also dismissed and therefore the present appeal has been filed by special leave obtained under article 136 of the Constitution. The submission of Mr. Chatterji learned Counsel for the appellant was naturally directed to showing that the reasoning adopted by the learned judges of the High Court was erroneous. The 140 reasoning was briefly as follows: The learned Judges assumed, accepting a submission made on behalf of the appellant Corporation during the arguments on the writ petition, that the authority which effected the transfer of the property to the Municipal Committee of Jabalpur by the order which we have set out as the opening of this judgment was not the Government of Central Provinces & Berar but the Central Government. Starting from this premise, they concluded that the notification could not be sustained under the terms of section 81. Section 81, it will be seen, empowers the State Government to resume immovable property transferred to the Corporation by itself when such property is required for a public purpose. If the property in question had been transferred by the Central Government, the argument ran that section 81 was inapplicable. It should be added that both in the basic assumption that it was the Central and not the Local Government the predecessor of the State Government that had effected the transfer, as well as in the further consequence that the exercise of the power under section 81 of the Corporation Act was ineffective, the learned Judges were aided by concessions accepting the correctness of this position which appear to have been made by the Deputy Advocate General who represented the State before them. , We shall have occasion to refer to this aspect later. Meanwhile to proceed with the reasoning of the learned Judges, section 81 being assumed not to be available to sustain the impugned notification, the learned Counsel for the State appears to have relied on the provisions of section 38 of the Act of 1922 as enabling the State Government to resume the land, and this notwithstanding that by the Jabalpur Corporation Act III of 1950 the entirety of the C. P. & Berar Municipalities Act of 1922 including section 38 bad been expressly repealed. The learned Judges considered that this was possible by 141 reason of a saving contained in section 3 (1) of the Jabalpur Corporation Act which reads "3. (1) All debts and obligations incurred, all contracts entered into with and all matters and things engaged to be done by or for, the Municipality of Jubbulpore, before this Act comes into force shall be deemed to have been incurred, entered into with or engaged to be done by, or for, the Corporation as constituted under this Act." Mr. Chatterji learned Counsel for the appellant Corporation submitted to us that the learned Judges of the High Court bad wrongly applied the saving in section 3 (1) of Act III of 1940 to sustain the resumption of land under the impugned notification. He consider, however, that in view of our conclusion that the impugned notification fell clearly within the power vested in State Government under section 81 of the Jabalpur Corporation Act, it is not necessary to pronounce upon the correctness of the submissions made to us on the construction of section I (1) of that Act, There could not be any dispute that if the authority that had transferred the property covered by the impugned notification, to the Municipal Committee of Jabalpur was the Government of Central Provinces & Berar, the right of the suceessor Government viz. ' the State Government of Madhya Pradesh to take over the land from the Corporation for the purpose of forming a public road would manifestly be within their power under a. 81. That the Corporation of Jabalpur was the successor in title to the Municipal Committee of Jabalpur and. ' that the property which was vested in the Municipal Committee of Jabalpur was transferred to and became vested in the appellant Corporation under section 71 of the Jabalpur Corporation Act, were never in dispute and indeed formed the 142 very basis of the appellant 's petition to the High Court. If any particular property had vested in the Municipal Committee subject to its being divested in particular contingencies, that the property in the hands of the Corporation would be held subject to the same obligations or disabilities could also not be in controversy. Nor could it be contested that the making of a public road is "a public purpose" for which land may be resumed by the State under section 81. What we desire to point out is that if the State of Madhya Pradesh was or must be deemed to have been the transferee of the property under the communication dated April 5, 1930, the validity of the notification under section 81 could not be challenged. As we have pointed out earlier, the learned Judges proceeded, however on the assumption that it was not the Government of C. P. & Berar but the Central Government that was the transferrer of the land in question. There ' was, however, no basis upon which the learned Judges could have rested this assumption. In the first place, in the writ petition by which the appellant Corporation challenged the validity of the notification it did not deny the fact that it was the Government of C. P. & Berar that had effected the transfer, and, in fact, the allegations in the petition proceeded on the basis that it was the State Government that had done so but the contention raised was that on a proper construction of is. 81 it applied only to transfers made after the Jubbulpore Corporation Act, 1948 came into force an untenable contention which has not been persisted in. The question as to who a transferor is obviously a question of fact or at best a mixed question of law and fact and when a party in a writ petition does not allege any such fact, it stands to reason that he ought not to be permitted to travel beyond the facts stated, 143 at the stage of the arguments, To confine a party to his pleadings, particularly to his allegations as regards facts is dictated not merely by the need for orderliness in these proceedings but for avoiding surprise to the other party and consequent injustice resulting therefrom. Save in exceptional cases, parties should be held strictly to their pleadings and if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences. This salutary rule was not adhered to in this case, and the departure from the pleadings which the appellant was permitted to adopt during the course of its arguments before the High Court has led to injustice because thereby the Counsel for the State who was apparently not prepared, to meet an argument not raised in the petition, made submissions at the spur of the moment which were not justified by the true state of affairs. In our opinion, on the allegations made in the petition by the appellant Corporation it ought not to have been permitted to put forward a case that the State Government was not the transferor of the property and the learned Judges of the High Court should have proceeded on the basis of the pleadings in the case. Apart from this question of pleading, we consider that there is no merit in the contention even otherwise. We have already set out the terms by which the transfer of the land was communicated to the Municipal Committee. The preamble recites that is what being communicated is the order of the Government of the Central Provinces. The words 144 of conveyance are in the second paragraph and they read: "Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee. . . ". The expression "Government" here obviously, in the context, means the Government of the Central Provinces. Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states: "The land shall be liable to be. divested under section 38 (2) and resumed by Government ". "Government" here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub section referred to. Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to "Government" again is to the "State Government". On the terms of the document therefore it was the Government of the Central Provinces that made the grant the predecessor of the State Government. We find therefore that there is no factual foundation for the submission which was apparently made before the High Court that the transfer in the present case was by the Central Government. No doubt, the communication refers to the fact that previous to making the grant the Government of C. P. & Berar had obtained the approval of the Central Government, but that was merely a matter of administrative arrangement between the Central and Local Governments which is totally irrelevant for determining the identity of the Government which made the grant. Besides, the corporation having accepted the grant from the State Government was obviously estopped from contending that 145 the land of which it continued in possession under that grant was not one by the State Government or that the State Government had not the authority to make the grant. If such contention is both not open to the Corporation and not tenable on the merits. , it would follow that the impugned notification was fully justified by the, provisions under section 81 of the Jabalpur Corporation Act. We therefore hold that the impugned notification was valid, though for reasons very different from those on which its validity was sustained by the learned Judges of the High Court. The appeal fails and is dismissed. In view however of the concession made by the respondent before the High Court which misled the learned Judges we consider it proper to direct that each party should bear its costs throughout. Appeal dismissed.

IN-Abs

Acting under section 38 (1) (f) of the C. P. Municipalities Act 1922, the Provincial Government, with the sanction of the Government of India, transferred certain Nazul Lands to the Municipal Committee to be used for the purposes of a garden. The 1922 Act was repealed by the City of Jabalpur Corporat ion Act, 1948, which replaced the Municipal Committee by the Jabalpur Corporation. Under section 81 of the Corporation Act the State Government issued a notification notifying that a portion of this land needed for making a road stood divested from the Corporation. The Corporation filed a writ petition before the High Court challenging the notification. On a concession made by the counsel for the State that the transfer of the land had been made by the Central Government the High Court held that the notification could not be sustained under section 81 which was applicable only to transfers made by the State Government But the High Court sustained the notification under section 38 of the repealed 1922 Act, relying upon the saving in section 3 (1) of the Corporation Act. Held, that the transfer of the land in fact had been made by the State (Provincial) Government and the notification was fully justified by the provisions of section 81 of the Corporation Act. There was no basis on which the High Court could have based its assumption that the transfer was by the Central Government. The allegations in the writ petition proceeded on the basis that the transfer was by the State Government. On the pleadings the appellant ought not to have been permitted to put forward a case that the State Government was not the transferor of the property. To confine a party to his pleadings particularly in respect of facts, is dictated not merely by the need for orderliness but for avoiding surprise to the other party. Save in exceptional cases, parties should be held strictly to their pleadings, and if there is need to amend them, the Court should insist on formal amendments being affected. 136 in the present case, on the terms of the order transferring the land it was clear that the transfer was made by the Provincial Government.

Appeal No. 476 of 1961. Appeal by special leave from judgment and order dated January 5, 1955, of the Punjab High Court of (Circuit Bench) at Delhi in Civil Misc. No. 71/D of 1954. N. C. Chatterjee, Hardayal Hardy and N. N. Keswani, for the appellant. R. section Narula, for the respondents Nos. 1 to 3. 1962. April 18. The Judgment of the Court was delivered by AYYANGAR, J. This is an appeal by special leave against a judgment of a learned Single Judge of the Punjab High Court holding that section 7 A of the Delhi and Ajmer Rent Control Act, 1947 (hereinafter called the Act), was unconstitutional as violative of the fundamental right guaranteed by article 14 of the Constitution. The first respondent Ram Nath owns a building in Delhi of which, among others, the appellant company was a tenant. The appellant moved the Rent Controller. Delhi, under section 7A of the Act for fixation of the fair rent of the portion in its occupation. These proceedings have had a chequered history which it is not material to set out, but suffice it to say that the Rent Controller, 244 Delhi, computed the fair rent for the entire building at Rs. 565/ p. m. and the fair rent payable by the appellant at Rs. 146/ per month. It is necessary to mention that under the Act the Rent Controller would have bad jurisdiction to entertain 'the appellant 's application for the fixation of fair rent and for so fixing it only if the construction of the building in question was completed after March 24, 1947, but if the construction of the building was completed earlier the ordinary Civil Courts and not the Rent Controller would have had jurisdiction to determine the matter. The date of the completion of the first respondent 's building therefore loomed large in the enquiry before the Rent Controller and that authority recorded a finding on this matter adverse to the first respondent in his order. The landlord first respondent preferred an appeal against the order of the Rent Controller to the learned District Judge, Delhi, but the appeal was dismissed. Thereafter he moved the High Court of the Punjab under article 227 of the Constitution challenging the correctness and propriety of every finding by the Rent Controller and of the District Judge on appeal. This petition came on for hearing before a learned Single Judge of the High Court. A Division Bench of the High Court had sometime previously held in another batch of cases (British Medical Stores vs Bhagirath Mal) (1) arising under the Act, that section 7A was unconstitutional and void and following this decision he allowed the petition of the first respondent and set aside the order of the Rent Controller as without jurisdiction, without considering the other matters which would arise if the sect ion was valid and the Rent Controller had jurisdiction. From this decision of the learned Single Judge, the appellant preferred an appeal under the Letters Patent to a Division Bench. (1) [1955] 1. L. R. 8 Punjab, 639. 245 Mean while the judgement in British Medical Stores vs Bhagirath Mat (1) was brought tip by way of appeal to this Court, and as the appeal was getting ready to be heard, the appellants applied for and obtained special leave to appeal to this Court even during the pendency in the High Court, of the appeal by it under the Letters Patent. The Letters Patent appeal was thereafter withdrawn by the appellant. The appeal in the British Medical Stores case (1) was heard by this Court and the same was allowed by a judgment dated August 2, 1961, and this Court held reversing the judgment of the Punjab High Court that section 7 A of the Act was valid It would thus be seen that the only point which the learned Judge considered and on which the revision petition of the landlord first respondent was allowed no longer subsists and hence the appellant is entitled to have the appeal allowed. As the learned Single Judge did not consider the other objections raised by the first respondent to the order of the Controller fixing the standard fair rent payable by the appellant, the appeal has to be remanded to the High Court for being dealt with according to law. Before concluding it is necessary to advert to a preliminary objection to the hearing of the appeal raised by learned Counsel for the landlord respondent. His submission was that the special leave which was granted by this Court exparte should be revoked as having been improperly obtained. The facts in relation thereto were these. The judgment of the learned Single Judge to appeal from which the leave was granted was dated January 5, 1955, and the application to this Court seeking leave was (1) Punjab 639. (2) See Roshan Lal Mehrau .Ishwar Dass [1962] 2 S.C.R.947. 246 made on January 5, 1959, i.e., after a lapse of four years. It is obvious that it was an application which had been filed far beyond the period of limitation prescribed by the rules of this Court. Learned Counsel for the respondent urged that there were no sufficient grounds for condoning that long. delay and that we should therefore revoke the leave. We are not disposed to accede to this request for revoking the leave in the peculiar circumstances of this case. Learned Counsel invited our attention to a few decisions in which leave granted exparte was revoked at the stage of the hearing of the appeal on an objection raised by the respondent; but we do not consider that the facts of the present appeal bear any analogy to those in the decisions cited. In the first place, there was no by passing the High Court, because the appellant had filed an appeal under the Letters Patent and it was during the pendency of that appeal that he moved this Court for leave. Next, there was no suppression of any fact which would have relevance to the granting or withholding of the leave, and the exact position as it stood at the time the petition was tiled was set out in it. Thirdly, it is obvious that if the delay had not been condoned and leave refused when application therefor was made in January 1959, the appellant would have prosecuted his Letters Patent appeal and he could obviously have come up here if the decision went against him. In fact, the grant of special leave in the circumstances of this case, merely served to shorten the proceedings, and this Court acceded to the petition for leave obviously because the appeal in this Court from judgments in the case of the British Medical Stores etc. (1) were getting ready for bearing and there was some advantage if the appellant was in a position, to intervene in those other appeals. In (1) Punjab 639. 247 view of these considerations we are of the opinion that this is not a case in which the leave should be revoked. Nevertheless, we consider that we should add that, except in very rare cases, if not invariably, it should be proper that this Court should adopt as a settled rule that the delay in making an application for special leave should not be condoned ex parte but that before granting leave in such cases notice should be served on the respondent and the latter afforded an opportunity to resist the grant 'of the leave. Such a course besides being just, would be preferable to having to decide applications for revoking leave on the ground that the delay in making the, same was improperly condoned years after the grant of the leave when the Court naturally feels embarrassed by the injustice which would be caused to the appellant if leave were then revoked when he would be deprived of the opportunity of pursuing other remedies if leave had been refused earlier. We would suggest that the rules of the Court should be amended suitably to achieve ' this purpose. The result is that the appeal is allowed and the order of the learned Single Judge accepting the revision petition under article 227 preferred by the landlord first respondent is set aside. The case is remanded to the High Court for considering the ' petition of the respondent in accordance with law and on the footing that section 7 A of the Rent Control Act is a valid piece of legislation. It is admitted that the point as regards the constitutionality of section 7 A of the Rent Control Act was not raised by the landlord respondent, and in the circumstances of the case we direct the parties to bear their own costs in this Court. The costs in the High Court will be as directed by that Court. Appealed allowed. To be reprinted.

IN-Abs

Against the judgment of the Single judge of the Punjab High Court dated January 5, 1953, in which he followed the decision of a Division Bench holding that section 7A of the Delhi and Ajmer Rent Control Act, 1947, was unconstitutional and void, the appellants preferred an appeal under the Letters Patent. Meanwhile the judgment or the Division Bench was brought up by way of appeal to the Supreme Court, and as the appeal was getting ready to be heard, the appellants made an application on January 5, 1959, for special leave to appeal to the Supreme Court against the judgment of the Single judge. No notice was given to the respondent to the application, and special leave was granted ex parte. The Letters Patents appeal was thereafter withdrawn by the appellants. When the appeal came on for hearing in due course, the respondent raised an objection to the hearing of the appeal on the grounds that the application for special leave was barred by limitation, that there were no sufficient reasons for condoning the long. delay of four years, and that the special leave granted ex parte should be revoked. 243 Held, that, in the peculiar circumstances of the case, leave should not be revoked. Expect in very rare cases, if not invariable, the Supreme Court should adopt as a settle rule that the delay in making an application for special leave should not condoned ex parte but that before granting leave in such cases notice should be served on the respondent and the latter afforded an opportunity to resist the grant of the leave. Desirability of the Rules of the Supreme Court being amended suitably pointed out.

Appeal No. 154 of 1952. Appeal from the Judgment and Decree dated the 23rd June, 1949, of the High 131 1010 Court of Judicature at Bombay (chagla C. J. and Gajendragadkar J.) in Second Appeal No. 557 of 1945 against the Judgment and Decree dated the 19th March, 1945, of the Court of Small Causes, Poona, in Civil Appeal No. 175 of 1943, arising from the Decree dated the 31st March, 1943, of the Court of the Extra Joint Sub Judge of Poona in Suit No. 858 of 1941. C. K. Daphtary, Solicitor General for India (J.B. Dadachanji, with him) for the appellant. V. M. Tarkunde for the respondents. February 27. The judgment of the Court was delivered by MAHAJAN J. This is an appeal by defendant No. I from the decree of the High Court of Judicature at Bombay in Second Appeal No. 557 of 1945, whereby the High Court confirmed the decree of the lower courts granting possession of land to the respondents on the forfeiture of a lease. The appeal is confined to survey No. 86/2 at Mundhava in Poona district. The principal question arising for decision in the ap. peal is whether notice as contemplated by section III (g) of the is necessary for the determination of a lease for non payment of rent even where such lease was executed before the coming into force of the . The only other question that falls for determination is whether the High Court should have interfered with the discretion of the lower courts in refusing relief against forfeiture in the circumstances of this case. The present respondents are the daughter and grand sons of the original plaintiff Vinayakbhat. His adoptive mother was Ramabai. She owned two inam lands at Mundhava which were then numbered Pratibhandi Nos. 71 and 72. Present survey Nos. 86/1 and 86/2 together correspond to old Pratibhandi No. 71. On 1st July, 1863, Ramabai, while she was in financial difficulties, passed a permanent lease of both these numbers to one Ladha Ibrahim Sheth. The lessee paid a premium of Rs. 999 for the lease, and also agreed to pay 1011 a yearly rent of Rs. 80 to Ramabai during her lifetime and after her death a yearly amount equal to the assessment of the two lands to the heirs of Ramabai. The lease provided that in default of payment of rent the tenant 's rights would come to an end. On 18th August, 1870, Ladha Ibrahim sold his tenancy rights to one Girdhari Balaram Lodhi for Rs. 7,999. The sale deed provided that in default of payment of rent to Ramabai or her heirs, the purchaser would have no rights whatsoever left over the property. On the same day the purchaser passed a rent note in favour of Ramabai. The rent note provided for the payment of the agreed rent in the month of Pousb every year, and stated that in case of default the tenant or his heirs would have no right over the land. Defendant No. 1 and the other defendants are the grandsons of Seth Girdhari Balaram. In spite of the nullity clause in the lease it appears that the lessee has been more or less a habitual defaulter in the payment of rent. In the year 1913, rent for six years was in arrears. Vinayakbhat filed Suit No. 99 of 1913 in the court of the II Class Sub Judge, Poona, against the present defendants for possession of the demised premises on the ground of forfeiture. A number of defences were raised by them. Inter alia, it was pleaded that as no notice had been given to them the forfeiture was not enforceable. These contentions were negatived but the court granted relief against forfeiture. Defendant No. 1 was a minor at that time and became a major in or about 1925. In the year 1928 again rent for two years was in arrears. Vinayakbhat filed Civil Suit No. 258 of 1928 against the present defendants for possession on the ground of forfeiture. The plaintiff subsequently waived the forfeiture by accepting three years ' rent which by then had fallen in arrears and costs of the suit. In the year 1931 rent for three years again fell into arrears. The amount was then sent by money order and the landlord accepted it. In the year 1934 again rent for three years remained unpaid. At that time proceedings were started by Government for the acquisition of the old survey No. 72. 1012 The landlord claimed that he was entitled to the whole compensation money as the tenant 's rights had ceased by forfeiture for non payment of rent. Defendant No. 1 through his pleader sent a notice to Vinayakbhat to come and take the arrears of rent. 'He agreed and accepted the arrears of rent and the forfeiture was again waived. As a result of this the defendants got Rs. 32,000 by way of compensation for the permanent tenancy rights in old survey No. 72, while Vinayakbhat got Rs. 1,400 for compensation for the acquisition of his rights as landlord in that land. In 1938 rent for four years was again in arrears. Vinayakbhat filed Civil Suit No. 982 of 1938 in the court of the I Class Sub Judge at Poona against all the present defendants for possession of survey Nos. 86/1 and 86/2 on the ground that the lease had determined by forfeiture for non payment of rent. In that suit defendant No. 1 pleaded that there was no forfeiture because no rent was fixed in respect of the suit property and also because it was for the, plaintiff to recover rent and not for the defendants to go to the plaintiff and pay it. These contentions were negatived. It was held that forfeiture had occurred but relief against forfeiture was again granted. On plaintiff 's appeal in this case, the learned District Judge refused to interfere with the discretion of the trial judge in granting relief against forfeiture but observed that the defendants having obtained relief against forfeiture thrice before should not expect to get it for a fourth time if they again make default in the payment of rent. The default which has given rise to the present suit occurred on 28th January, 1941, and the plaintiff filed the suit out of which this appeal arises for possession on the ground of forfeiture and for the arrears of rent which remained unpaid. It was alleged in the plaint that the rent due on 28th January, 1941, was not paid, though demanded. Plaintiff asked for possession of survey Nos. 86/1 and 86/2 after removal of the structures thereon. Defendant No. 1 pleaded that as a result of partition rights in survey No. 86/2 had fallen to 1013 his share, that according to the terms of the rent note it was for the plaintiff to approach the defendants and. not for the defendants to go to the plaintiff and pay it, ' ' that as the plaintiff did not approach the defendants and no demand for rent was made, no forfeiture occurred, that defendant No. I did offer the rent to the plaintiff, but the plaintiff fraudulently refused to accept it, that the plaintiff ought to have sent a notice according to law if he wanted to enforce the right of forfeiture and that without prejudice to the above contentions he should be granted relief against forfeiture. The trial court decreed the plaintiff 's suit and negatived the contentions raised by the defendants. In awarding Possession of the entire property to the plaintiff the trial court imposed a condition that defendant No. I should continue to be in possession of the two structures in survey No. 86/2 till the end of March, 1950. On the question whether a notice was necessary before the lease could be terminated, the trial court expressed the view that the provision in the rent note that on non payment of rent the rights of the tenant would come to an end was a clause of nullity and not merely a clause of forfeiture and that the lease was therefore determined under section 111 (b) and not under section III (g) of the and that no notice as required by section 111 (g) was necessary for terminating the lease in suit. On the issue whether forfeiture should be relieved against, the trial court said that relief could have been given to the lessee against forfeiture under section 1 14 had it not been for the fact that the defendants had disentitled themselves to relief by contumacious conduct on their part, that even this paltry rent had never been paid in time during the last twenty years at any rate, and that after defendant No. I had attained majority and got the estate in his charge in 1922 23 he had uniformly defaulted in the payment of rent and that the defendants raised totally false defences and in every suit a false excuse was set up in an attempt to justify the arrears of rent. 1014 In pursuance of the trial court 's decree plaintiff took possession of all the suit lands in April, 1943, except one acre which he took possession on 13th September, 1943. Defendant No. I remained in possession of the two structures on survey No. 86/2. Against the decision of the trial judge defendant No. I alone filed an appeal to the District Judge of Poona. The lower appellate court confirmed the decree of the trial court with two modifications. Defendant No. I was allowed to remove the buildings on survey No. 86/2 and also the trees therein within three months. On the issue whether a notice was necessary, the appellate court found that the lease came to an end not under section 111(b) but under section 111 (g) of the Transfer of Pro perty Act, but that no notice of forfeiture was necessary as the lease had been executed prior to the coming into force of the . The appellate court saw no valid reason for interfering with the finding of the trial judge on the question concerning relief against forfeiture. From this appellate decree defendant No. I filed a second appeal to the High Court of Judicature at Bombay. The plaintiff filed cross objections in regard to the trees and costs. The High Court dismissed the appeal and allowed the cross objections. An application was made for leave to appeal to the Supreme Court and it was granted with reference to survey No. The law with regard to the determination of a lease by forfeiture is contained is section III (g) of the . Under that provision a lease is determined by forfeiture in case the lessee breaks an express condition which provides that on breach thereof the lessor may re enter, or in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself, or the lessee is adjudicated an insolvent and the lease provides that the lessor may reenter on the happening of such event and a certain further act is done by the lessor as thereinafter mentioned. Prior to its amendment by Act XX of 1929, this sub section further provided 1015 "And in any of these cases the lessor or his transferee does some act showing his intention to determine the lease. " By Act XX of 1929, this subsection was amended and the amended sub section now reads: "And in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease. " Section 111 (g) in terms makes the further act an integral condition of the forfeiture. In other words, without this act there is no completed forfeiture at all. Under the old section an overt act evidencing the requisite intention was essential. As the law stands today under the Act, notice in writing by the landlord is a condition precedent to a forfeiture and the right of re entry. Section 63 of Act XX of 1929, restricts the operation of this amendment to transfers of property made after 1st April, 1930. The lease in this case was executed before the came into force in 1882. The amendment therefore made in this sub section by Act XX of 1929 not being retrospective, cannot touch the present lease and it is also excluded from the reach of the by the provisions of section 2. The position was not seriously disputed in the High Court or before us that the statutory provisions of section 111(g) as such cannot be made to govern the present lease which was executed in the year 1870. It was however strongly argued that the amendment made in 1929 to section 111(g) of the Act embodies a principle of justice, equity and good conscience and notwithstanding section 2 of the Act, that principle was applicable in this case and there can be no forfeiture unless notice in writing to the lessee of his intention to determine the lease by the lessor bad been given. It is axiomatic that the courts must apply the principles of justice, equity and good conscience to transactions which come up before them for determination even though the statutory provisions of the Transfer of 1016 Property Act are not made applicable to these transactions. It follows therefore that the provisions of the Act which are but a statutory recognition of the rules of justice, equity 'and good conscience also govern those transfers. If, therefore, we are satisfied that the particular principle to which the legislature has now given effect by the amendment to section 111 (g) did in fact represent a principle of justice, equity and good conscience, undoubtedly the case will have to be decided in accordance with the rule laid down in the section, although in express terms it has not been made applicable to leases executed prior to 1929 or even prior to the coming into force. The main point for consideration thus is whether the particular provision introduced in sub section (g) of section 111 of the in 1929 is but a statutory recognition of a principle of justice, equity and good conscience, or whether it is merely a procedural and technical rule introduced in the section by the legislature and is not based on any well established principles of equity. The High Court held, and we think rightly, that this provision in sub section (g) of section III in regard to notice was not based upon any principle of justice, equity and good conscience. In the first instance it may be observed that it is erroneous to suppose that every provision in the and every amendment effected is necessarily based on principles of justice, equity and good conscience. It has to be seen in every case whether the particular provisions of the Act relied upon restates a known rule of equity or whether it is merely a new rule laid down by the legislature without reference to any rule of equity and what is the true nature and character of the rule. Now, so far as section 111 (g) of the Act is concerned, the insistence therein that the notice should be given in writing is intrinsic evidence of the fact that the formality is merely statutory and it cannot trace its origin to any rule of equity. Equity does not concern itself with mere forms or modes of procedure. If the purpose of the rule as to notice is to indicate the intention of the lessor to 1017 determine the lease and to avail himself of the tenant 's breach of covenant it could as effectively be achieved by an oral intimation as by a written one without in any way disturbing the mind of a chancery judge. The requirement as to written notice provided in the section therefore cannot be said to be based on any general rule of equity. That it is not so is apparent from the circumstance that the requirement of a notice in writing to complete a forfeiture has been dispensed with by the legislature in respect to leases executed before 1st April, 1930. Those leases are still governed by the unamended sub section (g) of section 1 1 1. All that was required by that sub section was that the lessor was to show his intention to determine the lease by some act indicating that intention. The principles of justice, equity and good conscience are not such a variable commodity, that they change and stand altered on a particular date on the mandate of the legislature and that to leases made between 1882 and 1930 the principle of equity applicable is the one contained in sub section (g) as it stood before 1929, and to leases executed after 1st April, 1930, the principle of equity is the one stated in the sub section as it now stands. Question may also be posed, whether according to English law a notice is a necessary requisite to complete a forfeiture. The English law on the subject is stated in Foa 's General Law of Landlord and Tenant (7th edition) at page 316 in these terms : " In no case can the lessee take advantage of the proviso for re entry in order to avoid the lease, even where it is in the form (not that the lessor may reenter, but) that the term shall cease, or that the lease shall be void for all purposes, or 'absolutely forfeited '; for expressions of this kind only mean that the tenancy shall determine at the option of the lessor. . This has been usually expressed by saying that the lease is voidable and not void; but the true principle appears to be that the lease does become void to all intents and purposes, though this is subject to the condition that the party who is seeking to set up its invalidity 132 1018 is not himself in default, for otherwise he would be taking advantage of his own wrong. It follows that where the proviso makes the lease void, the landlord must, in order to take advantage of it, do some unequivocal act notified to the lessee, indicating his intention to avail himself of the option given to him. The service upon the lessee in possession of a writ in ejectment is sufficient". The Law of Property Act, 1925, by section 146 has consolidated the law in England on this subject. The provision with regard to the giving of notice before a right of re entry accrues to the landlord is expressly excluded by sub section (11) in cases of re entry on forfeiture for non payment of rent. In England it is not necessary in case of non payment of rent for a landlord to give notice before a forfeiture results. It cannot, therefore, be said that what has been enacted in sub section (g) of section II 1 is a matter which even today in English law is considered as a matter of justice, equity and good conscience. In English law the bringing of an action which corresponds to the institution of a suit in India is itself an act which is definitely regarded as evidencing an intention on the part of the lessor to determine a lease with regard to which there has been a breach of covenant entitling the lessor to re enter : vide Toleman vs Portbury and Prakashchandra Das vs Rajendranath Basu(2). In India there is a substantial body of judicial authority for the proposition that in respect of leases made before the forfeiture is incurred when there is a disclaimer of title or there is non payment of rent. Any subsequent act of the landlord electing to take advantage of a forfeiture is not a condition precedent to the right of action for ejectment. The bringing by a landlord of a suit for ejectment is simply a mode of manifesting his election. The principle of these cases rests upon the ground that the forfeiture is complete when the breach of the condition or the denial of title occurs. But as it is left to the lessor 's option to take advantage of it or not, the (1) L.R. 6 Q.B. 245.(2) (1931)58 cal. 1019 election is not a condition precedent to the right of action and the institution of the action is a sufficient manifestation of the election. The same principle is applied for actions for relief on the ground of fraud. [vide Padmabhaya vs Ranga(1) ; Korapalu vs Narayana(2)]. In Rama Aiyangar vs Guruswami Chetty(3),it was saidthat as the lease was not governed by the , the institution of the suit was a sufficient determination of the lease and no other previous act determining the same such as a notice to quit was necessary for maintaining the action. The same view was expressed in Venkatachari vs Rangaswami Aiyar(4). In Venkatarama Aiyar vs Ponnuswami Padayachi(5), it was observed that the forfeiture will not be produced merely by the unilateral act of ceasing to comply with the conditions upon which the property is held, but it must involve also some expression of intention to enforce the forfeiture on the part of the lessor. In other words, the lessee cannot by his unilateral act terminate the lease, and cannot take advantage of his own wrong. That is an intelligible principle and is based on a maxim of equity. But the defaulting lessee cannot claim the benefit of a notice in writing to complete the forfeiture he has incurred. The lessor has to simply express an intention that he is going to avail of the forfeiture and that can be done by the filing of a suit, as in English law, in all cases not governed by the . Again in Ramakrishna Mallaya vs Baburaya (6), it was said that in an ejectment suit based on leases executed prior to the , no act on the part of the landlord showing that he elected to take advantage of the forfeiture for non payment of rent was necessary. The contrary view expressed in Nourang Singh vs Janardan Kishor(7), that the institution of a suit for ejectment could not be regarded as a requisite act to show the intention of a (1) Mad. 161. (2) Mad. (3) (4) (1919) 36 M.L.J. 532. (5) A.I.R. 1935 Mad. (6) (7) Cal. 469, 1020 landlord to determine a lease within the meaning of section 111 (g), was dissented from in Prakashchandra Das vs Rajendranath Basu(1); and it was said that there is no special reason why the lessor 's election must be made at some time prior to the institution of a suit and that it was difficult to find a raison d 'etr for the view that the cause of action has not completely accrued if the election is made at the moment when the suit is instituted, i.e., the moment the plaint is presented. The cause of action for the suit can arise simultaneously with the presentation of a plaint. In our opinion the provision as to notice in writing as a preliminary to a suit for ejectment based on forfeiture of a lease is not based on any principle of justice, equity or good conscience and cannot govern leases made prior to the coming into force of the , or to leases executed prior to 1st April, 1930. The rights and obligations under those leases have to be determined according to the rules of law prevailing at the time and the only rule applicable seems to be that a tenant cannot by his unilateral act and by his own wrong determine the lease unless the lessor gives an indication by some unequivocal expression of intention on his part of taking advantage of the breach. On no principle of equity is a tenant entitled to a notice in writing telling him that the lease has been determined. The High Court was therefore right in the view that it took of the matter and there are no valid reasons for taking a contrary view. Considerable reliance was placed by Mr. Daphtary on the decision of Chandrasekhara Aiyar J. sitting singly in the case of Umar Pulavar vs Dawood Rowther(2), wherein the learned Judge said that section 111 (g) as amended in 1929 embodied a principle of justice, equity and good conscience and must be held to govern even agricultural leases and where there was a forfeiture by denial of the landlord 's title, a notice in writing determining the lease was necessary. it was there observed that the principle so embodied (1) Cal. (2) A.I.R. 1947 Mad. 1021 in the sub section as a result of the amendment becomes, so to say, a principle of justice, equity and. good conscience. The learned Judge for this view placed reliance on the decision in Krishna Shetti vs Gilbert Pinto( '), in which it was said that the was framed. by eminent English lawyers to reproduce the rules of English law, in so far as they are of general. application and rest on principle as well as authority and its provisions are binding on us as rules of justice, equity and good conscience. With respect, we are constrained to observe that this is too broad a statement to make. It seems that the attention of the learned judges was not drawn to the fact that the provision as to notice for determining a lease for nonpayment of rent was not a part of the English law. It also does not seem to have been fully appreciated that the rule enunciated in sub section (g) of section 111 prior to its amendment in 1929 and which still governs leases executed before 1st April, 1930, OD the reasoning of the decision would also be a rule of justice, equity and good conscience and according to it the institution of a suit for ejectment would be sufficient indication on the part of the landlord for determination of the lease and a notice in writing as required by the amended section would not be a prerequisite for institution of such a suit. In our judg ment, this case was wrongly decided and we are unable to support it. As pointed out by Napier J. in Krishna Shetti vs Gilbert Pinto (1), the courts should be very careful in applying statutory provisions and the assistance of the as a guide on matters which have been excluded from the purview of the Act by express words should not be invoked, unless the provisions of the Act embody principles of general application. Mr. Daplitary also placed reliance on certain observations contained in the Full Bench decision Brahmayya vs Sundaramma (1). There it was said that although section 106 of the does not (1) Mad. (2) A.I.R. 1948 Mad. 1022 apply to leases for agricultural purpose by virtue of section 117 of the Act, nevertheless the rules in section 106 and in the other sections (sections 105 to 11 6) in Chapter V of the Act are founded upon reason and equity and they are the principles or English law and should be adopted as the statement of the law in India applicable also to agricultural leases. In our opinion, the above statement is again formulated in too wide a language. Section 105 gives a statutory definition of the word "lease". It enunciates no principle of equity. The relation of lessor and lessee is one of contract and in Bacon 's Abridgement a lease is defined as a contract between the lessor and the lessee for the possession and profits of land on the one side and recompense by rent or other consideration on the other. The statute has given a more comprehensive definition of the term. Section 107 makes registration of a lease compulsory. This section again does not concern itself with any princi ple of justice or equity. Section 108 (j) enacts that the lessee may transfer absolutely by way of mortgage or sublease the whole or any part of his interest in the property and any transferee of such interest or part may again transfer it. The law in India and England on this subject is not the same and it cannot be said that this sub section enacts or enunciates any general principle of equity. Parts of sections 109, 1 10 and Ill contain mere rules of procedure or rules of a technical nature. These certainly cannot be said to be based on any principles of equity. In our judgment, therefore, the statement in this decision that sections 105 to 116 of the are founded upon principles of reason and equity cannot be accepted either as correct or precise. Of course, to the extent that those sections of the Act give statutory recognition to principles of justice, equity and good conscience they are applicable also to cases not governed by the Act. Reference was also made to the decision of the Bombay High Court in Tatya Savla Sudrik vs Yeshwanta Kondiba Mulay (1) where it was said that the (1) 1023 principle embodied in section 111 (g) of the that in the case of forfeiture by denial of landlord 's title a notice in writing determining them lease must be given is a principle of justice, equity and good conscience which must be held to govern even agricultural leases. In that case it was contended that following upon forfeiture which had been incurred a suit was filed by the plaintiffs in eviction and nothing more needed to be done by the plaintiffs. For this contention reliance was placed on two earlier decisions of the Bombay High Court, Venkaji Krishna Nadkarni vs Lakshman Devji Kandar (1) and Vidyavardhak Sang Co. vs Avvappa (2). This contention was negatived in view of the decision of Chandrasekhara Aiyar J. above referred to, and also in view of a binding decision of a Division Bench of that court in Mahiboobkhan Muradkhan vs Ghanashyam Jamnaji(3). The learned Chief Justice in the judgment under appeal has explained the distinction between the present case and that case and has not followed his own earlier decision in arriving at his conclusions here. With respect we think that that decision did not state the law on the point correctly. Under English law the institution of a suit for ejectment has always been considered an unequivocal act on the part of the landlord for taking advantage of the default of the tenant and for enforcing the forfeiture in case of non payment of rent, and even in other cases except where statutory provisions were made to the contrary. Reference was also made to the observations of their Lordships of the Privy Council in Aditya Prasad vs Ramratan Lal (1). Their Lordships dealing with the question whether a certain document created a charge upon a village observed that the appellant could not redeem it without paying both the mortgage debt and the amount subsequently raised and it was said that the provisions of the on the point were identical with the principles of justice, equity and good conscience. The observation made in that case must be limited to that case and cannot be (1) Bom, 354 F.B. (2) (3) Unreported. (4) (1930) 57 I.A. 173. 1024 held as applicable to all cases irrespective of the nature of the provisions involved. Similar observations are contained in another decision of their Lordships of the Privy Council in Muhammad Raza vs Abbas Bandi Bibi (1), which concerned the provisions of section 10 of the which recognizes the validity of a partial restriction upon a power of disposition in the case of a transfer inter vivos. It was held that there was no authority that a different principle applied in India before the Act was passed and that under English law a partial restriction was ' not repugnant even in the case of a testamentary gift. Lastly, Mr. Daphtary drew our attention to the decision in Roberts vs Davey(2), which relates to a licence. There it was observed that it was necessary for the licensor to have done some act showing his intention to determine the licence and until such act was shown, it continued in force. Littledale J. in this case said that the instrument was "a mere licence to dig, and did not pass the land. An actual entry, therefore, was unnecessary to avoid it; but by analogy to what is required to be done in order to determine a freehold lease which, by the terms of it, is to be void on the non performance of covenants, it seems to follow that, to put an end to this licence, the grantor should have given notice of his intention so to do". The basis of the decision was that some act amounting to an exercise of the option had to be proved before the licence was determined. This decision therefore does not in any way affect the decision of the High Court in this case. On the question whether the tenant should have been given relief against forfeiture the High Court held that the matter was one of discretion and both the lower courts had exercised their discretion against the appellant and that being so, unless they were satisfied that the discretion was not judicially exercised or was exercised without proper materials they would not ordinarily interfere with it in second appeal. It was said that the non payment in this case seems to have (1) (1932) 59 I.A. 236. (2) ; 1025 become chronic and that this was not a case for the exercise of equitable jurisdiction. Mr. Daphtary contended that the High Court failed to appreciate the rule applicable for the exercise of the discretion in such cases and that the rule is that if at the time relief is asked for the position has been altered so that relief cannot be given without causing injury to third parties relief will be refused, but if that position is not altered so that no injustice will be done there is no real discretion and the court should make the order and give the relief. Reference was made to the decision of Page J. in Debendralal Khan vs F. M. A. Cohen (1), wherein it was said that the court normally would grant relief against forfeiture for non payment of rent under section 114 of the and that if the sun) required under the section was paid or tendered to the lessor at the hearing of the suit the court has no discretion. in the matter and must grant relief to the tenant. We do not think that the learned Judges intended to lay down any hard and fast rule. Indeed the learned Judge proceeded to observe as follows: "In exercising the discretion with which it is invested under section 114 a court in India is not bound by the practice of a court of Chancery in England, and I am not disposed to limit the discretion that it possesses, Those who seek equity must do equity, and I do not think merely because a tenant complies with the conditions laid down in section 114 that he becomes entitled as of right to relief" In our opinion, in exercising the discretion, each case must be judged by itself, the delay, the conduct of the parties and the difficulties to which the landlord. has been put should be weighed against the tenant, This was the view taken by the Madras High Court in Appaya Shetty vs Mohammad Beari (2) , and the matter was discussed at some length. We agree with the ratio of that decision. It is a maxim of equity that a person (1) Cal. 485. (2) Mad. 133 1026 who comes in equity must do equity and must come with clean hands and if the conduct of the tenant is such that it disentitles him to relief in equity, then the court 's hands are not tied to exercise it in his favour. Reference in this connection may also be made to Ramakrishna Mallya vs Baburaya(1), and Ramabrahmam vs Rami Reddi (2). The argument of Mr. Daphtary that there was no real discretion in the court and relief could not be refused except in cases where third party interests intervene is completely negatived by the decision of the House of Lords in Hyman vs Rose (3). Relief was claimed in that case under the provisions of section 14(2) of the Conveyancing Act, 1881, against forfeiture for breaches of covenant in the lease. The appellants offered as the terms on which relief should be granted to deposit a sum sufficient to ensure the restoration of the premises to their former condition at the end of the term and make full restitution. It was argued that the matter was one of discretion and the court should lean to relieve a tenant against forfeiture and if full recompense can be made to the landlord the relief should be granted. Lord Loreburn in delivering the opinion of the House observed as follows: "I desire in the first instance to point out that the discretion given by the section is very wide. The court is to consider all the circumstances and the conduct of the parties. Now it seems to me that when the Act is so express to provide a wide discretion, meaning, no doubt, to prevent one man from forfeiting what in fair dealing belongs to some one else, by taking advantage of a breach from which he is not commensurately and irreparably damaged, it is not advisable to lay down any rigid rules for guiding that discretion. I do not doubt that the rules enunciated by the Master of the Rolls in the present case are useful maxims in general, and that in general they reflect the point of view from which judges would regard (1) (2) A.I.R. 1928 Mad. 250. (3) 1027 an application for relief. But I think it ought to be distinctly understood that there may be cases in which any or all of them may be disregarded. If it were otherwise the free discretion given by the statute would be fettered by limitations which have nowhere been enacted. It is one thing to decide what is the true meaning of the language contained in an Act of Parliament. It is quite a different thing to place conditions upon a free discretion entrusted by statute to the court where the conditions are not based upon statutory enactment at all. It is not safe, I think, to say that the court must and will always insist upon certain things when the Act does not require them, and the facts of some unforeseen case may make the court wish it had kept a free hand. " With great respect we think that the observations cited above contain sound principles of law. We are, therefore, unable to accede to the contention of Mr. Daphtary that though section 114 of the confers a discretion on the court, that discretion except in cases where third party interests intervene must always be exercised in favour of the tenant irrespective of the conduct of the tenant. It is clear that in this case the tenant is a recalcitrant tenant and is a habitual defaulter. For the best part of 25 years he has never paid rent without being sued in court. Rent has been in arrears at times for six years, at other times for three years and at other times for four years and so on, and every time the landlord had to file a suit in ejectment which was always resisted on false defences. No rule of equity, justice or good conscience can be invoked in the case of a tenant of this description. He cannot always be allowed to take advantage of his own wrong and to plead relief against forfeiture on every occasion, particularly when he was warned by the court of appeal on a previous occasion. He had already had relief three times on equitable grounds and it is time that the court withheld its hands and ordered his ejectment. In this situation the High Court was fully justified in finding that in second appeal it would not interfere with the 1028 discretion of the courts below in refusing to, grant relief against forfeiture. The result therefore is that this appeal fails is dismissed with costs. Appeal dismissed. Agent for appellant: R.A. Govind. Agent for respondents: Rajinder Narain.

IN-Abs

The provision as to notice in writing of the lessor 's intention to determine the lease, container in section 111(g) of the , as amended in 1929, is not based on any principle of justice, equity or good conscience and is not applicable to leases executed prior to 1st April, 1930. Where a lease deed executed before the , came into force, provided that the lessee 's rights should come to an end on default of payment of rent, and, as rent was not duly paid, the lessor instituted a suit for ejectment of the lessee without giving him a notice in writing of his (the lessor 's) intention to determine the lease : Held, that the suit was maintainable. Umar Pulavar vs Dawood Rowther (A.1,R. , Brahmayya vs Sundodaramma (A.I.R. , Tatya Savla Sudrik vs Yeshwanta Kondiba Mulay disapproved. Toleman vs Portbury (L.R. 6 Q.B. 245), Prakash Chandra Das vs Rajendra Nath Basu (I.L.R. , Rama Aiyangar vs Guruswami Chetty , Venkatachari vs Rangaswami Aiyar (36 M.L.J. 532) and Krishna Shetti vs Gilbert Pinto (I.L.R. relied on. Venkatarama Aiyar vs Ponnuswamy Padayachi (A.I.R. 1935 Mad. 918), Aditya Prasad vs Ram Ratanlal (57 I A. 173), Muhammad Raza vs Abbas Bandi Bibi (59 I.A. 236), Roberts vs Davey ; distinguished.

Appeal No. 537 of 1960. Appeal from the judgment and order dated December 23, 1959, of the Mysore High Court in Writ Petition No. 229 of 1955. section section Shukla and E. Udayarathnam, for the appellant. H. N. Sanyal, Additional Solicitor General of India, R. Gopalakrishnan and P. D. Menon, for the respondents Nos. 1 and 2. R. Gopalakrishnan, for respondent No. 3 1962. April 18. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal arises from a writ petition filed by the appellant, Raghutilaka Tirtha Sripadangalavaru Swamiji, in the Mysore High Court challenging the validity of section 6 (2) of the Mysore Tenancy Act, 1952 (XIII of 1952) hereafter called the Act, and the notification issued under the said section on March 31, 1952. The appellant 's case as set out in his writ petition before the High Court was that the impugned section as well as the notification issued under it infringed his fundamental rights guaranteed under articles 14, 19 (1) (f), 26, 31 and 31A of the Constitution. This contention has been rejected by the High Court and it has been hold that the section and the notification under challenge are valid and constitutional. The appellant then applied for a certificate from the High Court, both under article 132 and article 133 of the Constitution. The High Court granted him a certificate under article 133, but refused to certify the, case under article 132. There 229 after the appellant applied to this Court for liberty to raise a question about the interpretation of the Constitution and permission has been accorded to the appellant accordingly. That is how the present appeal has come to this Court. The appellant owns 6 acres and 30 ghuntas of garden land in village Mulbagilu in Taluka Thirthahalli in the district of Shimoga. Respondent No. 3, Ramappa, Gowda, is his tenant in respect of this land. A registered lease deed was executed in favour of respondent No. 3 by the appellant on March 11, 1943; under this document respondent No. 3 undertook to pay 82 1/2 maunds of areca in addition to Rs. 17/12 in cash as rent per year. In 1955 respondent No. 3 filed an application before respondent No. 2, the Tehsildar of Thirthahalli, under section 12 of the Act and claimed that the standard rent payable by him to the appellant should be fixed (Tenancy case 85 of 1955 56). Meanwhile respondent No. 1, the Government of Mysore, had, in exercise of the powers conferred on it by section 6 of the Act, issued a notification No. R9. 10720/ L. section 73 54.2 on March 28/29, 1955. This notification purported to fix the standard rent for lands of the category to which the appellants land belongs at one third of the produce. Feeling aggrieved by this notification the appellant filed the present writ petition in the High Court on December 16, 1955, His case was that section 6 (2) as well 'as the notification issued under it were ultra vires, invalid and inoperative. Before dealing with the contentions raised before us by Mr. Shukla on behalf of the appellant it would be necessary to consider very briefly the scheme of the Act. The Act has been passed by the Mysore Legislature because it was thought necessary to regulate the law which governs the relations of landlords and tenants of agricultural lands and to regulate and impose restrictions on the 230 transfer of agricultural lands, dwelling houses, sites and lands appurtenant thereto belonging to or occupied by agriculturists in the State of Mysore except Bellary District and to make provisions for certain other purposes appearing in the Act. That is the recital contained in the preamble to the Act. It would thus be seen that the primary object of the Act is to afford much needed relief to the agricultural tenants by regulating their relations with their landlords and in that respect the Act bears a very close resemblance to the provisions of the Bombay Tenancy and Agricultural Lands Act, LXVII of 1948. Indeed, the material provisions of the Act with which we are concerned are substantially similar. Chapter I of the Act deals with the preliminary topic of defining the relevant terms used in the Act. Chapter II contains general provisions regarding tenancies. Section 4 defines persons who are deemed to be tenants. Section 5 provides that no tenancy would be for less than five years. Section 6 deals with the maximum rent payable by the tenants. Section 8 provides for the calculation of rent payable in kind in the manner indicated by cls. (i) and (ii) and prohibits the landlord from recovering or receiving rent calculated in any other manner. Under a,. 9 receipt of rent in terms of service or labour is prohibited. Section 11 abolishes all 'cases and section 10 enables the tenants to claim a refund of rent which has been recovered in contravention of the provisions of the Act. Section 12 then deals with enquiries with regard to reasonable rent. Sub section (3) of section 12 lays down five factors which have to be borne in mind by the authority dealing with an application for the fixation of reasonable rent. Section 13 is a corollary of section 12 and authorises the reduction of rent after reasonable rent has been determined under section 12. Section 14 deals with suspensions or remission of rent. Section 15 231 provides for termination of tenancy. Under section 18 a statutory bar is created against the eviction of a tenant from a dwelling house and under section 19 the tenant has the first option of purchasing the site on which he has built a dwelling house. Similarly, under section 22 the tenant is given an option of purchasing the land leased out to him. section 24 deals with some cases where relief can be granted against termination of tenancy and section 25 with relief against termination of tenancy for non payment of rent. Section 30 provides for the procedure to recover rent and section 31 protects the tenants ' rights under any other law. Chapter III deals with the procedure and jurisdiction of Amildar and provides for appeals against the decisions of the Amildar. Chapter IV deals with offences and prescribes penalties for them and Chapter V contains miscelaneous provisions. That, in its broad outlines, is the nature of the provisions made by the Act in order to give relief to the agricultural tenants. Section 6 with which we are directly concerned in the present appeal reads thus: "6. (1) Notwithstanding any agreement, usage, decree or order of a court or any law, the maximum rent payable in respect of any period after the date of coming into force of this Act by, a tenant for the lease of any land shall not exceed one half of the crop or crops raised on such land or its value as determined in the prescribed manner : Provided that where the tenant does not cultivate the land the rent payable shall be the reasonable rent to be fixed by the Amildar. (2) The Government may, by notification in the Mysore Gazette, fix a lower rate of the maximum rent payable by the tenants of lands 232 situate in any particular area or may fix such rate on any other suitable basis as they think fit. " As we have already indicated, the provisions of the two sub clauses of a. 6 are substantially similar to the provisions of section 6 ( 1) and (2) of the corresponding Bombay Act. Indeed, it would be correct to say that Act with which we are concerned has been modelled on the pattern of the Bombay Act and has adopted most of its important provisions. The validity of section 6 of the Bombay Act was challenged before this Court in "VasantalMaganbhai Sanjanwala vs The State of Bombay (1)" and it has been held that the said section is valid. The reasons given by this Court in upholding the validity of is. 6 of the Bombay Act apply with equal force in support of the validity of section 6 of the Mysore Act and so the point raised by the appellant in challenging the validity of the impugned section is really covered by the earlier decision of this Court. Mr. Shukla, however, contends that the preamble to the Act differs from the preamble of the Bombay Act inasmuch as the latter preamble refers to the fact that that Act was passed inter alia for the purpose of improving the economic and social conditions of peasants and ensuring the full and efficient use of land for agriculture and so considerations of social justice on which the validity of the corresponding provision of the Bombay Act was sought to be sustained cannot be invoked in dealing with the present appeal. , We are not impressed by this argument. It is true that the preamble to the Act merely says that the Act was passed because it was though necessary to regulate the law which governs the relations of landlords and tenants of agricultural lands and it does not refer to the requirement of social justice or does not specifically mention the object of ensuring the full and efficient (1) ; 233 use of land for agriculture. But in dealing with a law which has been passed for the purpose of effecting an agrarian reform it would be pedantic to ignore the essential basis of its material provisions merely on the ground that the concept of social justice on which the said provisions are based has not been expressly stated to be one of the objects of the Act in the preamble. We have already examined briefly the broad scheme of the Act and it is obvious that the important provisions of the Act are intended to improve the economic and social conditions of the agricultural tenants and so the policy of social justice can be safely said to be writ large on the face of the Act. Therefore, we do not think that the argument based upon the fact that the preamble does not refer to social justice distinguishes section 6 of the Act from the corresponding section of the Bombay Act. Then it is urged that unlike the Mysore Act, the Bombay Act has distinguished between irrigated land and non irrigated land and has provided by section 6(1) that the maximum rent payable in the case of irrigated land shall not exceed one forth and in the case of other lands shall not exceed one third of the crop of such land or its value as determined in the prescribed manner. It is true that section 6(1) of the Act makes no such distinction between irrigated and non irrigated lands. But that, in our opinion, is not a matter of essential importance. Like section 6(1) of the Bombay Act section 6(1) of the Act also intends to provide for a maximum ceiling beyond which agricultural rent will not be allowed to soar and so far as the fixation of a maximum ceiling of rent is concerned it is not essential that a distinction must necessarily be made between. irrigated lands and non irrigated lands. It must be borne in mind that what the section does is to prescribe the maximum and not to provide for a minimum In prescribing a maximum it may be open to the Legislature to provide for a maximum which would be 234 common to all lands whether irrigated or not, That is why we are not inclined to attach any importance to the point that in the absence of classification of land, while prescribing a maximum section 6(1) suffers from any infirmity. Then it is argued that the Bombay Act while prescribing a maximum has taken the precaution of also prescribing a minimum and the absence of the latter provision makes a material difference. This argument is clearly misconceived. It is true that section 8 of the Bombay Act which had been inserted by the Bombay Legislature in 1956 did provide for the maximum and the minimum rent, but as the decision of this Court in the case of Sanjanwala (1) shows in upholding the validity of the impugned provision of the Bombay Act no reliance was placed upon the fixation of the minimum rent. Indeed, the minimum rent was fixed subsequent to the decision of the High Court which was under appeal before this Court in that case and the fact that a minimum had been prescribed subsequently has been only incidentally mentioned in the judgment. Therefore the absence of a provision fixing the minimum rent does not introduce any infirmity in the impugned provision. We are, therefore, satisfied that the case of the impugned section is substantially similar to the case of section 6 of the Bombay Act with which this Court was concerned in the case of Sanjanwala (1) and the challenge to the validity of section in the present appeal must, therefore, be held to be covered by the said decision. That takes us to the question as to whether the impugned notification is invalid. This notification has been issued in exercise of the powers conferred on the State Government by section 6(2) and it provides that the rate of maximum rent payable by the tenants of lands situated in the areas specified in Schedule I and Schedule If to the notification 235 shall be one third and one fourth respectively of the crop or crops raised on such lands with effect from the year commencing on April 1, 1955. Schedule I deals with Maidan areas in which the maximum rent or rents shall be one third of the, crop or crops and Schedule If deals with Malanad areas in which the maximum rate of rent shall be one fourth of the crop or crops raised. It appears that the classification of lands between Maidan an Malanad lands is well known in Mysore. Maidan lands are lands on the plains, whereas Malanad are lands on hilly tracts. The distinction between the two categories of lands takes into account the different conditions of rain fall, the different nature of the cultivation, the difference ' in the living conditions and the availability of labour and the difference in the quantity and the quality of the produce. It is true that the notification does not prescribe the lower rate of the maximum rent area by area in the sense of district by district, but it purports to prescribe the said maximum by classifying the land in the whole of the State in the two well known categories of Maidan and Malanad lands. It is urged by Mr. Shukla that the impugned notification is invalid, because it is inconsistent with the provisions of section 6(1). The argument is that section 6(1) lays down a general rule and section 6(2) provides for an exception to the said general rule. On that assumption it is contended that an exception cannot be allowed to swallow up the general rule and that is precisely what the notification purports to do. This argument is based on the decision of the House of Lords in Macbeth vs Ashley It would be noticed that this argument raises the question about the construction of the two sub clauses of s.6. Before addressing ourselves to that question, (1) [1874] L.R. 2 SC. 236 however, we may refer to the decision of the House of Lords on which the argument is based. It appears that II o 'clock at night was the hour appointed for closing public houres in Scotland, although in special cases, and for well considered reasons, a deviation was allowed with reference to any particular locality really requiring it. The Magistrates of Rothesay had ordered for closing at 10 instead of 11 and the effect of the order was that it embraced every public house in the burgh. The House of Lords held that the Magistrates order .was ultra vires. The statutory provision with which the House of Lords was concerned was contained in the Act of Parliament, 25 and 26 Vict. c. 35. As a result of these provisions 11 o 'clock at night was appointed to be the hour for closing public houses. There was however, a proviso which said inter alia that in any particular locality requiring other hours for opening and closing inns, hotels, and public houses it shall be lawful for such justices and Magistrates respectively to insert in the schedule such other hours, not being earlier than six or later than eight o 'clock in the morning for opening,, or earlier than nine o 'clock or later than eleven o 'clock in the evening for closing the same as they shall think fit. It is in pursuance of the authority conferred on them by the said proviso that the Magistrates of Rothesay passed an order embracing every public house in the burge by which a deviation from the statutorily fixed hour was effected. In dealing with the validity of the order issued by the Magistrates Lord Chancellor Lord Cairns expressed his opinion that if the exception is to swallow up the rule it ceases, of course, to be an exception at all and that which might fairly have been an exercise of discretion becomes no exercise of the kind of discretion mentioned in the Act of Parliament. It was for this reason that the order 237 issued by the Magistrates was declared to be ultra vires. It was conceded that the Magistrates had a discretion, but the Lord Chancellor observed that the words "conferring discretion" expressly bear with reference to a particular locality and not with the whole burgh. What should be true about the whole burgh had been treated as a matter reserved for and determined by the consideration of the Imperial Parliament. The Lord Chancellor did not express any opinion on the question as to whether the discretion vested in the Magistrates can be exercised by them more than once but without deciding that point he held that the order of the Magistrates really amounted to evading an Act of Parliament. In substance, the Magistrates had once for all attempted with regard to all the public houses in their district to change the rule laid down by the Act of Parliament. Lord Chelmsford, who concurred with the opinion expressed by the Lord Chancellor, rested his conclusion on the ground that it was impossible to say that the limits which the Magistrates had defined could be called a particular locality within burgh and so it appeared that what the Magistrates had done was something very like an attempt to evade the Act of Parliament. According to Lord Selborne, the participle "requiring" is connected with the substantive "locality" and therefore it must be a requirement arising out of the particular circumstances of the place. That is why Lord Selborne thought that the Magistrates must in exercise of an honest and bona fide judgment, be of opinion that the particular locality which they ex(opt from the ordinary rule is one which, from its own special circumstances, requires that difference to be made. It would thus be seen that though the general basis of tHe decision, as it has been expressed by Lord Cairne, appears to be that the exception cannot swallow up the rule one of the reasons which 238 ultimately influenced the decision was that the discretion had to be exercised bona fide and after due deliberation in respect of a particular locality and that the manner in which the order was issued indicated that the requirements of the particular localities had not been duly examined by the Magistrates. It is significant that though Lord Cairns posed the question as to whether the discretion in question can be exercised more than once, he did not choose to answer it; but the trend of the opinions expressed by the Law Lords during the course of their speeches may seem to suggest that the discretion cannot be exercised more than once and in any case, it must be exercised by special reference to the particular locality as indicated by the proviso. If an order is made in respect of the whole of the burgh, it cannot be said that it has been passed after exercising due discretion in respect of the requirements of each particular locality. With respect, if the discretion is given to the Magistrates to provide for a departure from the rule prescribed by the general provision by reference to particular localities, it is not easy to see why the said discretion cannot be exercised more than once. Indeed, situations may arise when the Magistrates may have to consider the matter from time to time in respect of different localities and if it appears to the Magistrates considering the cases of different localities that in regard to each one of them a departure from the general rule should be made, it is not easy to follow why the proviso does not justify different orders being passed by the Magistrates in respect of different but particular localities. On the other hand, if the main provision is construed to mean that the time prescribed by it was to apply generally only with certain exceptions contemplated by the proviso, that would be a different matter. However, it is not necessary for us to pursue this point further and to express a definite 239 opinion on the general proposition that an exception cannot swallow the general rule because, as we will presently show, this rule cannot be applied to the provisions of section 6 at all. In this connection we may, however, point out that both in Max a well and in Craies, the decision in Macbeth 's case (1) appears to have been treated as an authority for the proposition that an order like the one passed by the Magistrates in that case amounted to an evasion of the Parliamentary statute, because it was not in honest and bona fide exercise of the discretion vested in them. (Maxwell on Interpretation of Statutes, 11th Edn., p. 121, and Craies on Statute Law, 5th Edn., p. 75.) But assuming that the proposition for which Mr. Shukla contends on the authority of the decision in Macbeth 's case (1) is sound, does it apply to section 6 at all and the answer to this question will depend upon the construction of the provisions contained in the two sub clauses of section 6. It would be noticed that section 6(1) declares a maximum beyond which no landlord can recover rent from his tenant. In other words, as soon as the Act came into force a ceiling was fixed beyond which the landlord cannot recover rent from his tenant even though it may be justified by agreement, usage, decree or order of a court or any other law, The provisions of this sub section apply individually and severally to all agricultural leases and govern the relations of individual landlords and tenants in respect of payment of rent by the latter to the former. The fixation of the maximum by sub section (1) is really not intended to lay down a general rule as to what a landlord should recover from his tenant and it is in that sense alone that its relation to the provisions of sub section (2) must be judged. In that connection we may point out that there is one proviso to (1) (1874) L. R. 2 S.C App 352. 240 cultivate the land and it lays down that in their case the rent shall be reasonable rent to be fixed by the Amildar. Sub section (2) is so worded that in terms it cannot be said to be a proviso to sub section (1) add in substance it is not such a proviso nor is it an exception to sub section Having prescribed the maximum beyond which agricultural rent cannot go under a. 6(1) the legislature has premitted the Government to fix a lower rate of the maximum rent in respect of lands situated in particular areas. The Government has also been authorised to fix the payment of rent on any other suitable basis as it thinks fit. In other words, the authority conferred on the Government is either to fix a lower rate or to fix any other basis on which the rent could be fixed. The provision is an independent provision and so the two sub sections must be read as different, independent, though coordinate, provisions of the Statute. It would, we think, be erroneous to treat sub section (2) as a proviso or exception to sub section Whereas sub.a. (1) deals with and applies to all leases individually and prescribes a ceiling in that behalf, sub section (2) is intend to prescribe a maximum by reference to different areas in the State. The object of both the provisions is no doubt simi lar but it is not the same and the relation between them cannot legitimately be treated as the relation between the general rule and the proviso or exception to it. The argument that by issuing the notification the Government has purported to amend a. 6(1) is, in our opinion, not well founded. As we have already seen, a. 6(1) is intended to apply to all the agricultural leases until a notification is issued under a. 6(2) in respect of the areas where the leased lands may be situated. It is not suggested that 241 under section 6(2) it is necessary that the Government must fix the lower rates by reference to individual lands and so there can be no doubt that even on the appellant 's argument it would be competent to the Government to fix lower rents, say districtwise. If instead of prescribing the lower rates districtwise after classifying the lands into two categories which are well recognised, the Government prescribed the rates by reference to the said categories of lands throughout the State, we do not see how the said notification can be said to be inconsistent with section 6(2) or with section 6( 1) either. The scheme of section 6 does not seem to postulate that after the notifications are issued under section 6(2) some area must inevitably be left to be covered by section 6(1). Such an assumption would be inconsistent with the object underlying the said provision itself. What section 6(1) has done is to fix a general ceiling apart from the areas and without considering the special factors appertaining to them. Having thus fixed a general ceiling the Legislature realised that the ceiling may have to be changed from area to area and so power was conferred on the Government to fix the ceiling at a lower rate, The Government having examined the matter came to the conclusion that the more equitable and reasonable course to adopt would be to divide the agricultural lands into two well known categories and fix the ceiling by reference to them. Now in the very nature of things, the Legislature must have anticipated that the exercise of the power under a. 6(2) might cover all the areas in the State and that may mean that the general ceiling prescribed by section 6(1) may not apply to any land which is covered by the notification. If section 6(1) is not a general rule and section 6(2) is not an exception to it, then the consequence flowing from the issue of the impugned notification cannot be characterised as an exception swallowing up the 242 general rule. That, in substance, is the view which the Mysore High Court has taken in the matter and we think that the said view is right. In the result. , the appeal fails and is dismissed with costs. Appeal dismissed.

IN-Abs

The Mysore Tenancy Act, 1952, was enacted, inter alia, for the purpose of regulating the law which governed the relations of landlords and tenants of agricultural lands. Subsection (1) of section 6 of the Act provided : "Notwithstanding any agreement, usage, decree or order of a court or any law, the maximum rent payable in respect of any period. by a tenant for the lease of any land shall not exceed one half of the crop or crops raised on such land or its value as determined in the prescribed manner". "The Government may, by notification in the Mysore Gazette, fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as they think fit". In exercise of the powers conferred by s.6(2), the Government of Mysore issued a notification purporting to fix the standard rent for land 227 specified in Sch. I which dealt with Maidan areas i.e., lands on the plains at one third of the produce, and for those specified in Sch. II which dealt with Malnad areas i.e., lands on hilly tracts at one fourth. The appellant who owned garden land in the district of Shimoga in Mysore State and who had leased out the land to a tenant, challenged the validity or s 6(2) of the Act as well as the notification on the rounds that they contravened articles 14, 19(1) (f), 26, 31 and 31 A of the Constitution of India, and that, in any case, the notification was inconsistent with section 6(1) inasmuch as it was based on section 6(2) which being an exception to section 6(1) could not be allowed to swallow up the general rule and that was precisely what the notification purported to do. The Mysore Tenancy Act was modelled on the pattern of the Bombay Tenancy and Agricultural Lands Act, 1948, and the provisions of s.6 of the Mysore Act were. similar to s.6 of the Bombay Act. In Vasantlal Maganbhai Sanjanwala vs The State of Bombay, ; ; it was held that section 6 of the Bombay Act was vaild. The appellant contended that the aforesaid decision was not applicable because there were difference,; between the two Acts inasmuch as (1) in the preamble to the Bombay Act it was stated that it was passed inter alia for the purpose of improving the economic and social conditions of peasants and this was not mentioned in the Mysore Act, (2) unlike the Mysore Act, the Bombay Act, made a distinction between the irrigated and non irrigated land (3) the Bombay Act while prescribing a maximum took the precaution of also prescribing a minimum and the absence of the latter provision in the Mysore Act made a I material difference. Held, that : (1) the Mysore Tenancy Act, 1952, was substantially similar to Bombay Tenancy and Agricultural Lands Act, 1948, and that the question as to be whether section 6 (2) of the Mysore Act was valid must be held to be covered by the decision the Vasantlal Maganbhai Sanjanwala vs The State of Bombay ; Accordingly, s.6(2) of the Mysore Tenancy Act, 1952, was valid. (2) on its true construction, section 6(1) of the Mysore Tenancy Act, 1952, wag intended to apply to all agricultural leases until a notification was issued under s.6(2) in respect of the areas where the leased lands might be situated ; s 6(2) could not, therefore, be considered as an exception to s.6(1) Consequently, the notification in question was valid, 228 Macbeth vs Ashley, (1874) L.R. 2 Sc. App. 352, considered and held inapplicable.

Civil Appeals Nos. 525 and 526 of 1960. Appeals from the judgment and order dated March 20, 1959, of the Orissa High Court in O.J.C. No. 12 of 1959. 382 A. Viswanatha Sastri, B.R.L. Iyengar and T. M. Sen, for the appellant (In C.A. No. 525/60) and respodent No. 1 (in C.A. No. 526 of 1960.) B. P. Maheshwari, for the appellants (in C.A. No. 526/60) and Respondents Nos. 2 to 8, 10, 13 to 16, 19 21, 23, 25, 27, and 28 (in C.A. No. 525/60). A. Ranganadham Chetty. A. V. Rangam, section Mishra, A. Vedavalli and R. Patnaik, for respondent No. 1 (in C.A. No. 525/60) and 2 (in C.A. No. 526 of 60). December 22. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These two appeals are directed against the order passed by the High Court of Orissa under article 226 of the Constitution striking down as unconstitutional sections 4 and 5 (1) of orissa Ordinance I of 1959 promulgated by the Governor of Orissa on January 15, 1959. This Order was passed on the Writ Petition filed by Mr. B. K. Bose against the State of Orissa and 27 persons who were elected Councillors of the Cuttack Municipality, including the Chairman and the Vice Chairman respectively. Appeal No. 525 has been filed by the State of Orissa whereas Appeal No. 526 is filed by the said Municipal Councillors. The appellants in both the appeals obtained leave from the Orissa High Court to appeal to this Court. It appears that during December, 1957 to March, 1958, elections were held for the Cuttack Municipality under the provisions of the Orissa Municipal Act, 1950 Orissa (XXXIII of 1950) (hereinafter called the Act) and the 27 appellants in Appeal No. 526 of 1960 were declared elected as Councillors. From amongst them, Manmohan Mishra was elected the Chairman and Mahendra Kumar Sahu the Vice Chairman. Mr. B. K. Bose, who is an Advocate practising in Cuttack and a resident within the municipal limits of Cuttack, 383 had contested the said elections as a candidate from Ward No.13. He was, however, defeated. Thereupon, he presented an application to the High Court (O.J.C. No. 72 of 1958) to set aside the said elections. To this application he impleaded the State of Orissa and the 27 elected Councillors. In his petition Mr. Bose alleged that the elections held for the Cuttack Municipality were invalid and he claimed an injunction restraining the 27 respondents from functioning as elected Councillors and the Chairman and the Vice Chairman amongst them from discharging their duties as such. The respondents to the petition traversed the allegations made by Mr. Bose and urged that the elections were valid and that the petitioner was not entitled to any relief under. article 226. The High Court upheld the contentions raised by the petitioner. It came to the conclusion that the qualifying date for determining the age qualification of voters under s.13 of the Orissa Municipal Act had been published by the State Government only on January 10, 1958, though the preliminary electoral rolls had already been published on December 23, 1957. In consequence, the claims and objections had been invited for a period of 21 days from the said date to January 12, 1958. As a result of the delay made in publishing the qualifying date for the determination of age qualification of voters, the citizens of Cuttack were, in fact, given only two days ' time to file their claims and objections, whereas under the relevant Election Rules they were entitled to 21 days. The High Court also came to the conclusion that this drastic abridgment of the period for filing claims and objections had materially affected the results of the elections, by depriving several voters of their right to be enrolled as such. The High Court also found that whereas a candidate was entitled to 15 clear days for the purpose of canvassing, the notification issued under the Orissa Municipal Election Rules curtailed this period to 384 14 days. According to the High Court, the respondents to the petition had failed to show that the results of the elections had not and could not have been affected by the contravention of the said Rules. On these findings, the elections in question were set aside and appropriate orders of injunction issued as claimed by the petitioner. This judgment was pronounced on December 11, 1958. It appears that the State of Orissa took the view that the effect of the said judgment could not be confined only to Cuttack Municipality. As a result of the findings made by the High Court during the course of the said judgment the validity of elections to other Municipalities ' might also be exposed to the risk of challenge and that would have necessitated the preparation of fresh electoral rolls after following the procedure prescribed in that behalf by the Act. That is why the Governor of Orissa promulgated the impugned Ordinance on January 15, 1959. Broadly stated, the effect of the Ordinance was that the elections to the Cuttack Municipality stood validated and the said Municipality began to function once again. It also validated the electoral rolls prepared in respect of the other Municipalities in the State of Orissa and thus sought to save elections held or to be held in respect of the said Municipalities from any possible challenge. When Mr. Bose found that his success in the Writ Petition (O.J.C. No. 72 of 1958) had thus been rendered illusory by the Ordinance, he moved the High Court again by the present Writ Petition. He contended that the material provisions of the Ordinance, viz., sections 4 and 5(1) were unconstitutional and he asked for an appropriate relief on that basis. The High Court has again upheld the contentions raised by Mr. Bose and has struck down ss.4 and 5(1) of the Ordinance and issued appropriate orders of injunction restraining the elected Councillors and 385 the Chairman and Vice Chairman from functioning as such. The State of Orissa and the 27 Councillors by separate applications obtained a certificate from the High Court and have come to this Court by their two separate appeals Nos. 525 and 526 of 1960, Before dealing with the validity of the impugned provisions of the Ordinance, it is necessary to consider the broad features of the Ordinance itself. As the preamble to the Ordinance shows, the Governor of Orissa promulgated it because he thought it necessary to provide for the validation of electoral rolls and elections to Municipalities. In his opinion, the preparation of fresh electoral rolls and the holding of fresh elections which would have become necessary unless a validating Ordinance had been passed, would have entailed huge expenditure and would have given rise to problems regarding the administration of such Municipalities during the intervening period. He also thought that it was necessary to take immediate steps to provide for the validation of the electoral rolls and the elections since the Legislature of the State of Orissa was not then in session and the Governor thought circumstances existed which rendered it necessary to take immediate action. In exercise of the powers conferred on him by article 213(1) of the Constitution, he was, therefore, pleased to promulgate the Ordinance. That, according to the statement made in the preamble to the Ordinance explains the genesis of its promulgation. The Ordinance consists of five sections. Section 1 gives its short title and extent, while s.2 is the defining section. Sections, 3, 4 and 5 read thus: "3. (1) Notwithstanding the Order of any Court to the contrary or any provision in the Act or the rules thereunder: (a) the electoral rolls of the Cuttack Municipality shall be, and shall always 386 be deemed to have been validly prepared and published; and (b) the said electoral rolls shall be deemed to have come in force on the date of publication and shall continue to be in force until they are revised in accordance with the rules made in this behalf under the Act. (2) The validity of the electoral rolls shall not be called in question in any court on the ground that the date on which a person has to be not less than 21 years of age was fixed under Section 13 of the act after the publication of the preliminary electoral rolls. Any order of a court declaring the election to the Cuttack Municipality invalid on account of the fact that the electoral rolls were invalid on the ground specified in Sub section (2) of section 3 or on the ground that the date of polling of the election was not fixed in accordance with the Act or the rules made thereunder, shall be deemed to be and always to have been of, no legal effect, whatsoever, and the elections to the said Municipality are hereby validated. (1) All actions taken, and powers exercised by the Councillors, Chairman or Vice Chairman of the Cuttack Municipality prior to the coming into force of this Ordinance shall be deemed to have been validly taken, and exercised. (2) All actions taken and powers exercised by the District Magistrate of Cuttack in respect of the Cuttack Municipality in pursuance of the order of the Government of Orissa in the Health (L. section G.) Department No. 8263 L.S.G. dated the 13th December, 1958, shall be deemed to have been taken 387 and exercised by the Council of the said Municipality or its Chairman or Vice Chairman, as the case may be. " It will thus be seen that section 3 purports to validate the electoral rolls which had been held to be invalid by the High Court in Writ Petition No. 72 of 1958. Sub section (1) of section 3 deals specifically with the infirmities found in the elections held for the Cuttack Municipality whereas sub section (2) deals with the defects in the electoral rolls in respect of all the Municipalities. Section 4 validates, in particular, the elections to the Cuttack Municipality which had been held to be invalid by the High Court. Section 5(1) purports to protect all actions taken and powers exercised by the Councillors, the Chairman and the Vice Chairman prior to the coming into force of the Ordinance, while section 5(2) validates all actions taken and powers exercised by the District Magistrate of Cuttack in respect of the Cuttack Municipality in pursuance of the Order there specified. In other words, the Ordinance is a validating Ordinance. It purports to validate the elections of the Cuttack Municipality in particular and to make valid and regular the electoral rolls which would otherwise have been held to be irregular and invalid in accordance with the judgment of the High Court. Before the High Court, on behalf of Mr. Bose five points were raised. It was argued that the provisions of the Ordinance were a mere colourable device to set aside the judgment of the High Court in O.J.C. No. 72 of 1958. It was, in fact, and in substance, not any exercise of legislative power by the Governor but assumption by him of judicial power which is not warranted by the Constitution. The High Court has rejected this contention and the finding of the High Court on this point has not been challenged before us. So we are relieved of the task of considering the merits of this finding. 388 It was then contended that section 4 of the Ordinance contravenes the equality before law guaranteed by article 14 of the Constitution. It was also urged alternatively that even if section 4 did not contravene article 14, it did not successfully cure the invalidity of the elections to the Cuttack Municipality arising out of the fact that material prejudice had been caused to the citizens by the abridgement of the period for filing claims and objections and of the period for canvassing. In regard to section 5(1) the argument was that it was invalid under article 254(1). All these three contentions have been accepted by the High Court and the correctness of the findings recorded by the High Court in that behalf fall to be considered in the present Appeals. The last contention raised in support of the petition was that on February 23, 1959, a Bill entitled "Orissa Municipal Election Validating Bill, 1959" which contained substantially similar provisions as those of the Ordinance, was sought to be introduced in the Orissa Legislative Assembly but was defeated by a majority of votes and that made the ordinance invalid. This contention has been rejected by the High Court and the finding of the High Court on this point has not been challenged before us. Thus, out of the 5 points raised before the High Court, 3 have been argued before us. For Mr. Bose, Mr. Ranganathan Chetty has also urged two additional points. He has contended that the present appeals have really become infructuous in view of the fact that the impugned Ordinance lapsed on April 1, 1959. This argument has been strenuously pressed before us in the form of a preliminary objection against the competence of the appeals themselves. On the merits, Mr. Chetty has urged an additional ground that the Ordinance was invalid inasmuch as it purported to invalidate the judgment of the High Court in O.J.C. No. 72 of 1958 delivered under article 226 of the Constitution. 389 Let us first consider whether section 4 offends the equality before law guaranteed by article 14. In coming to the conclusion that the said section is unconstitutional on the ground that it contravenes article 14. the High Court was very much impressed by the fact that as a result of its earlier judgment, Mr. Bose had obtained a very valuable right of preventing the existing Councillors from functioning as such and of having fresh elections conducted according to law in which he would have the right to stand as a candidate once again. The petitioner Mr. Bose, may legitimately ask, observed the High Court, why, when hundreds of successful suitors who have sought the help of that Court for relief under article 226 were allowed to enjoy the fruits of their success, he alone should have been discriminated against by hostile legislation. With respect, this rhetorical approach adopted by the High Court, in dealing with the question about the validity of section 4 is open to the obvious criticism that it is inconsistent with the view taken by the High Court itself in this very judgment that the Governor was competent to issue an Ordinance to invalidate the judgment of the High Court pronounced in O.J.C. No. 72 of 1958; as we have already pointed out one of the contentions raised by Mr. Bose against the validity of the Ordinance was that in the guise of the exercise of the legislative powers, the Governor had purported to exercise judicial powers and that was beyond his competence. Since the finding of the High Court on this question has not been challenged before us by Mr. Chetty, we propose to express no opinion on its merits. But if it is held that in promulgating the validating Ordinance the Governor was exercising his powers under article 213(1) and his legislative competence in that behalf is not in doubt, then it is difficult to appreciate how the High Court should have allowed itself to be influenced by the grievance made by Mr. Bose that he had been deprived of the fruits of his success in the earlier Writ Petition. 390 The High Court was, no doubt, influenced by its conclusion that Mr. Bose alone had been singled out for discriminatory treatment of the impugned Ordinance and that, according to the High Court, constituted violation of the provisions of article 14. There are, however, two obvious infirmities in this conclusion. Looking at the scheme of the Ordinance, it is clear that sections 3 and 4 must be read together. The object of the Ordinance was two fold. Its first object was to validate the elections to the Cuttack Municipality which had been declared to be invalid by the High Court and its other object was to save elections to other Municipalities in the State of Orissa whose validity might have been challenged on grounds similar to those on which the elections to the Cuttack Municipality had been successfully impeached. It is with this two fold object that section 3 makes provisions under its two sub sections (1) and (2). Having made the said two provisions by section 3, section 4 proceeded to validate the elections to the Cuttack Municipality. If we bear in mind this obvious scheme of the Ordinance, it would be unreasonable to read section 4 in isolation and a part from section 3. The High Court was in error in dealing with section 4 by itself unconnected with section 3 when it came to the conclusion that the only subject of section 4 was to single out Mr. Bose and deprive him of the fruits of his success in the earlier Writ Petition. If sections 3 and 4 are read together, it would be clear that Mr. Bose alone had not been singled out or discriminatory treatment; the validating provisions applied, no doubt, to the Cuttack Municipal elections but they are also intended to govern any future and even pending dispute in regard to the elections to other Municipalities. Therefore in our opinion, the High Court was not right in coming to the conclusion that the object of the Ordinance was only to validate the Cuttack Municipal elections and nothing more. 391 Besides, if the power to validate by promulgating an Ordinance is conceded to the Governor under article 213(1), it would not be easy to appreciate why it was not open to the Governor to issue an Ordinance dealing with the Cuttack Municipal Elections themselves. The Cuttack Municipal Elections had been set aside by the High Court and if the Governor thought that in the public interest, having regard to the factors enumerated in the preamble to the Ordinance, it was necessary to validate the said elections, it would not necessarily follow that the Ordinance suffers from the vice of contravening article 14. Article 14 has been the subject matter of decisions in this Court on numerous occasions. It is now well established that what the said Article forbids is class legislation no doubt, but it does not forbid reasonable classification for the purposes of legislation. In order that the test of permissible classification should be satisfied, two conditions have to be fulfilled, viz., (1) the classification must be founded on an intelligible differentia which would distinguish persons or things grounded together from others left out of the group, and (2) that the differentia must have a rational relation to the object sought to be achieved by the statute in question. As this Court has held in the case of SHRI RAM KRISHNA DALMIA V. SHRI JUSTICE section R. TENDOLKAR(1), a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself. Therefore, if the infirmity in the electoral rolls on which the decision of the High Court in the earlier writ petition was based, had not been applicable to the electoral rolls in regard to other Municipalities in the State of Orissa, then it may have been open to the Governor to issue an Ordinance only in 392 respect of the Cuttack Municipal Elections, and if, on account of special circumstances or reasons applicable to the Cuttack Municipal Elections, a law was passed in respect of the said elections alone, it could not have been challenged as unconstitutional under article 14. Similarly, if Mr. Bose was the only litigant affected by the decision and as such formed a class by himself, it would have been open to the Legislature to make a law only in respect of his case. But as we have already pointed out, the Ordinance does not purport to limit its operation only to the Cuttack Municipality; it purports to validate the Cuttack Municipal Elections and the electoral rolls in respect of other Municipalities as well. Therefore, we are satisfied that the High Court was in error in coming to the conclusion that section 4 contravenes article 14 of the Constitution. Having regard to the fact that certain infirmities, in the electoral rolls were presumably found to be common to electoral rolls in several Municipalities the Governor thought that the decision of the High Court raised a problem of public importance affecting all Municipal elections in the State and so, acting on the considerations set out in the preamble to the ordinance, he proceeded to promulgate it. In dealing with the challenge against section 4 of the said Ordinance, the High Court should have considered all the provisions of the Ordinance together before coming to the conclusion that section 4 was discriminatory and contravened Art 14. In support of the finding of the High Court, Mr. Chetty referred us to the decision in the State of Vermont vs Albert Shedroi. (1) In that case the Court was dealing with a statute which exempted certain persons from the obligation to obtain a licence for the privilege of selling goods as peddlers. The impugned statute conferred exemption on persons resident in the State, who had served as soldiers in 393 the war for the suppression of the Rebellion in the Southern States, and were honourably discharged. This statute was held to contravene the provisions of the 14th Amendment whereby no state can deny to any person within its jurisdiction the equal protection of the laws. In our opinion, this decision can afford no assistance to Mr. Chetty in supporting the finding of the High Court that section 4 contravenes article 14. The services rendered by the soldiers in the war for the suppression of the Rebellion in the Southern States had hardly any rational connection with the exemption granted to them from obtaining licence for selling goods as peddlers and so, the classification purported to be made by the impugned statute was obviously unreasonable and irrational. That is not so in the present case. Certain irregularities in the electoral rolls were discovered and it was thought that unless the said irregularities were validated, public exchequer would be involved in huge expenditure and problems regarding the administration of Municipalities during the intervening period would arise. That is why the Ordinance was promulgated. The impugned provisions of the Ordinance cannot be said to be based on a classification which is not rational and which has no reasonable connection with the object intended to be achieved by the Ordinance. Therefore, in our opinion the conclusion of the High Court that section 4 contravened article 14 cannot be sustained. As we have already pointed out, the High Court has taken the view that even if section 4 did not offend against Art 14, it nevertheless could not cure the invalidity of the elections to the Cuttack Municipality inasmuch as it had not said anything about the finding of the High Court that the irregularities complained against had caused material prejudice to the citizens of Cuttack by the abridgement of the period for filing claims and objections 394 and of the period for canvassing. When the validating provision, observes the High Court, merely cures the invalidity arising out of the fixation of the qualifying date after the publication of the preliminary electoral rolls and is completely silent about the results of the elections being materially affected thereby, it cannot be said to have annulled the judgment of this Court in O. J. C. No. 72 of 1958. The same reasoning would also apply to the abridgement of the period of canvassing from 15 days to 14 days which also materially affected the results of the elections. The High Court thought that if the Governor wanted to annul the effect of its earlier decision, he should have made express provision to that effect or at least should have referred to that fact in Section 4. It is not easy to appreciate this view. What the Ordinance has purported to do is to validate the electoral rolls and thereby cure the infirmities detected in them. Once that is done, there is hardly any occasion to say further that no prejudice shall be deemed to have been caused by the said infirmities of the electoral rolls. In validating the elections to the Cuttack Municipality, the Ordinance was not expected or required to cover the reasons given by the judgment or the finding recorded in it. The basis of the judgment was the irregularities in the Electoral rolls and the procedure followed in holding the elections. Those irregularities have been validated and that inevitably must mean that the elections which were held to be invalid would have to be deemed to be valid as a result of the Ordinance and so no question of material prejudice can arise. That being so, we do not think there is any substance in the alternative argument urged in support of the plea that section 4 is ineffective even if it does not contravene Art, 14. That takes us to the question as whether section 5(1) is invalid. The High Court has taken the view that section 5(1) purports to protect not only actions taken and powers exercised under the Municipal 395 Act but all actions and all powers exercised even outside the Municipal Act in violation of other laws. Basing itself on this broad and wide construction of 5(1), the High Court thought that between ss.5(1) and s.477A of the Indian Penal Code there was inconsistency. That is why it struck down section 5(1) under articles 254(2) and 213(1) of the Constitution. We have no hesitation in holding that the construction placed by the High Court on section 5 (1) is obviously unreasonable. The object of section 5 (1) is plain and unambiguous. It seeks to save actions taken and powers exercised by the Councillors, the Chairman or the Vice Chairman in pursuance of, and in accordance with, the provisions of the Municipal Act. Having validated the elections to the Cuttack Municipality, it was obviously necessary to validate actions taken and powers exercised by the appropriate authorities and Councillors as such after the elections were held and before they were invalidated by the judgment of the High Court. Having regard to this plain object which s.5(1) is intended to serve, it is,. we think, wholly unreasonable to put upon its words an unduly wide construction and then strike it down as inconsistent with article 254(2) of the Constitution. It is true that section 5(1) is not in express terms confined to all actions taken and powers exercised under the Municipal Act, but, in the context, that is obviously intended. Indeed, it is doubtful whether it was really necessary to add the words under the Municipal Act having regard to the scheme of the ordinance and the context in which section 5(1) is enacted. Therefore, we do not think that the High Court was justified in holding that section 5(1) was void to the extent of its repugnancy to the existing laws dealing with matters in the Concurrent List. There is no repugnancy to any existing laws and so, there is no contravention of article 254(2) of the Constitution at all. We will now deal with the two additional grounds urged before us by Mr. Chetty. He contends 396 that the Governor was not competent to issue an Ordinance with a view to over ride the judgment delivered by the High Court in its jurisdiction under article 226 of the Constitution. This argument is obviously untenable, for it erroneously assumes that the judgment delivered by the High Court under article 226 has the same status as the provisions in the Constitution itself. In substance, the contention is that just as a provision in the Constitution like the one in article 226 cannot be amended by the Governor by issuing an Ordinance, so a judgment under article 226 cannot be touched by the Governor in his Ordinance making power. It is true that the judgment delivered by the High Court under Art.226 must be respected but that is not to say that the Legislature is incompetent to deal with problems raised by the said judgment if the said problems and their proposed solutions are otherwise within their legislative competence. It would, we think, be erroneous to equate the judgment of the High Court under article 226 with Art 226 itself and confer upon it all the attributes of the said constitutional provision. We must now turn to the main argument urged before us by Mr. Chetty that the Ordinance having lapsed on April 1st 1959, the appeals themselves have become infructuous. He contends that the Ordinance was a temporary statute which was bound to lapse after the expiration of the prescribed period and so, as soon as it lapsed, the invalidity in the Cuttack Municipal elections which had been cured by it revived and so there is no point in the appellants challenging the correctness of the High Court 's decision. Indeed, it was this point which Mr. Chetty strenuously stressed before us in the present Appeals. If the true legal position be that after the expiration of the Ordinance the validation of the elections effected by it comes to an end, then Mr. Chetty would be right in contending 397 that the appeals are infructuous. But is it the true legal position ? that is the question which calls for our decision. It is true that the provisions of section 6 of the General Clauses Act in relation to the effect of repeal do not apply to a temporary Act. As observed by Patanjali Sastri, J., as he then was, in section Krishnan vs The State of Madras(1) the general rule in regard to a temporary statute is that, in the absence of special provision to the contrary, proceedings which are being taken against a person under it will ipso facto terminate as soon as the statute expires. That is why the Legislature can and often does, avoid such an anomalous consequence by enacting in the temporary statute a saving provision, the effect of which is in some respects similar to that of section 6 of the General Clauses Act. Incidentally, we ought to add that it may not be open to the Ordinance making authority to adopt such a course because of the obvious limitation imposed on the said authority by article 213(2) (a). Wicks vs Director of Public Prosecutions (2) is an illustration in point. The Emergency Powers (Defence) Act, 1939, section 11, sub section 3, with which that case was concerned, provided that the expiry of the Act shall not affect the operation thereof as respects things previously done or omitted to be done. The appellant Wicks was convicted in May, 1946, of offences committed in 1943 and 1944, contrary to Regulation 2A of the Defence (General) Regulations 1939, made pursuant to the Act. Both the Act and the Regulation expired on February 24, 1946. It was as a result of this specific saving provision contained in section 11 (3) of the Act that the House of Lords held that, although regulation 2A had expired before the trial of the appellant, he was properly convicted after the expiration of the Act, since section 11 (3) did not expire with the rest of the 398 Act, being designed to preserve the right to prosecute after the date of expiry. Mr. Chetty contends that there is and can be, no corresponding saving provision made by the Ordinance in question and so, the invalidity of the Cuttack Municipal Elections would revive as soon as the Ordinance expired by lapse of time. This contention is based on the general rule thus stated by Craies: "that unless a temporary Act contains some special provision to the contrary, after a temporary Act has expired, no proceedings can be taken upon it and it ceases to have any further effect. That is why offences committed against temporary Acts must be prosecuted and punished before the act expires, and as soon as the Act expires any proceedings which are being taken against a person will ipso facto terminate." (1) In our opinion, it would not be reasonable to hold that the general rule about the effect of the expiration of a temporary Act on which Mr. Chetty relies is inflexible and admits of no exceptions. It is true for instance that offences committed against temporary Acts must be prosecuted and punished before the act expires. If a prosecution has not ended before that day, as a result of the termination of the Act, it will ipso facto terminate. But is that an inflexible and universal rule ? In our opinion, what the effect of the expiration of a temporary Act would be must depend upon the nature of the right or obligation resulting from the provisions of the temporary Act and upon their character whether the said right and liability are enduring or not. As observed by Parker, B. in the case of Steavenson vs Oliver, (2) "there is a difference between temporary statutes and statutes which are repealed the latter (except so far as they relate to transactions already completed under them) become as if they had never existed; but with respect to the former, the 399 extent of the restrictions imposed, and the duration of the provisions, are matters of construction. " In this connection, it would be useful and interesting to consider the decision in the case of Steavenson itself. That case related to 6th Geo. 4, c. 133, section 4 which provided that every person who held a commission or warrant as surgeon or assistant surgeon in His Majesty 's Navy or Army, should be entitled to practise as an apothecary without having passed the usual examination. The statute itself was temporary and it expired on August 1, 1826. It was urged that a person who was entitled to practise as an apothecary under the Act would lose his right after August 1, 1826, because there was no saving provision in the statute and its expiration would bring to an end all the rights and liabilities created by it. The Court rejected this contention and held that the person who had acquired a right to practise as an apothecary, without having passed the usual examination, by virtue of the provision of the temporary Act, would not be deprived of his right after its expiration. In dealing with the question about the effect of the expiration of the temporary statute, Lord Abinger, C. B. observed that "it is by no means a consequence of an act of Parliament 's expiring, that rights acquired under it should likewise expire. Take the case of a penalty imposed by an act of Parliament; would not a person who had been guilty of the offence upon which the legislature had imposed the penalty while the Act was in force, be liable to pay it after its expiration ? The case of a right acquired under the Act is stronger. The 6 Geo. 4 c. 133, provides that parties who hold such warrants shall be entitled to practise as apothecaries; and we cannot engraft on the statute a new qualification, limiting that enactment. " It is in support of the same conclusion that Parker, B. made the observations which we have already cited. "We must look at this act", 400 observed Parker, B., "and see whether the restriction in the 11th clause, that the provisions of the statute are only to last for a limited time, is applicable to this privilege, in question. It seems to me that the meaning of the legislature was that all assistant surgeons, who were such before the 1st of August, 1826, should be entitled to the same privileges of practising as apothecaries, as if they had been in actual practice as such on the 1st of August, 1815, and that their privileges, as such was of an executory nature, capable of being carried into effect after the 1st of August, 1826. " Take the case of a penalty imposed by a temporary statute for offences created by it. If a person is tried and convicted under the relevant provisions of the temporary statute and sentenced to undergo imprisonment, could it be said that as soon as the temporary statute expires by efflux of time, the detention of the offender in jail by virtue of the order of sentence imposed upon him would cease to be valid and legal ? In our opinion, the answer to this question has to be in the negative. Therefore, in considering the effect of the expiration of a temporary statute, it would be unsafe to lay down any inflexible rule. If the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created has expired. If a penalty had been incurred under the statute and had been imposed upon a person, the imposition of the penalty would survive the expiration of the statute. That appears to be the true legal position in the matter. This question sometimes arises in another form. As Craies has observed: "If an act which repeals an earlier Act is itself only a temporary Act, the general rule is that the earlier Act is revived after the temporary Act is spent; and inasmuch as ex hypothesis the temporary Act expires and is not repealed, the rules of construction laid 401 down by ss.11(1) and 38 (2) of the Interpretation Act, 1889, do not apply, But there will be no revivor if it was clearly the intention of the legislature to repeal the earlier Act absolutely." Therefore even as regards the effect of the repealing of an earlier Act made by a temporary Act. the intention of the temporary Act in repealing the earlier Act will have to be considered and no general or inflexible rule in that behalf can be laid down. This position has been tersely expressed by Lord Ellenborough, C. J., when he observed in Warren vs Windle (1) "a law though temporary in some of its provisions, may have a permanent operation in other respects. The stat, 26 Geo. 3, c. 108, professes to repeal the statute of 19 Geo. 2, c. 35, absolutely, though its own provisions, which it substituted in place of it, were to be only temporary. " In other words, this decision shows that in some cases the repeal effected by a temporary Act would be permanent and would endure even after the expiration of the temporary Act. We have referred to this aspect of the matter only by way of analogy to show that no inflexible rule can be laid down about the effect of the expiration of a temporary Act. Now, turning to the facts in the present case, the Ordinance purported to validate the elections to the Cuttack Municipality which had been declared to be invalid by the High Court by its earlier judgment so that as a result of the Ordinance, the elections to the Cuttack Municipality must be held to have been valid. Can it be said that the validation was intended to be temporary in character and was to last only during the life time of the Ordinance ? In our opinion, having regard to the object of the ordinance and to the rights created by the validating provisions, it would be difficult to accept the contention that as soon as the Ordinance expired the validity of the elections came to an end and their invalidity was revived. The rights created by this 402 Ordinance are, in our opinion, very similar to the rights with which the court was dealing in the case of Steavenson and they must be held to endure and last even after the expiry of the Ordinance. The Ordinance has in terms provided that the Order of Court declaring the elections to the Cuttack Municipality to be invalid shall be deemed to be and always to have been of no legal effect whatever and that the said elections are thereby validated. That being so, the said elections must be deemed to have been validly held under the Act and the life of the newly elected Municipality would be governed by the relevant provisions of the Act and would not come to an end as soon as the Ordinance expires. Therefore, we do not think that the preliminary objection raised by Mr. Chetty against the competence of the appeals can be upheld. The result is that the appeals are allowed, the order passed by the High Court is set aside, and the Writ Petition filed by Mr. Bose is dismissed with costs throughout. Appeals allowed.

IN-Abs

Elections were held for the Cuttack Municipality and 27 persons were declared elected as Councillors. One B, who was defeated at the elections, filed a writ petition before the High Court challenging the elections. The High Court held that the electoral rolls had not been prepared in accordance with the provisions of the Orissa Municipalities Act, 1950, as the age qualification had been published too late thereby curtailing the period of claims and objections to the preliminary roll to 2 days from 21 days as prescribed; Consequently the High Court set aside the elections. The State took the view that the judgment affected not merely the Cuttack Municipality but other municipalities also. Accordingly, the Governor promulgated an ordinance validating the elections to the Cuttack Municipality and validating the electoral rolls prepared in respect of other municipalities. Thereupon, B filed a writ petition before the High Court contending that the ordinance was unconstitutional. The High Court found that the ordinance contravened article 14 of the Constitution, that it did not successfully cure the invalidity and that it offended article 254(1) of the Constitution as it was inconsistent with many Central Acts falling in the concurrent list and was unconstitutional. The State and the Councillors appealed and challenged the findings of the High Court. B raised two further contentions that the appeal had become infructuous as the ordinance had expired and that the ordinance was invalid as it purported to invalidate the judgment of the High Court. ^ Held, that the ordinance was valid and that it successfully cured the invalidity of the electoral roll and of the elections to the Cuttack Municipality. The Ordinance did not offend article 14 of the Constitution. Its object was not only to save the elections to the 381 Cuttack Municipality but also to other municipalities whose validity might be challenged on similar grounds. It did not single out B for any discriminatory treatment. Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar; , , referred to. State of Vermont vs Albert Shedroi,(1904)68 L. Ed. 179, distinguished. The Ordinance effectively removal the defects in the electoral rolls found by the High Court by its first judgment. It was not necessary for it to further state that the result of elections was not materially affected. Section 5(1) of the Ordinance which saved the actions taken and powers exercised by the Councillors, the Chairman and the Vice Chairman was not repugnant to any existing law and did not contravene article 254(2) of the Constitution. Section 5(1) was confined to action taken under the Orissa Municipalities Act and did not extend to violations of other laws made by the Central Legislature under the concurrent list. The first judgment of the High Court under article 226 of the Constitution could not be equated with article 226 itself. As such the Governor did not transgress any constitutional limitation in nullifying its effect by the validating Ordinance. The invalidity of the electoral rolls and the elections to the Cuttack Municipality did not revive on the expiry of the Ordinance. The general rule with regard to temporary statutes is that, in the absence of a special provision to the contrary, proceedings being taken under it against a person will ipso facto terminate as soon as the statute expires. But, if the right created by the Statute is of an enduring character and has vested in the person, that right cannot be taken away simply because the statute has expired. The rights created by the Ordinance lasted even after the Ordinance lapsed as its object was to remove the invalidity permanently. Krishnan vs State of Madras [1951] S.C.R. 621, Wicks vs Director of Public Prosecutions, [1947] A.C. 362, Steavenson vs Oliver ; and Warren vs Windle, ; , referred to.

Appeals Nos. 319 and 320 of 1961. Appeals by special leave from the order dated October 23, 1959 of the Foreign Exchange Appellate Board, New Delhi, in Appeal No. 51 of 1959. A. V. Viswanatha Sastri, K. L. Misra, Advocate General for the State of Uttar Pradesh, B. P. Khaitan, section K. Kapur and B. P. Maheshwari, for the appellant (in C. A. No. 319 of 1961) and the respondent (In C. A. No. 320 of 1961). M. C. Setalvad, Attorney General of India, C. N. Joshi and P. D. Menon, for the respondents (In C. A. No. 319 of 61) and the appellant (in C. A. No. 320 of 1961). 1962 April 19. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. The appellant in Civil Appeal No. 319 of 1961, Shri section P. Jain in the Chairman of the Board of Directors of a Company called Sahu Jain Ltd., which holds the managing agency of two companies, the Rohtas Industries Ltd. or more shortly the Rohtas, and the New Central Jute Mills Ltd. The Rohtas carry on business in the manufacture and sale of paper, and own a paper Mill at Dalmianagar in the State of Bihar. Shri Jain is the Chairman of the Board of Directors of that Company also. The New Centre Jute Mills Ltd. carry on business in the manufacture and sale of Jute, and own Mill at Calcutta. They also do business in the manufacture and sale of chemicals and fertilizers at Varanasi. On June 30, 1958, Shri section P. Jain left India on a tour to the continent of Europe and on his return to this country he was searched at the Palam Airport on October 1, 1958, and the following document was found in his leather attache case "Deutsche Bank Aktiengesellschaft. to our letter of 25th Sept., 1958 to .Mr. section P. Jain, Hotel Briedenbacher Hof. Dusseldorf. The "DM account with limited convertibility No. 50180 of Mr. section P. Jain has been credited in 1958, upto now,. with the following amounts from German sources ; 20th March ,118,65 from M/s. J. M. Voith G. m: b. H. Maschinenfabrik, Heidenbeim marked "DM 210.081,31 less DM. 262,65 banking charges" (the said charge was made by the remitter 's bank which is not a branch of ours); 11th July from Messrs. Escher Wyss G. m. b. H. marked "as, per letter of 7th July 1958" in translation. 9th August ,81 from Messrs. J.M. Voith G. m. b. H. Maschinemfabrik, Heiden heim marked "DM. 201.676,59 less banking charges." 15th August , 03 from Messrs. Friedr. Udhe G. m. b. H. Dertmund, marked in translation "derived expenses DM. 465.633,63 interest payment DM. 7.2.52,40. " 24th. September , from Messrs. Pintsch Bamag A.G., Butzbach marked in translation ,payment of excess price." 25th September from Messrs. Pintech Bamag A.C., Butsbech marked in translation "in respect of excess price." Now section 4(1) of the Foreign Exchange Regulations Act (VII of 1947)herienafter referred to as ,the Act ' providesthat " 'Except with the previous general or special permission of the Reserve Bank, no person resident in India other than authorised dealer shall 301 outside India buy or borrow from, or sell or lend to, or exchange with, any person not being an authorised dealer, any foreign exchange. " The expression foreign exchange ' as defined in s.2(d) means 'foreign currency and includes all deposits, credits and balances payable in any foreign cur rency and any drafts, travellers ' cheques, letters of credit and bills of exchange expressed or drawn in Indian currency but payable in any foreign currency. " As Shri Jain had admittedly not obtained the permission general or special of the Reserve Bank, for opening the account aforesaid, the Director of Enforcement started proceedings against him under section 4(1) of the Act. The explanation of Shri Jain was that the amounts in question had been deposited into the Bank by four German firms in settlement of claims which two Indian Companies the Rohtas and the New Central Jute Millis Ltd. had against them for delayed and defective supplies of machinery and equipment under previous contracts, that the deposits in question had been made subject to the condition that they should be utilised only for making initial payments towards price of new machineries to be purchased from the German firms and that in consequence there was no loan by the appellant within s.4(1) of the Act. The Director rejected this explanation and held that s.4(1) had been contravened and imposed a fine of Rs. 55 lakhs on Shri Jain under section 23(i)(a) of the Act. Against this order there was an appeal to the Foreign Exchange Appellate Board who, examining the question in the light of fresh materials which were made available to them accepted the version of Shri Jain, and held that the deposits had been made by the German firms under the circumstances and on the condition stated by him. They however held that even so the deposits in question would inn law be loans by Shri Jain to the 302 Bank, and. that in consequence, s.4(1) of the Act had been infringed, as no permission had been obtained as required by it. In this view they confirmed theorder of the Director but reduced the fine to Rs.5 lakhs. Against this order both Shri section P. Jainand the Union of India have preferred the above appeals with the leave of this Court under Art.136 of the Constitution. In this judg ment Shri section P. Jain will be referred to as the appellant and the Union of India as respondents. On the contentions urged before us the questions that arise for our decision in these appeals are : (1)What. are the terms and conditions on which the deposits in question were made; (2)whether on those terms and conditions there has been a violation of s.4(1) of the Act by the appellant; and (3)whether the imposition of penalty under section 23 (i) (a) of the Act is bad on the ground that the section is in contravention of article 14 and in consequence void. It will be convenient to dispose of the last contention first, as it goes to the very root of the jurisdiction of the Director of Enforcement to proceed under the impugned section. Section 23 (1) of the Act is as follows "23(1) If any person contravences the provisions of section 4, section 5, section 9, or sub section (2) of section 12 or of any rule, direction or order made thereunder, he shall (a)be liable to such penalty not exceeding three times the value of the foreign exchange in respect of which the contravention has taken place, or five thousand rupees, whichever in more, as 303 may be adjudged by the Director of Enforcement in the manner hereinafter provided, or (b) upon conviction by, a Court, be punish able with imprisonment for a term which may extend to two years, or with fine, or with both. " Then there is section 23 D which, omitting what is not material, ruins as follows: "23.D(1) For the purpose of adjudging under clause (a) of sub section (i) of section 23 whether any person has committed a con travention, the Director of Enforcement shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity of being heard and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of the said section 23 : Provided that if, at any stage of the inquiry, the Director of Enforcement is of opinion that having regard to the circumstances of the case, the penalty which he is empowered to impose would.not be adequate, he shall, instead of imposing any penalty himself, make a complaint in writing to the Court. " It will be seen that when there is a contravention of s.4(1), action with respect to it is to be taken in the first instance by the Director of Enforcement. He may either adjudge the matter himself in accordance with section 23(1)(a), or he may send it on to a Court if he considers that a more servere penalty than he can impose is called for. Now the contention of the appellant is that when ,the case is transferred to a Court, it will be tried in 304 accordance with the procedure prescribed by the Criminal Procedure Code, but that when the Director himself tries it, he will follow the procedure prescribed therefor under the Rules framed under the Act, and that when the law provides for the same offence being tried under two procedures, which are substantially different, and it is left to the dis cretion of an executive officer whether the trial should take place under the one or the other of them, there is clear discrimination, and article 14 is contravened. Therefore section 23 (1) (a) must, it is argued, be struck down as unconstitutional and the imposition of fine on the appellant under that section set aside as illegal. It is not disputed by the appellant that the subject matter of the legislation, viz., Foreign Exchange, has features and problems peculiarly its own, and that it forms a class in itself. A law which prescribes a special procedure for investigation of breaches of foreign exchange regulation will therefore be not hit by article 14 as it is based on a classification which has a just and reasonable relation to the object of the legislation. The vires of section 23 (1) (a ' is accordingly not open to attack on the ground I that it is governed by a procedure different from that prescribed by the Code of Criminal Procedure. That indeed is not controverted by the appellant. That being so, does it make any difference in the legal position that section 23 D provides for transfer by the Director of Enforcement of cases which he can try, to the Court ? We have not here, as in State of West Bengal vs Anwar Ali (1) a law, which confers on an officer an absolute discretion to send a case for trial either to a Court or to a Magistrate, empowered to try cases under a special procedure. Section 23 D confers authority on the very officer who has power to try and dispose of a case to send it on for trial to a Court, and that too only when he consider that a more severe (1) ; 305 punishment than what he is authorised to impose, should be awarded. In a Judicial system, in which there is a hierarchy of Courts or Tribunals, presided over by magistrates or officers belonging to different classes, and there is a devolution of powers among them graded according to their class, a provision such as section 23 D is necessary for proper administration of justice. While on the one hand a serious offence should not go without being adequately punished by reason of cognizance thereof having been taken by an inferior authority, the accused should on the other hand have in such cases the benefit of a trial by a superior court. That is the principle underlying section 349 of the Criminal Procedure Code, under which magistrates of the second and third class, are empowered to send the cases for trial to the District Magistrate or Sub Divisional Magistrate, when they consider that a more severe punishment than they can inflict is called for. In our view the power conferred on the Director of Enforcement under section 23 D to transfer cases to a Court is not unguided or arbitrary, and does not offend article 14 and section 23 (1) (a) cannot be assailed as unconstitutional. (1)Passing on to the question as to the terms on which the deposits standing to the credit of the appellant in the Deutsche Bank were made, though before the Director, and the Appellate Board, the truth of the settlements between the German firms, and the appellant was itself questioned by the respondents, before us it is not disputed that there were such settlements or that the deposits were made pursuant thereto. The 'whole of the controversy before us is limited to the question whether the deposits were unconditional and absolute or whether they were made subject to the condition, that the appellant could operate on them only for payment of the price of new machineries to be purchased from those German firms. 306 Before entering on a discussion of the materials bearing on this point, we may deal shortly with a question which was agitated before the Director of Enforcement and the Appellate Board. That is whether the provisions of the Evidence Act are applicable to the proceedings under the Act. Rule 3 (5) of the Rules framed under the Act provides that in taking evidence, "the Director shall not be bound to observe the provisions of the (1 of 1872)". Section 24 A of the Act provides that the court shall presume the genuineness and the truth of the contents of certain documents tendered in evidence by the prosecution unless the contrary is proved. The Director of Enforcement held that by reason of the above provisions the Evidence Act had no application to proceedings under the Act. The Appellate Board came to a different conclusion. It held that section 24 A had application only to proceeding in Court and that Rules 3 (5) had not the effect of rendering admissible evidence which was irrelevant or inadmissible under the Evidence Act. In our opinion this is the correct view to take of the scope of section 24 A and Rule 3 (5) and that was conceded before us by the learned Attorney General appearing for the respondents. For a satisfactory determination of the question as to the terms on which the deposits in account No. 50180 were made, it is necessary to narrate briefly the history and nature of the disputes, which form the subject matter of the settlements. They have their origin in four contracts entered into with four German firms, two of them by the Rohtas and the other two by the New Central Jute Mills Ltd. Taking the first of them, some time prior to 1953 the Rohtas had placed an order with a German firm called Messrs. Voith & Company for the supply of three paper Machines. The shipment of these machines was 307 delayed beyond the time stipulated and moreover when they were supplied their production was found to be far below what had been guaranteed under the agreement. The Rohtas claimed compensation from M/s. Voith & Company on both these accounts and after some correspondence between them a representative of the German firm Mr. Zimmermann came over to India to make an enquiry on the spot, and as a result of the discussion which he had with the Rohtas he recommended on February 21, 1957 that a sum of pound 17,900/ might be paid by the German firm as compensation for delay in ship ment. He however declined to admit the claim made by the Rohtas on account of the deficiency in the output of the machines. In accordance with this recommendation Messrs. Voith & Co. remitted on March 15, 1958, German Marks equivalent to the sum of pound 17,900/ to the Deutsche Bank to be credited in the name of the appellant and it was so credited on March 20, 1958. The appellant was in due course informed of the deposit, but on May 14, 1958, he wrote to M/s. Voith & Co. that he was not prepared to accept the amount in full satisfaction as no compensation was paid for deficiency in output. Thus 'the dispute 'was still unsettled, when the appellant left for Germany. Coming next to the second contract, some time in 1951 the Rohtas had purchased from M/s. Escher Wyss another firm in West Germany a Yankee Paper making Machine. As soon as it was installed it was discovered that some of its parts were defective and that its output was also below what was guaranteed. On December 17, 1953, the appellant brought these defects to the notice of the German firm and asked them to substitute good and suitable parts in the place of the unusable old ones. On this a protracted correspondence followed but as the machines could not be worked without replacement of the defective parts, the Rohtas could 308 not wait until a settlement was reached and so purchased, the requisite parts from another German firm called O 'Dorries and made a demand on M/s. Escher Wyss & Company for compensation. A representative of the firm Mr. Staudenmaier came over to India some time in 1956 to investigate the matter, and after making a local inspection he submitted proposals for remodelling the machines. On June 17, 1957, the Rohtas wrote to the German firm that they were not agreeable to these proposals and requested them "to have the claims settled as put forward by us in our previous letters". Thus the claim under this contract was also pending settlement at the material period. The facts relating to the third and fourth contracts concerned in these disputes are that the New 'Central Jute Mills Ltd. had decided to instal at Varanasi a Gas and Synthesis Ammonia Plant for the manufacture of Chemicals and Fertilisers and placed orders for the machineries and parts with two German firms M/s. Friedrich Udhe and M/s. Pintsch Bamag. The case of the appellant is that many of the equipments which were supplied by the two firms were not in accordance with the specifications, that the pipe lines were Dot properly fabricated and were untailored and that there was also shortage in the supplies made by M/s. Pintsch Bamag. The New Central Jute Mills Co. claimed compensation for the defective supplies as aforesaid from the German firms, and negotiations for settlement of these claims were also pending at the relevant dates. Another factor forming the background for the settlements must now be mentioned. At about this time the appellant bad come to a decision to instal a new Paper Plant at Dalmianagar and a new Ammonium Chloride Plant at Varanasi. 309 To carry out those projects it was necessary to secure the requisite foreign exchange and for that the permission of the Government of India had to be obtained. Accordingly the appellant wrote on May 26, 1958, to the Ministry of Commerce & Industries and again on June 5, 1958, to the Ministers for Industries and for Finance settling out his proposals for expensations and desiring to know the amounts of foreign exchange which could be made available for these projects. In his reply to the appellant dated June 9, 1958, the Minister for Industries stated: "As you know under the present acute foreign exchange position, no earlier payments before production are permitted . Also export earnings from the products of a particular plant lay only be allowed to be used for payments for that very plant and nor for the payment of Import and other capital goods and equipment". for the Continent was that he had outstanding claims against four German firms and negotiations for their settlement were pending, and that he had on hand schemes for expansion of industries at Dalmianagar and Varanasi which could be put through only if the requisite machinery could be imported but that the Government of India would not permit imports which involved payments of price at the time of delivery of goods. The appellant left India for Europe on June 30, 1958. In the following months he contacted the respresentative of the four German firms mentioned above and all the disputes were settled. According to the appellant, the terms of the settlement which were same in all the four contracts were as follows: The amount payable to the Indian Companies as compensation was fixed. It was to be deposited by the German firms to the credit of the 310 appellant in the Deutsche Bank. The Indian Companies were to obtain import licences from the Government of India and place orders with the respective firms for the supply of new machineries. The amounts 'in credit in the Deutsche Bank were to be supplied pro tanto for the payment of the price of these machines to the respective firms. The appellant was not to operate on this account except for the purpose of making payments to the German in the manner aforesaid. It is now necessary to refer to the evidence bearing on the settlements, because, as already stated, while the respondents admit that there were settlements with the German firms and deposits were made pursuant thereto, they do not admit that the deposits were made subject to condi tions, as stated by the appellant. It will be remembered that on March 20, 1958, M/s. Voith & Company had deposited with Deutsche Bank DM. 210.081,31 Marks being the equivalent of pound 17,900/ as compensation for delayed shipment, which was the only portion of the claim admitted by them, in full settlement of all the claims of the Rohtas. Now pursuant to the settlement reached with the appellant, they deposited on August 1, 1958, a further sum of DM. 201,67,659 Marks in the name of the appellant in the Deutsche Bank. The terms of the settlement appear, in two letters written by M/s. Voith & Company on August 1, 1958, one to the Rohtas and the other to the Deutsche Bank. In the letter addressed to the Rohtas M/s. Voith and Company say "Mr. Jain informed us of your plans for the future such as the establishment of a new complete pulp and paper making unit in Assam, and in particular, of your immediate desire to increase the production of your Board Machine P.M. I in Dalmia 'a ar. For this re construction project we have already submitted an offer. Regarding the remodelling of your 311 P.M. I., we understand that you have already obtained an industrial licence and that you expect to get an import licence for the equipment offered by us. An advance payment of 20% of the ex works price is, however, for this comparatively small order a pre condition for our credit insurance. In view of Mr. Jain 's assurance that we will enjoy preference for the supply of our machinery in the event that an import licence for the new paper mill will eventually be obtained, and in order to make the early placing of your order for the reconstruction of P.M. I possible, we have finally agreed to meet your claims for the paper machines already supplied to the extent of a total sum of DM. 412,058 including the amount already placed with the Deutsche Bank, Dusseldorf, in March representing 20% of the price quoted in our offer of January 15th, 1958. We are, therefore, remitting the balance to the Deutsche Bank as per letters addressed to them translation of which we attach hereto. This settlement of your claims is, considered on the definite understanding that the total amount can only be utilised by you to make to us the initial payment of 20% on and when the import licence for the reconstruction of P.M.I. is received. The Bank is, therefore, instructed to hold both remittances made by us at your disposal for this purpose only. On the same day M/s. Voith & Company advised the Deutsche Bank that they had remitted a further sum of DM.? 201,676.59 to it in addition to the previous remittance of DM. 210,381.31 and then go on to say ,the two amounts are paid in final settlement, of the claims of Messrs. Rohtas Industries Limited against us in connection with the supply of 3 paper machines. We repeat that the said amounts may be utilised by Mr. section P. Jain, Chairman of Messrs. Rohtas Industries Limited, only for the purpose of asking initial payments to us against further purchase of 312 machinery, which payments will be made on final approval of our tender after receipt of the Indian import licence. For other 's sake please confirm receipt of these instructions to us. " It should be mentioned that under the Export Regulations in force in Germany no goods manufactured therein could be exported unless 20% price quoted were paid for before the goods left the country. The effect of the arrangement come to between M/s Voith & Company and the appellant was that the firm would be free to export goods to the Rohtas on payment to it of 20% of the price out of the funds standing to the credit of the appellant in the Deutsche Bank, and it may be gathered that the total amount of compensation had relation to the 20 per cent of the price of the new machinery to be purchased. The settlement made in respect of the three "other contracts was also on the same lines. Escher Wyss & Company settled the claim of the Rohtas on July 7 1958, and wrote to the appellant as follows : "We are pleased that a solution has been arrived in the course of the talks we had with you to settle your long outstanding claim. We have declared to pay the agreed amount of DM. 205.000, as finally settled immediately for your satisfaction to Deutsche Bank to be held by them for your utilising in purchase of machinery by Messrs. Rohtas Industries Ltd., Dalmianagar from us after you have finally decided on the several plans discussed here and obtained import licences from your Government. We have pointed out to you that we attach great value to entertaining good and friendly relations and to do further business with you. We shall thank you also to let us have a confirmation that all claims against our firm in connection with our delivery of Yankee Paper Machine are now definitely settled." On the same 313 day M/s. Escher Wyss & Company transferred a sum of DM. 205.000 to the Deutsche Bank communicating to. them a copy of the letter addressed to the appellant containing the terms of the deposit with them. The amount was duly credited to the account of the appellant on July 11, 1958. On August 11, 1958, a settlement was reached between the appellant and M/s. Friedrich Udhe & Company, who, then addressed the following letters to the Deutsche Bank: "We are releasing a sum of DM. 472,866,03 as derived expenses DM. 465.633,63 and interests payment DN. 7.252.40 to meet claims of Mr. section P. Jain, President, New Central Jute Mills, Calcutta. We request you to hold this amount in the name of Mr. section P., Jain but it shall not be payable to him and is to be utilised only for payment to us against purchase of expansion machinery by Sahu Chemicals Proprietor New Central Jute Mills after they secure licence and DM transfer guarantee from their Government. " The amount was actually credited in the Deutsche Bank in the name of the appellant on August 15, 1958, Confirming this arrangement M/s. Friedrich Udhe wrote to the appellant on August 18, 1958, as follows : "As a very special case, to promote our pleasant business relations, we have, only in view of your assurance for expansion order, released a sum of DM. 472,886,03 calculated as aforesaid, against our engineering fees and expenses on your existing supply, which must be utilised, however, only towards your meeting payments to us against order and shipments which are essential for our credit insurance. We have made over this amount to Deutsche Bank A. C. with instructions to hold the same for payment aforesaid after your Government grants you licence and DM transfer guarantee is established as may be acceptable to competent German authorities. " 214 On September 21, 1958, there was a settlement of the dispute with M/s. Pintsch Bamag under which the latter agreed to pay 600.000 Marks in full satisfaction of the claim on the same terms as in the other contracts. On the same day M/s Pintsch Bamag wrote the following letter to the Deutsche Bank. "We hereby notify you that we are placing DM. 600.000 with you in payment of excess price claimed by Mr. section P. Jain, President of New Central Jute Mills Co. Ltd., we further advise that the amount is to be held by you in the name of Mr. section P. Jain, but it would not be available to him except for making payment to us against extension machinery to be ordered with us by Sahu Chemicals Proprietors New Contrat Jute Mills Co., on their obtaining licence from their Government and approval of payment conditions.", On September 24, 1958, M/s. Pintsch Bamag wrote to the appellant. that they had deposited the amount settled in the Deutsche Bank and added "we must however point out expressly that but for the assurance of extension order to us, it would not have been possible for us to meet your claims. This amount will be available therefore only for making payment to us against extension machinery and the bank has been specifically advised to hold the same for you only in accordance therewith. " The evidence above referred to clearly establishes that the deposits in account No. 50180, were made subject to the conditions stated by the appellant, and there is intrinsic evidence in the entries themselves in this account which support this contention. Thus the entry relating to the receipt of deposit from Messrs. Friedrich Udhe speaks of "derived expenses" and "interest ' '; and those relating to the receipt from Messrs. Pintsch Bamag read as "payment of excess price and "in respect of excess price". These entries have reference to the nature of the claime on account of which the deposit are made, and would be wholly out of place in 315 the case of ordinary deposits. On the other hand, they would be quite explicable if made under; special directions from the depositors. But the matter does not rest there. While the appeal was pending before the Appellate Board both the parties agreed that further information should be elicited from the Bank as to several matters concerning the deposits, and on August 21, 1959, a questionnaire agreed to by counsel on either sides was sent by the appellant to the Bank for its reply. Therein the Bank was asked to furnish particulars regarding the heading of account No. 50180 the certified copy of the relevant entries therein, the certified copy of page 1 of the letter dated September 25, 1958 from the Bank to Mr. Jain, and the communications which passed between the Bank and Mr. Jain in respect of the six items of deposit appearing in the account. Among the questions sent to the Bank were the following : (a) Please state whether the amounts referred to were deposited with you and were held by you on the conditions mentioned in the letters, copies whereof are enclosed herewith. (b) What is meant by the expression ',DM" account with limited convertibility" ? What does it signify in relation to the deposits taken by you under the conditions mentioned in those letters ? Was the acceptance of these conditional credits by the Bank confirmed to the persons who deposited these amounts ? To this the Bank sent a reply dated September 1, 1959, to the Chairman of the Board, but addressed to the appellant. Therein it give particulars of the six items of deposit as contained in the letter 316 dated September 25, 1958. Then there are the following statement which are material " 'The deposited amounts are being held by us subject to the conditions given in the enclosed certified copies of the relevant letters from the German parties concer ned. As is evident from the stipulations mentioned above, you are not entitled to withdraw the amounts specified or parts thereof, without fulfilling the terms and conditions stipulated in the said letters. The acceptance of these conditions, has, of course, been confirmed to the firms concerned and we are, therefore, bound to observe the conditions vis a vis those firms, too, before we possibly could carry out any instructions from your part to dispose of the funds. It need not be emphasized that these conditions applied during all the time the amounts have been maintained in this ,account where, indeed, they continue to be kept on the same basis. " As the letter of the Bank did not contain replies to all the questions raised in the letter of August 2 1, 1959, the Appellate Board directed that it should be asked to send a further reply with respect to all the questions. On September 17, 1959 the appellant accordingly wrote another letter to, the Bank asking for a reply specifically to all the questions, to which the Bank again replied on September 23, 1959. Therein they stated that the heading of the account was "Mr. Shanti Prasad Jain, Account No. 50180" that the account consisted in its entirety of six items of credit totalling DM. 1.689: 429,50 and that there were no further credits or debits in the account. The reply then proceeds on to state. ; The restrictions prevailing against the 317 disposal of the amounts as imposed upon us by the firms who deposited the money are as is customary in such cases not expressed or referred to in the heading of the account. Such restrictions are marked to the account concerned by means of internal instructions. That is what has been done in this case too. We give below the exact copy of page 1 of our letter dated 25th September, 1958 except for the portion wherein we communicated to you some particulars of a strictly confidential nature concerning the affairs of a third party, some client of ours. This information we cannot disclose to any other party, as you evidently went us to do. we, however, state that this omitted part page 1 does not in any way relate either to the account of the six items of deposit or to you". The copies of the communications addressed by the German firms to the Bank were enclosed. It is not disputed for the respondents that if the statements contained in the replies given by the Bank are to be accepted at their face value then the case of the appellant must be held to be established beyond all reasonable doubt. But they contend that there are circumstances which give rise to a suspicion that the above statements might have been inspired ' by the appellant. 'They argue that the letter of the Bank dated September 25, 1958, shows that what we have on record is only the second page of the account of the appellant in the Bank and that shows that this is only a continuation of a previous account which has not been produced. It is also pointed out that in the letter which the Bank sent to the Appellate Board on September 23, 1959, it was stated that the annual statement of the account ending December 31, 1958, had been sent to the appellant but that again has not been produced. All this, it is said, throws a cloud of suspicion on the truth of the arrangement as set up by the appellant, 318 We are not impressed by this contention. There is no basis the evidence for the supposition that the account as produced is not the whole of the dealing of the appellant with the Bank. The Bank has categorically stated that the six items of credit were all the transactions standing in the name of the appellant and there is no reason to discredit it. Nor is there any force in the contention that the annual statement ending December 31, 1958, had not been produced by the appellant, because the total amount standing to the credit of the appellant on that date as stated in the letter of the Bank, is precisely what is shown in the account at page 2. It is, therefore, clear that there were no dealings between the Bank and the appellant, other than those we are concerned with. Nor is there any position the complaint that it is only the second page of the account that has been produced and the first page suppressed. The Bank has made it clear that the first page only contains some confidential communications relating to a customer, and that there are no entries relating to the deposits of the appellant in that page. It is argued for the respondents that it is unusual for a Bank to take deposits on the terms stated by the appellant, and that furnishes cogent reason for rejecting the settlements pleaded by him as an afterthought. It should be mentioned that while the matter was pending before the Appellate Board, the respondents obtained the opinions of German Banks and a German Lawyer as to whether deposits on the terms mentioned by the appellant were usual and what the incidence of such deposits was. Among the opinions received was one from Sal Oppanheim Koein in which it is stated "A Germanbanking practice in export trade with India as described in your above letter is not known to This is strongly relied on for the 319 respondents, but then it is further stated in that opinion : "We think it possible however, that in individual cases, agreements of this kind could be arranged between the two contracting partners. If the contracting parties reach such an agreement, and if the customer instructs his bankers accordingly, the bankers, will, as a matter of usual busi ness conduct inform the third party beneficiary accordingly of the instructions and all relevant modalities which they have received. . If it has been ascertained that the Indian beneficiary has not fulfilled or cannot fulfil the stipulations agreed upon, be forfeits his claims to conditional. payment and the bank can then, on principle, refund the customer of the secured amount. As in the aforementioned case, proceedings here depend on the terms stipulated in individual cases, between the customer and his bankers. " We have then the opinion of the Dresdner Bank on the practice of the German Banks. There. in after observing that they would as a matter of principle avoid handling transactions of the sort referred to lost they should get involved in dispute between the depositor and the payee, the Bank proceeds on to state that "we will handle such business only if the depositor and the payee are known to us as well reputed businessmen" and that, when a Blocked Account is opened at the depositor 's request in the name of the payee, the responsibility of the Bank with reference to the amount "vis a vis the depositor to release the deposited money to the payee is only upon receipt of a special authorization to this effect from the depositor" and that "on the other hand Bank, may refund this amount to the depositor only after expiration of +,he term stipulated by the depositor or, with the payee 's consent, before expiration of the stipulated term." ' This is relied on behalf of the appellant. 320 Another Bank, Messrs. Schacht & Company stated in their opinion that a German Bank when handling deposits would follow exclusively the instructions given by the depositor and that when payments have to be made out of the deposits on the fulfilment of certain conditions the Bank would "effect the payment only after fulfilment of these conditions given by the depositor" and that conditional deposits would "as a rule be limited in time so that after expiration of this limit amounts which have not been paid out for reasons of non utilization or non fulfilment of the conditions will be at the depositor 's free disposal. " One Mr. J. Bergermann a lawyer of Bonn states in his opinion that "it is common practice to accept deposits under conditions" and that in case of such deposits the payee , 'could not enforce payments if the conditions are not fulfilled. " There was some argument before us as to who will be entitled to the amounts in deposit in case the conditions agreed to between the parties are not fulfilled. One view is that the amounts would then revert back to the depositors. The German lawyer could not say on this question more than this that "ifthe conditions are not fulfilled the legal situation isdoubtfull. " The correct position possibly is that if the conditions become impossible of performance, the contract becomes void on the ground of frustration, and the parties are thrown back on their rights prior to the settlement. It is however unnecessary to enter into a discussion of this question, as all that we now concerned with is to see whether deposits of the kind set up by the appellant are so unusual, as to cast a suspicion on their truth. The evidence on record shows that such deposits are well known, though not very common in German banking practice, and there are therefore no sufficient grounds for discrediting the 321 statements of the Bank, as to the terms on which the deposits were made. But the respondents argue that stripped of all its embellishments, the substance of the agreements between the appellant and the German firms, was that the latter were to pay compensation to the Indian Companies, not in cash, but in kind, by delivery of goods manufactured by them against new orders, that that object could have been easily achieved by the Indian Companies and German firms entering into a simple contract to that effect, without complicating the matter by associating the Deutsche Bank in the transaction, and that there is therefore ground for suspecting that the present version of the terms of the arrangement is an after thought so conceived as to fit in with deposits which must have been made previously in the normal course. We are unable to accept this argument. The Doutsche Bank occupies, it should be marked, a position analogous to the State Bank in this country, and it is a Bank of great international repute, and status. Its statements as regards the conditions which the deposits were made are not to be lightly brushed aside, and no grounds have been shown as to why they should not be accepted. On the other hand, there is on record unimpeachable evidence which fully supports them. On March 15, 1958, when M/s. Voith & Company remitted to the Bank the sum equivalent to pound 17,900/ to the credit of the appellant, they gave the following instructions to the Bank : "The said amount should be held in the name of Mr. section P. Jain, Chairman of Messrs. Rohtas Industries Ltd., who will arrive in Germany in the course of the next month. As soon as we have arrived on a final understanding With Mr. section P. Jain would be authorised to 322 utilise the above amount for payment only of the purchase of further machinery by Messrs. Rohtas Industries Limited from us. Please be advised that the amount may not be used otherwise by Mr. section P. Jain or Messrs. Rohtas Industries Limited. " Thus the deposit was conditional, and it was to be repaid to the depositors in payment of the price of goods, to be thereafter ordered by, and supplied to the Rohtas. The importance of this lies in this that it is the first of the six credits in account No. 50180, which is now under scrutiny, and it was long prior to the settlement reached between the parties, which was on August 1, 1958. This completely shatters the theory that the statement of the Bank might have been 'inspired ' as suggested for the respondents. The fact would appear to be that when Mr. Zimmermann came over to India in February 1957 for settling the claim of the Rohtas for compensation, he must have been apprised of the intention of the appellant to expand the industries, and as practical businessmen, he, and the appellant must have evolve the scheme of conditional deposits, to be applied in payment of future goods to be ordered by the Indian Companies. Such a scheme would be of advantage to M/s. Voith & Company because that would insure them new business, and they could make up for it in fixing the price. The Indian Companies would under this arrangement be in a position to overcome the difficulties of getting foreign exchange, and it would be easy to get import license from the Government of India. And as for depositing the amounts in the Bank, that would not merely lend assurance to the Indian Companies, but also enable the parties to comply with the German regulations, as to payment of 20 per cent of the price of manufactured goods, before they axe exported. This precisely is the sort of 323 arrangement which businessmen might be expected to conclude in the situation in which the parties were placed. It should be noted that when the proposal of M/s. Voith & Company and the deposits made by them were communicated to the appellant, he raised no objection in his reply dated May 14, 1958, to the conditions under which the deposit was made. He declined to accept it only because no compensation was awarded for deficiency in output, and it is this claim which was also settled on August 1, 1958, when a second deposit was made by M/s. Voith & Company. The scheme evolved by the appellant and M/s. Voith & Company set the pattern for settlement ' with the other three firms, and that is how all the four contracts came to be settled on the same terms. On the evidence above referred to. , we are satisfied that the deposits in account No. 50180 were made by the German firms on the conditions stated by the appellant. We have reached this conclusion on a consideration of the evidence on record, without reference to any abstract doctrine as to burden of proof. But it is only right to observe, that the proceedings under the Act are quasi criminal in character and it is the duty of the respondents as prosecutor to make out beyond all reasonable doubt that there has been a violation of the law. Vide the decision in re. H. P. C. Productions Ltd. (1) cited for the appellant. The learned Attorney General did not contest this position. (2)That brings us on to the next question which is whether on our finding as to the nature of the deposits the appellant has contravened section 4(1) of the Act. The appellate Board has held that he has, for the reason that under the law the true relationship between a Banker and a customer is that of a debtor and creditor and that it makes no difference in that relationship that the deposites were conditional. The respondents maintain that this (1) 324 is the correct view to take of the relationship between the appellant and the Deutsche Bank with reference to account No. 50180 and that he must be held to have lent out the monies deposited in that account to the Bank. The contention of the appellant on the other hand is threefold. Firstly, it is said, that on the terms of the deposits, he has no present right to the amounts standing to his credit in the account, that he would become entitled to them only on the happening of certain contingencies, and that until then there was no debt due to him and that therefore there could be no lending in respect, of that debt. Secondly, it is contended, that when the German firms transferred the amounts mentioned in account No. 50180 to the Deutsche Bank that was not by way of deposit with it as a bank but by way of entrustment for safe custody to be paid over to the person who might become entitled to them in terms of the agreement and that the monies deposited Under those agreements. were not monies lent to the Bank. And thirdly, it is argued, that on the terms on which the deposits were made in the Bank, the position of the Banker was not that of a debtor but that of a trustee, the appellant being the beneficiary entitled to the amounts on fulfilment of the conditions of which the Bank had been apprised. We must now examine these contentions. Now the law is well settled that when moneys are deposited in a Bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not trustee and beneficiary. The banker is entitled to use the monies without being called upon to account for such user, his only liability being to return the amount in accordance with the terms agreed between him and the customer. And it makes no difference in the jural relationship whether the deposits were made by the customer himself, or 325 by some other persons, provided the customer accepted them. There might be special arrangement under which a Banker might be constituted a trustee, but apart from such an arrangement, his position qua Banker is that of a debtor, and not trustee. The law was stated in those terms in the old and well known decision of the House of Lords in Foley vs Hill (1), and that has never been questioned. If the point under consideration fell to be decided solely on the basis of account No. 50180 in the Deutsche Bank, there could be no answer to the contention of the respondents that the appellant was a creditor in respect of the amounts deposited in that account he must be held to have advanced them as loan to the Bank. It needs hardly to be stated that it makes no difference in the legal position that the amounts shown in the account were not deposited by the appellant but by the German firms as he bad accepted them. But it is contended for the appellant that the acceptance of the deposits by him was under special agreements entered into with the German firms, which gave him no present right to the amounts, that though the account stands in his name he has no right to operate on it, that before he can do so he must obtain licence from the Government of India to import the goods, ' then place an order with the respective German firms for supply of new machineries and parts and then only draw on the account and that even then it can only be for the payment of the price payable to those firms for the supply of new goods. The right of the appellant to the amounts in deposit is, it is argued, contingent on the happening of these events and that until then there was no debt due to him and section 4(1) had no application. (1) E.R. 1002. 326 In our opinion this contention is well founded. A contingent debt is strictly speaking not a debt at all. In its ordinary as well as its legal sense, a debt is a sum of money payable under an existing obligation. It may be payable forthwith, solvendum in presenti, then it is a debt "due"; or it may be payable at a future date, solvendum futuro; then it is a debt "accuring". But in either case it is a debt. But a contingent debt has no present existence, because it is payable only when the contingency happens, and exhypothesi that may or may not happen. The question whether a contingent debt is a debt as understood in law has often come up for consideration before English Court in connection with garnishee proceedings taken by judgment creditors to attach it as a debt. The, decision has invariably been that they are not debts ,accruing" and could not be attached. In Webh vs Stenton (1), the point for decision was whether an amount payable by a trustee to the beneficiary in futuro could attached by a judgment creditor as a debt "owing or accruing" and it was answered in the negative. Discussing the distinction between an existing debt and a contingent debt, Lord Lindley observed "I should say, apart from any authority, that a debt legal or equitable can be attached whether it be a debt owing or accruing; but it must be debt, and a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation, debitum in presenti, solvendum in futuro. An accruing debt, therefore, is a debt not yet actually payable but a debt which is represented by an existing obligation. The result seems to me to be this: you may attach all debts, whether equitable or legal; but only debts can be attached; and moneys which may or may not become payable 327 from a trustee to his cestui que trust are not debts." "The meaning of 'accruing debt" observed Lord Black burn in Tapp vs Jones(1), ",is debitum in presenti solvandum in futuro, but it goes no further, and it does not comprise anything which may be a debt, however, probable or however soon it may be a debt. " The law is thus well settled that a contingent debt is no debt until the contingency happens, and as the right of the appellant to the amounts in deposit in his name in the Deutsche Bank arises only on the happening of the contingencies already mentioned, it follows that there is no debt due to him in presenti and there could be no loan thereof within section 4(1) of the Act. We should add that our conclusion that there is no present debt owing to the appellant is based on the fact that the contingency on which his title to the amounts in deposit will arise, such as the grant of import licence by the Government is one the fulfilment of which is wholly beyond his control. Different consideration might arise when the contingency is one which can be fulfilled by the very person, who is to take under it. It is further contended on behalf of the appellant that the payments made by the German firm in account No. 50180 cannot be regarded as deposits made by or on behalf of a customer in the normal course of banking business and that in con. sequence the principle of law that when banker receives monies from a customer he becomes his debtor in respect of those moneys has no application. There is considerable force in this argument. It is well know that Bank engage, in addition to their normal work as Bankers, in several (1) (1875)L.R.100 B.591, 328 activities, which are not associated with, and do not involve any elements of banking. In Halsbury 's Laws of England, Third Edition, Vol. 2, Not" (g) it is stated "Numerous other functions are undertaken at the present day by banks, such as the payment of domiciled bills, custody of Valuables, discounting bills, executor and trustee business or acting in relation to stock exchange transactions, and banks have functions under certain financial legislation, e. g. by delegation under the Exchange Control Act, 1947, or as authorised dealers under that Act and subordinate legislation. These functions are not strictly banking business. " In Paget 's Law of Banking, Sixth Edition, p. 43, it is stated that "superimposed on this general relationship of banker to customer there may be special relationships arising from particular circumstances and requirements" and that the express terms of those relationships overrides the implied terms arising from the general relationship. It was argued for the respondents, that this statement of the law could have, as suggested by the word superimposed ', reference only to special contracts entered into with customers, and that involves the admission that the appellant is a customer. Normally no doubt Banks would undertake these works for their customers, but there is nothing to prevent them from doing so for others as well. In Corpus Juris Secundum, Vol. 9, it is stated "The intention of the parties controls the character of the relation between Bank and depositor, which may be that of bailee and bailor, but is ordinarily that of debtor and creditor" (Page 546). And it is pointed out when money is delivered to a Bank "for application to a particular specific purpose" it is not a general deposit creating the relationship of debtor and creditor, but a (,specific deposit" creating the relationship of bailee and bailor or trustee and beneficiary. Vide p. 570, 329 Therefore the fact that money has been put in a Bank does not necessarily import that it is a deposit in the ordinary course of banking. We have to examine the substance of it to see whether it is in fact so or not. It is unnecessary for the purpose of this case to elaborately examine what banking business, properly so called, consists in. It is summed up as follows in Halsbury 's Laws of England. Third Edition Vol. 2 p. 150 Para 277: ', 'the receipt of money on current or deposit account and the payment of cheques drawn by and the collection of cheques paid in by a customer. " Applying these tests, can it be said that account No. 50180 is truly a banking account? Did the appellant open the account in the Bank with a view to deposit his moneys from time to time, and to operate on it by drawing cheques? The question admits of only one answer, and that is in the nega tive. The account was opened in the Bank with a view to effectuate the arrangement between the German firms, and the appellant, which was that the amounts were to be repaid to the depositors a price of new machineries to be supplied by them and the appellant was not to operate on it except for that purpose. The Bank was informed of this arrangement and took the deposits with notice of the rights of the parties thereunder. Under the circumstances the Bank has really only custody of the money as if it were a stakeholder, with a liability to hand it over to the persons who would become entitled to it under the arrangement. On these facts it cannot be said that there is a deposit in a commercial sense of the word. It would be more correct to say that the Bank holds the money under a special arrangement which constitutes it not a debtor, but a sort of a stakeholder. It was also argued on behalf of the appellant that when Deutsche Bank received the amounts 330 from the German firms on the terms mentioned by them, the relationship that was constituted between it and the appellant was one of trustee and beneficiary and not that of debtor and creditor and that therefore section 4(1) was out of the way. We are unable to agree with this contention. Under the terms of the arrangement between the German firms and the appellant the deposits were to stand in the name of the appellant and so they never vested in the Bank. It is true that the Bank would have the right to use the funds but that is not because they belong to it but because it must be taken to be the understanding of the parties, when they entrusted the moneys to it pending there repayment to the German firms in terms of the agreement, that the Bank was to have the right to use them until a demand is made for their return. Relience was placed for the appellant on the decision of the Privy Council in Official Assignee vs Bhat (1), where it was held that a trust fund which was authorised to be invested in business could be traced, on the principle laid down in re. Hallett 's Estate (2), into the assets of the business. But in that case it was admitted that the deposit was a Trust and the point for decision was only whether the undoubted rights of the beneficiary to follow that amount was lost by the authority given to the trustee to use it in his business. But here the question is whether the Bank is a trustee and the fact that they are entitled to use the funds does not clothe them with the character of a trustee. If that were not so every banker must be a trustee which clearly is not the law. Then again who are the beneficiaries under the trust, the German firms or the appellant? The fact is that the arrangement under which the monies were deposited in the Bank is sui generis and its position in truth is that of a bailee, not a debtor or trustee. It is unnecessary to pursue the discussion further (1) (1933) L.R. 60. I.A. 203. (2) 331 in view of our decision that the relationship between the Bank and the appellant is not that of debtor and creditor. It remains to deal with the contention urged on behalf of the appellant that even if it be held that the appellant had made the deposits in question in the Deutsche Bank as a customer, there had been no contravention of is. 4 (1) of the Act as the prohibition enacted therein is only against lending of foreign exchange by a person who is resident in India and that at the time of the deposits in question the appellant was not in India but in Germany. There is no substance in this contention. The intention of the Legislature was plainly to prohibit all transactions in foreign exchange by persons who are residents of India whether such transactions take place during their actual residence in India or during their sojourn in foreign parts. To hold that the prohibition under the Act does not extent to acts done outside India by residents of India must inevitably lead to large scale evasion of the Act resulting in its object being defeated. A construction which leads to such a result must be avoided. The expression "resident in India" is clearly used in the sense "resident of India". It may be mentioned that the words used in section 1 (I) of the corresponding British Statute Exchange Control Act. 1947 are "no person resident in, the United Kingdom, other than an authorised dealer, shall, outside the United Kingdom, buy or borrow any gold or foreign currency from, or sell or lend any gold or foreign currency to, any person other than an authorised dealer": It will be seen that the language in the Indian Statute is in identical terms. In re. H. P. C. Production Ltd. (1) cited on behalf of the appellant the question was whether certain transactions entered into by a resident of England 332 but outside England were hit by section 1 and the basis of the decision is that they would be if the other conditions were satisfied. We have no hesitation in holding that if the appellant did in fact land monies to the Deutsche Bank while he was in Germany he would, have contravened section 4 (1) of the Act. In view of our conclusion that the appellant has only a contingent right to the amounts standing in credit in account No. 50180 and that the deposits were made in the Bank not in the course of normal banking business but under a special arrangement, it must be held that there was no lending of those amounts by the appellant to the Bank within section 4(1) of the Act and the order of the Appellate Board Imposing a fine of Rs. 5 lakhs on him under section 23(1)(a) must be held, to be illegal and set aside. In the result Appeal No. 319 of 1961 is allowed and Appeal No. 320 of 1961 dismissed with costs, one hearing fee.

IN-Abs

The appellant had claims, for compensation against certain German firms in respect of machineries supplied by them to the appellant 's concerns. The appellant went to Germany and arrived at settlements with the firms, under which the firms deposited certain sums of money with the Deutsche Bank in the account of the appellant with the stipulation that the money was only to be used by the appellant for purchases of new machineries from the same firms after obtaining import licenses from the Government of India. The appellant had not obtained permission, general or special, of the Reserve Bank for opening this account. Section 4(1) of the Foreign Exchange Regulation Act, 1947, prohibits a 'Person resident in India ', inter alia, from lending to any person outside India foreign exchange without the permission of the Reserve Bank. Section 23 lays down the penalties for contravention of section 4(1) on adjudication by the Director of Enforcement and on conviction by a Court. Section 23D confers upon the Director the power to adjudicate whether any person has contravened section 4 (1) and empowers him, if he is of the opinion that the penalty which he is empowered by impose would not be adequate in the circumstances of any particular case, to make a complaint in writing to the Court. The Director inquired into the appellant 's Deutsche Bank account, held that the appellant had contravened s, 4(1) and imposed a penalty of Rs. 55 lakhs. On appeal the Foreign Exchange Appellate Tribunal held that the deposits amounted 298 in law to loans by the appellant to the Bank and consequently section 4(1) was contravened but it reduced the penalty to Rs. 5 lakhs. The appellant contended (i) that section 23(1) of the Act offended article 14 of the Constitution as two parallel procedures were provided for the same offence and it was left to the discretion of the executive to choose which was to be applied in. a particular case, and (ii) that there was no loan by the appellant to the Bank and therefore there was no contravention of section 4(1). Held, that the power conferred upon the Director under section 23D to transfer cases to a court is not unguided or arbitrary and, does not offend article 14 and section 23(1) cannot be assailed as unconstitutional. A serious offence should not go without being adequately punished; and in such cases the accused should have the benefit of trial by a Superior Court. Under section 23D the transfer is to a Court and that only when the Director considers that a more severe punishment than what he is authorised to impose should be awarded. Held, further, that the appellant had not lent money to the Deutsche Bank and had not contravened the provisions of section 4(1) of the Act. Though normally when moneys are deposited in a Bank, the relationship that is constituted between the Banker and the customer is one of debtor and creditor, there may be special arrangement under which the relationship may be different. The right of the appellant to the amounts in deposit was contingent on the happening of certain events some of which were beyond his control and until then there was no debt due to him. A contingent debt is no debt until the contingency happens, and as the right of the appellant to the amounts in deposit in his name in the Deutsche Bank arises only on the happening of the contingencies, i.e. granting of the import licenses by the Government of India, there was no debt due to him in presenti and there was no loan thereof within section 4(1) of the Act. The fact that money has been put in a Bank does not necessarily import that it is a deposit in the ordinary course of banking. The purpose of the deposits and the conditions attached to it indicated that the Deutsche Bank held the money under a special arrangement which constituted it not a debtor, but a sort of a stakeholder. The words "a person resident in India" in section 4(1) has been used in the sense of "resident of India", and it was not necessary that at the time of the contravention of section 4(1) should be actually in India. Foley vs Hill, (1848) 11 H. L. C. 28, Webb vs Stenton, and Tapp vs Jones, (1875) L. R. 10 Q.B. 591, referred to. 299

Appeal No. 300 of 60. Appeal from the judgment and order dated November 13, 1958, of the Rajasthan High Court in D.B.C. Writ Application No. 58 of 1957. Chand Mal Lodha and Brijbans Kishore, for the appellant. section K. Kapur and D. Gupta, for the respondent. April 19. The Judgment of the Court. was delivered by GAJENDRAGADKAR, J. The appellant, Firm Ghulam Hussain Haji Yakoob &. Sons, moved the Rajasthan High Court by a petition under article 226 of the Constitution for the issue of a writ in the nature of prohibition or other writ or appropriate order, declaring that it was not liable to pay the customs duty sought to be levied on it by the Controller of Sirohi by his order of the 9th Feb., 1956. It appears that one Mohammad Sagir had taken a contract for cutting forest of Haranj Amrapura from the Thakur of Nibaj on the 12th July, 1946. The duration of this contract was five years and the purpose of the contract was to enable the contractor to prepare charcoal. This contract was subsequently transferred to the appellant by the said Sagir on the 13th September, 1948. In due course, the contract was extended by the Thakur of Nibaj by two years and on endorsement was made on it to that effect on the 15th April, 1950. Under this contract, the appellant prepared charcoal and exported it out of the State of Sirohi. The Assistant Commissioner, Customs and Excise, Sirohi, took the view that the appellant was liable to pay 257 customs duty @ As. /8/ per maund on the quantity of charcoal exported by it. The Asstt. Commissioner found that the charcoal thus exported by the appellant was 2 7, 003 mds. Accordingly, the said Asstt. Commissioner made a report to the Commissioner on the 11th February, 1954. The matter was then dealt with by the Dy. Commissioner, Customs & Excise, and he passed on order that the appellant had exported charcoal without payment of duty. This order was made on the 17th December, 1954. According to the finding made by the Dy. Commissioner, the charcoal exported by the appellant after the 30th November, 1948, amounted to 48,650 maunds. On this basis, the appellant was asked to pay Rs. 24,325 / on account of the duty on export of charcoal @ As. /8/ a maund. The appellant challenged the correctness of this order by preferring an appeal to the Government, but its appeal was rejected on the 24th May, 1956. The appellant came to know about this order on the 5th April, 1957, when it was asked by the Tehsildar 'to deposit the duty assessed on it along with interest. Since the appellant did not deposit the amount, the Customs authorities had, in the meanwhile, made a requisition to the Collector of Sirohi for recovery of the said amount, and the Collector had issued a notice on the appellant under the Public Demand Recovery Act on the 9th February, 1956. It is the validity of this notice that the appellant challenged by its present writ petition. The appellant 's case was that the order purported to have been passed by the State Council of Sirohi by which the customs duty @ As. /8/ was levied on charcoal was invalid and ultra vires and so, it was not competent to the Customs authorities to levy any duty on the charcoal exported by the appellant and it was not competent to the Collector to issue a demand notice for the recovery of the said duty under the Public Demand Recovery Act. On the other hand, the respondent, the State 258 of Rajasthan, disputed the correctness of, the appellant 's allegation that the duty had been illegally levied. It was urged by the respondent that the said duty had been levied validly by the resolution passed by the State Council which had been approved by Her Highness Shri Rajmata Saheba, Since the said resolution had been duly passed by a competent authority, the levy of the duty imposed on the appellant was valid and the Collector was justified in issuing the notice of demand under the Public Demand Recovery Act. The High Court has upheld the plea made by the respondent, with the result that the writ petition filed by the appellant has been dismissed with costs. The appellant then applied for and obtained a certificate from the High Court and it is with the said certificate that it has come to this Court by its present appeal. The customs tariff had been prescribed in the State of Sirohi by the Sirohi Customs Act of 1944 Section 14 of the said Act lays down that : " 'except as hereinafter ' provided, customs duties shall be levied at such rates as are prescribed in the Sirohi Customs Tariff on all goods mentioned therein, at the time of import or export of goods (including those belonging to the State) into or out of Sirohi State by rail, road or air". It would thus be seen that section 14 which is the charging section provides that customs duties shall be levied on the goods mentioned in the Tariff at the rates prescribed by it. The result is that it is only in respect of goods mentioned in the Tariff and at the rates. specified therein that customs duties could be leived. Section 15 of the said Act conferred upon the Darbar power to fix and alter tariff rates. It says that the Darbar may, from time to time, by 259 notification in the Sirohi State Gazette, save in emergency cases, alter the rates prescribed in the Tariff and such altered rates shall come into force from the date mentioned in the notification or, in the event of the notification not reaching any customs post concerned, on a subsequent date from such date. " The effect of this section is that the power to fix and alter tariff rates has been conferred on the Darbar which is required ordinarily to issue a notification in that behalf. The High Court thought that as a result of reading sections 14 and 15 together, it was open to the Darbar not only to alter rates at which customs could be levied but, also to include new items under the taxable articles mentioned in the Tariff. This view is clearly erroneous. The power conferred on the Darbar by s 15 is to fix and alter tariff rates. No ,power has been conferred on the Darbar to add to the list of taxable commodities in the Tariff itself The goods on which customs duties could be levied have been specified in the Tariff attached to the Act and no addition could be made to the said Tariff in that behalf by the Darbar by virtue of the authority conferred on it by section 15. There is no doubt about this position. At this stage, it is relevant to add that in the Tariff prescribed by the Act of 1944, charcoal is included in the list of commodities, the import of which is liable to pay the customs duty. It is however, not included in the list of commodities the export of which is liable to pay customs duty. This position is not disputed. Therefore, in order that export of charcoal should be made liable to pay the customs duty, the respondent ought to be able to rely upon some legislative enactment in that behalf. It appears that in 1940, the Ruler of the Sirohi State brought into existence the Council of 260 State and its functions and duties and its rights were duly notified in the State Gazette. The Council which was designated as the Council of State, Sirohi, was to consist of His Highness as President, the Chief Minister as Vice President and such other member as His Highness may appoint from time to time. The general working of the Council had to be under the control of the President who, under rule 9, was empowered, if the matter was urgent, to act on behalf of the Council, provided that the Council was duly informed about the action taken by the President as soon as possible. Rule I I of the notification provided that all cases of the kind enumerated in Schedule I shall be referred to the Council for decision before final orders are passed, save as provided in rule 9. Now, amongst the matters specified in Schedule I is included the topic of any new taxation, or alteration or abolition of taxation. This is entry 7 in the said Schedule. It would thus appear that it was within the competence of the Council to consider the proposal for any new taxation or alteration or abolition under rule 11 and it was for the Ruler to pass final orders in the light of the decision by the Council on that point. Rule 11 makes it clear that though it wag competent to the Council to reach a decision on topics covered by entry 7 in Schedule 1, it was for the Ruler to pass final orders which would make the decision effective. In other words, there can belittle doubt that the power of the Council in respect of the matters covered by Schedule I were no more than advisory ; it was always for the Ruler to decide what final orders should be passed in respect of the matters referred to the Council for its decision. That is the nature and scope of the power conferred on the Council. Since the Ruler of the State, His Highness Maharajadhiraja Maharao Taj Singhji Bahadur, was 261 a minor in 1947, His Excellency the Crown Representative was pleased to sanction the passing of the Regency Act for the Sirohi Minority Administration on the 14th August, 1947. This Act provided that it was to come into force on the 14th August, 1947 and was to continue until the Ruler attained the age of 18 years. Section 3 of the Act prescribes that for the purpose of the Constitution of the Sirohi State, the word "Ruler" wherever occurring in the Constitution shall be deemed to be the Board of Regency. Section 4 provided for the constitution of the Board of Regency. It was to consist of Her Highness the Dowager Maharani Saheba of Sirohi, Maharana Shri Sir Bhawani Singhji Bahadur of Danta and Raj Saheban Shri Bhopalsinghji of Mandar. Section 6 of the Act provided that the Board of Regency shall be legal guardian of the Ruler. After this Act was passed, the functions of the Ruler were discharged by the Board of Regency which, for all constitutional and legal purposes, represented the Ruler during his minority. In pursuance of the material provisions of this Act, notification was issued on the same clay constituting the Board of Regency. Thus, it would be clear that when the impugned order levying a duty on coal was passed on the 31st May, 1948, the constitutional position was that the governance of the State was entrusted to the Board of Regency; and under the Board of Regency was functioning the State Council which had been constituted by the previous Ruler in 1940. It is in the light of this constitutional position that the question about the validity of the impugned levy of customs duty on the appellant has to be judged, On the 31st May, 1948, an order was passed which purports to have been issued in pursuance of the Council Resolution dated 15th May, 1948, for which approval had: been obtained from Her Highness Shri; Raj Mata Saheba. As a result of this Order, the duties imposed on goods specified 262 in the Tariff attached to the earlier Act were enhanced in respect of bones, wool, timber and fire wood, and a fresh duty was imposed in respect of export of charcoal. This duty was imposed @ As. /8/ per maund. As we have already soon, it is common ground that according to the Tariff prescribed by the Act of 1944, charcoal was not included in the list of articles, the export of which was liable to customs duty. The question which calls for decision in the present appeal is whether the order thus issued is valid; and the answer to this question depends upon whether or not the imposition of the customs duty on charcoal has been levied by an authority which was legislatively competent to issue such an order. If the levy has been ordered only by the State Council without the approval of the Board of Regency, then it would be invalid because it was not competent to the State Council to pass a law. It was open to the State Council to reach a decision on the question about the imposition of customs duty on any new article, but that decision had to be approved and accepted by the Board of Regency which alone was clothed with the requisite legislative power. Therefore, the validity of the order can be sustained only if it is shown that it has been passed with the approval of the Board of Regency of which Shri Raj Mata Saheba was the President. In dealing with this question, it is necessary to bear in mind that the order does not formally recite that Shri Raj Mata Saheba had approved of the order as the President of the Board of Regency. The order has been issued by the Secretary of the State Council and does not purport to have been issued by the executive officer of the Board of Regency. The order does not refer to the Board of Regency at all and does not purport to say that Shri Rajmata Saheba, when she gave her approval, was acting on behalf of the Board. If the order had formally been passed as on behalf 263 of the Board of Regency, it would have been open to the respondent to contend that the assumption should be that it was duly passed by the Board of Regency and has been promulgated according to the rules of business prescribed by the said Board. But since the order does not purport to have been issued either on behalf of the Board of Regency or on behalf of Shri Raj Mata Saheba acting for the Board of Regency, it is necessary to enquire whether, in fact, the Board of Regency has approved of this order, and it appears that so far as this enquiry is concerned, the respondent has placed no material before the Court which would assist it in coming to the conclusion in favour of the validity of the impost. Indeed, the plea taken by the respondent is disputing the correctness of the appellants claim before the High Court, was that Shri Raj Mata Saheba was the President of the Board of Regency and that whenever she acted, she did so on behalf of the Board and it was for her to take counsel from the other members. It was, therefore, urged that in the circumstances, it would be presumed that she has passed the orders in consultation with other members till the contrary is proved. It is significant that this plea proceeds on the assumption that it was at the option of Shri Raj Mata Saheba either to consult the Board of Regency or not. The respondent 's case appears to be that the Raj Mata being the President of the Board of Regency could act on her own in matters relating to the government of the State either executively or legislatively and that it was for her to decide whether she should consult the other members of the Board or not. The case set out by the respondent is not that the Raj Mata as the President of the Board always consulted the Board before she acted on its behalf. On the contrary, the plea taken seems to suggest that the Raj Mata was not bound 264 to consult the Board and could have acted independently of the Board in passing orders either executive or legislative. That being the plea, it is difficult for us to accept the argument that the approval of the Raj Mata to which the impugned order makes a reference, can be safely taken to be the approval of the Raj Mata after she had consulted the Board in that behalf. There is no doubt that as a result of the Sirohi Regency Act, the governance of the State was left in the hands of the Board of Regency and it was the Board of Regency alone acting collectively that could legislate or pass executive orders. If the Raj Mata took the view that she could act on her own without consulting the Board. that was clearly inconsistent with the material provisions of the Act. Therefore, we are not inclined to accept the conclusion of the High Court that the impugned order can be said to have been passed as a result of the decision of the Board of Regency, since the Board of Regency alone was clothed with the necessary legislative authority, Unless the Board passed the resolution, it could not take effect as a law in the State of Sirohi. The approval of the Raj Mata to the resolution passed by the State Council cannot cure infirmity arising from the fact that the State Council had no legislative power. The High Court seems to have taken the view that since the Raj Mata entered into the agreement of merger, she can be treated at the de facto Ruler of the State and as such, she was competent to exercise the necessary legislative power to pass the impugned order. we are not inclined to accept this view. It is clear that the document of merger has been signed by the Raj Mata describing herself as the President of the Regency Board; but the High Court thought that since the document had not been signed by the Board itself, the Raj Mata could be treated as the de facto Ruler of the State. 265 This view is clearly erroneous. Since the Raj Mata was the President of the Board of Regency, it was competent to her to sign the document on behalf ' of the Board and she purported to sign it as the; President of the Board of Regency obviously because she had consulted the Board and it was as a result of the decision of the Board that she proceeded to execute the document and sign it as the Board 's President, Therefore, there is no substance in the contention that, the Raj Mata alone, without the concurrence of the Board, could have validly given sanction to the passing of the impugned order. In the result, we must hold that the impugned order has not been validly passed and no levy of customs duty can be legally imposed on the appellant in regard to the charcoal which it has exported out of the State of Sirohi. It is, however, urged that the duty levied against the appellant for the export of charcoal can be sustained under the provisions of Rajasthan Ordinance (No.16 of 1949). Section 4(2) of the said Ordinance authorised the Government to issue any revised tariff and in exercise of this power, the Government of Rajasthan has issued a notification No. 211/SRD on the 10th August, 1949, whereby a revised tariff was imposed and it was directed that the duties of customs shall be levied and collected in accordance with the said revised Tariff. According to item No.367 in the said Tariff, export duty on charcoal was As. /8/ per maund. The respondent 's argument was that when Sirohi became a part of Rajasthan, the Ordinance in question applied to Sirohi and so, the claim for the customs duty made against the appellant was justified under the relevant provisions of the said Ordinance. This Ordinance came into force on the 4th August, 1949. In our opinion, this argument is not well founded. When Ordinance XVI was passed and 266 same into force, it no doubt applied to the whole of Rajasthan as it was then constituted, but the State of Sirohi was at the relevant time not a part of Rajasthan and it became a part of Rajasthan as from the 25th January, 1950. It appears that the Ministry of States issued a notification on the 24th January, 1950, in exercise of the powers conferred on the Government of India by subsection (2) of section 3 of the Extra Provincial Jurisdiction Act 1947 (47 of 1947) and it was as a result of this notification that the Central Government delegated to the Government of the United States of Rajasthan the extra provincial jurisdiction including the power conferred by section 4 of the said Act to make orders for the effective exercise of that jurisdiction. It is thus clear that until the 25th, January, 1950, Sirohi was not a part of Rajasthan and was not amenable to the application of the Ordinance in question. The respondent attempted to suggest that as soon as Sirohi became a part of Rajasthan, the Ordinance in question applied to it. This argument is obviously falla cious. When Sirohi became a part of Rajasthan, the laws applicable to Rajasthan prior to the merger of Sirohi could be made applicable to Sirohi only after an appropriate legislation had been passed in that behalf. In fact, in 1953, the Rajasthan Laws (Application to Sirohi) Act (No.III of 1953) was passed to declare that certain Rajasthan laws applied to Sirohi. Section 3 of this Act provided that the Rajasthan laws specified in the Schedule to the Act shall, in so far as they relate to any of the matters enumerated in Lists II and III in the Seventh Schedule to the Constitution of India, apply, and as from the appointed day, be deemed to have applied to Sirohi not withstanding any thing to the contrary contained in the Sirohi Administration Order, 1948, or in any other law, or instrument. There is a proviso to this 267 section with which we are not concerned for the purposes of the present appeal. The Ordinace in question is not included in the Schedule and so, it is clear that the said Ordinance was not intended to apply to Sirohi. It is not suggested that any other law passed by the Rajasthan State or any other instrument executed in that behalf made the Ordinance in question applicable to Sirohi. Therefore, we are satisfied that the respondent cannot rely upon the relevant provisions of the Rajasthan Ordinance 1949 to support the demand for customs duty against the State of Sirohi. In the result, the appeal must be allowed and the writ issued in favour of the appellant declaring that the appellant is not liable to pay the customs duty in question and quashing the orders passed by the Dy. Commissioner, Customs & Excise as well as the Minister of Excise & Taxation and the demand notice issued by the Collector at the instance of the excise authorities. The appellant would entitled to its cost throughout. Appeal allowed.

IN-Abs

The appellant firm was made liable to pay Rs. 24,395/as customs duty for exporting charcoal from the State Sirohi and as it did not deposit the amount the collector of Sirohi, on the requisition of the customs authorities, issued a notice for recovery of the said amount under the Public Demands Recovery Act. The appellant moved the High Court under article 226 of the Constitution. Its case was that the order of the Sirohi State Council levying customs duty on the export of charcoal at the rate of 1 81 per maund wag invalid and ultra vires. The case of the respondent was that the said duty had been validly levied by virtue of the resolution passed by the State Council and approved by the Rajmata. The High Court held in favour of the respondent and dismissed the petition. The question was whether the impugned order dated May 31, 1948, purported to have been passed in pursuance of the Council Resolution dated May 15, 1948, imposing for the first time customs duty on export of charcoal, had been validly issued. Held, that the State Council did not have legislative power ; after the passsing of the Regency Act for the Sirohi Minority Administration, 1947, it could pass a law only with the approval of the Board of Regency of which the Rajmata Saheba was the President ; since there was nothing to show that the Board had approved of. the order, it must be held to be invalid. It was not correct to say that the Raj Mata could act independently of the Board, it was the Board alone that could collectively legislate or pass executive orders. The view of the High Court that the Raj Mata could be treated as the de facto Ruler as the State was clearly erroneous. 256 Nor could the levy on the appellant be sustained under the relevant provisions of Rajasthan Ordinance (No. 16 of 1949), which had no application.

Appeals Nos. 397 and 398 of 1961. Appeals by special leave from the judgment and order dated September 19, 1958, of the Andhra 249 Pradesh High Court in Tax Revision Cases Nos. 62 and 63 of 1956. B. Sen and B. P. Maheshwari, for the appellants. K. N. Rajagopal Sastri and D. Gupta for the respondents. April 19. The Judgment of the Court was delivered by HIDAYATULLAH, J. These two appeals with special leave have been filed by Messrs. G. Gilda Textile Agency, Vijayawada, against the State of Andhra Pradesh. They are directed against a common order of the High Court of Andhra Pradesh in two revisions filed under section 12 B(1) of the Madras General Sales Tax Act, 1939 (9 of 1939). The matter relates to the levy of sales tax from the appellant on its turn over for ,the years, 1954 55. and 1955 56. The appellant was an agent of several non resident principals, on whose behalf it booked orders and dealt with the indents. There were agreements between the non resident principals and the appellant, and three such agreements contained in letters have been produced as instances, and are marked Exs. A 3, A 3(a) and A 3(b). Under these agree ments, the appellant was appointed as indenting agent in Andhra Pradesh for cloth merchants, who, admittedly, resided and carried on business outside Andhra Pradesh. It was required to book orders and to forward them to the principals, receiving commission on sale of goods despatched to Andhra Pradesh. In some cases, this commission was only available on the orders booked by the appellant and in others, on all the sales effected by the principals in this territory. The appellant did business in three different ways, which have been described as three separate categories in the case. In the first 250 category, the appellant took delivery of the goods found buyers and delivered the goods to the buyers. This a category of sales was hold to be within the Madras General Sales Tax Act and the appellant, liable to the tax. The appellant does not question this part of the decision. The second category was in which it merely booked orders and forwarded them to Bombay and the principals sent the goods with the railway receipts through the bank to the purchasers in Andhra Pradesh. The connection of the appellant was Dot considered sufficient to constitute it the ',,dealer", as defined in the Madras General Sales Tax Act, and such sales were omitted from the turnover. No dispute, therefore, arises about this category. The third category related to goods sold by the outside dealers to buyers in the State. The appellant in these transactions, besides booking orders, received the railway receipts from the outside principal, handed them over to the buyers and sometimes collected and transmitted the amounts to the outside principal. The period involved is covered by the Sales Tax Validation Act, 1956 (7 of 1956), and no question under the Constitution arises. The only question is whether the appellant comes within section 14 A of the Madras General Sales Tax Act, and it liable to tax Act, as a dealer. It may be pointed out that the appellant did not produce any correspondence between it and the non resident principals or the covering letters which must have been sent along with the railway receipts. The Tribunal under the Madras General Sales Tax Act, therefore, came to the conclusion that the railway receipts which had been sent, must have been endorsed by the sellers either in favour of the appellant or in blank, to enable the appellant to claim the goods from the railway or to negotiate them. The Tribunal, before, hold that the appellant 251 must be deemed to be a "dealer" under s.14 A and thus liable to tax under that section. Section 14 A of the Act reads as follows "In the case of any person carrying on the business of buying and selling goods in the State but residing outside it (hereinafter in this section referred to as a 'non resident '), the provisions of this Act shall apply subject to the following modifications and additions, namely: (i) In respect of the business of the non resident, his agent residing in the State shall be deemed to be the dealer. (ii) The agent of a non resident shall be assessed to tax or taxes under this Act at the rate or rates leviable thereunder in respect of the business of such non resident in which the agent is concerned, irrespective of the amount of the turn over of such business being less than the minimum specified in Section 3, sub section (3). (iii) Without prejudice to his other rights any agent of a non resident who is assessed under this Act in respect of the business of such non resident may retain out of any moneys payable to the non resident by the agent, a sum equal to the amount of the tax or taxes assessed on or paid by the agent. (iv) Where no tax would have been payable by the non resident in respect of this business in the State by reason of the turnover there of being less 252 than the minimum specified in Section 3, sub section (3), he shall be entitled to have the amount of the tax or taxes paid by his agent refunded to him or application made to the assessing authority concerned, or where more than one such authority is concerned, to such one of the authorities as may be authorised in this behalf by the State Government by general or special order. (v) Such application shall be made with in twelve months from the end of the year in which payment was made by or on behalf of the non resident of the tax or taxes or any part thereof. " The section makes the agent liable fictionally as a dealer in the circumstances laid down in the section, viz., that be is acting on behalf of a nonresident person doing business of buying or selling goods in the State. The agent is assessed to tax under the Act in respect of the business of such non resident in which the a cut is concerned, irrespective of whether the turnover of such business is more or less than the minimum prescribed in the Act. It is contended that the first thing to decide is whether the non resident could be said to be carrying on the business of selling in Andhra Pradesh in the circumstances of this case, and reliance is placed upon a decision of this Court reported in Mahadayal Premchandra vs Commercial Tax Officer, Calcutta (1) In that case, this Court was called upon to consider the Bengal Finance (Sales Tax) Act, 1941 (6 of 1941). There also, the agent was sought to be made liable in respect of the sale of goods belonging to non resident (1) , 253 principal under a section which may be taken to be in pari materia with the section, we are considering. This Court held that the Kanpur Mille, whose agent the appellant in the case was, were not carrying on any business of selling goods in West Bengal and were selling goods in Kanpur and despatching them to West Bengal for consumption. This part of the judgment is called in aid to show that the first condition of the liability of the agent in the present case under the Madras General Sales Tax Act is not fulfilled. Unfortunately for the appellant, in this case there is a clear finding by the High Court that the non resident principals were carrying on the business of selling in Andhra Pradesh. The High Court has observed that if the non resident principals took out railway receipts in their own Dames, thereby manifesting their intention to remain the owners and to retain. the control over the goods, the sales must be taken to have been completed or to have taken place in the State of Andhra Pradesh. From this, the High Court came to the conclusion that the non resident principals were doing business of selling in Andhra Pradesh. The High Court pointed out that inasmuch as the appellant after securing the orders received the railway receipts from the sellers and banded them over to the buyers and sometimes collected the consideration and transmitted the same to the sellers, the sales thus resulting must be hold to have taken place in the State either on behalf of the appellant or on behalf of the non resident principals, and whichever view be correct, the appellant as agent was liable as a dealer within the Act. Either it was a dealer itself, or it became a dealer by the fiction created by section 14 A, since the non resident principals had done business in each case in the State of Andhra Pradesh. The case of this Court on which reliance has been placed, turned on its own facts, and a 254 finding there cannot be used in the present case, because no finding on the facts of one case can be applied to the facts of another. Sub section (2) of section 14 A was said to be connected with the opening part, and it was argued that the tax was leviable on the turnover relating to the business of a nonresident, which was carried on by the non resident in the taxable territory. In our opinion, once the finding is given that the non resident principal carried on the business of selling in Andhra Pradesh and the appellant was the admitted agent through whom this business was carried on, the rest follows without any difficulty. The High Court, in our opinion, was, therefore, right in upholding the levy of the tax from the appellant, in view of our decision that the appellant came within the four corners of section 14 A in relation to the transactions disclosed in the last category. The appeals fail, and are dismissed with costs, one hearing fee. Appeals dismissed.

IN-Abs

The appellant was an agent in Andhra Pradesh of certain non resident principals who were dealers in cloth. received commission in some cases on the orders booked and in others on all the sales effected by the principals in the terri tory. One kind of transactions it carried on in course of its business related to goods sold by its principal to buyers in the State. The appellant in these transactions, besides booking orders, received the railway receipts from the outside principals, handed them order to the buyers and some times collected and transmitted the amount to the outside principals. The appellant was assessed to sales tax on its turnover for the years 1954 55 and 1955 56. The question was whether in carrying on such transactions the appellant was a dealer within section 14A of the Madras General Sales Tax Act, 1939. The Tribunal held that the appellant was such a dealer and the High Court in affirming that decision held that the non resident principals were doing the business of selling in the State and the sales in question were by the appellant either on behalf the principal or on its own behalf and that the appellant was in either cass liable. Held, that the High Court had taken the right view the matter. Section 14A of the Act made the agent fictionally liable as a dealer in the circumstances as specified by it, and the agent was liable irrespective of whether the turn over of its business was more or less than the minimum prescribed by the Act. Mahadayal Premchandra vs Commercial Tax Officer Calcutta, , distinguished.

Appeal Nos. 555 & 556 of 1960. Appeals by special. leave from the judgment and order dated July 17, 1956, of the Bombay High Court in Special Civil Applications Nos. 580 and 581 of 1956. A.V. Viswanatha Sastri, B. R. Nayak and Naunit Lal, for appellants. Abdurrahman Adam Omer, section N. Andley, Rameshwar Nath and P. L. Vohra, for the respondents No. 1 and 3 to 6. 1962. April 23. The Judgment of the Court was delivered by DAS GUPTA, J. Disputes having arisen between the appellant, a Co operative Bank and one Amin Saheb Patil, who had taken loans from the Bank and Kutubuddin Mohamad Ajim Kazi, who had stood surety in respect of the loans they were 350 referred to arbitration in two references under s.54 of the Bombay Co operative Societies Act, 1925. The Board of Arbitrators originally consisted of Mr. L. V. Phadke, Mr. C. K. Phadke and Mr. Trilokekar. After the Board had several meetings and recorded some evidence Mr. Trilokeker, who was the nominee of the borrower, Amin Saheb, retired. Thereafter the Board was re constituted with Mr. Kotwal as the new nominee of the borrower. This Board also recorded some evidence but after sometime Mr. Kotwal also retired. There was a fresh constitution of the Board with the other two members as before and Mr. M. D. Thakur as the nominee of the, borrower. Further evidence was recorded by the Board thus constituted and finally the Board gave its award in the matters on March 14, 1955. Dissatisfied with these awards amin Saheb filed two revision applications before the Bombay Co operative Tribunal. Apart from certain objections on the merits of the awards a preliminary objection was taken before the Tribunal as regards the legality of the awards on the ground that the Board as last constituted had acted on, evidence not recorded before it. The Tribunal accepted this preliminary objection, set aside the awards and remanded the cases to the Assistant Registrar for a rehearing. Shortly after this Amin Saheb died but his heirs and legal representatives made two applications to the Bombay High Court under article 227 of the Constitution against the, Tribunal 's decision. The High Court held that the Tribunal had erred in thinking that the Board of Arbitrators had acted illegally in seting on the evidence recorded by the previous Boards when this was done with the full knowledge of the parties and without any objection on either side. Accordingly, they set aside the orders passed by the Tribunal and 351 restored the awards made by the Board of Arbitrators. The Bank has now appealed against the decision of the High Court after obtaining special leave from this Court. Three points are raised before us in support of the appeal. The first is that the Tribunal had not made any error in holding that the Board had acted illegally in acting upon the evidence recorded by the previous Boards. 'Secondly, it is urged that even if the Board had erred it was not such an error as would entitle the High Court to interfere under article 227 of the Constitution. Lastly, it was contended that in any case, the High Court was not justified in setting aside the awards ' when the Tribunal had disposed of the application only on preliminary points and had not considered it on merits. our opinion there is no substance in the first two contentions. As the High Court has pointed out normally it would have been wrong and indeed illegal for the Tribunal to act on evidence not taken before it. The position is however different when the parties expressly or impliedly agree that some evidence not taken before the Tribunal should be treated as evidence and taken into consideration. It is settled law that question of mode of proof is a question of procedure and is capable of being waived and therefore evidence taken in a previous judicial proceeding can be made admissible in a subsequent proceeding by consent of parties. This applies to proceedings of a civil nature. While what is not relevant under the Evidence Act cannot in proceedings to which Evidence Act applies, made relevant by consent of parties, relevant evidence can be brought on the record for consideration of Court or the Tribunal without following the regular mode, if parties agree. The reason behind this rule is 352 that it would be unfair to ask any party to prove a particular fact when the other party has already admitted that the way it has been brought before the Court has sufficiently proved it. We are therefore of opinion that in the facts of these cases when the appellant Bank not only raised no objection to the Board as last constituted proceeding on the evidence already recorded before the previous Boards, but indeed appears to have invited the Board to act on such evidence previously recorded, the appellant cannot be allowed later on to object to the Board having considered the evidence merely because the decision has goes against it. The Tribunal was clearly wrong in thinking otherwise and the error cannot but be considered to be an error apparent on the face of the record and as such the High Court had not only the power but duty to interfere with the Tribunal 's order. It appears to us however that having come to the conclusion that the Tribunal was wrong in allowing the preliminary objection raised before it the High Court was not entitled to ignore the fact that before the Tribunal other questions had been raised which had not been considered by it. The proper order to pass in such a case, in our opinion, would be to set aside the order of the Tribunal and direct it to decide the applications for revision on their merits. We therefore allow the appeals in part, and order, in modification of the order made by the High Court, that the Tribunal 's order remanding the cases to the Assistant Registrar be set aside but the Tribunal should now proceed to hear the revision applications on their merits. In the circumstances of the case, we order that the parties will bear their own costs. Appeals allowed in part.

IN-Abs

The dispute between the appellant a cooperative bank and A who had taken loan and his surety was referred to arbitration under section 54 of the Bombay Go operative Societies Act. The Board of Arbitrators consisted of three members; after the Board has recorded some evidence, the nominee of the borrower retired. Thereafter, the Board was reconstituted. This Board also recorded some evidence ; but after some time, the newly appointed nominee of the borrower retired. There was a fresh constitution of the Board with the other two members as before and a new member as the nominee of the borrower. Further evidence was recorded by the Board thus constituted and finally the Board gave its award in the matter. Dissatisfied with this award A filed revision applications before the Bombay Co operative Tribunal. Apart from certain objections on merit a preliminary. objection was taken as regards the legality of the award on the ground that the Board as last constituted had acted on evidence not recorded before it. The Tribunal accepted this preliminary objection and set aside the award and remanded the cases to the Assistant Registrar. Shortly after this A died but his heirs and legal representatives moved the Bombay High Court under article 227 of the Constitution against the Tribunal 's decision. It set aside the orders passed by the Tribunal and restored the award made by the Board of Arbitrators. The Bank came up in appeal by special leave to the Supreme. Held, that when the parties expressly or impliedly agree that some evidence not taken before the Tribunal should be treated as evidence and taken into consideration, it will not be wrong or illegal for the Tribunal to act on such evidence not taken before it, the question of mode of proof is a question of procedure and is capable of being waived and therefore evidence taken in a previous judicial proceeding of a civil nature can heir made permissible in a subsequent proceeding by consent of parties, 349 While what is not relevant under the Evidence Act cannot in proceedings to which Evidence Act applies, be made relevant by consent of parties, relevant evidence can be brought on the record for consideration of the Court or the Tribunal without following the regular mode, if parties agree. When a party does not only raise no objection before a Court or Tribunal to proceed on the evidence already recorded before the previous Court or Tribunal and impliedly invites the Court or Tribunal to act on such evidence previously recorded, he cannot be allowed later on to object to the Court or Tribunal having considered such evidence. The High Court having come to the conclusion that the Tribunal was wrong in allowing the preliminary objection raised before it, the High Court was not entitled to ignore the fact that before the Tribunal other questions had been raised which had not been considered by it. The proper order to pass in such a case ordinarily would be to set aside the order of the Tribunal and direct it to decide the applications for revision on their merits.

Appeal No. 568 of 1960. Appeal from the judgment, and order dated April 6, 1956, of the Madras High Court in 0. S, A. No. 147 of 1953. H. N. Sanyal, Additional Solicitor General of India, V. D. Mahajan and P. D. Menon, for the appellant. R.Ganapathy Iyer, M. section K. Sastri and M. section Narasimhan, for the respondent. April 19. The Judgment of the Court was delivered by AYYANGAR, J. The point involved in this appeal which comes before us on a certificate of fitness under article 133 (1)(e) granted by the High, Court of Madras is a very short one and relates to the nature and extent of the jurisdiction posses sed by the High Court in considering the validity 279 of an order of the Customs Authorities interpreting the provisions of the entries in the Tariff Schedule as regards the imposition of duties. The respondent imported from Australia a quantity of oats which was described in the indent, contract and shipping documents as " 'standard feed oats". The commodity imported consisted of oats in whole grain. The question raised related to the proper classification of the goods imported under the Import Trade Control Schedules current during the period July to December 1952 when the consignment reached India. The controversy centered round the point whether the "feed oats" fell within item 42 or within item 32 of the Circular. Item 42 ran: " 'Fodder, bran and pollards O.G.L. Soft" i.e., this item was covered by an open general licence and so no special import licence was necessary for the import of these goods from a soft currency area, while as regards item 32 the entry ran: "Graio, not otherwise specified, including broken grain but excluding flour (a) oats (b) others Ports Nil A.V." which meant that a licence was necessary for the importation of the goods specified in it which would be granted by the Joint Chief Controller of Imports or Exports at Calcutta and Bombay, if they were the ports of entry, and by the Deputy Chief Controller of Imports & Exports Madras if they were to be imported through Madras; "nil" that no quotas were specified limiting the quantity to be imported, & that actual users (A.U.) could apply for the licence. 280 The respondent who carried on business in fodder under the name and style of Balakrishna Flour Mills placed an order with an Australian firm for the supply of whole grain "feed oats" without obtaining any licence for the import. The goods arrived in Madras on August 1, 1952 and when the respondent attempted to clear the goods, the Customs Authorities insisted on the production of a licence before he would be permitted to do so. The Assistant Collector hold that. the goods imported fell within item 32 and as admittedly the respondent held no licence from the Deputy Chief Controller of Imports & Exports, Madras covering the import, there had been a contravention of a. 19 of the Sea Customs Act read with section 3(2) of the Import & Export Control Act, 1947 and so proceeded to deal with the violation under section 167 (8) of the Sea Customs Act. He directed the confiscation of the good sand imposed a fine of Rs.5,000/ in lieu of confiscation, if the. respondent desired to clear the goods. An appeal filed to the Collector of Customs was rejected and thereafter the respondent moved the High Court for the issue of a writ of mandamus under section 45 of the Specific Relief Act. In his affidavit in support of the application the respondent besides contending that oats in full grain fell within the head fodder ' under item 42, set out earlier, because (1) he had imported them for being made available solely for feeding race horses at Bangalore, (2) that in South India oats was not used as human foods but only as feed for horses, and (3) that in any event, he had been misled by an answer that he received from the Deputy Chief Controller of Imports, Madras of whom he had made an enquiry as to whether feed oats could be imported under an open general licence under serial No. 42 and had received an affirmative answer, The learned 281 Single Judge who heard the application dismissed it on the ground that the order of the Customs Authorities classifying uncrushed feeds oats as grain and not as fodder could not be said to be either perverse or malafide and that consequently the Court could not interfere with the decision of the authorities. An appeal was perferred therefrom to a Division Bench and the learned Judged allowed the appeal and issued a direction prohibiting the Collector and his subordinates from collecting or taking steps to recover the fines and penalties imposed on the respondent. It is the correctness of this order of the Division Bench that is challenged in this appeal. Shortly stated, the ground on which the learned Judges allowed the respondent 's appeal were : (1) that the decision of the Customs authorities as regards the entry of the Tariff classification within which an imported commodity fell was not final but was open to judicial review and had ultimately to be decided by the Courts, (2) In the case before the Court, entry 32 reading "grain" had, in the absence of any specific entry regarding oats to be read as excluding all grains which would be "fodder" i.e., which were usually used as cattle or animal feed, and that as the respondent had imported the oats for use as horse feed the proper item within which the goods imported fell was item 42 Fodder etc. In arriving at this conclusion the learned Judges referred to the answer of the Deputy Chief Controller to the query by the respondent to which we have adverted earlier, as a circumstance indicative of the doubts entertained by the departmental authorities themselves on this matter. With very great respect to the learned Judges we are unable to agree with them both as regards the function and jurisdiction of the Court in matters 282 of this type, as well as in their actual construction of the relevant entries in the Import Trade Circular. As regards the limits of the jurisdiction of the Court it is sufficient to refer to the decision in Venkatesvaram vs Wadhwani. (1) That was a case where a party moved the High Court under Art.226 of the Constitution, and not as here under section 45 of the Specific Relief Act under which the power of the Court to interfere is certainly narrower and not wider. This Court proceeded on the basis that it is primarily for the Import Control authorities to determine the head or entry under which any particular commodity fell; but that if in doing so, these authorities adopted a construction which no reasonable person could adopt i.e., if the construction was perverse then it was a case in which the Court was competent to interfere. In other words, if there were two constructions which an entry could reasonably bear, and one of them which was in favour of Revenue was adopted , the Court has no jurisdiction to interfere merely because the other interpretation favourable to the subject appeals to the Court as the better one to adopt. In the present case it could not be contended that uncrushed oats did not answer the description of "grain" and therefore the decision of the Customs authorities holding that the oats imported fell within item 32 could not be Raid to be a view which on no reasonable interpretation could be entertained. In other words, the conclusion or decision of the Customs authorities wag rationally supportable. We consider that even if there was no specific reference to "oats" in entry 32, any particular species of grain cannot be excluded merely because it is capable of being used as cattle or horse feed. The word " 'fodder" is defined in the Oxford ' dictionary as 'dried food, hay, straw etc. for stall feeding Cattle". Without resorting to (1) ; , 283 Johnson 's famous definition of " 'oats" in his Dictionary, it is sufficient to point out that oats, though they may serve as food for horses, is also used as human food; in other words it is not by its nature or characteristic capable of serving solely as food for animal,% and incapable of use in the human dietary. For instance, all coarse grains like Ragi and Khambu serve as food for man as well as for cattle. The mere fact therefore that a grain is capable of being used as horse or other cattle feed does not make it "fodder" excluding it from the category of grain to which it admittedly belongs. The decision of the Assistant Collector. and of the Collector on appeal holding the oats imported by the respondent to be grain cannot therefore be characterised as perverse or malafide and in the circumstances we consider that the learned Judges of the High Court erred in interfering with the order of the appellant. In this particular case however, the matter is placed beyond the pale of controversy by the specific reference to "oats" in entry 32 where "grain" is classified into two categories "oats" and "other. grains". It is apparent that unfortunately the attention of the learned Judges was 'not drawn to the entry in full, because, in the course of the judgment they point out that the construction of entry 42 would be different if there had been a specific reference to oats in entry 32. Learned Counsel for the respondent laid some stress on the respondent having been misled by the answer of the Deputy Chief Controller of Exports to a query as regards the scope of entry 42. The answer which was stated to have misled was in these terms : "Feed oats classifiable under serial 42 of Part IV can be imported under Open General License No. XXIII". 284 an answer by no means a model of clarity. This letter is dated September 14, 1951, and it is the case of the respondent that he placed an order for the import of "feed oats" because he was led to believe that for its import no licence was necessary. The contract for the purchase of the foods for import was entered into in the beginning of June, 1 952, but before that date the Deputy Chief Controller wrote a further letter to the respondent on January 1, 1952, clarifying the answer he gave in his earlier letter, and pointing out that whereas if the oats were in whole grain it would fall within item 32, but if the same was crushed, it would be "fodder" within item 42. The respondent however, denied having received this letter and there is no specific finding on this point by the learned Judges of the High Court. We do not propose to record any finding either. We are drawing attention to this matter merely for pointing out that it is a matter which the authorities could properly take into account in modifying, if they consider that the respondent has really been misled, the quantum of penalty imposed on the respondent. The appeal is accordingly allowed and the order of the Division Bench of the High Court set aside. The application filed by the respondent under section 45 of the Specific Relief Act will stand dismissed. In the circumstances of the case we direct that the parties bear their own costs in this Court. Appeal allowed.

IN-Abs

Item 42 of Part IV of the Import Trade Control Schedule permitted "fodder. . " to be imported without a special import licence from a soft Currency area. Item 32 of the same Schedule related to "grain. and included oats; and a licence was necessary for importing goods covered by this item. The respondent imported from Australia, without a licence, goods described as "feed oats" for feeding race horses. He claimed that the goods were covered by Item 42 and could be imported without a licence. The customs authorities held that the goods were "grains" within the meaning of Item 32 which could not be imported without a licence, confiscated the goods and imposed a penalty in lieu of confiscation. The respondent moved the High Court for the issue of a writ of mandamus under section 45 specific Relief Act. The High Court held that the 278 goods were covered by item 42 and issued a writ prohibiting the authorities from recovering the penalty imposed. Held, that the High Court had no, jurisdiction to interfere with the decision of the customs authorities that the goods fell within item 32. It is primarily for the Import Control authorities to determine the head of entry under which any particular commodity falls, and only when the construction adopted is perverse are the courts entitled to interfere. In the present case the decision of the customs authorities was not one which could not be supported on any,reasonable basis, and could be called perverse. Venkatesvaran vs Wadhwani, A. I. R. , referred to. Held, further that the goods imported fell within item 82 and not within item 42. Oats are undoubtedly grain. Any particular species of grain cannot be, excluded, from the item "grain" merely because it is capable of being used as cattle or horse feed. The matter is made clear by the reference to "coats" in item 32 where grain is classified into two categories, oats and "other gains".

l Appeal No. 9 of 1962. Appeal by special leave from the judgment and order dated August 29, 1961, of the, Railway Rates Tribunal, Madras in Complaint No. 1 of 1960. Veda Vyasa and 1. N. Shroff, for the appellant. Niren De., P. C. Chatterjee and section N. Mukherjee, for the respondents. April 23. The Judgment of the Court was delivered by DAs GUPTA, J. This appeal by special leave arises out of a complaint made by the appellant, the Upper Doab Sugar Mills Ltd., Shamli, to the Railway Rates Tribunal. The complaint as originally made was against the station to station rates on sugarcane on the Shahdara (Delhi) Saharanpur Light Railway imposed by the. respondent, the Railway Company. by their rates Circular No. 8 of 1953 with effect from October 1, 1953. The complaint was that these rates had been and were unreasonable. The Railway Company in their answer to the complaint pointed out that the rates imposed by the rate Circular No. 8 of 1953 had long before the date of the complaint ceased to be in force and that subsequent to the decision of this Court in S.S. Light Railway Co. Ltd. vs Upper Doab Sugar Mills Ltd. (1) a new rate had come into operation from February 10, 1960, under Local Rate Advice No. 2A of 1960. After this the complaint prayed for amendment of his complaint by adding a complaint against this new Advice rate. The prayer was allowed. The complaint as it stands after the amendment made on February 3, 1961, is both against the rates imposed under Local Rates Advice (1) 336 No. 8 of 1953 and also the rates under the now Advice No. 2A of 1960 and is that these rates and charges are all unreasonable. The prayers are: (I ) for a declaration that the rates charged under the Local Rates Advice No. 8 of 1953 and the surcharges were unreasonable from 1 10 1953 to 10 2.1960; (2) a declaration that the rates charged from 10 2 1960 under rate Advice No. 2A of 1960 are also unreasonable; (3) a direction of refund of the excess collected or which may be collected after the date of the amendment of the complaint on the basis of rate Advice No. 2A of 1960 over the reasonable rates that may be fixed by the Tribunal and (4) the fixation of the rates as mentioned in the complaint as reasonable rates from various stations to Shamli. The main contentions of the Railway Company with which we are concerned in the present appeal are: (1) that the Tribunal had no jurisdiction to entertain the complaint as regards the reasonableness of rates prior to the institution of the complaint (2) that the Tribunal had no jurisdiction to grant any refund. These questions are raised in Issues Nos. 6 and 9A and are in these words "6. Has the Tribunal jurisdiction to entertain or try the present complaint regarding reasonableness or otherwise of rates and/or charges prior to the institution of this complaint, or, at any rate, prior to 27 7 1958. 9A. Has this Tribunal jurisdiction to grant a refund. " The Tribunal rightly took up the consideration of these issues first. It held that it had no jurisdiction to entertain or try the complaint as regards the reasonableness or otherwise of rates and charges made prior to the institution of the complaint on 337 May 6, 1960. It also held that it had no jurisdiction to grant any refund. In coming to these conclusions, the Tribunal followed the decision of the Madras High Court in Southern Railways vs The Railway Rates Tribunal (1). It is contended before us in appeal that the Tribunal 's decisions on these questions were wrong. It will be helpful to consider briefly the background in which the Railway Rates Tribunal came into existence. Till the establishment of these Tribunals the actions of the Government of India with regard to the regulations of rates and charges that may be charged by Railway Companies were largely influenced by the policy of laissez faire. The only provision as regards such a regulation was to be found for many years only in the contracts between the Government of India and the Railway Companies. One of the earliest contracts with the Madras Railway Company, dated December 22, 1852, had a provision that the Company could charge only such fares and tolls as might have been approved by the East India Company and that no increase in approved fares etc., could be brought into effect without the previous sanction of the East India Company. In the contracts of most of the companies ' there used to be a provision in the following terms: "The Secretary of State shall from time to time authorise maximum and minimum rates within which the Company shall be entitled to charge the public for services rendered by way of, or in connection with, the conveyance of passengers and goods on the undertaking, and shall prescribe the several classes and descriptions of passengers and goods to which rates shall be respectively (1) A.I.R. 1955 (Madras) 476. 338 applicable." (Srinivasan 's Railway Freight Rates) The maxima were fixed by the Local Governments for the railways within their provinces in 1869 while the Government of India prescribed the maxima for good grains and coal, and fares for the lowest class of passengers only. Statutory provisions for fixation of maxima and minima for rates and charges were first made the year 1939 by the Act 33 of 1939 which introduced section 42 (b) in these words: "The Federal Railway Authority may be general or special order fix maximum and minimum rates for the whole or any part of a railway, other than a minor railway, and prescribe the conditions in which such rates will apply. (2)Any complaint that a railway administra tion is contravening any order issued by the Federal Railway Authority in accordance with the provisions of this section shall be deter mind by that Authority. " Before this however, as a result of the inves tigations made by the Acworth Committee, a Railway Rates Advisory Committee had been established. This Committee was empowered to investigate and make recommendations on: 1. Complaints of "undue preference" section 42(2) of the Indian Railways Act. Complaints that rates are unresonable in themselves. Complaints or disputes in respect of terminals section 46 of the Indian Railways Act. 339 4. The reasonableness or otherwise of any conditions as to packing of articles, specially liable to damage in transit or liable to cause damage to other merchandise; 5. Complaints in respect of conditions as to packing attached to a rate; and 6. Complaints that railways do not fulfll their obligations to provide reasonable facilities under section 42 (3) of the Indian Railways Act. " It is to be noticed that this Committee could only make recommendations and could not make any effective order itself. The Railway Rates Tribunal come into existence as a result of the amendment of the Railways Act of 1890 in 1948 (Act No. 65 of 1948). Section 34 of the Act as amended, provides that there shall be a Tribunal called the Rates Tribunal for the purpose of discharging functions specified in the Chapter. These functions were specified in sections 41 ' and 42, while section 39 empowered the Tribunal to pass interim and final orders. including orders for payment of costs for the purpose of exercising the jurisdiction conferred. The first sub section of section 41 set out a number of matters of which complaints might be made against a railway administration or jointly against two or more railway administrations.and states that such complaints "shall be heard and decided by the Tribunal". The second sub section of section 41 provided that in the case of a complaint under cl. (d) of sub s 1, that is, where the complaint is that a railway administration or rail. way administrations is or are unreasonably refusing to quote a now station to station rate, the Tribunal may fix a now station to station rate. The first sub section of section 42 gave the Tribunal the exclusive 340 power to reclassify any commodity in a higher class but added that such power shall not be exercised except on the application of the Central Government. The third sub section of section 42 provided that the Tribunal as well as the Central Government would have power to re classify any commodity in lower class. In December, 1949, the Indian Railways Act was further amended by the Act No. 56 of 1949. Some changes were then made in section 41 which it is unnecessary to set out. There was amendment again in December, 1957, by Act No. 53 of 1957 by which amongst other changes, a. 41 was changed. As a result of these changes cl. 1 of a. 41 reads thus : "41(1) Any complaint that a railway administ ration (a) is contravening the provisions of section 28, or (b) it charging for the carriage of any com modity between two stations a rate which is unreasonable, or (c) is levying and other charge which is unreasonable shall hear and decide any such complaint in accordance with the provisions of this Chapter. " The second sub section(which was not changed by the 1957 Act) deals with the question of burden of proof in connection with complaints. under el. (a) of the first sub section and also says that in deciding whether a lower charge to any trader or class of traders does amount to undue preference or not the Tribunal will take into consideration whether such lower charge is necessary in 'the interest of the public. The third sub section ruins thus : "In the case of a complaint under el. (b) or cl. (c) of sub section 1 the Tribunal may fix such rate or charge as it considers reasonable: Provided that the rate 341 to be fixed under cl. (b) of sub section I shall be within the limits of the maximum and minimum rates fixed by the Central Government under sub s.1 of section 29." Section 41A which was added by the amending Act of 1957 gives the Tribunal a power to vary or revoke an order made by it on being satisfied on an application made by the Railway Administration that since the order was made there has been a material change in the circumstances on which it was based, but such application cannot be made till the expiry of one year from the date of the order. The old section 42 was substituted by a new section in these words : "The Central Government alone shall have the power to classify or reclassify any commodity, (b) to increase or reduce the level of class rates and other charges. " It will be noticed that this amendment took away the power which the Tribunal formerly had in the matter of classification of commodities. The amendment of section 41 however gave the Tribunal jurisdiction to entertain and consider complaints in respect of standard terminal charges which had been excluded in the old section 41. At the same time it took away the Tribunal 's jurisdiction to entertain any complaint that a Railway Administration has unreasonably placed a commodity in a higher class or that it was unreasonably refusing to quote a new station to station rate which it had under the old cls. (d) and (e). Our first task is now to construe the words of cl. (b) and (e) of the first sub section of section 42. The question is what did the legislature mean by the words "is charging" in clause (b) and "is levying" in cl. (c) ? The use of the present progressive tense is to denote something which is taking place at present. What has already taken place cannot be described by saying that "it is taking place. " Just as one cannot say of a man who has ceased to 342 exist, that he is existing; so also, one cannot say of a charge which has already been made that "it is being made. " of the charge which has already been made a person aggrieved can complain that "the Railway Administration has charged me at this rate." ' It will not be correct to say that 'the Railway Administration is charging me at this rate. " This, it is true, proceeds on the assumption that the words "charging a rate" was used by the legislature in its ordinary meaning of "demanding a price. " This, it is contended on behalf of the appellant, is not however the only sense in which the words "charging a rate" of its senses, it is was demanded in the past". in cl. (c) the words used are can be used; and one "Collecting a price that It is pointed out that "levying a charge" and ",levying" can certainly mean "collecting. " It will be legitimate, argues the learned Counsel, to think that the word #charging" in cl. (b) and the word "levying" in el. (c) were used by the legislature in the same sense. According to him, both these words should be construed widely so as to include ,,collecting a price. " The words "charging" in cl. (b) and " 'levying" in cl. (c) were used in the one and the same sense. We find it impossible to agree however that they were used to include "collecting". It appears to be clear that if the intention of the legislature was to give the Tribunal jurisdiction over complaints in connection with charges already made the legislature would have used the words "has charged and is charging" and would not merely say " 'is charging" Special jurisdiction of such a nature would be given clearly and the very fact that the words ,has charged" have not been used is sufficient ground for thinking that it was not the legislatures intention to give the Tribunal jurisdiction over complaints in 343 connection with charges made in the past. In our opinion, the words ,,is charging" in cl. (b) and ,,is levying" in cl. (c) must be construed to mean ,is demanding a price at the present time for services to be rendered. " The conclusion of the Railway Rates Tribunal that it had no jurisdiction to entertain or try the complaints as regards the reasonab leness or otherwise of rates and charges made prior to the institution of the complaint is therefore correct. When the Tribunal had no jurisdiction to consider the reasonableness or otherwise of any charges made prior to the institution. of the complaint, it follows necessarily that it could have no occasion to order any refund. For, the question of refund could arise only after a decision that the charges made were more than what was reasonable. It is clear however that even in respect of those charges and rates for which the Tribunal had jurisdiction to entertain a complaint the Tribunal had no power to order any refund. It is necessary to consider this question as the prayer for refund as made in the complaint was not only for charges already made but for charges that might be made in future under the rate Advice No. 2A of 1960. On behalf of the appellant it has been urged that it would be inequitable for the Tribunal not to make an order of refund in respect of charges made after the date of the complaint, if it comes to the conclusion that those charges were more than what was reasonable. The question of equity does not however arise. The Tribunal can have no more jurisdiction that what it is given by the Act whichbrings it into existences ; and if on a properconstruction of the words of the statute we findthat the Tribunal was not given any such jurisdiction we cannot clothe it with that jurisdiction on any consideration of convenience or equity or justice. 344 What the Tribunal has to do after a complaint is made is mentioned in section 41 (1) itself. It is said there that the Tribunal shall hear and decide the complaint. The complaint being that something is unreasonable all that the Tribunal has to decide is whether that thing is unreasonable or not. A finding that it is unreasonable does not involve any consideration or decision of what would flow from the finding. In other words, in making the complaint the complainant can ask only for a declaration that the rate or charge is unreasonable and it is only this declaratory relief which the Tribunal has been authorised to give. There is no provision that the Tribunal can also give a consequential relief. The only other thing which the Tribunal is authorised to do in connection with the complaint is to fix "such rate or charge as it consider reasonable". In the absence of anything to indicate to the contrary it is reasonable to think that this fixation can only be prospective, that is, the Tribunal in making this order fixing the reasonable rate or charge will mention a future date for this to come .into operation. Even if it was assumed for the sake of argument that the Tribunal can fix these rates from the date of the complaint that would not give the Tribunal any power to order refund. Mr. Veda Vyasa has argued that the power to order refund flows from section 39 of the Act. Section 39 is in these words : "For the purpose of exercising the jurisdiction conferred on it by this Chapter, the Tribunal may pass such interim and final orders as the circumstances may require, including orders for the payment, subject to the provisions of this Chapter, of costs; and it shall be the duty of the Central Government or the State Government, as the case may be, on whom any obligation is imposed by any such order to carry it out. " Is it neceserly 345 for the Tribunal to make the order for refund at least in respect of the charges made after the date of the complaint in excess of what is held to be reasonlable "for the purpose of exercising the jurisdiction conferred on it?" The utmost that could be said is that the relief for making an order of refund has a connection with the order holding the rates already charged after the date of the institution of the complaint to be unreasonable. It is impossible to say however that such )an order is necessary for the purpose of exercising the jurisdiction conferred that jurisdiction in connection with complaints, being under a. 41, only to arrive at a decision whether a certain rate was reasonable or not and if it was unreasonable to fix a reasonable rate. An order for refund can by no stretch of imagination be considered to be " 'necessary for the purpose of exercising the jurisdiction". Section 39 is therefore of no assistance to the appellant 's contention. It was next urged that unless the Tribunal is held to have power to make an order of refund, s.46 (B) will be meaningless. Section 46 (B) provides that the Tribunal may transmit any order made by a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree. It is obvious that an order for payment of coati; which may be made by the Tribunal could under a. 46 (B) be transmitted to a civil court and executed by a civil court as if it were a decree. Even if the Tribunal can pass no other order, which may require execution, a. 46 (B ) will serve its purpose in connection with the orders for costs. Nor is it necessary for us to speculate as to what other orders made by the Tribunal could require execution by the civil courts. For., such considerations cannot in any way throw any light on the nature of the orders that can be made under a. 39. It is hardly necessary to mention that a. 39 does not 346 confer any jurisdiction; but only provides for means for exercise by that Tribunal the jurisdiction which it has otherwise got under other sections. It is interesting to remember in this connection the words used by the British Parliament in section 196 (3) of the Government of India Act, 1935. The first sub section of section 196 provided for the constitution of the Railway Tribunal and then the third sub section proceeded to say : "It shall be the duty of the Railway Tribunal to exercise such jurisdiction as is conferred on it by this Act, and for that purpose the Tribunal may make such orders, including interim orders, orders varying or discharging a direction or order of the Authority,, orders for the payment of compensation or damages and of costs and orders for the production of docu ments and the attendance of witnesses, as the circumstances of the case may require, and it shall be the duty of the Authority and of every federated state and of every other person or Authority affect ed thereby to give effect to any such order". These important words ,,orders for the payment of compensation or damages" have been omitted from the present section 39. Mr. Veda Vyasa strenuously contended that unless the Tribunals be held to have jurisdiction to order refund, the 'appellant and others in his position would be deprived of their right to obtain relief against unreasonable charges already paid in view of the provisions of section 26 of the Act. Section 26 (which is in the same words as the old 41) run thus : "Except as provided in this Act no suit shall be instituted or proceeding taken for anything done or any omission made by a Railway Administration in violation or contravention of any provisions of this Chapter" (Ch. V). The argument in that section 26 stands in the way of bringing any suit of the civil courts on a claim for refund of charges 347 made in excess of reasonable charges. This proceeds on the misconception that such a suit would be , 'for anything done or any omission made by a Railway Administration in violation or contravention of Ch. V of the Act". There is no provision in Ch. V however saying that unreasonable charges shall not be made by a Railway Administration. If therefore any Railway Administration has received payment of unreasonable charges or rates that is not "anything done in violation or contravention of any provisions of Chapter V". If under the law, apart from the Railways Act, a consignor is entitled to obtain relief against unreasonable charges which he has paid, in the past, section 26 will not stand in his way. What his rights in law are in respect of such past charges: and whether any claim for repayment of charges made in excess of reasonable charges can succeed in law in civil courts on the theory that as a common carrier the Railway is not entitled to charge anything more than reasonable rates and charges, need not be examined here. As a suit on ,such a claim world not be on anything done or any omission made by the Railway Administration in violation or in contravention of any provisions of Ch. V, the provisions of section 26 are quite irrelevant for the decision of the question whether the Tribunal has any jurisdiction to make an order for refund. Our conclusion therefore is that neither expressly nor by necessary implication has the Railway Rates Tribunal been given any jurisdiction to make any order for refund. The decisions of the Railway Rates Tribunal, in the present case, on both the issues are therefore correct. The appeal is accordingly dismissed with costs.

IN-Abs

A complaint was made by the appellant to the Railway Rates Tribunal against station, to station rates as being unreasonable on sugarcane imposed by the respondent Railway Co. by their rates circular No. 8 of 1953 with effect from October 1, 1953. The Railway company in their answer pointed out that the rates imposed by the rates circular 8 of 1953 had long before the date of the complainant ceased to be in force and a new rate had come into operation from February 10, 1960. Thereafter the complainant was allowed to amend the complaint. The prayers were for a declaration that the rates charged were unreasonable, that a direction of refund of the excess collected or which may be collected after the date of the amendment of the complaint over the reasonable rates that may be fixed by the Tribunal and, lastly, for fixation of the rates. The main contentions of the respondent were that the Tribunal had no jurisdiction to entertain the complaint as regards the reasonableness of rates prior to the institution of the complaint and that the Tribunal had no jurisdiction to grant refund. The Indian Railways Act underwent several amendments and by the amendment in December 1957, section 41 was changed. As a result of the change cl. I of section 41 read thus: "Any com plaint that a railway administration (a) is contravening the provisions of section 28, or (b) is charging for the carriage of any commodity between two stations a rate which is unreasonable or is levying any other charge which is unreasonable shall hear and decide any such complaint in accordance with the provisions of this Chapter. " 334 The Tribunal held that it had no jurisdiction to entertain or try the complaint as regards the rates and charges to prior to the institution of the complaint and it had no jurisdiction to grant any refund. The appellants came up in appeal to the Supreme Court. Held, that the words "is charging" in clause (b) and "is levying" in clause (c) of section 41 (1) of the Act must be construed to mean "is demanding a price at the present time for services to be rendered". The Railway Rates Tribunal had no jurisdiction to entertain or try the complaint as regards the reasonableness or otherwise of rates and charges made prior to the institution of the complaint. When the Tribunal had no jurisdiction to consider the reasonableness, or otherwise of any charges made prior to the institution of the complaint, it follows necessarily that it could have no occasion to order any refund. For the question of refund could arise only after a decision that the charges made were more than what was reasonable. Held, further, that neither expressly nor by necessary implication has the Railway Rates Tribunal been given any jurisdiction to make any order for refund. , Southern Railway vs The Railway Rates Tribunal, A.I.R. 1955 (Madras) 676, referred to. After a complaint is made the Tribunal shall hear and decide the complaint. The complaint being that something is unreasonable all that the Tribunal has to decide is whether that thing is unreasonable or not. A finding that it is unreasonable does not involve any consideration or decision of what would flow from the finding. In otherwords, in making the complaint the complainant can ask only for a declaration that the rate or charge is unreasonable andit is only this declaratory relief which the Tribunal has been authorised to give. There is no provision that the Tribunal can also give a consequential relief. The only other thing which the Tribunal is authorised to do in connection with the complaint is to fix "such rate or charge as it considers reasonable. " In the absence of any thing to indicate to the contrary it is reasonable to think that this fixation can only be prospective, that is, the Tribunal in making this order fixing the reasonable rate or, charge will mention a future date for this to come incoporation. 335

nal Appeals Nos. 176 of 1959 and 40 of 1960. Appeals by special leave from the judgment and order dated August 26, 1959, of the Bombay High Court, in Cr. A. No. 1638 of 1958. A. section R. Chari, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant (in Cr. A. No. 176 of 59). Erenny Parekh and K. R. Choudhri, for the appellant (in Cr. A. No. 40 of 60). Jai Gopal Sethi, R. L. Mehta and R. H. Dhebar, for the respondents. April 24. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. A criminal conspirac. to which, according to the prosecution, M.G. Agarwal 407 M. K. Kulkarni and N. Laxminarayan, hereafter called accused Nos. 1, 2 and 3 respectively, were parties between December, 1954, and June 1955, at Bombay, has given rise to the criminal proceedings from which the two present appeals arise. At the relevant time, the three accused persons were attached to the office of the Income tax Officer, Ward No. A III in Greater Bombay. Accused No. I was designated as the First Income tax Officer, and accused Nos. 2 and 3 worked under him as second and third Assessment Clerks respectively. The main charge against these persons was that during the relevant period, they had entered into a criminal conspiracy by agreeing to do or cause to be done illegal acts, by corrupt and illegal means and by abusing their position as public servants to obtain for themselves pecuniary advantage in the form of income tax refund orders and this criminal object was achieved by issuing the said refund orders in the names of persons who either did not exist or were not assessees entitled to such refunds. The prosecution case was that after the said refund orders were thus fraudulently issued, they were fraudulently cashed and illegally misappropriates. The ten persons in whose names these refund orders were fraudulently issued were G.M. Thomas, P.N. Swamy, K. section Patel, section R. Bhandarkar, section P. Jani, D. M. Joshi, C. B. Kharkar, Ramnath Gupta, V. M. Desai and K. V. Rao. It appears that twenty five bogus vouchers were issued in respect of these ten fictitious cases ; eleven accounts were fraudulently opened in different Banks in Bombay and misappropriation to the extent of Es. 54,000/ has thereby been committed. That, in. substance, is the main charge which was levelled against the three accused persons. Nine other subsidiary charges were also framed against them. Charges 2, 3 and 4 wore in respect of the income tax refund order issued on 408 the 7th January, 1955, in favour of Mr. G. M. Thomas. The prosecution alleged that by their several acts in respect of the issuance of this refund order, the three accused persons had committed offences under sections 467 and 471 read with, section 34 I.P.C., as well as section 5(2) of the Prevention of Corruption Act read with section 5(1)(d) of the said Act and a. 34 of 'the Indian Penal Code. Similarly, charges 5, 6, and 7 were framed under the same sections respectively in regard to the income tax refund order issued in favour of Mr. G. M. Thomas on the 2nd April, 1955. In regard to the income tax refund order issued in favour of Mr. section R. Bhandarkar on 2nd April, 1955, charges, 8, 9 and 10 were framed under the said respective, sections. That is how the case against the three, accused persons under ten charges was tried by the Special Judge , Greater Bombay. It would thus be seen that, in substance, the prosecution case if; that in order to carry out the criminal object of the conspiracy, the three accused, persons adopted a very clever and ingenious modus operandi in defrauding the public treasury. They" decided to take adequate steps to issue income tax refund orders in the names of non existing persons and to misappropriate the amounts by encashing the said refund certificates issued in pursuance of the said refund orders. In furtherance of the conspiracy and in furtherance of the common intention of all the conspirators, steps were taken to forge the signatures of the said fictitious persons as claimants wherever necessary, to prepare some of the supporting documents and to deal with the cases as though they were cases of genuine assessees submitting a return and making a claim for refund. It is by adopting this clever device that all the accused persons have succeeded in misappropriating such a large amount as Re. 54,000/ . 409 It appears that when a return 'or refund application is received in the Income tax Office, first goes to the assessment refund clerk who, in ue course, puts it up for orders before the Incometax Officer. In ordinary course, the Income tax Officer sends a notice to the assessee, examines him and the accounts produced by him to see if the return is correct. That done, an assessment order is passed by the Income tax Officer. Thereafter, a form known as I.T. 30 form is prepared. This form contains several columns which, when filled in, give details about the income tax payable by the assessee the tax paid by him, the refund ordered by the income tax Officer or the collection demanded by aim. After this form is duly filled, it is sent to another clerk for preparing the refund order. At that stage, the refund order is prepared and the said order together with the demand and collection register and I.T. form 30 are sent back to the Income tax Officer who examines the record and signs the refund order and the I.T. form 30 and himself makes or causes to be made an entry in the demand and collection register. At this time, he also cancels the refund certificates, such as dividend warrants. The Income tax Officer also receives the advice memo prepared by the refund clerk and signs it. The said memo is sent to the Reserve Bank and the refund order is sent to the assessee. After the refund voucher is cashed by the Reserve Bank, the advice memo is received back in the Income tax Office. It is thereafter that an entry is made in the Daily Refund Register. The prosecution case is that the conspirators purported to adopt all steps which they deemed necessary to carry out their criminal object in order formally to comply with the procedure prescribed by the department in making refund orders. At this stage, it is relevant to state briefly how, according to the prosecution, the fraud of the 410 conspirators was discovered. In April ' 1955, Mr. Sundararajan who was then the Commissioner of Income tax, Bombay City received a report that many irregularities were being committed in respect of refund orders issued by A III Ward. On receiving this report, he told Mr. Gharpure who was the Inspecting Assistant Commissioner of Income tax, A Range, to carry out an inspection of the work of accused No. 1. He, however, cautioned Mr. Gharpure to carry out his assignment as if he was making an inspection in the normal course in order that no suspicion should arise in the mind of accused No. 1. Mr. Gharpure accordingly made inspection and submitted his report on the 6th ,Tune, 1955. It is common ground that Mr. Gharpure was not able to discover any fraud. On the 10th June, 1955, Mr. Sundararajan asked Mr. Gharpure to produce before him all the refund books kept in A III Ward. They were accordingly produced before him. On examining these books, Mr. Sundararajan found certain sus picious features. He came across one counter foil of the refund order in the Dame of G. M. Thomas and he noticed that the relevant postal acknowledgment did not bear any postal stamp and presented a clean and fresh appearance. That appeared to Mr. Sundararajan to be suspicious. He also found that a number of refunds were made in round figures which was very unusual. The files showed that on the back of the counter foils the postal acknowledgments were not stuck up nor were advice notes stuck up. His suspicions having been raised by these unusual features of the files, Mr. Sundararajan conducted a further scrutiny of the six counter foil books particularly to find out whether the refund orders were in respect of round figures and he found that such refund orders had been passed, in the names of Messrs G. M. Thomas, K. section Patel, P. N. Swamy, D. N. Joshi and S, R. Bhandarkar. 411 After the refund orders were encashed they we 're sent to the Accountant General 's Office by the Reserve Bank and so, Mr. Sundararajan thought that he could got them from the said office. All this happened in the evening of the 10th June, 1955. On the 11th June, 1955, which was a Saturday, Mr. Sundararajan called for the income tax files of some of the persons named above including G. M. Thomas and K. section Patel along with the files of twenty other regular assessees. The files of the twenty regular assessees were submitted to him but not of the ten fictitious persons. On enquiry he was told that those files were not available. ' The non production of the said files confirmed his suspicion that something irregular must have happened in respect of them. That is why he sent for accused No. 1 at 2 p. m. but he was not in his office. He came at 3 p. m. Mr. Sundararajan showed him the relevant counter foils and examined him. The statement made by accused No. I was duly recorded by Mr. Sundararajan. As a result of the enquiry made by him, Mr. Sundararajan was satisfied that the three accused persons had fraudulently brought into existence several documents as a result of which a large amount had been misappropriated, and so, he requested the Central Board of Revenue to suspend accused No. 1. At that stage, Mr. Sundararajan naturally wanted to search the office of A III Ward, but he could not carry out the search since he was told that the key of the A III Ward Office had been taken way by accused No. 3. He then left instructions with the police guard of his office that nobody should be allowed to enter the room of A III Ward without his permission. Next day, he attended his office but he found that no person in A III Ward had gone to work. Before he left the office, he got the office of A III Ward sealed and 412 left word with the Inspector on duty that if any person came to work in that office thereafter, it should be reported to him. After Mr. Sundararajan reached home, he received a telephone message that accused No. 3 had come to A III Ward Office with the keys. Mr. Sundararajan directed the Inspector to take charge of the keys from accused No. 3 and ask him to attend office the next day. Next day was a Monday (13 6 1955). On that day, Mr. Sundararajan accompanied by certain other officers went to the office of A IlI Ward, opened the seal and the lock and after going inside, attached six registers. He also made a search for the assessment records of the ten persons in question but he did not find them. He then transferred accused No. 1 to an unimportant charge and instructed the Banks that no withdrawals should be allowed from any of the eleven accounts, since the said accounts appeared to him to be suspicious. He then sent for accused No. 3 and examined him. He also sent for accused No. 2 but he was not available since he had gone on leave. He directed one of his inspectors to enquire whether the said ten persons were real persons or were merely fictitious Dames. All this happened on the 13th June, 1955. On the 14th June, 1955, Mr. Sundararajan went to A III Ward Office along with accused No. 3. He wanted to search for the missing papers, viz., the assessment record of the ten persons in question. Accused No. 3 waited for some time and then opened accused No. 2 's table and took out some papers. A list of these papers was made and they were taken in charge. This list has been signed by Mr. Sundararajan and the officers who accompanied him as well as by accused No. 3. Thereafter, accused Nos. 2 & 3 were suspended and as a result 413 of the investigation which followed, all the three accused persons were put up for their trial before the learned Special Judge for Greater Bombay on the charges already indicated. Before the learned trial Judge, accused No. 3 pleaded guilt to all the charges framed against him, whereas accused Nos. 1 and 2 denied that they had anything to do with the alleged commission of the offences charged. The prosecution sought to prove its case against all the three persons by producing before the learned trial Judge the relevant documents including the files kept in A III Ward office, and it examined four witnesses from the department for the purpose of showing the procedure that is followed in passing assessment orders and granting refunds and with the object of showing that the conspiracy could not have succeeded without the active assistance and co operation of accused No. 1. These witnesses are Sundararajan, P. W. 1, Nagwekar, P. W. 2, Subramanian, P.W. 5 and Downak, P. W. 21. It also. examined Das Gupta, P. W. 26, to prove the handwriting of the accused persons. Eleven other witnesses were examined to prove the identity of accused Nos. 2 and 3 in respect of the steps taken by them to open accounts in different banks in order to encash the refund vouchers issued in pursuance of the refund orders passed by accused No. 1. The learned trial Judge held that the evidence accused by the prosecution did not establish beyond a reasonable doubt 'the existence of the criminal conspiracy between the three accused. He was not inclined to hold that the ten alleged persons were non existent. Even so, he proceeded to deal with the case on the basis that the ten persons were non assesses and yet the refund orders had been passed in their favour. According to the 414 learned trial Judge, accused No. I may have innocently signed the, relevant documents without looking to them in a hurry to dispose of cases, placing confidence in his staff; and so, it would be difficult to hold that he was a member of the conspiracy. The utmost, said the learned Judge, that can be argued against him is that he was negligent. That is how he acquitted accused No. 1 of the principal charge of conspiracy under section 120 B &.ad as a result, the other charges as well. In regard to accused No. 2, the learned Judge was likewise not satisfied that the evidence adduced by the prosecution to prove his signatures on the relevant documents established the fact that he had signed those documents and he was not impressed by the other evidence led before him to show that he assisted accused No. 3 in the matter of encashing the refund vouchers. On these findings, accused No. 2 was acquitted of all the charges framed against him. Since accused No. 3 had pleaded guilty to the charges, the learned Judge convicted him under sections 47 1, of the I. P.C. and section 5 (2) of the Prevention of Corruption Act and sentenced him to different terms of imprisonment which were ordered to run concurrently. , He, however, acquitted accused No. 3 so far as the charge of conspiracy was concerned and he acquitted accused Nos. 1 and 2 of all the offences. Against the order of acquittal passed by the learned Judge in favour of accused Nos. 1 and 2, the State of Maharashtra preferred an appeal in the Bombay High Co art and this appeal succeeded. The High Court has found that the learned trial Judge a misdirected himself by assuming that accused No. I had pleaded that he had negligently signed the relevant documents and passed the relevant orders in a hurry, placing confidence in his staff. The High Court has pointed out that far from pleading negligence, accused No. 1 had definitely stated 415 in his written statement filed in the trial Court that before he directed the issue of refund in the ten cases, be had examined the files containing the supporting documents and had satisfied himself that it was proper to allow the refund in each one of those cases. This position was conceded by the learned Advocate who appeared for accused No. 1 in the High Court. The High Court then examined the question as to whether the ten assessees were existing persons or were fictitious names and it came to the. conclusion that the ten names given for the eleven accounts in which refund orders were passed were fictitious names. The High Court then examined the circumstantial evidence on which the prosecution relied in support and proof of its main charge of conspiracy between the three accused persons and it came to the conclusion that the said charge had been proved against all the three accused persons beyond a reasonable doubt. That is how the High Court partially allowed the appeal preferred by the State and convicted all the three accused persons under section 120 B of the Indian Penal Code. It also convicted accused No. 2 of the offences under sections 467, 471, I. P. C., and section 5(2) of the Prevention of Corruption Act. In regard to the other offences charged, the order of acquittal was confirmed. Having convicted accused Nos. 1 & 2 under section 120 B, the High Court has sentenced each one of them to suffer rigorous imprisonment for 18 months for the said offence. Accused No. 2 has also been directed to suffer R.I. for 18 months in respect of each of the offences under sections 467, 471, I. P. C. and section 5 (2) of the Prevention of Corruption Act. These sentences are ordered to run concurrently with the sentence ordered under section 120 B. It is against this order of conviction and sentence passed by the High Court in appeal that accused Nos. 1 , 2 have come to this Court by special leave by their appeals Nos. 176 of 1959 and 40 of 1960. 416 Since the impugned order of conviction and sentence was passed against the appellants by the High Court in exercise of its powers under section 423 of the Criminal Procedure Code while hearing 'an appeal against their acquittal, the first question which calls for our decision relates to the extent of the High Court 's powers in interfering with orders of acquittal in appeal. This question has been discussed and considered in several judicial decisions both by the privy Council and this Court. In dealing with the different aspects of the problem raised by the construction of section 423, emphasis has sometimes shifted from one aspect to the other and that is likely to create a doubt. about the true scope and effect of the relevant provisions contained in section 423. Therefore, we propose to deal with that point and state the position very briefly. Section 423 (1) prescribes the powers of the appellate Court in disposing of appeals preferred before it and clauses (a) and (b) deal with appeals against acquittals and appeals against convictions respectively. There is no doubt that the power conferred by clause (a) which deals with an appeal against an order of acquittal is as wide as the power conferred by clause (b) which deals with an appeal against an order of conviction, and so, it is obvious that the High Court 's powers in dealing with criminal appeals are equally wide whether the appeal in question is one against acquittal or against conviction. That is one aspect of the question. The other aspect of the question centres round the approach which the High Court adopts in dealing with appeals against orders of acquittal. In dealing with such appeals, the High Court ;naturally bears in mind the presumption of innocence in favour of an accused person and cannot lose sight of the fact that the said presumption is strengthened by the order of acquittal passed in his favour by the trial Court and so, the fact that the accused person is 417 entitled to the benefit of a reasonable doubt will always be present in the mind of the High Court when it deals with the merits of the case. As an appellate Court the High Court is generally slow in disturbing the finding of fact recorded by the trial Court, particularly when the said finding is based on an appreciation of oral evidence because the trial Court has the advantage of watching the demeanour of the witnesses who have given evidence. Thus, though the powers of the High Court in dealing with an appeal against acquittal are as wide as those which it has in dealing with an appeal against conviction, in dealing with the former class of appeals, its approach is governed by the overriding consideration flowing from the presumption of innocence. Sometimes, the width of the power is emphasized, while on other occasions, the necessity to adopt a cautious approach in dealing with appeals against acquittals is emphasised, and the emphasis is expressed in different words or phrases used from time to time. But the true legal position is that however circumspect and cautious the approach of the High Court may be in dealing with appeals against acquittals, it is undoubtedly entitled to reach its own conclusions upon the evidence adduced by the prosecution in respect of the guilt or innocence of the accused. this position has been clarified by the Privy Council in Sheo Swarup vs The, King Emperor (1) and Nur Mohammad vs Emperor In some of the earlier decisions of this Court, however, in emphasizing the importance of adopting a cautious approach in dealing with appeals against acquittals, it was observed that the presumption of innocence is reinforced by the order of acquittal and so, "the findings of the trial Court which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for (1) (1934) L.R. 61 1. A. 398. (2) A.I.R. 1945 P.C. 151, 418 very substantial and compelling reasons": vide Surajpal Singh vs The State (1). Similarly in Ajmer Singh vs State of Punjab (2), it was observed that the interference of the High Court in an appeal against the order of acquittal would be justified only if there are "very substantial and compelling reasons to do so. ') In some other decisions, it has been stated that an order of acquittal can be reversed only for "good and sufficiently cogent reasons" or for "strong reasons". In appreciating the effect of these observations, it must be remembered that these observations were not intended to lay down a rigid or inflexible rule which should govern the decision of the High Court in appeals against acquittals. They were not intended, and should not be read to have intended to introduce an additional condition in clause (a) of section 423 (1) of the Code. All that the said observations are intended to em phasise is that the approach of the High Court in dealing with an appeal against acquittal ought to be cautious because as Lord Russell observed in the case of Shoo Swarup, the presumption of innocence in favour of the accused "is not certainly weakened by the fact that he has been acquitted at his trial." Therefore, the test suggested by the expression "substantial and compelling reasons" should not be construed as a formula which has to be rigidly applied in every case. That is the effect of the recent decisions of this Court, for instance, in Sanwat Singh vs State of Rajasthan (2), and Harbans Singh vs The State of Punjab (4); and so, it is not necessary that before reversing a judgment of acquittal, the High Court must necessarily characterise the findings recorded therein as perverse. Therefore, the question which we have to ask ourselves in the present appeals is whether on the material produced by the prosecution, the High Court was justified in reaching the conclusion that the (1) ; , 201. (2) ; (3) ; (4) (1962) Supp. I.S.C.R 104. 419 prosecution case against the appellants had been proved beyond a reason able doubt, and that the contrary view taken by the trial Court was, erroneous. In answering this question, we would, no doubt, consider the salient and broad features of the evidence in order to appreciate the grievance made by the appellants against the conclusions of the High Court. But under article 136 we would ordinarily be reluctant to interfere with the finding of fact recorded by the High Court particularly where the said findings are based on appreciation of oral evidence. There is another point of law which must be considered before dealing with the evidence in this case. The prosecution case against accused No. 1 rests on circumstantial evidence. The main charge of conspiracy under section 120 B is sought to be established by the alleged conduct of the conspirators and so far as accused No. 1 is concerned, that rests on circumstantial evidence alone. It is a well established rule in criminal jurisprudence that circumstantial evidence can be reasonably made the basis of an accused person 's conviction if it is of such a character that it is wholly inconsistent with the innocence of the accused and is consistent only with his guilt. If the circumstances proved in the case are consistent either with the innocence of the accused or with his guilt, then the accused is entitled to the benefit of doubt. There is no doubt or dispute about this position. But in applying this principle, it is necessary to distinguish between facts which may be called primary or basic on the one hand and inference of facts to be drawn from them on the other. In regard to the proof of basic or primary facts the Court has to judge the evidence in the ordinary way, and in the appreciation of evidence in respect of the proof of these basic or primary facts there is no scope for the application 420 of the doctrine of benefit of doubt. The Court considers the evidence and decides whether that evidences proves a particular fact or not. When it is held that a certain fact is proved, the question arises whether that fact leads to the inference of guilt of the accused person or not, and in dealing with this aspect of the problem, the doctrine of benefit of doubt would apply and an inference of guilt can be drawn only if the proved fact is wholly inconsistent with the innocence of the accused and is consistent only with his guilt. It is in the light of this legal position that the evidence in the present case has to be appreciated. The Court then considered the evidence and the findings of the High Court and dismissed the appeals. Appeals dismissed.

IN-Abs

Appellant Agarwal was an Income Tax Officer and appellant Kulkarni, a clerk under him. They were put up for trial along with another clerk of the Department on several charge the principal charge being that they had entered into a criminal conspiracy to obtain for themselves pecuniary advantage in the form of income tax refund orders in the name of fictitious persons and had thereby fraudulently mis appropriated a large amount of Government money. The trial judge held that the prosecution had failed to establish criminal conspiracy and acquitted the appellants of the charge under section 120B and the second appellant of all other charges under the Indian Penal ( ode but while acquitting the third person also under section 120B,, convicted him of other offends as he had pleaded guilty. The State appealed against this order of acquittal. The High Court allowed the appeal in part and convicted all the accused persons under section 120B of the Code and the second appellant also under the other charges. Held, that there was no doubt that the powers of the High Court under section 423 (1) (a) of the Code of Criminal Procedure in dealing with an order of acquittal were as wide as those under section 423 (1) (b) in respect of orders of conviction; ' but in dealing with an appeal against acquittal that Court had to bear in mind the fact that the initial presumption of innocence in favour of the accused person is strengthened by the order of acquittal; But however cautious or circumspect the court might be, it was, nevertheless, free to arrive at its own conclusions as to the guilt or innocence of the accused on the evidence adduced before it by the prosecution; Sheo Swarup vs King Emperor , 934) L. R. 61 I. A. 398 and Nur Mohammad vs Emperor, A.I.R. 1945 P. C. 151., referred to. 406 Observations made on ' this point in certain decided cases of this Court were not intended to lay down a rigid or inflexible rule that should govern all such appeals and it is not necessary that the High Court must characterise the findings as perverse, before it can reverse a judgment of acquittal. Surajpal Singh vs The State, ; and Ajmer Singh vs State, of Punjab, ; , considered. Sanwat Singh v, State of Rajasthan; , and Harbans Singh vs State of Punjab, [1962]_"Supp. 1 section C. R. 104 referred to. It was settled law that a conviction can be reasonably founded on circumstantial evidence if it is wholly inconsistent with the innocence of the accused and Consistent only with his guilt. If the circumstances proved are consistent either with innocence or guilt, the accused person is entitled to the benefit of doubt. But in applying this principle a distinction must be made between primary facts ' which have to be proved in the ordinary way and the inference of guilt to be drawn therefrom. It is in connection with the latter aspect of the problem that the doctrine of benefit of doubt can apply ; and an inference of guilt can be drawn only if the proved facts are wholly inconsistent with innocence, and consistent only with guilt.

ON: Criminal Appeal No. 169 of 1957. 771 Appeal by special leave from the judgment and order dated the April 9, 1956, of the Patna High Court in Cr. A. No. 445 of 1955. WITH Criminal Appeals Nos. 124 to 126 of 1958. Appeals from the judgment and order dated May 16, 1958, of the Allahabad High Court in Criminal Appeals Nos. 76 and 108 of 1955 and Cr. M. Writ No. 2371 of 1955. Janardan Sharma for appellant in Criminal Appeal No. 169 of 1957: The appellant has been convicted under sections 124A and 505 Indian Penal Code. Both these sections are ultra vires as they contravene the provisions of article 19(1)(a) of the Constitution. A speech may disturb public order or it may not, but both are made punishable under Section 124A. The section hits speeches of both varieties permissible speeches and impermissible speeches. The explanation to section 124A do not affect the interpretation of the main section. In a democratic set up a citizen is entitled to criticise the Government with a view to change it. Two questions arises in the cases, namely (i) does section 124A enact a law which is in the interest of public order and (ii) does this section impose reasonable restrictions in the interest of public order. The decision in I. L. R. (1958) 2 All. 84 which has declared s.124A to be ultra vires takes the correct law. R. C. Prasad, for respondent in Criminal Appeal No. 169 of 1957: Referred to the decision in Ramji Lal Modi vs State of U. P. [1957] S.C.R.860. Stated that he would adopt the submissions to be made by Shri C. B. Agarwala. C. B. Agarwala for the appellant in Criminal Appeals Nos. 124 to 126 of 1958: The correct meaning of the provisions of section 124A in the context 772 of the present set up and the Constitution is that given by the Federal Court in Niharendu Dutt 's case, and not the meaning given to them by the Privy Council in Bhalerao 's case 74 I. A. 89. Intepretation by Courts of words of statutes to a particular set of facts has been changing with the change in the social and political structure of society and the opinion of its reasonable members. Section 124A is in a chapter which deals with offencss against the State. Therefore, it is not a case of libel against any offioer but of an offence against the State. Words in the English law relating to sedition are the same as in section 124A vide Stephen 's Commentary on the law of England, Vol. 4, page 141, Halsbury 's Law of England 3rd Edition, Vol. 10, page 169 Jowitt 's Dictionary of English law, page 1605, Stephen 's History of Criminal Law, Vol. 2, page 298 and 301 Chapter 24. Under English Law a tendency to create tumult or disorder is an essential element of sedition. Russel on Crimes, Vol. 1, p. 229, R. vs Collins, ; R. vs Sullivan, 11 Cox. Section 124A has been taken from the English Law (see Section 124A must, therefore, be interpreted in the same manner as sedition is interpreted in England and it must be held that a tendency to disturb public order is an essential element of the offence under section 124A. Articles 133 and 133A of the Canadian Criminal Code which deal with sedition have been given the same interpretation, 1951, canadian section C. R. 265. The view taken in Tilak 's case , in Bhalerao 's case 74 I.A. 89 and in Wallice Johnsons case[1940] A. C. 231 that incitement to violence or a tendency to disturb public order was not a necessary ingredient of section 124A, is not the correct view. takes the correct view and lays down that the tendency to disturb public order is a necessary ingredient of the offence under section 124A. Devi Saran 's case 32 Pat. 1124 also takes the same view. 773 There are two interpretations of section 124A before the Court, one taken by the Federal Court and the other taken by the Privy Council. This Court should accept the interpretation given by the section Court, as that interpretation would make the section Constitutional. Even if the interpretation put by the Privy Council be accepted as correct one, section 124A will still be valid. The section certainly contemplates cases where the speech is likely to disturb public order and as such the section in the interest of public order as contemplated in article 19(2) and the mere fact that some cases in which the public order is not likely to be disturbed are also included therein, cannot invalidate the section. This court took a similar view in Ramjilal Modi 's case ; and in Virendra 's case [1958] section C. R. 308, the decision Lohia 's case [1960] 2 section C. R. 821 does not affect this case, as in that case it was found that that provisions curtailing freedom of speech were not in the interest of public order as the connection between the provisions and disturbance of public order as too remove. Even if the section be held according to the Privy Council view to include which threaten public order and those which the section can be held valid with respect s where public order is threatened as the two of case are severable. , [1951] section C. R. 682, [1953] 1059 and ; P. Verma for the Attorney General of Article 374(2) of the Constitution perversion of the Federal Court shall have the rect as the decision of the Supreme Court. Decision of the Federal Court in be deemed to be a decision of this Court and should be held binding. A tendency to disturb public order is inherent in section 124A itself. Gopal Behari for respondent in Criminal Appeal No. 124 of 1958: The interpretataion of section 124A by 774 the Privy Council has been accepted by the High Court. Even in English Law sedition does not necessarily include an intention to disturb public order; , Explanations (2) and (3) would be redundant if section 124A is interpreted to incorporate the English view of sedition. The Allahabad High Court as well as other High Courts have given the same interpretation of section 124A as the Privy Council has. See 1941 All. 156, 1930 Lah. 309, and 10 Luck. The decision in Lohia 's case also ; governs the present case also section 124A punishes such speeches also as have no tendency to disturb public order and contravenes article 19(1)(a). It is not saved by article 19(2) as placing of restriction on such speeches is not in the interest of public order. It is not open to the Court to rewrite the section by removing from its purview such speeches as have no tendency to disturb public order and to confine it to such speeches as have a tendency to disturb public order. The whole section must fail; it cannot be dissected. C. B. Agarwala in reply: In English law is a necessary ingredient of seditious intention it must have a tendency to cause tumult or di R. vs Alred, , R. vs Burdott, 101, 803; R. vs O 'Brien, The Council has only said that actual incite violence was not a necessary ingredient of It has not gone further and has not laid tendency to disturb public order was not a ingredient of section 124A. Even though public is not an ingredient of the offeence under there is a tendency to disturb public speeches or writings which bring or atte bring into hatered or contempt or excite or at to excite dissatisfaction towards the Government established by law. January 20. The Judgment of the court was delivered by 775 SINHA, C. J. In these appeals the main question in controversy is whether sections 124A and 505 of the Indian Penal Code have become void in view of the provisions of article 19(1)(a) of the Constitution. The constitutionality of the provisions of section 124A, which was mainly canvassed before us, is common to all the appeals, the facts of which may shortly be stated separately. In Criminal Appeal 169 of 1957, the appellant is one Kedar nath Singh, who was prosecuted before a Magistrate, 1st Class, at Begusarai, in the district of Monghyr, in Bihar. He framed the following charges against the accused person, which are set out in extenso in order to bring out the gravamen of the charge against him. "First. That you on 26th day of May, 1953 at village Barauni, P. section Taghra (Monghyr) by speaking the words, to wit, (a) To day the dogs of the C. I. D are loitering round Barauni. Many official dogs are sitting even in this meeting. The people of India drove out the Britishers from this country and elected these Congress goondas to the gaddi and seated them on it. To day these Congress goondas are sitting on the gaddi due to mistake of the people. When we drove out the Britishers, we shall strike and turn out these Congress goondas as well. These official dogs will also be liquidated along with these Congress goondas. These Congress goondas are banking upon the American dollars and imposing various kinds of taxes on the people to day. The blood of our brothers mazdoors and Kishanas is being sucked. The capitalists and the zamindars of this country help these Congress goondas. These zamindars and capitalists will also have to be brought before the peoples court along with these Congress goondas. 776 (b) On the strength of the organisation and unity of Kisans and mazdoors the Forward Communists Party will expose the black deeds of the Congress goondas, who are just like the Britishers. Only the colour of the body has changed. They have to day established a rule of lathis and bullets in the country. The Britishers had to go away from this land. They had aeroplanes, guns, bombs and other weapons with them. (c) The Forward Communist Party does not believe in the doctrine of vote itself. The party had always been believing in revolution and does so even at present. We believe in that revolution, which will come and in the flames of which the capitalists, zamindars and the Congress leaders of India, who have made it their profession to loot the country, will be reduced to ashes and on their ashes will be established a Government of the poor and the downtrodden people of India. (d) It will be a mistake to expect anything from the Congress relers. They (Congress rulers) have set up V. Bhave in the midst of the people by causing him wear a langoti in order to divert the people 's attention from their mistakes. To day Vinova is playing a drama on the stage of Indian politics. Confusion is being created among the people. I want to tell Vinova and advice his agents, "you should understand it the people cannot be deceived by this illusion and fraud of Vinova". I shall vinova not to become a puppet in the of the Congress men. These persons, understand the Yojna of Vinova, realise that Vinova is an agent to the Congress Government. (e) I tell you that this Congress Government will do no good to you. 777 (f) I want to tell the last word even to the Congress Tyrants, "you play with the people and ruin them by entangling them in the mesh of bribery, black marketing and corruption. To day the children of the poor are hankering for food and you Congress men are assuming the attitude of Nawabs sitting on the chairs. " Brought or attempted to bring into hatred or contempt or excited or attempted to excite disaffection towards the Government established by law in the Indian Union and thereby committed an offence punishable under section 124A of the Indian Penal Code and within my cognizance. Secondly. That you on the 26th day of May, 1953 at village Barauni, P. section Tegra (Monghyr) made the statement, to wit, (a) To day the dogs of the C. I. D. are loitering round Barauni. Many official dogs are sitting even in this meeting. The people of India drove out the Britishers from this country, And elected these Congress Goondas to the gaddi and seated them on it. To day these Congress Goondas are sitting on the gaddi due to the mistake of the people. When we have driven out the Britishers, we shall strike and turn out these Congress Goondas. These Congress Goondas are banking upon the American dollars and imposing various kinds of taxes on the people to day. The blood of our brothers Mazdoors and Kisans is being sucked. The capitalists and the zamindars of this country help these Congress Goondas. These zamindars and capitalists will also have to be brought before the people 's Court along with these Congress Goondas. 778 (b) On the strength of organisation and unity of kisans and mazdoors the Forward Communist Party will expose the black deeds of the Congress Goondas, who are just like the Britishers. Only the colour of the body has changed. They have, to day, established a rule of lathis and bullets in the country. The Britishers had to go away from this land. They had aeroplanes, guns, bombs, and other reasons with them. (c) The Forward Communist party does not believe in the doctrine of votes itself. The party had always been believing in revolution and does so even at present. We believe in that revolution, which will come and in the flames of which the capitalists, zamindars and the Congress leaders of India, who have made it their profession to loot the country, will be reduced to ashes, and on their ashes will be established a Government of the poor and the downtrodden people of India. (d) It will be a mistake to expect anything from the Congress rulers. They (Congress rulers) have set up V. Bhave in the midst of the people by causing him wear a langoti in order to divert the attention of the people from their mistakes. To day Vinoba is playing a drama on the stage of Indian politics. Confusion is being created among the people. I want to tell Vinova and advise his agents, "You should understand it that the people cannot be deceived by this Yojna, illusion and fraud of Vinova. I shall advice Vinova not to become a puppet in the hands of the Congress men. Those persons who understand the Yojna of Vinova, realise that Vinova is an agent of Congress Government. 779 (e) I tell you that no good will be done to you by this Congress Government. (f) I want to tell the last word even to Congress tyrants "you play with the people and ruin them by entangling them in the mesh of bribery, black marketing and corruption. To day the children of the poor are hankering for food and you (Congress men) are assuming the attitude of Nawabs sitting on the chairs". . With intent to cause or which was likely to cause fear or alarm to the public whereby any persons might be induce to commit an offence against the State of Bihar and against the public tranquility, and thereby committed an offence punishable under section 505(b) of the Indian Penal Code and within my cognizance. After recording a substantial volume of oral evidence, the learned Trial Magistrate convicted the accused person both under sections 124A and 505(b) of the Indian Penal Code, and sentenced him to under go rigorous imprisonment for one year. No separate sentence was passed in respect of the conviction under the latter section. The convicted persons preferred an appeal to the High Court of Judicature at Patna, which was heard by the late Mr. Justice Naqui Imam, sitting singly. By this judgment and order dated April 9, 1956, he upheld the convictions and the sentence and dismissed the appeal. In the course of his judgment, the learned Judge observed that the Judge observed of the charge against the appellant was nothing but a vilification of the Government; that it was full of incitements to revolution and that the speech taken as a whole was certainly seditionus. It is not a speech critising any of is measures. He held that the offences both under sections 124A 505(b) of the Indian Penal Code had been made out. 780 The convicted person moved this Court and obtained special leave to appeal. It will be noticed that the constitutionality of the provisions of the sections under which the appellant was convicted had not been convassed before the High Court. But in the petition for special leave, to this Court, the ground was taken that sections 124A and 505 of the Indian Penal Code "are inconsistent with article 19(1) (a) of the Constitution". The appeal was heard in this Court, in the first instance, by a Division Bench on May 5, 1959. The Bench, finding that the learned counsel vco the appellant had raised the constitutional issue as to the validity of sections 124A and 505 of the Indian Penal Code, directed that the appeal be placed for hearing by a Constitution Bench. The case was then placed before a Constitution Bench, on November 4, 1960, when that Bench directed notice to issue to the Attorney General of India under r. 1, O.41 of the Supreme Court Rules. The matter was once again placed before a constitution Bench on February 9, 1961, when it was adjourned for two months in order to enable the State Governments concerned with this appeal, as also with the connected Criminal Appeals Nos. 124 126 of 1958 (in which the Government of Uttar Pradesh is the appellant) to make up their minds in respect of the proseocuions, as also in view of the report that the Law Commission was considering the question of amending the law of sedition in view of the new set up. As the States concerned have instructed their counsel to press the appeals, the matter has finally come before us. In Criminal Appeals 124 126 of 1958 the State of Uttar Pradesh is the appellant, though the respondents are different. In Criminal appeal 124 of 1958, the accused person is one Mohd, Ishaq Ihahi. He was prosecuted for having delivered a speech at Aligarh as Chairman of the Reception Committee of the All India Muslim Convention on October 30, 781 1953. His speech on that occasion, was thought to be seditious. After the necessary sanction, the Magistrate held an enquiry, and finding a prima facie case made out against the accused, committed him to the Court of Session. The learned Sessions Judge, by his Judgment dated January 8, 1955, acquitted him of the charge under section 153A, but convicted him of the other charge under section 124A, of the Indian Penal Code, and sentenced him to rigorous imprisonment for one year. The convicted person preferred an appeal to the High Court. In the High Court the constitutionality of section 124A of the Indian Penal Code was challenged. In Criminal Appeal No. 125 of 1958, the facts are that on May 29, 1954, a meeting of the Bolshovik Party was organised in village Hanumanganj, in the District of Basti, in Uttar Pradesh. On that occasion, the respondent Rama Nand was found to have delivered an objectionable speech in so far as he advocated the use of violence for overthrowing the Government established by law. After the sanction of the Government to the prosecution had been obtained, the learned Magistrate held an enquiry and ultimately committed him to take his trial before the Court of Sessions. In due course, the learned Sessions Judge convicted the accused person under section 124A of the Indian Penal Code and sentenced him to rigorous imprisonment for three years. He held that the accused person had committed the offence by inciting the audience to an open violent rebellion against the Government established by law, by the use of arms. Against the aforesaid order of conviction and sentence, the accused person preferred an appeal to the High Court of Allahabad. In Criminal Appeal 126 of 1958, the respondent is one Parasnath Tripathi. He is alleged to have delivered a speech in village Mansapur, P.S. Akbarpur, in the district of Faizabad, on September 26, 1955, in which he is said to have 782 exhorted the audience to organise a volunteer army and resist the Government and its servants by violent means. He is also said to have excited the audience with intent to create feelings of hatred and enmity against the Government. When he was placed on trial for an offence under section 124A of the Indian Penal Code, the accused person applied for a writ of Habeas Corpus in the High Court of Judicature at. Allahabad on the ground that his detention was illegal inasmuch as the provisions section 124A of the Indian Penal Code were void as being in contravention of his fundamental rights of free speech and expression under article 19(1)(a) of the Constitution. This matter, along with the appeals which have given rise to appeals Nos. 124 and 125, as aforesaid, were ultimately placed before a Full Bench, consisting of Desai, Gurtu and Beg, JJ. The learned judges, in separate but concurring judgments, took the view that section 124A of the Indian Penal Code was ultra vires article 19(1)(a) of the Constitution. In that view of the matter, they acquitted the accussed persons, convicted at aforesaid in the two appeals Nos. 124 and 125, and granted the writ petition of the accused in criminal Appeal No. 126. In all these cases the High Court granted the necessary certificate that the case involved important questions of law relating to the interpretation of the Constitution. That is how these appeals are before by on a certificate of fitness granted by the High Court. Shri C. B. Agarwala, who appeared on behalf of the State of Uttar Pradesh in support of the appeals against the orders of acquittal passed by the High Court, contended that the judgment of the High Court (bow reported in Ram Nandan vs State (1) in which it was laid down by the Full Bench that section 124A of the Indian Penal Code was ultra article 19(1)(a) of the Constitution and, 783 therefore, void for the reason that it was not in the interest of public order and that the restrictions imposed there by were not reasonable restrictions on the freedom of speech and expression, was erroneous. He further contended that the section impugned came within the saving cl. (2) of article 19, and that the reasons given by the High Court to the contrary were erroneous. He relied upon the observations of the Federal Court in Niharendu Dutt Majumdar vs The King Emperor (1). He also relied on Stephen 's Commentaries on the Laws of England, Volume IV, 21st Edition, page 141, and the Statement of the Law in Halsbury 's Laws of England, 3rd Edition, volume 10, page 569, and the cases referred to in those volumes. Mr. Gopal Behari, appearing on behalf of the respondents in the Allahabad cases has entirely relied upon the full Bench decision of the Allahabad High Court in his favour. Shri Sharma appearing on behalf of the appellant in the appeal from the Patna High Court has similarly relied upon the decision aforesaid of the Allahabad High Court. Before dealing with the contentions raised on behalf of the parties, it is convenient to set out the history of the law, the amendments it has undergone and the interpretations placed upon the provisions of section 124A by the Courts in India, and by their Lordships of the judicial Committee of the Privy Council. The section corresponding to section 124A was originally section 113 of Macaulay 's Draft Penal Code of 1837 39, but the section was omitted from the Indian Penal Code as it was enacted in 1860. The reason for the omission from the Code is enacted is not clear, but perhaps the legislative body did not feel sure above its authority to enact such a provision in the Code. Be that as it may, section 124A was not placed on the Statute Book until 1870, by Act XXVII of 1870. There 784 was a considerable amount of discussion at the time the amendment was introduced by Sir James, Stephen, but what he said while introducing the bill in the legislature may not be relevant for our present purposes. The section as then enacted ran as follows: "124A. Exciting Disaffection Whoever by words, either spoken or intended to be read, or by signs, or by visible representation, or otherwise, excites, or attempts to excite, feelings of disaffection to the Government established by law in British India, shall be punished with transportation for life or for any term, to which, fine may be added, or with imprisonment for a term which may extend to three years, to which fine may be added, or with fine. Explanation Such a disapprobation of the measures of the Government as is compatible with a disposition to render obedience to the lawful authority of the Government and to support the lawful authority of the Government against unlawful attempts to subvert or resist that authority, is not disaffection. Therefore, the making of comments on the measures of the Government, with the intention of exciting only this species of disapprobation, is not an offence within this clause. " The first case in Indian that arose under the section is what is known as the Bangobasi case (Queen Empress vs Jagendra Chunder Bose (1)) which was tried by a Jury before Sir Comer Petheram, C J. while charging the jury, the learned Chief Justice explained the law to the jury in these terms: 785 "Disaffection means a feeling contrary to affection, in other words, dislike or hatred. Disapprobation means simply disapproval. It is quite possible to disapprove of a men 's sentiments or action and yet to like him. The meaning of the two words is so distinct that I feel it hardly necessary to tell you that the contention of Mr. Jackson cannot be sustained. If a person uses either spoken or written words calculated to create in the minds of the persons to whom they are addressed a disposition not to obey the lawful authority of the Government, or to subvert or resist that authority, if and when occasion should arise, and if he does so with the intention of creating such a disposition in his bearers or readers, he will be guilty of the offence of attempting to excite disaffection within the meaning of the section though no disturbance is brought about by his words or any feeling of disaffection, in fact, produced by them. It is sufficient for the purposes of the section that the words used are calculated to excite feelings of ill will against the Government and to hold it up to the hatred and contempt of the people, and that they were used with the intention to create such feeling. " The next case is the celebrated case of Queen Empress vs Balqanqaddhar Tilak (1) which came before the Bobay High Court. The case was tried by a jury before Strachey, J. The learned judge, in the course of his charge to the jury, explain the law to them in these terms: "The offence as defined by the first clause is exciting or attempting to excite feelings of disaffection to the Government. What are "feelings of disaffection" ? I agree with Sir Comer Petheram in the Bangobasi case that disaffection means simply the 786 absence of affection. It means hatred, enmity dislike, hostility, contempt and every from of ill will to the Government. "Disloyalty" is perhaps the best general term, comprehending every possible form of bad feeling to the Government. That is what the law means by the disaffection which a man must not excite or attempt to excite; he must not make or try to make others feel enmity of any kind towards the Government. You will observe that the amount or intensity of the disaffection is absolutely immaterial except perhaps in dealing with the question of punishment: if a man excites or attempts to excite feelings of disaffection, great or small, he is guilty under the section. In the next place, it is absolutely immaterial whether any feelings of disaffection have been excited or not by the publication in question. It is true that there is before you a charge against each prisoner that he has actually excited feelings of disaffection to the Government. If you are satisfied that he has done so, you will, of course, find him guilty. But if you should hold that charge is not made out, and that no one is proved to have been excited to entertain feelings of disaffection to the Government by reading these articles, still that alone would not justify you in acquitting the prisoners. For each of them is charged not only with exciting feelings of disaffection, but also with attempting to excite such feelings. You will observe that section places on absolutely the same footing the successful exciting of feelings of disaffection and the unsuccessful attempt to excite them, so that, if you find that either of the prisoners has tried to excite such feeling in others, you must convict him even if there is nothing to show that he succeeded. Again, it is 787 important that you should fully realise another point. The offence consists in exciting or attempting to excite in others certain bad feeling towards the Government. It is not the exciting or attempting to excite mutiny or rebellion, or any sort of actual disturbance, great or small. Whether any disturbance or outbreak was caused by there articles, is absolutely immaterial. If the accused intended by the articles to excite rebellion or disturbance, his act would doubtless fall within section 124A, and would probably fall within other sections of the Penal Code. But even if he neither excited nor intended to excite any rebellion or outbreak or forcible resistance to the authority of the Government, still if he tried to excite feelings of enmity to the Government, that is sufficient to make him guilty under the section. I am aware that some distinguished persons have thought that there can be no offence against the section unless the accused either counsels or suggests rebellion or forcible resistance to the Government. In my opinion, that view is absolutely opposed to the express words of the section itself, which as plainly as possible makes the exciting or attempting to excite certain feelings, and not the inducing or attempting to induce to any course of action such as rebellion or forcible resistance, the test of guilt. I can only account for such a view by attributing it to a complete misreading of the explanation attached to the section, and to a misapplication of the explanation beyond its true scope. " The long quotation has become necessary in view of what followed later, namely, that this statement of the law by the learned judge came in for a great deal of comment and judicial notice. We have omitted the charge to the jury relating 788 to the explanation to section 124A because that explanation has now yielded place to three separate explanations in view of judicial opinions expressed later. The jury, by a majority of six to three, found Shri Balgangadhar Tilak guilty. Subsequently, he, on conviction, applied under cl. 41 of the Letters Patent for leave to appeal to the Privy Council. The application was heard by a Full Bench consisting of Farran, C. J., Candy and Strachey, JJ. It was contended before the High Court at the leave stage, inter alia, that the sanction given by the Government was not sufficient in law in that it had not set out the particulars of the offending articles, and, secondly, that the judge misdirected the jury as to the meaning of the word "disaffection" insofar as he said that it might be equivalent to "absence of affection". With regard to the second point, which is only relevant point before us; the Full Bench expressed itself to the following effect: "The other ground upon which Mr. Russell has asked as to certify that this is a fit case to be sent to Her Majesty in Council, is that there has been a misdirection, and he based his argument on one major and two minor grounds. The major ground was that the section cannot be said to have been contravened unless there is a direct incitement to stir up disorder or rebellion. That appears to us to be going much beyond the words of the section, and we need not say more upon that ground. The first of the minor points is that Mr. Justice Strachey in summing up the case to the jury stated that disaffection meant the absence of affection". But although if that phrase had stood alone it might have misled the jury, yet taken in connection with the context we think it is impossible that the jury could have been misled by it. That expression was used in connection with the 789 law as led down by Sir Comer Petheram, in Calcutta in the Bangobashi case. There the Chief Justice instead of using the words "absence of affection" used the words "contrary to affection". If the words "contrary to affection" had been used instead of "absence of affection" in this case there can be no doubt that the summing up would have been absolutely correct in this particular. But taken in connection with the context it is clear that by the words "absence of affection" the learned Judge did not mean the negation of affection but some active sentiment on the other side. Therefore on that point we consider that we cannot certify that this is a fit case for appeal. " In this connection it must be remembered that it is not alleged that there has been a miscarriage of Justice. " After making those observations, the Full Bench refused the application for leave. the case was then taken to Her Majesty in council, by way of application for special leave to appeal to the Judicial Committee. Before their Lordships of the Privy Council, Asquith, Q. C., assisted by counsel of great experience and eminence like Mayne, W. C. Bonnerjee and others, contended that there was a misdirection as to the meaning of section 124A of the Penal Code in that the offence had been defined in terms to wide to the effect that "disaffection" meant simply "absence of affection" and that it comprehended every possible form of bad feeling to the Government. In this connection reference was made to the observations of Petheram, C.J. in Queen Empress vs Jogender Bose(1). It was also contended that the appellant 's comments 790 had not exceeded what in England would be considered within the functions of a Public journalist, and that the misdirection complained of was of the greatest importance not merely to the affected person but to the whole of the Indian Press and also to all her Majesty 's subjects; and that it injuriously affected the liberty of the press and the right to free speech in public meetings. But in spite of the strong appeal made on behalf of the petitioner for special leave, the Lord Chancellor, delivering the opinion of the Judicial Committee, while dismissing the application, observed that taking a view of the whole of the summing up they did not see any reason to dissent from it, and that keeping in view the rules which Their Lordships observed in the matter of granting leave to appeal in criminal cases, they did not think that the case raised questions which deserve further consideration by the Privy Council. (vide Gangadhar Tilak vs Queen Empress) (1). Before noticing the further changes in the Statute, it is necessary to refer to the Full Bench decision of the Allahabad High Court in Queen Empress vs Amba Prasad (2). In that case, Edge, C.J., who delivered the judgment of the Court, made copious quotations from the judgments of the Calcutta and the Bombay High Courts in the cases above referred to. While generally adopting the reasons for the decisions in the aforesaid two cases, the learned Chief Justice observed that a man may be guilty of the offence defined in section 124A of attempting to excite feelings of disaffection against the Government established by law in British India, although in a particular article or speech he may insist upon the desirability or expediency of obeying and supporting the Government. He also made reference to the decision of the Bombay High Court in the Satara (3) case. In that case a Full Bench, consisting of Farran, C.J., and Parsons and Ranade, JJ, 791 had laid it down that the word "disaffection" in the section is used in a special sense as meaning political alienation or discontent or disloyalty to the Government or existing authority. They also held that the meaning of word "disaffection" in the main portion of the section was not varied by the explanation. Persons, J., held that the word "disaffection" could not be construed as meaning 'absence of or contrary of affection or love '. Ranade J., interpreted the word "disaffection" not as meaning mere absence or negation of love or good will but a positive feeling of aversion, which is akin to ill will, a definite insubordination of authority or seeking to alienate the people and weaken the bond of allegiance, a feeling which tends to bring the Government into hatred and discontent, by imputing base and corrupt motives to it. The learned Chief Justice of the Allahabad High Court observed that if those remarks were meant to be in any sense different from the construction placed upon the section by Strachey, J., which was approved, as aforesaid, by the Judicial Committee of the Privy Council, the later observations of the Bombay High Court could not be treated as authoritative. As the accused in the Allahabad case had pleaded guilty and the appeal was more or less on the question of sentence, it was not necessary for their Lordships to examine in detail the implications of the section, though they expressed their general agreement with the view of the Calcutta and the Bombay High Courts in the first two cases, referred to above. The section was amended by the Indian Penal Code Amendment Act (IV of 1898). As a result of the amendment, the single explanation to the section was replaced by three separate explanations as they stand now. The section, as it now stands in its present form, is the result of the several A.O.S. of 1937, 1948 and 1950, as a result of the constitutional changes, by the Government of India Act, 1935, by the Independence Act of 1947 and by the Indian 792 Constitution of 1950. Section 124A, as it has emerged after successive amendments by way of adaptations as aforesaid, reads as follows: "Whoever by words, either spoken or written, or by signs or by visible representation, or otherwise, brings or attempts to bring into hatred to contempt, or excites or attempts to excite disaffection towards the Government established by law in India shall be punished with transportation for life or any shorter term to which fine may be added or with imprisonment which may extend to three years, to which fine may be added, or with fine. Explanation 1. The expression "disaffection" includes disloyalty and all feelings of enmity. Explanation 2. Comments expressing disapprobation of the measures of the Government with a view to obtain their alteration by lawful means, without exiting or attempting to excite hatred, contempt or disaffection do not constitute an offence under this section. Explanation 3. Comments expressing disapprobation of the administrative of other action of the Government without exciting or attempting to excite hatred, contempt or disaffection, do not constitute an offence under this section. " This offence, which is generally known as the offence of Sedition, occurs in chapter IV of the Indian Penal Code, headed 'Of offences against the State '. This species of offence against the State was not an invention of the British. Government in India, but has been known in England for centuries. Every State, whatever its form of Government, has to be armed with the power to punish those who, by 793 their conduct, jeopardise the safety and stability of the State, or disseminate such feelings of disloyalty as have the tendency to lead to the disruption of the State or to public disorder. In England, the crime has thus been described by Stephen in his Commentaries on the Laws of England, 21st Edition, volume IV, at pages 141 142, in these words. "Section IX. Sedition and Inciting to Disaffection We are now concerned with conduct which, on the one hand, fall short of treason, and on the other does not involve the use of force or violence. The law has here to reconcile the right of private criticism with the necessity of securing the safety and stability of the State. Sedition may be defined as conduct which has, either as its object or as its natural consequence, the unlawful display of dissatisfaction with the Government or with the existing order of society. The seditious conduct may be by words, by deed, or by writing. Five specific heads of sedition may be enumerated according to the object of the accused. This may be either 1. to excite disaffection against the King, Government, or Constitution, or against Parliament or the administration of justice; 2. to promote, by unlawful means, any alteration in Church or State; 3. to incite a disturbance of the peace; 4. to raise discontent among the King 's subjects; 5. to excite class hatred. It must be observed that criticism on political matters is not of itself seditious. The test is the manner in which it is made. Candid and honest discussion is permitted. The law 794 only interferes when the discussion passes the bounds of fair criticism. More especially will this be the case when the natural consequence of the prisoner 's conduct is to promote public disorder. " This statement of the law is derived mainly from the address to the Jury by Fitzerald, J., in the case of Reg vs Alexander Martin Sullivan (1). In the course of his address to the Jury the learned Judge observed as follows: "Sedition is a crime against society, nearly allied to that of treason, and it frequently precedes treason by short interval. Sedition in itself is a comprehensive term, and it embraces all those practices, whether by word, deed or writing, which are calculated to disturb the tranquility of the State, and lead ignorant persons to endeavour to subvert the Government and the laws of the empire. The objects of sedition generally are to induce discontent and insurrection and stir up opposition to the Government, and bring the administration of justice into contempt; and the very tendency of sedition is to incite the people to insurrection and rebellion. Sedition has been described, as disloyalty in action and the law considers as sedition all those practices which have for their object to excite discontent or dissatisfaction, to create public disturbance, or to lead to civil war; to bring into hatred or contempt the Sovereign or the Government, the laws or constitution of the realm, and generally all endeavours to promote public disorder. " That the law has not changed during the course of the centuries is also apparent from the following statement of the law by Coleridge, J., in the course of his summing up to the Jury in the case of Rex. vs Aldred (2): 795 "Nothing is clearer than the law on this head namely, that whoever by language, either written or spoken incites or encourages other to use physical force or violence in some public matter connected with the State, is guilty of publishing a seditious libel. The word "sedition" in its ordinary natural signification denotes a tumult, an insurrection, a popular commotion, or an uproar; it implies violence or lawlessness in some form. " In that case, the learned Judge was charging the Jury in respect of the indictment which contained the charge of seditious libel by a publication by the defendant. While dealing with a case arising under Rule 34(6) (e) of the Defence of India Rules under the Defence of India Act (XXXV of 1939) Sir Maurice Gwyer, C.J., speaking for the Federal Court, made the following observations in the case of Niharendu Dutt Majumdar vs The King Emperor (1); and has pointed out that the language of section 124A of the Indian Penal Code, which was in pari materia with that of the Rule in question, had been adopted from the English Law, and referred with approval to the observations of Fitzerald, J., in the case quoted above; and made the following observations which are quite apposite: ". generally speaking, we think that the passage accurately states the law as it is to be gathered from an examination of a great number of judicial pronouncements. The first and most fundamental duty of every Government is the preservation of order, since order is the condition precedent to all civilisation and the advance of human happiness. This duty has no doubt been sometimes performed in such 796 a way as to make the remedy worse than the disease; but it does not cease to be a matter of obligation because some on whom the duty rests have performed it ill. It is to this aspect of the functions of government that in our opinion the offence of sedition stands related. It is the answer of the State to those who, for the purpose of attacking or subverting it, seek (to borrow from the passage cited above) to disturb its tranquillity, to create public disturbance and to promote disorder, or who incite others to do so. Words, deeds or writings constitute sedition, if they have this intention or this tendency; and it is easy to see why they may also constitute sedition, if they seek, as the phrase is, to bring Government into contempt. This is not made an offence in order to minister to the wounded vanity of Government, but because where Government and the law cease to be obeyed because no respect is felt any longer for them, only anarchy can follow. Public disorder, or the reasonable anticipation or likelihood of public disorder, is thus the gist of the offence. The acts or words complained of must either incite to disorder or must be such as to satisfy reasonable men that is their intention or tendency. " This statement of the law was not approved by their Lordships of the Judicial Committee of the Privy Council in the case of King Emperor vs Sadashiv Narayan Bhalerao (1). The Privy Council, after quoting the observations of the learned chief Justice in Niharendu 's case (2), while disapproving of the decision of the Federal Court, observed that there was no statutory definition of "Sedition" in England, and the meaning and content of the crime had to be gathered from any decisions. 797 But those were not relevant considerations when one had to construe the statutory definition of 'Sedition ' as in the Code. The Privy Council held that the language of section 124A, or of the Rule aforesaid, under the Government of India Act, did not justify the statement of the law as made by the learned Chief Justice in Niharendu 's case(1) they also held that the expression "excite disaffection" did not include "excite disorder", and that, therefore, the decision of the Federal Court in Niharendu 's case(1) proceeded on a wrong construction of section 124A of the Penal Code, and of sub para (e), sub rule (6) of Rule 34 of the Defence of India Rules; Their Lordships approved of the dicta in the case of Bal Gangadhar Tilak (2), and in the case of Annie Basant vs Advocate General of Madras (3), which was a case under section 4 of the Indian Press Act. (I of 1910), which was closely similar in language to section 124A of the Penal Code. The Privy Council also referred to their previous decision in Wallace Johnson vs The Kinq(4) which was a case under sub section 8 of section 326 of the Criminal Code of the Gold Coast, which defined "seditious intention" in terms similar to the words of s.124A of the Penal Code. In that case, their Lordships had laid down that incitement to violence was not necessary ingredient of the Crime of sedition as defined in that law. Thus, there is a direct conflict between the decision of the Federal Court in Niharendu 's case (1) and of the Privy Counsil in a number of cases from Indian and the Gold Coast, referred to above. It is also clear that either view can be taken and can be supported on good reasons. The Federal Court decision takes into consideration, as indicated above, the pre exiting Common Law of England in respect of sedition. It does not appear from the report of 798 the Federal Court decision that the rulings aforesaid of the Privy Council had been brought to the notice of their Lordships of the Federal Court. So far as this Court is concerned, the question directly arising for determination in this batch of cases has not formed the subject matter of decision previously. But certain observations made by this Court in some cases, to be presently noticed, with reference to the interrelation between freedom of speech and seditious writing or speaking have been made in the very first year of the coming into force of the Constitution. Two cases involving consideration of the fundamental right of freedom of speech and expression and certain laws enacted by some of the States imposing restrictions on that right came up for consideration before this Court. Those cases, reported in Romesh Thappar vs The State of Madras(1) and Brij Bhushan vs The State of Delhi(2) were heard by Kania C.J., Pazl Ali, Patanjali Shastri, Mehr Chand Mahajan, Mukherjea and Das, JJ, and judgments were delivered on the same day (May 26, 1950). In Romesh Thappar 's case (1), the majority of the Court declared section 9(1 A) of the Madras Maintenance of Public Order Act (Mad. XXXIII of 1949), which had authorised imposition of restrictions on the fundamental right of freedom of speech, to be in excess of cl. (2) of article 19 of the Constitution authorising such restrictions, and, therefore, void and unconstitutional. In Brij Bhushan 's case (2), the same majority struck down section 7(1)(c) of the East Punjab Public Safety Act, 1949, as extended to the Province of Delhi, authorising the imposition of restrictions on the freedom of speech and expression for preventing or combating any activity prejudicial to the public safety or 799 the maintenance of public order. The Court held those provisions to be in excess of the powers conferred on the Legislature by cl. (2) of article 19 of the Constitution. Mr. Justice Patanjali Sastri, speaking for the majority of the Court in Romesh Thappar 's case (1) made the following observations with reference to the decisions of the Federal Court and the Judicial Committee of the Privy Council as to what the law of Sedition in India was: "It is also worthy of note that the word "sedition" which occurred in article 13(2) of the Draft Constitution prepared by the Drafting Committee was deleted before the article was finally passed as article 19(2). In this connection it may be recalled that the Federal Court had, in defining sedition in Niharendu Dutt Majumdar vs The King Emperor (2) held that "the acts or words complained of must either incite to disorder or must be such as to satisfy reasonable men that that is their intention or tendency", but the Privy Council overruled that decision and emphatically reaffirmed the view expressed in Tilak 's case to the effect that "the offence consisted in exciting or attempting to excite in others certain bad feelings towards the Government and not in exciting or attempting to excite mutiny or rebellion, or any sort of actual disturbance, great or small" King Emperor vs Sadashiv Narayan Bhalerao. Deletion of the word "sedition" from the draft article 13(2), therefore, shows that criticism of Government exciting disaffection or bad feelings toward it is not to be regarded as a justifying ground for restricting the freedom of expression and of the press, unless it is such as to undermine the security of or tend to overthrow the State. It is also significant that the corresponding 800 Irish formula of "undermining the public order or the authority of the State" (article 40(6)(i) of the Constitution of Fire, 1937) did not apparently find favour with the framers of the Indian Constitution. Thus, very narrow and stringent limits have been set to permissible legislative abridgement of the right of free speech and expression, and this was doubtless due to the realisation that freedom of speech and of the press lay at the foundation of all domocratic organisations, for without free political discussion no public education, so essential for the proper functioning of the processes of popular government, is possible, freedom of such amplitude might involve risks of abuse. But the framers of the Constitution may well have reflected, with Madison who was "the leading spirit in the preparation of the First Amendment of the Federal Constitution" that "it is better to leave a few of its naxious branches to their luxuriant growth, than, by prunning, them away to injure the vigour of those yielding the proper fruits" : (quoted in Near vs Minnesotta). Those observations were made to bring out the difference between the "security of the State" and "public order". As the latter expression did not find a place in article 19(2) of the Constitution, as it stood originally, the section was struck down as unconstitutional. Fazl Ali, J., dissented from the views thus expressed by the majority and reiterated his observations in Brij Bhushan 's case (1) In the course of his dissenting judgment, he observed as follows: "It appears to me that in the ultimate analysis the real question to be decided in this case is whether "disorders involving menace to the 801 peace and tranquillity of the Province" and affecting "Public safety" will be a matter which undermines the security of the State or not. I have borrowed the words quoted within inverted commas from the preamble of the Act which shows its scope and necessity and the question raised before us attacking the validity of the Act must be formulated in the manner I have suggested. If the answer to the question is in the affirmative, as I think it must be, then the impugned law which prohibits entry into the State of Madras of "any document or class of documents" for securing public safety and maintenance of public order should satisfy the requirements laid down in article 19(2) of the Constitution. From the trend of the arguments addressed to us, it would appear that if a document is seditious, its entry could be validly prohibited, because sedition is a matter which undermines the Security of the State; but if on the other hand, the document is calculated to disturb public tranquillity and affect public safety, its entry cannot be prohibited, because public disorder and disturbance of public tranquillity are not matters which undermine the security of the State. Speaking for myself, I cannot understand this argument. In Brij Bhushan vs The State. I have quoted good authority to show that sedition owes its gravity to its tendency to create disorders and authority on Criminal Law like Sir James Stephen has classed sedition as an offence against public tranquillity. " In Brij Bhushan case (1), Fazl Ali, J., who was again the dissenting judge, gave his reasons to greater detail. He referred to the judgment of the Federal Court in Niharendu Dutt Majumdar 's case (2) 802 and to the judgment of the Privy Council to the contrary in King Emperor vs Sada Shiv Narayan (1). After having pointed out the divergency of opinion between the Federal Court of India and the Judicial Committee of the Privy Council, the learned Judge made the following observations in order to explaim why the term "sedition" was not specifically mentioned in article 19(2) of the Constitution: "The framers of the Constitution must have therefore found themselves face to face with the dilemma as to whether the word "sedition" should be used in article 19(2) and if it was to be used in what sense it was to be used. On the one hand, they must have had before their mind the very widely accepted view supported by numerous authorities that sedition was essentially an offence against public tranquillity and was connected in some way or other with public disorder; and, on the other hand, there was the pronouncement of the Judicial Committee that sedition as defined in the Indian Penal Code did not necessarily imply any intention or tendency to incite disorder. In these circumstances, it is not surprising that they decided not to use the word "sedition" in clause (2) but used the more general words which cover sedition and everything else which makes sedition such a serious offence. That sedition does undermine the security of the State is a matter which cannot admit of much doubt. That it undermines the security of the state usually through the medium of public disorder is also a matter on which eminent Judges and jurists are agreed. Therefore, it is difficult to hold that public disorder or disturbance of public tranquillity are not matters which undermine the security of the State. " 803 As a result of their differences in the interpretation of Art.19(2) of the Constitution, the Parliament amended cl.(2) of article 19, in the form in which it stands at present, by the Constitution (First Amendment) Act, 1951, by section 3 of the Act, which substituted the original cl. (2) by the new cl. This amendment was made with retrospective effect, thus indicating that it accepted the statement of the law as contained in the dissenting judgment of Fazl Ali, J., in so far as he had pointed out that the concept of "security of the state" was very much allied to the concept of "public order" and that restrictions on freedom of speech and expression could validly be imposed in the interest of public order. Again the question of the limits of legislative powers with reference to the provisions of articles 19 (1)(a) and 19(2) of the Constitution came up for decision by a Constitution Bench of this Court in Ramji Lal Modi vs The State of U.P. (1). In that case, the validity of section 295A of the Indian Penal Code was challenged on the ground that it imposed restrictions on the fundamental right of freedom of speech and expression beyond the limits prescribed by cl.(2) of article 19 of the Constitution. In this connection, the Court observed as follows: "the question for our consideration is whether the impugned section can be properly said to be a law imposing reasonable restrictions on the exercise of the fundamental rights to freedom of speech and expression in the interests of public order. It will be noticed that language employed in the amended clause is "in the interests of" and not "for the maintenance of". As one of us pointed out in Debi Saron vs The State of Bihar, the expression "in the interests of" makes the ambit of the protection very wide. A law may not have 804 been designed to directly maintain public order and yet it may have been enacted in the interests of public order. " Though the observations quoted above do not directly bear upon the present controversy, they throw a good deal of light upon the ambit of the power of the legislature to impose reasonable restrictions on the exercise of the fundamental right of freedom of speech and expression. In this case, we are directly concerned with the question how for the offence, as defined in section 124A of the Indian Penal Code, is consistent with the fundamental right guaranteed by article 19 (1) (a) of the Constitution, which is in these terms: "19. (1) All citizens shall have the right. (a) to freedom of speech and expression. " This guaranteed right is subject to the right of the legislature to impose reasonable restrictions, the ambit of which is indicated by cl. (2), which, in its amended form, reads as follows: "(2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence. " It has not been questioned before us that the fundamental right guaranteed by article 19(1)(a) of the freedom of speech and expression is not an absolute right. It is common ground that the right is subject to such reasonable restrictions as would come within the purview of cl. (2), which comprises (a) security of the State, (b) friendly relations with foreign States, (c) public order, (d) decency or morality, etc. With reference to the constitutionality 805 of section 124A or section 505 of the Indian Penal Code, as to how far they are consistent with the requirements of cl. (2) of article 19 with particular reference to security of the State and public order, the section, it must be noted, penalises any spoken or written words or signs or visible representations, etc., which have the effect of bringing, or which attempt to bring into hatred or contempt or excites or attempts to excite disaffection towards the Government established by law" has to be distinguished from the person 's for the time being engaged in carrying on the administration. "Government established by law" is the visible symbol of the State. The very existence of the State will be in jeopardy if the Government established by law is subverted. Hence the continued existence of the Government established by law is an essential condition of the stability of the State. That is why 'sedition ', as the offence in section 124A has been characterised, comes under Chapter VI relating to offences against the State. Hence any acts within the meaning of section 124A which have the effect of subverting the Government by bringing that Government into contempt or hatred, or creating disaffection against it, would be within the penal statute because the feeling of disloyalty to the Government established by law or enmity to it imports the idea of tendency to public disorder by the use of actual violence or incitement to violence. In other words, any written or spoken words, etc., which have implicit in them the idea of subverting Government by violent means, which are compendiously included in the term 'revolution ', have been made penal by the section in question. But the section has taken care to indicate clearly that strong words used to express disapprobation of the measures of Government with a view to their improvement or alteration by lawful means would not come within the section. Similarly, comments, 806 however strongly worded, expressing disapprobation of actions of the Government, without exciting those feelings which generate the inclination to cause public disorder by acts of violence, would not be penal. In other words, disloyalty to Government established by law is not the same thing as commenting in strong terms upon the measures or acts of Government, or its agencies, so as to ameliorate the condition of the people or to secure the cancellation or alteration of those acts or measures by lawful means, that is to say, without exciting those feelings of enmity and disloyalty which imply excitement to public disorder or the use of violence. It has not been contended before us that if a speech or a writing excites people to violence or have the tendency to create public disorder, it would not come within the definition of 'sedition '. What has been contended is that a person who makes a very strong speech or uses very vigorous words in a writing directed to a very strong criticism of measures of Government or acts of public officials, might also come within the ambit of the penal section. But, in our opinion, such words written or spoken would be outside the scope of the section. In this connection, it is pertinent to observe that the security of the State, which depends upon the maintenance of law and order is the very basic consideration upon which legislation, with a view to punishing offences against the State, is undertaken. Such a legislation has, on the one hand, fully to protect and guarantee the freedom of speech and expression, which is the sine quo non of a democratic form of Government that our Constitution has established. This Court, as the custodian and guarantor of the fundamental rights of the citizens, has the duty cast upon it of striking down any law which unduly restricts the freedom of speech and expression with which we are concerned in this case. But the freedom has to be guarded again 807 becoming a licence for vilification and condemnation of the Government established by law, in words which incite violence or have the tendency to create public disorder. A citizen has a right to say or write whatever he likes about the Government, or its measures, by way of criticism or comment, so long as he does not incite people to violence against the Government established by law or with the intention of creating public disorder. The Court, has, therefore, the duty cast upon it of drawing a clear line of demarcation between the ambit of a citizen 's fundamental right guaranteed under article 19(1)(a) of the Constitution and the power of the legislature to impose reasonable restrictions on that guaranteed right in the interest of, inter alia, security of the State and public order. We have, therefore, to determine how far the sections 124A and 505 of the Indian Penal Code could be said to be within the justifiable limits of legislation. If it is held, in consonance with the views expressed by the Federal Court in the case of Niharendu Dutt majumdar vs The King Emperor(1) that the gist of the offence of 'sedition ' is incitement to violence or the tendency or the intention to create public disorder by words spoken or written, which have the tendency or the effect of bringing the Government established by law into hatred or contempt or creating disaffection in the sense of disloyalty to the State in other words bringing the law into line with the law of sedition in England, as was the intention of the legislators when they introduced section 124A into the Indian Penal Code in 1870 as aforesaid, the law will be within the permissible limits laid down in cl. (2) of article 19 of the Constitution, if on the other hand we give a literal meaning to the words of the section, divorced from all the antecedent background in which the law of sedition has grown, as laid down in the several decisions of the Judicial Committee of the Privy Council, it will be true to 808 say that the section is not only within but also very much beyond the limits laid down in cl. (2) aforesaid. In view of the conflicting decisions of the Federal Court and of the Privy Council, referred to above, we have to determine whether and how far the provisions of sections 124A and 505 of the Indian Penal Code have to be struck down as unconstitutional. If we accept the interpretation of the Federal Court as to the gist of criminality in an alleged crime of sedition, namely, incitement to disorder or tendency or likelihood of public disorder or reasonable apprehension thereof, the section may lie within the ambit of permissible legislative restrictions on the fundamental right of freedom of speech and expression. There can be no doubt that apart from the provisions of (2) of article 19, sections 124A and 505 are clearly violative of article 19(1)(a) of the Constitution. But then we have to see how far the saving clause, namely, cl.(2) of article 19 protects the sections aforesaid. Now, as already pointed out, in terms of the amended cl. (2), quoted above, the expression "in the interest of. public order" are words of great amplitude and are much more comprehensive than the expression "for the maintenance of", as observed by this Court in the case of Virendra vs The State of Punjab (1). Any law which is enacted in the interest of public order may be saved from the vice of constitutional invalidity. If, on the other hand, we were to hold that even without any tendency to disorder or intention to create disturbance of law and order, by the use of words written or spoken which merely create disaffection or feelings of enmity against the Government, the offence of sedition is complete, then such an interpretation of the sections would make them unconstitutional in view of article 19(1)(a) read with cl. It is well settled that if certain provisions of law construed in one way would make 809 them consistent with the Constitution, and another interpretation would render them unconstitutional, the Court would lean in favour of the former construction. The provisions of the sections read as a whole, along with the explanations, make it reasonably clear that the sections aim at rendering penal only such activities as would be intended, or have a tendency, to create disorder or disturbance of public peace by resort to violence. As already pointed out, the explanations appended to the main body of the section make it clear that criticism of public measures or comment on Government action, however strongly worded, would be within reasonable limits and would be consistent with the fundamental right of freedom of speech and expression. It is only when the words, written or spoken, etc. which have the pernicious tendency or intention of creating public disorder or disturbance of law and order that the law steps in to prevent such activities in the interest of public order. So construed, the section, in our opinion, strikes the correct balance between individual fundamental rights and the interest of public order. It is also well settled that in interpreting an enactment the Court should have regard not merely to the literal meaning of the words used, but also take into consideration the antecedent history of the legislation, its purpose and the mischief it seeks to suppress (vide (1)). The Bengal Immunity Company Limited vs The State of Bihar (1) and (2) R.M.D. Chamarbaugwalla vs The Union of India (2). Viewed in that light, we have no hesitation in so construing the provisions of the sections impugned in these cases as to limit their application to acts involving intention or tendency to create disorder, or disturbance of law and order, or incitement to violence. We may also consider the legal position, as it should emerge, assuming that the main section 124A is 810 capable of being construed in the literal sense in which the Judicial Committee of the Privy Council has construed it in the cases referred to above. On that assumption, it is not open to this Court to construe the section is such a way as to avoid the alleged unconstitutionality by limiting the application of the section in the way in which the Federal Court intended to apply it ? In our opinion, there are decisions of this Court which amply justify our taking that view of the legal position. This Court, in the case of R.M.D. Chamarbaugwalla vs The Union of India (1) has examined in detail the several decisions of this Court, as also of the Courts in America and Australia. After examining those decisions, this Court came to the conclusion that if the impugned provisions of a law come within the constitutional powers of the legislature by adopting one view of the words of the impugned section or Act, the Court will take that view of the matter and limit its application accordingly, in preference to the view which would make it unconstitutional on another view of the interpretation of the words in question. In that case, the Court had to choose between a definition of the expression 'Prize Competitions" as limited to those competitions which were of a gambling character and those which were not. The Court chose the former interpretation which made the rest of the provisions of the Act, Prize Competitions Act (XLII of 1955), with particular reference to sections 4 and 5 of the Act and Rules 11 and 12 framed thereunder, valid. The Court held that the penalty attached only to those competitions which involved the element of gambling and those competitions in which success depended to a substantial degree on skill were held to be out of the purview of the Act. The ratio decidendi in that case, in our opinion, applied to the case in hand in so far as we propose to limit its operation only to such activities as come within the ambit of 811 the observations of the Federal Court, that is to say, activities involving incitement to violence or intention or tendency to create public disorder or cause disturbance of public peace. We do not think it necessary to discuss or to refer in detail to the authorities cited and discussed in the reported case R.M.D. Chamarbaugwalla vs The Union of India (1) at pages 940 to 952. We may add that the provisions of the impugned sections, impose restrictions on the fundamental freedom of speech and expression, but those restrictions cannot but be said to be in the interest of public order and within the ambit of permissible legislative interference with that fundamental right. It is only necessary to add a few observations with respect to the constitutionality of section 505 of the Indian Penal Code. With reference to each of the three clauses of the section, it will be found that the gravamen of the offence is making, publishing or circulating any statement, rumour or report (a) with intent to cause or which is likely to cause any member of the Army, Navy or Air Force to mutiny or otherwise disregard or fail in his duty as such; or (b) to cause fear or alarm to the public or a section of the public which may induce the commission of an offence against the State or against public tranquillity; or (c) to incite or which is likely to incite one class or community of persons to commit an offence against any other class or community. It is manifest that each one of the constituent elements of the offence under section 505 has reference to, and a direct effect on, the security of the State or public order. Hence, these provisions would not exceed the bounds of reasonable restrictions on the right of freedom of speech and expression. It is clear, 812 therefore, that cl. (2) of article 19 clearly save the section from the vice of unconstitutionality. It has not been contended before us on behalf of the appellant in C.A. 169 of 1957 or on behalf of the respondents in the other appeals (No. 124 126 of 1958) that the words used by them did not come within the purview of the definition of sedition as interpreted by us. No arguments were advanced before us to show that even on the interpretation given by us their cases did not come within the mischief of the one or the other section, as the case may be. It follows, therefore, that the Criminal Appeal 169 of 1957 has to be dismissed. Criminal Appeals 124 126 of 1958 will be remanded to the High Court to pass such order as it thinks fit and proper in the light of the interpretation given by us. Appeal No. 169 of 1957 dismissed. Appeals Nos. 124 to 126 of 1958 allowed.

IN-Abs

Section 124A of the Indian Penal Code which makes sedition an offence is constitutionally valid. Though the section imposes restrictions on the fundamental freedom of 770 speech and expression, the restrictions are in the interest of public order and are within the ambit of permissible legislative interference with the fundamental right. There is a conflict on the question of the ambit of section 124A between decision of the federal Court and of the Privy Council. The Federal Court has held that words, deeds or writings constituted an offence under section 124A only when they had the intention or tendency to disturb public tranquility. to create public disturbance or to promote disorder, whilst the Privy Council has taken the view that it was not an essential ingredient of the offence of sedition under section 124A that the words etc, should be intended to or be likely to incite public disorder. Either view can be taken and supported on good reasons. If the view taken by the Federal Court was accepted section 124A would be use constitutional but if the view of the Privy Council was accepted it would be unconstitutional. It is well settled that if certain provisions of law construed in one way would make them consistent with the constitution, and another interpretation would render them unconstitutional, the Court would lean in favour of the former construction. Keeping in mind the reasons for the introduction of section 124A and the history of sedition the section must be so construed as to limit its application to acts involving intention or tendency to create disorder, or disturbance of law and order; or incitement to violence. Niharendu Dutt Majumdar vs King Emperor, , followed. King Emperor vs Sadashiv Narayan Bhalerao, (1947) L.R. 74 I.A. 89 and Wallace Johnson vs The King not followed. Romesh Thapar vs The State of Madras. (1050) S.C.R. 594. Brij Bhushan vs The State of Delhi. ; and Ramji Lal Modi vs The State U.P. ; , referred to. The Bengal Immunity Company Limited vs The State of Bihar, and R. M. D. Chamarbaugwala vs The Union of India, [1957] section C. R. 930 applied. Each one of the constituent elements of the offence of making, publishing or circulating statements conducing to public mischief, punishable under section 505 of the Indian Penal Code, had reference to, and a direct effect on, the security of the State or public order. Hence the provisions of section 505 were clearly saved by article 19(2). ^

Appeal No. 92 of 1952. Appeal by special leave from the Judgment and Order dated 16th May, 1951, of the High Court of Judicature at Calcutta (Harries C. J. and Das J.) in Appeal from Original Order No. 136 of 1949 arising out of Judgment and Order dated the 25th April, ' 1949, of the said High Court (Banerjee J.) in Extra ordinary Suit No. 2 of 1948. N. C. Chatterjee (B. Sen, with him) for the appellant. section P. Sinha (A. K. Dutt, with him) for the respondent. February 27. The Judgment of the Court was delivered by MUKHERJEA J. This appeal, which has come before us on special leave, is directed against a judgment of an Appellate Bench of the Calcutta High Court, dated the 16th May, 1951, by which the learned Judges dismissed an appeal taken against an order, made by a single Judge on the Original Side of that Court,, under clause 13 of the Letters Patent, on the preliminary ground that the appeal was not competent in law. There is no dispute about the material facts of the case which lie with in a short compass. On 7th August, 1947, a suit was filed by the respondent Kumar Rupendra Deb Raikot in the Court of the Subordinate Judge at Jalpaiguri in West Bengal,being Title Suit No. 40 of 1947,for recovery of possession of a large estate known as Baikunthapur Raj situated in that district, on the allegation that he, being the eldest son of late Prosanna Deb Raikot, the last holder of the estate, became entitled to the properties on the I death of his father under a custom of the family which excludes all females from inheritance and follows the rule of Iineal 1161 primogeniture in matters of succession. Prosanna died in December, 1946, and Asrumati Debi, the appellant before us, is admittedly his widow. There was no son born to her and her only child is a daughter named Prativa. According to the plaintiff respondent, his mother Renchi Debi, who is a Lepcha by birth was another lawfully wedded wife of Prosanna and was married to the latter in what is known as the " Gandharba form. Prosanna had three sons by this wife, the plaintiff being the eldest. Asrumati, it is alleged, took possession of the bulk of the properties comprised in the estate on the death of her husband, although she had no legal right to the same and it was to evict her from these properties that this suit was brought. Besides Asrumati, the plaintiff also impleaded three other agnatic relations of the deceased (who are defendants Nos. 2 to 4) and also his own two younger brothers as defendants to the suit. Asrumati filed her written statement on January 19, 1948, and the main defence put forward by her was that there was no legal marriage between her husband and the plaintiff 's mother, the latter being only one of the several mistresses of her husband. She denied that there was any custom in the family under which females were excluded from inheritance. The defendants 2 to 4 also filed written statements, challenging the legitimacy of the plaintiff and his claim to succession, and put forward their own rights as heirs under the customary law obtaining in the family. On 30th April, 1948, the plaintiff presented an application in the Original Side of the High Court of Calcutta under clause 13 of the Letters Patent, praying for transfer of the suit filed in the Jalpaiguri court to the High Court to be tried in its Extraordinary Original Civil Jurisdiction. This application was heard by Banerjee J. sitting singly and by his order dated the 25th of April, 1949, the learned Judge allowed the application, substantially on the ground that having regard to the atmosphere of prejudice that was created in the locality by supporters of the defendant, who wielded 1162 considerable influence in the district, the plaintiff might have a legitimate apprehension that he would not get fair trial in the district court. Against this decision the defendant No. 1 took an appeal to the Appellate Bench of the High Court of Calcutta and the learned Judges (Trevor Harries C. J. and Das J.) dismissed the appeal on the ground that the order appealed again was not a 'judgment ' within the meaning of clause 15 of the Letters Patent. It is the propriety of this decision that has been challenged before us in this appeal. The High Court of Calcutta in holding the appeal before it to be incompetent based its decision entirely upon an earlier pronouncement of a Division Bench of the same court, where it was held by Mookerjee A.C.J. sitting with Fletcher J. that an order for transfer of a suit made under clause 13 of the Letters Patent was not a 'judgment ' within the meaning of clause 15 (1). Reliance was placed by the learned Judges for this view upon the pronouncement of Sir Richard Couch C. J. in the well known and often cited case of The Justice of the Peace for Calcutta vs The Oriental Gas Company (2), where the learned Chief Justice said as follows: "We think that 'judgment ' in clause 15 means a decision which affects the merits of the question between the parties by determining some right or liability. It may be either final or preliminary, or interlocutory, the difference between them being that a final judgment determines the whole cause or suit, and a preliminary or interlocutory judgment determines only a part of it, leaving other matters to be determined. " The identical question, whether an order for transfer under clause 13 of the Letters Patent is a 'judgment ' for purposes of appeal, was pointedly raised before the Madras and the Rangoon High Courts, and while the Madras High Court (3) answered the question hi the affirmative, a definitely negative answer was given by (1) See Khatizan vs Sonairam, I.L.R. (2) 8 Ben. L.R. 433. (3) Vide Krishns Reddi vs Thanikacha, I.L.R 47 Mad. 136. 1163 the Rangoon High Court (1). The Madras decision purports to be in accordance with the view enunciated a Full Bench of that court in Tuljaram vs Alagappa(2) where Sir Arnold White C. J. sitting with Krishna swami Aiyar and Ayling JJ. formulated a definition of 'judgment ' in a comprehensive manner differing fro the wide interpretation put upon the term in the earlier case of DeSouza vs Coles (3). "The test seems me," thus observed the learned Chief Justice, "to be not what is the form of the adjudication, but what is its effect on the suit or proceeding in which it is made. If its effect, whatever its form may be, and whatever may be the nature of the application on which it is made, is to put an end to the suit or proceeding so far as the court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, I think the adjudication is a judgment within the meaning of the clause. " This decision, it may be pointed out, has not only been adhered to in Madras since then without any comment, but the Calcutta High Court has in several instances manifested a marked leaning towards it (4). On the other hand, a Full Bench(1) of the Rangoon High Court presided over by Page C.J. took 'a view altogether different from that of the Calcutta and the Madras High Courts as regards the meaning of the word I judgment ' in clause 13 of the Rangoon Letters Patent, which corresponds to clause 15 of the Letters Patent of the Calcutta and Madras High Courts. It was held by the Full Bench of the Rangoon High Court that the term 'judgment ' in the Letters Patent means and is a decree in a suit by which the rights of the parties in the suit are determined. In other words, 'judgment ' is not what is defined in section 2 (9) of the Civil Procedure Code as being the statement given by the judge of the grounds of a decree (1) Dayabhai vs Muyugappa Chettiay, 13 Rang. 457 (F.B.). (2) 35 M 1 (F.B.). (3) (4) Vide Muathura Sundari vs Haran Chandra I.L.R. 43 Cal. 857; Chandi Charan vs Jnanendra 29 C.L.J. 225 at 229 Lea Badin vs Upendra Mohan Roy Chaudhury, 1164 or order, but is a judoment in its final and definitive sense embodying a decree. A final ' judgment is an adjudication which conclusively determines the rights of the parties with regard to all matters in issue in the suit, whereas a preliminary or interlocutory judgment is a decree by which the right to the relief claimed in the suit is decided but under which further proceedings are necessary before a suit in its entirety can be disposed of. Save and except final and preliminary judgments thus defined, all other decisions are ' orders ' and they do not come within the description of I judgments ' under the relevant clause of the Letters Patent. No 'order ' is appealable unless an appeal is expressly provided against it by the Civil Procedure code or some other Act of the Legislature. In this view an ' order ' for transferring a suit from a subordinate court to the High Court could not possibly be regarded as a 'judgment ', and consequently no appeal would lie against such an order. This definition of ' judgment 'has been accepted in several cases by the Nagpur High Court (1), and substantially this seems to be the view of the Allahabad High Court also (2). A Full Bench of the Lahore High Court(, '), however, has refused to accept this view and has preferred to follow the tests enumerated by the Calcutta and the Madras High Courts. The Bombay High Court accepted the Calcutta view from the very beginning (4). In view of this wide divergence of judicial opinion, it may be necessary for this court at some time or other to examine carefully the principles upon which the different views mentioned above purport to be based and attempt to determine with as much definiteness as possible the true meaning and scope of the word I judgment ' as it occurs in clause 15 of the Letters Patent of the Calcutta High Court and in the corresponding clauses of the Letters Patent of the other High Courts. We are, however, relieved from embarking (1) Vide Kunwar Lal Singh vs Uma Devi, A.I.R. 1945 Nag. 156; Shankar Deo vs Kalyani, A.I.R. 1948 Nag. 85. (2) Vide Shahzadi Begam vs Alakhnath, 57 All. 983 (F.B.) (3) Shaw Hari vs Sonah Mal Beli Ram, I.L.R. , (4) Vide Sonebai vs Ahmedbhai, , 1165 on such enquiry in the present case as we are satisfied that in none of the views referred to above could an order of the character which we have before us, be regarded as a judgment ' within the meaning clause 15 of the Letters Patent. Couch C.J., as said already, defined 'judgment ' be a decision which determines some right or liability affecting the merits of the controversy between the parties. It is true that according to the learned Chief Justice an adjudication, in order that it might rank as a 'judgment ', need not decide the case on its merits, but it must be the final pronouncement of the court making it, the effect of which is to dispose of or terminate the suit or proceeding. This will be apparent from the following observations made by Couch C.J. in the course of his judgment in the case referred to above : " It is, however, said that this court has already put a wider construction upon the word I judgment ' in clause 15 by entertaining appeals in cases where the plaint has been rejected as insufficient, or as showing that the, claim is barred by limitation,, and also in cases where orders have been made in execution. These however are both within the above definition of a judgment, and it by no means follows that, because we hold the order in the present case not to be appealable, we should be bound to hold the same in the cases referred to. For example, there is an obvious difference between an order for the admission of a plaint and an order for its rejection. The former determines nothing, but is merely first step towards putting the case in a shape for determination. The latter determines finally so far as the court which makes the order is concerned that the suit, as brought. will not lie. The decision, therefore, is a judgment in the proper sense of the term . " It cannot be said, therefore, that according to Sir Richard Couch every judicial pronouncement on a right or liability between the parties is to be regarded 151 1166 as a 'judgment ', for in that case there would be any number of judgments in the course of a suit or proceeding, each one of which could be challenged by way of appeal. The judgment must be the final pronounce ment which puts an end to the proceeding so far as the court dealing with it is concerned. It certainly involves the determination of some right or liability, though it may not be necessary that there must be a decision on the merits. This view, which is implied in the observations of Sir Richard Couch C.J. quoted above, has been really made the basis of the definition of I judgment ' by Sir Arnold White C.J. in the Full Bench decision of the Madras High Court to which reference has been made (1). According to White C.J. to find out whether an order is a I judgment ' or not, we have to look to its effect upon the particular suit or proceeding in which it is made. If its effect is to terminate the suit or proceeding, the decision would be a 'judgment ' but not otherwise. As this definition covers not only decisions in suits or actions but 'orders ' in other proceedings as well which start with applications, it may be said that any final order passed on an application in the course of a suit, e.g., granting or refusing a party 's prayer for adjournment of a suit or for examination of a witness, would also come within the definition. This seems to be the reason why the learned Chief Justice qualifies the general proposition laid down above by stating that "an adjudication on an application, which is nothing more than a step towards obtaining a final adjudication in the suit, is not a judgment within the meaning of the Letters Patent. " As stated already, it is not our purpose in the present case to frame an exhaustive definition of the word 'judgment ' as used in clause 15 of the Letters Patent. We have indicated what the essential features of a I judgment ' are according to both the Calcutta and the Madras High Courts and all that we need say is that, in our opinion, an order under clause 13 of the Letters Patent does not satisfy the tests of a 'judgment ' as formulated by either of these High Courts. (1) Vide Tuljaram vs Alagappa, , 1167 The question that requires determination in an application under clause 13 of the Letters Patent is, whether a particular suit should be removed from any court which is subject to the superintendence of the High Court and tried and determined by the latter as a court of extraordinary original jurisdiction. It is true that unless the parties to the suit are agreed on this point, there must arise a controversy between them which has to be determined by the court. In the present case, a single Judge of the High Court has decided this question in favour of the plaintiff in the suit; but a decision on any and every point in dispute between the parties to a suit is not necessarily a ' judgment '. The order in the present case neither affects the merits of the controversy between the parties in the suit itself, nor does it terminate or dispose of the suit on any ground. An order for transfer cannot be placed in the same category as an order rejecting a plaint or one dismissing a suit on a preliminary ground as has been referred to by Couch C.J. in his observations quoted above. An order directing a plaint to be rejected or taken off the file amounts to a final disposal of the suit so far as the court making the order is concerned. That suit is completely at an end and it is immaterial that another suit could be filed in the same or another court after removing the defects which led to the order of rejection. On the other hand, an order of transfer under clause 13 of the Letters Patent is, in the first place, not at all an order made by the court in which the suit is pending. In the second place, the order does not put an end to the suit which remains perfectly alive and that very suit is to be tried by another court, the proceedings in the latter to be taken only from the stage at which they were left in the court in which the suit was originally filed. Mr. Chatterjee in the course of his arguments placed considerable reliance upon the pronouncement of the Calcutta High Court in Hadjee Ismail vs Hadjee Mahomed (1), where it was held by Court C.J. and (1) 1168 Pontifex J. that an order refusing to rescind leave to sue granted under clause 12 of the Letters Patent was a 'judgment ' under clause 15 and could be challenged by way of appeal. This decision was followed by the Bombay High Court in Vaghoji vs Camaji(1); and it is argued by Mr. Chatterjee that there is no difference in principle between an order of that description and an order transferring a suit under clause 13 of the Letters Patent. The contention of Mr. Chatterjee undoubtedly receives support from the judgment of the Madras High Court in Krishna Reddy vs Thanikachala(2),where precisely the same line of reasoning was adopted. In our opinion, this reasoning is not sound and there is an essential difference between an order rescinding or refusing to rescind leave to sue granted under clause 12 of the Letters Patent and one removing a suit from a subordinate court to the High Court under clause 13 of the Letters Patent, and this distinction would be apparent from the observations of Sir Arnold White C.J. in the Madras Full Bench case(3) mentioned above, to which sufficient attention does not appear to have been paid by the learned Judges of the same court who decided the later case. Referring to the decision of the Bombay High Court in Vaghoji vs Camaji(1), White C.J. observed as follows: "As regards the Bombay authorities I may refer to Vaghoji vs Camaji(1), where it was held that an appeal lay from an order dismissing a Judge 's summons to show cause why leave granted under clause 12 of the Letters Patent should not be rescinded and the plaint taken off the file. Here the adjudication asked for, if made, would have disposed of the suit. So also would an order made under an application to revoke a submission to arbitration. I think such an order is appealable." Leave granted under clause 12 of the Letters Patent constitutes the very foundation of the suit which is instituted on its basis. If such leave is rescinded. the (1) I.L.R. (2) I.L.R. 47 Mad. (3) Vide Tuljaram vs Alagappa 1169 suit automatically comes to an end and there is no doubt that such an order would be a judgment. If, on the other hand, an order is made dismissing the Judge 's summons to show cause why the leave should not be rescinded, the result is, as Sir Lawrence Jenkins pointed out(1), that a decision on a vital point adverse to the defendant, which goes to the very root of the suit, becomes final and decisive, against him so far as the court making the order is concerned. This brings the order within the category of a 'judgment ' as laid down in the Calcutta cases. We need not express any final opinion as to the propriety or otherwise of this view. It is enough for our purpose to state that there is a difference between ail order refusing to rescind leave granted under clause 12 of the Letters Patent and one under clause 13 directing the removal of a suit from one court to another, and there is no good reason to hold that the principle applicable to one applies to the other also. The result, therefore, is that, in our opinion, the view taken by the High Court is right and this appeal should fail, and is dismissed with costs. Appeal dismissed. Agent for the respondent No. 1 : Sukumnar Ghose for P. C. Dutt.

IN-Abs

An order for transfer of a suit, made under clause 13 of the Letters Patent of the Calcutta High Court is not a "judgment" within the meaning of clause 15 of the Letters Patent and no appeal lies therefrom under the Letters Patent, as it neither affects the merits of the controversy between the parties in the suit itself, nor terminates or disposes of the suit on any ground. [Meaning of the word "judgment" discussed]. Khatizan vs Sonairam (I.L.R. , Justices of the Peace for Calcutta vs Oriental Gas Co. , Dayabhai vs Murugappa Chettiar (I.L.R. 13 Rang. 457), Tuljaram vs Alagappa (I.L.R. , Mathura Sundari vs Haranchandra (I.L.R. , Chandicharan vs Tnanendra (29 C.L.J. 225), Lea Badin vs Upendra Mohan Boy Chowdhry , Kanwar Lal Singh vs Uma Devi (A.I.R. 1945 Nag. 156), Sankar Deo vs Kalyani (A.I.R. , Shahzadi Begum vs Alaknath (I.L.R. 57 All. 983), Shaw Hari vs Sonahal Beli Ram (I.L.R. 23 1160 Lab. 491), Sonebai vs Ahmedbhai and Vaghoji vs Gamaji (I.L.R. referred to. Krishna Reddi vs Thanikachala (I.L.R. 47 Mad. 136) disapproved.

iminal Appeals Nos. 176 to 178 of 1961. Appeals by special leave from the judgment and order dated August 10, 1961, of the Patna High Court in Cr. A. No. 152 of 1961 and Death Reference No. 3 of 1961. Sushil Kumar Jha, Subodh Kumar Jha and B. C. Prashad, for the appellants. C. K. Daphtary, Solicitor General of India and section P. Verma, for the respondents. 434 1962. April 26. , J. This judgment will govern Criminal Appeals nos. 177 and 178 also. All these three appeals arise out of the same trial. The learned Additional Sessions Judge, Monghyr who conducted the trial convicted the appellant, Ramchandra Chaudhary who is appellant in Criminal Appeal No. 177 of 1961 for an offence under section 302 Indian Penal Code. He also convicted Baleshwar Rai alias Nepali Master, appellant in this appeal and Jogendra Chaudhary, appellant in Criminal Appeal No. 178 of 1961 of an offence under section 302 read with section 34, Indian Penal Code. He sentenced each of the three to death. Their appeals were dismissed by the High Court of Patna, and sentences of death passed against them were confirmed by it. They have come up before this Court by special leave. The prosecution story is briefly as follows On March 17, 1959 at about 8.00 p.m. the chaukidars of the village Fateha had assembled,. as usual, in the 'crime centre ' of the village. Their names are Anandi Paswan, (deceased), Misri Paswan (P.W.2), Baleshwar Paswan (P.W.3) and Narain Paswan. Anandi Paswan and Misri Paswan were lying on a chouki. Anandi Paswan had a 'bhala ' and a muretha ' while Misri Paswan had a 'pharsa ' and a 'muretha '. These weapons is well as the shirt of ,he deceased were kept on the chouki. The other two choukidars were lying on the ground. The crime centre is housed in the 'dalan ' of Tilak. Chaudhary (P.W.6). One other person, Srilal Chaudhary, (P.W. 7), the brother of Tilak Chaudhary, was also lying there on the khatia on the north east of the said 'dalan '. In an adjacent room were P.W.11 Nathuni Chaudhary alias Durga Das and P.W.12 Ramchander Jha. 435 According to the prosecution a little before 9.00 p.m. someone from outside called out "Darogaji". On hearing this, the deceased Anandi Paswan and Misri Paswan got up. It was a moonlit night and they saw Ramchander Chaudhary, Jogendra Chaudhary and another person, who was later identi fied to be Nepali Master, standing closeby. As soon as they went towards the appellants, Jogendra Chaudhary and Nepali Master caught the deceased while Ramchandra Chaudhary caught Misri Paswan. Both Ramchandra Chaudhary and Jogendra Chau dhary had guns with them which were slung across their shoulders. These three persons then took the deceased and Misri Paswan to the road to the East of the 'dalan ', running north to south, and proceeded southward. Neither the deceased nor Misri Paswan raised any cry, apparently because they were threatened that if they did so, they would be shot. When this party reached the place to the west of one Peare Sao 's house and to the east of the house of Rampratap Tanti (P.W. 5). the deceased called for Rampratap 's help, and freeing himself from the clutches of his captors started running way westward. , Upon this Ramehandra Chaudhary let go the hand of Misri Paswan and fired at the deceased. Misri Paswan then ran into the house of Peare Sao and took shelter there. While entering that house, he heard a second gun shot. His presence in the house was detected by. Ajo(P.W. 8), the wife. of Peare Sao who forced him to leave the house. Thereafter he came out into the lane and concealed himself behind the door. After the moon had set and it became dark, he went to the house of Fakir Paswan (P.W. 4), which is to the east of the house of Peare Sao, and narrated the occurrence to him. He mentioned Ramchandra and Jogendra as the two persons who has taken part in the incident. In the early hours of the morning he went to the place where gun shots were fired, and found Anandi Paswan, chaukidar lying dead in a 436 ditch by the side of the road, face downwards. He noticed that Anandi Paswan had received two gun shot wounds on his back. Thereafter he went home and contacted the other chaukidar, Narain Paswan and Baleswar Paswan. He placed them in charge of the dead body and then went to the police station along with Ramdeo, son of the deceased. He lodged the first information report at the police station. After recording it, the junior Sub Inspector of police commenced investigation and after completing it submitted a charge sheet against the three appellants on March 15, 1959. It is the prosecution case that the appellants are "veteran criminals" and the chaukidars used to report about their movements and that this was the motive for the murder. It was further said that the deceased had helped the Dalsingsarai police in arresting one Motia Mushar, who was the ploughman of the appellant Ramchandra, in a dacoity case. All the appellants denied having participated in the incident. The defence is that a false case has been concocted by the police. The main evidence against the appellant is that of P.W. 2, Misri Paswan. He has actually named Ramchandra Chaudhary and Jogendra Chandhary in the first information report. Regarding the third appellant, he stated that 'he was unknown. Ramchandra and Jogendra have been identified not only by Misri Paswan, but also by five other wit. nesses, Narain Paswan, Rampratap Tanti, Srilal Chaudhary, Nathuni Chaudhary and Ramchander Jha. All these, five persons had an opportunity to see the appellants because, it may be recalled, some of them were in the 'dalan ' and some in the adjacent room when the appellants came near there and one of them cried out "Darogaji". Their evidence has been accepted 437 as true and adequate not only by the learned Sessions Judge who had an opportunity to see and hear the witnesses depose but also by the High Court. Their evidence cannot be reappraised in their appeals by special leave. The learned counsel, however, said that in so far as Jogendra Chaudhary is concerned, common intention to commit murder had not been established. The existence of common intention has always to be inferred from facts. Here it has been established that all the three appellants came together. Two of them, Ramchandra and Jogendra had guns, with them. The prosecution has established to the satisfaction of the learned Additional Sessions Judge and the High Court that as Anandi Paswan was giving information to the police about the movements of the appellants and had also taken the major part in getting one Motia Mushar arrested in a dacoity case, Ramchandra nursed a ' grievance against Anandi. The inference, therefore, must be that he had come with the intention of taking revenge on Anandi Paswan by killing him and the other two appellants who accompanied him shared that intention. As the High Court has pointed out, this is made clearer by the statement of Misri Paswan to the effect that Ramchandra said at the time of the incident that 'his (servant) Motia was taken away forcibly and then Jogendra asked the deceased sarcastically, "Where is your military today ?" In the circumstances, therefore, there can he no doubt that common intention to commit murder was established not only with respect to Jogendra but also with respect to Nepali Master who was all along with them. On behalf of Nepali Master the learned counsel contended that he has been identified at the test identification parade by one witness only and that the other persons did not turn up for identification and, therefore, it is not legally permissible to base 438 the identification by only one person. It is sufficient to say that even the evidence of a single witness can sustain the conviction of an accused person if the court which saw and heard him depose regards him as a witness of truth. However, in this case, Nepali Master was identified not by one witness only but by two witnesses (P. W. 7) Srilal Choudhary and (P. W. 9) Dukhi Mahto. It was said that Srilal is an old man of 75 and has a weak eyesight and therefore his evidence should be kept out of account. He is evidence has been believed by the learned Sessions Judge as well as by the High Court and we cannot reassess it. It was contended before the High Court and is also contended before us that as the test identification was held long time after his arrest, the evidence of these two witnesses could not be believed. This circumstance was also considered by the High Court and it observed : "The contention is attractive; but, in view of exhibit 6, it is difficult to accept the same". Exhibit 6 is an anonymous letter written to Senior. Sub Inspector, Kashi Nath (P. W. 22), of which the only portion which has been admitted in evidence reads thus: "The rascal Anandia Choukidar spoiled the life of that poor Mushar by instigating the section 1 of Police of Dalsingsarai and subsequently he also spied against us for nothing". This document along with ex. 3, dated June 9, 1959, which is admittedly in the handwriting of Nepali Master, was sent to the Government handwriting expert. Both the documents were examined by him. In his evidence he has stated. "The Board of Experts consisting of myself, Chatterjee and Srivastava examined 439 these independently and our unanimous opinion was that exhibit 3, tallied with disputed writings (Ext. " This being so, the admission contained in Ext. 6 as to the motive is clearly admissible under section 21 of the Evidence Act. The High Court was, therefore, right in holding that Ext. 6 afforded corroboration to the evidence of (P. W. 7) Srilal Chaudhary and (P. W. 9) Dukhi Mahto. It is then contended that exhibit 6 is hit by s.162 of the Criminal Procedure Code because it was received by the Sub Inspector during the course of the investigation. Section 162 of the Criminal Procedure Code only bars proof of statements made to an investigating officer during the course of investigation. Section 162 does not say that every statement made during the period of investigation is barred from being proved in evidence. For a statement to come within the purview of section 162, it must not merely be made during the period of investigation but also in the course of investigation. The two things, that is, "the period of investigation" and " 'course of investigation ' are not synonymous. Section 162 is aimed at statements recorded by a police officer while investigating into an offence. This is clear from the opening words section 162. They speak only of statements made to a police officer during the course of investigation. This implies that the statement sought to be excluded from evidence must be ascribable to the enquiry conducted by the investigating officer and not one which is de hors the enquiry. A communication like Ext. 6 will not fall within the ambit of such statements. In this view we hold that the document in question is not hit by section 162 of the Criminal Procedure Code and the High Court was right in admitting it in evidence. There is no substance in the appeals and they are, therefore, dismissed. Appeal dismissed.

IN-Abs

Section 162 of the Code of Criminal Procedure only bare proof of statement made to an investigating officer during the course of investigation. It does not say that every statement made during the period of investigation is barred from being proved in evidence. For a statement to come within the purview of section 162, it must not merely be made during the period of investigation but also in the course of investigation. The two things, "the period of investigation" and "Course of investigation" are not synonymous. Section 162 is aimed at statements recorded by a Police Officer while investigating into an offence. This is clear from the opening words section 162. They speak only of statement made to a police officer during the course of investigation. This implies that the statement sought to be excluded from evidence must be ascribable to the enquiry conducted by the investigating office and not one which is de hors the enquiry.

Appeal No. 289 of 1959. Appeal from the judgment and decree dated December 16, 1955, of the Madras High Court in Appeal No. 231 of 1954. N. C. Chatterjee, K.N. Bajagopala Sastri, V.S. Venkata Raman and T. K. Sundara Raman, for the Appellants Nos. 2 to 6. A. V. Vishwantha Sastri, R. Ganapathy Iyer 442 section Gopalaratnam and G. Gopalkrishnan, for respondent No. 1. T. section Venkataraman, for respondent No. 2 1962. April 26. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal on a certificate is preferred against the judgment and decree of the High Court of Judicature at Madras confirming those of the Subordinate Judge, Madurai, in a suit for a declaration that the adoption of the 2nd defendant by the 1st defendant was invalid. The following genealogy will be helpful to appreciate the facts and the contentions of the parties Rengatha | __________________________ | | Dhanappa Kulandaivelu (Sr.) | | _______________________ Dhanappa | | | Renganatha Subramania Kulandaivelu (Jr.) | | Shanmugha Chandarashekhara(Pl.) widow Guruvammal | | | Kanniappa (P2) Anni (D 1) | | (died Feb. to P 5 adopted D 2) | Renganatha Dhanappa(D11) Sankaralinga(D19) Balaguruswami(D4) Palaniandava(D 20) D5 to D10 Shanmughasundara(D12)D 21and D 22 Avadaiappa (D 14) D 15 to D IS 443 Shanmugha, Subramania and Kulandaivelu (Jr.) became divided in 1878 and since the division each of the three. branches of the family was living separately. Kulandaivelu (Jr.) died in the year 1912 possessed of considerable property described in the plaint schedule leaving him surviving his widow, Guruvammal Anni, who is the 1st defendant as his sole heir. In 1951, Guruvammal Anni, with a view to adopt the 2nd defendant to her deceased husband, wrote letters to her husband 's sapindas who were majors i.e., plantiffs 1 and 2, and defendants 5, 11, 12, 14, 19 and 20, seeking their con sent to her adopting the 2nd defendant. The said sapindas, except defendants 12 and 14, refused to give their consent for the reasons mentioned in their replies. Defendant 12 did not receive the letter, but the 14th defendant gave his consent to the adoption. On May 25, 1951, Guruvammal Anni adopted Kuandaivelu (Jr.), the 2nd defendant as a son to her late husband. On May 30, 1951, she executed exhibit A 1, the adoption deed, and registered the same on June 12, 1951. Chandarasekhara, the son of Subramania, and his son, Kanniappa, and three minor grandsons filed O. S, No. 156 of 1951 in the Court of the Subordinate Judge, Madurai, for a declaration that the adoption of the 2nd defendant by the 1st defendant was invalid, void and of no effect. Defendant 3, is the natural father of defendant 2; defendants 4 to 21 are the other sapindas of 1st defendant 's husband, being the descendants of Renganatha. The particulars of their relationship to Kulandaivelu will be seen from the aforesaid genealogy. It was, inter alia, alleged in the plaint that the adoption made by the 1st defendant of the 2nd defendant without the consent of the sapindas was bad and that the consent given by the 14th defendant was purchased and therefore would not validate it. Defendants 1, 2 and 3 filed written statements supporting the adoption; they pleaded that the nearer sapindas 444 improperly refused to give the consent, the adoption made on the basis of the consent given by the 14th defendant was valid. The learned Subordinate Judge, on a consideration of the evidence and the relevant law on the subject, came to the conclusion that the 12th defendant, though received the notice seeking his consent, returned the same, that the other sapindas, excluding defendant 14, improperly refused to give their consent to the adoption and that, therefore, the adoption made with the consent of defendant 14 was valid in law. The Subordinate Judge also rejected the contention of the plantiffs that the 14th defendant, having regard to his disbelief in the religious efficacy of adoption and the Hindu rituals,,was disqualified from giving his consent. In the result, he dismissed the suit. On appeal a division Bench of the Madras High Court, agreeing with the view of the learned Subordinate Judge, came to the conclusion that the sapindas were actuated by improper motives in refusing to give their consent. The second contention directed against the consent given by defendant 14 does not appear to have been seriously pressed before the High Court. In the result the High Court dismissed the appeal with costs. It may be mentioned that the 1st defendant, Guruvammal Anni died pending the suit and that the 1st plaintiff died after the appeal was disposed of by the High Court. The other plaintiffs have preferred to present appeal against the judgment of the High Court. The main question raised in this appeal in whether the refusal of the sapindas, other than defendant 14, to give consent to the adoption of the 2nd defendant by the last defendant was improper and, therefore, could be disregarded. Before we consider the legal aspects of the question raised, we shall briefly state the relevant facts, either admitted or concurrently found b 445 the courts, below. Kulandaivelu, the last male holder, died on January 29, 1912, possessed of extensive, property. His widow, Guruvammal Anni, ,Was managing the said property through power of attorney agents. rho 1st defendant is the 3rd defendant 's father 's mother 's sister 's daughter 'section The 3rd defendant was also helping the 1st defendant in respect of certain transactions during the management of her properties by one of her power of attorney agents. The 3rd defendant and his wife were living with the 1st defendant; and the second defendant was born in 1930 in the house of Guruvammal Anni. She was very much attached to him and as he grow up she also performed pujas in company with him. The 2nd defendant studied in the District Board High School, Sholavandan taking Sanskrit as his second language and was studying for B. A. (Hons.) degree in 1951 when he was adopted. ' In 1951 Guruvammal Anni was about 67 years old and wanted to take a boy in adoption who would not only discharge religious duties to her husband as his son and preserve the continuance of her husband 's lineage, but would also be of great solace and help to her during the remaining years of her life. With that object, she issued notices to the sapindas of her husband intimating them of her intention to adopt the 2nd defendant, who, according to her, had all the necessary qualifications to fulfil the role of an adopted son. The boy proposed to be adopted by her was young healthy, educated, religious minded and devoted to her, having been born in her house and brought up by her. In April 1951, the 1st defendant sent letters Ex. A 1 to the 1st plaintiff, Ex. A 10 to the 2nd plaintiff, exhibit A 15 to the 4th defendant and a similar one to the 5th defendant, Ex A 18 to the 11th defendant, exhibit B 3 to the 12th defendant. exhibit B 52 to the 14th defendant, exhibit A.21 to the 19th defendant, and exhibit A 25 to the 20th 446 defendant, seeking for their consent to her adopting the 2nd defendant. As already stated, all the said persons excepting defendants 12 and 14, replied refusing to give their consent to the proposed adoption; the 12th defendant received the letter but returned it unopened, and the 14th defendant gave his consent. exhibit A 3 is the reply sent by the lot plaintiff. He has given various reasons for refusing to give his consent to the proposed adoption. As much of the argument turned upon the contents of this letter, we would briefly give the said reasons. They are: (1) the 1st defendant did not think fit to take a boy in adoption for many years though her husband died 38 years ago and that four years ago there was some talk about it, but, at the instance of the 1st plaintiff and other agnates, she, gave up the idea of making an adoption stating that she would not think of adopting a boy to her husband; (2) the present attempt to take a boy in adoption was at the instance of the 3rd defendant who was exercising considerable influence over her to take a boy in adoption aged about 20 years and who was not an agnate was opposed to the uniform and invariable custom prevailing in the community; and (4) there were eligible boys among his grandsons under the age of 7 years and among his cousin 's great grandsons under the age of 18 years and the parents of the said boys had no objection to give any one of them in adoption. He summarized,his objections in the following words: "I do strongly object to the adoption of Kulandaivelu,your agent 's son; not only for the reason that he is aged and ineligible, but also for the reasons that he is not agnate and the proposed adoption is prompted by corrupt and selfish decision on the part of your agent. The proposed adoption has behind it the motive of defeating the legitimate reversionary 447 interest of your husband 's agnates and is absolutely wanting in good faith. " exhibit A 12 is the reply of the 2nd plaintiff, i.e., the son of the 1st plaintiff. He has practically repeated the objections found in his father 's letter; while the father stated in his letter that there were eligible boys for adoption among his grandsons and great grandsons of his cousin, the 2nd plaintiff only referred to his sons; he says in his letter: "Moreover if you really desire to take a boy in adoption I have got sons who are less than seven years old and who are fit for being taken in adoption. I have no objection whatever to give in adoption anyone of the aforesaid boys whom you like. A 16 in the reply given by the 4th defendant. He has eligible boys, who are the great grandsons of the cousin of the 1st plaintiff and who can be given in adoption; these are some of the boys ,mentioned by the 1st plaintiff in his letter. He sets up the case that the 1st defendant 's husband had adopted one Sankarlinga Mudaliar even when he was alive '. He refuses to give the consent on the ground that there was already an adoption. exhibit B 5 is the reply given by the 5th defendant and be only adopts the reasons given by his father, the 4th defendant. Ex A 1 9 is the reply given by the 11th defendant, who is the father of the 14th defendant. His reply is on the same lines as given by the 1st plaintiff. B 4 is the reply given by the 14th defendant; he gives his wholehearted consent to the adoption. He has four eligible sons, defendants 15 to 18, who could be given in adoption. exhibit A 22 is the reply of the 19th defendant and exhibit A 26 that of his son, the 20th defendant. The 19th defendant stated that he has grandsons aged less than 8 years and that the parents of the said boys have no objection to give any one of them in adoption. The 20th defendant offers one 448 of his sons to be taken in adoption by the 1st defend ant. The position that emerges from the aforesaid replies is this: (1) the 1st plaintiff suggested that any one of his grandsons or his cousin 'section great grandsons might be taken in adoption; (2) the 2nd plaintiff, the 19th defendant, the 16th defendant and the 20th defendant offered their sons or grandsons, as the case may be, for adoption; (3) the 14th defendant, the son of the 11th defendant gave his consent to the adoption; (4) to 12th defendant, who has only one son, though he received the notice did not reply; and (5) the 4th and the 5th defendants set up another adoption by the last male holder. In short, the elderly members of the branch of Danappa, except defendants, 4, 5, 12 and 14, objected to the adoption mainly on the ground that the proposed boy was not a sapinda and that they were willing to give one of their sons or grandsons, as the case may be, in adoption. The other grounds given by them are similar to those given by the 1st plaintiff. The said grounds indicate that they were anxious that the widow should not take the boy in adoption but should leave the properties to the reversioners. The other reasons given, namely, the alleged influence of the 3rd defendant over the widow, the custom against adoption of a person other than an agnate and the ineligibility of the boy, were all found by both the courts below to be untenable. The replies disclose a concerted action on the part of the sapindas to prevent the widow from taking the 2nd defendant in adoption. They had nothing to say against the qualifications of the boy, for, as we have already noticed, he was in every way the most suitable boy from the standpoint of the widow. The only objection, therefor(,, was that the boy was not an agnate and that there were eligible boys among the agnates. The question, therefore, in this case is whether the refusal to give consent to the 449 adoption by the widow of a boy,, highly qualified in every way, on the simple ground that be was not an agnate and the other agnates were available for adoption would be an improper refusal by the sapindas so as to entitle the widow to ignore their refusal and take the boy in adoption with the Consent of the remoter sapinda. Mr. N.C. Chatterjee, learned counsel fore the appellants, contends that the refusal of the sapindas to give consent, in the circumstances of the present case, was proper for two reasons, namely, (1)according to Hindu shastras a widow has to take only a sapinda in adoption in preference to one outside that class, and (2) the 1st plaintiff did not refuse but gave consent on Condition that one or other of his grandsons or great grandsons of his cousin should be taken in adoption and the said condition is sanctioned by Hindu law. Mr. Vishwanatha Sastri, learned counsel for the respondents, on the other hand, contends that the refusal by the agnates to give consent for the adoption was improper, for, they, being the guardians and protectors of the widow, were in a fiduciary relationship with the widow and that they ,should have exercised their discretion objectively, and reasonably from the standpoint of the advisability of taking the 2nd defendant in adoption in the last male holder 's branch and that in the present case the agnates refused to give consent from selfish motives in order to protect their reversionary interest, and therefore the adoption made with the consent of the remoter sapinda was valid. The main question that arises in this appeal is whether the refusal by the nearer sapindas to give consent to the adoption as learned counsel for the respondents described it, or the giving of the consent subject to a condition as learned counsel for the appellant calls it, is improper, with the 450 result the adoption made by the 1st defendant of the 2nd defendant with the consent of the remoter reversioner was valid under the Hindu law. Before we notice the relevent case law and textual authority on the subject, it would be convenient to clear the ground. This appeal arises out of an adoption made in the Dravida country and this case is governed by the school of Hindu law applicable to that part of the country. Further we are not concerned here with an adoption in a Hindu joint family but only with one in a divided family. We must, therefore, steer clear of the ramifications of the doctrine of consent in its impact on an adoption made by a widow in a joint Hindu family. It is not disputed that in a case where the last male holder is a divided member of the family, his widow can make an adoption with the consent of a remoter sapinda if a nearer sapinda or sapindas improperly refused to give consent to the adoption. It is also common case that an adoption of a boy by a widow outside the class of sapindas is valid. This controversy centres round the question whether in the present case the conditional consent given by some of the sapindas and the refusal by the others to give consent to the adoption were proper. This question depends for its solution on the answer we give to the following interrelated questions : (1) What is the source and the content of the power of the widow to adopt a boy ? (2) What is the object of adoption ? (3) Why ' is the condition of consent of the sapindas for an adoption required under the Hindu law for its validity ? (4) What is the scope of the power of the sapindas to give consent to an adoption by a widow and the manner of its exercise ?; and (5) What are the relevant circumstances a sapinda has to bear in mind in exercising his power to give consent to an adoption ? 451 It is common place that a widow adopts a boy to her husband and that nobody except a widow can make an adoption to her husband. The reason is that Hindu law recognizes her not merely as an agent of her husband but, to use the felicitous Hindu metaphor, as his surviving half : see Brihaspati XXV, II and Yagnavalkya I, 156. In Sarkar Sastri 's Hindu Law. 8th edn., pp. 161 162, it is, stated that though according to the commentaries, the widow adopts in her own right, the modern view is that she acts merely as a delegate or repre sentative of her husband, that is to say, she is only an instrument through whom the husband is supposed to act. Mulla in his book "Principles of Hindu Law" stated that she acts as a delegate of her husband. The Judicial Committee in Balusu Guralingaswami vs Balusu Ramlakshmamma (1) pointed out that if the consent of the husband 's kinsmen has been obtained, the widow 's power to adopt is co extensive with that of her husband. It is, therefore, clear that a Hindu widow in making an adoption exercises a power which she alone can exercise, though her competency is conditioned by other limitations which we shall consider at a later stage. Whether she was authorised by her husband to take a boy in adoption or whether she obtained the assent of the sapindas, her discretion to make an adoption, or not to make it, is absolute and uncontrolled. She is not bound to make an adoption and she cannot be compelled to do so. But if she chooses to take a boy in adoption there is an essential distinction between the scope of the authority given by her husband and that of the assent given by the sapindas. As the widow acts only as a delegate or representative of her husband, her discretion in making an adoption is strictly conditioned by the terms of the authority conferred (1) Mad. 398, 408. 452 on her. But in the absence of any specific authorisation by her husband, her power to take a boy in adoption is coterminus with that of her husband, subject only to the assent of the sapindas. To put it differently, the power to adopt is that of the widow as the representative of her husband and the requirement of assent of the sapindas is only a protection against the misuse of it. It is not, therefore, right to equate the authority of a husband with the assent of the sapindas. If this distinction is borne in mind, it will be clear that in essence the adoption is an act of the widow and the role of the sapindas is only that of advisers. The next question is, what is the object of adoption ? It would be unnecessary and even be pedantic if we attempted to consider the old Hindu law texts at this very late stage in the evolution of Hindu law on the subject, for the law on this aspect had been fully and adequately considered by the Judicial Committee from time to time. It would be sufficient if we noticed a few of the leading decisions on the subject. Sir James W. Colvile, speaking for the Judicial Committee, in The Collector of Madurai vs Moottoo Ramalinga Sathupathy (1) observed: "The power to adopt when not actually given by the husband can only be exercised when a foundation for it is laid in the otherwise neglected observance of religious duty, as understood by Hindoos". The Judicial Committee again speaking through Sir James W. Colvile in Sir Raghunadha vs Sri Brozo Kishore (2) restated the principle with some modification thus : "It may be the duty of a Court of Justice administering the Hindu law to consider the (1) , 442. (2) 18761 L.R. 3 I.A., 154, 193. 453 religious duty of adopting a son as the essen tial foundation of the law of adoption; and the effect of an adoption upon the devolution of property as a mere legal consequence". But he hastened to add : "But it is impossible not to see that there are grave social objections to making the succession of property and it may be in the case of collateral succession, as in the present instance, the rights of parties in actual possession dependent on the caprice of a woman subject to all the pernicious influences which interested advisers are too apt in India to exert over women possessed of, or capable of exercising dominion over, property". This caution given by the Judicial Committee is relied upon to emphasize the point that right to property of the last male holder is a dominant consideration in the matter of taking a boy in adoption. But, if the passage was read along with that preceding it, it would be obvious that the Judicial Committee emphasized the performance of a religious duty as an essential foundation of the law of adoption, though it did not fail to notice that the devolution of Property was a legal consequence. In Raja Vellanki Venkata Krishna Row vs Venkata, Rama Lakshmi Narsayya (1), the Judicial Committee through Sir James W. Colvile reiterated the principle that adoption was made by a widow only in a bona fide performance of a religious duty. In Veera Basavaraju vs Balasurya Prasada Rao (2), Mr. Ameer Ali, delivering the judgment on behalf of the Board, appeared to strike a new note and lay more emphasis on property rights. The Board gave as one of its reasons why the consent of divided brothers was required, namely. that they (1) (1876) L.R. I.A. 1, 14. (2) , 273. had an interest in the protection of the inheritance. The Judicial Committee observed : "lt is true that in the judgment of this Board in the Ramnad case (1) some expressions are used which might imply that the question of reversionary interest forms only a secondary consideration in determining what sapindas ' assent is primarily requisite, but the remarks that follow as to the right of co parceners in an undivided family to consider the expediency of introducing a new co parcener, coupled with the observations of the Board in the subsequent case (4), show clearly that, rights to property cannot be left out of con sideration in the determination of the question". It may be said with some justification that till this stage the Judicial Committee had not clearly disclosed its mind, but was wavering between two positions, namely, whether religious duty was the sole object of adoption or whether proprietary interests had an equal or a subordinate place with or to that of a religious object. But in Amurendra Mansingh vs Sanatan Singh (2) the Judicial Committee reconsidered its earlier decisions, resurveyed the entire law on the subject and veered round to the view that the validity of an adoption was to be determined by spiritual rather than temporal considerations. Sir George Lowndes observed : ". it is clear that the foundation of Brahminical doctrine of adoption is the duty which every Hindu owes to his ancestors to provide for the continuance of the line and the solemnization of the necessary rites. . . "It can, they think, hardly be doubted that in this doctrine the devolution of property, though recognized as the inherent right (1) (1868) 12 M.I.A. 397. (2) (1933) L.R. 60 I.A. 242, 248. 455 of son, is altogether a secondary considera tion. . . . "Having regard to this well established doctrine as to the religious efficacy of sonship, their Lordships feel that great caution should be observed in shutting the door upon any authorized adoption by the widow of a sonless man. . . Nor do the authoritative texts appear to limit the exercise of the power by any considerations of property. " This decision is, therefore, a clear pronouncement by the highest judicial authority of the time that the substitution of a son of the deceased for spiritual reasons is the essence of adoption and the consequent devolution of property is mere accessory to it. Whatever ambiguity there may have still remained it was dispelled by a later decision of the Privy Council in Ghanta China Ramasuabbayya v, Moparthi Chenchuramayya (1), wherein Sir Madhavan Nair, delivering the judgment on behalf of the Board, after a resurvey of the textual authorities and the earlier decisions, observed at p. 170: "Under the Hindu law it is the "taking of a son" as a Substitute for the failure of male issue. Its object is two fold: (1) to secure the performance of the funeral rites of the person to whom the adoption is made; and (2)to preserve the continuance of his lineage. " Adverting to observation of Mr. Ameer Ali in Veera Benavaraju vs Balasurya Prasada Rao (2 ), he proceeded to state at p. 175: "The utmost that could be said in favour of the appellants is the statement in the judgment that right to property cannot be left out of consideration in the determination of the question", while the spiritual (1) (1947) L.R. 74 I.A. 162. (2) (1918)L.R.451.A265,275. 456 welfare of the deceased also is referred to in the course of the judgment. That the above regular view of adoption cannot any longer be maintained appears to be clear from the judgment of the Board ' in Amarendra Mansingh v, Sanatan Singh (1) Reverting to the object of adoption, he remarked at P. 179: Their lordships do not desire to labour this point, as in their view the following opinion of the Board, delivered by Sir George Lowndes in Amarendra 's case (1) should be considered to have settled the question finally so far as the Board is concerned. " It may, therefore, safely be held that the validity of an adoption has to be judged be spiritual rather than temporal considerations and that devolution of property is only of secondary importance. The next question is, why does the Hindu law insist upon the assent of the sapindas as a prerequisite for the validity of an adoption made by a widow ? A basis for the doctrine of consent may be discovered in the well known text of vasishtas: "Let not a woman give or accept a son except with the assent of her Lord." The following two texts of Yagnavalkya in Chapter 1, verse 85 and in Chapter 2, verse 130 are also ordinarily relied upon sustain the said doctrine: "Let her father protect a maiden; her husband a married woman; sons in old ega; if none of these, other gnatis (Kinsmen). She is not fit for independence. "He whom his father or mother gives in adoption it; Dattaka (a son given)." (1) (1933) L. R. 60 1. A. 242, 248. 457 A brief summary of the evolution of the law by ,subsequent commentators by the process of interpretation of the said two texts is found in the judgment of a division Bench of the Madras High Court in Sundara Rama Rao vs Satyanarayanamurti (1). It was pointed out therein bow Devanna Bhatta reconciled the two seemingly contradictory positions by laying down that a Hindu widow could give her son in adoption if she be authorized by an independent male, how by parity of reasoning the said principle was extended to a widow taking a boy in adoption, how the same view was expressed by Nandapanditha, how Vidyaranyaswami in his Dattaka Mimamsa recognized the validity of an adoption by a widow with the permission of the father, etc., and how the later commentators relying upon the word ,etc." evolved a thesis that the word "father" in the text was only illustrative, and gradually extended it to other kinsmen. The said doctrine is mainly founded on the state of perpetual tutelage assigned to women by Hindu law expressed so tersely and clearly in the well known text of Yagnavalkya in Chapter 1, verse 85, quoted above. The leading decision, which may be described as classic on the subject, is what is popularly known as the Ramnad case (2). Sir James W., Colvile, who has made a real contribution to the development of this aspect of Hindu law, observed at p. 439: "But they (the opinions of Pandits) show a considerable concurrence of opinion, to the effect that, where the authority of her Hus band is wanting, a Widow may adopt a Son with the assent of his kindred in the Dravida Country. " The reason for the rule is clearly stated at p. 442 thus: "The assent of kinsmen seems to be required by reason of the presumed incapacity (1) I.L.R. 1950 &W. 461. (2) (1868) 12 M.I.A. 397, 442. 458 of women for independence, rather than the necessity of procuring the consent of all these whose possible and reversionary interest in the estate would be defeated by the adoption. The nature and effect of the consent is stated thus: "All that can be said is, that there should be such evidence of the assent of kinsmen as suffices to show, that the act is done by the Widow in the proper and bona fied performance of a religious duty, and neither capriciously nor from a corrupt motive." The same principle has been affirmed and restated by the Judicial Committee in subsequent decisions: See Raja Vellanki Venkata Krishna Row vs Venkata Rama Lakshmi Narsayya (1), Veera Basayaraju vs Balasurya Prasada Rao (2) Sri Krishnayya Rao vs Surya Rao Bahadur Garu (3) and Ghanta China Ramasubbayya vs Moparthi Chenchuramayya (4). It will be seen that the reason for the rule is not the possible deprivation of the proprietary interests of the reversioners but the state of perpetual tutelage of women, and the consent of kinsmen was considered to be an assurance that it was a bona fide performance of a religious duty and a sufficient guarantee against any capricious action by the widow in taking a boy in adoption. The next question, which is very important for the present inquiry, is, what is the scope and content of the power of consent the Hindu law places in the hands of the kinsmen? and why does the Hindu law confer the said power on the kinsmen? In the Ramnad Case(5) the judicial Committee described the father of the husband as the natural guardian of (1) (1876) L.R. 4 I.A. 1, 14.(2) (1918) L.R. 45 I.A. 265, 273. (3) (1917) L.R. 74 I.A. 162. (5) (1868) 12M.I.A. 397, 442. 459 the widow and her venerable protector. In Raja Vellanki Venkata Krishna Rao vs Venkata Rama Lakshmi Narsayya (1), the Judicial Committee described the sapindas as the family council; in Venkamma vs Subramaniam 2 ) as the natural advisers of the widow; in Veera Bagaydraju vs Balasurya Prasada Rao( 3) as her natural guardians and protectors of her interest; in Sri Krishnayya Rao vs Surya Rao Bahadur Garu (4) as family council, natural guardians and protectors of her interest; and in Ghanta China Ramasubbauya vs Moparthi Chenchuramayya (5) as the widow 's guardians and competent advisers. Whatever phraseology may have been used in the various decisions, it is manifest that all of them are only consistent with their exercising fiduciary power having regard to the object for which the said power was conferred on them. The scope of the exercise of the power depends (1) on the nature of the power, and (2) on the object for which it is exercised. The nature of the power being fiduciary in character, it is implicit in it that it shall not be exercised so as to further the personal interests of the sapindas. The law does not countenance a conflict between duty and interest, and if there is any such conflict the duty is always made to prevail over the interest. It would be a negation of the fiduciary duty, were we to hold that a sapinda could refuse to give his consent on the ground that the members of his branch or those of his brother 's would be deprived of their inheritance. If that was the object of the refusal, it could not make any difference in the legal results, howsoever the intention was camouflaged. Suppose a sapinda gives his consent on the condition that a member of his branch only should be adopted. In effect and substance be introduced 2,0.3 (1) (1876) L. R. 4 I.A. 1, 14. (3) I.A. 265, 273. (2) (1906) L. R. 34 I.A. 22. (4) (1935)69M.L.J.3488 (5) (1947) L.R. 74 I.A. 162. 460 his personal interest in the matter of his assent, with a view to secure the properties to his branch. It would only be a matter of degree should he extend the choice of the widow to the divided branches of his family comprehending a large group of sapindas, for even ' in that case the sapinda seeks to inforce his choice on the widow on extraneous considerations. In giving or withholding his consent in his capacity as guardian or the protector of the widow, the sapinda should form an honest and independent judgment on the advisability or otherwise of the proposed adoption with reference to the widow 's branch of the family: see Sri Krishnayya Rao vs Surya Rao Bahadur Garu (1). Sapinda should bring to bear an impartial and judicial mind on the problem presented to him and should not be served by extraneous and irrelevant considerations. He shall ask himself two questions, viz., (i) whether the proposed adoption would achieve the object for which it was intended, and (ii) whether the boy selected was duly qualified. We have already noticed that the object of the adoption is two fold: (1) to secure the performance of the funeral rites of the person to whom the adoption is made, and (2) to preserve the continuance of his lineage. The sapinda should first answer the question whether the proposed adoption would achieve the said purpose. If the Widow"s power to take a boy in adoption was not exhausted, there would hardly be all occasion when a sapinda could object to the widow taking a boy in adoption, for every valid adoption would invariably be in discharge of a religious duty. But is also permissi ble for a sapinda to take objection in the matter of selection of the boy on the ground that he is not duly qualified for being adopted; he may rely upon any mandatory prohibitory rules laid down by shastras and recognised by courts in regard to the selection of a particular boy. He may object on (1) 461 the ground that the boy belongs to a different caste or that he is married for such an adoption would be invalid. He may also object on the ground that the boy is an idiot that he is suffering from an incurable disease, that he is notoriously in bad character, for in such cases he would not be suitable to continue the line. Such and similar other objections are relevant to the question of the advisability of the adoption with reference to the widow 's branch of the family. In this context an argument is raised to the effect that a sapinda is equally entitled to object to an adoption on the ground that the boy proposed to be adopted is not a sapinda. In a modified form, it is further contended that even if there is no legal prohibition against a non sapinda being taken in adoption by a widow, the sapinda whose consent is asked for can legitimately relay upon the recommendatory texts of shastras in objecting to an adoption. or imposing a condition on the proposed adoption. This raises the question whether under the 'Hindu law there is any prohibition against a widow taking a non sapinda in adoption in preference to a sapinda. In Kane 's "History of Dharmasastra", Vol. 111, it is pointed out that Dattaka Mimamsa and Dattaka Chandrika quote passages of Saunaka and Sakala to the effect that a man should refer a sapinda or a sagotra to one who is not a sapinda or of the same gotra. The following order is recommended: the full brother 's son, then a sagotra gapinda, then a sapinda though not of the same gotra, then one not a sapinda though of the same gotra, then one who is neither a sapinda nor a sagotra. But the learned author opines that the said order is purely recommendatory and an adoption in breach of it is quite valid. In Mayne 's Hindu Law, it is stated : "According to the Dattaka Mimamsa and the Dattakh Chandrika, in the first place, the nearest male sapinda should be selected, if 462 suitable in other respects, and, if possible, a brother 's son, as he is already, in contemplation of law, a son to his uncle. If no such near sapinda is available, then one who is more remote; or in default of any such, then one who is of a family which follow the same spiritual guide, or, in the case of Sudras, any member of the caste. The learned author is also of the opinion that these precepts are merely recommendatory and that the adoption of a stranger is valid, even though near relatives, otherwise suitable, are in existence. It is suggested that this rule of reference is not applicable to sudras and that in their case any member of the caste can be adopted and that among the members of the caste no references are indicated. In Sarkar Sastri 's "Hindu Law of Adoption" the relevant passage of Saunaka is translated thus at p. 309: "Amongst Brahmins; the affiliation of a son should be made from amongst sapindas; or on failure of them a on sapinda (may be affiliated); but any other should not be affiliated; amongst Kahatriyas, one from their own tribe, or one whose gotra is the same as that of the adopters guru or preceptor (may be affiliated) : amongst Vaisyas, from amongst those of the Vaisya tribe: amongst Sudras, from amongst those of the Sudra tribe : amongst all classes, from amongst their respective classes, not from others. " This passage lends support to the suggestion made by learned counsel for the respondents that amongst Sudras no preferential treatment is meted out to a sapinda in the matter of adoption. Be it as it may, for the purpose of this case, we shall assume that according to the commentators a sapinda may have to be referred to a non sapiuda in the matter of 463 adoption. The effect of the a said rules was considered by the Judicial Committee as early as 1878 in Srimati Uma Devi vs Gokoolani Das Vahapatra wherein Sir James W. Colvile observed: "Sir Thomas Strange, after recapitulating the rules which ought to guide the discretion of the adopter, including the authorities on which the Plaintiff relies, says; " 'But the result of all the authorities upon this point is, that the selection is finally a matter of conscience and discretion with the adopter, not of absolute prescription, rendering invalid an adoption of one not being precisely in him who upon spiritual considerations ought to have been referred. " Then the Judicial Committee quoted Sir William Macnaghten in this regard: the relevant part of the passage reads: " . . the validity of an adoption actually made does not rest on the rigid observance of that rule; of selection, the choice of him to be adopted being a matter of discretion." The Judicial Committee concluded its decision thus at p. 54: "Their Lordships feel that it would be highly objectionable on any but the strongest grounds to subject the natives of India in this matter to a rule more stringent than that enunciated by such text writers as Sir William Macnaghten and Sir Thomas Strange. Their. treatises have long been treated as of high authority by the Courts of India, and to over rule the propositions in question might disturb many titles. " It may, therefore, be taken that as early as 1878 the Judicial Committee treated the said rules as (1) (1878) L.R. 5 I.A. 40,52.53. 464 more moral injunction on the conscience of a pious Hindu, and that the selection is finally a matter of his discretion. If those injunctions were disobeyed and not followed in 1878 and adoption were made ignoring them, it would be unrealistic to rely upon them in the case of adoptions made in recent years. The choice of the boy is with the widow: it is a matter of her conscience and it is left to her discretion. The sapindaship is not a legal qualification nor the nonsapindaship a legal dis qualification either. An orthodox lady may give some heed to the religious texts which have fallen into desuetude, but she need not do so. It is open to her to select any qualified boy from a large circle. It would be open to a sapinda to say that the boy selected by her is not qualified from physical, moral or religious stand point. But it would be incongrous to hold that a sapinda in giviing his advice should enforce the rule of preference which has no legal sanction behind it. This approach would have the effect of enforcing a rule of preferenco which has fallen in desuetude by an indirect process: what was a moral injunction on the conscience of the adopter in the olden days would now be made a legal injunction by a circuitous method. If this be allowed, a sapinda in the guise of a moral injunction could deprive a widow of her right to take a qualified boy of her own choice in adoption and thus securing the inheritance for himself, if she does not adopt an unwanted boy or preserving the estate for a close relative of his, if she does. We should therefore hold that a sapinda has no right to refuse to give his consent or impose a condition on ground that the widow should take a sapinda in preference to a non sapinda in adoption. Such a condition would in the modern context be entirely extraneous to the question of the selection of a boy by a widow for adoption to her husband 's branch of the family. 465 In this context two judgments of the Madras High Court on which strong reliance is placed by learned counsel for the appellants may be noticed. The first is a judgment of a division Bench in Subrahmanyan vs Venkamma (1), wherein the learned Judges held that the adoption made by a widow was invalid because she did not apply for the consent of one of the two sapindas of equal degree on the ground that such an application would have been in vain. Bhashyam Ayyangar, T., speaking for the division Bench, made the following observation at p. 63 7: "But, assuming, as the first defendant says, that some five years before the adoption the plaintiff wanted her to take One of his sons in adoption, there is nothing improper in a sapinda proposing to give his assent to the widow adopting his own son. if such son be th e nearest sapinda, and refusing to give his assent to her adopting a stranger or a distant sapinda, if there be no reasonable objection to the adoption of his own son. . " These observations are in the nature of obiter, for these were not necessary for disposing of that appeal in view of the fact that no consent of the said sapinda was asked for Be it as it may, the observations of Bhashyam Ayyangar, J., deserve the highest respect, for his erudition in Hindu law is unquestioned But these observations were made in the year 1903 at a time when the scope of the power of sapindas ' consent had not become crystallised. As we have already pointed out, the doctrine of fiduciary relationship was gradually evolved by later decisions. The recommendatory character of the preferential right of a sapinda to be adopted was emphasised as early as 1875; and even that moral force gradually ceased to have any persussive effect on an adopter as time passed by. In (1) Mad. 466 the modern conditions it would not be proper to allow the old texts to be used by a sapinda to force his son or nephew on an unwilling widow. In Amarendia 's case (1) it was finally decided that spiritual reasons are the essence of adoption and that devolution of property is only a consequence of it, and therefore the preferential claim of a sapinda to be adopted ceased to have any validity. With greatest respect to the learned Judge, We must hold that the said observations have no Longer any relevance in the context of a modern adoption. The next decision, which is an unreported one, is in Alluri Venkata Narasimharaju vs Alluri Bangarraju (2). In that case, a widow made an adoption with the consent of a coparcener of her deceased husband: two other coparceners who were asked for permission refused to give the same. The said coparceners suggested that each of them had sons and that they were prepared to give one of their sons in adoption. This offer was not acceptable to the widow. They subsequently intimated their desire to give their own sons in adoption, but the widow refused. Having regard to that fact and other circumstances of the case, the learned Judges said that the refusal was proper. The learned Judges had not considered the question from the standpoint of the fiduciary power of sapindas, but they were influenced mostly by the intransigent conduct of the widow in taking a boy in adoption without considering their proposal with a view to prevent the induction of an outsider into the joint family. That was a case of an adoption by a widow to a deceased member of a coparcenary and it may be that different consideration might arise in such a situation on which we do not propose to express any opinion. Adverting to that judgment, Satyanarayana Rao, J., observed in Sundara Rama Rao v, Satyanarayanamurti (3): (1) (1933) L. R. 60 I.A. 242. (2) A p p Is Noos 95 & 226 of 1944 (decided on 15.7.1946) 1.L.R. 1950 Mad 461. 467 "No general rule can, therefore, be laid down that in all cases and under all circumstances the refusal of a sapinda to give his assent to the adoption on the ground that the widow refused to accept the boy of his own in adoption as a proper refusal. The question has to be considered on the facts of each case. " Another division Bench of the Madras High Court consisting of Rajamannar, C.J., and Balakrishna Ayyar, J., in Venkatarayudu vs Sashamma (1), held that refusal by a sapinda to give his assent to the proposed adoption by a widow, of a boy, on the ground that the boy was not a Sapinda or sagotra or a gnati, was not proper. It is true in that case the sapinda did not offer his son or make any suggestion that a sapinda or sagotra was available for adoption. The learned Chief Justice, speaking for the Court, observed: "As Mayne (Hindu law, tenth Edition) remarks at pages 221 and 222 it is very difficult to conceive of a case, where a refusal by a sapinda can be upheld as proper. ,The practical result of the authorities therefore appears to be that a sapinda 's refusal to an adoption can seldom be justified". It may be that in a case where the sapinda refused his consent to the adoption of a boy on the ground that the boy was disqualified, say, on the ground of leprosy or idiocy, the refusal would be proper. In this case, we have no hesitation in holding that the refusal by the plaintiffs on the ground that the proposed boy was not a sapinda or sagotra or a gnati was no t proper. " The division Bench did not follow the observation of Bhashyma Ayyangar, J. Another division Bench of the Madras High Court, consisting of Satyanara. yana Rao and Viswanatha Sastri, JJ, noticed the (1) A. 1. R. 746. 468 observations of Bhasyham Ayyangar J., in Sundara Rama Rao vs Satyanrayanamurti (1). Therein Viswanatha Sastri, J., observed: "With the greatest deference to that great Judge, it seems to me to be questionable whe ther refusal to consent by a sapinda to an adoption by the widow except 'on condition that his son should be adopted is a valid or proper refusal. " In the present case, the High Court followed and accepted the said observations, and we also agree with them. We, therefore, hold that the observations of Bhashyam Ayyangar, J., are only in the nature of obiter and that they have rightly been treated as such in later decisions. That apart, as we have pointed out, the said observations are opposed to the principle of fiduciary power which has now been accepted. The result of the foregoing discussion may be summarized thus: The power of a sapinda to give his Consent to an adoption by a widow is a fiduciary power. It is implicit in the said power that he must exercise it objectively and honestly and give his opinion on the advisability or otherwise of the proposed adoption in 'and with reference to the widow 's branch of the family. As the object of adoption by a widow is two fold, namely, (1) to secure the reference of the funeral rites of the person to whom the adoption is made as well as to offer spindas to that person and his ancestors, and (2) to preserve the continuance of his lineage, he must address himself to ascertain whether the proposed adoption promotes the said two objects. It is true that temporal consideration, through secondary in importance, cannot be eschewed completely but those considerations must necessarily be only those connected with that branch of the widow 's family. (1) I.L.R. 469 The sapinda may consider whether the proposed ' adoption is in the interest of the wellbeing of the widow or conducive to the better management of her husband 's estate. But considerations such as the protection of the sapindas ' inheritance would be extraneous, for they pertain to the self interest of the sapinda rather than the wellbeing of the widow and her branch of the family. The sapindas, as guardians and protectors of the widow, can object to the adoption, if the boy is legally disqualified to be adopted or if he is mentally defective or otherwise unsuitable for adoption. It is not possible to lay down any inflexible rule or standard for the guidance of the sapinda. The Court which is called upon to consider the propriety or otherwise of a sapinda 's refusal to consent to the adoption has to take into consideration all the aforesaid relevant facts and such others and to come to its decision on the facts of each case. Bearing the said principles in mind, let us now scrutinize the persons given by the different sapinda is refusing to consent to the proposed adoption with a view to ascertain whether their refusal was proper or not. At an earlier stage of the judgment we have given the reasons given by each one of the sapindas who were approached by the widow for their assent. The 1st plaintiff is the only sapinda who made a general suggest that the widow could make an adoption from one of his grandsons or his cousin 's great grandsons. But a scrutiny of his reply discloses that he also looked at the problem presented to him from a personal and selfish angle. His reply reveals a biased mind. He has expressed surprise that the widow should have thought fit to take a boy in adoption, for earlier, according to him, she gave up the idea of making an adoption at the request of the 1st plaintiff and other ' agnatem and also stated that 470 when she decided to make the adoption she would select a suitable boy from those of his first cousin. This clearly shows that he was more concerned with the reversioners ' inheritance to the estate of the last male holder rather than with the religious benefit that would accrue to him. He then questions the widow 's motive, which again is an irrelevant consideration. He then relies upon the custom prevailing in their community whereunder an agnate alone could be taken in adoption, but no attempt has been made to establish the said custom: therefore, it may be taken that a false reason is given. As regards the boy proposed to be adopted, he vaguely states that he is aged and ineligible for adoption. Finally, he declares that he has no objection to the widow making an adoption, provided one of his grandsons or the great grandsons of his cousin is taken in adoption. It will be seen that except the vague generalities he cannot point out any particular disqualification attached to the boy either on religious or secular grounds: nor can be say that by adopting him the interests of the widow or of the branch of her family would be adversely affected. The entire reply discloses a closed and biased mind against the widow taking a boy in adoption; and the proposal made to her to take one of the sapindas is only made with full consciousness on his part that it would be refused. On a consideration of the entire letter, we have no hesitation in holding that the 1st plaintiff improperly refused to give his assent to the adoption. The refusal by defendants 4 and 5 was obviously improper, for they set up an adoption alleged to have been made by Kulandaivelu, the last male holder, before his death. Defendant 12 did not care to reply: he had only son and was, presumably, not willing to give his only son in adoption or take sides. Defendant 11 in his reply offered one of his grandsons or of his brother 's i.e., the only son of 471 defendant 12 and the sons of defendant 14. For the reason already stated, 12 would not give his son in adoption, and defendant 14 had given hit; consent to the adoption. Therefore, 11 's grandsons were not available for adoption. This leaves only the replies of the 2nd plaintiff and defendants 19 and 20 for consideration. 2nd plaintiff wanted his ,son to be adopted, and defendant 19, and his son defendant 20, wanted the sons to be adopted. These three sapindas were clearly actuated by self interest. The replies given by the sapindas appear to us to be a part of their concerted action to prevent the widow from taking a boy in adoption. The sapindas either singly or collectively did not bring to bear their impartial mind on the request made to them, but they either refused to give their consent or gave it subject to an improper condition with a view to advance their self interest. They did not consider the advisability or otherwise of the proposed adoption in and with reference to the widow 's branch of the family. We, therefore. hold that their refusal was improper and that the widow rightly ignored it. The next question is whether defendant 14 was legally competent to give his consent to the question. It is contended that defendant 14 was a member of the Dravida Munnetra Kazhagam, having no faith in Hinduism and Hindu scriptures and practice and therefore he was incompetent to give his advise on the question of adoption, which is a religious act. Learned counsel for the respondents contends that the certificate issued by the High Court is confined only to one question, namely, whether the refusal by the spinda 's to give their consent to the adoption was improper on the facts found and, therefore, it is not open to the appellants to raise any other question before us. Reliance 472 is placed upon Order XVI, r. 4 and Order XVIII, r. 3(2) of the Supreme Court Rules. Under Order XVI, r. 4. "Where a party desires to appeal on grounds which can be raised only with the leave of the Court, the petition of appeal shall be accompanied by a separate petition indicating the grounds so proposed to be raised and praying for leave to appeal on those grounds and the Petition shall, unless the Court otherwise directs, be heard at the same time as the appeal. " Under Order XVIII, r. 3 (2), the case lodged by a party ,,shall not travel beyond the limits of the certificate or the special leave, as the case may be, and of such additional grounds, if any, as the Court may allow to be urged on application made for the purpose. " These two provisions do not proprio vigore lay down that the High Court can issue a limited certificate; but they assume that under certain circumstances it can do so. Under article 133, of the Constitution, under which the High Court gave the certificate, does not empower the High Court to limit certificate to any particular point. If the decree of the High Court is one of affirmance the High Court certifies that the appeal involves a substantial question of law; and it has been the practice of some of the High Courts to state the substantial question of law in the certificate issued. Once the certificate is issued and the appeal is properly presented ' before this Court, the entire appeal will be before it. The assumption underlying the said rules of the Supreme Court may appropriately refer to a certificate issued by a High Court under article 132 of the Constitution, whereunder the High Court certified that the case involves a substantial question of law as to the interpretation of the Constitution: and where such a certificate is given. any party in the case may appeal to the Supreme Court on the ground that any 473 such question as aforesaid has been wrongly, decided and, with the leave of the Supreme Court, on any other ground. " But we are not concerned here with a certificate issued under article 132 of the Constitution. We, therefore, bold that the entire appeal is before us But it does not follow from the said legal position that we should allow the appellants to raise that plea before us, if they had failed to do so before the High Court. The points argued before the High Court are recorded by the learned Judges thus Mr. Venkatasubramania Ayyar learned counsel for the plantiffs appellants, did not address arguments to us to displace the ' findings of the trial Judge on the additional issues though he made it clear that he was not abandoning those any of his clients ' conten tions embodied in those issues. He however confined his arguments before us to Issues 1, 2 and 3." From this statement it appears that though this point was not argued before the High Court, it was not abandoned. We shall, therefore, deal with the same. The contention is that defendant 14 is a member of the Dravida Munnetra Kazhagam, having no faith in Hinduism and Hindu scriptures and practice and, therefore, he is incompetent to give consent to the adoption, which is a religious act. Under the Hindu law a sapinda has power to give consent to a proposed adoption by a widow. Defendant 14 is admittedly a sapinda and, there. fore, he can ordinarily give his consent to the adoption, unless it has been established that he is mentally or otherwise unfit to give his consent. It is not suggested that he is not intellectually competent to give an unbiased advice on the advisability of taking a boy in adoption in the widows branch 474 of the family. But it is said that he has no belief in Hindu scriptures and, therefore, he cannot give consent to an adoption which is a religious act. The, act of giving consent is not a religious act; it is, the act of a guardian or protector of a widow, who is authorised to advise the widow, who is presumed to be incompetent to form an independent opinion. His non belief in Hindu scriptures cannot in an way detract from his capacity to perform the said act. That apart, defendant 14 in his evidence clearly says that he had considered the qualifications of the proposed boy for adoption and gave his consent. His reasons are : " 'Defendant 2 had faith in God just like Defendant 1. He used to go to the temples and give charities. He had good physical build. He was in a position to take over the management of Defendant 's estate immediately. In view of these facts I considered him to be fit for adoption. He was then reading in B. A. class". These reasons clearly disclose that he applied his mind to the crucial question and gave his consent after satisfying himself about the advisability of taking the boy in adoption. But it is suggested to him in the cross examination that he had no faith in God, but be denies it and says : "I believe that there is a God but I do not believe in the meaningless religious rites and ceremonies". To further question, he answers : "I have no faith in taking a boy in adoption. Nor do I believe that a Pierson has, "atma" and that it should get salvation after death. Nor do I believe that there is an thing called "hell" or "paradise". Nor do I believe that a person leaving no son will go to hell". 475 The fact that he does not believe in such thing does not make him any the less a Hindu. The non belief in rituals or even ' in some dogmas does not ipso facto remove him from the fold of Hinduism. He was born a Hindu and continues to be one till he takes to another religion. But what is necessary is, being a Hindu, whether he was in a position to appreciate the question referred to him and give suitable answer to it. After going through his evidence, we have no doubt that this defendant had applied his mind to the question before him. Whatever may be his personal predilections or views on Hindu religion and its rituals, he is a Hindu and he discharged his duty as a guardian of the widow in the matter of giving his consent. In the circumstances of the case, his consent was sufficient to validate the adoption. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

IN-Abs

The appellants, the nearer sapindas of the husband of the 2nd respondent who had adopted the 1st respondent, the son of her agent, filed a suit for a declaration that the adoption was invalid on the ground that they had properly refused their consent and that the remote sapinda who had given his consent was disqualified from so doing as he did not believe in the Hindu scriptures. The appellants who had been asked for their consent had refused it on the ground that the 1st respondent was not an agnate and that among their grand children or children there were eligible boys whom their parents were willing to give in adoption. The trial court at Madurai as well as the High Court of Madras dismissed the suit, holding that the nearer sapindas had improperly refused their consent and that in the circumstances the adoption with the content of the remote sapinda was valid. On appeal by a certificate under article 133 (1)(c). Held, that the power of Hindu widow to adopt is coextensive with that of her husband and when her discretion is not limited by her husband it is absolute and is only subject to the assent of the sapindas. Balusu Gurulingaswami vs Balusu Ramalakshmamma Mad.398, referred to. The validity of an adoption has to be judged by spiritual rather than temporal considerations and that devolution of property is only. of secondary importance. The Collector of Madras vs Mootoo Ramalinga Sethupathy (1868) 12 M.I.A. 397, Sri Raghunadha vs Shri Brozo Kishore. (1876) K.R. 3. I.A. 154, Raja Vellanki Venkata Krishna Row vs Venkata Rama Lakshmi Narasayya, (1876) L.R. 4, I.A 1, Veera Basavaraju vs Balasurya Prasada Rao, (1918), L.R. 4, I.A. 265, Amarendra Mansingh vs Sanatan Singh, (1933) L.R. 60, I.A. 242 and Ghanta China Ramasubbayya vs Mooparthi Chanchuramayya, (1947) L.R. 74, I.A. 162, referred to. 441 Held, further, that consent of sapindas was an assurance of the bonafide performance of a religious duty and the guarantee against capricious action by a widow in taking a boy in adoption and not the possible deprivation of proprietory interests of the reversioners. Sri Krishnayya Rao vs Surya Rao Bahadur Garu; , referred to. The sapindas who are in a fiduciary relation to the widow should exercise their power objectively and without being actuated by their own self interest and that the rules regarding taking only a sapinda in adoption were only recommendatory and the fact that the widow wishes to adopt a non sapinda is no proper ground for withholding consent by a sapindas. Sundara Rama Rao vs Satynarayanamurti I.L.R , Venkamma vs Subramaniam, (1906) L.R. 34 I.A. 22, Srimati Uma Devi vs Gokoolanund Das Mahabata, (1876) L.R. 5 I.A. 40, Alluri Venkata Naratimbaraju, vs Alluri Bangarraju vs C. A. No. 226 of 1944 dated 25 7 46 by the Madras High Court and Venkatayudu vs Seshamma , referred to. Observations of Bhashyam Ayyangar, J. in Subrahamanyam vs Venkamma Mad. 127 held to be obiter and not approved. The refusal of consent by the appellants was improper. Order XVI r. 4 and Or. XVIII r. 3 (2) of the Supreme Court do not by themselves enable the High Court to limit the certificate under article 133 of the Constitution to certain grounds and upon this grant of such a certificate the whole appeal was before this Court and all questions urged before the High Court were open. The consent given by the remote sapinda on a proper appreciation of the relevant facts and despite has non belief in rituals, he still being a Hindu, was valid.

Appeal No. 526/59. Appeal by special leave from the judgement and order dated March 3, 1958, of the Patna High Court in Misc. case No. 940 of 1956. B. K. Khanna and P. D. Menon for the appellant. P. K. Chatterjee, for the respondents. April 26. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave against the judgment of the Patna High Court. The brief facts necessary for present purposes are these. There is a colliery in the district of Dhanbad known as Allabad colliery of which the respondents are the owners. On February 5, 1955, there was an accident in the colliery as a result of which 52 p6rsons lost their lives. In consequence, the Government of India ordered an inquiry into the disaster under section 24 of the , No. 35 of 1962, (hereinafter referred to as the Act). The court of inquiry contained of Mr., Justice B. P. Jamuar and two persons were appointed to assist him as assessors. The court of inquiry submitted its report on September 26, 1955, which was published on December 17, 1955. A question was raised before the court of inquiry whether the management should be ordered to pay the expenses of the inquiry as provided by r. 22 of the Mines Rules, 1955, (hereinafter referred to as The Rules), which lays down that "if a court of 478 inquiry finds that the accident was due to any carelessness or negligence on the part of the management the court may direct the owners of the mine to pay all or any part of the expenses of the inquiry in such manner and within such time as the court may specify. The court of inquiry found in its report that the accident was due to negligence on the part of the management and therefore ordered the owners to pay the expenses of the inquiry. The amount of the expenses to be paid were however not quantified in the report of September 26, 1955. On July 27,1956 the Chief Inspector of Mines requested Mr. Justice Jamuar that the amount of expenses should be specified and the manner in which it should be paid and the time within which the payment might be made, might be fixed. Notices were issued to the parties concerned thereafter and on September 7, 1956, Mr. Justice Jamuar ordered the owners to pay Rs. 17,778/2/as expenses of the inquiry within two months of the date of the order. Thereupon a petition was filed under article 226 of the Constitution by the respondents challenging the order of September 7, 1956. It was conceded there in that r. 22 of the Rules conferred power on the court of inquiry to direct the owner to pay all or any part of the expenses of inquiry within such time as the court may specify. But the order passed in this case was challenged on three grounds, firstly that the court of inquiry became functus officio after it had submitted its report on September 26, 1955 and therefore Mr. Justice Jamuar had no power left to pass the order of September 7, 1959. It was also contended that if the order of September 7, 1956, be treated as a review of the order of September 26, 1956 it would still be void, as there was no power of review in the court of inquiry, Lastly. it was urged that when the order of September 479 7, 1956, was passed, the assessors were not present and were not associated with the inquiry and therefore Mr. Justice Jamuar could not pass the order alone. All these three contentions were accepted by the High Court and it allowed the writ petition adding that it was not interfering with the order relating to expenses made by Mr. Justice Jamuar in his report of September 26, 1955. It is this order of the High Court, which is being challenged before us. The main contention on behalf of the respondents is that as the court of inquiry became functus officio after the report of September 26, 1955, it was not open to Mr. Justice Jamuar to quantify the expenses by the order of September 7, 1956. Before we deal with this main argument we should like to dispose of briefly the other two submissions made before the High Court which were also accepted by it. The first of these contentions is that the order of September 7, 1957 is an order of, review and as there is no power of review granted to the court of inquiry. Mr. Justice Jamuar had no power to pass that order. It is enough to say that the order of September 7, 1956, cannot be called an order of review. We have already pointed out that the order that the owners should pay the expenses of the inquiry was already incorporated in the report of September 26, 1955, though it was not quantified. All that the order of September 7, 1956, has done is to quantify the amount of expenses. Therefore, this order cannot be treated as a review or any variation of the order passed in the report of September 26, 1955. It would have been a different matter if no order as to the payment of expenses had been made in the report of September 26, 1955. In that case it may have been possible for the respondents to argue that the later order was an order reviewing the failure to am an order as to expenses in. the report. But 480 when the report itself contained the order for payment of expenses, the later order is merely a quantification of that order and would be on a par with what happens every day in courts which pass decrees with costs. When giving judgment, courts do not quantify costs in the judgment. This quan tification is done later in the office of the court and if there is any dispute about it the court settles that dispute and then includes the cost in the decree or final order. What has happened in the present case is something similar and the order of Mr. Justice Jamuar dated September 7, 1956, cannot in ' the circumstances be called an order of review which he had no power to pass. The contention therefore under this head must fail. Turning now to the other contention, namely, that the order of September 7, 1956, was bad because the two assessors were not associated with Mr. Justice Jamuar when the order was passed, it is enough to say that under section 24 (1) the inquiry is held by a competent person appointed for the purpose and assessor are appointed to assist the person appointed to hold the inquiry. Even so, the person who holds the inquiry is the person appointed to do so and the assessors need not in our opinion be associated with him in all orders which are in the nature of ministerial orders and quantification of expenses must be treated as an order of a ministerial nature. It is not disputed that the assessors were associated with Mr. Justice Jamuar when the report of September 26, 1955, was made and it was ordered that the owners should pay the expenses of the inquiry. That was in our opinion the order of the court of inquiry as to payment of expenses and in that the assessors were associated. The later order wag mere quantification of that and it was in our opinion not necessary that the assessors should be associated at that stage also, for the 481 order of quantification is more or less of a ministerial nature and was made by the person who was appointed to hold the inquiry. In the circumstances we are of opinion that the fact that the order of September 7, 1956, was passed only by Mr. Justice Jamuar and the assessors were not associated with him would not make it invalid for this was merely carrying out the order in the report of September 26, 1956 by which the owners were ordered to pay the expenses of the inquiry and in that order the assessors were associated. The contention on this head also must therefore fail. This brings us to the main contention raised on behalf of the respondents, namely, that the., court of inquiry became functus officio when the report was made on September 26, 1955, and thereafter it was not open to Mr. Justice Jamuar to pass any order quantifying the expenses. Now it is not in dispute that there was no time fixed within which the report had to be made by the court of inquiry. Therefore, it cannot be said that the period for which the court of inquiry was appointed came necessarily to an end on September 26, 1955, and so the court of inquiry became functus officio on that date. If the court of inquiry when it submitted its report in this case on September 26, 1955 had ordered the owners to pay the expenses of the inquiry and had added further that expenses would be quantified later by the person holding the inquiry it could not possibly be argued that it was not open to the person appointed to hold the inquiry to quantify the expenses later. But it is said that in this case though the court of inquiry ordered that the expenses should be paid by the owners it did not say in the report that the expenses to be paid would be quantified later by the person appointed to hold the inquiry. That is undoubtedly so. But we have to see what the order in the report of Septmber 26, 1955 by which the owners were 482 ordered to pay the expenses of the inquiry, necessarily implies. It is obvious that the intention of the court of inquiry was that the owners should pay the expenses. Generally it may Dot be possible to quantify the expenses incurred in the inquiry at that stage and a quantification of expenses would ordinarily take place after the report is submitted. It seems to us therefore clear that when a court of inquiry orders that the owners shall pay the expenses such an order necessarily carries with it the implication that the person appointed to hold the inquiry would later quantify the expenses after necessary materials are put before him. This is exactly what happened in this, case. After the order of the court of inquiry that the owners should pay the expenses was known to the Chief Inspector of Mines, he applied that the expenses should be quantified and Mr. Justice Jamuar passed the order doing so. The order therefore that was passed on September 7, 1956, was merely a consequential order to what the court of inquiry had decided on September 26, 1955 and in our view the earlier order of September 26, 1955, had necessarily implicit in it that the person appointed to hold the inquiry would quantify the expenses as soon as the materials for that purpose are placed before him. It was not necessary therefore to say in so many words in the report of September 26, 1955, that the expenses would be quantified by the person appointed to hold the inquiry later on materials being placed before him. If this were not to be implicit in the order that was passed on September 26, 1955, that order would be completely useless for it does not specify the amount which could be recovered as expenses. We are therefore of opinion that when such an order is passed in a report of a court of inquiry it necessarily carries with it the implication that the person appointed to hold the inquiry would quantify the expenses later on materials being 483 placed before him, as otherwise such an order would be rendered completely nugatory. Therefore, unless we find anything in section 24 which prevents such an order of quantification being passed later by the person appointed to hold the inquiry, we see no reason why such a quantification should not be made later. We have also pointed out that the order appointing the court of inquiry in this case did not fix a date by which the report was to be made. Therefore, in these circumstances we are of opinion that it was open to Mr. Justice Jamuar to quantify the expenses and that it was not necessary that at that stage the assessors should be associated with him. We are therefore of opinion that it cannot be said that the person appointed to hold the inquiry was functus officio in this case and could not quantify the expenses in accordance with the direction contained in the report of September 26, 1955. The appeal is hereby allowed and the order of the High Court is set aside. The High Court has allowed no costs in its order; in the circumstances we think that the parties should bear their own costs of this Court. Appeal allowed.

IN-Abs

The Government of India under section 24 of the , ordered an enquiry into the disaster in the respondent 's colliery. The Court of inquiry submitted its reporto 476 September 26, 1955, and found inter alia that the accident was due to the negligence on the part of the management and therefore ordered the owners to pay the expenses of the en quiry as provided by r. 22 of the Mines Rules, 1955. The amount of the expenses to be paid were, however, not quanti fied in the report. At the request of Chief Inspector, Mines, the judge of the Court of Inquiry after due notice to the parties concerned quantified the expenses by his order dated September 7, 1956. The respondents petitioned under article 226 of the Constitution challenging the order quantifying the expenses on three grounds (1) the Court of Inquiry became functus officio after it had 'submitted its report and therefore the judge had no power left to pass the order quantifying the expenses. If the said order was to be treated as review of the order awarding expenses it would still be void as there was no power of review in the Court of Inquiry (3) When the order quantifying the expense was passed the two assessor were not present and were not associated with the enquiry therefore, the judge could not pass the order alone. The High Court allowed the writ petition adding that it was not interfering with the order relating to expenses made by the judge in his report dated September 26, 1955. Held, that when an order to pay expenses is passed without quantifying the amount in a report by a Court of Inquiry, it necessarily carries with it the implication that the person appointed to hold the enquiry would quantify the expenses later in materials being placed before him as otherwise such an order would be rendered completely nugatory. Where no time was fixed within which the report had to be made by the Court of enquiry it cannot be said that the period for which the Court of enquiry was appointed necessarily came to an, end with the submitting of the report and this Court of Inquiry became functus officio. Held, further, that when the report itself contained the order for payment for expenses, the later order is merely a quantification of the earlier order and would be on a par with what happens everyday in courts which pass decrees with costs. When giving judgment, courts do not quantify cost in the judgment. Therefore the order dated September 7, 1956, cannot be treated as a review or any variation of the order pawed in the report of September 26, 1955, which the judge had no powers to pass. Held, also, that it was open to the judge of the Court of inquiry to quantify the expenses and that it was not necessary that at that stage the assessors should be associated with him. Under section 24(1) of the Act$ the enquiry is held by a competent 477 person for the purpose, and assessors are appointed to assist the person to hold the enquiry and the assessors need not be associated with him in all orders which are in 'the nature of ministerial order and quantification of expenses must be treated as an order of a ministerial nature.

iminal Appeal No. 60 of 1962. Appeal by special Leave from the judgment and order dated October 25, 1961, of the Punjab High Court in Criminal Appeal No. 890 of 1961 of Murder Reference No. 74 of 1961. Jai Gopal Sethi, C. L. Sareen and R. L. Kohli, for appellant. Gopal Singh, D. Gupta, P. D. Menon, for respondent. April 27. The Judgment of the Court was delivered by DAS GUPTA, J. The Appellant was convicted by the Sessions Judge, Patiala, of an offence under s.302 of the Indian Penal Code for the murder of Gurdev Singh and sentenced to death. The Punjab High Court dismissed his appeal and confined the sentence of death. The present appeal is on the strength of special granted by this Court. The prosecution case is that at about 2.30 p.m. on November 18, 1960 when Gurdev Singh was passing the tea stall of Cbaran Singh, not far from the courts at Barnala on a motor cycle, the appellant Sewa Singh, who was at that time in that shop with a double barrel gun stood up and fired a shot at him. Gurdev Singh was hit on the right side of his chest and died instantaneously. The appellant and one Gogar Singh, who was with him, ran away. The accused pleaded not guilty. It was not disputed that Gurdev Singh had died of a gun shot 547 injury at the time and place as alleged. It was satr entiously contended, however, that he was not the culprit. According to the prosecution this occurrence was witnessed by Charan Singh, the owner of the shop and Mukhtiar Singh, a Student, and Bakhtawar Singh, the two persons who were having tea in the shop. At the trial Charan Singh denied any knowledge as to who had fired the shot and was declared hostile by the prosecution. The other two witnesses gave evidence that they saw the present appellant, who was known to them from before, firing the shot from a double barrel gun. Their evidence was believed by the Trial Judge and also by the High Court. In support of the appeal it is contended by Mr. Sethi that we should look at the evidence ourselves as the High Court does not appear to have taken into consideration, in appreciating the evidence, the Characteristics of the injuries caused by the shot. He has drawn our attention to a decision of this Court in Zora Singh vs The State of Punjab (Criminal Appeal No. 81 of 1957: Judgment delivered on 10.5 1957). According to the learned Counsel these features of the injury as they appear from the Doctor 's evidence clearly show that when the gun was fired it was held in close contact with the body of the victim or within two or three inches of it. This, argues the learned Counsel, shows that the witnesses who have claimed to have been the occurrence did not actually see the occurrence as they give a totally different version as regards the distance of the gun from the body of the victim. It has to be mentioned that the judgment of the High Court contains no discussion on this point and it does not appear that the attention of the learned Judges was 548 drawn to the features of the injury on which we are now asked to hold that the shot which killed Gurudev Singh was fired from a very close range, not exceeding a few inches. Even so, we have thought it proper to hear the Counsel on this question, ,.is in our view these features ought ordinarily to be taken into consideration in assessing the value of the evidence of the eye witnesses. The doctor 's evidence shows: (1) that the wound caused was a roundish, wound 1 1/2"x 1 1/4" communicating with the right chest cavity; (2) that the wound was plugged with a cork wadding and card board disc of 12 bore cartridge; (3) that the right fourth and fifth ribs were blown off under the wound and also the right lung was punctured over an area 2 1/2"x 2" about in its middle lobe about its interior margin in the middle which was blown off, (4) that the woollen coat, which was on the body of the deceased, was bloodstained with a corresponding rent blackened charred; the shirt was also blood stained with a corresponding rent blackened. The doctor gave the opinion that the distance from which the shot was fired might be three to four feet. There was some cross examination of the doctor in the Committing Court but the correctness of this opinion was not challenged. The doctor did not appear to give evidence before the Sessions Court. His deposition as recorded by the Committing Court was treated as evidence in the Sessions Court under the provisions of s.509 of the Code of Criminal Procedure. Turning first to the size of the wound it appears to us that far from supporting the theory of death having been caused by a contact shot it indicates that the shot was fired from about a yard away. Speaking of ordinary shot guns, Sir Sidney Smith in his Forensic Medicine, 9th Edition; page 182 says : "At about a yard the charge of shot will enter as one mass,. making a whole with irregular 549 edges about an inch in diameter." Major Sir Gerald Burrard in his Identification of firearms and Forenisic Ballistics says at P.73 : "It may be assumed for all practical purposes that if the diameter of the wound is an inch, or less, than the distance of the shot was 18 inches or under, irrespective of the gauge of the shotgun or the degree of choke. Up to 2 feet there is very little difference in the spread between guns of various and different obokes, the hole at this distance being slightly over an inch in diameter. At 3 feet the hole is nearly 1 1/2 inches in diameter, and the difference between the two extremes of boring, true cylinder and full choke, begins to be evident. ' In Lyon 's Medical Jurisprudence, 10th Edition, we find stated at p. 279 thus: "At a distance of 3 feet the shot mass begins to spread, the wound is an inch or slightly more in diameter. " In Taylor 's Principles and practice of Medical Jurisprudence, 11th Edition, 'the matter is described thus at page 334: In the case of shot guns the distance from which the weapon was fired may be deduce d from the amount of scattering of the charge. Up to about a yard the whole of the charge enters in a mass, producing a round hole about the size of the bore of the weapon. . . In view of these authorities, it is reasonable to hold even without knowing whether the gun had an unchoked or a choked barrel that a roundish wound of 1 1 /2" x 1 1/4" would be caused if the gun is fired at a distance of about a yard. We are unable to agree that the burning of the clothes as described by the doctor is any indication that the shot was fired from within a few inches. Mr. Sethi has drawn our attention to the statement made in the several text books that whet the gun is fired from a distance of only a few inched; the wound would be surrounded by a zone of black ening and burning. in the Present case no mark 550 of blackening or burning were noticed by the doctor on the skin round the wound or in the depths of the wound; but the rent in the woollen coat was found blackened and charged and the rent in the shirt blackened. On this question it is important to mention the opinion as given in the Taylor 's Principle and Practice of Medical Jurisprudence, 10th Edition at p. 441 thus: "The amount or degree to which the clothes and body of a person may be burnt by the near discharge of firearms has given rise to a medico legal inquiry. The facts in any given case can be determined only by experiments with the actual weapon used, and loaded as nearly as possible in the same manner as it was when used for the purpose which are being investigated. It is impossible to state rules as to the precise distance from which it is possible to produce marks of burning, for this depends on the quantity and nature of the powder, the method of charging, and the nature of the weapon. It is unusual, however, to get marks of burning beyond a yard or a yard and a half with a shot gun, or at more than half a yard with a revolver." According to this view therefore marks of burning may be found in the clothes or body of a person if the shot was fired at a distance of a yard or a yard and a half with a shot gun. Even though this opinion is not reiterated in Taylor 's 11th Edition, it seems clear, in view of this opinion that the presence of the burning marks in the clothes cannot from a reasonable basis for holding that the gun was fired in this case from the close range of a few inches only. It is necessary next to consider the fact that the cork was found lodged in the body. Glaister 551 in Medical Jurisprudence and Texicology, 9th Edition at p. 265 says, while speaking of a shot fired close to the body surface up to a few inches that "the wad may be forced in the wound. " It appeas to be clear that in a contact wound the wad is likely to enter the body. But the authorities are not so clear to the maximum distance at which the wad may enter the body. The nearest statement appears to be given by Sir Sidney Smith in his Forensic Medicine, 9th Edition at p. 182 thus : " 'the wads enter with the projectile in near discharges. " Reading this statement in the light of the discussion in the previous paragraphs, it appears to us that a discharge up to yard has been considered by the learned author as a near discharge. The fact that the wad was lodged in the wound appears therefore to be quite consistent with the shot having been fired from about a yard. It remains to consider what the doctors has described as the "blowing off" of the ribs and a part of the right lung. This description, if correctly given, indicates the entry of gas into the wound and that, it is true, ordinarily takes place only if the shot is fired within a few inches of the body, As we have already noticed however, the dimension of the wound itself is a clear indication that shot was fired at a distance of about a yard. There is thus some apparent inconsistency between what is indicated by the size of the wound and what the doctors has described as "the blowing off" of the ribs and a par of the right lung. As there is less likelihood of any mistake being made in the measurement of the wound than about the doctor 's view about the "blowing off" of the ribs. , we are of opinion that what the doctor has described as "blowing off" is not a good reason for thinking that the shot was fired only a few inches off from the body. 552 On a consideration of all the features of the wound as described by the doctors together, we have come to the conclusion that the doctor 's opinion as given in his examination in chief, which was not challenged in cross examination before the Committing Magistrate, that the shot may have been fired about three to four feet away should be accepted as correct. We find no reason therefore interfere with the assessment of evidence as made by the High Court and also with the order, of conviction and sentence passed by it. The appeal is accordingly dismissed. Appeal dismissed.

IN-Abs

The appellant was tried and convicted for murder and sentenced to death. Two eye witnesses testified that he shot and killed the deceased from a shop while the later was passing on a motor cycle. The doctor who conducted the postmortem gave evidence that the shot might have been fired from a distance of three or four feet. This evidence was not challenged in cross examination. On appeal to the High Court the conviction and sentence were confirmed. The appeal came up before the Supreme Court by way or special Ieave. The main contention on behalf of the appellant was that the characteristic of the wound which would have shown that the deceased was shot from a distance of few inches and not from the distance stated by the witnesses were not taken into consideration by the High Court. It was contended that if the High Court had considered these factors the credibility of the witnesses would have become doubtful. Held, that the nature and features of the fatal wound should ordinarily be taken into consideration in assessing the 546 value of the evidence of the eye witnesses. On consideration of all the features of the wound as described by the doctor the conclusion is reached that the doctor 's opinion, which was not challenged in cross examination, that the shot was fired from a distance of three to four feet is correct.

Appeal No. 173 of 1956. Appeal from the judgment and order dated November 15, 1954, of the former Madhya Pradesh High Court at Gwalior in C. F. A. No. 9 of 1951. Ganpat Rai, for the appellant. N. section Bindra and D. D. Sharma for the respondent. 621 1962. April 30. The Judgment of the Court was delivered by KAPUR, J. This is an appeal against the judgment and order of the High Court of Madhya Bharat at Gwalior on a certificate of that Court under article 133 (1) (c) and like Civil Appeal No. 24 of 1961, raised the question of the applicability of the Indian Code of Civil Procedure and the question whether the decree sought to be executed was a dec ree of a foreign Court or not. It is a reverse case in the sense that the decree sought to be executed was passed by a Court in West Bedford province of what was British India. In the appeal the appellant is the judgment debtor and the decree holder is the respondent. On December 3, 1949, a decree was passed in favour of the respondent by the Subordinate Judge, Bankura, in the West Bengal and a certificate of transfer was applied for on July 27, 1950, granted on August 8, 1950, and was transferred for execution On August 28, 1950. On September 25, 1950, the decree holder took out execution in the Court of the Additional District Judge, Morena, in what was Gwalior State and subsequently became a part of the United State named Madhya Bharat and after the Constitution the Part B State of Madhya Bharat. On the judgment debtor 's objection the application for execution was dismissed on December 29, 1950, but the appeal against that order was allowed by the High Court on November 15, 1954. It is unnecessary to set out the various sections of the Indian Code of Civil Procedure or to trace the various steps by which as. 43 and 44 were amended in that Code ; that we have done in C. A. No. 24 of 1960 decided today. It was contended before us by the judgment debtor that 622 the Court had no power to transfer the decree under section 38 to the Court in Morena. On the date when the decree was transferred the Courts in Madhya Bharat were governed by the Indian Code of Civil Procedure as adapted by the Madhya Bharat Adaptation Order of 1948 but the power of transfer by the Court at Bankura was governed by sections 38 and 39 of the Indian Code of Civil Procedure. Under the Code, the Court to which the decree could be transferred was one established in what was British India because the Code extended to the territories of what was British India and it was not till, the coming into force of Act 11 of 1951 on April 1, 1951, that the Indian Code was applied to the "Territories of India" which comprised Parts A, B and C State. It was contended by Mr. N. section Bindra counsel for the respondent that under sections 38 and 39 of the Indian Code of Civil Procedure a decree could be sent for execution to any Court, the expression "Court" being understood as a place where justice was administered and for this reliance was placed on Manawala Goundan vs Kumarappa Reddy (1) where the word "Court" in section 622 of the old Civil Procedure was defined as a place where justice is judicially administered ; but that was in a case where it had to be determined whether a District Registrar was Court for the purpose of Civil Procedure Code. The definition as given in that case is not of any help in determining the question now before us because what we have to see is whether the Court at Morena even though it administered justice judicially was covered by the word "Court" in section 38 or not. As we have said above "Court" in the section means a court to which the Indian Code of Civil Procedure applies and not any Court. Similarly at the relevant time in es. 40 and 42 of the Indian Code of Civil Procedure "Court" nece I. L. R. 30 mad. 623 ssarily meant a Court to which Indian Civil Procedure Code applied i. e., a Court in what was British India. The Court at Morena not being such a Court the decree could not be transferred to it under the Indian Code of Civil Procedure and sections 38 and 39 were inapplicable to justify such a transfer. The decree, it was then argued, was executable under section 43 of the Indian Civil Procedure Code as amended by the Adaptation of Laws Order of June 5, 1950, which had retrospective effect as from January 26, 1950. After the amendment that section reads : "S 43 Any decree passed (a) by a Civil Court in Part B State, or (b). . . . (c). . . . may, if it cannot be executed within the jurisdiction of the Court by which it was passed, be executed in manner herein provided within the jurisdiction of any Court in the States". The argument was that in the present case the expression "in a Part B State, 'should be read as if the expression was "in a Part A State". This again is not permissible for us. Section 43 has to be interpreted as it is and a Court cannot read it as if its language was different from what it actually is. It is not permissible for this court to amend the law as suggested. Besides the Indian Civil Procedure Code was not extended to Madhya Bharat till April 1, 1951, by Act 11 of 1951. The decrees of foreign courts were, under the Gwalior Code of which Morena was a part, executable neither under section 233 which required a suit to be brought on the basis of foreign decrees nor under the Madhya 624 Bharat Code of Civil Procedure. The decree therefore could not be executed in Morena under s.43 of the Indian Code of Civil Procedure. It was next argued that the appellant firm was not a foreigner because it did not fall under the foreigners Act (Act 31 of 1946) and reference was made to section 2 (a.) (iii) which was amended by Act 38 of 1947 on December 15, 1947 ; but this Act is not relevant for the purpose of finding out whether the decree was a foreign decree or not because the execution of decrees is governed by the provisions of the Code of Civil Procedure and not by the Foreigners Act. Under the former a decree can be executed by a Court which passed the decree or to which it was transferred for execution and the decree which could be transferred has to be a decree passed under the Code and the Court to which it could be transferred has to be a Court which was governed by the Indian Code of Civil Procedure. But in the present case it was not transferred to a Court which at the time of the transfer was governed by the Indian Code of Civil ,Procedure and therefore the transfer was ineffective for the purpose of execution and as we have said above, section 43 of the Indian Code was inapplicable before Act 11 of 1951 to the State of Madhya Bharat. It is not necessary to go into the other questions raised if the above two questions are decided against the respondent. We therefore allow this appeal, set aside the judgment and order of the High Court and restore that of the executing court. The appellant will have its costs in the court. Appeal allowed.

IN-Abs

A decree passed in favour of the respondent by a Subordinate judge of West Bengal was transferred for execution on August 28, 1950 to the Court of the Additional District judge of Morena in what was originally Gwalior State and subsequently became a part of the United States of Madhya Bharat and after the Constitution State of Madhya Bharat. On the date when the decree was transferred, the 620 Courts in Madhya Bharat were governed by the Indian Code of Civil Procedure as adapted by the Madhya Bharat Adapt action Order of 1948 but the power of transfer by the Court of Bankura was governed by sections 38 and 39 of the Indian Code of Civil Procedure. On the judgment debtor 's objection the application for execution was dismissed but the appeal against that order was allowed by the High Court. The appellant contended that the Court had no power to transfer the decree under section 38 to the Court in Morena. The question was with regard to the applicability of the Indian Code of Civil Procedure and whether the decree sought to be executed was a decree of a foreign Court or not. Held, that the Court at Morena not being a court, to which Indian Civil Procedure Code applied, the decree could not be transferred to it under the Indian Code of Procedure and sections 38 and 39 were inapplicable to justify such a transfer. The Indian Civil Procedure Code was not extended to Madhya Bharat till April 1, 1951, by the Act 2 of 1951. The decrees of foreign courts were under the Gwalior Court of which Morena was a part, not executable under section 233 which required a suit to be brought on the basis of foreign decree under not the Madhya Bharat Court of Civil Procedure. Held, further, that the Foreigners Act is not relevant for the purpose of finding out whether the decree was a foreign decree or not because the execution of decree is governed by the provisions of the Code of Civil Procedure and not by Foreigners Act. A section of an enactment has to be interpreted as it is and a Court cannot read it as if its language was different from what it actually is.

l Appeal 483 of 1957. Appeal from the judgment and decree dated November 25, 1949, of the Madras High Court in Appeal No. 66 of 1946. A. V. Viswanatha Sastri and T.V.R. Patachar for the appellant. Bhimsenakarama and B K.B. Naidu, for respondents Nos. 1 and 2. T. Satyanarayan, for respondents Nos. 7 and 8. 1962. April 27. Sarkar, J., delivered a separate Judgment. The Judgment of Subba Rao and Mudholkar, JJ., was delivered by Subba Rao, J. 501 SARKAR, J. In 1929, one Bapiah filed a suit against the appellant, then a minor, his father and another person on a promissory Dote executed by the two last mentioned persons, The appellant was represented in that suit by his maternal grandfather as his guardian ad litem. 'A decree was passed in that suit. The decree holder put the decree in execution and obtained an order for the sale of certain properties in which the appellant was interested. The properties were sold in due course in favour, it is said. , of a clerk of the decree holder. Thereafter, the appellant 's guardian ad litem made an application under O. 21 r. 90 of the Code of Civil Procedure for setting aside the sale. Later, however, the guardian ad litem came to a settlement with the decree holder and the auction purchaser that the guardian ad litem would give up the contention regarding the invalidity of the sale and withdraw the petition to set it aside and also give up possession of the properties sold to the auction purchaser and decree holder and the auction purchaser in their turn would give up their claim for costs of the petition. In pursuance of this agreement the petition was withdrawn and dismissed by order made on August 12, 1932. After attaining majority, the appellant filed a suit in 1944 to set aside the order of August 12, 1932, and for a re hearing of the petition which was dismissed by the order of that date. It is from this ,suit that the present appeal arises. The suit was decreed by the trial Court but on appeal the decision of the trial Court was reversed by the High Court at Madras and the suit was ordered to be dis missed. There is no dispute that the suit was competent and within time. The only question in this appeal is whether the order of August 12, 1932 is voidable under O. 32 r. 7 of the Code of Civil Procedure, 1908, at the instance of the appellant. That rule forbids the 502 guardian for the suit to "enter into any agreement or compromise on behalf of a minor with reference to the suit" without the leave of the court and provides that the any such agreement or compromise entered into without the leave of the court shall be voidable against all parties other than minor. Order 32, r. 7 of the present Code corresponds to section 462 of the Code of 1882. It has been settled since the Code of 1882 was in force that the provision under the consideration applies to proceedings in execution though it only mentions agreement or Compromise with reference to the suit. As long ago as 1901, Jenkins C.J. said in Virupakshappa vs Shidappa, (1) "I will first deal with the question whether section 462 applies to a compromise of execution proceedings. On the words of the section I think it does; applications in execution are proceedings in the suit, so that a compromise of such a proceeding would be a compromise with reference to the suit. This view has been followed ever since. The High Court took the view that a compromise of an execution proceeding would be within O. 32, r. 7 only when it affected directly the rights and liabilities created by the decree. It observed that the compromise in the present case was not affected by the rule as it concerned only the rights and liabilities under the auction sale and not those arising under the decree. I am unable to agree with this view. The High Court rested itself on the fact that all the reported decisions dealt with cases in which the agreements had directly affected the rights and liabilities under the decree. This does not to my mind furnish sufficient justification for the High Court 's view. No decision has been brought to our notice in which it has been held that O. 32, r. 7 does not apply to a compromise of execution proceedings (1) (1901) I.R.L. , 114. 503 which does not directly affect the rights and liabilities created by the decree. It does not seem to me that on principle the High Court 's view can be justified. It is true that O. 32, r. 7 does not apply to all agreements. In Bhodes vs Swithenbank (1) it was observed, "This is an action by an infant by means of her next friend, who undoubtedly has the conduct of the action in his hands. If, however, the next friend does anything in the action beyond the mere conduct of it, whatever is so done must be for the benefit of the infant, and if, in the opinion of the Court it is not so, the infant is not bound". It may therefore be said that an agreement concerning the conduct of the proceeding does not require the sanction of the Court. Beyond this, I find no justification for limiting the operation of the rule. I observe that Jenkins C.J. in what I have earlier read from his judgment, said that the rule "applies to a compromise of execution proceedings". Therefore, it seems to me that according to the learned Chief Justice it applies to all compromises of execution proceedings, excepting, of course, compromises concerning the conduct of them, and this whether the compromise directly affects the rights or liabilities under the decree or not. I think the principle of the rule was correctly stated by Heaton J. when dealing with section 462 of the Code of 1882 he observed in Gurmallapa vs Mallappa (2), "That section, I think, necessarily implies that during the continuance of proceedings in Court, the dispute between the minor and another party which the Court had to decide could not be compromised except by the guardian ad litem of the minor, and by him only with the leave of the Court. " I think that any compromise of a proceeding which concerns the dispute involved in it (1) ,578. (2) (1920)I.L.R.44 Bom.574,581. 504 would require the sanction of the Court. I should also point out that sub r. (6) of r. 3 of O. 32 provides that a person appointed guardian for the suit for a minor shall unless his appointment is terminated, continue as such throughout all the proceedings arising out of the suit including the proceedings in execution of a decree. The object behind O. 32 seems to me to be that when an infant is involved in a legal proceeding, he should have a guardian assigned to him and that guardian should be under the control of the Court before which the proceeding is pending so as not to be able to affect the rights and liabilities of the infant, the subject matter of the proceeding, by a compromise which the Court has not approved as one for the benefit of the infant. If this is the prin ciple, as I think it is, there would be no justification for limiting the operation of the rule in its application to execution proceedings, only to compromises which directly affect the rights and liabilities under the decree. The rule, in my view, would apply, among others, to compromises which bring a proceeding to an end and thereby affect the rights or liabilities of the infant involved in it. I think this view receives support from the observations of Varadachariar J. in Katneni Venkatakrishnayya vs Ganapati China Kanakayya(1) that, "Rule 7 deals with the conduct of a next friend ' as such who, as pointed out in Bhodes vs Swithenbank(2) is an officer of the Court to conduct the suit; and the principle underlying are 7 is that whenever he proposes to do anything beyond the normal conduct of the suit, he has to obtain the leave of the Court to do so.", Quite obviously the word "suit" in this observation would include a proceeding in execution. It is of some interest to point out that the learned Judges of the High Court were careful to (1) (1938) I.I.R. Mad. 819,828. (2) ,578 505 use the word "directly"; they said the agreement or compromise in the present case did "not directly deal with or regulate the extent and nature of the rights and liabilities under the decree, which stand intact and unaffected as before. " This seems to me to indicate that the learned Judges were conscious that the compromise in this case affected the rights and liabilities of the appellant under the decree at least indirectly. It seems to me that if the rule prohibits an agreement which directly affects the rights and liabilities of an infant under a decree, there would be no reason to think that it would not similarly prohibit an agreement deliberately made to affect the same rights and liabilities indirectly. The agreement challenged in this ' case, is, as I shall endeavour to show, of this kind. Turning now to the facts of this case I think the proceeding in which the compromise was arrived at was in the course of execution of the decree. It was a proceeding to challenge the validity of an execution sale. It was therefore a proceeding, a compromise in reference to which would be governed by O. 32, r. 7 under the rule laid down in Virupakshappa 's case(1). It also seems to me clear that the compromise was not concerning the conduct of the proceeding. It brought the proceeding to an end and its result was that the appellant 's right to question the validity of the sale was lost. He because bound by the sale, good or bad. His liability under the decree was reduced only by the amount of the proceeds of the sale, however inadequate a price might have been fetched in it. , It may be that if the proceeding to set aside the sale had been continued and not abandoned, the sale might have been set aside and a fresh sale, if one took place, might have fetched a larger prim and thereby diminished the liability (1) am. 109. ;I. 506 under the decree to a greater extent. Such a compromise cannot be said to be one relating to the conduct of the proceeding. It seems to me also to be one affecting seriously the liability of the appellant under the decree since it deprived him of his right to have that liability reduced by a larger amount by a sale properly held. It is a compromise which from all points of view, should have been made with the sanction of the Court. Before concluding I think it right to say that the decree holder and auction purchaser can derive no assistance from Jitendra Nath Rao vs Samarandra Nath Mitter(1). In that case the Judicial Committee held that the agreement contemplated by O. 32, r. 7 is one which is made with a party to the suit or proceeding. Here the agreement was in the execution proceeding and it was made with the decree holder and the auction purchaser both of whom were parties to it, the former having been a party to the suit itself out of which the execution proceeding arose. I think this appeal should be allowed. J.SUBBA 'RAO, J. This appeal raises the question of the construction of the provisions of Order XXXII, r. 7 of the Code of Civil Procedure. Bhushayya, the appellant, and respondents 7 and 8 herein are the sons of one Dokka Adeyya (since died). On the basis of a promissory note executed by Dokku Adeyya and respondent 5 in favour of one Bapayya, the latter filed C.S. No. 88 of 1929 in the Court of the Subordinate Judge, Bapatla, and obtained a decree therein. In that suit, the appellant, who was then a minor, was a defendent and was represented by his maternal grandfather ' as his guardian. In execution of the said decree, properties of Dokku Adeyya were brought (1) (1943) L.R. 70 I.A. 68. 507 to sale and were purchased by the decree holder 's clerk, Bapiraju, subject to the mortgage in favour of the decree holder. Before the sale was confirmed, on March 29, 1932, the appellant, represented by his maternal grandfather, filed E.A. No. 136 of 1932 to set aside the sale under Order XXI, r. 90 of the Code of Civil Procedure. The said petition was posted for inquiry to August 12, 1932. On that day, a memorandum was filed in the court by the guardian of the appellant to the effect that the matter was adjusted and that the petition should be dismissed as having been withdrawn. No sanction of the court was obtained by the guardian for withdrawing the petition. On the said day, the court passed an order dismissing the application. Subsequently, the sale was confirmed. On October 9, 1944, the appellant, who bad then attained majority, filed a suit, O.S. No. 80 of 1944, on the file of the Subordinate Judge, Tenali, for setting aside the order dated August 12, 1932 and to try the application for setting aside the sale on market. It was, inter alia pleaded that the said order was void in as much as the guardian of the appellant withdrew the application without the sanction of the court as he should do under Order XXXII, r. 7 of the Code of Civil Procedure, hereinafter referred to as the Code. The contesting defendants, some of them being the subsequent aliences, filed written statements seeking to sustain the validity of the said order. For the purpose of this appeal we need not notice any other point. The learned Subordinate Judge held that the withdrawal of the said petition and the consequent dismissal thereof was void, as the guardian did not obtain the sanction of the Court under Order XXXII, r. 7 of the Code. On appeal, the High Court came to the conclusion that Order XXXII, r. 7 of the Code had not relevance to an application for setting aside the sale in the circumstances of the cam. Hence the appear. 508 The only question that arises in this appeal is whether the withdrawal of the said petition by the guardian was in contravention of Order XXXII, r. 7 of the Code. Before construing the provisions of the said Order, it would be convenient to notice what exactly were the terms of the agreement. The High Court in its judgment summarised the factual position on that date thus: "The agreement is that the guardian adlitem should give up the contentions regarding the invalidity of the auction sale and should withdraw the petition to set aside the sale and also deliver up possession of the pro perties purchased, to the auction purchaser and that the decree holder and auction pur chaser should give up their claim for costs o f the said petition. It was in pursuant of this agreement that the petition was withdrawn and dismissed (no costs being given)". This is the correct petition, and we need not elaborate further on it. Order XXXII, r. 7, clauses (1) and (2) read as follow: Clause (1) "No next friend or guardian for the suit shall, without the leave of the Court expressly recorded in the proceedings, enter into any agreement or compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian. Clause (2). "Any such agreement or compromise entered into without the leave of the Court so recorded shall be voidable against all parties other than the minor. " In Madras, there is also another clause, viz., cl. (1 A) introduced by an amendment made in 1910 and it reads "Where an application is made to the Court for leave to enter into an agreement or 509 compromise or for withdrawal of a suit in pursuance of a compromise or for taking any other action on behalf of a minor or other person under disability and such minor or other person under disability is represented by counsel or pleader, the counsel or pleader shall file in Court with the application a certificate to the effect that the agreement or compromise or action proposed is in his opinion for the benefit of the minor or other person under disability. A decree of other for the compromise of a suit, appeal or matter to which a minor or other person under disability is a party shall recite the sanction of the Court thereto and 'shall set out the terms of the compromise as in Form No. 24 in Appendix to this schedule. " Under this Order, no guardian shall enter into an agreement or compromise on behalf of a minor with reference to a suit in which he acts as next friend or guardian. The short question is, what is the meaning to be given to the words "an agreement or compromise with reference to the suit" ? Mr. Viswanath Sastri, learned counsel for the appellant, raised two contentions, namely : (1) That the execution proceedings are proceedings with reference to the suit and therefore any compromise or agreement entered into or effected by a guardian of a minor in execution proceedings affecting his rights procedural or substantive, whether in issue in the suit or declared by the decree or not would require the sanction of the court and an agreement entered into without that sanction would be void. (2) An application to set aside a sale is a proceeding with. in the meaning of section 141 of the Code ' and, therefore, O. XXXII, r. 7, as far as it can be made applicable, would apply to such proceeding; as the compromise was entered into by the guardian in such a proceed without the leave of the Court, the said com 510 promise as well as the order made pursuant thereto was void. On the other hand, Mr. Bhimasankaram, learned counsel for the respondents, while supporting the test laid down by the High Court, namely, that an agreement to fall within the mischief of the said Order shall be such as deals directly with the rights and liabilities involved in the suit or defined by the decree, attempted to abridge the scope of the test further by trying to make a distinction between an agreement relating to rights conferred by the decree and th%t only relating to liabilities imposed thereunder. Order XXXII, r. 7, is one of the provisions designed to safeguard the interests of a minor during the pendency of a suit against hostile, negligent or collusive acts of a guardian. The scope of the provisions is implicit in the phraseology used therein. The crucial words are "any agreement or compromise . with reference to the suit". The words "with reference", if taken out of the context, are of the widest import. They may take in ' every procedural step in the conduct of a suit, such as adjournment, admission of documents, inter locutories, inspection etc.,, and obviously it could not have been the intention of the Legislature that agreements in respect of such procedural steps should conform to the requirements of the rule. If that be not so, the rule instead of protecting the interests of a minor would easily become a major obstacle in disposing of suits in which a minor is ranged as party on one side or the other. So consistent with the purpose of the rule the words " 'with reference to the suit" must be limited to the rights put in issue in the suit. The next limitation is that the. protection is only during the pendency of the suit. When does a Suit come to an end It has been held that for the 511 purpose of the said rule an execution proceeding is a continuation of a suit: see Virupakshappa vs Shidappa and Basappa(1), Arunachellam Chetty vs Ramanadhan Chetty(2), and Muthalakkammal Chetty vs Narappa Reddiar(3). If it was a continuation, the rule would also apply to an agreement or compromise with reference to the said execution proceeding. But, just like in the case of a suit, in the case of execu tion proceedings also, the agreement or compromise shall be one affecting rights or liabilities ascertained or declared by the decree put in execution. As in the case of a suit, so also in the case of an execution of a decree, mere procedural steps not affecting the rights or liabilities so declared are not governed by the provision. The guardian may agree to an adjournment of a sale, to a waiver of a fresh proclamation, to a reduction of upset price etc. It could not have been the intention of the Legislature that every time such a step is taken, the procedure laid down in Order XXXIII, r. 7, of the Code should be complied with. The next limitation is that the agreement or compromise shall be entered into with a party to a suit or his legal representative. The rule does not provide for dealings of a guardian with persons not parties to a suit. The question directly arose in a case which went up to the Privy Council, viz., in Jitendra Nath Roy vs Samarandra Nath Mitter(4). There, a decree obtained in favour of a minor, represented by his guardian, was assigned by the guardian for consideration to another without obtained the leave of the court. Advertising to the question of validity of such an assignment, Lord Atkin observed "They (the Judges of the High Court) took the view that, in the rule in the phrase, "agreement or compromise. with reference (1) Bom. 110.(2) Mad. 309. (3) Mad. 430.(4) (1949) L.R. 70 I.A. 68. 512 to the suit" the words mean agreement with a party to the suit and do not cover a transfer of a decree to someone then unconnected with the suit, even assuming that such transfer could properly be described as an agreement. They expressed their agreement on this point with a decision of the Full Bench of the Mad ras High Court in Katneni Venkatakrishnayya Garapati China Kanakayya(1), which is preci sely in point. It appears to their Lordships that it cannot have been intended to require the leave of the court to an agreement, for example, made with a non party.to finance a suit, whether with a stipulation to receive part of the proceeds or not. The Conjunction of the word "agreement" with the word "com promise" appears to indicate the kind of agreement intended. " We agree with these observations. The result is that Order XXXII, r. 7, of the Code will apply to only to an agreement or compromise entered into by a guardian of a party to the suit, who is a minor with another party thereof during the pendency of the suit and the execution proceedings. The next question is whether the application for setting aside a sale is a proceeding in execution of a decree. Order XXI of the Code prescribes, among others, the different modes of execution, one of them being execution against the property of a judgraent debtor. The Order also prescribes a procedure for sale of the said property and for setting aside a sale obtained by fraud or material irregularity. Under Order XXI, r. 92, where no application is made under r. 89, r. 90, or r. 91 to set aside a sale or where the application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become abso (1) I.L.R. 513 lute; under sub r. (3) of r. 92 of the said Order, "No suit to set aside an order made under this rule shall be brought by any person against whom such order made. " It is, therefore, clear that Order XXI provides a self contained machinery for executing a decree and for deciding disputes that may arise in connection with the execution. The execution is not closed till the decree is discharged or barred by limitation. In this view, we must hold that an application filed by a judgment debtor to set aside a sale is an application in execution of a decree. Even so, as we have already indicated, to attract Order XXXII, r. 7, of the Code the agreement or compromise entered into between the guardian and the auction purchaser shall be an agreement or a compromise affecting the rights or liabilities declared by the decree. Can it be said that in the present case the agreement affected any such right or liability ? The suit was on the basis of a promissory note executed by the father and the brother of the appellant. The appellant was also a party to the suit. The decree was for recovery of the amount covered by the promissory note with interest. It did not in any way affect the title of the appellant to the entire or to any part of the property of the family sold in execution of the decree. The appellant, by his guardian, filed an application to set aside the sale on the ground of fraud and material irregularity in the conduct of the sale. The guardian agreed to withdraw the said application on certain conditions. The agreement also did not in any way affect the rights or liabilities declared under the decree. Not with stand. ing the agreement, the decree was left intact. It is said that if the sale was set aside, the decree would have to be executed afresh, but as it was not aside on the basis of the said agreement, the sale price in discharge of the decree; therefore, the argu. ment proceeds, the agreement affected the discharge 514 of the decree. The father of appellant could have sold the family property out of court and could have out of the sale proceeds, discharged the decree. In that event it could not be said that the sale affected the rights or liabilities decree. If so, the sale of property through court cannot equally affect any such rights or liabilities declared by the decree. We? therefore, hold that the agreement or compromise entered into by the guardian in respect of such a sale did not affect the rights ascertained and declared by the decree, and, therefore, the leave of court under Order XXXII, r. 7, of the Code was not necessary. Before leaving this part of the case, we should make it clear that it is not our intention to lay down that under no circumstances an, agreement or compromise entered into by a guardian to withdraw an application filed for setting aside a sale would be governed by Order XXXII, r. 7, of the Code. There may be arrangements or compromises in respect of such a petition whereunder the rights declared by decrees are affected. We also assumed for the purpose of this ease that the auctionpurchaser was a party to the suit, as there was some controversy on the question whether he was a benamidar for the decree holder. Lastly it was contended that by reason of section 141 of the Code, the procedure provided under Order XXXII, r. 7, should be extended to an agreement or a compromise entered into by a guardian in respect of an application to set aside a sale under Order XXI, r. 90, of the Code. The argument is that an application under Order XXI, r. 90, is an independent proceeding, and as the agreement for withdrawing the said proceeding affects the right created by the sale, it falls within the meaning of the said rule. Section 141 of the Code reads : "The procedure provided in this Code in regard to suits shall be followed, as far as it 515 can be made applicable, in all proceedings in any Court of civil jurisdiction. The corresponding is. 646 of the Code of 1882 read as follows: "The procedure herein prescribed shall be followed, as far as it can be made applicable, in all proceedings in any Court of civil jurisdiction other than suits and appeals". There was a conflict on the question whether the said section applied to proceedings in execution. To steer clear of the conflict the following Explanation was added to the section by the Civil Procedure Code Amendment Act 6 of, 1892 "Explanation: This section does not apply to applications for the execution of decrees which are proceedings in suits": But the section was construed by the Privy Council even without the said of the Explanation in Thakur Prasad vs Sheikh FakirUllah (1), wherein it observed : "It is not suggested that section 373 of the Civil Procedure Code (Order XXIII, r. I of the present Code) would of its own force apply to execution proceedings. The suggestion is that it is applied by force of section 647 (section 141 of the present Code). But the whole of Chapter XIX of the Code. consisting of 121 sections, is devoted to ' the procedure in executions, and it would be surprising if the framers of the Code had intended to apply another procedure, mostly unsuitable, by saying in general terms that procedure for suits should be followed as far as applicable. Their Lordships think that the proceedings spoken of in 8. 647 include original matters in the nature of suits such as (1) [1894] L.R. 22, 1. A. 44, 49. 516 proceedings in probates, guardianships, and so forth, and do not include executions. " This view has ever since been followed. We have already held that the application by the judgmentdebtor to get aside the sale is a proceeding in execution ' and, therefore, section 141 of the Code will not apply for two reasons, namely, (1) as execution proceedings were continuation of suit within the meaning of Order XXXII, r. 7 of the Code, and as the Code provided specifically for suits, section 141 could not be invoked; and 2) as we have held, an application by a judgment debtor to get aside a sale is a proceeding in execution and therefore section 141, which applies only to original proceedings, does not apply to such proceedings. In the result, the appeal fails and is dismissed with costs of the contesting respondent. By COURT. In accordance with the opinion of the majority the appeal is dismissed with costs of the contesting respondents.

IN-Abs

One B obtained a decree for money against the appellant and his father. The appellant was a minor and was represented by his maternal grandfather as his guardian. In execution certain properties were sold and the appellant filed an application for setting aside the sale through his guardian. The guardian entered into a compromise with the decree hold er and the auction purchaser under which the application was withdrawn. Subsequently the sale was confirmed. After at taining majority the appellant filed a suit for setting aside the order for withdrawal of the application for setting aside the sale and for a rehearing of that application on the ground that the guardian bad not obtained the leave of the court as required by O.32, r : 7 Code of Civil Procedure before entering into the compromise. Held, (per Suhba Rao and Mudholkar, jj., Sarkar, J. contra) the O.32, r.7 was not applicable to the withdrawal of the application for setting aside the sale and the order for withdrawal of that application was binding on the appellant, Order 32, r. 7 is applicable only to "an agreement or compromise with reference to the suit", and there are the following limitations to its applicability: (i) it is applicable only where the rights put in issue in the suit are involved and not to mere procedural steps; (ii) it is applicable only during the pendency of the suit which includes execution proceedings; and (iii) the agreement or compromise must be with a party to the suit. Though the application for setting aside the sale was an application in execution of the decree, the agreement or compromise entered into by the guardian with the auction purchaser to withdraw the application did not affect the rights and liabilities declared by the decree and therefore leave of the court under O.32, r.7 was not necessary. Section 141 of the Code 500 could not be utilised to, make O.32, r.7 applicable to the agreement in question. as section 141 was applicable to original proceedings and not to proceedings in execution. Virupakshappa vs Shidappa and basappa. 110, Arunachellam Chetty vs Ramanadhan Chetty, Mad. 309 Muthalakkammal vs Narappa Reddier, (1933) I.L.R. , Jitendra Nath Roy vs Samarendra Nath Mitter (1943) L.R. 70 I.A. 68, Katneni Venkatakrishnayya vs Garapati China Kanakayya, I.L.R. and Thakur Prasad vs Sheikh Fakir Ullah, (1894) L.R. 22 I.A. 44, referred to. Per Sarkar, J. The leave of the court under O.32, r. 7 was necessary before the guardian could enter into the agree ment or compromise to withdraw the application for setting aside the sale. There was no justification for limiting the operation of the rule in its application to execution proceedings only to compromises which directly affected the rights and liabilities under the decree; it was applicable to all compromises which brought a proceeding to an end thereby affecting the rights and liabilities of the minor, The compromise in the present case was not merely concerned with the conduct of proceedings but it seriously affected the liability of the appellant under the decree. Virupakshappa vs Shidappa, (1901)1.L.R. Rhodes vs Swithenbank, (1889) L. R. , Gurmallappa vs Mallappa, Bom. 574 and Katneni Venkatakrishnayya vs Ganapati China Kanakayya, (1938) I.L.R. Mad. 819, referred to.

Appeal No. 24 of 1960, Appeal from the judgment and decree dated August 1, 1957, of the Allahabad High Court in Special Appeal No. 249 of 1955. B. Sen, P. W. Sahasrabudhe and 1. N. Shroff, for the appellant. G. section Pathak and O. C. Mathur, for the respondents. April 30. The Judgment of Kapur, Ayyangar and Mudholkar, JJ., was delivered by Kapur, J. The Judgment of Sarkar and Das Gupta, JJ., was delivered by Das Gupta, J. KAPUR, J. This its an appeal against the Judgment and order of the High Court of Allahabad holding that the execution of the decree passed by the Additional District Judge, Gwalior, dated November 18, 1948, in favour of the appellant against the respondents was not executable at Allahabad. The appellant in this court is the decree holder and the respondents are the judgment debtors. For the decision of this appeal it is necessary to deal with the various Statutes, Orders and agreements as a result of which the erstwhile Indian State of Gwalior became a part of the territories of the Union of India governed by one Civil Procedural law. It will also be necessary to refer to the various changes in the law of civil procedure applicable at the various stages of the litigation leading to this appeal. We shall first deal with the integration of the Indian State of Gwalior with the Indian Union. 581 Upto August 15, 1947, i.e. before the independence of India under the Indian Independence Act (10 & 11 Geo, Ch. 30) Gwalior was what was termed under the Government of India Act of 1935 an Indian State and its Courts were 'foreign courts ' within section 2 (5) of the Indian Code of Civil Proce dure. After independence by section 7 (i) (b) of that Act the suzerainty of the British Crown lapsed and so also all treaties, agreements and obligation which had previously been entered into between the Rulers of Indian States and the British Crown. The second Question can conveniently be dealt with at a later and appropriate stage. By the Instrument of Accession which by August 15, 1947, (p. 36 of White Paper on Indian States) was entered into between the Ruler of the State of Gwalior and the Dominion of India certain subjects mentioned in the schedule to that Instru ment were transferred to the Dominion of India but Civil Procedure was not one of them. By a covenant signed in April 1948, the Rulers of Gwalior, Indore and certain other States in Central India formed the United State of Gwalior, Indore and Malwa which was termed United State (Madhya Bharat). By a fresh , Instrument of Accession executed on July 19, 1948, the United State acceded to the Dominion of India and when the Constitution came into force it became Madhya Bharata Part B State and was governed by the provi sions of the Constitution as applicable to such States. This then was the process of transformation of the Indian State of Gwalior into a part of the Republic of India. On May 15, 1947, the appellant instituted a suit in the Court of the District Judge, Gwalior, for recovery of Rs. 6,92,236.15 0 against the respondents, who are the sons and legal representatives of the late Munshi Ishwar Saran. The writs of summons were served on the respondents on 582 September 12, 1947, but they did not appear in the Court of the Additional District Judge who actually tried the suit. On, November 18, 1947, the trial Judge ordered suit to proceed ex parte and on November 18, 1948, the claim was decreed with costs and interest. On August 9, 1949, the appellant made an application to the Court of the Additional District Judge praying for transfer of the decree for execution to the Court of Civil Judge, Allahabad, where the properties of the father of the respondents were situate. On April 25, 1950, the Court passed the following order "I order transfer of this execution care. A certificate of transfer relating to non satis faction of decree be issued to the Civil Judge, 1st Class, Allahabad, for execution proceedings. This execution case be dismissed". On September 14, 1951, another order was made sending the decree for execution to the Court of the Civil Judge, 1st Grade, Allahabad. Along with it a copy of the order dated April 23, 1950, was also sent. The order was as follows "Order dated 14th September, 1951 for transfer of decree to another court for execution". Whereas in the above mentioned case the applicant submitted that the Judgment Debtor resided or held property within the local limits of the jurisdiction of the court of Civil Judge, ist Grade, Allahabad and prayed for the sending of a certificate to that court for execution of the said decree and it being considered necessary and proper, the said certificate be sent to that court under Order XXI, Rule VI. A copy of this order along with copies of decree, certificate of non payment of decretal 583 amount and other orders passed in connection with execution be forwarded directly to the court of the Civil Judge, 1st Grade, Allahabad. Dated 14th September 1951. Enclosures: 1. Certificate. Application of the decree holder 3. Copy of decree in the case. Copy of order, dated 25th April, 1950. B. K. Mehra. District & Sessions Judge District Gwalior, Madhya Bharat". The parties were not in accord as to which of these orders was the real order for transfer. It is unnecessary to resolve this controversy because we shall proceed on the assumption that the order of transfer was the later one which the appellant has relied upon i.e. of September 14, 1951. On October 16,1951, the appellant filed in the Court of Civil Judge, Allahabad, an Application for execution of the decree for realisation of the amount due under it which by then had amounted to Rs. 8,98, 7 7 0. This was registered as Execution Case No.47 of 1951 'rho respondents filed their objections under section 47 of the Code of Civil Procedure on February 8, 1952. They pleaded that the Gwalior Court was a Foreign Court, to the jurisdiction of which, they had not submitted and the decree was, therefore, an absolute nullity; that the decree was not in accordance with law and that the application for execution was not maintainable. By an order of the High Court under section 34 of the Civil Procedure Code, the execution case was transferred to the High Court and 584 registered as Extraordinary Miscellaneous Case No. 1 of 1954. The matter was beard by Brij Mohan Lal J., who bold that the decree was passed by a Foreign Court, to The jurisdiction of which, the respondents had not subsisted; that the decree was not binding on the respondents and could not be executed in the territories of Uttar Pradesh. The execution application was, therefore, dismissed. On appeal against that judgment the Appeal Court upheld the judgment of the learned Single Judge holding that the rule in Sirdar Gurdial Singh vs Maharaja of Faridkot (1) was applicable to the case; that Gwalior was a foreign State on the date of the decree and its status as a foreign State was ' not affected by the Indian Independence Act, 1947, the Standstill Agreement, 1947 the First Instrument of Accession 1947, the 1948 Covenant by which the United State of Madhya Bharat which included Gwalior was formed or the Second Instrument of Accession, 1948, an that Gwalior State ceased to be a foreign State only on the coming into force of the Constitution of India on January 26, 1950. It also held that the District Judge 's court passing the decree was a foreign Court at the time of the suit. As the appellant had not submitted to the jurisdiction of the Gwalior District Judges Court the decree passed by it was an absolute nullity;that even if the Gwalior law authorised the passing of such a decree, the decree was a nullity and it was not correct to Pay that as a result of the various constitutional changes, the impediment in the way of its execution was removed; that there was no provision of law by which a decree passed by the Gwalior Court could be executed in Uttar Pradesh; that article 261(3) of the Constitution was not retroactive and did not operate on the decree in question to make it executable; that section 43 of the Indian Civil procedure Code as it stood after the Amendment Act II of 1951 was inapplicable; that the right to resist the execution (1) (1894) L. R 21 I. A. 171. 585 of the decree on the ground that it was a nullity was not taken away by the political changes and, therefore, the judgment of the learned Single Judge was upheld. Against this judgment and Order the appellant has come in appeal to this Court on a certificate under article 133(i) (a) and (e) of the Constitution; The vital question for decision is whether the decree passed by the Gwalior Court on November 18, 1948, was executable in the State of Uttar Pradesh which, was at one time, a part of what was British India, Gwalior at the relevant time being a part of the United State aforesaid. For this purpose, the questions that arise are: 1. Was the decree a decree of a foreign court? 2. Could the Court at Gwalior order the transfer of the decree for execution in the Allahabad Civil Court? 3. If it could not, then was the decree executable at Allahabad under sections 43 & 44 of the Code of Civil Procedure? and 4. Could the respondents judgment debtors take an objection to the execution of the decree on the ground that it was an absolute nullity, being the decree of a foreign Court? We shall first enquire into the nationality of the decree passed in favour of the appellant which necessitates a determination of the Court passing the decree i.e, whether it was or was not a Court falling within section 2(5) of the Indian Code of Civil Procedure (Act V of 1909) which shall hereinafter be termed the 'Indian Code. At the.time when the suit was brought i. e. 586 May 15, 1947, the definition of "Foreign Court" in section 2(b) of the Indian Code was: ""Foreign Court" means a court situate beyond the limits of British India which has no authority in British India and is not established or, continued by the Central Government or the Crown representative. " As a result of the Adaptation Order of March 23, 1948, the definition was: " "Foreign Court" means a court situate beyond the limits of provinces which has no authority in the provinces and is not established or continued by the Central Government. " By the Adaptation Order of January 26, 1950, there was a further change in the definition of "Foreign Court" and it then stood as follows: ""Foreign Court" means a court situate beyond the limits of the States which has no authority in States and is not established or continued by the Central Government." After Act II of 1951 came into force on April 1, 1951 the section read as follows: "Foreign Court" means a court situate outside India and not established or continued by the authority of the Central Government. " At the time of the passing of the decree on November 18, 1948 the definition of the Foreign Court was as amended by the Adaptation order of March 23, 1948 i. e. a court situate beyond the limits of the provinces which means the provinces of what was British India and which had no authority in the provinces (of British India) and was not established or continued by the Central Government. The court at Gwalior fell 587 within this definition and therefore on a plain reading, of the definition it was a foreign court and a judgment passed by it would be a foreign judgment as defined in section 2(6) where the expression "foreign judgment" is defined as the judgment, of a foreign court. Under the Indian Code the judgment obtained by the appellant in Gwalior court would be governed by section 13 of that Code and its conclusiveness is governed by cl. (a) to cl. (f) of that section. The rules laid down in that section are rules of substantive law and not merely of procedure. It is to be noted that in the present case the respondents did not submit to the jurisdiction of the Gwalior Court. In Halsbury. 's Laws of England Vol. VII p. 144, paragraph 257 (3rd Ed. ) conditions necessary for giving jurisdiction to a foreign court are set out and at least one of them is required to be satisfied before a foreign judgment is regarded as having extra territorial validity. None of them was satisfied in the present case. Firstly the respondents were not the subjects of Gwalior; they did not owe any allegiance to the Ruler of Gwalior and therefore they were under no obligation to accept the judgments of the courts of that State. Secondly the were not residents in that State when the suit was instituted. Thirdly they were not temporarily present in that State when the process was served on them. Fourthly they did not in their character as plaintiffs in the foreign action themselves selected the for am where the judgment was given against them. Fifthly they did not voluntarily appear in that court. Sixthly they had not contracted to submit to the jurisdiction of the foreign court. The Gwalior Court therefore was not a court of competent jurisdiction. The judgment of Gwalior Court was therefore a nullity outside the United State (Madhya Bharat). See Gurdyal Singh vs Raja 588 of Faridkot (1). Lord Selborne there observed as follows: "Under these circumstances there was, in their Lordships ' opinion, nothing to take this case out of the general rule, that the plaintiff must one in the court to which the Defendant is subject at the time of suit ("Actor sequitor forum rai"); which is rightly stated by Sir Robert Phillimore (International Law, Vol. 4, section 891 to "lie at the root of all international, and of most domestic, jurispru dence on this matter". All jurisdiction is properly territorial and "extra territorium jus dicenti, imprime non paretur". Territorial jurisdiction attaches (with special exceptions) upon all persons either permanently or temporarily resident within th e territory while they are within it; but it does not follow them after they are living in another independent country. It exists always as to land within the territory and it may be exercised over moveables within the territory; and, in questions of status or succession governed by domicil, it may exist as to persons domiciled, or who when living were domiciled, within the territory. As between different provinces under one severeignty (e.g., under the Roman Empire) the legislation of the sovereign may distribute and regulate jurisdiction; but no territorial legislation can give jurisdiction which any foreign Court ought to recognise against foreigners, who owe allegiance or obedience to the power which so legislates". But it was submitted by the appellant that the Court at Gwalior ceased to be a foreign court because firstly as a consequence of the constitutional.documents executed by the Rulers of Indian States the 'United State (Madhya Bharat) (1) (1894) 1. R. , 423 589 become a part of the Dominion of India and therefore a decree passed by a court of the State could not be the decree of a foreign court; secondly as a result of the coming into force of the Constitution of India what was United State (of Madhya Bharat) became a Part B State of the Union of India and therefore a decree passed by the Gwalior Court even though a nullity in the erstwhile province of U. P. ceased to be so and took Indian nationality and thus became executable in the State of U. Thirdly it was submitted that the decree passed by the Gwalior Court was a valid decree in the United State (Madhya Bharat) and therefore was not an absolute nullity but there was in impediment to its executability which was removed as soon as the United State (Madhya Bharat) became a part of the Union of India and fourthly it was submitted that subsequent changes in the Indian Code consequent upon the promulgation of the Adaptation Order of January 26, 1950 under article 372 of that Constitution and subsequent amendment of the Order of June 5,1950, which became retrospectively operative from January 26, 1950 and by a subsequent Act [Civil Procedure Amendment Act (Act II of 1951] the Gwalior Court became competent to transfer its decrees for execution to the Court at Allahabad; and under the provisions of the Indian Code relating to execution amended from time to time the decree sought to be executed became executable by the Court at Allahabad. The first contention is unsustainable because the constitutional changes did not effect any change in the status or nationality of the Gwalior Court till after the passing of the decree of November 18, 1948 and there being no specific provision to the contrary those change left the decree unaffected. The United State (Madhya Bharat) had not become a part of the Dominion of India despite the various 590 constitutional documents executed by the Rulers of the Indian States. The effect of these Constitutional documents was examined and decided in Rao Shiv Bahadur Singh vs The State of Vindhya Pradesh(1); Virendra Singh vs The State of Uttar Pradesh(1) and Prem Nath Kaul vs The State of Jammu & Kashmir(3). In Rao Shiv Bahadur Singh 's case it was held that in spite of the Instrument of Accession by which all subjects enumerated in Lists I and III of Schedule VII of the Government of India Act 1935 were banded over to the Dominion Government and in spite of the Covenant by which the Rajpramukh had declared that the Constitution of India which was to be adopted by the Constituent Assembly of India shall be the Constitution for Vindhya Pradesh and specifically superseded and abrogated other constitutional provisions inconsistent therewith which were then in force in the State, those arrangements brought about an integrated United State of Vindhya Pradesh within the framework of the Dominion of India "but only by way of accession". In Virendra Singh 's case Bose J., observed as follows: ((Despite the readjustment, the sum total of the sovereignties; which had resided in each (ruler) before the covenant now resided in the whole and its component parts; none of it was lost to the Dominion of India". (P. 419) A somewhat similar view was taken by the Court of Appeal in Sayco vs Ameer Ruler Sadiq Mohammad of Bahawalpur where an objection was taken by the Ruler of Babawalpur State that he still retained his independent status and the State of Bahawalpur was not within His Majesty 's Dominion (1) [1953]1 S.C.R. 415,418,419. (2) [1959] Supp 2 S.C.R. 275. (3) , 394. 591 in spite of the Ruler of Babawalpur having acceded to the Dominion of Pakistan. At the relevant date i.e. on November 18, 1948, the various constitutional changes did not affect the position and status of the United States (Madhya Bharat) which comprised Gwalior also; it did not become a part of the Dominion of India but continued to retain its status. The United State (Madhya Bharat) was not comprised in the ', 'Territory of India" till after the Constitution came into force on January 26, 1950. This Court has hold that the Constitution is prospective and not retrospective: Janardhan Reddy vs The State of Hyderabad(1); Lachamandas Kewal Ram Ahuja vs The State of Bombay (2); [Keshavan Madhua Menon vs State of Bombay(,). Before the Constitution, Madhya Bharat was not a Part B State but became one as a consequence of the Constitution. Therefore the decree which was sought to be executed remained a decree of a foreign court as defined in section 2(5) of the Indian Code then applicable and its judgment had to be enforced in the manner that foreign judgments were enforceable i. e. either a suit had to be brought on the basis of that judgment or if there was a provision in the Indian Code it had to be executed in accordance with that provision; Mull 's C. P. C. p.96; Dicey, Conflict of Laws, Rule 162(7th Ed.). A Judgement which is governed by the rule in Sirdar Gurdyal Sing 's (4) case not being by a court of competent jurisdiction in the international sense i. e. according to the principles of International Law (Cheshire, Private International Law, p. 641, 6th Ed.) and the respondent not having submitted to its jurisdiction is a nullity outside the territory of the State in which the,court passing the decree is situate. In that case it was said: (1) ; , 368 (2) ; , 730. (3) (4) (1894) L.R. 21 I.A. 171. 592 "In a personal action to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign Court, to the jurisdiction of which the Defendant has not in any way submitted himself, is by inter national law an absolute nullity. He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the Courts of every nation except (when authorised by special local legislation) in the country of the forum by which it was pronounced". On the basis of such a decree therefore no action could be brought in what was British India the decree being of a Court in an Indian State. By el. 27 of the Adaptation of Laws Order made on January 26, 1950, the previous operation of or anything done or suffered under any existing law or any right, privilege, obligation or liability already acquired, accrued or incurred remains unaffected. This Order was subsequently amended on June 5, 1950 and el. 27 was numbered as 20 but there was no change in its language. Therefore by a change made in the definition of "foreign court ' or other changes introduced in the Indian Code the effect of and rights and liabilities under the decree sought to be executed, no fresh rights accrued to the appellant nor were any fresh liabilities incurred by the Respondents and if the decree was a nullity outside the United State (Madhya Bharat) it remained a nullity and Adaptation Order did not change its efficacy. The effect of Act II of 1951 by which the Indian Code was applied to Madhya Bharat was no different qua the rights and liabilities under previous Orders and decrees; see section 20 of that Act which will be more fully discussed later in this judgment. In this connection we may refer to the judgement of this Court in Kishori Lal vs Shanti 593 Devi(1). There, an order under section 488, Criminal Procedure Code, had been passed by a Magistrate at Lahore before the Partition of India and that was sought to be enforced under section 490 of the Criminal Procedure Code in a Magistrate 's Court at Delhi. An objection was raised that the order was enforceable as it was the order of a foreign court ' i. e. of a court which had subsequently become a Pakistan Court. This Court held that the order was of an Indian Court when made and was at the time of its enforcement in the Delhi Court still an order of a domestic tribunal. In the absence of any specific bar there was no reason why it should lose its Indian nationality simply because Lahore was no longer a part of India. Bose J., at p. 442 observed: "A number of enabling provisions were passed after the partition to meet certain special cases of this kind and of course, where there is specific legislation, effect must be given to it. But where, as here, there is nothing then in the absence of a specific bar we hold that an order which was good and competent when it was made and which was passed by a tribunal which was domestic at the date of its making and which could at that date, have been enforced in an Indian Court, does not lose its efficacy by reason of the partition". This no doubt is the reverse case of the present one but the principle laid down there that the effect of the judgment obtained before the constitutional changes does not change unless there is a specific provision to that. effect is applicable to this case also. Following the decision in Kishori lal 's(1) case Wanchoo J., (as he then was in Laxmi Chand vs Mst. Tipuri(2) held that the crucial date for determining the validity or enforceability of an order or a (1) A.I.R. 19S3 section C. 441. (2) J. L. R. 594 decree is the date when it was made. Therefore if a decree was unenforceable in a particular court at the time it was passed, it would not become enforceable and valid simply because of the political changes That took place unless there is a specific provision to the contrary. The Calcutta High Court in Shah Kanti Lal vs Dominion of India (1) held that there, is no retrospective effect of the Constitution including its definition of The words "Territory of India" which has the effect of converting what was a foreign judgment before the Constitution of India to a domestic judgment after the Constitution. The argument ' raised against the decree of the Gwalior Court being a nullity and not remaining so after the Constitution must therefore fail. The next argument raised was that the decree passed by the Court at Gwalior on November 18, 1948, was not a nullity as under the Madhya Bharat Code of Civil Procedure it was a valid decree and there was only an impediment to its executability which was removed as a consequence, of the constitutional changes and the subsequent amendments of the Indian Code. This argument is also not well founded. The decree was, in the international sense a nullity outside Madhya Bharat even though according to the law in that State it was not so. We have all ready held that the decree was foreign when it was born in Gwalior and it continued to be so as there was no process or procedure for its becoming, a naturalised Indian decree. The decree being a nullity outside the courts of the United State (Madhya Bharat), in the absence of any specific provision, it could not be enforced in the United State (.Madhya Bharat). It will not be correct to say that the decree which was a nullity before the Constitution came into force suffered Only from the defect of enforcibility by execution Section 13 creates substantive rights and is not merely (1) A.I.R. 944 Cal. 595 procedural and therefore defenses which were open to the Respondents were not taken away by any constitutional changes in the absence of a specific provision to the contrary. It is erroneous to say therefore that the decree of the Gwalior Court was unenforceable when passed because of some impediment which the subsequent constitutional changes had removed; but that decree suffered from a. more fundamental defect of being a nullity and the rights and liabilities created under it remained unaffected by subsequent changes. That, in our opinion, is the effect of the judgment of this Court in Kishori Lal 's case(1). See also E. Radhesham Roshan Lal vs Kundanlal Mohanlal") where it was held that the right of the judgment debtor to plead that the decree is a nullity, is not a procedural matter but is a vested right in the judgment debtor and it cannot be taken away by the provision of law which is not retrospective. The Nagpur High Court in Ram Kishan Jankilal vs Seth Harmukharai Lachmi Narayan(3) also held that a decree by the Indore High Court prior to the constitution was of a court without jurisdiction and merely because Indore became a part of the "Territory of India" after the Constitution did not retrospectively clothe the court at Indore with jurisdiction in order to make the decree which was a nullity, into a valid decree. It was next argued that as a result of subsequent changes in the provisions of the Indian Code result from constitutional changes in the country, and amendments in the Indian Code the decrees of the Courts in Madhya Bharat became executable under the provisions of the Indian Code and the Gwalior Court could therefore transfer the decree for execution to the Court at Allahabad. We shall therefore discuss the power of the Court at Gwalior to make the order 'of transfer dated September 14, 1951, assuming without decid (1) A.I.R. (1953) S.C. 441. (2) I.L.R. 1956 Punj. (3) A.I.R. 1955 Nag. 103, 596 ing that order which the appellant relies upon Was a judicial orders of transfer. At the time when 'the suit was filed i. e. May 15, 1947, the law relating to civil procedure applicable to Gwalior State was the Gwalior Civil Procedure Code (Gwalior Act 1 of Samvat 1966 i. e. 1909). The relevant provisions of that Code dealing with transfer of decrees were se. 227 and 229 the former corresponding to section 38 of the Indian Code of Civil Procedure and the latter to section 39 of that Code. Sub section (2) of section 229 corresponds to section 41. of the Indian Code of Civil Procedure. By the (Madhya Bbarat) Indian Civil Procedure Adaptation Act (Madhya Bharat) Act 70 of Samvat 2006 or 1949 the Indian Code was adapted in Madhya Bharat (and this adapted Code will here inafter be referred to an the Madhya Bharat Code). It was to come into force on January 23, 1950, i. e.15 days after its publication in the Gazette. By a. 3 the Indian Code was adapted, and it mutatis mutandis came into force in Madhya Bharat. It was also provided therein that whatever and whenever amendments would be made in the said Indian Code they would be applicable to Madhya Bharat with necessary alterations. By section 4 of Madhya Bharat Code above mentioned the previous Codes in force in the various States comprising Madhya Bharat were repealed and it was provided inter alia that all decrees passed and judgments given in accordance with the repealed Code as well as other acts done thereunder would have the same force as if they were issued or made by a competent authority under the Madhya Bharat Code. Thus on January 23, 1950, the Indian Code with necessary amendments and adaptations was made applicable to the State of Madhya Bharat but this was under the orders of the legislative authority of Madhya Bharat, which could only legislate for and in the territories of that State. As we have already said on January 26, 1950, the adaptation of Laws 597 Order was promulgated under article 372 of the Constitution of India by the President of India. Under that Order existing laws Were adapted as mentioned in the Schedule to the Order. Clause 27 of that Order provided that "Nothing in this Order shall affect the previous operation of, or anything duly done or suffered under any existing law or any right, privilege, obligation or liability already acquired, accrued or incurred under any such law, or any penalty, forfeiture or punishment incurred in respect of any offence already committed against any such law". As a result of this adaptation, certain changes were made in the Indian Code. But it did not affect any act already done or any liability already incurred. Thus it left the operation of decrees previously passed unaffected. On June 5, 1950, the President promulgated the adaptation of Laws (Amendment) Order, 1950, but gave it a retrospective effect, so that it was deemed to have come into force on January 26, 1950. Under the amended Adaptation order certain changes Were made in the Indian Code which will be discussed later in this judgment. But it did not affect the operation of cl. 27 above set out, Under the adaptation of Laws (Third Amendment) Order of April 4, 1951, cl. 27 was renumbered as el. 20. The Indian Code was amended by the Code of Civil Procedure (Amendment) Act, 195 1, (II of 195 1) which came into force on April 1, 1951. By that Act, the Indian Code was extended to the whole of India excepting certain territories mentioned in section 2 which are not relevant for the purpose of this appeal. Thus it became applicable to Madhya Bharat which was then a Part B State and consequently it became operative in what at one time was the Indian State Section 20 of this Act provided for of Gwalior. repeals and savings. That section runs as follows: 598 section 20 (1) "Repeals and Savings. If, immediately before the date on which the said Code comes into force in any Part B State, corresponding to the said Code, that law shallon that date stand repealed: Provided that the repeal shall not affect (a) the previous operation of any law so repealed or anything duty done or suffered thereunder, or (b) any right, privilege, obligation or liability accrued or incurred under any law so repealed, or (e) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty forfeiture or punishment as aforesaid and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if this Act had not been passed. (2) Subject to the provisions contained in subsection (1) notifications publisbed, declaration and rules made, places appointed, agreements filed, scales prescribed, forms framed, appointments made and powers concerned under any enactment hereby repealed shall, so far as they, are consistent with the said Code, have the same force and effect as if they had been respectively published, made, appointed, filed prescribed, framed and conferred under the said Code and by the authority empowered thereby in such behalf. 599 (3) In every law or notification passed or issued before the commencement of this Act in which reference is made to or any Chapter or section of any law hereby repealed, such reference shall so far as may be practicable be taken to be made to the said Code or its corresponding Part, Order, section or rule. " On the coming into force of Act II of 1951 aforesaid the rights that were acquired or accrued under the decree passed previously remained unimpaired and unaffected by the repeal and all rights and privileges acquired or accrued under the decree continued as before so also all liabilities or obligations incurred thereunder. And all such rights and privileges were enforceable as if the Act had not been passed. Therefore the decree of the Gwalior Court dated November 11, 1948 continued to be enforceable as decree under the Madhya Bharat Code. As we have said before we shall assume for the purposes of this appeal that the order of transfer by the Court at Gwalior was the one passed on September 14, 1951. By then by the operation of Act II of 1951 there was one Civil Procedure Code for what was Gwalior and U. P. and indeed for the whole of India. The question then is, was the order dated September 14, 1951, transferring the decree for execution to the Civil Judge, Allahabad an effective order to which sections 38 and 39 of the Indian Code applied and could the decree so transferred be executed by the execution Court at Allahabad ? It was contended on behalf of the appellant that it could be executed as it was a decree which fell within sections 38 and 39 of the Indian Code, which the Gwalior Court had the power to transfer and 600 which the Allahabad Court had under the law the authority to execute. We think it is not so. The main provisions for execution of decrees are contained in Part II "Execution" in the Indian Code and minor rules are contained in Order 21. Of these provisions sections 36 to 42 deal with Courts which can execute decrees, can transfer decrees and the power of executing Courts in regard to transferred decrees. The present sections 43 to 45 deal with execution ' of decrees passed by Civil Courts in place to which the Indian Code does not extend execution of decrees passed by revenue courts, by the courts in the United Kingdom and other reciprocating territory and execution of decrees in foreign territories. Section 38 of the Indian Code provides that a decree may be executed by the Court which passed it or by the court to which it is sent for execution. Court which passed a decree is defined in section 37 and section 39 provides for the transfer of decrees for execution. It reads 39 (1) 'The court which passed a decree may, on the application of the decree holder send it for execution to another Court". Section 40 of the Indian Code provides for the transfer of a decree to a court in another State where it has to be executed in such manner as may be prescribed by Rules in force in that state and section 42 lays down the powers of the Court in executing transferred decree. It provides that the power of the Court in executing decrees shall be the same as if it had been passed by itself. These are the relevant provisions which deal with the transfer to and execution of decrees in other courts and to courts of another State and powers of such courts in execution and the procedure to by followed by them. The jurisdiction of the Allahabad Court to execute the decree sent to it by the Gwalior Court can be examined from two angles : (1) Was the court at Gwalior a court which could under section 39 of the Indian Code transfer its decree to the Allahabad Court for execution; and (2) was the decree sent for execution a decree which a court governed by the Indian Code as was the Allahabad Court, such that it could be executed by the transferee court. We are unable to see how the Gwalior Court could send under section 39 decrees which it had passed when it was not governed by the Indian Code. It is fallacious to think that the court at Gwalior governed by the Indian Code was identical with the court which was governed by another Code. In our opinion, the Gwalior Court which made the order of transfer of September 1951 when it was governed by the Indian Code was a different court from what it was at the time it passed a decree when functioning under a different Code of Civil Procedure. The Court which made the order of transfer in September, 1951 was thus not the court which passed the decree within the meaning of section 39. The decrees in the sections dealing with execution of decrees i.e. sections 37 to 42 are decrees which were passed by courts governed by the Indian Civil Procedure Code because those sections relate to decrees passed in suit under the provisions of that Code. The preamble to the Indian Civil Procedure Code is "whereas it is expedient to consolidate and amend the laws relating to the procedure of the Courts of Civil Judicature." Under section 1 (3) as it exists now the Code extends to the whole of India except 'certain Tribal Areas etc. Previous to the Amendment Act 11 of 1951 above referred to, section 1 (3) of the Indian Civil Procedure Code reads as under: 602 section 1 (3) "This section and sections 155 to 158 extend to the whole of India except Part B States; the rest of the Code extends to the whole of India except Part B States and the Scheduled Districts". Therefore the Indian Code was not then applicable to those States which became Part B States as a result of the Constitution of India. " Decree" in the Indian Code is defined to mean the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any matters in controversy in the suit. . It means, therefore, that a decree which is to be executed under the Indian Code by a transferee Court is a decree passed in a suit i.e., in civil proceeding which is instituted by the presentation of a plaint under section 25 of the Code. Therefore 'the decree which is referred to in Part II dealing with execution i.e. sections 37 to 42 in a decree which is passed in a suit commenced in the manner provided in the Indian Code, is conducted and decided under the provisions of the Indian Code, and there is nothing in Act 11 of 1951 above referred to which has changed that position. Reference was made by counsel for the appellant to sub section (2) of section 30 of Act 11 of 1951 but that section does not apply to judgments and decrees passed but applies to the other matters therein mentioned e.g., notifications, declarations, rules and appointments etc. It has no reference to decrees passed or Orders made under the local Codes of Civil Procedure. That section therefore is not of any assistance to the appellant. Whatever rights or privileges the appellant bad acquired or whatever rights or privileges bad accrued to him were continued and it cannot be said that the decree passed under the Madhya Bharat Code became a decree 603 under the Indian Code by virtue of a 20 of Act 11 of 1951. On the other hand by cls. (b) and (c) of sub section (1) of that section the decree continued to be decree governed by the Madhya Bharat Code and executable under it. The Gwalior Court therefore had no power under as 38 and 39 to transfer the decree of November 18, 1948, and consequently the Allahabad Court acquired no power to execute it. It was next contended that if the Court at Gwalior that passed the decree had no power under as. 38 to 42 of the Indian Code to transfer the decree for execution and the Court at Allahabad was not empowered to execute that decree then the decree could be executed under the provisions of as 43 and 44 of the Indian Code. Of course the decree was not sought to be executed under either of these two provisions. But we shall examine these sections of the Indian Code as applicable to the Courts at Allahabad at the relevant time. Prior to the Indian Independence (Adaptation of Central Acts and Ordinance) Order of 1948 promulgated on March 23, 1948, which will hereinafter be termed the Adaptation Order 1948, the relevant portion of section 43 was as follows: Execution of decrees passed by British Courts or in places to which this part does not extend or in foreign territory. Any decree passed by a Civil Court established in any part of British India to which the provisions relating to execution do not extend or by any Court established or continued by the authority of the Central Government or the Crown Representative in the territories of any foreign Prince or State, may, if it cannot be executed within the jurisdiction of the court by which it passed. 604 executed in manner herein Provided within the jurisdiction of any court in British India" After the Adaptation Order 1948 the provisions essentially remained the same and there was only a change in nomenclature. Instead of British India the expression ,the provinces of India" and in place of "territories of any Foreign Prince or State" "in any Indian State" were substituted. After the coming into force of the Constitution Adaptation of Laws Order of January 6. 1950 was promulgated. There again the change in section 43 was nominal and in place of "Province of India" the word "State" was substituted. Thus there was no change which is material for the present 'appeal till the Adaptation of Laws (Amendment) Order dated June 5, 1950, which had retrospective effect as from January 25, 1950 and section 43 was amended as follows " 'Execution of decrees passed by Civil Courts in Part B States, in places to which this Part does not extend or in foreign territory. Any decree passed: (a) by a Civil Court in a Part B State, or (b) by a Civil Court in any area within a Part C State or Part B State to which the provisions relating to execution do not extend, or (c) by a Court established or continued by the authority of the Central Government outside India, may, if it cannot be executed within the jurisdiction of the Court by which it ,was passed, be executed in a manner herein provided within the jurisdiction of any court in the States. 605 By the operation of Act 11 of 1951, section 43 was further amended and it then read as follows Execution of decrees passed by Civil, Courts in places to which this Cock does not extend. Any decree passed by any Civil Court, established in any part of India to which the provisions of this Code do not extend, or by any Court established or continued by the authority of the Central Government outside India, may, if it cannot be executed within the jurisdiction of the Court by which it was passed, be executed in the manner herein provided within the jurisdiction of any Court in the territories to which this Code, extends". Thus after the Constitution came into force by virtue of the Adaptation Order, a decree which was passed by a Civil Court in a Part B State could be executed in the manner provided, within the jurisdiction of any Court in what were the States of India i. e. Part A, B & C States. It was submitted on behalf of the appellant that the words in section 43 of the Code as adapted by the Adaptation Order of June 5, 1950, "Any decree passed by a Civil Court in a Part B State" must be read as "a Civil Court in what became a Part B State". We are unable to accept, this contention. This would mean that the Constitution is retrospective. But it has been held by this Court that the Constitution is prospective. Madhya Bharat, before the Constitution of India i. e. before January 26, 1930, was not a Part B State. It became one as a consequence of the Constitution. As a matter of fact there were no Part B States, before the Constitution. Therefore a decree passed 606 before the Constitution by a Civil Court in Madhya Bharat cannot be considered as a decree by a Civil Court in a Part B State. After the Indian Code came into force in Part B States as a result of Act 11 of 1951 under section 43 only those decrees could be executed which were passed by Civil Courts established in Parts of India to which the provisions of the Civil Procedure Code "do not extend" or by Courts estab lished or continued by the authority of the Central Government outside India, and in none of these categories does the decree passed by the Gwalior Court after the establishment of Madhya Bharat fall. It was not a decree passed by a Court in a part of India to which the Indian. , Code "does not extend". Those areas were set out in section 1 (3) of the Indian Code. Therefore, under the provisions of section 43 of the Indian Code of Civil Procedure the decree could not be executed. We shall not take section 44 of the Code: S.44 "Execution of decrees passed by Courts of Indian States. The Provincial Government may, by notification in the Official Gazette declare that the decrees of any Civil or Revenue Courts in any Indian State not being Courts established or continued by the authority of the Central Government or of the Crown Representative, or any class of such decrees, may be executed in the Province as if they had been passed by Courts of British India. By the Adaptation Order of 1948 in place of the words "British India" "that Province" were substituted. By the Adaptation Order of January 26 1950, the section read as follows: 607 Execution of decrees passed by Courts of Part B States. The State Government may by notification in the Official Gazette declare that the decrees of any Civil or Revenue Courts in any Part B State, or any class of such decrees, may be executed in the State as if they had been passed by Courts of that State". This section was again amended by the Adaptation Order of June 6, 1950, which gave it retrospective effect as from January 26, 1950. It then read as follows: Execution of decrees passed by Revenue Court Part B States. The Government of a Part A State or Part C State may by notification in the Official Gazette, declare that the decree of any Revenue Courts in any Part B State or any class of such decrees may be executed in the Part A State or Part C State, as the case may be, as if they had been passed by Courts of that State". Finally after Act 11 of 1951 which came into force on April 1, 1951, section 44 is as follows: Execution of decrees passed by Revenue Courts in places to which this Code does not extend. The State Government may, by notification in the Official Gazette, declare that the decrees of any Revenue Court in any part of India to which the provisions of this Code do not ext end or any class of such decrees may be executed in the State as if they had been passed by courts in that State". At the time when the decree was sought to be executed in the, Execution Court at Allahabad, section 44 of the Code was what was 608 substituted by Act 11 of 1951 and that certainly could Dot be availed of by the appellant as it bad no application to decrees of Civil Courts and the argument in regard to decrees of Part B States is the same as in the case of a. 43 of the Code which has been discussed above. It was next argued that in construing the words "the decree of a civil court in a Part B State" we should have regard to the fact that at the time section 43 was amended in this manner section 44 was also amended in such a way that it was no longer possible for a State Government to issue a notification as it could have done but for such amendment declaring that the decrees of civil courts in an Indian State might be executed in the State as if they have been passed in the courts of that State. It is said that this took away the whatever chance a decree made by an Indian State had of being made executable in other parts of India. So, it is argued we should interpret the words "the decree of a civil court in a Part B State", to include decrees made by a civil court in what later became Part B State at a time when it was an Indian State. It could 'not, it is urged, have been the intention of the legislature in making the amendment of June 3, 1950 to totally destroy this chance of executability which was possible under the law as it stood before. We do not think this is a relevant consideration. If the legislature bad intended to save this chance of executability under a possible future notification it could have easily made the necessary provision. It has to be remembered that the right of executability which had attached to a decree on the basis of a notification already made would continue after the date of amendment. Only, if the law had not been changed as it was by the amendment on June 3, 1950, there would have existed a chance that the decrees of courts of Indian 609 States in respect of which no notification had been made under section 44 could have become executable by a notification made in future thereunder. The power to make such a notification in respect of decrees of civil courts in Indian States was however deliberately taken away and it is useless and irrelevant to worry about the resultant loss of chance of executability by a possible future notification that might have existed under the old law. It was finally contended that by virtue of article 261, the decree passed by the Gwalior Court was executable. The first clause of article 261 provides for full faith and credit to be given throughout the territory of India to judicial proceedings of the Union and of every State. Clause 3 of article 261 was as follows: "Final judgments or orders delivered or passed by Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory according to law". The first matter to be considered in regard to article 261 is that the Constitution is prospective and not retrospective and it applies to decrees which were passed after the coming into force of the Constitution and not before and, therefore, neither clause 1 nor clause 3 can have any application to the decree sought to be executed. In our opinion, therefore, the decree of the Gwalior Court sought to be executed was A, decree of a foreign court which did not change its nationality in spite of subsequent constitutional changes or amendments in the Code. The Gwalior Court could not transfer the decree for execution to the Court at Allahabad under sections 38 and 39 nor could 610 the Court of Allahabad execute the decree without Such transfer. The provisions of sections 43 and 44 of the Code also were not applicable in this case. For these reasons the appeal fails, and is dismissed with costs. DAS GUPTA, J. This appeal is by a decreeholder whose application for execution of the decree has been unsuccessful. The decree was passed on November 18, 1948, by the Court of the District Judge, Gwalior, in Gwalior State. It was ex parte, the defendants the respondents in the present appeal who are residents the United Provinces, now Uttar Pradesh, not having appeared in the Gwalior Court. On August 9, 1949, the decree holder applied to the Gwalior Court for transferring the decree to the Court of the Civil Judge, Allahabad, for execution. On April 25, 1950, the Gwalior Court passed an order for transfer of the decree for the execution to the Civil Judge, First Grade, Allahabad. It needs to be mentioned that on the date when the suit was instituted, i.e., May 15, 1947; the date on which the decree was passed, November 18, 1948; the date on which the application was made for transferring the decree, August 9, 1949; as also the date April 25, 1950, when the order for transferring the decree was made by the Gwalior Court, the Code, of Civil Procedure which is in force in India did not apply to the Gwalior Court. For, even though the Gwalior State had acceded to the Dominion of India by an Instrument of Accession by the under of the State made on August 15, 1947, arid after that the United State (Madhya Bharat) of which Gwalior became a part by a covenant signed in April 1948, acceded to the Dominion of India on July 19, 1948, by a fresh Instrument of Accession and after the Constitution of India came into force this United States (Madhya 611 Bharat) became part of the territory of India as Madhya Bharat being a Part B State, the Indian Code of Civil Procedure did not become applicable to the Courts in Gwalior till after the enactment of Act 11 of 1951 which came into force on April 1, 1951. From this date the Indian C de of Civil Procedure became applicable to the Courts of Gwalior also. We have already mentioned that On April 25, 1950, an order for transfer of the decree had been made by the Gwalior Court. The further action which has to be taken under 0. 21 r. 6 of the Indian Code, of Civil Procedure by the court sending a decree for execution was not however taken till September 14, 1951. On that date an order was made by the Gwalior Court certifying that the amount of the decree had "not been paid or realised by execution" and ordering that the certificate be sent to the Civil Judge ' First Grade, Allahabad under O. 41 r. 6. This order closed with the sentence "a copy of this order along with copies of decree passed in connection with the execution be forwarded directly to the court of the Civil Judge, First Grade, Allahabad. " The application for execution was made in the Court at the Civil Judge at Allahabad on October 16, 1951. To this application the judgment debtor raised objections under section 47 of the Code of Civil Procedure. This application was ultimately heard by a single Judge of the High Court of Allahabad who dismissed the application being of opinion that the decree obtained by the appellant was a nullity and on that ground in executable at Allahabad. This view was upheld by the same High Court on appeal. Three questions have been raised in this appeal. The first is: whether vis a vis the Allahabad Court the decreed sought to be executed was a 612 foreign decree which the Allahabad Court rightly considered to be a nullity and on that account inexecutable in Allahabad Courts. The second question raised before us is whether, even assuming. that this was not a foreign decree the Allahabad Court was a Court to which it could be sent for execution within the meaning of section 37 and 38 of the Indian Code of Civil Procedure. The third question is whether a. 43 or section 44 of the Code of Civil Procedure made the decree executable in the Allahabad Courts. It is unnecessary in our judgment to investigate the first question. The objection raised on the nullity of the decree could be raised only in the Allahabad Court where the decree was sought to be executed. But before that question would arise the Allahabad Court must have power to execute the decree either oil transfer of the decree to it under section 38 or under the provisions of section 43 or s.44 of the Code. For reasons to be presently stated, we do not think that there could be valid transfer of the decree to the Allahabad Court or that it had any power to execute the decree under section 43 or s.44. bat is why we think that, the question bow far the decree was a nullity does not fall for our decision in this case. With other modes of enforcement of a foreign decree this case has no concern. In solving the problems raised by the second and the third questions it is necessary first to have an idea of the scheme, of the Indian Code of Civil Procedure as regards what courts in India can execute decrees. We find in Part II of the Civil Procedure Code which relates to the execution of decrees, only three sections dealing with this matter. They are sections 38, 43 and 44. Sections 38 provides that a decree may be executed either by the Court which passed it, or by the Court to which it is sent 613 for execution. Section 43 as it stands at present provides that: "Any decree passed by any civil court established in any part of India to which the provisions of this Code do not extend, or by any court established or continued by the authority of the Central Government outside India, may, if it cannot be executed within the jurisdiction of the Court by which it was passed be executed in the manner herein provided within the jurisdiction of any court in the territories to which this Code extends. " We shall have later to refer to the several changes which section 43 has undergone between the time the decree was made and the present day. Section 44 provides that "the State Government may, by notification in the Official Gazette, declare that the decrees of any revenue court in any part of India to which the provisions of this Code do not extend, or any class of such decrees, may be executed in the State as if they had been passed by courts in that State. " This section has also undergone some change during the relevant period. To this change we shall later refer. Let us first examine whether the Allahabad Court where the decree holder is seeking to execute the decree is a court by which the decree can be executed under section 38. Obviously, it is not the Court which passed the decree. The controversy is whether it is a Court to which the decree was sent for execution. The provisions for sending a decree for execution to another Court by the Court which passed the decree are contained in section 39 of the Code of Civil procedure. According to the decree holder the decree was sent by the Gwalior Court to the Allahabad Court by its order dated September 14, 1951. The Judgment debtors ' contention on the other hand is that the only 114 order of transfer was that of April 25, 1950. If the judgment debtors ' contention is correct it would follow that there was no order for transfer under section 39, as on that date the Gwalior Court was not governed by the Indian Code of Civil Procedure. Learned Counsel for the decree holder appellant has contended that the directions that were given on September 14, 1951, really amounted to an order for transfer under section 39. According to the learned Counsel the Indian Courts should ignore the order of April 25 1950, as non existent, so that it was open to the Gwalior Court to make a fresh order in the matter on September 14, 1951, when it was governed by the Indian Code of Civil Procedure. Therefore, it is argued, though it might be true to say that if the order of April 25, 1950, had been made under the Indian Code of Civil Procedure, what was ordered on September 14 1951; was merely a direction under O 21 r. 6 of the Civil Procedure Code for the ministerial carrying out of the order under section 39 already made, that is, not the position here as the first order of April 25, 1950, was admittedly not under the Indian Code of Civil Procedure. The matter is by no means free from difficulty; but let us assume that this order of September 14, 1951, was the order by which the Gwalior Court then governed by the Indian Code of Civil Procedure, purported to transfer the decree to the Allahabad Court for execution. The question still remains. Was it an order within the meaning of a. 39 of the Code of Civil Procedure? The answer to this question depends on weather the Gwalior Court which was functioning on September 14, 1951, was "the Court which passed the decree." Under the Indian Code of Civil Procedure the right to execute a decree arises as soon as a decree is made. Immediately on the making of the decree the Court which passed the decree has jurisdiction 615 to execute it and at that very point of time that very Court has the jurisdiction to transfer it to another court governed by the Indian Code of Civil procedure for execution. It is reasonable to think that in speaking of " 'courts" in the phrase, "courts which passed the decree" section 37, as well as section 39 contemplate only courts governed by the Indian Code of Civil Procedure. For, it is with the procedure of such courts only that this Code is concerned. On the date the present decree was made the Indian Code of Civil Procedure did not apply to the Gwalior Court. In other words, it was not a ""court" for the purposes of the Indian Code of Civil Procedure. Later on, it is true, from April 1951, the Indian Code of Civil procedure became applicable to the Gwalior Court. It will be proper, in our opinion, to think that the court when governed by the Gwalior Code of Civil Procedure had a distinct identity from the court at Gwalior after it came to be governed by the Indian Code of Civil Procedure. The Court which made the order of transfer in September 14, 1961 was therefore not ",the Court which passed the decree" within the meaning of section 39. It is clear therefore that the Allahabad Court had no power to execute the decree under section 38 of the Civil Pro cedure Code as there was no valid transfer to it from the "court which passed the decree. " It remains to consider whether section 43 or section 44 are of any assistance to the decree holder. Coming to section 44 first, it has to be mentioned that upto March 23, 1948 the section ran thus : "The Provincial Government may by notification in the Official Gazette declare that the decree ' of any Civil or Revenue Courts in any Indian State, not being courts established or continued by the authority of the Central Government or of the Crown Representative, or any class of such decrees, may be executed in the Province as if they had been 616 by courts of British India. " The section was materially amended on June 3, 1960 with retrospective effect from January 26, 1950. On amendment the section ran thus : "The Government of a Part A State or Part B States may, by notification in the Official Gazette declare that the decrees of any Revenue Court in any Part B State or any class of such decrees may be executed in the Part A State or Part C State, as the case may be, as if they had been passed by courts, of that State. " It is obvious that the decree holder can get no benefit from section 44 after this amendment. If however there had been a notification by the U. P. Government under section 44 as it originally stood in respect of decrees of Civil Courts in Gwalior State the present decree would have been executable in Allahabad Courts on January 26, 1950, and that right of executability would have continued upto the present time. There was however no such notification. It is clear therefore that section 44 is of no assistance to the decreeholder. It is equally clear that section 43 is also no assistance to him. Section 43 as it originally stood was in these words : " 'Any decree passed by any civil court established in any part of British India to which. the provisions relating to execution do not extend, or by any court established or continued by the authority of the Central Government or the Crown Representative in the territories of any foreign prince or State outside India, may if it cannot be executed within the, jurisdiction of the Court by which it was passed, be executed in the manner herein provided within the jurisdiction of any court in British India. " The decree of Gwalior Court did not fall within this. The section was amended after March 23, 617 1948, and for the words "in any part of British India" the words "in any area within the provinces of India" were substituted. This change could not 'however bring the decree of a Gwalior State within the section. The next change, which it is necessary to mention was made by the amendment of June 3, 1950, with retrospective effect from January 26, 1950. On this amendment section 43 ran thus , "Any decree passed, (a) by a Civil Court in a part B State or (b) by a civil court in any area within a part A State or part C State to which the provisions relating to execution do not extend, or (c) by a court established or continued by the authority of the Central Government out side India, may, if it cannot be executed within the jurisdiction of the Court by which it was passed, be executed in a manner provided within the jurisdiction of any court in the States. " It has been strenuously contended on behalf of the decree holder that the decree passed by the Gwalior Court on November 18, 1948, is a decree passed by a civil court in a Part B State. It is true that Gwalior became Part of a Part B State from January 26, 1950, and civil courts in Gwalior were from that date civil courts in any Part B State. Every decree made by a court in Gwalior after January 26, 1958, would get the benefit then of section 43 as amended. We are unable to see however how the decree passed by a civil court in Gwalior before that date could get any such benefit. The agreement of the appellant 's council that a decree passed by a civil court in Gwalior before Gwalior become included in a Part B State is a decree passed by a 618 civil court in a Part B State really asks us to construe the words ",by a civil court in a part B State" as by a "civil court in an Indian State which has later become included in a Part B State." For such a construction we cannot see any justification. It was urged by the learned Counsel that it could not have been the intention of the legislature to make any radical departure in the scheme of making decrees of courts of Indian States executable in as courts in Indian provinces. It is pointed out that under section 44 as it originally stood such a decree would have become executable in the courts of the provinces if the Provincial Government made the necessary notification under section 44. The position was safe when there was such a notification. But, even when there was no such notification there was always the probability of such a notification being made. That probability disappeared with the amendment of section 44 on June 3, 1950. It is reasonable to think, argues the learned Counsel, that when at the same time section 44 was thus being amended the legislature used the words: "any decree passed by a civil court in a Part B State ', ' its intention was to include within those words "decrees made by a civil court in an Indian State which later become a Part B State," In our opinion, the words actually used by the legislature do not admit of such an interpretation. If it was the legislature 's intention to preserve for the decrees of the Indian States this chance of executability it could have easily made the necessary provision by using suitable phraseology either in section 43 or section 44. On a proper construction of the words that were actually used, viz., "any decree passed by a civil court in a part B State", we see no reason to think that the legislature intended to use to mean ,,decrees made by a civil court in an Indian State, which later became a Part B State" Section 43 619 therefore as it stood after the amendment of June 3, 1951 is of no assistance to the decree holder. Section 43 was further amended by Act 11 of 1951 and the words as they stand at present have already been set out. The appellant rightly does not contend that section 43 as it now stands applies to the present decrees. Our conclusion therefore is that the Allahabad Court had no power to execute the decree either under sections 38 or under sections 43 or 44 of the Code of Civil Procedure. Therefore, even if the decree was not a foreign decree, the decree holder 's application for execution was rightly dismissed. The appeal is accordingly dismissed with costs. Appeal dismissed.

IN-Abs

The appellant instituted a suit for the recovery of money against the respondents in a Court in Gwalior State in May 1947. The respondents who were residents in U. P. did not appear before the court and in November 1948 the Gwalior Court passed an ex partc decree. On September 14, 1951, the Gwalior Court transferred the decree for execution to Allahabad, and on October 16, 1951, the appellant filed an application for execution of the decree before the Allahabad Court. The respondents contended that the decree being a decree of a Foreign Court to whose jurisdiction they had not submitted was a nullity and the execution application in respect thereof was not maintainable. Held, that the decree was not executable at Allahabad. Per Kapur, Ayyangar and Mudholkar, JJ.The decree of the Court in Gwalior State sought to be executed was a foreign decree which not change its nationality inspite of subsequent constitutional changes or amendments in the Code of Civil Procedure. On the day on which it passed the decree the Gwalior Court was a foreign Court within the meaning of section 2 (5) of the Code. None of the conditions necessary to give its judgment extra territorial validity existed (i) the respondents were not the subjects of Gwalior; (ii) they were not residents in Gwalior at the time the suit was filed, (iii) they were not temporarily present in gwalior when the process was served upon them, (iv) they did not select the forum which passed the decree against them, (v) they did not voluntarily appear before the court, and (vi) they had not contracted to submit to the jurisdiction of the 579 by the Indian Code, was a different court from that which passed the decree under the Local Code, and was not the court. which passed the decree within the meaning of section 39. Sections 37 to 42 of the Code deal with execution of decree., passed by the courts governed by the Indian Code. The decree could not be executed under the provisions of section 43 of the Code at any time. After its adaptation in June 1950, section 43 applied to "a decree passed by a Civil Court in a Part B State". There were no Part B States at the time when the decree was passed and these words could not be read as "a decree passed by a civil court in what became a Part B State". Nor could the decree be executed under section 44 as that section was also inapplicable to this decree. Article 261 (3) which provides that the final judgments or orders of Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory is inapplicable to the decree of the Gwalior court as the, provision is prospective and not retrospective. Per Sarkar and Das Gupta, JJ. Even in the decree passed by Gwalior Court was not a foreign decree the Allahabad Court had no power to execute it either under section 38 or under sections 43 or 44 of the Code of Civil Procedure. Section 38 provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution. The Allahabad Court was not the court which passed the decree. Section 39 empowers the court which passed the decree to transfer it for execution to another court. The word "court" in the phrase "court which passed the decree" in section 39 contemplates only courts governed by the Indian Code of Civil Procedure. The Gwalior ,.Court which was governed by the Gwalior Code when it passed the decree had a distinct identity from the court at Gwalior after it came to be governed by the Indian Code. The Court which transferred the decree was accordingly not the court which passed the decree and the order of transfer was not a valid order. Section 43 of the Code provided for the execution of decrees passed by the Civil Courts in places where the Indian Code did not extend. The decree of the Gwalior Court did not fall within this section as it stood before the Constitution. A, After the adaptation in 1950 the section applied to a decree passed "by a Civil Court in a Part B State". These words could not be read as "by a civil court in an Indian State which has later been included in a Part B State". The Gwalior Court which passed the decree was not a Civil Court in a Part B State. 'Section 44 was equally inapplicable to the decree,. The section after adaptation in 1950 580 applied only to decrees of revenue courts. Before the adap tation it could apply only if there was a notification issued by the U. P. Government but no such notification was issued.

Appeal No. 383 of 1961. Appeal from the judgment and order dated July 21 1959, of the Special Bench of the Calcutta High Court in Matter No. 76 of 1952. D. R. Prem and R. L. Dhebar, for the appellant and respondents NOS. 2 and 3. section P. Desai and B. P. Maheshwari, for respondent No. 1 565 1962. April 30. The brief facts necessary for present purposes are these. The respondent had imported 2,000 drums of mineral oil. Out of this quantity, the appellant, the Collector of Customs, Calcutta, confiscated 50 drums by order dated September 20, 1950. He also imposed a personal penalty of Rs.61,000/on the respondent under the , No. 8 of 1878, (hereinafter referred to as the Act). The respondent appealed to the Central Board of Revenue under section 188 of the Act, and this appeal was dismissed in April 1952. Thereupon the respondent filed a petition under article 226 of the Constitution in the High Court. We are in the present appeal not concerned with the merits of the case put forward by the respondent, for the matter has not yet been heard on the merits. When the petition came up before a learned Single Judge a question was raised as to the jurisdiction of the High Court to hear the petition in view of the decision of this Court in Election Commission India vs Saka Venkata Subba Rao.(1) As the learned Single Judge considered the point important, he referred the matter to a larger bench; and eventually the question was considered by a Full Bench if the High Court. The Full Bench addressed itself two questions in that connection, namely, (i) whether any writ could issue against the Central Board of Revenue which was a party to the writ petition and which was permanently located outside the jurisdiction of the High Court, and (ii) whether if no writ could issue, against the Central Board of Revenue any writ could be issued against the appellant, which was the original authority to pass the order under challenge, when the appellate (1) ; , 566 authority (namely, the Central Board of Revenue) had merely dismissed the appeal. The Full Bench held on the first question. that the High Court, had no jurisdiction to issue a writ against the Central Board of Revenue in view of the Precision in the case of Sake Venkata Subba Rao.(1). On the second question, it held that as the Central Board of Revenue had merely dis missed the appeal against the order of the Collector of Customs Calcutta, the really operative order was the order of the appellant, which was located within the jurisdiction of the High Court, and therefore it had jurisdiction to pass an order against the Collector of Customs in spite of the fact that order had been taken in appeal (which was dismissed) to the Central Board of Revenue to which no writ, could be issued. The Full Bench further directed that the petition would be placed before the learned Single Judge for disposal in the light of its decision or, the question of jurisdiction. Thereupon there was an application for a certificate to appeal to this Court, which was granted; and that in how the matter has come up before us. The only question which 1ells for decision before us in the second question debated in the ' High Court,. namely, whatever the High Court would have jurisdiction to issue a writ against the Collector of Customs Calcutta in spite of the fact that his order was taken in appeal to the Central Board of Revenue against which the High Court could not issue a writ and the appeal had been dismissed. There seems to have been a difference of opinion amongst the High Courts in this matter. The Rajasthan High Courts in Barkatali vs Custodian General of Evacuee Property (1) held that where the A.I.R. (1904) Raj. 567 original authority passing the order was within the jurisdiction of the High Court but the appellate authority was not within such jurisdiction, the High Court would still have jurisdiction to issue a writ to the original authority, where the appellate authority had merely dismissed the appeal and the order of the original authority stood confirmed without any modification whatsoever. On the other hand, the PEPSU High Court in Joginder Singh Waryam Singh vs Director, Rural Rehabilitation. Pepsu Patiala, the Nagpur High Court in Burhanpur, National Textile Workers Union, vs Labour Appellate Tribunal of India at Bombay ( 2) and the Allahabad High Court in Azmat Ullah, vs Custodian, Evacuee Property (3 ) held otherwise, taking the view that even Where the appeal was merely dismissed, the order of the original authority merged in the order of the appellate authority, and if the appellate authority was beyond the territorial jurisdiction of the High Court, no writ could issue even to the original authority. It may be mentioned that the Rajasthan High Court had occasion to reconsider the matter after the decision of this Court in A. Thangal Kunju Mudaliar vs M. Venkita chalam Potti ( 4 ) and held that in view of that decision, itsearlier decision in Barkatali 's case (5) was no longer good law. The High Court has however not noticed this later decision of the Rajasthan High Court to which the learned Chief Justice who was party to the earlier Rajasthan case was also a party. The main reason which impelled the High Courts, which held otherwise, was that the order of the original authority got merged in the order of the Appellate authority when the appeal was disposed of and therefore if the High Court had no territorial jurisdiction to issue a writ against the appellate authority it could not issue a writ (1) A.I.R. (1955) Pepsu 91 (3) A. I. R. (1955) All 435. (2) A. I. R. (4) ; (5) A.I.R. (1954) Raj. 568 against the original authority, even though the appellate authority had merely dismissed the appeal without any modification of the order passed by the original authority. The question therefore turns on whether the order of the original authority becomes merged in the order of the appellate authority even where the appellate authority merely dismisses the appeal without any modification of the order of the original authority. It is obvious that when an appeal is made, the appellate authority can do one of three things, namely, (i) it may reverse the order under appeal, (ii) it may modify that order, and (iii) it may merely dismiss the appeal and thus confirm the order without any modification. It is not disputed that in the first two cases where the order of the original authority is either reversed or modified it is the order of the appellate authority which is the operative order and if the High Court has no jurisdiction to issue a writ to the appellate authority it cannot issue a writ to the original authority. The question therefore is whether there is any difference between these two cases and the third case where the appellate authority dismisses the appeal and thus confirms the order of the original authority. It seems to us that on principle it is difficult to draw a distinction between the first tori kinds of orders passed by the appellate authority and the third kind of order passed by it. In all these three cases after the appellate authority has disposed of the appeal, the operative order is the order of the appellate authority whether it has reversed the original order or modified it or confirmed it. In law, the appellate order of confirmation is quite as efficacious as an operative order as an appellate order of reversal or modification. Therefore, if the appellate authority is beyond the territorial jurisdiction of the High Court it seems difficult to bold even in a case where the appellate 569 authority has confirmed the order of the original authority that the High Court can issue a writ to the original authority which may even have the effect of setting aside the order of the original authority when it cannot issue a writ to the appellate authority which has confirmed the order of the original authority. In effect, by issuing a writ to the original authority setting aside its order, the High Court would be interfering with the order of the appellate authority which had confirmed the order or the original authority even though it has DO territorial jurisdiction to issue any writ to the appellate authority. We therefore feel that on principle when once an order of an original authority is taken in appeal to the appellate authority which is located beyond the territorial jurisdiction of the High Court, it is the order after the appeal is disposed of; and as the High Court cannot issue a writ against the appellate authority for want of territorial jurisdiction it would not be open to it at issue a writ to the original authority which may be within its territorial jurisdiction once the appeal is disposed of, though it may be that the appellate authority has merely confirmed the order of the original authority and dismissed the appeal. It is this principle, viz., that the appellate order is the operative order after the appeal is disposed of, which is in our opinion the basis of the rule that the decree of the lower court merges in the decree of the appellate court, and on the same principle it would not be incorrect to say that the order of the original authority is merged in the order of the appellate authority whatsoever its decision whether of reversal or modification or mere confirmation. This matter has been considered by this Court on a number of occasions after the decision in Saka Venkata Subba Rao 's case.(1) (1) ; 570 In A. Thangal Kunju Mudaliar 's case (1), though the point was not directly in issue in that case, the Court had occasion to consider the matter (see p. 1213) and it approved of the decisions of the PEPSU, Nagpur and Allahabad High Courts, (referred to above). Then in Commissioner of Income tax vs Messrs. Amritlal Bhogilal and Company (2), a similar question arose as to the merging of an order of the income tax officer into the order of the Appellate Assistant Commissioner passed in appeal in connection with the powers of the Commissioner of Income tax in revision. Though in that case the order of registration by the Income tax officer was held not to have merged in the order of the Assistant Commissioner on appeal in view of the special provisions of the Income tax Act, this Court observed as follows in that connection at p. 720 : ",There can be no doubt that, if an appeal is provided against an order passed by a tribunal, the decision of the appellate authority is the operative decision in law. If the appellate authority modifies or reverses the decision of the tribunal, it is obvious that it is the appellate decision that is effective and can be enforced. In law the position would be just the same even if the appellate decision merely confirms the decision of the tribunal. As a result of the confirmation or affirmable of the decision of the tribunal by the appellate authority the original decision merges in the appellate decision and it is the appellate decision alone which subsists and is operative and capable of enforcement. The matter was considered again by this Court, in Madan Gopal Rungta vs Secretary to the Government of Orissa (3) in connection with an order of the (1) (1955)2 S.C.R.1196. 12) (1959) S.C.R. 713, (3) (1962) (Supp.) 3 S.C.R. 966. 571 Central Government in revision under the Mineral Concession Rules, 1949, framed under the Mines and Minerals (Regulation and Development) Act, (No. 53 of 1948) and it was held that when the Central Government rejected the review. petition against the order of the State Government under the Mineral Concession Rules it was in effect rejecting the application of the appellant of that case for grant of the mining lease to him. The question of the original order with the appellate order was also considered in that case though it was pointed out in view of r.60 of the Mineral Concession Rules that it is the Central Government 's order in review which is the effective and final order. Learned counsel for the respondent sought to distinguish Madan Gopal Rungla 's case (1) on the ground that it was based mainly on an interpretation of r. 60 of the Mineral Concession Rules 1949, though he did not pursue this further when section 188 of the was pointed out to him. The main reliance however of the respondent both in the High Court and before us is on the decision in the State of Uttar Pradesh vs Mohmmed Nooh (2). That was a case where a public servant was dismissed on April 20, 1948 before the Constitu tion had come into force. His appeal from the order of dismissal was dismissed in May 1949 which was also before the Constitution came into force. His revision against the order in the appeal was dismissed on April 22, 1950, when the Constitution had come into force, and the question that arose in that case was whether the dismissed public servant could take advantage of the provisions of the Constitution because the revisional order had been passed after the Constitution came into force. In that case, this Court certainly held that the order of dismissal passed on April 20, 1948 could not be said to have merged in the orders in appeal and in revision. It (1) (1962) (Supp.) 3 S.C.R. 906. (2) ; 572 was pointed out that the order of dismissal was operative of its own strength as from April 20, 1948 and the public servant stood dismissed as from that date and therefore it was a case of dismissal before the Constitution came into force and the. public servant could not take advantage of the provisions of the Constitution in view of the fact that his dismissal had taken place before the Constitution had come into force. As was pointed out in Madan Gopal Rungta 's, case(1) Mohammad Nooh 's case (2) was a special case, which stands on its own facts. The question there was whether a writ under article 226 could be issued in respect of a dismissal which was effective from 1948. The relief that was being sought was against an order of dismissal which came into existence before the Constitution came into force and remained effective all along even after the dismissal of the appeal and the revision from that order. It was in those special circumstances that this Court held that the dismissal had taken place in 1948 and it could not be the subject matter of consideration under Art.226 of the constitution, for that would be giving retrospective effect to the Article. The argument based on the principle of merger was repelled by this Court in that case on two grounds, namely, (i) that the principle of merger applicable to decrees of courts would not be applicable to departmental tribunals, and (ii) that the original order would be operative on its own strength and did not gain greater efficacy by the subsequent order of dismissal of the appeal or revision. in effect, this means that even if the principle of merger were applicable to an order of dismissed like the one in Mohammad Nooh 's case, (2) the fact would still remain that the dismissal was before the Constitution came into force and therefore the person dismiss could not take advantage of the provisions of the Constitution, so (1) (1962)(Supp.)3 S.C.R.906. (2) ; 573 far as that dismissal was concerned. That case was not concerned with the territorial jurisdiction of the High Court where the original authority is within such territorial jurisdiction while the appellate authority is not and must therefore be confined to the special facts with which it was dealing. We have therefore no hesitation in holding consistently with the view taken by this Court in Mudaliar 's case (1) as well as in Messrs. Amritlal Bhogilat 's (2) that the order of the origin%] authority must be held to have merged in the order of the appellate authority in a case like the present and it is only the order of the appellate authority which is operative after the appeal is disposed of. Therefore, if the appellate authority is beyond the territorial jurisdiction of the High Court it would not be open to it to issue a writ to the original autbority which is within its jurisdiction so long as it can not issue a writ to the appellate authority. It is not in dispute in this case that no writ could be issued to the appellate authority and in the circumstances the High Court could issue no writ even to the original authority. We therefore allow the appeal, set aside the order of the High Court and dismiss the writ petition with costs. Appeal allowed. (1) ; (2) (1959) S.C.R. 713.

IN-Abs

The respondent imported 2,000 drums of mineral oil and the appellant confiscated 50 drums and imposed a personal penalty. The appeal of the respondent was dismissed by the Central Board of Revenue. The respondent filed a petition under article 226 of the Constitution in the Calcutta High Court. A Full Bench of the High Court held that the High Court had no jurisdiction to issue a writ against the Central Board of Revenue in view of the decision in the case of Saka Venkata Subbha Rao. However, as the Central Board of Revenue had merely dismissed the appeal against the 564 order of the appellant, the High Court further held that it had jurisdiction to pass an order against the appellant. The appellant came to this Court after obtaining a certificate. Held that the appellant had merged into that of the Central Board of Revenue and hence no order could be issued against the appellant. It is only the order of the appellate authority which is operative after the appeal is disposed of. It is immaterial whether the appellate order reverses the original order, modifies it or confirms it. The appellate order of confirmation is as efficacious as an operative order as an appellate order of reversal or modification. As the appellate authority in this case was beyond the territorial jurisdiction of the High Court, it was not open to the High Court to issue a writ to the original authority which was within its jurisdiction. Election Commission, India vs Saka Vankata Subba Rao, , A. Thangal Kunju Mudatiar vs M. Venkitachalam Poiti, ; , Commissioner of Income tax vs M/s. Amritlal Bhogilal & Co. [1959] section C. R. 713 and Madan Gopal Rungta vs Secretary to the Government of Orissa, (1962) (Supp.) 3 S.C.R. followed. Barkatali vs Custodian General of Evacuee Property, A. 1. R. , overruled. Joginder Singh Waryam Singh vs Director, Rural Rehabilitation, Pepsu, Patiala, A. 1. R. 1955 Pepsu 91, Burhanpur National Textile Workers Union vs Labour Appellate Tribunal of India at Bombay, A. I. R. , and Azmat Ullah vs Custodian, Evacuee Property, A.I.R. 1955 All 435, approved. State of U. P. vs Mohammed Nooh, ; , distinguished.

Appeal No. 22 of 1960. Appeal by special leave from the judgment and order dated March 19, 1958, of the Allahabad High Court in F. A. No. 62 of 1954. section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant. G. section Pathak, section K. Kapur, B. N. Kirpal and Ganpat Rai, for the respondent. April 27. The Judgment of the Court was delivered by section K. DAs, J. This is an appeal by special leave granted by this Court on December 8, 1958. On July 19, 1950, Satya Deo Gupta, respondent before us, made an application under a. 14 of the (Act V of 1940) (hereinafter referred to as the Act) for registration of the trade name of a biochemical medicinal preparation, commonly known as 'Laksbmandhara ', in Class 5 of the Fourth Schedule to the Trade 486 Marks Rules, 1942. The application was made by the respondent as the sole proprietor of Rup Bilas Company situate, at Dhankutti in Kanpur. The averments made in the application were that the said medicinal preparation had been in use by the name of "Lakshmandhara ' since 1923 and was sold throughout the length and breadth of India as also in some foreign markets; the mark or name 'Lakshmandhara ' was said to be distinctive to the article, and it was stated that the approximate annual turnover was Rs. 40,000/ . Notice of the application was given by the Registrar of Trade Marks, Bombay, and the Amrit dhara Pharmacy, a limited liability company and appellant before us, filed an application in opposition. In this application the appellant stated that the word 'Amritdhara ' was already registered as a trade name for the medicinal preparation of the appellant, and that medicinal preparation was introduced in the market so far back as in the year 1901; on account of its great popularity many people advertised similar medicines with slight variations of name to pass off their goods as 'Amritdhara '. It was averred that the composite word Lakahmandhara ' was used to denote the same medicine as Amrit, dhara '; and the single word dhara , it was stated, was first used in conjunction with 'Amritdhara ' to denote the medicine of the appellant and the medicine 'Lakahmandhara ' being of the same nature and to quality could be easily passed off as 'Amritdhara ' to the ultimate purchaser. The appellant contended that as 'Amritdhara ' was already registered and 'Lakshmandhara ' being a similar name was likely to receive the public, registration should be refused. On behalf of the respondent a counter affidavit was made in which it was stated that "Amritdhara ' and Lakshinandhara ' were two distinctly different names and no one could pass off one for the other. 487 It was further stated that during the long period of introduction and sale of Lakshmandhara ' since 1923, no objection was ever raised from any quarter, from the appellant or anybody else, to the use of the name 'Lakshmandhara '. It was denied by the respondent that the composite word 'Lakshmandhara ' was likely to deceive the public or could by any stretch of imagination be taken or mistaken for 'Amritdhara '. The respondent further alleged that the single word 'dhara ' had no particular significance in relation to the medicine, nor did that word mean or convey any special or exclusive meaning or effect in relation to the medicine. It was also stated that apart from the difference in name, the phial, label and packing of 'Lakshmandhara ' had exclusive designs of their own and were not likely to be confused with 'any other medicine of similar nature, least of all with 'Amritdhara ' whose packing was distinctly different in colour, design and layout. The Registrar of Trade Marks dealt with the application and the opposition thereto by his order dated September 10, 1953. It appears that apart from the affidavits filed, no other evidence was led on behalf of either party; but certified copies of certain decisions in earlier cases (to which the respondent was not, however, a party) given in favour of the appellant in support of its claim of infringement of its registered trade mark 'Amritdhara ' were filed. A list of such cases has been printed as annexure 'A '. These cases showed that a number of medicines with the word 'Amrit ' or 'dhara ' as part of their names had been introduced in the market since 1947; and the appellant 'successfully took action against them for infringement of its trade mark. Even in the Trade Marks Registry the appellant successfully opposed the introduction of names which contained the word 'dhara ' as part of the,trade name. A question has 488 been raised before us whether the Registrar of Trade Marks was justified in taking into consideration the decisions in those cases. To that question we shall advert later. The Registrar found that in 1901 Pandit Thakur Datta Sharma commenced to do business at Lahore in a particular ayurvedic medicine which was meant for alleviation for of headaches, diarrohea, constipation and other complaints. This medicine was first sold under the mark 'Amrit Ki Dhara ', but in 1903 the name was changed to "Amritdhara ', Pandit Thakur Datta Sharma formed a limited liability company in 1942 and the name 'Amritdhara ' became a well known popular name for the medicine. The sale of the medicine went up to about Re. 4 lacs a year. The business was done in Lahore but when partition came in 1947, the appellant established its business in Dehradun. The Registrar expressed the view that if the matter had rested on section 8 and section 10(1) of the Act, he world have no hesitation in allowing the opposition and dismissing the application. This could only mean that the Registrar was of the view that the name 'Lakshmandhara ' so nearly resembled the trade mark 'Amritdhara ' that it was likely to deceive the public or cause confusion to the trade. We are saying this because the High Court through that the Registrar did not express his own opinion whether the name 'Lakshmandhara ' was likely to cause deception to the public or confusion to the ' trade. The respondent, however, relied also on two other circumstances, viz. (a) honest concurrent user of the name 'Lakshmandhara ' since 1923, and (b) acquiescence on the part of the appellant in the user of the name Lakshmandhara '. The respondent contended that these two circumstances brought the case With in the meaning of special circumstances ' in A. 10(2) of the Act, which permitted the registration by more than one Proprietor of trade marks which are identical or 489 nearly resemble each other, subject to such condition and limitations, if any, as the Registrar might think fit to impose. On the point of honest concurrent user the Registrar found in favour of the appellant. As to acquiescence he, however, found in favour of the respondent and expressed his finding in these words. "In the case before me it is not disputed that the applicant commenced his user in a small way in 1923 and it may even be said that up to about 1942 the applicant 's user was insignificant. In paragraph 12 of the appli cant 's affidavit dated the 30th March, 1953 he has given details of advertisements in directories, pamphlets, newspapers etc. in which both the applicant 's and the opponents ' marks were advertised. The facts given in the affidavit go to show that from 1938 right up to the date of the applications by the applicant he has been advertising through mediums which were common to both the applicant and the opponents. Here we have a case in which Pandit Thakur Datta Sharma states that he had no notice of the applicant 's mark. He has, however, admitted that he had about 12 persons in his factory which constituted the clerical staff and amongst them were persons who were in charge of advertising the opponents mark. It seems to me that the opponents and their agents were well aware of the advertisements by the applicant and did not raise any protest till the applicant 's mark was advertised in the Trade Mark Journal. In other words the opponents stood by and, allowed the applicant to develop his business and, as I have shown, from small beginning he began to sell these medicines to the extent of about Rs. 43,000/ in 1949. In my opinion, this is 490 acquiescence which would come under, the phrase 'or other special circumstances ' in section 10(2) of the and, that appears to me to be fatal to the case of the opponents. " Before the Registrar it was admitted on behalf of the respondent that his goods were sold mainly in, Uttar Pradesh and there were, at the most, only sporadic sales in other States. Taking that circumstance into consideration the Registrar passed an order allowing registration of 'Lakshmandhara ' for sale in the State of Uttar Pradesh only. From the decision of the Registrar two appeals were referred to the High Court of Judicature at Allahabad under section 76 of the Act: one appeal Was referred by the respondent and ' the other by the appellant. The respondent complained of the registration being limited to Uttar Pradesh only and the appellant pleaded that registration should: have been refused altogether, The learned Judges of the High Court held that the words 'Amrit ' and 'dhara ' were common, words in the Hindi language and the combined word 'Amritdhara ' meant current of nectar ' or the flow of nectar '; the two words 'Lakshman ' and 'dhara 'were also well known common words and combined, together they meant "current or flow of Lakshman '. The learned Judges, then said: "There is no possibility of any Indian confusing the two ideas. Even phonetical differences are wide enough not to confuse anybody. The claim of the Amritdhara pharmacy that both the words Amrit and dhara ' have become so associated with their goods that the use of each part separately or in any combination is ' likely to mislead is an, untenable claim. The whole phrase 'Amritdhara ' had been registered and the Monopoly ' has to be 491 confined only to the use of the whole word. The words of common language like "Amrit ' and 'dhara ' cannot be made the monopoly of any individual. We, therefore see no reason to disallow registration of the trade mark "Lakshmandhara '. " As to honest concurrent user from 1923 to 1942 the learned Judges again held in favour of the respondent. But on the point acquiescence they held against the respondent and found in favour of the appellant. They said that from the fact that both the medicines were being advertised in the same journals or periodicals it did not, following that the attention of the appellant was, drawn to@ the use of the word 'Lakshmandhara ' by the respondent. In view, however, of their finding that the two names were not likely to cause any confusion and that the ' respondent had been an honest concurrent user from 1923 onwards, they held that there was no justification for refusing registration to the trade mark 'Lakshmandhara ' for the whole of India. They accordingly allowed the appeal of the respondent and dismissed that of the appellant by their judgment dated March 19, 1958. The appellant then obtained special leave from this Court and the present appeal has been filed in pursuance of the leave granted by this court. Two points have been agitated before us. The first point is whether the name 'Lakshmandhara ' was likely to deceive the public or cause confusion to trade within the meaning of section 8 and section 10 (1) of the Act. The second point is whether there was Such, acquiescence on) behalf of the appellant in the use of the name 'Lakshmandhara ' in the. State of Uttar Pradesh as to bring it within the, expression 'special circumstances ' mentioned in sub section 10 of the Act. We shall deal with these two points in the order in which we have stated them, 492 We may first read the relevant sections of the Act, viz.s. 8 and 10. 8. Prohibition of registration of certain matter. No trade mark nor part of a trade mark shall be registered which consists of, or contains, any scandalous design, or any matter the use of which would. (a) by reason of its being likely to deceive or to cause confusion or otherwise, be disentitled to protection in a Court of justice ; or (b) be likely to hurt the religious susceptibilities of any class of the citizen of India or (c) be contrary to any law for the time being in force, or to morality. Prohibition of registration of identical or similar trade mark. (1) Save as provided in sub section (2), no trade mark shall be registered in respect of any goods or description of goods which is identical with a trade mark belonging to a different proprietor and already on the register in respect of the same goods or description of goods or which so nearly resembles such trade mark as to be likely to deceive or cause confusion. (2) In case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do he may permit the registration by more than one proprietor of trade marks which are identical or nearly resemble each other in respect of the same goods or description of goods, subject to such conditions and limitations if any, as the Registrar may think fit to impose. (3) 493 It will be noticed that the words used in the sections and relevant for our purpose are "likely to deceive or cause confusion. " The Act does not lay down any criteria for determining what is likely to deceive or cause confusion. Therefore, every case must depend on its own particular facts, and the value of authorities lies not so much in the actual decision as in the tests applied for determining what is likely to deceive or cause confusion. On an application to register, the Registrar or an opponent may object that the trade mark is not registerable by reason of cl. (a) of section 8, or sub section (1) of section 10, as in this case. In such a case the onus is on the applicant to satisfy the Registrar that the trade mark applied for is not likely to deceive or cause Confusion. In cases in which the tribunal considers that there is doubt as to whether deception is likely, the application should be refused. A trade mark is likely to deceive or cause confusion by the resemblance to another already on the Register if it is likely to do so in the course of its legitimate use in a market where the two marks are assumed to be in use by traders in that market. In considering the matter, all the circumstances of the case must be considered. As was observed by Parker, J. in Pianotist Co. s Application (1), 'which was also a case of the comparison of two words "You must take the two words. You must Judge them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact you must consider all the surrounding circumstances and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks (1) ,777. For deceptive resemblance two important questions are: (1) who are the persons whom the resemblance must be likely to deceive or confuse, and (2) what rules of comparison are to be. adopted in judging whether such resemblance exists. As to confusion, it is perhaps an appropriate description of the state of mind of a customer who, on seeing a mark thinks,that it differs from the mark on goods which ' he has previously bought, but is doubtful whether that impression is Dot due to imperfect recollection. (See Kerly on Trade Marks, 8th edition, p. 400.) Let us apply these tests to the facts of the case under our consideration. It is not disputed before use that the two names 'Amritdhara ' and 'Lakahmandhara ' are in use in respect of the same description of goods, namely, a medicinal preparation for the alleviation of various ailments, Such medicinal preparation will be purchased mostly by people who instead of going to a doctor wish to purchase a medicine for the quick alleviation of ;their suffering, both villagers and townsfolk, literate as well as illiterate. As we said in Corn Products Refining Co. vs Shangrila Food Products Ltd (1); the question has to be approached from the point of view of a man of average intelligence and imperfect recollection. To such a man the overall structural and phonetic similarity of the ,two names 'Amritdhara ' and 'Lakshmandbara ' is, in our, opinion likely. t o deceive or ; cause confusion. We must consider, the overall similarity of the two composite words 'Amritdhara ' and 'Lakshman dhara '. We do not think that the learned Judges of the High Court were right in Paying that no Indian would mistake one 'for the other. An unwary purchaser of average intelligence and imperfect recollection would not, as the High Court supposed, split the name into its component parts and consider the etymological meaning thereof or 495 even consider the meanings of the composite words as 'current of nectar ' or current of Lakshman '. He. would go more by the overall structural and phonetic similarity and the nature of the medicine he has previously purchased, or has been told about, or about which has other vise learnt and which he wants to purchase. Where the trade relates to goods largely sold to illiterate or badly educated persons, it is no answer to say that a person educated in the Hindi language would go by the entymological or ideological meaning and, see the difference between 'current of nectar ' and current of Lakshman '. 'Current of Lakshman in a literal sense has no meaning to give it meaning one must further make the inference that the 'current or stream ' is as pure and strong as Lakshman of the Ramayana. An ordinary Indian villager or townsmen will perhaps know Lakshman, the story of the Ramayana being familiar to him but we doubt if he would etymologine to the extent of seeing the so called ideological difference between 'Amritdhara 'and 'Lakshmandhara '. He would go more by the similarity of the two names in the context of the widely known medicinal preparation which he wants for his ailments. We agree that the use of the word 'dhara ' which literally means 'Current or stream ' is not by itself decisive of the matter. What we have to consider here is the overall similarity of the composite words, having regard to the circumstance that the goods bearing the two names are medicina l preparations of the same description. We are aware that the admission of a mar is not to be refused, because unusually stupid people, "fools or idiots", may be deceived. A critical comparison of the two names may disclose some points of difference. but an unwary purchaser of average intelligence and imperfect recollection would be deceived by the overall similarity of the two names having regard 496 to the nature of the medicine he is looking for with a somewhat vague recollection that he had purchased a similar medicine on a previous occasion with. a similar name. The trade mark is the whole thing the whole word has to be considered a the case of the application to register 'Erectiks ' (opposed by the proprietors of the trade mark 'Erector ') Farwell, J. said in William Bailey (Bir mingham) Ltd.8 Application (1) : "I do not think it is right to take a part of the word and compare it with a part of the other Word; one word must 'be considered as a whole and compared with the other word as a whole. . . I think it is a danger ous method to adopt to divide the word up, and seek to distinguish a portion of it from a portion of the other word". Nor do we think that the High Court was. right in thinking that the appellant was claiming a. monopoly in the common Hindi word 'dhara '. We do not think that is quite the position here. What the appellant is claiming is its right under section 21 of the Act, the exclusive right to the use of its trade mark, and to oppose the registration of a trade mark which go nearly resembles its trade mark that it is likely to deceive or cause confusion. A large number of decisions relating to the use of composite words, such as Night Cap and RedCap, Limit and Summit, Rito and Lito, Notrate and Filtrate, etc. were cited in the High Court. Some more have been cited before us. Such deci sions, examples of deceptive resemblance arising out of contrasted words, have been summarised at page 429 to 434 in Karly on Trade Marks, 8th Edition. No useful purpose will be served by referring to them all. As we have said earlier, each case must be decided or its own fact. What degree of ' (1) 497 resemblance is necessary to deceive or cause confusion must the nature of things be incapable of definition a priori. As to the decisions in annexure 'A ', it has been argued before us that they were not at all admissible by reason of sections 40 to 43 of the . On behalf of the appellant it has been contended that they were admissible under section 13 of the Evidence. Act as showing the particular instances in which the appellant claimed its right under section 21 of the Act. We consider it unnecessary to decide this question for the purposes of this case because those decisions even if they are admissible under section 13 do not throw any light on the question whether 'Amritdhara ' and 'Lakshmandhara ' so nearly resemble each other as to cause deception or confusion. That is a, question which we must determine as a case of first impression and irrespective of the earlier decisions. On a consideration of all the circumstances, we have come to the conclusion that the overall similarity between the two names in respect of the same description of goods was likely to cause deception or confusion within the meaning of section 10(1) of the Act and Registrar was right in the view he expressed. The High Court was in error taking a contrary view. We know go the second question, that of acquiescence. Here again we are in agreement with the Registrar of Trade Marks, who in a paragraph of his order quoted earlier in this judg ment has summarised the facts and circumstances on which the plea of acquiescence was based. The matter has been put thus in Halsbury 's Laws of England, Vol. 32 (second edition) pages 659 657, paragraph 966. " If a trader allows another person who is acting in good faith to build up a reputa 498 tion under a trade name or mark to which he has rights, he may lose his right to complain, and may even be debarred from himself using such name or work. But even long user by another, if fraudulent, does not affect the plaintiff 's right to section final injunction on the other hand prompt warning or action before. the defendant has built up any good will may materially assist the plaintiff 's case". We do not think that there was any fraudulent user by the respondent of his trade name 'Lakshmandbara '. The name was first used in 1923 in a small way in Uttar Pradesh. Later it was more extensively used and in the same journals the two trade marks were publicised. The finding of the Registrar is that the appellant and its agent were well aware of the advertisements of the respondent, and the appellant stood by and allowed the respondent to develop his business till it grew from a small beginning in 1923 to an annual turnover of Rs. 43,000/ in 1946. These circum stances establish the plea of acquiescence and bring the case within sub section (2) of section 10, and in view of the admission made on behalf of the respondent 'that his goods were sold mainly in Uttar Pradesh, the Registrar was right in imposing the limitation which he imposed. For these reasons, we would allow the appeal, set aside the Judgment and order of the High Court, and restore those of the Registrar of Trade Marks, Bombay, dated September 10. 1953. In the circumstances of this case, there will be no order for costs. Appeal allowed.

IN-Abs

The respondent applied for registration of the trade name "Lakshmandhara" in relation to the medicinal preparation manufactured by him at Kanpur since 1923. It was admitted that the respondent 's product was mainly sold in the State of Uttar Pradesh. The appellant opposed the registration on the ground that it had an exclusive proprietary interest in the trade mark "Amritdhara" in relation to a similar medicinal preparation which had acquired considerable repu tation since 1903 and that the respondent 's trade name "Lakshmandhara" was likely to deceive and cause confusion and therefore the registration was prohibited by section 8 of the Trade Marks Act. The Registrar of Trade Marks held that there was sufficient similarity between "Amritdhar 'a ' and "Lakshamandhara" so as to cause confusion and it was likely to deceive the public, but the acquiescence of the appellant in the use of the trade name "Lakshmandhara" by the respondent in the relation to his product for a long period to the knowledge of the appellant was special circumstance under section 10(2) entitling the respondent to have his name registered along with the appellant 's trade name. He, however, confined the registration to sales with the State of Uttar Pradesh. Both the appellant and the respondent appealed to the High Court which allowed the respondent 's appeal holding that the words "Amrit" and "dhara" were common words in the Hindi language as also the words "Lakshman" and "dhara" and that there was no possibility of any Indian confusing the two ideas. The High Court further held there had been honest concurrent user by the respondent. ,, On the question of acquiescence it held against the respondent. On appeal by special leave. Held, that the question whether a trade name is likely to deceive or cause confusion by its resemblance to another al. ready registered is a matter of first impression and one for decision in each case and has to be decided by taking an over. all view of all the circumstances. The standard of comparison to be adopted in judging the resemblance is from the point of 485 view of a man of average intelligence and imperfect recollection. Pianotist Co. 's Application, , referred to. Corn Products Refining Co., vs Shangrila Food Product8 Ltd., , referred to. Held, further, that the two names as a whole should be considered for comparison and not merely the component words thereof separately. William Bailey (Birmingham) Ltd. '8 application, (1935) 52 R. P. C. 137, referred to. Held, also, that in the present case the similarity in the two name in respect of the same description of goods was likely to deceive or cause confusion; but the facts found by the Registrar established the plea of acquiescence so a to bring the case within sub s.(2) of section 10, and the Registrar was right in imposing the limitation which he imposed.

Appeal No. 177 of 1960. 554 Appeal from the Judgment and order dated March 27, 1958, of the Orissa, High Court in O. J.C. No. 191 of 1956. Hemendra Chandra Sen and section Ghose, for the appellants. N. section Bindra, V. N. Sethi and P. D. Xenon, for the respondents. April 30. The Judgment of the Court was delivered by SINHA, C. J. This appeal on a certificate granted by the High Court of Orissa raises the question of the interpretation of certain provisions of The Orissa Estates Abolition Act, 1951 (Orissa Act 1 of 1952) which hereinafter will be referred to as the Act. The appellants who were petitioners in the High Court were the proprietors of an Estate, known as Paikpara Estate, in the district of Puri, bearing Touzi Nos. 268, 269 and 270. The respondents are the State of Orissa and its officials. The facts on which the High Court based its judgment under appeal areas follows. Within the said Paikpara Estate, there were several tenures and sub proprietory interests. The Paikpara Estate vested in the State of Orissa by virtue of a notification issued under section 3 of the Act, on August 23, 1953. It is common ground that the interests of tenure holders and sub proprietors within the said estate have not yet been taken over under the provisions of the Act. Under the tenure holders aforesaid, there were some occupancy holdings which Lad been purchased by the proprietors, the appellants in this Court, long ago. Thus the proprietors by virtue of their purchase became occupancy raiyats, under the tenure holders or sub proprietors, in respect of the holdings purchased by them. It is also common ground that in the last Settlement Khatians their interests as occupancy 555 raiyat8 in respect of the holdings purchased by them have been recorded. On the lands of the occupancy holdings, there were several buildings which were used as Katcheri houses by the proprietors, for the administration of their estate. In January 1954, according to the petitioners in the High Court, the State Officials took illegal possession of those buildings situate on the raiyati land, as aforesaid. The appellants thereupon made an application to the Collector of Puri for vacant possession of the lands and the buildings, described in the petition, on the allegation that those lands together with the buildings, purchased from tenants with rights of occupancy, were, after purchase by the proprietors, used as Katcheri house by them. They also alleged that those properties had not vested in the State of Orissa as a result of the said notification, under the Act. Part of the said house had been let out to the Postal Department. The Anchal Adhikari of that area wrote to the Postmaster, and Superintendent of Post Offices, not to pay rent to the proprietors. The Postal Department, therefore, vacated that portion of the building in their occupation, which has gone into the occupation of the State Government. Another portion of the property, which was used as dhangola was let out for storing paddy, to a third party. That dhangola was also taken illegal possession of by the Naib Tehsildar of the place. Other portions of the property also are in illegal possession of the State Government, through its Anchal Adhikari. It was thus claimed on behalf of the proprietors that the State Government had no right to take possession of the property, as it did not form part of the estate which had been acquired under the Act, and had, on notification, vested in the State Government. The learned Collector of Puri did not concede the demand of the proprietors, and held that the occupancy holding is situated within the tenure held 556 under the proprietors and lay within the geographical limits of the (state which had vested in the Government. Being aggrieved by the aforesaid order of the Collector, dated November 20, 1956, the proprietors moved the High Court under article 226 of the Constitution for relief against what was alleged to be illegal interference with their interest not as proprietors but as occupancy tenants. The High Court dismissed the proprietors ' claim chiefly on the ground that the question raised by the petition before the High Court was "practically concluded by the observations of the Supreme Court in the case of K. C. Gajapati Narayan Deo vs The State of Orissa (1). It is manifest that the controversy raised in this case has to be answered with reference to the provisions of the Act. 'Estate ' has been defined in cl. (g) of section 2 of the Act as follows : " 'estate ' includes a part of an estate and means any land held by or vested in an Inter mediary and included under one entry in any revenue roll or any of the general registers of revenue paying lands and revenue free lands, prepared and maintained under the law relating to land revenue for the time being in force or under any rule, order, custom or usage having the force of law, and includes revenue free lands not entered in any register or revenue roll and all classes of tenures or under tenures and any jagir, inam or muafi or other similar grant"; Explanation I. Land Revenue means all sums and payments in money or in kind, by whatever name designated or locally known, received or claimable by or on behalf of the State from an Intermediary on account of or (1) ; 557 in relation to any land hold by or vested in such intermediary; Explanation II. Revenue free land includes land which is, or but for any special covenant, agreement, engagement or contract would have been, liable to settlement and assessment of land revenue or with respect to which the State has power to make laws for settlement and assessment of land revenue; Explanation III. In relation to merged territories estate ' as defined in this clause shall also include any mahal or village or collection of more than one such mahal or village held by or vested in an Intermediary which has been or is liable to be assessed as one unit to land revenue whether such land revenue be payable or has been released or compounded for or redeemed in whole or in part". The definition makes reference to an 'Intermediary ', which has been defined in cl.(h) as follows: 'Intermediary ' with reference to any estate means a proprietor, sub proprietor, landlord, landholder, malguzar, thikadar, gaontia, tenure holder, undertenure holder, and includes an inamdar a jagirdar, Zamindar, Ilaquadar, Khorgoshdar, Parganadar, Sarbaraka r and Maufidar including the Ruler of an Indian State merged with the State of Orissa and all other holders or owners of interest in land between the raiyat and the State; Explanation I. Any two or more Intermediaries holding a joint interest in an estate which is borne either on the revenue roll or on the rent roll of another Intermediary shall be deemed to be one Intermediary for the purposes of this Act; 558 Explanation II. The heirs and successors in interest of an Intermediary and where an Intermediary is a minor or of unsound mind or and idiot, his guardian, committee or other legal curator shall be deemed to be an Intermediary for the purposes of this Act. All acts done by an Intermediary under this Act shall be deemed to have been done by his heirs and successors in interest and shall be binding on them. Reading the two definitions together, the position in law is that 'estate ' includes the interest, by whatever name called, of all persons, who hold some right in land between the State at the apex and the raiyat at the base. That is to say, the Act is intended to abolish all Intermediaries and rentreceivers and to establish direct relationship bet ween the State, in which all such interests vest, after abolition under the Act, and the tillers of the soil. The interest of a raiyat is designated by the word 'holding and is defined by the Orissa Tenancy Act (Bihar and Orissa Act II of 1913), as follows: . " holding" means a parcel or parcels of land held by a raiyat and forming the subject of a separate tenancy". Under the, Orissa Tenancy Act, the unit of interest of a proprietor is an 'estate '. Under a proprietor may be a number of sub proprietors. 'Sub proprietor ' is also defined in the Tenancy Act, but we are not concerned in this case with that class of holders of land. The interest of a tenure holder or an under tenureholder is characterised as a "tenure '. Thus, the process of in feudalist and sub infeudation, which has been similar in all places where the Permanent Settlement took place, that is to say, in Bengal, Bihar and Orissa and Madras and Andhra Pradesh, 559 has led to the coming into existence of proprietors, with their estates, sub proprietors under them, tenure holders and under tenure holders and ultimately the tiller of the soil, the raiyat, whose unit of interest is a 'holding '. The Act was intended to abolish all proprietors, sub proprietors, tenureholders and under tennure holders, with a variety of names; but did not touch the interest of the raiyat. The same person, by transfer or by operation of law, might at the same time occupy different status in relation to land. He maybe in respect of a particular area, which is geographically included in the estate, the proprietor. That land may be held by a raiyat not directly under a proprietor but under a tenure holder, who holds directly under proprietor. The proprietor may have acquired the interest of a raiyat. Thus the proprietor, in his capacity as the owner of the estate holds the entire estate, and he may have by purchase acquired the interest of a raiyat, paying rent for the raiyati interest to his immediate landlord, the tenure bolder. The tenure holder, in his turn, may have been liable to pay rent to the proprietor. That is what appears to have happened in this case. The appellants held the Paikpara estate as proprietors. They also appear to have purchased the properties in question comprising raiyati lands with certain buildings thereon from the raiyat. Hence, the position in law is that though these lands with the buildings are situate geographically within the ambit of the appellants ' estate, they are not part of the estate. In other words, the appellants hold those properties with the buildings not as proprietors as such, but as rayats. It appears that the Courts below have not kept clearly in view this distinction. The Collector, in the first instance, and the High Court in the proceedings under article 226 of the Constitution, appear to have fallen into the error of confusing the petitioners ' position as ex proprietors, with their present position as raiyat in 560 respect of the land on which the buildings stand. The High Court has drawn the conclusion from the decision of this Court in K. C. Gajapati Narayan Deo vs The State of Orissa, (1) and has observed that whether the buildings in question vested in the Government, on the vesting of the estate under section 3 of the Act, world depend not upon whether it formed part of the estate acquired by the Government but on the, purpose for which the buildings wore used by the proprietors. As the buildings in question had been primarily used as office or Katcheri for the collection of rent or for the use of servants or for storing grains by way of rent in kind, the buildings will vest in the Government on the vesting of the estate itself. In our opinion, this conclusion drawn by the High Court from the decision of this Court is not well founded in law. The High Court draw its conclusions from the following observations of this Court in the aforesaid case at Pages 25 26. "Assuming that in India there is no absolute rule of law that whatever is affixed to or built on the soil becomes a part of it and is subject to the same rights of property as the soil itself, there is nothing in law which prevents the State legislature from providing as a part of the estates abolition scheme that buildings, lying within the ambit of an estate and used primarily for management or administration of the estate, would vest in the Government as appurtenances to the estate itself. This is merely ancillary to the acquisition of an estate and forms an integral part of the abolition scheme. Such acquisition would come within article 31 (2) of the Constitution and if the conditions laid down in clause (4) of the article are complied with, it would certainly attract the protection afforded by that clause. Compensation has (1) , 561 been provided for these buildings in section 26(2)(iii) of the Act and the annual rent of these buildings determined in the prescribed manner constitutes one of the elements for computation of the gross asset of an estate. " The observations quoted above of this Court have reference to the following definition of ,homestead ' in el. (i) of section 2 of the Act: "homestead ' means a dwelling house used by the Intermediary for the purpose of his own residence or for the purpose of letting out on rent together with any courtyard, compound, garden, orchard and outbuildings attached thereto and included any tank, library and place of worship appertaining to such dwelling house but does not include any building comprised in such estate and used primarily as office or kutchery for the administration of the estate on and from the is day of January, 1946". it will appear from this definition that the Legislature placed a proprietor 's homestead ' in two categories, namely (1) a dwelling house used by the Intermediary for his own purposes and (2) any building comprised in such estate and used primarily as office or. Katcheri for the administration of the estate on and from the list day of January, 1946. In respect of first category the Act provides in a. 6 that portion of the homestead shall be deemed to be settled by the State with the Intermediary, who will continue to hold it as a tenant under the State Government, subject to the payment of fair and equitable groundrent, except where under the existing law no rent is payable in respect of homestead lands. It will be noticed further that the second category in the definition of homestead, which has not been permitted to the outgoing 562 Intermediary has reference to "any building comprised in such estate". It has no reference to any building standing on rayati holding or a portion thereof. This becomes further clear with reference to the provisions of a. 5, which lays down the consequences of vesting of an estate in the State. Under cl (a) of section 5, the entire estate, including all kinds of lands described in meticulous details, and other non raiyati lands vest absolutely in the State Government. This Court, while dealing with the constitutionality of the Act, was not concerned with raiyati lands. Its observations had reference only to such buildings as stood upon the proprietor 's private lands like peel, seer, Zirat, etc., whicl, were in his possession as proprietor or as tenure bolder. It is thus clear that the very basis of the judgment of the High Court is entirely lacking. That the High Court was not unaware of this distinction becomes clear from the following passage in its judgment: "Doubtless, Ryoti lands are excluded from the scope of this clause. But buildings and structures standing on Ryoti lands and in the possession of the proprietor are not expressly saved. " The first sentence quoted above is correct, but not the second. 'I here is no question of expressly saving structures on ratyati lands, when it is absolutely clear that raiyati lands are not the subject matter of legislation by the Act. The same remarks apply to the reference in section. 26 (b) (iii). Section 26 begins with the words ,for the purpose of this chapter", namely, Chapter V, headed "Assessment of Compensation". Reading section 26 as a whole it is absolutely clear that for the purpose of assessment of the compensation payable to the outgoing proprietor or tenure holder, of the estate to be acquired, gross assets have to be determined, by aggregating the rents payable by 563 tenure holders or under tenure holders and raiyats. It is, thus, clear that the rent payable by the appellants as raiyats in respect of the disputed lands would form part of the assets which have to be included in the gross assets in determining compensation. But that does not mean that the interests of raiyats also have become vested in the State as a result of the notification under. 3, read with section 5. For the reasons aforesaid, it must be held that the appellant 's raiyati interests in the lands and in the buildings standing on those lands have not been affected by the abolition of his interest as proprietors, and that the State authorities had illegally taken possession of those. The appeal is accordingly allowed with costs here and below. Appeal allowed.

IN-Abs

The appellants held the Paikpara estate as proprietors. They had purchased the properties in question comprising raiyati lands with certain buildings thereon from the raiyat. Thus the proprietors became occupancy raiyat8 under the tenure holders or sub proprietors. By virtue of a notification issued under section 3 of the Orissa Estates Abolition Act, 1951, the Paikpara estate vested in the State of Orissa. But the interest of tenure holders and sub proprietors within the estate had not been taken over under the provisions of the Act: 553 The said buildings on the lands of the occupancy holdings were used as Katcheri houses by the proprietors for the administration of their estates. The state officials took possession of these buildings situated on the raiyati land. The appellants made an application to the collector, Puri, for vacant possession of the lands and the buildings. The Collector did not concede the demand and held that the occupancy holding was situated within the tenure held under the proprietors and lay within the geographical limits of the estate which had vested in the Government. The High Court dismissed the writ petition of the appellant under article 226 on the ground that the question raised was practically concluded by the Supreme Court in K. C. Gajapati Narayan vs Deo State of Orissa. The appellants came up in appeal on a certificate granted by the High Court. Held, that the appellants ' raiyati interests in the lands and in the buildings standing on those lands had not been affected by the abolition of their interests as proprietors, and the State Authorities had illegally taken possession of them. Held, further, that the Orissa Estates abolition Act,1951, was intended to abolish all proprietors,sub proprietors, tenureholders, with a variety of names, but did not touch the interest of the raiyat. Hence though these lands with buildings was situate geographicaiy within the ambit of the appellant 's estate, they were not part of the estate. The appellant held those properties with the buildings not as proprietors as such, but as raiyats. Held, also, that the conclusion drawn by the High Court from the decision in K. C. Gajapati Narayan Deo vs The State of Orissa is not well founded. The observation of this Court on which it drew its conclusion had reference to the definition of 'home stead ' in cl. (1) of section 2 of the Act. This court while dealing with the constitutionality of the Act, in the above case, was not concerned with raiyati lands. Its observations had reference only to such buildings as stood upon the proprietor 's private land, which were in his possession as proprietor or as tenure holder. K. C. Gajapati Narayan Deo vs The State of Orissa; , , not applicable.

Appeal No. 182 of 1952. Appeal by special leave from the Judgment and Order dated 2nd August, 1951, of the High Court of Judicature at Nagpur in Miscellaneous Petition No. 187 of 1950 under articles 226 and 227 of the Constitution. N. C. Chatterjee (R. M. Hajarnavis, with him) for the appellant. R. Ganapathy Iyer for the State of Madhya Pradesh. February 23. The Judgment of the Court was delivered by DAS J. On the 28th November, 1947, the appellant Hoosein Kasam Dada (India) Ltd., (hereinafter referred to as the assessee) submited to the Sales Tax Officer, Akola, a Sales Tax return in Form IV for the first quarter. Notice in Form XI calling upon the assessee to produce evidence in support of the said return having been issued by the Sales Tax Officer, the assessee produced his account books. Not being satisfied by the inspection of the account books as to the correctness of the return and being of opinion that the taxable turnover exceeded rupees two lacs the Sales Tax Officer submitted the case to the Assistant Commissioner of Sales Tax, Amravati, for assessment, 989 On the 25th January, 1949, the Assistant Commissioner issued a fresh notice in Form XI under section 11 and fixed the case for disposal on the 5th February, 1949. After various adjournments and proceedings to which it is not necessary to refer, the hearing commenced on the 9th June, 1949, when an agent of the assessee appeared with books of account of the Akola Branch. Eventually after various further proceedings the Assistant Commissioner on the 8th April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140 and a copy of the order in Form XIV was sent to the assessee. Being aggrieved by the order of assessment the assessee on the 10th May, 1950, preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(l) of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal. The assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22(l) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(l) of the Act as it stood when the assessment proceedings were started, i.e., before the said amendment. The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case. The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate 128 990 order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of sales tax assessed by the Assistant Commissioner of Sales Tax. The High Court dismissed the application on the 2nd August, 1951. The assessee applied to the High Court for leave to appeal to this Court which was also dismissed by the High Court on the 14th March, 1952. 'The assessee thereupon applied to this Court for special leave to appeal on the 12th May, 1952. This Court granted special leave to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioner 's appeal to the Sales Tax Commissioner, Madhya Pradesh. This Court took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded. The appeal has now come up for final disposal before us and in this appeal we are concerned only with the limited question of the effect of the amendment to section 22 of the Act. Section 22(l) of the Act was originally expressed in the following terms : "22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." The relevant portion of section 22 as amended runs as follows: "22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with 991 penalty, if any, in respect of which the appeal has been preferred. " It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred. The contention of the present assessee is that as the amendment has not been made retrospective its right of appeal under the original section 22(l) remains unaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal. That the amendment has placed a substantial restriction on the assessee 's right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal. The question is whether the imposition of such a restriction by amendment of the section can affect the assessee 's right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings. The question was answered in the negative by the Judicial Committee in Colonial. Sugar Refining Co., Ltd. vs Irving(1). In that case the Collector of Customs acting under an Act called the Excise Tariff Act, 1902, required the appellants to pay pound 20,100 excise duty on 6,700 tons of sugar. The appellants disputed the claim. So they deposited (1) 992 the money with the Collector and then brought the action by issuing a writ on the 25th October, 1902. A special case having been stated for the opinion of the Supreme Court, that Court on the 4th September, 1903, gave judgment for the Collector. In the meantime the Judiciary Act, 1903, was passed and received Royal assent on the 25th August, 1903, that is to say about 10 days before the judgment was delivered. By section 39(2) of that Act the right of appeal from the Supreme Court to the Privy Council given by the; Order in Council of 1860 was taken away and the only appeal therefrom was directed to lie to the High Court of Australia. The appellants having with the leave of the Supreme Court filed an appeal to the Privy Council the respondents filed a petition taking the preliminary point that no appeal lay to the Privy Council and praying that the appeal be dismissed. in dismissing that application Lord Macnaghten who delivered the judgment of the Privy Council said: "As regards the general principles applicable to the case there was no controversy. On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The Judicary Act is not retrospective by express enactment or by necessary intendment. And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In princi ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference 993 with existing rights contrary to the well known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested. " The principle of the above decision was applied by Jenkins C.J. in Nana bin Aba vs Sheku bin Andu (1) and by the Privy Council itself in Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi( '). A Full Bench of the Lahore High Court adopted it in Kirpa Singh vs Rasaldar Ajaipal Singh (3). It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication. In Sardar Ali vs Dalimuddin (4), the suit out of which the appeal arose was filed in the Munsiff 's Court at Alipore on the 7th October, 1920. The suit having been dismissed on the 17th July, 1924, the plaintiffs appealed to the Court of the District Judge but the appeal was dismissed. The plaintiffs then preferred a second appeal to the High Court on the 4th October, 1926. That second appeal was heard by a Single Judge and was dismissed on the 4th April, 1928. In the meantime Clause 15 of the Letters Patent was amended on the 14th January 1928 so as to provide that no further appeal should lie from the decision of a Single Judge sitting in second appeal unless the Judge certified that the case was a fit one for appeal. In this case the learned Judge who dismissed the second appeal on the 4th April, 1928, declined to give any certificate of fitness. The plaintiffs on the 30th April, 1928, filed an appeal on the strength of clause 15 of the Letters Patent as it stood before the amendment. The contention of the appellants was that the amended clause could not be applied to that appeal, for to do so would be to apply it retrospectively and to impair and indeed to defeat a substantive right which was in existence (1) Bom. (3) A. I. R 1928 Lah. (2) (1927) L.R. 54 I.A. Lah. (4) Cal. 994 prior to the date of the amendment. The apppllants claimed that on the 7th October, 1920, when the suit was filed they had vested in them by the existing law a substantive right to a Letters Patent appeal from the decision of a Single Judge and that an intention to interfere with it, to clog it with a new condition or to impair or imperil it could not be presumed unless it was clearly manifested by express words or necessary intendment. In giving effect to the contentions of the appellants Rankin C.J. observed at p. 518: Now, the reasoning of the Judicial Committee in The Colonial Sugar Refining Company 's case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court. If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit. " It was held that the new clause could not be given retrospective effect and accordingly the date of pre sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor. As against the last mentioned decision of the Calcutta High Court Sri Ganapathy Aiyar, appearing for the respondent, refers us to the decision of a Bench of the Bombay High Court in the case of Badruddin Abdul Rahim vs Sitaram Vinayak Apte (1), where it was held that the amendment of clause 15 of the Letters Patent operated retrospectively. That case followed an earlier decision of the same High Court in Fram Bomanji vs Hormasji Barjorji (2). The decision in the old case proceeded upon two grounds, namely, (1) that the question was one of procedure and (2) that sec (1) Bom. 753; A.I.R. (1928) Bom. (2) (1866) Bom. H.C. (O.C.J.) 49. 995 tion 2 of the New Letters Patent of 1865 gave retrospective operation to the Letters Patent by making it applicable to all pending suits. In so far as the first ground is concerned it clearly runs counter to the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. vs Irving (supra) and must be taken as overruled as Fawcett J. himself acknowledged at page 756. As regards the second ground it is inapplicable to the case before us and it is not necessary to express any opinion as to the. soundness and validity of that ground. It may be mentioned here that in Shaikh Hasan Abdul Karim vs King Emperor (1) another Bench of the same High Court expressly dissented from the decision in Badruddin Abdul Rahim vs Sitaram Vinayak Apte (supra). The principle laid down in the Colonial Sugar Refining Co. 's case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2). A Full Bench of the Allahabad High Court in Ram Singha vs Shankar Dayal (3) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan vs Genda (4) stood overruled by the Privy Council decision in the Colonial Sugar Refining Co. 's case. A Full Bench of Nagpur High Court in Radhakisan vs Shridar (5 ) has also taken the same view. The Punjab High Court has also adopted the same line in Gordhan Das vs The Governor General in Council (1). The case of Nagendra Nath Bose vs Mon Mohan Singha Roy (7) is indeed very much to the point. In that case the plaintiffs instituted a suit for rent valued at Rs. 1,30615 and obtained a decree. In execution of that decree the defaulting tenure was sold on the 20th November, 1928, for Rs. 1,600. On the 19th December, 1928, an application was made, under Order XXI, rule 90 of the Code of Civil Procedure, by the present petitioner, who was one of the judgment debtors, (1) I.L.R (2) A I.R. ; (3) All. 965; A.I.R. (1928) All. (4) All. 375. (5) A.I.R. (1950) Nag. (6) A.I.R, (1952) Punjab 103 (F.B.), (7) 996 for setting aside the sale. application having been dismissed for default of his appearance the petitioner preferred an appeal to the District Judge of Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree had not been deposited as required by the proviso to section 174, clause (c), of the Bengal Tenancy Act as amended by an amending Act in 1928. The contention of the petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale. Mitter J. said at page 1011: " We think the contention of the petitioner is wellfounded and must prevail. That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure. Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale (for that is the effect also where the application to set aside the sale is dismissed for default) under the provisions of Order 43, rule (1), of the Code of Civil Procedure. That right was unhampered by any restriction of the kind now imposed by section 174(5), Proviso. The Court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not. By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the, admission of which is now hedged in with a condition. There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal." 997 The, above decisions quite firmly establish and our decisions in Janardan Reddy vs The State (1) and in Ganpat Rai vs Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right. This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court. In the language of Jenkins C.J. in Nana bin Aba vs Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An [intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication. Sri Ganapathy Aiyar urges that the language of section 22(1) as amended clearly makes the section ret. rospective. The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date. A similar argument was urged before the Calcutta Special Bench in Sardar Ali vs Dalimuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. (1) (2) 129 998 Rankin C.J. repelled this argument with the remark at page 520: " Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants ' right." In our view the above observation is apposite and applies to the case before us. The true implication of the above observation as of the decisions in the other cases referred to above is that the pre existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. The argument of Sri Ganapathy lyer on this point, therefore, cannot be accepted. The learned Advocate urges that the requirment as to the deposit of the amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure. He contends that this case is quite different from the case of Sardar Ali vs Dalmuddin (supra), for in this case it is entirely in the power of the appellant to deposit the tax if he chooses to do so whereas it was not 999 within the power of the appellant in that case to secure a certificate from the learned Single Judge who disposed of the second appeal. In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time. Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose vs Mon Mohan Singha (supra). No cogent argument has been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement "touches" the substantive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellant 's pre existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure. Finally, Sri Ganapathy lyer faintly urges that until actual assessment there can be no 'lis ' and, therefore, no right of appeal can accrue before that event. There are two answers to this plea. Whenever there is a proposition by one party and an opposition to that proposition by another a 'lis ' arises. It may be conceded, though not deciding it, that when the assessee files his return a 'lis ' may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. It 1000 will appear from the dates given above that in this case the 'lis ' in the sense explained above arose before the date of amendment of the section. Further, even if the 'lis ' is to be taken as arising only on the date of assessment, there was a possibility of such a 'lis ' arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself. For all the reasons given above we are of the opinion that the appellant 's appeal should not have been rejected on the ground that it was not accompanied by satisfactory proof of the payment of the assessed tax. As the appellant did not admit that any amount was due by it, it was under the section as it stood previously entitled to file its appeal without depositing any sum of money. We, therefore, allow this appeal and direct that the appeal be admitted by the Commissioner and be decided in accordance with law. The appellant is entitled to the costs of this appeal and we order accordingly. Appeal allowed. Agent for appellant: Rajinder Narain. Agent for respondent: G. H. Rajadhyaksha.

IN-Abs

The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vested in a party when the proceedings are first initiated in, and before a decision is given by, the inferior Court and such a right cannot be taken away except by express enactment or necessary intendment. Section 22(l.) of the Central Provinces and Berar Sales Tax Act, 1947, provided that no appeal against an order of assessment should be entertained by the prescribed authority unless it was satisfied that such amount of tax as the appellant might admit to be due from him, had been paid. This Act was amended on the 25th November, 1949, and section 22(l) as amended provided that no appeal should ])a admitted by the said authority unless such appeal was accompanied by satisfactory proof of the payment of the tax in respect of which the appeal had been preferred. On the 28th of November, 1947, the appellant submitted a return to the Sales Tax Officer, who, finding that the turnover exceeded 2 lacs, submitted the case to the Assistant Commissioner for disposal and the latter made an assessment on the 8th April, 1950. The appellant preferred an appeal on the 10th May, 1950, without depositing the amount of tax in respect of which he had appealed. The Board of Revenue was of opinion that section 22(l.) as amended applied to the case as the assessment was made, and the appeal was preferred, after the amendment came into force, ' and rejected the appeal. Held, (i) that the appellant had a vested right to appeal when the proceedings were initiated, i.e., in 1947, and his right to appeal was governed by the law as it existed on that date ; (ii) that the amendment of 1950 cannot be regarded as a mere alteration in procedure or an alteration regulating the exercise of the right of appeal, but whittled down the right itself, and it had no retrospective effect as the Amendment Act of 1950 did not expressly or by necessary intendment give it retrospective effect, and the 988 appeal could not therefore be rejected for non payment of the tax in respect of which the appeal was preferred. Colonial Sugar Refining Co. Ltd. vs Irving , Nanabin Aba vs Sheku bin Andu (I.L.R. , Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi (54 I.A. 421), Kirpa Singh vs Rasaldar Ajaipal Singh (A.I.R. 1928 Lab. 627), Sardar Ali vs Dalimuddin (I.L.R. applied. Badraddin Abdul Rahim vs Sitaram Vinayak Apte (I.L.R. disapproved. In re Vasudeva Samiar (A.I.R. 1929 Mad. 381), Ram Singha vs Sankar Dayal (I.L.R. 50 All. 965), Radhakisan vs Sri Dhar (A.I.R. , Gordhan Das vs Governor General in Council (A.I.R. 1950 Punj. 103) and Nagendra Nath Bose vs Monmohan referred to.

Appeal No. 382 of 1960. Appeal by special leave from the judgment and decree dated October 31, 1957, of the Judicial Commissioner 's Court of Himachal Pradesh at Simla in Civil Regular Second Appeal No. 8, of 1957. Achhru Ram and Naunit Lal, for the appellant. Anil Kumar Gupta, section C. Agrawal, R. K. Garg, D. P. Singh and M. K. Ramamurthy, for the respondents. May 1. The Judgment of the Court was delivered by MUDHOLKAR, J. In this appeal by special leave against the judgment of the Judicial Commissioner, Himachal Pradesh in second appeal two points have been urged on behalf of the appellant. The first is that the Court of the Judicial Commissioner was in error in interfering with a finding of fact of the District Judge and the second is that the Court of the Judicial Commissioner was wrong in holding that the suit was not triable by a civil court but is triable by a revenue court under section 77 of the Punjab Tenancy Act, 1887 (Punj. XVI of 1887) (hereinafter referred to as the Act) which applies to Himachal Pradesh. In order to appreciate these points it is necessary to state some facts. The appellant who was plaintiff in the suit was the former ruler of the State of Bhagat, one of the Simla Hill states. The State of Bhagat and several other Simla Hill States were merged in Himachal Pradesh on July 1, 1947. As a consequence of the merger the ruler surrendered his sovereignty to the new States. Khasra Nos. 70, 80, 81, 167, 263/170, 171, 172, 173 and 2691177 measuring in all 15 bighas and 19 695 biswas, among other property, were declared to be the private property of the appellant. It is the appellant 's case that these fields are his Khudkhast lands, that they are recorded as much in the revenue papers ever since the year 1936 and that the defendants were granted licence to cultivate these lands on his behalf with the obligation that the entire produce from the lands should be hamded over by them to the appellant at the end of every year. The consideration for the arrangement was a remission in rent and land revenue which the appellant had granted to the respondents with respect to certain other lands which were leased out by him to the respondents. Bulk of these lands were declared to be the State property as a result of the merger and presumably the respondents have now to pay full assessment or rent with respect to them. According to the appellant the respondents failed to hand over the annual produce from the fields in suit to him and, therefore, he leased out the lands at Rs. 500/ per annum to Chuku Koli for Rs. 500/ for a period of one year from October, 1950. The respondents, however, obstructed Choku in taking possession of the land and despite repeated demands by the appellant, they kept him out of possession. He therefore instituted a suit for possession and mesneprofits from Rabi 1950 to Kharif 1953 at m. 500 per annum and future profits in July, 1954. On behalf of the respondents it was contended that they were the occupancy tenants of these lands for the last two or three generations. that they were cultivating these lands jointly and severally and that the suit was not cognizable by a civil court. They also contended that had filed a suit against the appellant in the court of the Assistant Collector, First Grade, Solon for a declaration to the effect that they are in possession of the lands as occupation tenants and that, therefore, the appellant 's suit 696 should be stayed. The trial court decreed the suit of the appellant as against all the respondents including the claim for mesne profits. The respondents preferred an appeal before the District Judge, Mahau. He dismissed the appeal and confirmed the decree of the trial court. They therefore preferred second appeal to the Court of Judicial Commissioner. The Judicial Commissioner allowed the appeal holding that the respondents were occupancy tenants of the lands and that consequently the provisions of section 77 (3) read with the first proviso thereto barred the jurisdiction of the civil court. On this finding the Judicial Commissioner set aside the decree granted by the trial court and affirmed by the District Judge and directed that the plaint be returned for presentation to proper court. It is contended before us by Mr. Achhru Ram for the appellant that for a suit to be barred under section 77 (3) of the Act from the cognizance of a civil court two conditions have to be satisfied. The first is that the suit should relate to one of the matters described in sub section 3 and the second is that the existence of the relationship of landlord and tenant should be admitted by the parties. If these two conditions are not satisfied then, according to him, the suit is not barred from the cognizance of a civil court. In support of his contention he has relied upon the decision in Sham Singh vs Amarjit Singh Baru vs Nader ; (2) Daya Ram vs Jagir Singh He has also relied upon certain observations of this Court in Magiti Sasamal vs Pandab Bissoi (4). Section 77 (3) and the first proviso there to run as follows: "The following suits shall be instituted in, and heard and determined by Revenue Courts, and no other Court shall take cognizance of (1) Lah. III (2) (1942) I.L.R.24 Lah. 191 F.B. (3) A.I.R (1956) Him. (4) 697 any dispute or matter with respect to which, any such suit might be instituted: Provided that (1) where in a suit cognizable and instituted in a Civil Court it becomes necessary to decide any matter which can under this sub section be heard and determined only by a Revenue Court shall endorse upon the plaint the nature of the matter for decision and the particulars required by Order VII, rule 10, Code of Civil procedure and return the plaint for presentation to the Collector. " We are not concerned with the second proviso. Below the second proviso the kind of suits which are triable by the revenue courts are set out in three groups. It is contended on behalf of the respondents that the suit in question would fall under entry (e) in the second group. That entry reads thus: "suits by a landlord to eject a tenant. " They also contend that their suit before the revenue court was one under entry (d) which reads thus: "Suits by a tenant to establish a Claim to a right of occupancy, or by landlord to prove that a tenent has not such a right. " It would, however, appear that not only it can (d) and (e) but every other item in the three groups relates to a dispute between tenants on the one hand and the landlord on the other. There is no entry or item relating to a suit by or against a person claiming to be a tenant and whose status as a tenant is not admitted by the landlord. It would, therefore, be reasonable to infer that the legislature barred only those suits form the cognizance of a civil court where there 698 was no dispute between the parties that a person cultivating land or who was in possession of land was a tenant. This is precisely what has been held in the two decisions of the Lahore High Court relied upon by Mr. Achhru Ran. In the first of these two cases Tek Chand J., observed: "It is obvious that the bar under clause (4) is applicable to those cases only in which the relationship of landlord and tenant is admitted and the object of the suit is to determine the nature of the tenancy i. e. whether the status of the tenant falls under sections 5, 6, 7 or 8 of the Act." In that case the suit was instituted by someone claiming to succeed to the tenancy of certain land on the death of the occupancy tenant. The learned Tudge observed: "In a suit like the one before us the point for decision is not the nature of the tenancy, but whether the defendant is related to the deceased tanant and if so whether their common ancestor had occupied the land. If these facts are established, the claimant ipso facto succeeds to the occupancy tenancy. But if they are found against him, he is not a tenant at all." As this facts were not established the High Court held that the landlord was entitled to sue the defendant who had entered on the land asserting a claim to be a collateral of the deceased tenant but who failed to substantiate his claim. This view was affirmed by a Full Bench consisting of five Judges in the other, Lahore case. In Daya Ram vs Jagir Singh (1) the same Judicial Commissioner who decided the appeal before us has expressed the view that where in a suit for ejectment the existence of the relationship of (1) A.I.R. (1956) Him. Pra. 61. 699 landlord and tenant is not admitted by the ' parties the Civil Court had jurisdiction to try the suit and that such a suit did not fall under section 77 (3) of the Act. In Magiti Sasamal vs Pandab Bissoi (1) this Court was considering the provisions of section 17 (1) of the Orissa Tenants Protection Act, 1948 (3 of 1948). The provisions of that section run thus: "Any dispute between the tenant and the landlord as regards, (a) tenant 's possession of the land on the 1st day of September, 1947 and his right to the benefits under this Act, or (b) misuse of the land by tenant, or (c) failure or the tenant to cultivate the land properly, or (d) failure of the tenant to deliver to the landlord the rent accrued due within two months from the date on which it becomes payable, or (e) the quantity of the produce payable to the landlord as rent, shall be decided by the Collector on the application of either of the parties. " It was contended in that case on behalf of the respondents who claimed to be tenants that suit for permanent injunction instituted by the appellant landlord was barred by the provisions of section 7 (1). Dealing with this contention this Court observed as follows: "In other words, section 7 (1) postulates the relationship of tenants and landlord between the parties and proceeds to provide for the exclusive jurisdiction of the Collector to try the five categories of disputes that may arise between the landlord and the tenant. The disputes which are the subject matter of section 7 (1) must be in regard to the five categories. That in the plain and obvious construction of the words any dispute as regards '. On this construction it would be unreasonable to (1) 700 hold that a dispute about the status of the tenant also falls within the purview of the said section. The scheme of section 7 (1) is unam biguous and clear. It refers to the tenant and landlord as such and it contemplates disputes of the specified character arising between them. Therefore, in our opinion, even on a liberal construction of section 7 (1) it would be difficult to uphold the argument that a dispute as regards the existence of relationship of landlord and tenant falls to be determined by the Collector under section 7 (1)". The observations of this Court would clearly apply to the present case also inasmuch as the relationship of landlord and tenant as between the parties to the suit is riot admitted by the appellant. Now we will come to the second point because the argument is that on the finding of the learned District Judge the respondents are tenants arid, therefore, their ejectment cannot be ordered by a Civil Court. As already stated the appellant challenged the finding of the Judicial Commissioner on the point on the ground that it had no jurisdiction to reverse the finding of the District Court because it was a finding of fact on the question. There is no doubt in our mind that the learned Judicial Commissioner was in error in reversing the finding of fact of the District Judge particularly so because the finding of the District Judge is based upon a consideration of entries in the record of rights from the year 1936 onwards showing that the lands were the khudkhast lands of the appellant and were in his possession, The learned Judicial Commissioner has omitted to bear in mind the provisions of section 44 of the Act which give a presumptive value to the entries in revenue records. It was argued before us that there are prior entaries which are in conflict with those on which the learned District Judge has 701 relied. It is sufficient to say that where there is such a conflict, it is the later entry which must prevail. Indeed from the language of section 44 itself it follows that where a new entry is substituted for an old one it is that new entry which will take the place of the old one and will be entitled to the presumption of correctness until and unless it is established to be wrong or substituted by another entry. In Deity Pattabhiramaswamy vs section Hanymayya(1) this Court held that a finding of fact arrived at by the District Judge on the consideration of all evidence, oral and documentary, adduced by the parties, cannot be set aside in second appeal. the question here is whether the respondents are the tenants of the appellant. Though for determining the question documentary evidence fell to be considered, the finding on the question is no less a finding of fact than may have been the case if the evidence to, be considered was merely oral. As was pointed out by this Court in that case as well as recently in Sir Chunilal V. Mohta & Sons Ltd., Bombay vs The Century Spinning & Manufacturing Co. Ltd, Bombay (2) an issue of law does not arise merely because documents which are not instruments of title or otherwise the direct foundation of rights but are merely historical documents, have to be construed. Of course here, as we have already pointed out, the Judicial Commissioner has ignored the presumption arising from certain documentary evidence and, therefore, there is an additional reason vitiating its finding. Upon this view we set aside the decree of the Court of the Judicial Commissioner and restore that of the trial court as affirmed by the District Court. Costs throughout will be borne by the parties as incurred. Appeal allowed. (1) A. 1. R. (2) (1962) Supp.

IN-Abs

The appellant filed a suit before the Civil Court for the ejectment of the respondents on the ground that they were licenses. Tile respondents claimed that they were occupancy tenants and contended that under section 77 of the Punjab Tenancy Act, 1887, the suit was triable by a revenue court only and not by the civil court. The trial court and the first appellate court decreed the suit holding that the respondents were not tenants. On second appeal the judicial Commissioner held that the respondents were occupancy tenants and that the civil court had no jurisdiction to entertain the suit. Held, that the civil court had jurisdiction to entertain the suit. Section 77 of the Punjab Tenancy Act was applicable only to suits between landlord and tenants where there was no dispute that the person cultivating the land was a tenant. But where the status of the defendant as a tenant was not admitted by the landlord, section 77 did not bar a suit in a civil court. Sham Singh vs Amarjit Singh, (1930) 1. L. R. and Baru vs Niadar, Lah. 19 1, F. B., approved. Magiti Sasamal vs Pandab Bissai, , relied on, Held, further that the finding of the first two courts that the respondents were not tenants was one of fact even though documentary evidence had to be considered in determining the question and the judicial Commissioner bad no jurisdiction to interfere with it in second appeal. The judicial Commissioner had ignored the presumption which arose from entire in the revenue records under section 44 of the Act and this vitiated his findings. Where there is conflict between prior and subsequent entries, the later entries must prevail.

Appeal No., 132 of 1959. Appeal from the judgment and decree dated March 23, 1956 of the Allahabad High Court in Special Appeal No. 291 of 1955. Veda Vyasa and C. P. Lal, for the appellant. J. P. Goyal, for the respondents. February 6. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Allahabad High Court. The brief facts necessary for present purposes are these. The three respondents were students of G. section Hindu Intermediate College at Sikandrarao and appeared at the Intermediate (Commerce) Examination con ducted by the appellant in the year 1954. On June 12, 1954, the result of the examination was published in newspapers and the three respondents passed in the second division. Thereafter they prosecuted further studies. But in December 1954, their fathers and guardians received information from the Principal of the G. section Hindu Intermediate College that the Examinations ' Committee of the appellant (hereinafter referred to as the Committee) had cancelled the result of the respondents for the examination of 1954 and further that they had been debarred from appearing at the examination of 1955. Thereupon the respondents filed a write petition in the High Court contending that the Committee had never afforded any opportunity to them to rebut the allegations made against them and that they were never informed about the nature of the unfair means used by them in the said exa mination and the first thing they come to know was the resolution of the Committee canceling their results and debating them from appearing in the examination of 1955. They therefore contended that they were entitled to an opportunity being 39 afforded to them to meet the case against them of using unfair means at the examination before the appellant took action against them by canceling their results and debarring them from appearing at the examination of 1955. The procedure thus adopted by the appellant was said to be in violation of the principles of natural justice inasmuch as they were given no opportunity whatsoever to defend themselves and to show cause against the action contemplated against them. It was further contended that the procedure adopted by the appellant violated the provisions of the U. P. Intermediate Education Act, No. II of 1921 (hereinafter referred to as the Act) and the U. P. Education Code, and therefore, the resolution canceling their results and debarring them from appearing in the later examination was without jurisdiction and illegal. They therefore prayed for a proper writ or order canceling the resolution of the appellant. The appellant opposed the application and its case was that the respondents had used unfair means at the examination and their cases were reported to the Committee under the Regulations and the Committee had acted under the, powers conferred on it under the Act and the Regulations framed thereunder after a thorough inquiry. It was not disputed, however, that no opportunity had been afforded to the respondents to rebut the allegations against them in the inquiry made by the Committee which resulted in the resolution canceling the results of the examination. A large number of contentions appear to have been urged in the High Court; but we are here only concerned with one of them, namely, whether the respondents were entitled to a hearing before the appellant decided to cancel the results. The contention on behalf of the respondents before the learned Single Judge was that the appellant was Under a duty to act judicially and therefore the 40 respondents should have been given a hearing before any order was passed , against them. The learned Single Judge held that no duty was cast on the Committee to act judicially and there was no statutory obligation on the Committee to give an opportunity to every examine to be heard; therefore he rejected the petition. The respondents then went in appeal which was heared by Dayal and Brijmohan Lall, JJ., who however differed. Brijmohan Lall, J., was of opinion that the Committee was not required to act judicially or quasijudicially when it considered cases of this kind and was acting merely administratively; be nevertheless was of the opinion that one of the rules of natural justice contained in the maxim audi alteram partem would apply in this case, even though the Committee was acting administratively. He was therefore in favour of allowing the appeal. Dayal J., agreed with the view of Brijmohan Lall, J., that in the present case no duty was cast on the Committee to act judicially and that the action of the Committee was merely administrative. He how ever did not agree that the Committee acted in violation of the principles of natural justice inasmuch as it did not give a hearing to the respondents. He was of the view that. is the Committee was acting merely administratively it was not bound to give a hearing, as the maxim audi alteram partem applied only to judicial or quasijudicial tribunals. The two learned Judges also differed on two other points with which we are not concerned. Eventually they referred three questions to be answered by another learned Judge and one of these questions was whether the failure of the Committee to provide an opportunity to the respondents of being heard vitiated its order, which was of an administrative nature. The matter then camo before a third learned Judge, Agarwala, J. He was doubtful whether the 41 view of the bench that there was no duty cast on the Committee to act judicially in the present case was correct; but as on that matter the two learned Judges were in agreement, he dealt with the case on the basis that the Committee was acting merely administratively, Even so, he came to the conclusion that the respondents were entitled to a hearing and agreed with the view of Brijmohan Lall, J. Consequently, the appeal was placed before the Bench again and in accordance with the opinion of the third Judge it was allowed. Then followed an application by the appellant for leave to appeal to this court, which was granted; and that is how the matter has come up before us. The main contention on behalf of the appellant is that the High Court was wrong in the view it took that an opportunity for hearing was iiecessary in this case even though the Committee acted merely administratively. It is contended that where a body is acting merely administratively, it is not necessary that it should give a hearing to a party who might be affected by its decision and that the principles of natural justice, including the maxim, audi alteram partem, apply only to judicial or quasi judicial bodies, i.e., bodies on whom a duty is cast to act judicially. It is submitted that where no such duty is cast on a body and it is acting merely administratively there is no necessity for it to hear the person who might be affected by it,. , order. The respondents on the other hand contend that though the final decision of the High Court is correct, the High Court was not right in holding that the Committee was acting merely administratively in a matter of this kind; they contend that considering the entire circumstances which operate in cases of this kind, the High Court should have held that there was a duty to act judicially and therefore it was necessary to give an opportunity to the respondents to be heard before action was taken against them. It is submitted that the 42 mere fact that there was nothing express in the Act or the Regulations framed thereunder which might make it obligatory for the Committee to call for an explanation and to hear the examinees whose cases it was required to enquire into was not wholly determinative of the question whether a duty was cast on the Committee in cases like this to act judicially. The first question therefore which falls for consideration is whether any duty is cast on the Committee under the Act and Regulations to act judicially and therefore it is a quasi judicial body. What constitutes , 'a quasi judicial act" was discussed in the Province or Bombay vs Kusaldas section Advani.(1) The principle, have been summarised by Das, J. (as he was then), at p. 725 in these words: "The principles, as I apprehend them are: (i) that if a statute empowers an authority, not being a court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a vis and prima farcie and in the absence of any thing in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi judicial act ; and (ii) that if a statutory 'authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority Will yet be a quasi. judicial act provided the authority is required by the statute to act judicially. (1) ; , 725. 43 In other words, while the presence of two parties besides the deciding authority will prima facie and in the absence of any other factor impose upon the authority the duty to act judicially, the absence of two such parties is not decisive in taking the act of the authority out of the category of quasi judicial act if the authority is nevertheless required by the statute to act judicially. " These principles have been acted upon by this Court in latter cases: see Nagendra Nath Bora vs The Commissioner of Hills Division & Appeals, Assam(1), Shri Radheshyam Khare vs The State of Madhya Pradesh(2), Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation("), and Shivaji Nathubhai vs The Union of India(4). Now it may be mentioned that the statute is not likely to provide in so many words that the authority passing the order is required to act judicially; that can only be inferred from the express provisions of the statute in the first instance in each case and no one circumstance alone will be determinative of the question whether the authority set up by the statute has the duty to act judicially or not. The inference whether the authority acting under a statute where it is silent has the duty to act. judicially will depend, on the express provisions of the statute read along with the nature of the rights affected, the manner of the disposal provided the objective criterion if any to be adopted, the effect of the decision on the person affected and other indicia afforded by the statute. A duty to act judicially may arise in widely different circumstances which it will be impossible and indeed inadvisable to attempt to define exhaustively:(vide observations of Parker, J. in R. vs Manchester Legal Aid Committee)(5). (1) ; (2) (3) [1959] Supp. 1 S.C.R. 319. (4) ; (5) , 44 We must therefore proceed to examine the pro. visions of the Act and the Regulations framed thereunder in connection with matters of this kind to determine whether the Committee can be said to have the duty to act judicially when it deals with cases of examines using unfair means in examination halls. Under s.7 of the Act, the Board constituted thereunder has inter alia powers to prescribe courses of instruction, to grant diplomas and certificates, to conduct examinations to admit candidates to its examinations to publish the results of its examinations, and to do all such things as may be requisite in order to further the objects of the Board as a body constituted for regulating and supervising High School and Intermediate education. Under section 1 3, the Board has power to appoint and constitute various committees, including the examinations ' committee, and under section 14, the Board can delegate its power. ; by Regulations to such committees. Section 15 gives power to the Board to make Regulations with respect to the constitution, powers and duties of committees, the conduct of examinations, and all matters which by the Act may be provided for by Regulations. Section 20 gives power to the Board and its committees to make bye laws consistent with the Act and the Regulations. It will be clear from the above that the Act makes no express provisions as to the powers of the committees and the procedure to be adopted by them in carrying out their duties, which are left to be provided by Regulations, and we have therefore to look to the Regulations framed under section 15 to see. what powers and duties have been conferred on various committees constituted under the Regulations. Section 13 (1) makes it incumbent on the Board to appoint the Committee and Chap. VI of the Regulations deals with the powers and duties of the Committee. Rule 1 (1) of Chap. VI with which we are particularly concerned reads as 45 follows: "It shall be the duty of the Examinations ' Committee subject to sanction and control of the Board. " "(1) to consider cases where examines have concealed any fact or made a false statement ill their application forms or a breach of rules and regulations to secure undue admis sion to an examination or used unfair means or committed fraud (including impersonation) at the examination or are guilty or a moral offence or indiscipline and to award penalty which may be one or more of the following : (1) withdrawal of certificate of having passed the examination ; (2) cancellation of the examination; (3) exclusion from the examination. " There is however no provision in Chap. VI as to how the Committee will carry out the duty imposed on it by r. 1 (1). Further, there is no express provision in the Act or the Regulations casting a duty on the Committee to act judicially when exercising its powers under r. 1 (1); and the question whether the Committee has to act judicially when exercising these powers will have to 'be decided on an examination of all the circumstances relevant in the matter. At the same time, there is nothing express in the Act from which it can be said that the Committee is not under a duty to act judicially. It is true that there is no procedure provided as to how the Committee will act in exercising its powers under r. 1 (1) and it is. further true that there is no express provision in that rule requiring the Committee to call for an explanation from the examines concerned and to hear the examines whose case,% ;it is required to consider. But we are of opinion that the mere fact that the Act or the Regulations do not make it obligatory on the Committee to call for an explanation and to 46 hear the examiner is not conclusive on the question whether the Committee acts as a quasi judicial body in exercising its powers under r. 1 (1). Even though calling for an explanation and hearing the examine may not have been made expressly oblitory by the Act or the Regulations, it is obvious that the Committee when it proceeds to decide mat ters covered by r. 1 (1) will have to depend upon materials placed before it, in coming to its decision. Before the Committee decides to award any penalty it has to come to an objective determination on certain facts and only when it comes to the conclusion that those facts are established that it can proceed to punish the examinee concerned. The facts which the Committee has to find before it takes action are (i) whether the examinee has concealed any fact or made a false statement in his application form; or (ii) whether the examinee has made a breach of the Rules and Regulations to secure under admission to an examination ; or (iii) whether the examinee has used unfair means at the examination ; or (iv) whether the examinee has committed fraud (including impersonation) at the examination ; or (v) whether the examinee is guilty of moral offence or indiscipline. Until one or other of the five facts is established before the Committee, it cannot proceed to take action under r. 1 (1). In order to come to the conclusion that one or other of these facts is established, the Committee will have to depend upon materials placed before it, for in the very nature of things it has no personal knowledge in the matter. Therefore, though the Act or the Regulations do 47 not make it obligatory on the Committee to call for an explanation and hear the examinee, it is implicit in the provisions of r. 1 (1) that the Committee must satisfy itself on materials placed before it that one or other of the facts is established to enable it to take action in the matter. It will not be possible for the Committee to proceed at all unless materials are placed before it to determine whether the examinee concerned has committed some misconduct or the other which is the basis of the action to 1 be taken under r. 1 (1). It is clear therefore that consideration of materials placed before it is necessary before the Committee can come to any decision in the exercise of its powers under r. 1 (1) and this can be the only manner in which the Commit, tee can carry out the duties imposed on it. We thus see that the Committee can only carry out its duties under r. 1 (1) by judging the Materials, placed before it. It is true that there is no lis in the present case, in the sense that there are not two contesting parties before the Committee and the matter rests between the Committee and the examinee; at the same time considering that materials will have to be placed before the Committee to enable it to decide whether action should be taken under r. 1 (1), it seems to us only fair that the examinee against whom the Committee is proceeding should also be heard. The effect of the decision of the Committee may in an extreme case blast the career of a young student for life and in any case will put a serious stigma on the examinee concerned which may damage him in later life. The nature of misconduct which the Committee has to find under r. 1 (1) in some cases is of a serious nature, for example, impersonation, commission of fraud, and perjury; and the Committee 's decision in matters of such seriousness may even lead in some cages to the prosecution of the examinee in courts. Considering therefore the serious following the 48 decision of the Committee and the serious nature of the misconduct which may be found in some cases under r. t (1), it seems to us that the Committee must be held to act judicially in circumstances as these. Though therefore there is nothing express one way or the other in the Act or the Regulations casting a duty on the Committee to act judicially, the manner of the disposal, based as it must be on materials placed before it and the serious effects of the decision of the Committee on the examinee concerned, must lead to the conclusion that a duty is cast on the Committee to act judicially in this matter particularly as it has to decide objectively certain facts which may seriously affect the rights and careers of examinees, before it can take any action in the exercise or its power under r. 1 (1). We are therefore of opinion that the Committee when it exercises its powers under r. 1 (1) is acting quasijudicially and the principles of natural justice which require that the other party, (namely, the examinee in this case) must be heard, will apply to the proceedings before the Committee. This view was taken by the Calcutta High Court in Dipa Pul vs University of Calcutta, (1) and B. C. Das Gupta vs Bijoyranjan Rakshit, in similar circumstances and is in our opinion correct. It is urged on behalf of the appellant that there are a large number of cases which come up before the Committee under r. 1 (1), and if the Committee is hold to act judicially as a quasijudicial tribunal in the matter it will find it impossible to carry on its task. This in our opinion is no criterion for deciding whether a duty is cast to act judicially in view of all the circumstances of the case. There is no doubt in our mind that considering the totality of circumstances the Committee has to act judicially when taking action under r. 1 (1). As to the manner in which it should give an opportunity to the examinee concerned to be (1) A. I. R. (2) A. 1. R. 49 heard, that is a matter which can be provided by Regulations or Bye laws if necessary. As was pointed out in Local Government Board vs Alridge, (1) all that is required is that the other party shall have an opportunity of adequately presenting his case. But what the procedure should be in detail will depend on the nature of the tribunal. There is no doubt that many of the powers of the Committee under Chap. VI are of administrative nature; but where quasi judicial duties are entrusted to administrative body like this it becomes a quasi judicial body for performing these duties and it can prescribe its own procedure so long as the principles of natural justice are followed and adequate opportunity of presenting his case is given to the examinee. It is not however necessary to pursue this matter further, for it is not in dispute that no opportunity whatsoever was given to the respondents in this case to give an explanation and present their case before the Committee. We are therefore of opinion that though the view of the High Court that the Committee was acting merely administratively when proceeding under r. 1 (1) is not correct, its final decision allowing the writ petition on the ground that no opportunity was given to the respondents to put forward their cases before the Committee is correct. We therefore dismiss the appeal. No order as to, in the circumstances. Appeal dismissed.

IN-Abs

The three respondents were declared by the appellant to have passed the Intermediate examination. Thereafter they prosecuted further studies and subsequently the fathers and guardians of the respondents were informed that the Examination Committee of the Board had cancelled the examination results of the respondents and that they were debarred from appearing at the next examination. The respondents filed a writ petition in the High Court of Allahabad contending that since the Examination Committee had never afforded any opportunity to them to rebut the allegations made against them the Examination Committee had violated the principles of natural justice. They also contended that the Committee had violated the provisions of the U. P. Intermediate Education Act, 192 1. The appellant while admitting that no opportunity had been afforded to the respondents to rebut the allegations against them, contended that the Examination Committee was only an administrative body acting merely administratively and it was not bound to give a hearing to a party who might be affected by its decision. The Single judge who heard the writ petition held that the Committee was not bound to act judicially and there was no statutory obligation on the Committee to give an opportunity to be heard. The respondents appealed to a Division Bench and one of the judges of Bench held that even though the Committee was not bound to act judicially or quasijudicially and it was acting administratively it ought to have given an opportunity to the respondents of being heard. The other judge was of the opinion that since the committee was acting only administratively it was not bound to give a hearing. The matter then went before a third judge who held that even though the Committee was acting merely administratively the respordents were entitled to a hearing. The appellant thereupon appealed to this Court. The appellant contended that the Committee was only a body a ing administratively and that the principles of natura 37 justice, including the maxim audi alteram partem apply only to judicial or quasi judicial bodies. The respondents contended that the High Court was wrong in holding that the Committee was only an administrative body. It was further submitted by them that the mere fact that there was nothing express in the Act or the Regulations framed thereunder which might make it obligatory for the Committee to call for an explanation and to hear the examinee whose case it was required to enquire into was not wholly determinative of the question whether a duty is cast on the Committee in cases like this to act judicially. Held, that the inference whether the authority acting under a statute, where it is silent, has the duty to act judicially will depend on the express provisions of the statute read along with the nature of the rights affected, the manner of disposal provided, the objective criterion if any to be adopted, the effect of the decision on the persons affected and other indicia afforded by the statute. The mere fact that the Act in question or the relevant Regulations do not make it obligatory on the Committee to call for anexplanation and to bear the examinee is not conclusive on the question whether the Committee acts as a quasi judicial body when exercising its powers under Ch. VI, r. 1 (1), of the Regulations. It is obvious that the Committee when it proceeds to decide matters covered by r. 1 (1) will have to depend upon materials placed before it and before it decides to award any penalty it has to come to an objective determination on certain facts and this is the only manner in which it can carry out the duties impos. ed on it. Even though there is no lis in the present case in the sense that there are not two contending parties before it the Committee should hear the examinees whose lives may be seriously affected by its decision even subjecting them in some cases to criminal prosecution on charges of impersonation, fraud and perjury. Though therefore there is nothing express one way or other in the Act or the Regulation casting a duty on the Committee to act judicially, the manner of the disposal and the serious effects of the decision of the Committee lead to the conclusion that a duty to act judicially is cast on the Committee and the Committee when it acts under r. 1 (1) is acting quasi judicially and the principles of natural justice will apply to its proceedings. Province of Bombay vs Kusaldas section Advani, ; , Yagendranath Bora vs Commissioner of Ilills Division & Appeals, Assam, ; Shri Radheshyam Khore vs State of Madhya Pradesh, , Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corpo ration, [1959] Stipp. 1 section C. R. 319 and Nathubhai vs Union (if lndia; , , followed.

Appeals Nos. 188 to 191 of 1956. 72 Appeals from that judgment and decree dated April 13, 1955, of the former "Nagpur High Court in Civil Suits Nos. 3, 4, 9 and 10 of 1955 (Original Nos. M.C.C. 194, 195, 200 and 202 of 1954). M. C. Setalvad, Attorney General .for India. A. V. Viswanatha Sastri, J. V. Jakatdar and I. N '. Shroff, for the, appellant (in C. A., No. 188 of 56). H. N. Sanyal, Additional Solicitor General of India, and G. C. Mathur, for the respondent (in C. A. No. 188 of 56). J. V: Jakatdar and 1. N. Shroff for the appellants (in C. As. Nos. 189 to 191 of 56). section T. Desai and G. C. Mathur, for the respondent (in C. A. No. 190 of 56). G. C. Mathur, for the respondent (in C. As. Nos. 189 and 191 of 56). February 7. The Judgment of the Court was delivered by AYYANGAR, J. Section 143(2) of the Government of India Act, 1935 enacted. "43(2). Any taxes, duties, cesses or fees which, immediately before the commencement of Part III of this Act, were being lawfully levied by any Provincial Government, municipality or other local authority or body for the purposes of the Province, municipality, district or other local area under a law in force on the first day of January, nin eteen hundred and thirty five, may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Federal Legislative List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by the Federal Legislature. " The precise import, significance and effect of the 73 words "continue to be levied and to be applied to the same purposes until provision to the contrary is made by the Federal Legislature" is the common question which arises in these four appeals which come before us by virtue of certificates under article 132 of the Constitution granted by the High Court of Madhya Pradesh at Nagpur. Section 51 of the Central Provinces and Berar Local Self Government Act, 1920 enacted : "51. (1) Subject to the provisions of any law or enactment for the time being in force a District Council may, by a resolution passed by a majority of not less than two thirds of the members present at a special meeting convened for the purpose, impose any tax, toll or rate other than those specified in sections 24, 48, 49, and 50. (2). . . . . . . . . (3). . . . . . . . . By virtue of the power thus conferred the District Council of Bhandara which was "a local authority" constituted under this Act of 1920 imposed a tax on the export of bidis and bidi leaves by rail out of the Bhandara district by a resolution dated May 14, 1925, as amended by another dated April 18, 1926. The tax was at the rate of 4 annas per maund on bidis and 2 annas per maund on bidi leaves. The Local Government framed rules for the collection of the tax under section 79 of the Act of 1920, and the said tax was being collected by this local authority on April 1, 1937, when Part III of the Government of India Act came into force. It is now common ground that the tax thus levied and collected was "a terminal tax on goods carried by railway" covered by entry 58 in the Federal, Legislative List List I in the Seventh Schedule to the Government of India Act of 1935. The result of this tax being in the Federal Legislative List, it is manifest, is that the Provincial Legislature 74 could not thereafter freshly impose such a tax under its legislative power. By reason of the provision however of section 143 (2) of the Government of India Act, 1935, extracted earlier, the local authority continued to retain the authority to levy and collect the said tax and the tax continued to be collected by the District Council even after April 1, 1937 when Part III of the Government of India Act came into force. While so, the Central Provinces and Berar Local Self Government Act, 1920, was repealed and was replaced by the Central Provinces and Berar Local Government Act, 1948, which came into force on June 11, 1948. District Councils which were the units of local government administration under the Act of 1920 were replaced by Janpads which comprised smaller areas and as a result the area which was under the jurisdiction of the District Council of Bhandara under the Local Self Government Act of 1920, came to be constituted into three Janpads, viz., those of Gondia, Bhandara and Sakoli these being the three Tahsils comprised in the district and the three Janpads were administered by three Janpad Sabhas formed under the Act of 1948. There were provisions in the later enactment providing for continuity in the powers to be exercised by the District Councils whom the former replaced. But what is of relevance to the points arising in the present appeals are those contained in a. 192 of the Act of 1948 which, as originally enacted, ran "On and from date on which this Act comes into force, the Central Provinces and Berar Local Self Government Act, 1920, shall be repealed : Provided that (a) all local authorities constituted under the said Act shall continue to function there under for such time till the constitution of 75 the Sabhas as the Provincial Government may, by notification, specify; (b) all rules and bye laws made, all noti fications published, all orders issued and all licences and permissions granted under the said Act and in force immediately be fore the commencement of this Act shall, so far as they are consistent with this Act, be deemed to have been respectively made, published, issued and granted thereunder;, (c) all rates, taxes and cesses due to the district Council or Local Board shall be deem ed to be due to the Sabha to whose area they pertain; and (d) all references made in any Act of the Provincial Legislature to the said Act shall be read as if made to this Act or to the corresponding provision thereof. " Pausing here, two matters which figured largely in the arguments require to be noticed in the provisions of this section. The first is that there was an express repeal of the Local Self Government Act of 1920 effected by the main part of the section. The second is that the repeal was not absolute and unconditional but was modified, by a saving which continued the operation of certain of the provisions of the repealed Act. But the terms in which the right to collect the rates, taxes and cesges was continued in favour of the Janpad Sabhas which replaced the District Councils under cl. (c) was capable of being construed as not enabling the future imposition of the rate, cess etc, by the Janpad sabhas. The scope and meaning of this clause which is one of the principal matters to be considered in these appeals we shall reserve for later consideration but at this stage it might be mentioned that the clause is certainly capable of being understood as transferring to the Sabhas only 76 the right to collect the rates, taxes or cesses which had accrued due to the District Councils which had remained unpaid on the date when by virtue of the first part of 192 the Act of 1920 stood repealed and the District Councils ceased to exist. If this were the proper meaning of this clause it is obvious that the Janpad Sabhas could no longer levy the terminal tax oil bidis and bidi leaves where the export was effected on or after June 11, 1948, on which date by virtue of the Act of 1948, coming into force the earlier Act of 1920, stood repealed. The Janpad Sabhas were, however, continuing the levy and the Provinoial Legislature sought to put the matter beyond doubt by an amending Act of 1949 by which cl. (b) of the proviso to section 192 was replaced by a new clause reading: ""All rules and bye laws and orders made, notifications and notices issued, licences and permits granted, taxes imposed or assessed, ceases (other than additional cesses imposed in accordance with section 49 of the said Act), fees, tolls or rates levied, contracts entered into and suits instituted and proceedings taken under the said Act and in force immediately before the commencement of this Act shall continue to be in force and in so far as they are not inconsistent with this Act, they shall be deemed to have been respectively made, issued, granted, imposed or assessed levied, entered into, instituted and taken under this Act until new provisions are made tinder the appropriate provisions of this Act." and by section 39 of the Amending Act this amendment was given retrospective effect from the commencement of the Local Government Act of 1948. It was not in dispute that if the terms of el. (b) as amended by the Act of 1949 had found a place in the Local Government Act of 1948 when originally enacted. the levy of this tax by the Janpad Sabhas would 77 have been valid. It is only necessary to add that if this tax had been lawfully levied by the Janpad Sabhas immediately before January 26, 1950, they could continue to be levied after Constitution came into force nothwithstanding the repeal of the Government of India Act by the Constitution and notwithstanding terminal taxes being a tax solely leviable by the Union List in Sch. VII) by reason of the provision contained in article 277 of the Constitution reading: "277. Any taxes. duties, ceases or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwith standing that those taxes, duties, ceases or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law. " It would thus be seen that in order to sustain the claim, of the respective Janpad Sabhas who are the respondents in these four appeals to continue to lawfully levy the terminal tax it should be established either that cl, (c) to the proviso to a. 192 enabled them to do so or that the amendment effected to proviso (b) to a. 192 of the Act of 1948 was validly enacted. Before considering this question it would be of advantage if we set out the facts of the cases under appeal. It is sufficient to refer to the facts in Civil Appeal 188 of 1956 because, except for the identity of the appellants and the amounts involved, the matter in controversy is exactly similar, Rama Krishna Ramanath appellant in Civil Appeal 188 is a proprietary concern carrying on business, alia, in manufacturing and selling bidis. In the 78 course of that business they export bidis to various places outside the territorial limits of the Janpad Sabha, Gondia. The Janpad Sabha, Gondia demanded and collected taxes when the export took place from railway stations within its territorial jurisdiction. Between January 26, 1950, and June 30, 1952, the respondent Sabha had collected tax totaling Rs. 3,818/15/3, the appellant concern contending that from the date of the coming into force of the Constitution the imposition and collection of the terminal tax by the respondent Sabha was illegal, because the right to levy terminal taxes was vested exclusively in the government of the Union under entry 89 in the First List to the 7th Schedule to the Constitution and sought the refund of this sum of tax from the respondent Sabha and also required that it should desist from continuing the imposition and levy of this tax, and when the request was not needed, served notice on the Sabha. In consequence of this notice though the Sabha discontinued the collection of the tax, it refused to refund the tax already collected. Thereupon the appellant instituted a civil suit inthe court of the Civil Judge at Gondia praying for a decree for the sum of Rs. 3,818/15/3 and costs. The suit was resisted and thereafter this alongwithseveral similar suits including three by the appellants in the other three appeals were all withdrawn to the High Court under article 228 of the Constitution for deciding the substantial question of law as to the interpretation of the Constitution and of the Government of India Act as to whether the levy of the tax by the respondent Sabha was lawful or not These suits were consolidated and were disposed of by a common judgment dated April 13, 1955, by which all the suits were dismissed but a certificate was granted under article 132 of the Constitution. On the strength of the certificate four of the aggrieved plaintiffs filed appeals to the Courts and that is how the matter is before us. 79 Before considering the submissions made to us by the learned Attorney General for the appellant it would be convenient to state the exact factual position relating to the levy of the impugned tax : (1)The tax being one on goods exported out of the local area by rail would answer the description of a terminal tax falling within the exclusive jurisdiction of the Central Legislature under the Government of India. Act, 1935. The position has continued to be the same under the distribution of legislative power in relation to taxes under the Constitution. The result would, therefore, be that but for the saving contained in section 143(2) of the Government of India Act, 1935 it would not have been legally competent for the local authority to continue to levy the tax after the Government of India Act came into force ; similarly but for article 277 that levy could not have been continued beyond January 26, 1950. On the facts stated earlier it would be seen that the right of the local authority to levy the tax would be ultimately dependent on the same being authorised by section 149(2) of the Government of India Act. (2)The, tax that was sought to be levied by the respondent Sabhas and which was challenged as unauthorised and illegal was identical in the incidence as the tax which the District Council of Bhandara lawfully levied, just prior to the commencement of Part III of the Government of .India Act, 1935. By incidence we mean the subjectmatter of the tax, the taxable event as well as the rate of the duty. In other words, the tax now sought to be levied and that which was lawfully imposed and collected prior to April 1, 1937 were exactly identical in their effect and operation. Similarly there was no controversy as regards either the identity of the area in aid of whose local administration the tax *as now sought to be collected, nor as regards the purposes for which they 80 were utilised as compared with what prevailed on April 1, 1937. The principle contention however, raised on behalf of the appellant before the High Court was based upon a denial of the identity of the authorities three Janpad Sabhas with the District Council, Bhandars which levied and collected the tax prior to April 1, 1937. The learned Judges of the High Court rejected this contention and held that the three Janpad Sabhas which replaced the District Council of Bhandara were in substance identical with the latter principally for the reason that the area covered by the three newly created Janpads was the same as that for which the District Council functioned and that the purposes for which the tax collected would be utilized which are the, criteria specified in section 143(2) were exactly the 'same, Just as it could not be disputed that if there were any change in the composition of the District Council the identity of a local authority would not be altered for the purposes of section 143(2), the mere splitting up of that local area for being administered by a plurality of Local Government Units would not effect any change material for the purposes of the continued exigibility of the tax under section 143(2). The learned Attorney General therefore very properly did not press before us this point based upon the disappearance of the District Council and its being replaced by the respondent Sabhas as any ground for denying to the respondent Sabhas the right to levy the tax. The only point that was urged before us in challenge of the right of the respondent Sabhas to continue the levy of this terminal tax may be formulated thus: The Provincial Legislature of Central Provinces & Berar in exercise of its legislative power under item 13 of the Provincial Legis lative List enacted the Local Government Act, 81 1948 and validly repealed the Act of 1920 under which this tax was levied. As part of the same legislation and taking effect at the same time it was open to that Legislature to have continued the provisions of the repealed Act of, 1920 under ,which the impugned tax was levied so as to enable the newly created Janpad Sabhas to exercise the fiscal powers of the District Councils which they replaced, thus so to speak modifying or qualifying the repeal. Such a continuance could be provided by a saving clause couched in appropriate phraseology to effectuate such an intention. If this had been done the source of legal authority to levy the tax would, even after the Act of 1948 came into force, have been the repealed Act of 1920 which to the extent of the saving would be deemed to have continued in force. But this was not done. There was, no doubt, a saving under the proviso to section 192 but the saving in respect of the taxes which was contained in sub cl.(c) to the proviso was confined to the recovery of taxes which had accrued due on the date of the repeal but which still remained uncollected and the purpose of the sub clause was to effect a distribution of those assets, viz., of the accrued arrears among the several Janpad Sabhas which replaced each District Council, so that when on June II, 1948, the Act of 1948 came into force, the effect of it was that the repeal of the Act of 1920 was for all purposes relevant to the matter now in controversy complete and with it the power to levy the tax in future stood. extinguished, save only as regards the right to collect the arrears which had accrued due to the District Councils before that date. No doubt, the Provincial Legislature effected an amendment to section 192 in 1949 by which the saving was extended to include the right of the Janpad Sabhas to continue to levy the impugned tax and this amendment was given retrospective effect as from Tune 11, 1948, but 82 this amendment was beyond the legislative com. petence of the Provincial Lagislature since in pith and substance it was virtually a legislation expressly conferring upon the Janpad Sabhas the right to levy a terminal tax a right which they did not possess before that date and unless the Legis lature was competent to enact a law in relation to such a tax it could not validly confer upon the local authority what in legal effect should be considered to be a fresh right to levy the tax. The argument was also presented in a slightly different form by saying that on the terms of section 143(2) of the Government of India Act there was a provision only for the continuance of the tax and that when once that continuity was broken by a valid piece ' of legislation such as took place in this case when the Local Self Government Act 1920 wes repealed without a properly drafted saving clause enabling the continued levy of the tax, the discontinuity created thereby could not thereafter be repaired and the gal) filled by further legislation even though it purported to be with restrospective effect. Mr. Sanyal learned Additional Solicitor General who appeared for the respondent Sabhas submitted several answers to sustain the validity of the continued imposition of the tax, He first urged that the effect of section 143 (2) of the Government of India Act, 1935 was in effect to vest in Provincial Legislatures a plenary power to legislate in respect of every tax which was being lawfully levied by local authorities etc. in the Province prior to the commencement of Part III of the Government of India Act so "much so that even if the amendment efrected to section 192 by the Local Government (Amendment) Act of 1949 be treated as itself a fresh imposition of the tax its validity could not bechallenged. We must express our inability toaccept this extreme contention. Section 143 (2) which is a saving clause and 83 obviously, designed, to prevent a dislocation of the finances of Local Governments and of local authorities by reason of the coming into force of the provisions of the Government of India Act distributing heads of taxation on lines different from ' those which prevailed before that date, cannot be construed as one conferring a plenary power to legislate on those topics till such time as the Central Legislature intervened. Such a construction would 'necessarily involve a power in the Provincial Legislature to enhance the rates of taxation a result we must say from which Mr. Sanyal did not shrink, but having regard to the language of the section providing for a mere continuity and its manifest purpose this construction must be rejected. The next point urged by Mr. Sanyal was based on the construction which he aought to put on cl.(c) of the proviso to section 192 of the Local Government Act of 1948. He submitted that the words ,,due to the District Council" were wide and apt enough to include not merely the taxes that had accrued due on the date of the repeal of the Act of 1920 but even the amounts which accrued later and became payable subsequent to that date "Due" he said meant ,,payable" and as the words of the sub section did not specifically limit the period when the cess became payable to some time anterior to the repeal of the Act of 1920. it ought to be read as including those amounts which accrued due and became payable even thereafter. We find it difficult to accept this submission either. The difficulty in accepting it is created only in part by the use of the expression "due" but the main hurdle in the way of the respondent is that what is saved by the sub clause (and is distributed among the Janpad Sabbas which replaced the District Councils), is specified as a cess ' rate etc. due to a District Council. The rate, cess or duty due to a District Council could obviously be only that which 84 had accured due to a District Council while that body was in existence and with the extinction of the District Councils by the repeal of the Act of 1920 there could be no question of any further sums being due to such a body. Mr. San _Val however sought to get over this situation by suggesting that the words "due to a District Council" were merely descriptive of the nature of the tax and did not pre dicate that it was an amount due to a particular body on the date when it became due. In our opinion this is not an interpretation which the words could reasonably bear and we have, therefore, no hesitation in rejecting this argument. It was then submitted that even if the words of cl. (c) of the proviso would not ordinarily include a saving as regards the right of the Janpad Sabhas to levy the tax in the future, still we should adopt that construction as being in consonance with and for giving effect to the intention of the legislature which made it clear that that was so by enacting the amendment to section 192 by the Act of 1949 within a year or so after the Act of 1948. We consider that this submission also deserves, in the circumstances of the present case, to be rejected. It is a cardinal principle of statutory construction that the intention of the legislature should be gathered from the words of the enactment. If, as we have held, those words are incapable of the construction that there was a savig of the right of the Janpad Sabbas to impose and collect the tax apart from the right to collect the arrears of tax which accured due while the District Council was in existence,that construction cannot be modified and the legislative intent with which that proviso was enacted supplemented by a reference to what the legislature did later. No doubt, there is authority for the position that when the meaning of the words used in an enactment is ambiguos or obscure, subsequent statutes might sometimes be used as what has been termed "a parliamentary exposition" of the obscure phraseology. It is hardly 85 necessary to discuss the permissible limits of this node of construction for the purpose of the present lase, because the prime conditions for invoking that rule are absent here there is no obscurity or ambiguity in the words of el. (c) and secondly if the learned Attorney General is right, the Provincial Legislature had no legislative capacity to enact the Amending Act of 1949 and this must include legislation either by way of explanation or exposition, and of course by positive enactment. If there is incapacity to enact retrospective legislation on the matter, the position is not rendered different by viewing it as parliamentary exposition. The validity of the amendment effected by the Act of 1949 must be judged independently and on its own inerits and its terms cannot be used as a guide to the interpretation of what the legislature in enacting section 192 of the Act 1948 intended by the words in cl. The next submission was that as the Act of 1949 amended the terms of section 192 so as to save the power of the Janpad Sabhas to levy the cess with retrospective effect from the date when the Act of 1920 stood repealed, there was in the eye of the law a continuity in the levy of the cese; or rate and so no hiatus or period of discontinuity existed 'such as had been suggested by the learned Attorney General and the existence of which was the entire foundation of his argument. It must, however, be mentioned that the learned Attorney General was not oblivious of this feature of the legislation of 1949, viz., that it purported to operate as it were to close the gap, but his submission was that if, in fact, the gap existed and there was factually a period of discontinaity, the legislature which had no authority to enact positive legislation with reference to the topic in May 1949 was incompetent to pass an enactment with retrospective effect. In our opinion, this argument of Mr. Sanyal requires serious consideration and the answer would 86 turn on the proper construction of the terms of section 143(2) of the Government of India Act. The first matter to be considered would be the source of the legislative power to enact the Local Government Act of 1948. In so far as the constitution of local authorities, their territorial distribution, the endowing them with powers, jurisdiction and authority in general are concerned, the legislative power therefore is to be found in entry 13 of the Provincial Legislative List II to Sch. VII of the Government of India Act, 1935 reading : "Local Government, that is to say, the constitution and powers of municipal corpora tions, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self government on village administration". It must however be observed that merely because the legislature is empowered under this entry to constitute local authorities and vest them with powers and jurisdiction it would not follow that these local bodies could be vested with authority to levy any and every tax for the purpose of raising revenue for the purposes of local administration. They could be validly authorised to raise only those taxes which the Province could raise under and by virtue of the relevant entries in the Provincial Legislative List. This is on the principle that the Province could not authorise local bodies created by it to impose taxes which it itself could not directly levy for the purposes of the Provincial Government. Now comes the question whether the Provincial Legislature was competent, by legislation, to discontinue the levy of the tax by effecting a repeal of the taxing provision contained in the Local Self Government Act of 1920. There is no doubt that the general principle is that the power of a legislative body to repeal a law is co extensive with its power to enact each a law, as would be seen from 87 the following passage in. the judgment by Lord Watson in Attorney General for Ontario vs Attorney General for the Dominion(1) : "Neither the Parliament of Canada nor the provincial legislatures have authority to repeal statutes Which they could not directly enact." But obviously its application in particular instances would be controlled by express constitutional provision modifying the same. We have such provision in the case on hand in section 143(2) of the Government of India Act, 1935. In the context the relevant words of the sub section could only mean "May continue to be levied if so desired by the Provincial Legislature" which is indicated by or is implicit in the use of the expression "May" in the clause 'may be continued until provision to the contrary is made by the Federal Legislature. " This would therefore posit a limited legislative power in the Province to indicate or express a desire to continue or not to continue the levy. If in the exercise of this limited power the Province desires to discontinue the tax and effects a repeal of the relevant statute the repeal would be effective. Of course, in the absence of legislation indicating a define to discontinue the tax, the effect of the provision of the Constitution would be to enable the continuance of the Dower to levy the tax but this does not alter the fact that the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy subject to the overriding power of the Central Legislature to put an end to its continuance and it is on the basis of the existence of this limited legislative power that the right of the Provincial Legislature to repeal the taxation provision under the Act of 1920 could be rested. Suppose for instance, a Provincial Legislature desires the continuance of the tax but considers the rate too High and (1)[1896] A. C. 348, 366. 88 wishes it to be reduced and passes an enactment for that purpose, it cannot be that the legislation is incompetent and that the State Government must permit the local authority to levy tax at the same rate as prevailed on April 1, 1937 if the latter desired the, continuance of the tax. If such a legislation were enacted to achieve a reduction of the rate of the duty, its legislative competence must obviously be traceable to the power contained in words "may continue to be levied" in section 143(2) of the Government of India Act. If we are right so far it would follow that in the exercise of this limited legislative power the Provincial Legislature would also have a right to legislate for the continuance of the tax provided, if of course, the other conditions of section 143(2) are satisfied, viz., (1) that the tax was one which was lawfully levied by a local authority for the purposes of a local area at the commencement of Part III of the Government of India Act. (2) that the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilisation is to take place continue to be the same and (3) the rate of the tax is not enhanced nor its incidence in any manner altered, so that it continues to be same tax. If as we have hold earlier there is a limited legislative power in the Province to enact a law with reference to the tax levy so as to continue it, the validity of the Act of 1949 which manifested the legislative intent to Continue the tax without any break, the legal continuity being established by the retrospective, operation of the provision, has to be upheld. The appeals therefore fail and are dismissed with costs one set of hearing fees. Appeals dismissed.

IN-Abs

Under the C. P. and Berar Local Self Government Act 1920, the District Council of Bhandara. in 1925, imposed a terminal tax on the export of bidis and bidi leaves by rail out of Bhandara district. By the Government of India Act, 1935, terminal tax was included in the Federal Legislative List but section 143 (2) of the Act provided that such a tax which was being lawfully levied under a law in force on January 1, 1935, may continue to be levied until provision to the contrary was made by the Federal Legislature. The District Council continued to leavy and collect the tax. In 1948 the C P. and Berar Local Government Act, 1948, came into force which repealed the 1920 Act. It replaced the District Council, Bhandara, with three janapada Sabhas. Clause (c) ;of the proviso to the saving section section 192 provided that 'all rates, taxes and cesses due to the District Council shall be deemed to be due to the Sabha to whose area they pertained, 71 By an amending Act of 1949 the Provincial Legislature replaced cl. (b) of the proviso to section 192 by a new cl. (b) which, inter alia, continued in force all taxes which were in force immediately before the commencement of the 1948 Act, this amendment was given retrospective effect from the commencement of 1948 Act. The appellant contended that the 1948 Act which repealed the 1926 Act did not save the terminal tax, and once the tax was discontinued the Provincial Legislature had no power left to impose it afresh and that the amendment was accordingly beyond its legislative competence_. The respondent contended that section 143 (2) of the Government of India Act, 1935. vested in the Provincial Legislature plenary power to legislate in respect of every tax which was being lawfully levied in the province, that cl. (c) of the proviso to section 192 of the 1948 Act saved the tax and that the amendment was validly made and it saved the tax with retrospective effect from the date of the repeal of the 1920 Act. Held, that the terminal tax was validly continued by the retrospective amendment of cl. (b) to the proviso of section 192 of 1948 Act. Section 143 (2) of the Government of India Act, 1935, did not confer upon the Provincial Legislature any plenary power of legislation in respect of taxes which were being validly imposed. But it did confer upon the Provincial Legislature a limited legislative power to enact a law with reference to the tax levy so as to continue it. The power of the Provincial Legislature to repeal the 1920 Act which imposed the tax was co extensive with its power to enact such a law. In exercise of this limited legislative power the Provincial Legislature was competent to enact the Amending Act of 1949. Attorney General for Ontario vs Attorney General for the Dominion, , referred to. Clause (c) of the proviso to section 192 of the 1948 Act did not save the future imposition of the tax; it merely provided for the collection of taxes already accrued in favour of the District Councils by the successor Sabhas. The words in this clause "due to the District Council" referred only to taxes which had accrued on the date of the repeal of the 1920 Act and did not include taxes which accrued later and became payable subsequent to that date. The subsequent amendment of 1949 could not be take a into account in construing cl. (c) and for determining the intention of the legislature.

Appeal No. 581 of 60. Appeal from the judgment and decree dated April 23. 1958, of the Punjab High Court (Circuit Bench) Delhi in Civil Regular First Appeal No. 32 D of 1953. Naunit Lal and D. Gupta, for the appellant, 703 Gurbachan Singh and Harbans Singh, for the respondent. May 1. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. This, appeal, on certificate granted by the Punjab High Court, arises in the following circumstances. M/s. Radha Ram Sohan Lal of Calcutta consigned certain goods to self at Delhi. of the consignment, certain articles were not delivered to M/s. Udho Ram & Sons, the plaintiffs, in whose favour the railway receipt had been endorsed by the consigner. Having failed to receive the compensation for the loss suffered on account of the articles not delivered, the suit giving rise to this appeal was instituted. There is now no dispute ' about the amount of loss, determined by the Court, as suffered by the plaintiffs. The only dispute between the parties is whether the loss of goods in transit between Calcutta and Delhi was due to the misconduct and negligence of the railways or not. The Union of India, the dependent, contended that the loss occurred due to circumstances beyond the control of the railway administration. The trial Court found that the railway wagon in which the consignment was loaded bad been thereafter properly riveted and sealed at Howrah, that the seals and rivet of one door of the wagon were found open when the train which left Howrah at 1. 30 a. m. on October 1, 1949, reached Chandanpur Station at 3.15 a. m., the same night, the train having stopped for 14 minutes at the Howrah Burdwan Link for the home signal at 2. 05 a. m., and that the railway protection police escorted the train. The High Court accepted these findings and they are not questioned. 704 The trial Court, however, found that the precaution taken of posting railway protection police in a good,; train, in view of the frequent thefts in running trains between Howrah and Chandanpur, amounted to the railways taking proper care of the goods delivered to them as carriers and that therefore the railways were not guilty of any negligence and misconduct. It was of the view that the railway protection police which usually traveled in the guard 's van, could not possibly know what was happening in the wagons at the other and or in the middle of the train during the journey. It therefore dismissed the suit. On appeal, the High Court held the railways responsible for the loss which, in its view, was due to its negligence and misconduct inasmuch as there was no evidence on record that the railway protection police took any precautions to see that nobody interfered with the train when it halted for 15 minutes at the Howrah Burdwan Link at night. There was no other arrangement for watch and ward at the Link. There was no evidence as to what was the strength of the railway protection ,police or to show that it did stir out of the train see that the wagons were not interfered with. It therefore concluded that the servants of the railway were negligent and did nothing to see that opportunities for theft were eliminated as far as possible, that the railway administration was responsible for the negligence of its employees as it could act through its employees and that therefore the lose of goods was due to the misconduct and negligence of the railways. It therefore reversed the decree of the trial court and decreed the plaintiffs ' suit for the amount of loss hold suffered by the plaintiffs. It is this decree against which the Union of India has obtained the certificate of fitness for appeal from the Punjab High Court and has preferred this appeal. 705 There is no evidence on record that the railway protection police which escorted the train was adequate in strength for the purpose of seeing that the goods were not interfered with in transit. In fact, the defendants did not allege in their written statement that any railway protection police escorted the train. The present of the railway protection police with the train was just deposed to by Chatterjee, D. W, 10, the then Assistant Station Master at Chandanpur Railway Station. He did not mention that fact in any of his messages or memorandum in which he simply mentioned the presence of the railway protection police at the time of re sealing the wagon. He stated in cross examination that he did not remember from memory the events of the occurrence at Chandanpur station on October 1, 1949, and was making his statement on the basis of the record before him. However, both the Courts below have recorded the finding that railway protection police did escort the train. There is no evidence as to why the police force could not see to the non interference with the wagons when the train halted at the Link where, according to the Courts below, the thieves probably get at the wagon and tampered with its seal and rivets. In the absence of any evidence about the strength of the railway protection police, the contention of the appellant that the force was adequate cannot be accepted. It may be true that any precautions taken may not be always successful against the loss in transit on account of theft,, but in the present case there is no evidence with respect to the extent of the precautions taken and with respect to what the railway protection police itself did at the place where the train had to stop. We cannot accept the contention that the railway protection police could not have moved out of the guard 's van due to the uncertainly of the stoppage of the train at the 706 signal. It was the job of its members to get down on every stoppage of the train and to keep an eye at the various wagons, as best as they could. There could be no risk of the train leaving them on the spot suddenly. They could climb up when the train was to move. The wagon in which the plaintiffs ' goods were, was in the centre of the train. It was the 29th marriage from the other end. It must be taken to be the duty of railway protection police to get out of the guard 's van whenever the train stops, be it at the railway platform or at any other place. In fact, the necessity to get down and watch the train when it stops at a place other than a station is greater than when the train stops at a Station, where at least on the station side there would be some persons in whose presence the miscreants would not dare to temper with any wagon and any tempering to be done at a station is likely to be on the off side. The responsibility of the railways under section 72 of the Indian Railways Act is subject to the provisions of section 151 of the Indian Contract Act. Section 151 states that in all cases of bailment, the bailer is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstance, take of his own goods of the same bulk, quality and value as the goods bailed. Needless to say that an ordinary person traveling in a train would be particular is keeping an eye on his goods especially when the train stops. It is not therefore imposing a higaher standard of care on the railway administration when it is said that its staff, and especially the railway protection police specially deputed for the purpose of seeing that no loss takes place to the goods, should get down from the wagon and keep an eye on the wagons in the train in order to see that no unauthorised person gets at the goods. 707 We are therefore of opinion that the finding of the High Court that the loss took place due to the negligence of the railway servants and, consequently, of the railway administration, is justified. We therefore dismiss the appeal with costs. Appeal dismissed.

IN-Abs

Certain goods consigned by a merchant to the respondent. Some of the goods were lost in transit. The respondent sued the railway authorities for damages for the loss on ground that the loss 'Was incurred due to the negligence of the railway authorities. The defence raised was that loss occurred due to factors beyond the control of the railway authorities. The suit was dismissed by the trial court. On appeal the High Court reversed the judgment of the trial court and found that the loss was caused by the negligence and misconduct of the railway authorities in as much as the railway police failed to take precaution to see that no body interfered with the goods. The Union of India appealed to the Supreme Court by way of certificate granted by the High Court. Held, that the responsibility of the railway under section 72 of the Indian Railways Act is subject to the provisions of section 151 of the Indian Contract Act and the Railway as a bailer was bound to take as much care of the goods bailed to it as a man of ordinary prudence would under similar circumstances. The loss having taken place due to the negligence of the railway servants the railway is liable for the loss incurred by the respondent.

Appeal No. 104 of 1956. Appeal by special leave from the Award dated December 29, 1958 of the Industrial Tribunal, Delhi in I. D. No. 36 of 1957 published in the Delhi Gazette dated 5th March, 1959. G. B. Pai and I. N. Shroff, for the Appellant. M. K. Ramamurthi, B. K. Garg, section C. Agarwala, and D. P. Singh, for the Respondent 1. 1962. May 2. The Judgement of the Court was delivered by WANCHOO, J.This appeal by special leave, arises out of an industrial dispute between the Birla Cotton Spinning and Weaving Mills Limited (hereinafter called the appellant) and its workmen. A large number of matters were referred for adjudication to the industrial tribunal but in the present appeal we are concerned with two, namely, ii) whether the wages require to be increased and standardised, and what directions are necessary in this respect, and (ii) whether any of the workmen doing the work of fancy jobbers should be designated and paid accordingly. The first point has however been confined to miseries and line jobbers only as the other operatives were covered by another award in another reference (No.1.D. 52 of 1957) between the same parties, which was decided earlier by this tribunal. That award came in appeal this Court and the decision of this Court is reported in The Management of Birla Cotton Spinning and Weaving Mills Ltd. vs Its workmen (1). This court had set aside the earlier award and sent the case back to the tribunal to proceed in the manner indicated in the judgment. We are told that matter has ended in a compromise between the parties. The claim of the workmen concerned in the present (1) A.I.R. (1961) S.C. 1179. 719 reference (namely, mistries and line jobbers) was that their wages were low and not standardised and in spite of representations made to the appellant, nothing had been done in the matter. The workmen therefore claimed that the wages should be increased and standardised and incremental pay scales should be introduced so far as mistries and line jobbers, were concerned. As to fancy jobbers the workmen 'g claim was that they had been wrongly designated recently as assistant fancy jobbers, though they were doing the job of fancy jobbers. It was therefore contended that they 'should be designated as fancy jobbers and their pay also increased and standardised accordingly. The appellant resisted the claim on a number of grounds. It was contended firstly that there was an earlier award in 1951 made by Shri Dulat, which was still in force and therefore the reference was incompetent. Next it was contended that there was no comparison between the Swatantra Bharat Mills and the Delhi Cloth Mills on the one hand and the appellant mills on the other and therefore the wages prevalent in those mills could not retaken as a standard for fixing wages for the appellant 's workmen. Thirdly, it was urged that incremental scales were provided nowhere in the textile industry and therefore this claim should be rejected. Fourthly, the workmen designated as assistant fancy jobbers had been so designated rightly and could not Claim to be fancy jobbers. And lastly, it was urged that there was no case for applying the Bombay standardisation scheme to the appellant 's workmen for conditions in Bombay and Delhi were in many respect different. The tribunal rejected the contention that the Dulat award of 1951 bad not been terminated and therefore the present reference was incompetent. The tribunal further held that though there were difference between the Swatantra Bharat Mills and 720 the Delhi Cloth Mills on the one hand and the appellant on the other, both in the matter of the working of the mills and in the matter of their financial position, they were not of importance as there were bound to be differences between unit and unit of the same industry and thus the wages paid in those two mills were comparable. As to the claim for ineremntal scale of wages, the tribunal held that no incremental scale had been provided in any standardisation scheme relating to textile industry and rejected this claim. It further held that the workmen now designated as assistant fancyjobbers were really fancy jobbersandhad been previously designated as such. Recently, however, they started to be called assistant fancy jobbers and therefore it was ordered that they ' should be designated as fancy jobbers. And lastly, the tribunal following its earlier award referred to above held that the Bombay standardisation scheme should be adopted for mistries and line jobbers as well as fancy jobbers. It also directed that "wherever the said existing wages are higher than those fixed under the Bombay Standardisation Scheme, they shall remain and shall not be lowered". It also directed that where operatives were designated by any other name, either not included in the Bombay list or materially different from the one appearing in the list, they should be paid the same wages as those doing identical work according to the Bombay list and a joint committee consisting of the representatives of the management and the union might be formed to investigate the anomalies, arising out of the application of the Bombay standardisation scheme, and in case of disagreement the matter might be referred to the industrial tribunal either through a regular reference made with mutual consent or as an arbitrator mutually agreed upon. 721 The appellant challenges the award and its main contentions are (i) that the reference was incompetent as the Dulat award of 1951 had not been termi nated; (ii) that the tribunal was wrong in holding that the assistant fancy jobbers should be designated as fancy jobbers; (iii) that the tribunal was wrong in applying the Bombay standardisation ' scheme to the appellant 's workmen without allowing the appellant even a chance of producing evidence with respect to that scheme and showing the difference between the conditions in Bombay and the conditions in Delhi, which would require modification of that scheme in its application to the appellant 's workmen; (iv) that the tribunal by directing the appointment of a joint committee to investigate the anomalies bad not solved the dispute referred to it with the result that there would be further disputes arising out of this direction of the tribunal; and (v) that the tribunal 's direction that ",wherever the said existing wages are higher than those fixed under the Bombay stan dardisation scheme, they shall remain, and shall not be lowered" is against the principle on which the standardisation schemes are based. The question whether the Dulat award of 1951 stood in ' the way of the present reference 722 being competent was considered by this Court in the earlier case (referred to above) and was rejected. It was then pointed out that the Dulat award had held that there was no justification for delaying standardisation and had ordered the parties to work out a scheme taking the Bombay award No. 1 as the working model. In pursuance of that direction, a scheme was worked out and the parties agreed to it on September 29, 1951. It was urged for the appellant that the agreed scheme of September 1951 thus became in a sense a part of the Dulat award and as it was terminated only in November 1956, while the present reference was made on March 3, 1956, that award stood in the way of the present reference being competent. This contention was negatived by this Court in, its earlier judgment on two grounds. In the first place, it was pointed out that this agreement could not be a part of the Dalat award in any sense and therefore the Dulat award could not stand in the way of the competence of the reference even if it was not terminated before the reference. In the second place, it was pointed that the agreement of 1951 did not amount to a settlement within the meaning of section 2 (p) of the , as it stood in 1951, and therefore section 19 (2) would not apply to 'that agreement. We were of opinion that on the same reasoning the present argument that the reference when it was made was incompetent because of the Dulat award being still in force, must fail and the contention on this head is rejected. (ii) We are of opinion that the tribunal was right in holding that it was only shortly before the reference that those workmen who used to be called fancy jobbers began to be designated as assistant fancy jobbers. The tribunal has considered the entire evidence on this point and we are in 723 agreement with the view expressed by it, namely, that the assistant fancy jobbers should be designa Birl ted as fancy jobbers as before and the recent innovation calling them assistant fancy jobbers was only a device to depress the status of this class of workmen. The contention therefore on this head must also fail. (iii). It appears that the tribunal merely followed its earlier award in ID 52 of 1957 when it proceeded to apply the Bombay standardisation scheme to mistries and line jobbers as well as fancy jobbers. That award, as we have pointed out, was set aside by this Court in the earlier judgment on various grounds. It is not necessary for us to repeat the reasons which impelled this Court in the earlier appeal to set aside the award in ID 52 of 1957. Those reasons in our opinion apply with full force to the present award also in so far as it introduces the Bombay standardisation scheme for the workmen concerned in the present dispute. In addition we may point out that the appellant wanted to produce evidence with respect to the Bombay standardisation scheme and to summon two witnesses from Bombay and Kanpur with respect to the working of that scheme; but the tribunal by its order dated January 6, 1958, held that it was not necessary to examine those witnesses in view of the conditions obtaining in Delhi, the region with which it was concerned. But even though the tribunal thus refused to examine evidence with respect to the working of the Bombay standardisation scheme it went on to the adopt that scheme in its entirety without any modification when it came to make its award, in view of its earlier award. We are of opinion that it was not fair for the tribunal to shut out evidence with respect to the working of the Bombay standardisation scheme which the app ellant wanted to produce and then apply that 724 scheme without any modification to the appellantmill. Another reason which impelled the tribunal to apply the Bombay standardisation scheme in this case was stated by it to be that the scheme was applicable to this class of workmen in the Delhi Cloth Mills and the Swatantra Bharat Mills. This statement in our opinion is not borne out by the evidence of the two witnesses produced by the workmen from those two mills. Manoharlal (W.W. 19), a labour officer of the Bharat Mills, was examined in this connection. He stated that for workers the Swatantra Bharat Mills had followed the Bombay standardisation scheme in the matter of payment of wages on voluntary basis but not for mistries and jobbers. This statement was apparently treated by the tribunal as meaning that the Bombay standardisation scheme was applicable to mistries and jobbers though Manohar Lal stated exactly the opposite. It is true that Manoharlal stated that for certain categories of misitries and jobbers the Swatantra Bharat Mills paid more than the Bombay standardisation scheme gave to such categories; but that does not mean that the Bombay staddardisation scheme as such was applicable to all mistries and jobbers in the Swatantra Bharat Mills. The second witness was B. L. Saxena, the labour officer in the Delhi Cloth Mills. He stated that the wages of line jobbers and mistries were more in certain cases and in some cases at par with the wages in the Bombay standardisation scheme. But he also stated that the line jobbers andmistries in the Delhi Cloth Mills had not been brought under the Bombay standardisation scheme. It appears from the evidence of both these witnesses that there is no fixed grade for mistries and jobbers and each one gets what may be called his own pay. Therefore in some cases the pay which a jobber or a misery gets may be higher or may be 725 equal to the wages in the standardisation scheme. But this does not mean that the Bombay standardisation scheme as such has been applied to mistries and jobbers in the other two mills in Delhi. The tribunal was therefore wrong even on a comparison of the other two mills in Delhi to hold that the Bombay standardisation scheme should be applied to the appellant mills also. The tribunal 's award with respect to fancy jobbers would also show how the manner in which the tribunal dealt with the application of the Bombay standardisation scheme to the appellants has resulted in unfairness. After having rightly held that the assistant fancy bobbers should be designated as fancy jobbers, the tribunal went on to award that the fancy jobbers so designated should be paid according to the Bombay standardisation scheme without apparently examining that scheme. A copy of that scheme has been produced before us and it shows that the Bombay scheme envisages three categories of workers in what is called fancy work, namely, head fancy jobber, fancy jobber and assistant fancy jobbers. Therefore before the tribunal decided to apply the Bombay standardisation scheme it was necessary to compare the work done by the fancy jobbers in the appellantmills with the work done by either the fancy jobber or assistant fancy jobber in the Bombay standardisation scheme and then decide whether they would come under 'the designation of fancy jobbers or assistant fancy jobbers under the Bombay standardisation scheme or some under one and some under the other. We are therefore of opinion that the manner in which the case has been dealt with by the tribunal show, as was pointed out in the earlier case also, that it was dealt with in a ever functory way, though in this case the tribunal had the excuse to follow its own award in the earlier case. We are 726 however of opinion that if the Bombay standardisation scheme is to be applied to the appellantmills with respect to the workmen concerned in the present appeal, the ' tribunal should go into the matter carefully again on the lines indicated by this Court in its earlier judgment and then decide whether the Bombay standardisation scheme as a whole should be applied to the appellant mills with respect to the workmen concerned in the present dispute or whether there should be any modification of that scheme in view of differences between the conditions in Bombay and the conditions in Delhi. This applies to all the workmen concerned in this appeal,i. e. the line jobbers, mistries and fancy jobbers. We are therefore of opinion that this appeal must be allowed and the case sent back to the tribunal for reconsideration on the lines indicated above and in accordance with the earlier judgment of this Court. As to the direction by the tribunal that a joint committee should be appointed to go into what is called,anomalies, it is enough to refer to what was said by this Court in the earlier judgment where a similar direction had been made. It was pointed out there that by making the direction the tribunal had left a part of the dispute to be resolved by the parties themselves, so that the tribunal had not done what it was expected to do itself under the terms of reference. We set aside this direction and order that the tribunal should go into this ' matter itself with the assistance of assessors, if it considers that necessary, before it applies the Bombay standardisation scheme either in its entirety or with modification to the workmen concerned in the appellant mills. This brings US to the last point. The direction in the present award by the tribunal is that 727 " wherever the said existing wages are higher than those fixed under the Bombay standardisation scheme, they shall remain, and shall not be lowered". Objection is taken to this direction by the appellant. There was a similar direction in the earlier award also and in that connection this Court observed as follows at p. 1182 : "It cannot be disputed that when a stand ardisation scheme comes into force it is an integrated whole and may sometime result in some categories of workmen getting less than what they were getting before. The whole purpose of a standardisation scheme is to standardise wages and where they are low to raise them to the standardised level. Similarly where the wages are high they have to be reduced in order to fit them in the standardised scheme. The tribunal therefore was clearly wrong in acting against the basic principle of a standardised scheme when it ordered that the wages should be increased according to the standardised scheme where they were low but should not be decreased where they were high. This principle of standardisation is clear and even the learned counsel for the workmen had to admit it. " It is urged on behalf of the respondents that these observations are liable to be misunderstood and may give rise to the impression that it is not open to a tribunal to protect the wages of individual workmen who may be getting more than the wages fixed under the standardisation scheme, at the time when such a scheme comes into force, The respondents do not dispute that the basic principal behind the standardisation scheme is what has been stated by this Court; but they contend that though after a standardisation scheme has been brought into force it may not be open 728 even to the management to give more wages than those provided in the standardisation scheme, that principal does not require necessarily that the wages of individuals who might be drawing more at the date the standardisation scheme comes into force should also be reduced and should not be protected for those individuals only. It is urged that it is open to the tribunal to protect the wages of such workmen who might be drawing more than the wages fixed in the standardisation scheme, though it may not be open to the management after the standardisation scheme comes into force to pay more wages than fixed in the standardisation scheme to any one employed thereafter. On the other hand, it is contended for the appellant that when a standardisation scheme comes into force even the wages of individuals who are getting more than what is provided in the standardisation scheme must be reduced and the tribunal cannot protect the wages even of such individuals. Reliance in this connection has been placed on behalf of the appellant on Daru vs Ahmedabad Spinning and Manufacturing Company limited. (1) In that case the principles governing a standardisation scheme were considered by the Bombay High Court considering the report of the Textile Labour Inquiry Committee and also the book of Dr. D. R. Gadgil on " 'Regulation of wages and other Problems of Industrial Labour in India". It was pointed out that when in an industry divergent wages were being paid and there was considerable difference between the top wage and the lowest wage, it was very difficult to standardise these wages and therefore the first thing to be done was to fix a minimum wage which is generally somewhere between the top and bottom; but where wages in a particular occupation are not very divergent and are more or less uniform, that is (1) (1955) 1 L. L. G. 355, 729 the time and the stage when a labour tribunal may well standardise those wages because in standardising them although it may result in some workers being paid less than what they are being paid, the loss to them would not be considerable and if it is in the interest of labour that all workers should be paid the same wages who are doing the same work then the standardisation would result in benefit to the cause of labour. There can be no dispute as to the validity of these principles and their soundness will be clear from the facts of that case. In that case a standardisation scheme had been brought into force in 1948. In 1951, one of the mills governed by the standardisation scheme introduced a new section the wages in which were covered by the standar disation scheme. However, the wages in the new section fixed by the said mill were higher than those fixed by the standardisation scheme. Later in 1953, the mills gave notice to the workmen reducing the wages fixed in 1951 so as to conform to the wages laid down in the standardisation scheme. This was objected to by the workmen whose wages were reduced and that is how the dispute arose. The High Court held in those circumstances that in view of the fact that the standardisation scheme was in force from 1948, it was not open to the employer to give higher wages than those fixed in the standardisation scheme in 1951 because it was of the essence of the standardisation scheme that the wages for the same work should be equal and that where higher wages had been paid than those fixed in the standardisation scheme they should be reduced to that level. That case however was not concerned with protection of the wages of individuals who might be getting more than what is provided in the standardisation scheme at the time when it is 730 brought into force. It is in this context that the observations made by the High Court have to be understood and in that context the observations laying down the principles behind a standardisation scheme are, if we may say so with respect, sound. It is however urged on behalf of the respondents that the protection given by the tribunal in this case is no more than protection for individual workmen who may be getting more wages than those fixed in the standardisation scheme when it comes into force and this direction is correct and that there is nothing in law which prevents the tribunal from giving such a direction for the protection of individuals who might be getting more wages at the time the standardisation scheme is brought into force. It seems to us that it would not be against the basic principle of standardisation to which this Court referred in the earlier case to protect the wages of individual workmen who might be getting more than the wages fixed in the standardisation scheme at the time when such a scheme is brought into force. It will be for the tribunal to decide whether it will protect these individual workmen or not. If it gives no direction for protection to individual workmen, they will not be protected and their wages will have to be lowered in case they are higher than those fixed in the standardisation scheme. But if the tribunal considers that it will be more in consonance with justice to protect the wages of individual workmen it may give a direction to that effect, even though they may be 'more than the wages fixed in the standardisation scheme. In such a case three conditions will always have to be borne in mind. In the. first place, there can be no further raising of the wages of these protected workmen by the management after the standardisation scheme comes into force, for any such further rise will be against the principle of standardisation. In the second 731 place, if the standardisation scheme fixes incremental scale of wages and if the protected workman is getting a wage which is between the minimum and the maximum and he is not entitled in accordance with the length of his service to that wage but something less in the grade, the extra amount that he may be getting will have to be absorbed in future increments till he is properly fitted in the incremental scale according to the length of service. Thirdly, when any workman 's service come,% to an end for any reason whatsoever, no other employee whether new or old would be entitled to claim the pay which the outgoing employee Was getting on the ground that a vacancy with that higher pay has arisen. Subject to these three conditions it may be open to a tribunal to protect the wages of individual workmen even though he may be getting higher wages than those fixed in a standardisation scheme at the time when the scheme is introduced. Now let us see what the tribunal has done in this matter. It directs that "wherever the said existing wages are higher than those fixed under the Bombay standardisation scheme, they shall remain, and shall not be lowered." This in our opinion is not protection of individual workmen but protection of wages, which may be higher than those fixed in the standardisation scheme. This in our opinion cannot be done as it is against the basic principles of a standardisation scheme as observed in the earlier case. The result of this direction by the tribunal would be that a particular post carrying with it higher wages will remain protected so that when the individual who may be getting that pay at the time the standardisation scheme comes into force is no more employed, the other workmen may be able to claim wages on the ground that the wages have been protected. The proper way of giving protection, if the tribunal thinks that justice demands that individuals who 732 are _getting higher wages then those fixed under a standardisation scheme should be protected, is to direct that the wages of such individuals should be fixed according to the standardisation scheme, and the difference, if any, between their wages and the standardised wages should be paid to them as personal pay so long as they are in service. As soon as such an individual goes out of ,service, another coming in his place will not be entitled to the personal pay the outgoing workman was getting, and will be fixed in the standardisation scheme. The direction however of the tribunal in this case is capable of being read not for the protection of individuals but for the protection of wages, and this in our opinion cannot be done in view of the basic principles governing a standardisation scheme. We are therefore of opinion that the direction for the protection of existing wages given in the form in which it has been given by the ' tribunal must be set aside. At the same time we leave it to the tribunal to decide if it considers it just when the matter goes back to it for reconsideration whether individual workmen should be protected, even in case a standardisation scheme is introduced, in the manner we have indicated above. We therefore allow the appeal and set aside partly the order of the tribunal with respect to certain matters with which we have dealt in the course of this judgment and direct that the tribunal should rehear the reference and reconsider in the light of this judgment and the earlier judgment what should be its award with respect to miseries, line jobbers and fancy jobbers in connection with the following term of reference : "Whether the wages require to be increased and standardised, and what directions are necessary in this respect. " 733 Parties will be at liberty to lead such further evidence on all matters sent back for reconsideration as they think fit. In the circumstances we order parties to bear their own costs. Appeal allowed.

IN-Abs

The dispute between the respondents and the appellants regarding ministries and line jobbers was referred to the Tribunal regarding the increase and standardisation of wages and regarding the designation of workmen doing the work of fancy jobbers and their pay. The appellant contended that an earlier award of 1951 had not been terminated and that the reference was incompetent. The Tribunal directed standardisation on the basis of the Bombay Scheme. The Tribunal 717 acceded to the claim regarding fancy jobbers. Finally the Tribunal directed that "whereever the said existing wages are higher than those fixed under the Bombay Standardisation Scheme, they shall remain and shall not be lowered" and that regarding operatives who were designated differently from Bombay list, they should be paid what those described by any other name but doing identical work were being paid in Bom bay and that the adjustment of anomalies that might arise in this matter should be decided by A Committee consisting of the representatives of the Management and the Union. Held, that the agreement following the earlier award %as not a settlement within the meaning of section 19(2) of the Industrial Disputes Act and the reference was Competent. Held, further, that the Tribunal ought to have considered the applicability of the Bombay Standardisation Scheme to the condition in Delhi by examining evidence and that the Tribunal ought not to have shut out evidence in respect of the working of the Bombay Standardisation Scheme in Delhi and that the Tribunal had not considered the matter carefully and made such modifications as might be necessary. The Tribunal ought not to have delegated the determination and adjustment of the anomalies in applying the Bombay standardisation scheme to a joint committee by it should have considered and determined those matters itself. Held, further, that in the event of standardisation it may be necessary if justice demanded it to give some measure of protection to such individual workmen as were getting higher wages than what they would get under standardisation scheme. But the matter will have to be considered by the Tribunal subject to three conditions: viz., (1) there can be no further rise in wages of those protected by the operation of the standardisation of scheme, (2) if there is an incremental scales fixed by the standardisation scheme and the protected workmen are getting between the minimum and the maximum but are not entitled thereto according to the length of their service, future increments should be adjusted till the protected workmen find their proper place in the scale according to the length of service, and (3) the category of protected workmen should in due course exhaust by the termination of service of such workmen by retirement or otherwise. Held, that the direction of the Tribunal could be read to mean the protection of existing higher wages generally rather than the higher wages of particular workmen and such a thing was not consistent with the principles of standardisation 718

Appeal Nos. 282 & 283 of 1959. Appeals by special leave from the judgment and decree dated December 18, 1956, of the Bombay High Court at Bombay in Second Appeals Nos. 233 and 185 of 1955 respectively. G. section Pathak, O. C. Mathur, J. B. Dadachanji and Ravinder Narain, for the appellants. section G. Patwardhan and K, R. Choudhri, for the respondents. May 2. The Judgment of the Court was delivered by SINHA, C.J. These two appeals, by special leave, directed against the judgment and decree of a single Judge of the Bombay High Court, raise a common question of law, and have. therefore, been heard together. This judgment will govern both the cases. The appellants were plaintiff landlords, 710 and the respondents were tenants in possession of certain lands which were situate in the erstwhile State of Baroda before it became part of the State of Bombay, by merger. The Bombay Tenancy and Agricultural Lands Act (Bombay Act LXVII of 1948) which hereinafter will he referred to as the Act was extended to Baroda on August 1, 1949. The suits out of which these appeals arise had been instituted by the appellants on the basis that the tenants respondents had become trespassers on the service of notice in March 1950, with effect from the beginning of the new agricultural section in May 1951. As the defendants did not comply with the terms of the notice and continued in possession of the lands, to which they had been inducted, the landlords instituted suits for possession in the Civil Court. The Trial Courts and the Court of Appeal decreed the suits for possession. But on second appeal by the tenants, the learned Single Judge. who heard the second appeals, allowed the appeals and dismissed the suits with costs throughout. It is not disputed that if the provisions of the Act were applicable to the tenancies in question, the plaintiffs ' suits for possession must fail, because these were instituted in the Civil Courts, which have Jurisdiction to try the suits only if the dependents were trespassers. It is equally clear that if the tenants could take advantage of the provisions of the Act, any suit for possession against a tenant would lie in the Revenue Courts and not in the Civil Courts. But reliance was placed upon the notification issued by the Bombay Government on April 24, 1951, to the following effect : "In exercise of the powers conferred by clause (d) of sub section (1) of Section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay LXVII of 1948) the Government of Bombay is pleased to specify the area 711 within the limits of the Municipal Borough of Baroda City and within the distance of two miles of the limits of the said Borough, as being reserved for Urban, non agricultural or industrial development". The learned Judge of the High Court, in disagreement with the Courts below,, held that under provisions of section 3A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant would be deemed to be a protected tenant from August 1, 1950, ' and that vested right could not be affected by the notification aforesaid, issued by the Government under section 88 (1)(d) which had the effect of putting the lands in question out of the operation of the Act. In other words, the learned Judge held the notification had no retrospective effect so as to take away the protection afforded to the tenants by a. 3A, aforesaid. The learned counsel for the appellants contended. in the first instance, that the notification, set out above, under section 88 (1)(d) operated with effect from December 28, 1948, when the Act came into force. In this connection, reliance was placed upon the decision of this Court, pronounced by me sitting in a Division Court, in the case of Sakharam vs Manikchand Motichand Shah, (1) in these words : "The provisions of a. 88 are entirely pro spective. They apply to lands of the descrip tion contained in cls. (a) to (d) of section 88(1) from the date on which the Act came into operation, that is to say, from December 28, 1948. They are not intended in any sense to be of a confiscatory character. They do not show an intention to take away what had already accrued to tenants acquiring the status of 'protected tenants". 712 It is necessary, therefore, to make some observations explaining the real position. In that case, the question then in controversy had particular reference to section 88(1)(c), which is the only provision quoted at page 2 of the blue print of the judgment. That case had nothing to do with el. (d) of section 88(1). In that case, the lands in dispute lay within two miles of the limits of Poona Municipality. It is clear, therefore, that the inclusion of el. (d) of section 88(1) was a slip and certainly was not relevant for consideration in that case. The provisions of section 88(1) are as follows : "Nothing in the foregoing provisions of this Act shall apply: (a) to lands held on lease from the Govern ment a local authority or a co operative society; (b) to lands held on lease for the benefit of an industrial or commercial undertaking; (c) to any area within the limits of Greater Bombay and within the limits of the Municipal boroughs of Poona City and Suburban, Ahmedabad, Sholapur, Surat and Hubli and within a distance of two miles of the limit,% of such boroughs; or (d) to any area which the State Government may, from time to time, by notification in tile Official Gazette, specify as being reserved for urban non agricultural or industrial development. It will be noticed that cls. (a), (b) and (c) of section 88(1) apply to things as they were at the date of the enactment, whereas el. (d) only authorised the State Government to specify certainareas as being reserved for urban non agricultural or industrial development, by notification in the Official Gazette, 713 from time to time. Under cls. (a) to (c) of a. 88(1) it is specifically provided that the Act, from its inception did not apply to certain areas then identified; whereas el. (d) has reference to the future. Hence, the State Government could take out of the operation of the Act such areas as it would deem should come within the description of urban non agricultural or for industrial development. Clause (d), therefore, would come into operation only upon such a notification being issued by the State Government. The portion of the judgment, quoted above, itself makes it clear that the provisions of section 88 were never intended to divest vested interests. To that extent the decision of this Court is really against the appellants. It is clear that the appellants cannot take advantage of what was a mere slip in so far as cl. (d) was added to the other clauses of s.88(1), when that clause really and did not fall to be considered with reference to the controversy in that case. In other words, this Court never intended in its judgment in Sakharam 's case`e(1) to lay down that the provisions of cl.(d) of s.88 (1) aforesaid were only prospective and had no retrospective operation. Unlike cls. (a), (b) and (c) of s.88(1), which this Court held to be clearly prospective, those of cl.(d) would in the context have retrospective operation in the sense that it would apply to land which could be covered by the notification to be issued by the Government from time to time so as to take those lands out of the operation of the Act of 1948, granting the protec tion. So far as cls. (a), (b) and (e) are concerned, the Act of 1948 would not apply at all to lands covered by them. But that would not take away the rights conferred by the earlier Act of 1939 which was being repealed by the Act of 1948. This is made clear by the provision in s.89(2) which preserves existing rights under the repealed Act. Sakharam 's case, (1) was about the effect of cl. (c) on (1) ; 714 the existing rights under the Act of 1939 and it was in that connection that this Court observed that s.88 was prospective. But el. (d) is about the future and unless it has the limited retrospective effect indicated earlier it will be rendered completely nugatory. The intention of the legislature obviously was to take away all the benefits arising out of the Act of 1948 (but not those arising from the Act of 1939) as soon as the notification was made under el. This is the only way to harmonise the other provisions of the 1948 Act, conferring certain benefits on tenants with the provisions in el. (d) which is meant to foster urban and industrial development. The observations of the High Court to the contrary are, therefore, not correct. But the matter does not rest there. The notification of April 24, 1951, was cancelled by the State Government by the following notification dated January 12, 1953 "Revenue Department, Bombay Castle, 12th, January, 1953. Bombay Tenancy and Agricultural Landis Act, 1948. No.9361/49 : In exercise of the powers conferred by clause (d) of sub section (1) of Section 88 of the Bombay Tenancy and Agri cultural Lands Act, 1948 (Bombay LXVII of 1948). The Government of Bombay is pleased to cancel Government Notification in the Revenue Department No.9361/49 dated the 24th/25th April, 1951". It would thus appear that when the matter was still pending in the Court of Appeal, the judgment of the lower Appellate Court being dated September 27, 1954, the notification cancelling the previous notification was issued. The suit had, therefore, to be decided on the basis that there was no notification in existence under s.88(1)(d), which could take the disputed lands out of the operation 715 of the Act. This matter was brought to the notice of the learned Assistant Judge, who took the view that though, on the merger of Baroda with Bombay in 1949, the defendants had the protection of the Act, that protection had been taken away by the first notification ' which was cancelled by the second. That Court was of the opinion that though the Appellate Court was entitled to take notice of the subsequent events, the suit had to be determined as on the state of facts in existence on the date of the suit, and not as they existed during the pendency of the appeal. In that view of the matter, the learned Appellate Court held that the tenants defendants could not take advantage of the provisions of the Act, and could not resist the suit for possession. In our opinion, that was a mistaken view of the legal position. When the judgment of the lower Appellate Court was rendered, the position in fact and law was that there was no notification under cl.(d) of s.88(1) in operation so as to make the land in question immune from the benefits conferred by the Tenancy Law. In other words, the tenents could claim the protection afforded by the law against eviction on the ground that the term of the lease had expired. But it was argued on behalf of the appellants that the subsequent notification, cancelling the first one, could not take away the rights which had accrued to them as a result of the first notification. In our opinion, this argument is without any force. If the landlords had obtained an effective decree and had succeeded in ejecting the tenants as a result of that decree, which may have become final between the parties, that decree may not have been re opened and the execution taken thereunder may not have been recalled. But it was during the pendency of the suit at the appellate stage that the second notification was issued canceling the first. Hence, the Court was bound to 716 apply the, law as it was found on the date of its judgment. Hence, there is no question of taking away any vested rights in the landlords. It does not appear that the second notification, canceling the first notification, had been brought to the notice of the learned Single Judge, who heard and decided the second appeal in the High Court. At any rate, there is no reference to the second notification. Be that as it may, in our opinion, the learned Judge came to the right conclusion in holding that the tenants could not be ejected, though for wrong reasons. The appeals are accordingly dismissed, but there would be no order as to costs in this Court, in view of the fact that the respondents had not brought the second notification cancelling the first to the pointed attention of the High Court. Appeal dismissed.

IN-Abs

Certain lands were situated in the erstwhile State of Baroda before it became a part of the State of Bombay by merger. The Bombay Tenancy and Agricultural Lands Act, 1948, was extended to Baroda on August 1, 1949. Suits were filed in the Civil Court by appellants landlord , against the respondents who were their tenants on the ground that the latter became trespassers with effect from the beginning of the new agricultural season in May, 1951. Decrees for possession were passed by the Civil Court in favour of landlords and the same were confirmed by the first appellate court. However, the High ' Court accepted the appeals and dismissed the suits. It was held that under the provisions of section 3 A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant would be deemed to be a protected tenant from August 1, 1950 and that vested right could not be affected by the notification dated April 24, 1951 issued under section 89 (1) (d) of the Act of 1948 by which the land in suit was excluded from the operation of the Act. The notification dated April 24, 1931 had no retrospective effect and did not take away the protection 708 afforded to tenants by section 3A. The landlords came to this Court by special leave. It was conceded that the appellants ' suits for possession would fail if the Act applied to the tenancies in question, because in that case only revenue courts had jurisdiction to try them. However, reliance was placed on notification dated April 24,1951 which excluded the land in suit from the operation of the Act. It was also contended on behalf of appellants that the subsequent notification cancelling the first one, could not take away the rights which had accrued to them as a result of the first notification. Held, that the notification dated April 24, 1951 was cancelled by another notification dated January 12, 1953. The second notification was issued when the matter was still pending in the first court of appeal. The suits had therefore to be decided on the basis that there was no notification in existence which would take the disputed lands out of the operation of the Act. The first appellate court was wrong in holding that the suits had to be decided on the basis of facts in existence on the date of filing of the suits. Held, further, that the second notification cancelling the first one did not take away any rights which had accrued to the landlords. If the landlords had obtained an effective decree and had succeeded in ejecting the tenants as a result of that decree which may have become final between the parties, that decree may not have been re opened and the execution taken thereunder may not have been recalled. However, it was during. the pendency of the suit at the ap pellate stage that the second notification was issued cancelling the first and the court was bound to apply the law as it was on the date of its judgment. Held, also, that clauses (a), (b) and (c) of section 88(1) applied to things as they were on the date of the commence ment of the Act of 1948 whereas clause (d) authorised the State Government to specify certain areas as being reserved for urban non agricultural or industrial development, by notification in the Official Gazette, from time to time. It was specifically provided in clauses (a) to (c) that the Act, from its inception, did not apply to certain areas then identified, whereas clause (d) had reference to the future. The State Government could take out of the operation of the Act such areas as in its opinion should be reserved for urban nonagricultural or 'industrial development. Clause (d) would come into operation only upon such a notification being issued by the State Government. In Sukharam 's case, this Court never intended to lay down that the provisions of 709 clause (d) were only prospective and had no retrospective operation. Unlike clauses (a) to (c) which were clearly prospective, clause (d) had retrospective operation in the sense that it would apply to land which would be covered by the notification to be issued by the Government from time to 2 time so as to take that land out of the operation of the Act of 1948, granting the protection. So far as clauses (a) to (c) were concerned, the Act of 1948 would not apply at all to lands covered by them, but that would not take away the rights conferred by the Act of 1939 which was repealed by the Act of 1948. Section 89(2) specifically preserved the existing rights under the repealed Act. Sukharam 's case was about the effect of clause (c) on the existing rights under the Act of 1939 and it was in that connection that this Court observed that section 88 was prospective. However clause (d) is about the future, and unless it has the limited retrospective effect indicated earlier, it will be rendered completely nugatory. The intention of the legislature obviously was to take away all the benefits arising out of the Act of 1948 (but not those arising from the Act of 1939) as soon as the notification was made under clause (d). Sakharam vs Manikchand Metichand Shah, ; , explained.

Appeals Nos. 5 1 2 and 513 of 1960. Appeal from the judgment and order dated March 27, 1956, of the Madras High Court, in Writ Petition Nos. 326 of 1955 and 107 of 1956. M. K. Nambiyar and P. Ram Reddy for the appellant. B. Ganapathy Iyer and P. D. Menon, for the respondents. R. Gopatakrishnan, for the Intervener No. 1. K. Bhimsankaran, B. R. G. K. Achar and P. D. Menon, for the intervener No. 1962. May 2. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The principal question which arises in these two appeals is related to the validity of s.24 of the Madras Electricity 750 Supply Undertakings (Acquisition) Act, 1954 (XXIX of 1954) (hereinafter called the Act). That question arises in this way. The appellant, the West Ramnad Electric Distribution Co. Ltd., Rajapalayam, was incorporated in 1935 to carry on, within the State of Madras and elsewhere, the business of an electric light and power company, to construct, lay down and establish and carry on all necessary installations, to generate, accumulate, distribute and supply electricity under a licence granted under the Indian Electricity Act of 1910. On the 24th January, 1950, the Madras Legislature passed an Act (XLIII) of 1949) for the acquisition of undertaking supplying electricity in the Province of Madras. Under the said Act, the Government was empowered to acquire any electrical undertaking on payment of compensation according to the relevant provisions of the s aid Act. In pursuance of the provisions of s.4(1) of the said Act, the respondent, State of Madras, passed on Order C.O. Ms. No.2059 on the 17th May, 1951, declaring that the appellant undertaking shall vest in the respondent from the 21st September, 1951. Thereafter, the respondent appointed the Chief Electrical Inspector as the Acquisition Officer, and on the appointed day, the said Officer took over possession of the appellant and all its assets, records and account books. The appellant then appointed the liquidator as its Accredited Representative for the purposes of the Act in order to claim compensation under the Act. The respondent then paid over to the appellant Rs. 6 lakhs on the 24th October, 1952 and Rs. 2,34,387 1 0 on the 5th July, 1953, as compensation. According to the appellant , Rs. 98,876 15 0 still remained to be paid to it by way of compensation under the Act, whereas the respondent suggested that only Rs. 6000/was the balance due to the appellant. That is how the appellant undertaking went into possession of 751 the respondent and the appellant was paid partial compensation. It appears that owners of some of the electrical undertakings in Madras which had been taken over by the respondent in accordant e with the provisions of s.4(1) of the 1940 Act, filed writ petitions in the High Court of Madras impugning the validity of the said Act. These writ petitions however, failed and by its judgment in Narasaraopeta Electric Corporation Ltd. vs State of Madras(1) the Madras High Court upheld the validity of the impugned Act in so far as it related to the licensees other than municipalities. The said licenses then moved this Court and their appeal succeeded. By its decision in the Rajamundry Electric Supply Corporation Ltd. vs The State of Andhra (2), this Court held that the impugned Act of 1949 was ultra vires. This decision was based on the ground that the Act was beyond the legislative competence of the Madras Legislature inasmuch as there was no entry in any of the three Lists of the Seventh schedule of the Government of India Act, 1935 relating to compulsory acquisition of any commercial or industrial undertaking. This Court ohservel that although s.299(2) of the said Constitution Act contemplated a law authorising compulsory acquisition for public purposes of a commercial or industrial undertaking, a corresponding entry had not been included in any of the three Lists and so. , the Madras Legislature was not Competent to pass the impugned Act. This decision was pro nounced on the 10th February, 1954. Meanwhile, the Constitution came into force on the 26th January, 1950, and the position of the legislative competence of the Madras Legislature in respect of the compulsory acquisition of commercial or industrial undertakings for public purposes has been materially altered. Entry 36 in List 11 of (1) (2) ; 752 the Seventh Schedule to the Constitution refers to acquisition or requisitioning of property, except for the purposes of the Union, subject to the provisions of entry 42 of List 111, whereas entry 42 of List III deals with the 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 'De given. That is how the two entries read at the relevant time. After the decision of this Court was pronounced in the case of Rajamundry Electric Supply Corpn. Ltd. (1), the Madras Legislature passed the Act and it received the assent of the President on the 9th October, 1954, and was published in the Government Gazette on the 13th October, 1954. The Act incorporated the main provisions of the earlier Act of 1949 and purported to validate action taken under the said earlier Act. After the Act was passed, the respondent issued a new Government Order No. 4388 on the 14th December, 1954, appointed the Chief Electrical Inspector to be the Acquisition Officer of the appellant concern for purposes of the Act. As a result of this order, the appellant undertaking which had been taken over by the respondent on the 21st September, 1951, continued, to be in the possession of the respondent. It is under these circumstances that the appellant filed its writ petition No. 326 of 1955 on the 26th April, 1955. In its writ petition, the appellant alleged that to the extent to which the Act purports to validate acts done under the earlier Act of 1949, it is ultra vires, ineffectual and inoperative. It was further urged that the three bases of compensation as laip (1) , 753 down by the Act are inconsistent with the requirements of article 31 of the Constitution and so, the operative provisions of the Act are unconstitutional. On these grounds, the appellant prayed for a writ of Certiorari or any other appropriate writ, or order or direction calling for the records relating to G.O. Ms. No. 2052 issued on the 17th May 1951 and quashing the same. Later, the appellant filed an other writ petition No. 107 of 1956 on the 31st January, 1956, and it added a prayer that a writ of Mandamus or any other writ, or order, or direction should be issued directing the respondent to restore possession of the appellant undertaking with all its assets along with masne profits from 21st September, 1951 or pay the market value of the said undertaking as on 21st September 1951 and interest thereon @ 6 per cent. per annum, and to direct payment of costs and pass such other orders as may be appropriate and just in the circumstances of the case. The claim thus made by the appellant was denied by the respondent. The respondent 's case was that the Act is valid and s.24 which operates retrospectively has validly and effectively validated actions taken under the earlier Act, with the result that the possession of the appellant undertaking which was taken on the 21st September, 1951, must be deemed to have been taken under the provisions of the Act and so the claim made by the appellant either for a writ of certiorari or mandamus could not be granted It was also urged that it would not be open to the appellant to claim possession of the undertaking or to ask for mesne profits in writ proceedings. Mr. Justice Rajagopalan who beard the two writ petitions, rejected the contentions raised by the appellant and dismissed the said petitions. He held that having regard to the fact that the 754 appellant had accepted compensation under the earlier Act, no real relief could be granted to it even if its contention that section 34 of the Act was invalid in uphold. In other words, the learned Judge took the view that even if the challenge made by the appellant to the validity of section 24 was found to be justified, in the present writ proceedings he would not be prepared to grant it the relief either of possession or of mesne profits. Even so, the learned Judge proceeded to examine the several points urged by the appellant in support of its contention that section 24 was invalid, and rejected them. In his opinion, the Act was valid and section 24 being retrospective in operation, validated the actions taken by the respondent under the earlier Act. The argument that the Compensation awardable under the Act was inconsistent with article 31(1) and 31(2) was not accepted, inter alia, on the ground that so material had been placed before the Court on which the appellant 's plea could be sus tained. The learned Judge has also recorded his conclusions on some other points urged before him, but it is unnecessary y to refer to them. After this decision was pronounced, the appellant moved the learned Judge for a certificate under article 132(1) of the Constitution and it is with the certificate thus granted to it under the said Article that the present appeals have been brought to this Court. The first point which Mr. Nambiar has raised before us on behalf of the appellant is that section 34 which purports to validate action taken under the earlier Act is, in law, ineffective to sustain the order issued by the respondent on the 17th May, 1951. It would be recalled that by this order, the respondent obtained possession of the appellant undertaking for the first time under the relevant provisions of the earlier Act. The argument is that there is no specific or express provision in the Act which makes the Act retrospective and no, s 24 755 even if it is valid, is ineffective for the purpose of sustaining the impugned order by which possession of the appellant concern was obtained by the respondent. The impugned order had recited that the appellant concern shall west in the Government on the 21st September, 1951, and it directed that under section 4(2) of the earlier Act the said order shall be published in the Gazette. Under the said order a further direction had been issued appointing the Chief Electrical Inspector to the respondent to be the Acquisition Officer, and the appellant was requested to take action for the appointment of an accredited respresentative in accordance with section 8 of the earlier Act and to submit the inventories and all particulars required under 'section 17 of the said Act. Mr. Nambiar contends that this order amounts to a notification which must be held to be a law under article 13 of the Constitution. For the purpose of the present appeals, we will assume that the said order is notification amounts to a law under article 13. Mr. Nambiar further contends that this notification was invalid for two reasons; it was invalid because it had been issued under the Provisions of an Act which was void as being beyond the legislative competence of the Madras Legislature, and it was void for the additional reason that before it was issued, the Constitution of India had come into force and it offended against the provisions of article 31 of the Constitution, and so, article 13(2) applied. Section 24 of the Act, no doubt, purported or attempted to validate this notification, but the said attempt has failed because the Act being prospective, section 24 cannot have retrospective operation. That, in substance, is the first contention raised before us. Before dealing with this argument, it would be necessary to examine the broad features of the Act and understand its general scheme. The Act was passed because the Madras Legislature thought 756 it expedient to provide for the acquisition of under takings other than those belonging to and under the control of the State Electricity Board constituted under section 5 of the in the State of Madras engaged in the business of supplying electricity to the public. It is with that object that appropriate provisions have been made by the Act to provide for the acquisition of undertakings and to lay down the principles for paying compensation for them. It is quite clear that the scheme of the Act was to bring within the purview of its material provisions under ' takings in respect of which no action bad been taken under the earlier act and those in respect of which action had been so taken. In fact, as we will presently point out, several provisions made by the Act clearly referred to both types of undertakings and leave Do room for doubt that both types of undertakings are intended to be governed by it. The definition of an 'accredited representative ' prescribed by section 2(b) shows that the accredited representative means the representative appointed or deemed to have been appointed under section 7. Similarly, section 2(j) which defines a licensee provides that in relation to an undertaking taken over or an undertaking which has vested in the Government under section 4, it shall be the person who was the licensee at the time when the undertaking was taken over or vested is the Government as the case may be, or his successor in interest. Section 2 (e) defines an undertaking taken over as meaning an undertaking taken over by the Government after the 1st January, 1951 and before the commencement of this Act. The ,vesting date ' under section 2 (m) means in relation to an undertaking, the date fixed under section 4 (1) as the date on which the undertaking shall vest in the Government or in the case of an undertaking taken over, the date on which it was taken over. These 757 definitions thus clearly point out that the Act was intended to apply to undertakings of which possession would be taken after the Act was passed as well as undertakings of which possession had already been taken under the relevant provisions of the earlier Act. Section 3 which deals with the application of the Act, provides that it shall apply to all undertakings of licensees including : (a) undertakings in respect of which notice for compulsory purchase has been served under section 7 of the Electricity Act, such undertakings not having been taken over before the commencement of this Act; and (b) undertakings taken over. Similarly, section 4 which gives powers to the respondent to take over any undertaking clearly" says that that 'power can be exercised in respect of any 'undertaking which had already not been taken over. In dealing with the appointment of sole representative, section 7, sub sections (3) and (5) bring out the same distinction between undertakings already taken over and those which had yet to be taken over. The same distinction is equally clearly brought out in section 10 (3), 11 sub s,(2), (5) and (1 1), and section 14 (3). It is thus clear that the Act, in terms, is intended to apply to undertakings of which possession had already been taken, and that obviously means that its material and operative provisions are retrospective. Actions taken under the provisions of the earlier Act are deemed to have been taken under the provisions of the Act and possession taken under the said earlier provisions is deemed to have been taken under the relevant provisions of the Act. This retrospective operation of the material provisions of the Act is thus writ large in all the relevant provisions and is an essential part of the scheme of the Act. Therefore, Mr. Nambiar is not right when he assumes that the rest of the Act is intended to be prospective and so, section 24 should be construed 758 in the light of the said prospective character of the Act. On the contrary, in construing section 24, we have to bear in mind the fact that the Act is retrospective in operation and is intended to bring within the scope of its material provisions undertakings of which possession had already been taken. Let us then construe s.24 and decide whether it serves to validate the impugned notification issued by the respondent on the 21st September, 1951. Section 24 reads thus: "Orders made, decisions or directions given, notifications issued, proceedings taken and acts of things done, in relation to any under taking taken ever, if they would have been validly made, given, issued, taken or done, had the Madras Electricity Supply Undertakings (Acquisition) Act,, 1949 (Madras Act XLIII of 1949), and the rules made thereunder been in force on the date on which the said orders, decisions or directions, notifications, proceeding, acts or things were made given, issued, taken or done are hereby declared to have been validly made, given, issued, taken or done, as the case may be, except to the extent to which the said orders, decisions, directions, notifications, proceedings, acts or things are repugnant to the provisions of this Acts. " The first part of the section deals, inter alia", with notifications which have been validly issued under the relevant provisions of the earlier Act. and it means that if the earliar Act had been valid at the relevant time; it ought to appear that the notifications in question could have been and had. in fact been made properly under the said Act. In other words, before any notification can claim the benefit of section 24, it must be shown that it was issued properly under the relevant provisions of the earlier Act, 759 assuming that the said provisions were themselves valid and in force at that time. The second part of the section provides that the notifications covered by the first part are declared by this Act to have been validly issued; the expression "hereby declared" clearly means "declared by this Act" and that shows that the notifications covered by the first part would be treated as issued under the relevant provisions of the Act and would be treated as validly issued under the said provisions. The third part of the section provides that the statutory declaration about the validly of the issue of the notification would be subject to this exception that the said notification should not be inconsistent with or repugnant to the provisions of the Act. In other words, the effect of this section is that if a notification had, been issued properly under the provisions of the earlier Act and its validity could not have been impeached if the said provisions were themselves valid, it would be deemed to have been validly issued under the provisions of the Act, provided, of course, it is not inconsistent with the other provisions of the Act. The section is not very happily worded, but on its fair and reasonable construction, there can be no doubt about its meaning or effect. It is a saving and validating provision and it clearly intends to validate actions taken under the relevant provisions of the earlier Act which was invalid from the start. ' The fact that section 24 does not use the usual phraseology that the notifications issued under the earlier Act shall be deemed to have been issued under the Act, does not alter the position that the second part of the section has and is intended to have the same effect. No doubt, Mr. Nambiar suggested that section 24 does not seem to validate actions taken under the earlier Act on the basis that the 'earlier Act was void and honest and in support of this argument, he ralies on the 760 fact that the notification following under the first part of section 24 are referred to as validly made and the earlier Act and the rules made thereunder are assumed to have been in force on the date on which the said notification was issued. He also relies on the provisions of section 25 which purports to repeal the said Act and that, no doubt, gives room for the argument that the Legislature did not recognise that the said Act was nonest and dead right up from the start. It is not easy to understand the genesis of section 25 and the purpose which it is intended to achieve. The only explanation given by Mr. Ganpati Aiyer on behalf of respondent is that since the earlier Act was in fact on the statute book, the legislature may have thought that for the sake of form, it may have to be repealed formally and so, section 25 was enacted. But even if the enactment of the said section be held to be superfluous or unnecessary, that cannot assist the appellant in the construction of section 24. We have no doubt that section 24 was intended to validate actions taken under the earlier Act and on its fair and reasonable construction, it must be held that the intention has been carried out by the legislature by enacting the said section. Therefore, the argument that section 24, even if valid, cannot effectively validate the impugned notification, cannot succeed. Mr. Nambiar then contends that the impugned notification is invalid and inoperative because it contravenes article 31 (1) of the Constitution. Article 31 (1) provides that no person shall be deprived of his property save by authority of law. It is urged that this provision postulates the existence of an antecedent law, before a citizen is deprived of his property. The notification was issued on the assumption that there was an antecedent law, viz., the earlier Act of 1949 ; but since the said Act was nonest, the notification is not supported by the authority of any pre existing law 761 and so, it must be held to be invalid and ineffective. In our opinion, this argument is not wellfounded. If the Act is retrospective in operation and section 24 has been enacted for the purpose of retrospectively validating actions taken under the provisions of the earlier Act, it must follow by the very retrospective operation of the relevant provisions that at the time when the impugned notification was issued, these provisions were in existence. That is the plain and obvious effect of the retrospective operation of the statute. Therefore in considering whether article 31(1) has been complied with or Dot, we must assume that before the notification was issued, the relevant provisions of the Act were in existence and so, article 31(1) must be held to have been complied with in that sense. In this connection, it would be relevant to refer to the provisions of article 20 (1). because the said provisions illustrate the point that where the ' Constitution desired to prevent the retrospective operations of any law, it has adopted suitable Phraseology to carry out that object. article 30 (1) provides that no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the , lime of the commission of the offence. By using the expression ",law in force" in both the parts of article 20 (1), the Constitution has clearly indicated that even if a criminal law was enacted by any legislature retrospectively, its retrospective operations would be controlled by article 30(1). A law in force at the time postulates actual factual exis tence of the law at the relevant time and that excludes the retrospective application of any subsequent law. article 31(1), on the other hand, does not use the expression ',law in force at the time". It 762 merely says "by authority of law", and so if subsequent law passed by the legislature is retrospective in its operation would satisfy the requirement of Art 31 (1) and would validate the impugned notification in the present case. Therefore, we are not satisfied that Mr. Nambiar is right in contending that the impugned notification is invalid for the reason that at the time when it was issued there was no law by whose authority it could be sustained. That takes us to the larger issue raised by Mr. Nambiar in the present appeals. He contends that the power of the legislature to make laws retrospective cannot validly be exercised so as to care the contravention of fundamental rights retrospectively. His contention is that the earlier Act of 1949 being dead and non existent, the impugned notification contravened article 31(1) and this contravention of a fundamental right cannot be cured by the legislature by passing a subsequent law and making it retrospective. In support of this argument, he has relied on the decision of this Court in Deep Chand vs The State of Uttar Pradesh (1). In that case, one of the questions which arose for decision was whether the doctrine of eclipse applied to a law which was found to be invalid for the reason that it contravened the fundamental rights, and the majority decision held that it did not apply to such a law. In feeling with a question as to the applicability of the doctrine of eclipse, a distinction was drawn between a law which was void either for want of legislative power at the time when it was passed, or because it contravened fundamental rights on the one hand, and the law which was valid when it was passed but subsequently became invalid because of supervening circumstances on the other. In the latter case, the law was valid when it was passed and became invalid because a cloud was cast on its validity by supervening (1) (1959) Supp. 2 S.C.R. 8. 763 circumstances. That being so, if the constitutional amendment subsequently made removes the cloud, the validity of the law is revived. That is the effect of application of the doctrine of eclipse; but there can be no scope for the application of the said doctrine to a law which is void and nonest either for want of legislative competence or because it contravenes fundamental rights. That, in substance, is the effect of the majority decision in Deep Chand 's case. In the present appeals it is not disputed that the earlier Act of 1949 was dead and void from the start, and that no doubt, is consistent with the majority decision in Deep Chand 's case. But the question as to whether the legislature can retrospectively validate actions taken under a void law did not arise for consideration in Deep Chand 's case. The only point which was decided was that the removal of the cloud by a subsequent constitutional amendment will not automatically revive a law which was void from the start, but that obviously is not case before us. What we are called upon to decide is the present appeals is whether or not it is competent to the legislature to pass a law retrospectively to validate actions taken under a void Act, and in deciding this question, Deep Chand 's case would not afford ue any assistance. Mr. Nambiar did not dispute the position that in enacting laws in respect of topics covered by appropriate entries in the relevant Lists of the 7th Schedule to the Constitution, the legislatures would be competent to make the provisions of the laws passed by them retrospective. He, however, seeks to import a limitation on this legislative power where the contravention of fundamental rights is involved. No authority has been cited in support of the plea that the legislative power of the legislature is subject to any such limitation even where the contravention of fundamental rights is involved. On principle, it is difficult to appreciate how such 764 a limitation on the legislative power can be effectively pleaded. If a law is invalid for the reason that it has been passed by a legislature without legislative competence, and action is taken under its provisions, the said action can be validated by a subsequent law passed by the same legislature after it is clothed with the necessary legislative power. This position is not disputed. If the legislature can by retrospective legislation cure the invalidity in actions taken in pursuance of laws which were void for want of legislative competence and can validate such action by appropriate provisions, it is difficult to see why the same power cannot be equally effectively exercised by the legislature in validating actions taken under law which are void for the reason that they contravened fundamental rights. As has been pointed out by the majority decision in Deep Chand 's case, the infirmity proceeding from lack of legislative competence as well as the infirmity proceeding from the contravention of fundamental rights lead to the same result and that is that the offending legislation is void and honest. That being so, if the legislature can validate actions taken under one class of void legislation, there is no reason why it cannot exercise its legislative power to validate actions taken under the other class of void legislation. We are, therefore, not prepared to accept 'Jr. Nambiar 's contention that where the contravention of fundamental rights is concerned, the legislature cannot pass a law retrospectively validate actions taken under a law which was void because it contravened fundamental rights. In this connection, it may be useful to refer to some decisions which deal with the legislature 's power to pass retrospective laws. in the United Provinces vs Mst. Atiqabegum (1) Gwyer C.J. observed that "the validation of doubtful executive acts is (1) 136. 765 not so unusual or extraordinary a thing that little surprise would be felt if Parliament had overlooked it, and it would take a great deal to persuade me that the legislative power for the purpose has been denied to every Legislature, including the Central or Federal Legislature, in India. " It is true, ",he added," that validation of executive orders or any entry even remotedly analogous to it is not to be found in any of the three lists; but I am clear that legislation for that purpose must necessarily be regarded as subsidiary or ancillary to the power of legislating on the particular subjects in respect of which the executive orders may have been issued." The same principle was stated by Speans C. J. in Piare Dusadh vs The King Emperor.(1) This question has been considered by this Court in several decisions to some of which we will now briefly refer. In the Union of India vs Madan Gopal Kabra this Court had occasion to consider the validity of certain amendments made in the Income Tax Act by section 3 of the Finance Act (XXV of 1950). These amendments had the effect of applying retrospectively the charging sections of the Taxing Act and their validity was impeached. In rejecting the argument that the levy authorised to be imposed by the amendments was ultra vires, Patanjali Sastri, C. J., observed that "while it is true that the Constitution has no retrospective operation, except where a different intention clearly appears, it is not correct to say that in bringing into existence new Legislatures and conferring on them certain powers of legislation, the Constitution operated retrospectively. The legislative powers conferred upon Parliament under Articles 245 and 246 read with List I of the, Seventh Schedule could obviously be exercised only after (1) , 105. (2) ; , 554. 766 the Constitution came into force and no retrospective operation of the Constitution is involved in the conferment of these powers. But it is a different thing to say that Parliament in exercising, the powers thus acquired is precluded from making a retrospective law," and so, the conclusion was that Parliament was content to make a law imposing a tax on the income of any year prior to the commencement of the Constitution. In M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh (1), the validity of the Sales Tax laws Validation Act, 1956 (7 of 1956) was questioned and the majority of the Court held that the said Act was in substance one lifting the ban on taxation of inter State sales and within the authority conferred on the Parliament under article 286(2) and further that under that provision, it was competent to the Parliament to enact a law with retrospective operation. This conclusion also proceeded on the basis that the Power of a legislature to pass a law included a power to pass it retrospectively, and so, the argument that the impugned Act was ban on the ground that it was retrospective in operation was rejected. The same principle has been again enunciated by this Court in M/s. J. K. Jute Mills Co. Ltd. vs State of Uttar Pradesh (2). it has been held in this case that the power of the legislature to enact a reference to a topic entrusted to it is unqualified, subject only to any limitation imposed by the Constitution in the exercise of such a power, and that I it would be competent for the Legislature to enact a law which is either prospective or retrospective, vide also Mt. Jadao Bahuji vs The Municipal Committee, Khandwa, Jadab Singh vs The Himanchal Pradesh Administration and Raghubar Dayal Jai Prakash vs The Union of India(5). Therefore, there is no doubt about (2) (1962) 2 S C.R. I. (3) ; (4) (5) ; 767 the competence of the Legislature to enact a law and 'make it retrospective in operation in regard to topics included within the relevant Schedules of the Constitution. Our conclusion, therefore, is that the appellant 's contention that it was beyond the competence of the Madras Legislature to make the Act retrospective so as to validate the impugned notification, cannot be accepted. That takes us to the last argument raised by Mr. Nambiar before us. He contends that section 5 of the Act which provides for the payment of compensation to the licensees whose undertakings are taken over, is invalid because it is inconsistent with article 31(2). It is common ground that the provisions of article 31(2) with which we are concerned in the present appeals are those as they stood before the 4th Constitutional Amendment came into force. article 31(2) then provided, enter alia, that no property shall be compulsorily acquired save for the public purpose and save by authority of law which provides for compensation for the property so acquired and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given. In support of his argument, Mr. Nambiar has relied on the decision of this Court in the State of West Bengal vs Mrs. Bala Banerjee (1). In dealing with the question about the scope and effect of the provisions of article 31(2) in so far as they referred to the payment of compensation, this Court observed that though entry 42 of List III conferred on the Legislature the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner of the property acquired, article 31 (2) required that such principles must ensure that what is determined as (1) ; 768 payable must be "compensation ', that is, a just equivalent of what the owner has been deprived of. That is why in considering the validity of any statute is the light of article 31(2) it would be open to the Court to enquire whether all the elements which make up the true value of the property acquired have been taken into account in lying down the principles for determining compensation. It appears that section 8 of the West Bengal Land Development and Planning Act, 1948 (XXI of 1948) which was impugned in that case limited the amount of compensation so as to not to exceed the market value of the land on December, 31, 1946, no matter when the land was acquired. This part of section 8 was struck down as invalid because it was hold that in fixing the market value on December 31, 1946, as the ceiling on Compensation, the legislature had patently ignored the fact that prices of lands had considerably risen after the said date and that tended to show that the compensation awardable under the said provision could not be said to be just equivalent of what the owner would be deprived of. Mr. Nambiar, therefore, contends that since section 5 does not authorise the payment of compensation which can be treated as just equivalent of the property which would be taken over under its provisions, it must be struck down as inconsistent with article 31 (2). It may be conceded that the 4th Constitution amendment which substantially changed the provisions of article 31 (2) would be inapplicable in the present case, and that the High Court was in error in making a contrary assumption. In support of this argument, Mr. Nambiar has also referred us to section 7A of the (No. 9 of 1910) as it then stood. Section 7A (2) of the said Act lays down 769 that in purchasing undertakings under section 7A (1), the value of such lands, buildings, works, materials, and plant shall be deemed to be their market E value at the time of purchase, due regard being had to the nature and condition for the time being of such lands, buildings, materials and plant and the state of repair thereof and to the circums tance that they are in such position as to be ready for immediate working and to the suitability of the same for the purpose of the undertaking. The proviso to a. 7A lays down that to the value determined under sub section (2) shall be added such percentage, if any, not exceeding twenty per centum of that value as may be specified in the license on account of compulsory purchase. Mr. Nambiar suggests that the provisions made in section 7A (2) and the proviso to a. 7A of this Act give a fair picture of what could be regarded as a reasonable compensation that should be paid to the undertakings before they are acquired. Before dealing with this argument, it is necessary to examine the scheme of s.5 which provides for the compensation to be paid to the licensees. Section 5 provides that the compensation payable to a licensee on whom an order has been served under s.4 or whose undertaking has been taken over before the commencement of the act, shall be determined under any one of the Bases A, B and C specified by the section as may be chosen under a. 8. Then follow detailed provisions about the three Bases A, B and C. Under Basis A, the compensation payable shall be an amount equal to twenty times the average not annual profit of the undertaking during a period of five consecutive account years immediately preceding the vesting date. The explanation makes it clear that the net annual profit shall be determined in the manner laid down in Part A or Part B, as the case may be, of Sch. 1. It is also clear that this basis shall 770 not apply to an undertaking which has not been supplying electricity for five consecutive account years immediately preceding the vesting date. Under Basis B, the compensation payable shall be the aggregate value of all the shares constituting the share capital of the undertaking, reckoned as indicated in (a), (b), (c), and (d) 'thereof. These respective clauses have reference to the dates on or before which the shares of the undertaking have been issued, for instance, cl. (a) provides that in the case of shares issued on or before the 31st March, 1946, the value of each share shall be reckoned at its average value as arrived at from the quotations for the shares as given in the official list of the Madras share Market on the 15th day of each month and where such market was closed on that day, the quotations on the next working day during the period of there years commencing on the 1st April, 1946, and ending on the 31st March, 1949. Under clause (b) it is provided that in the case of shares issued on or before the 31st March, 1946, if clause (a) does not apply but there have been bonafide transfers in each of the different classes of shares in every one of the three years aforesaid, and such transfers have been duly registered in the appropriate books of the licensee, the value of each share of each such class shall be reckoned at one third of the aggregate of its three annual average values for the three years, the average value for each year being determined ' from the transactions in that year. It is not necessary to set out clauses (c) and (d). The explanation to this Basis provides that it shall not apply unless clause (a) or clause (b) is applicable. Under Basis C, the compensation payable shall be the aggregate value of the amounts specified in cls. (i) to (viii). These clauses refer respectively to the book Value of all completed works in beneficial 771 use pertaining to the undertaking and handed over to the Government less depreciation as specified; the book value of all works in progress: the book value of all other fixed assets; the book value of all other fixed assets; the book value of all plant and equipment; the book value of all intangible assets to the extent such value has not been written off in the books of the licensee; the amount due from consumers as specified in cl. (vii); and any amount paid actually by the licensee in respect of every contract referred to in section 6 (2) (a) (iii). Where basis C is applied, an additional sum by way of solatium. is required to be paid as specified in cls. (a) and (b) to cl. The explanation to Basis C explains how the book value of any fixed assets has to be ascertained. That, in broad outlines, is the nature of the three Bases prescribed by section 5 for assessing the compensation to be paid to a licensee. It is true that in none of the three bases does the Legislature refer to the market value of the undertaking, but that itself cannot justify the argument that what is intended to be paid by way of compensation must necessarily mean much less than the market value. The failure of the legislature to refer to the fair market value cannot, in our opinion, be regarded as conclusive or even presumptive evidence of the fact that what is intended to be paid under section 5 does not amount to a just equivalent of the undertaking taken over. After all, in considering the question as to whether compensation payable under one or the other of the Bases amounts to just equivalent. We must try to assess what would be payable under the said basis. On this point, the real difficulty,, in the way of the appellant is that it has produced no material before the Court on which its plea can be sustained. As the High Court has pointed out, in the absence of any satisfactory material it would be difficult 772 for the Court to come to any definite conclusion on the question as to whether just equivalent is provided for by section 5 or not. Mr. Nambiar, no doubt, attempted to suggest that in the Madras High Court oral evidence is not allowed to ' be adduced on questions of fact in writ proceedings. That may be so; but it is quite clear that the affidavit made by the appellant in support of its petition could have easily set forth all relevant facts showing that the compensation payable under section 5 was so inadequate that it could not be regarded as a just equivalent of the property acquired. In the absence of any material, we do not see how we can assess the validity of Mr. Nambiar 's contention that section 5 contravenes article 31 (2) of the Constitution. It is true that in its petition, the appellant made a general allegation that the market value of its assets at the relevant time would be Rs. 16,49,350/ , but no satisfactory material was placed in the form of proper affidavits made by competent persons to show how this market value was deter mined. In fact, the appellant did not state before the High Court and was unable to state even before this Court what principles should have been laid down by the legislature in determining a just equivalent for the undertaking taken over by the respondent. The general argument that s.5 does not provide for the payment of market value cannot, in the absence of material, help the appellant at all in challenging the validity of section 5. In this connection, it must be borne in mind that 8 of the Act leaves it to the opinion of the licensee to intimate to the Government in writing which basis of compensation it wants to be adopted, and so, it is not as if the choice of the basis is left to the Government in every case. Take, for instance, Basis A; the compensation payable under this Basis is: an amount equal to twenty times the aver ag 773 net annual profit of the undertaking during a period of five consecutive account years preceding the vesting date. Now, in determining the fairness A or otherwise of the compensation awardable under basis A, it cannot be ignored that what is acquired is an undertaking which is a going commercial concern and so, it would, prima facie, be inappropriate to attempt to determine its value safely or mainly by reference to the buildings it owns or the machin ery it works. It would also be relevant to remember that undertakings of this kind cannot claim a general market in the sense in which lands can claim it. That being so, if the legislature thought that giving the undertaking twenty times the average not annual profit would amount to a just equivalent, prima facie it would be difficult to hold that the basis adopted by the legislature is such as could be held to be inconsistent with article 31 (2). The Basis B may or may not be satisfactory, but Basis C may prima facie be satisfactory in respect of new undertaking and in any case, the option in most cases would be with the undertaking itself. Therefore, in the absence of any material, we are unable to hold that on looking at the scheme adopted by section 5 by itself, the appellant 's argument that what is offered by way of compensation is not a just equivalent, can be accepted. It may be that in some oases basis B may work hardship and conceivably even basis A or basis C may not be as satisfactory as it should be; but, when a party challenges the validity of a statutory provision like section 5, it is necessary that the party must adduce satisfactory and sufficient material before the Court on which it wants the Court to hold that the compensation which would be paid under everyone of the three Bases under the inpugned statutory provision does not amount to a just equivalent. Looking merely at the scheme of the section itself, it is impossible to arrive at such a conclusion. That is the view 774 taken by the Madras High Court and we see no reason to differ from it. Therefore, the challenge to the validity of the Act on the ground that its important provisions contained in section 5 offend against article 31 (2) must be rejected. That being our view, we must held that the High Court was right in rejecting both the writ petitions filed by the appellant. On that view, it is, unnecessary to consider whether appellant would have been entitled to get the relief of possession or mesne profits which it purported to claim by its two petitions. The appeals accordingly fail and are dismissed with costs. One set of hearing fees. Appeals dismissed.

IN-Abs

By an order dated May 17, 1951, the appellant undertaking vested in the respondent from September 21, 1951, under the provisions of section 4(1) of the Madras Electricity apply Undertakings Act 1949. Thereafter the respondent appointed the Chief Electrical Adviser as the Acquisition Officer who took over possession on the appointed date, and a part of the compensation payable under the Act was paid. The validity of the said Act was challenged by some other electrical undertakings in Madras and in Raja Chaudhry Electric Supply Corporation Ltd. vs State of Andhra Pradesh, the Supreme Court held that the Act of 1 949 was ultra vire8. After the said decision was pronounced, the Aadras Legislature passed the impugned Act, the Madras Act ' 29 of 1954. The Act incorporated the main provisions of earlier Act of 1949 and purported the validate action taken under the said earlier Act. A new Government order was issued and the Chief Electrical Adviser was appointed the Acquisition Officer of the appellant concerned. As a result of this order, the appellant undertaking which had been taken over by the respondent earlier in 1951, continued to be in the possession of the Respondent. The appellant filed two writ petitions and alleged that to the extent to which the Act purported to validate acts done under the earlier Act of 1949 it was ultra vires, ineffectual and inoperative, It was further urged that the three basis of compensation laid down by the Act were inconsistent with the requirements of ' 748 article 31 of the Constitution, and so; the operative provisons of the Act were unconstitutional. The question was also raised whether or not it was competent to the Legislature to pass a law restrospectively to, validate action taken under a void Act. Held, that it was within the competence of the Madras Legislature to enact a law and make it retrospective in operation. The Madras Act, 29 of ' 1954, in terms is intended to apply to undertakings of which possession had already been taken, and that obviously means that its material and opera tive provisions are retrospective. The effect of section 24 is that if a notification had been issued properly under the provisions of the earlier Act and validity could not have been impeached if the said provisions were themselves valid, it would be deemed to have been validly issued under the provisions of the Act, provided, of course it is not inconsistent with the other provisions of the Act. It is a saving and validating provision and it clearly intends to validate action taken under the relevant provisions of the earlier Act which was invalid from the start. Held, further, that article 31(1), of the Constitution, unlike Art;, 20(1), does not use the expression "law in force at the time it merely says "by authority of law" and so, if a subsequent law passed by the Legislature is retrospective in its operation, it would satisfy the requirement of article 31(1) and would validate the impugned notification in the present case. The Legislature can pass a law retrospectively validating action taken under a law which was void because it contravened fundamental rights, If the Legislature can by retrospective legislation cure the invalidity of action taken in pursuance of laws which were void for want of legislative competance and can validate such action by appropriate provisions, the same power can be equally effectively exercised by the Legislature for validating actions taken under laws which are void for the reason that they contravened fundamental rights. Held, also, that the failure of the Legislature to refer to the fair market value cannot, be regarded as conclusive or even presumptive evidence of the fact that what is intended to be paid under section 5 does not amount to a just equivalent of the undertaking taken over. After all, in considering the 749 question as to whether compensation payable under one or the other of the bases amounts to a just equivalent, the court must try to assess what would be payable on the said basis of market value. It may be that in some basis B may work hardship and conceivably evert basis A or basis C may not be as satis factory as it should be ; but when a party challenges the validity of a statutory provisions like section 5, it is necessary that the party must adduce satisfactory and sufficient material before the Court on which it wants the court to hold that the compensation which would be paid under everyone of the three bases under the impugned statutory provisions does not amount to a just equivalent. Looking merely at the scheme of the section itself, it is impossible to arrive at such a conclusion. Narasaraopeta Electric Corporation Ltd. vs State Of Madras, , Rajamundru Electric Supply Corporation Ltd. vs State of Andhra, ; , and Deep Chand vs State of U. P., (1959) Supp. 2 section C. R. 8, referred to.

Appeal No. 435 of 1961. Appeal from the order dated September 7, 1959, of the High Court of Mysore at Bangalore, in Income tax Referred case No. 2 of 1955. C. K. Daphtary, Solicitor General of India, N. D. Karkhanis, R. H. Dhebar, and P. D. Menon, for the appellant A.V. Viswanatha Sastri and K. B. Chaudhuri, for the respondent. May 3. The Judgment of the Court was delivered by HIDAYATULLAH, J. This appeal by the Commissioner of Income tax, Mysore, on a certificate granted under a. 66A of the Indian Income tax Act, is directed against a judgment of the High Court of Mysore dated September 7, 1959, by which the 979 following question referred by the Income tax Appellate Tribunal, Madras Bench, was answered in favour of the respondent : "Whether there are materials for the tribunal to hold that the sum of Rs. 2,87,422/aforesaid represents a loss of capital." Originally two question were referred, but with the second question we are not now concerned. The respondent is a limited liability Company called the Mysore Sugar Co. Ltd., in which a very large percentage of shares is owned by the Government of Mysore. We shall refer to the respondent as the assessee Company. The asseesee Company purchases sugarcane from the sugarcane,growers, and crashes them in its factory to prepare sugar. As a part of its business operations, it enters into agreement with the sugarcane growers, who are known locally as "Oppigddars" and advances them sugarcane seedlings, fertilisers and also cash. The Oppigedars enter into a written agreement called the "Oppige", by which they agree to sell sugarcane exclusively to the assessee Company at current market rates and to have the advances adjusted towards the price of sugarcane, agreeing to pay interest in the meantime. For this purpose, an account of each Oppigeddar is opened. by the assessee Company. A crop of sugarcane takes about 18 months to nature, and these agreements take place at the harvest season each year, in preparation for the next crop. In the year 1948 49 due to drought, the assessee Company could not work its sugar mills and the Oppigedars could not grow or deliver the sugarcane. The advances made in 1948 49 thus remained unrecovered, because they could only be recovered by the supply of sugarcane to the assessee Company. The Mysore Government realising the hardship appointed 980 a Committee to investigate the matter and to make a report and recommendations. This report was made by the Committee on July 27, 1950, and the whole of the report has been printed in the record of this case. The Oppige bond is not printed, perhaps because it was in Kaunada, but the substance of the terms is given by the Committee and the above description fairly represents its nature. The Com mittee recommended that the assessee Company should ex gratia forego some of its dues, and in the year of account*ending June 30, 1952, the Company waived its rights in respect of Rs. 2,87,422/The Company claimed this is a deduction under sections 10 (3) (xi) and 10 (2) (xv) of the Indian Incometax Act. The Income tax Officer declined to make the deduction, because, in his opinion this was neither a trade debt nor even a bad debt but an ex gratia payment almost like a gift. An appeal to the Appellate Assistant Commissioner also failed. Before the Income tax Appellate Tribunal, Madras. Bench, these two arguments were again raised, but were rejected, the Tribunal holding that the payments were not with an eye to any commercial profit and could not thus be said to have been made out of commercial expediency, so as to attract section 10 (2) (xv) of the Act. The Tribunal also held that these were not bad debts, because they were " 'advances, pure and simple, not arising out of sales" and did not contribute to the profits of the business. From the order of reference, it appears that the Appellate Tribunal was also of the opinion that these advances were made to ensure a steady supply of quality sugarcane, and that the loss, if any, must be taken to represent a capital loss and not a trading loss. The Appellate Tribunal, however, referred the question for the opinion of the High Court, and the High Court held that the expenditure was not in the nature of a capital expenditure, and was 981 deductible as a revenue expenditure. It relied upon a passage from Sempath Ayyangar 's Book on the Indian Income tax Law and on the decision of this Court in Badridas Daga vs Commissioner of Incometax (1.), to hold that this amount was deductible in computing the profits of the business for the year in question under a. 10 (1) of the Income tax Act. The case has been argued before us both under section 10 (1) and section 10 (2) (xv), though it appears that the case of the assessee Company ' has changed from a. 10 (1) to section 10 (2) .(xi) and section 10 (2) (xv) from time to time. The question, as propounded, seems to refer sections 10 (2) (xv) and 10(1) and not to section 10 (2) (xi), We, however, do not wish to emphasise the nature of the question posed, because, in our opinion, the central point to decide is whether the money which was given up, represented a loss of capital, or must be treated as a revenue expenditure. The tax under the head "Business" is payable under is. 10 of the Income tax Act. That section provides by sub section (1) that the tax shall be payable by an assessee under the head "Profits and gains of business, etc." in respect of the profits or gains of any business, etc. carried on by him. Under sub section (2), these profits or gains are computed after making certain allowances. Clause (xi) allows deduction of bad and doubtful business debts. It provides that when the assessee 's accounts in respect of any part of his business are not kept on the cash basis, such sum, in respect of bad and doubtful debts, due to the assessee in respect of that part of his business is deductible but not exceeding the amount actually written off as irrecoverable in the books of the assessee. Clause (1) ; 982 (xv) allows any expenditure not included in cls. (1) to (xiv), which ;is not in the nature of capital expenditure or personal expenses of the assessee, to be deducted, if laid out or expended wholly and exclusively for the purpose of such business, etc. The clauses expressly provide what can be deducted; but the general scheme of the section is that profits or gains must be calculated after deducting outgoings reasonably attributable as business expenditure but so as not to deduct any portion of an expenditure of a capital nature. If an expenditure comes within any of the enumerated classes of allowances, the case can be considered under the appropriate class; but there may be an expenditure which, though not exactly covered by any of the enumerated classes, may have to be considered in finding out the true assessable profits or gains. This was laid down by the Privy Council in Commissioner of Income tax vs Chitnavis (1) and has been accepted by this Court. In other words, section 10 (2) does not deal exhaustively with the deductions, which must be made to arrive at the true profits and gains. To find out whether an expenditure is on the capital account or on revenue, one must consider the expenditure in relation to the business. Since all payments reduce capital in the ultimate analysis, one is apt I to consider a loss as amounting to a loss of capital. But this is not true of all losses, because losses in the running of the business cannot be said to be of capital. The Questions to consider in this connection are: for that was the money laid out? Was it to acquire an asset of an enduring nature for the benefit of the business, or was it an outgoing in the doing of the business? If money be lost in the first circumstance, it is a loss of capital, but if lost in the second circumstance, it is a revenue loss. In the first, it bears the (1) (1932) L.R. 59 I.A. 290. 983 character of an investment, but in the second, to use a commonly understood phrase, it bears the character of current expenses. This distinction is admirably brought out in some English cases, which were cited at the Bar. We shall refer 'Only to three of them. In English Crown Spelter Co. Ltd vs Baker 0), the English Crown Spelter Co. carried on the business of zinc smelting for which it required large quantities of 'blende '. To get supplies of blende, a new Company called the) Welsh Crown Spelter 'Company was formed, which received assistance from the English Company in the shape of advances on loan. Later, the English Company was required to write off pound 38,000 odd. The question arose whether the advance could besaid to an investment of capital, because if theywere, the English Company would have no right to deduct the amount. If on the other hand, it was money employed for the business it could be deducted. Bray, J. who considered these questions, observed: "If this were an ordinary business transaction of a contrary by which the Welsh Company were to deliver certain trend, it may be at prices to be settled hereafter, and that this was really nothing more than an advance on account of the price of that blend, there "would be a great deal to be said in favour of the Appellants It is impossible to look upon this as an ordinary business transaction of an advance against goods to be delivered I can come to no other conclusion but that this was an investment of capital in the Welsh Company and was not an ordinary trade transaction of an advance against goods. . " (1) 984 The second case, Charles Marsdon & Sons. Ltd vs The Commissioners of Inland Revenue (1), is under the Excess Profits Duty in England, and the question arose in the following circumstances: an English Company carried on the business of paper making. To arrange for supplies of wood pulp, it entered into an agreement with a Canadian Company for supply of 3000 tons per year between 1917 1927. The English Company made an advance of E. 30,000 against future deliveries to be recouped at the rate of E. I per ton delivered. The Canadian Company was to pay interest in the meantime. Later, the importation of wood pulp was stopped, and the Canadian Company (appropriately called the Ha Ha Company) neither delivered the pulp nor returned the money. Bowlatt, J. held this to be a capital expenditure not admi ssible as a deduction. He was of opinion that the payment was not an advance payment for goods, observing that no one pays for goods ten years in advance, and that it was a venture to establish a source and money was adventured as capital. The last case, to which we need refer to illustrate the distinction made in such cases is Reid 's Brewery Co. Ltd vs Nale (2). The Brewery Company there carried on, in addition to the business of a brewery, a business of bankers and money lenders making loans and advances to their customers. This helped the customers in pushing sales of the product of the Brewery Company. Certain sums had to be written off, and the amount was held to be deductible. Pollock, B, said: "of course, if it be capital invested, then it comes within the express provision of the Income Tax Act, that no deduction is to be X X made on that account" (1) (1919) T. T.C. 217. (2) 985 but held that: " . .no person who is 'acquainted with the habits of business ,loan doubt that this is not Capital invested. What it is, is this. It is capital used by the Appellants but used only in the sense that all money which is laid out by persons who are traders, whether it be in the purchase of goods be they traders along, whether it be in the purchase of raw material be they manufacturers. or in the case of money lenders, be they pawnbrokers or money lenders, whether it be money lent in the course of their trade, it is used and it comes out of capital, but it is not an investment in the ordinary sense of the word. " It was thus held to be a use of money in the course of the Company 's business, and not an investment of capital at all. These cases illustrate the distinction between an expenditure by way of investment and an expenditure in the course of business, which we have described as current expenditure. The first may truly be regarded as on the capital side but not the second. Applying this test to this simple case, it is quite obvious which it is. The amount was an advanced against price of one crop. The Oppigedars were to get the assistance not as an investment by the assessee company in its agriculture, but only as an advance payment of price. The amount, so far as the assessee Company was concerned., represented the current expenditure towards the purchase of sugarcane, and it makes .DO difference that the sugarcane thus purchased was grown by the Oppigedars with the seedlings, fertiliser and money taken on account from the assessee Company. In so far as the assessee Company was concerned, it was doing no more than making a forward arrangement for the next 986 year 's crop and paying an amount in advance out of the price, so that the growing of the crop may not suffer due to want of funds in the hands of the growers. There was hardly any, element of investment which contemplates more than payment of advance price. The resulting loss to the assessee Company was just as much a loss on the revenue side as would have been, if it had paid for the ready crop which was not delivered. In our judgment, the decision of the High Court is right. The appeal fails, and is dismissed with costs. Appeal dismissed.

IN-Abs

The assesses Company used to purchase sugarcane from the sugarcane growers to prepare sugar in its factory, in which a very large percentage of shares was owned by the Government of Mysore. As a part of its business operation it entered into written agreements with the sugarcane growers and advanced them seedlings, fertilizers, and also cash. The cane growers entered into these agreements known as "oppige" by which they agreed to sell sugarcane exclusively to the assessee company at current market rates and to have the 977 advances adjusted towards the price. An account of each "Oppigedar" was opened by the company. These agreements were entered into for each crop. In the year 1948 49 due to drought, the assessee company could not work its mills and the "oppigedar" could not grow or deliver the sugarcane and thus the advances made in the year remainded unrecovered. The Mysore Government realising the hardship appointed a committee to investigate the matter and make a report. The Committee recommended that the assessee company should ex gratia forgo some of its dues, and in the year of account ending June 30, 1952, the company waived its rights in respect of Rs. 2,87,422/ . The Company claimed this as a deduction under section 10 (2) (xi) and section 10 (2) (xv) 'but the Income Tax Officer declined to make the deduction and the appeal before the Appellate Assistant Commissioner also failed. The Tribunal was also of the opinion that these advances were made to ensure to steady supply of quality surgarcane and the loss, if any, must be taken to represent a capital loss and not a trading loss but the tribunal referred the. question thereby arising for the decision of the High Court. The High Court relying upon a decision of this Court in Badridas Daga vs Commissioner of Income tax held, that the expenditure was not in the nature of a capital expenditure, but was a revenue expenditure and that this amount was deductible in computing. the profits of the business for the year in question under section 10 (1) of the Income tax Act. The central point for decision in the present case, was whether the money which was given up, represented a loss of capital or must be treated as a revenue, expenditure. Held, that section 10 (2) does not deal exhaustively with the deductions which must be made to arrive at the true profits and gains. It mentions certain deductions in cls. (i) to (xiv) and if an expenditure comes within any of the emunerated classes of allowance the case has to be considered under the appropriate class. Clause (xv) is a general clause which allows an expenditure to be deducted, if laid out or expended wholly and exclusively for the purpose of such business, which is not in the nature of capital expenditure or personal expenses of the assessee. But the general scheme of the section is that profits or gains must be calculated after deducting outgoings reasonably attributable as business expenditure but not so as to deduct any part of a capital expenditure. To find out whether an. expenditure is on the capital account or on revenue, one must consider the expenditure in 978 relation to the business. The questions to consider in this connection are for what was the money laid out ? Was it to acquire an asset of an enduring nature for the benefit of the business, or was it an outgoing in the doing of business ? If money be lost in the first circumstance it, is a loss of capital, but it lost in the second circumstance, it is a revenue loss. In the first, it bears the character of an investment, but in the second, it bears the character of current expenses. English Crown Spelter Co. Ltd. vs Baker, , Charles Marsden & Sons Ltd. vs The Commissioners of Inland Revenue, and Raid 's Brewery Co. Ltd. vs Nale, , applied. Badridas Daga vs Commissioner of Income tax (1959) section C. R. 690 and Commissioner of Income tax vs Chitnavis, (1932) L. R : 59 I. A. 290, referred to. Held, in this case, there was hardly any element of investment which contemplate more than payment of advance price. The resulting loss to the assessee company was just as much a loss on the revenue side as would have been, if it had paid for the ready crop which was not delivered,

Appeal No. 640 of 1961. Appeal by special leave from the judgment and order dated September 14, 1961, of the Calcutta High Court in Matter No. 44 of 1961. WITH Civil Appeals Nos. 173 to 175 of 1962. Appeal by special leave from the judgments and order dated September 14 and 21, 1961, of the Calcutta High Court in Matters Nos. 149, 258 and 162 of 1961. M.C. Setalvad, Attorney General of India, B. Sen and P. K. Boae, for the appellants in C.A. No. 640 of 61. Sachine Chaudhuri, Ellis Meyer, Subrota K. Chaudhuri and I. N. Shroff, for the respondent in C.A. No. 640/61. 956 N.C. Chatterjee, B. L. Kanodia and B. P. Mahemari, for the appellants in C.A. No. 173 of 1962. B.Sen, B. L. Kanodia and B. P. Maheshwari, for the appellants in C.As. No. 174 and 175 of 1962. G.S. Pathak, M. G. Poddar and D. N. Mukherjee for the respondents in C.A. No. 173/62. P.L. Khaitan, section N. Andley and Rameshwar Nath, for the respondents in C A. No. 174/62. A.O. Bhabra, M. G. Poddar, P. L. Khaitan and D.N. Mukherjee for the respondents in C. A. No. 175/62. 1962. May .3. The Judgment of the Court was delivered by S.K. DAS, J. These four appeals, all with special leave of this Court, have been heard together because they raise common questions of law ' and fact. This judgment will govern them all. In the High Court of Calcutta, in or about February July, 1961, a series of applications numbering about 170 were filed by sellers of raw jute. The main relief asked for by those applications was the revocation of the authority of an arbitrator appointed under certain contracts Which the applicants had entered into with the respondents in circumstances which we shall presently state. Except in two or three casts the respondents were all jute mill companies which purchase raw jute and manufacture finished goods therefrom. The main controversy which these applications gave rise to was dealt with by the High court in its judgment dated September 14. 1961, in the application entitled Ram Kumar Chhotaria vs Titaghur Jute Factory Co. Ltd. (Matter No. 20 of 1961 before the High Court). 957 Certain special points arising in some of the other applications were dealt with in separate ' judgments. The High Court stated in its judgment in Ram Kumar Chhotaria vs Titaghur. Jute Factory Co. Ltd. that the only relief, among the many included in the petition, pressed at the hearing was leave to revoke the authority of the appointed arbitrator under the provisions of section 5 of the (Act 10 of 1940) which provides that "the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement. " We shall now state the circumstances in which the applications were made for leave to revoke the authority of the appointed arbitrator and in doing so we shall state somewhat fully the facts alleged in the application of M/s. Amarchand Lalitkumar a firm registered under the Indian Partnership Act, and carrying on business in Calcutta, which firm is the appellant before us in Civil Appeal No. 640 of 1961. The facts being similar we shall not repeat them with regard to the other three appeals, but refer to such special facts or points in those appeals as have been pressed before us. On April 22, 1960, M/s. Amarchand Lalitkumar, whom we shall refer to as the appellant, entered into a contract being contract No. 1786 with Shree Ambica Jute Mills Ltd., respondent in Civil Appeal No. 640 of 1961, whereby the appellant agreed to sell and the respondent agreed to buy some 10,000 maunds of Middle and Bottom Jute at a particular price. The Contract was negotiated by a firm of brokers M/s. A. M. Mair & Co. (Private) Ltd., and was entered into in the standard printed form prescribed by the East India Jute & Hessian Exchange Ltd. (hereinafter referred to as the 958 (Exchange) and was subject to the rules and bylaws made by it. The contract was a 'forward contract being a transferable specific delivery contract in raw jute, the contract providing by a guarantee clause for "shipment or despatch during August/September, 1960". By the operation of the provisions of the Forward Contracts (Regulation) Act 1952 (Act 74 of 1952), and the notifications made by the ' Central Government thereunder, forward contracts for the sale or purchase of raw jute in the city of Calcutta which included the area within the municipal limits of Calcutta, the Port of Calcutta and the districts of 24 Parganas, Nadia, Howrah and Hooghly, could only be entered into between members of a recognised association or through or with any such member. The exchange was such a recognised association. The Act empowered recognised associations to make bye laws for the regulation and control of forward contracts subject to the previous approval of the Central Government. The Exchange made such bye laws relating to the transferable specific delivery contracts in raw jute which bye laws will be found in Chapter IX of the Working Manual issued by the Exchange. Terms and conditions of transferable specific delivery contracts in raw jute as prescribed by the said byelaws provided for arbitration of all claims and disputes arising out of or in relation to such contracts by the Tribunal of Arbitration, of the Bengal Chamber of Commerce and Industry or the Indian Chamber of Commerce in Calcutta in accordance with the rules framed by the said Chambers. In some appeals before us the contracts provided for arbitration by the Bengal Chamber of Commerce and Industry and some by the Indian Chamber of Commerce in Calcutta. The rules of the two Chambers for constituting Tribunals of Arbitration are similar and such difference as is material for our purpose will be adverted to later in this judgment. Paragraph 11 in Ch. IX of the 959 Working Manual of the Exchange made certain provisions for unavoidable delay in the supply of goods by the sellers of jute. In order to appreciate the main controversy between the parties it is necessary to quote the relevant, portion of that paragraph. "11. (a) In the case of jute and in the event of seller being prevented or delayed in carrying out their obligations under the con tract by the occurrence of fire, strikes, riots, political or communal disturbances, hartals and or civil 'Commotions, breakdown of public transport services, suspension of bookings, they shall give immediate intimation thereof to buyers. The sellers ' and buyers ' rights shall thereupon be as follows : (i)On the sellers 'Producing satisfactory evidence of the prevention or delay, they shall be granted an extension of time for delivering not exceeding thirty days from due date of all penalties. (ii)If the contract be not implemented within the extended period referred to in clause (i) above buyers shall thereupon be entitled to exercise any one of the following option (1) of cancelling the contract, (2) of buying against sellers in the open market on the day on which the option is declared and charging them any difference, (3)of cancelling the 'contract and charging sellers the difference between contract and the market price on the day on which the option is declared 960 Sellers shall notify buyers that the goods will or will not be shipped within such extended period referred to in clause (i) and in the case of sellers intimating that they will be unable to ship within the extended time buyer shall exercise their option under clause (ii) on the fifth working day of receiving such notice and notify, sellers. In ' the absence of any such notice from sellers it shall be deemed that the goods have not been shipped and buyers shall exercise their aforesaid option on the fifth working day after expiration of the extended date and notify sellers. . . . ." The case of the appellant was that at the relevant time certain emergent conditions srose in the raw jute trade and industry, which prevented the appellant from supplying the raw jute stipulated for in the contract within the time mentioned in the guarntee clause. By a letter dated October 10, 1960, the respondent exercised its option under para. 1 1 quoted earlier, cancelled the contract and charged the appellant for the difference in price between the contract rate ' and the market rate prevailing on the date of cancellation. The appellant denied that it bad any liability to pay the difference. Thereupon the respondent applied for arbitration by the Tribunal of Arbitration constituted in accordance with the rules of the Bengal Chamber of Commerce and Industry. The Registrar of the Chamber wrote to the appellant that the arbitration case (No. 10 of 1961) would be heard by the Tribunal on a certain date. The date was then extended and before the Arbitration Tribunal could decide the matter the applications in the High Court were made for revoking the authority of the appointed arbitrator. The facts and circumstances which according the appellant situated the emergency were 961 stated in para 11 of the petition and the substance of the allegations was that owing to the two causes of scarcity of raw jute and speculation, the prices of raw jute shot up abnormally giving rise to an emergent condition in the jute trade and industry and especially in respect of trading in future contracts in raw jute. The appellant 's case was that by reason of that emergency the buyers and sellers of raw jute were placed in two conflicting camps and the vast majority of the arbitrators in the panel of arbitration comprising the Tribunal of Arbitration of the Bengal Chamber of Commerce and Industry were either directly or indirectly connected with one or other of the jute mills which were all buyers of raw jute. In paras. 21, 22 and 23 of its petition the appellant stated that when the parties entered into the contract they never contemplated that there would happen such an exceptional situation as arose in the jute trade during the relevant period of September October, 1960 ; that the arbitrators of the Tribunal of Arbitration of the Bengal Chamber of Commerce and Industry were disqualified from acting as arbitrators inasmuch as they were all connected with the buyers and there was every probability that they would be biased in favour of the buyers; therefore, the appellant reasonably apprehended that it would not be possible for the arbitrators to act as impartial or disinterested judges. In para 33 the appellant stated : "The interest of the sellers of raw jute are in conflict with the interest of the buyers of raw jute. In the events that have happened the sellers of raw jute have formed themselves into a group and the buyers of raw jute have formed another group. The Indian Jute Mills Association is dominated by the buyers. The Indian Jute Pi) ills Association dominates the said Chamber and its Arbitrator. The Indian Jute Mills Association is committed 962 to the view that the said contracts have not been frustrated. The said Association has also formed an opinion in respect of the disputes between the buyers and the sellers of raw jute. " These were the allegations on which the appellant prayed that the authority of the appointed arbitrator should be revoked under section 5 of the . The application was opposed by the respondent which denied the allegations made by the appellant both as to the facts and circumstances which were said to constitute the emergency and as to the alleged reasonable apprehension of bias in the appointed Arbitration Tribunal. We have stated earlier that in the High Court to main controversy between the parties centred round the question, (1) if there was such an emergent condition in the jute trade and industry at the relevant time as divided the sellers and buyers of raw jute into two opposing camps, and (2) if the existence of such opposing camps, provided such opposing camps were proved to exist, would justify the revocation of the authority of the appointed arbitrator. The learned Judge who heard the applications dealt first with the legal position in England and India, in the matter of revocation of the authority of an appointed arbitrator. Having dealt with the legal position, he Went into the facts of the case and held that no such emergent condition has been proved as would justify the revocation of the authority of an appointed arbitration. He expressed his final conclusion in these words: "In my opinion, the allegations about the buyers and sellers in raw jute being thrown into conflicting camps by the operation of emergent circumstances or above 963 reasonable apprehension of bias in the minds of the sellers that they will not get justice from the persons whose names appear on the list of the panel of arbitrators of the Bengal Chamber of Commerce and Industry are unsubstantial." He accordingly dismissed the applications with costs. We consider that as a matter of logical sequence, we should deal with the question of fact first whether there was any such emergent condition in the jute trade aid industry at the relevant time as divided the sellers and buyers of raw jute into two conflicting camps so as to give rise to a reasonable apprehension in the minds of the sellers that they will not get a just decision from the appointed arbitrator. It, is only when we answer the question of fact in favour of the appellants that a consideration of the legal position would be necessary. What are the circumstances on which the appellants rely in support of their allegation of an emergent condition in the jute trade dividing the buyers and sellers of raw conflicting camps ? It is pointed out that on October 18, 1960, the Exchange issued a press note in which it was stated inter alia that owing to emergent conditions prevail ing in the jute trade, the Director of the Exchange had imposed from time to time various control measures in respect of trading in future contracts in raw jute and had taken up a review of the trading position in transferable specific delivery contracts. On October 31, 1960, a notice by the Exchange directed that trading in transferable specific delivery contracts in raw jute shall be registered with the Exchange. In their petitions for leave to revoke the authority of the arbitrator, the appellants also referred to reports made by reporters of 964 certain newspapers as also news items published therein. We do not think that these newspapers reports establish anything beyond. what the reporters heard from people whose identity is not disclosed, and they are not admissible in evidence to establish either that an emergency had arisen or the nature thereof. At best they show that there were reports in the market of a short fall in jute production, a shortage of supply of raw jute from Pakistan, sealing of some of the looms in the raills, and a reduction in working hours. The affidavits filed on behalf of the appellants do not, however, establish that there had been any failure of the jute crop in Bengal, Bihar and Assam or that jute had become unavailable at its normal sources or that such a crisis had arisen as would divide the buyers and sellers into conflicting camps. It is Worthy of note that like any other trade in goods in a short market, the jute trade, especially the trade in future contracts, is very sensitive and readily responds to any stimulus, including forces which affect supply and demand even temporarily. Such responses can even be said to be the normal feature of the jute trade like any other trade in commodities. As there was no evidence of the rise and fall in prices of raw jute during the relevant period except from what we could gather from the differences in price between the contract rate and the market rate claimed by. the respondents, we allowed the parties to produce before us the rates quoted by authorised brokers for various kinds of jute from April 1960 to August These figures show that the market in raw jute almost always fluctuates; sometimes there is steady rise '; sometimes a fall; sometimes there is a steep rise or a steep fall. Take for example, the period between August 1960 to January 1961 the period of delivery in most of the cases in one of the varieties of jute viz. Assam Bottom Jute. 965 August 1960 there was a steady rise from Rs.35/ to about Rs.40/ per maund. In September 1960 the rise continued and reached to about Rs. 43/ . It continued also in October and reached about Rs. 54/ . Towards the middle of November there was a fall. In January 1961 there was again a rise which continued till March. In April there was again a fail which continued till July 1961. We have taken only one example, but these ups and downs in price levels are noticeable in other varieties of jute also, such as, Pakistan N. C. Cuttings etc. A person trading in future contracts must take these ups and downs into consideration when entering into contracts, and we fail to appreciate how these ups and downs can constitute an emergent condition which will divide the buyers and sellers into two conflicting camps. The question whether the seller was entitled to an extension of time in the circumstances then prevailing would undoubtedly arise for determination by the appointed arbitrator, who having practical experience of the fluctuations which the trade normally undergoes would be in a position to judge the validity of such a claim. But it is difficult to appreciate how this periodical rise or fall in prices can be called an emergency which made the contracts impossible of performance or divided ' the buyers and sellers into two conflicting camps at the relevant time. Much was made of the fact that the Indian Jute Mills Association was a very influential body of jute mill owners, affiliated with the Bengal Chamber of Commerce and Industry. It was alleged that they were sister bodies having their offices at the came place and that they carried out a common policy in matters of trade. It was pointed out that the majority of arbitrators in the panel of arbitration of the Behgal Chamber of Commerce and Industry were either directly or in. directly connected with one or other of the jute 966 mills. The relevant rules of Bengal Chamber of Commerce and Industry, it was pointed out, provided that "the Tribunal shall consist of such members or assistants to members and of such other persons who were from time to time on the panel of special Advisory Board to the Indian Jute Mills Association, as may from time to time be selected by the Registrar". In this respect there is a difference in the rules made by the Indian Chamber of Commerce, Calcutta. Those rules provide for an unrestricted selection and say that in making an appointment and nomination, the Registrar shall select, as far as possible, persons or a person having practical knowledge of the subject matter of the contract or contracts in question and the Registrar shall not appoint any person who for any reason within his knowledge would not be a proper person to act as Arbitrator etc. in the parti culor matter. The appellant in Civil Appeal No. 640 brought to our notice the circumstance that his solicitor wrote to the Registrar of the Bengal .Chamber of Commerce and Industry for the names of the arbitrators and was told in reply that it was not the practice of the Tribunal to disclose the names of the arbitrators; but a classification of arbitrators of some of the cases was furnished and this showed that one of the arbitrators would be a mill representative and the other a jute broker or baler. We have taken all these circumstances into our consideration and we are unable to agree with the appellants that they made out a case of a reasonable apprehension of bias on the basis alleged, namely, that of a clash of interests between buyers and sellers on the ground of a rise in prices. The High Court has rightly pointed out that it is not quite correct to say that the persons who made the applications were only sellers of raw jute and not buyers their turn ' they are people who carry 967 on business in Calcutta and some of them probably have buying agencies in the mofussil. They must be buying jute from others and selling them to shippers, balers, and jute mills. The jute mills usually buy raw jute and turn out manufactured products therefrom, which they sell. Balers and shippers buy raw jute and sell the same after pressing and baling. At one end of the chain there are jute growers who are only sellers while others are both buyers and sellers of jute or jute goods. This latter category of persons must be taking note of the trends in the market in entering into their contracts and unless there was an emergency of the kind which nobody could foresee, it is impossible to say that there was such a clash of interests between buyers and sellers that the appointed arbitrator having practical experience of normal fluctuations of the market would not be able to judge with fairness and impartiality the claim of the sellers that they were entitled to an extension of time or other relief. The high Court further pointed that though there were 170 applications, the number of applicants was only 42 and some only of the. jute mills in West Bengal were involved. The High Court then said: "If one takes into consideration the number of jute mills situate in the district of 24 Parganas, Howrah, Hooghly and Nadia and considers further that there are thousands of persons who are engaged in the trade of raw jute it is significant that only a few dozen of them have come to this Court in between the period February, 1961, to the end of June, 1961. It appears to me that the difficulty, real or assumed, is confined to a very small number of persons, not brought about by any emergent conditions at all as alleged. There can be no denying the fact that the outturn of jute has been smaller 968 thaw expected and that jute mills have had to reduce their working hours. Such a shortage in jute cannot be said to have brought about an upheaval in the trade throwing buyers and sellers into sharply divided conflicting camps. " We are in agreement with the view thus expressed by the High Court. As to the arbitrators to be appointed by the Indian Chamber of Commerce, Calcutta, and in some of the appeals before us the arbitrators have to be so appointed, there can hardly be any ground for a reasonable apprehension. The names of the arbitrators are not known nor even their classification. The rules contemplate that the Registrar shall not appoint any person as arbitrator who for any reason within his knowledge would not be a proper person to act as arbitrator. What grounds can there be of a reasonable apprehension in such cases? We have held that there are no conflicting camps of buyers and sellers and even if there are such camps, the Registrar can select persons who have practical experience of the subject matter of the contract and not other wise improper persons to act as arbitrators. The difference between an 'application under a. 5 of the and one under a. 34 is a difference as to the point of time when the application is made. If proceedings are commenced in Court, application is made under section 34; if. proceedings have not commenced in Court the application is made under section 5. The object of both the section is the same, namely, to prevent arbitration. But different considerations would arise on an application to set aside an award on the ground that the arbitrator was biased. It is true that on an application under section 5 it is not necessary to show that. the arbitra or is in fact biased and it is enough to show that 969 there is a reasonable ground for apprehension that the arbitrator will be biased. But the reasonable ground must be established to the satisfaction of the Court to which an application for leave to revoke ' the authority of an appointed arbitrator is made. No such reasonable ground is made out in the present appeals. We now turn to the legal position which seems to us to be quite clear. Before the Court exercises its discretion to give leave to revoke an arbitrator 's authority, it should be satisfied that a substantial miscarriage of justice will take place in the event of its refusal. In considering the exercise by the Court of the power of revocation it must not be forgotten that arbitration is a particular method for the settlement of disputes. Parties not Wishing 'the law 's delays ' know, or ought to know, that in referring a dispute to arbitration they take arbitrator for better or worse, and that his decision is final both as to fact and law. In many cases the parties prefer arbitration for these 'reasons. In exercising its discretion cautiously and sparingly, the Court has no doubt these circumstances in view, and considers that the parties should not be relieved from a tribunal they have chosen because they fear that the arbitrator 's decision way go against them. (See Russel on Arbitration, 16th edition, page 54). The grounds on which leave to revoke may be given have been put under five heads : 1 .Excess or refusal of jurisdiction by arbitrator. Misconduct of arbitrator. Disqualification of arbitrator. Charges of Fraud. Exceptional cases. 970 We have held that there were no such exceptional circumstances in these cases as would justify us to come to the conclusion that the appointed arbitrator would be disqualified as a result of bias by reason of a conflicting class interest. In view of this finding it is unnecessary to examine the decisions, English or Indian, as respects the principle that an interest of which the parties were fully aware at the date of the arbitrators appointment will not in general disqualify him, nor will the fact that he stands in a particular relationship to the parties or to the matters in dispute, if it can be said that the parties selected him with knowledge that this was or must be so. Nor are we concerned with the exception to which the aforesaid rule is subject in relation to arbitrators appointed to determine future disputes, and the statutory changes made in English law relating thereto. There are, however, four decisions of the Calcutta High Court which bear an apparent resemblance to the cases under our consideration and to those decisions we must now turn. In Balabux Agarwala vs Lachminarain Jute Manufacturing Co. Ltd(1) the question was of a certain suits on applications under section 34 of the and one of the grounds taken was that persons interested in or connected with various jute mill companies were members of the Bengal Chamber of Commerce and were on the panel from which arbitrators were chosen; and a reference was made to a circular letter which showed that the arbitrators or the firms they represented were all buyers and as such interested in seeing that the points in issue were decided against the others. After scrutinising the allegations made in support of this ground, the Court said : "For all know the tremendous rise in prices which, it is said, will prompt the (1) (1947)51C.W.N.863,875. 971 arbitrators who are buyers to decide against the plaintiffs who are sellers so as to make huge profit for themselves, may well have induced the plaintiffs to make these allegations against the arbitrators or their firms so as to get out of their submission and to take their chance of winning the suit in Court and getting the benefit of that rise in prices. In my opinion the allegations in the affidavits are not such as I may act upon them. The Bengal Chamber of Commerce has gained a reputation for the excellence of their arbitration proceedings and I shall require much more specific averments of facts properly verified showing that in any particular case justice will be denied by the Bengal Chamber of Commerce to any party. " These observations do not help the appellants of the present oases. Rather they show that the Court must be fully satisfied before it exercises its discretion under section 5. to revoke the authority of an appointed arbitrator. The same learned Judge came to a contrary conclusion in Tolaram Nathmull vs Birla Jute Manufacturing Co. Ltd.(1), That was also a case of stay under section 34, and one of the questions raised was whether there was sufficient reason why the matter should not be referred to arbitration. One of the points to be decided in that connexion was whether 'mesta ' was jute within the meaning of the Jute (Price Control) Order and if the Jute Mills Association had issued a circular, while the arbitration was pending, stating, or deciding that 'mesta ' was not included in that Order. It was held that at a meeting of the representatives of five associations the view was expressed that 'mesta ' did not come within the Order. In those circumstances the learned Judge said (1) ,196. 972 "In the light of these principles, the question I have to consider is whether, in the events that have happened, it will be fair to drive the plaintiff firm to a tribunal both the members of which are members of associations which have expressed some definite views on the question in controversy. There is, to my mind, considerable justification for the apprehension expressed by the plaintiff firm of probable bias of the arbitrators. I do not question the honesty and integrity of the two arbitrators, but, in the circumstances appearing in the evidence before me, it will be unfair alike to them and to plaintiff firm to put them in a position of conflict with their own associations. On the whole I have come to the conclusion that this is a case *here circumstances exist which are calculated to bias the mind,% of the arbitrators and where the plaintiff firm may legitimately ask the Court to release it from its bargain to go to arbitration". The decision rested on the facts established in that case and cannot help the appellants to prove their case, on the present applications. In fairness to learned Counsel for the respondents we must say that he submitted before us that the decision in Tolaram Nathmull vs Birla Jute Manufacturing Co. Ltd. (1) went much beyond what was accepted as the correct legal position in English decisions referred to by the learned Judge; but that is an aspect of the matters which we consider it unnecessary to decide. We hold that the facts which must be established to call in aid that decision have not been established in these cases. In Dwarkadas Co. vs Keshardeo Bubna (2) the same learned Judge explained the position succinctly by holding (see headnote, pars, 4) (1) , 196. (2) 973 "The fact that members of a committee of an association of commercial men dealing in a particular commodity are themselves the arbitrators and ate also buyers and sellers of that commodity will not ordinary dispute between a particular buyer and a particular seller. But extraordinary circumstance may .nevertheless arise, as in the case of a commercial crisis, when the members of the association may be sharply divided into two opposing groups, as buyers in general and sellers in general as may make it improper for the committee, which may be packed with an overwhelming majority of buyers or sellers, as the case may be, to adjudicate upon a dispute between a buyer and a seller. " The pre requisite condition for the application of the principle which be laid down is not fulfilled in the present cases. The last decision is Bhuwalka Brothers Ltd. vs Fatechand Murlidhar (1). That was a case which .proceeded on different grounds, viz. (1) frustration and (2) applicability of an Ordinance to the contract under consideration. On those two grounds, the learned Judge thought that he should give leave to the petitioner to revoke the authority of the appointed arbitrator. We say nothing as to the correctness of the decision, but merely point out that the facts of the cases under our consideration are entirely different. We have, therefore, come to the conclusion that on the main point of controversy between the parties, the High Court came to a correct finding on facts and there are no grounds for interference. It remains now to consider two special points taken on behalf of the appellants ' in Civil Appeals (1) 974 Nos. 174 and '175. The points taken were : (1) that the contracts were not in accordance with law, and (2) that the parties were not ad idem with regard to one of the clauses thereof. Both these points have been dealt with by the learned Judge of the High Court in his judgment dated September 21, 1961, in great detail and as we are in agreement with him it is not necessary to deal with these two points in detail. On point number (1) the argument before us was based on para. 7(c) of the byelaws in Ch. IX of the Working Manual. That paragraph, so far as it is relevant here, reads as follows: "7(c) In the case of Pakistan Jute, buyers to deliver to sellers, or sellers ' nominee, letter of authority to import the Pakistan Jute or open confirmed, irrevocable Letter of Credit in terms of paragraph 8(b)(ii) within 14 working days from the commencement of the delivery period of the contract failing which there shall be free extension for delivery equal to the period of delay occurring after the 14 working days but where stipulated quantities monthly are sold the free extension shall only be in respect of the delivery for the first month. If buyers do not deliver letter of authority or open confirmed irrevocable Letter of Credit within one month from. the commencement of the delivery period of the contract, the sellers shall be entitled to exercise any One of the following options on the next working day .following the expiry of the said month: (i) Cancelling the contract. (ii) Cancelling the contract and charging buyers the difference (if any) between the contract price and the market price 975 on the date of cancellation of the contract. The clause in the bought note said : "The buyers to give letter of authority to the sellers and the sellers to open letter of credit. If the buyers fail to furnish the license up to December 1960 the contract will be deemed as cancelled. " The corresponding clause in the sold note said "The buyers to give letter of authority to the sellers and the sellers to open letter of credit. If the buyers fail to furnish the license up to December 1960 the contract will be deemed as cancelled without any difference on the both sides. " The argument was that the clauses in the bought and sold notes were not in conformity with para. 7(c) and therefore the contracts were not in conformity with law. We do not see any material conflict between para. 7(c) of the bye laws and the clauses in the. bought and sold note. Instead of one month given to the buyers for delivery of letter of. authority in para 7(c) the time given in the contracts was up to December 1960. We do not think that this extension of time brought the contracts into any material conflict with the provisions of para. 7 (c). As to the second point the argument was that the expression "without any difference on both sides" occurred in the sold notes not in the bought notes, and therefore, the parties were not ad idem with regard to this clause. The learned Judge rightly pointed out that the expression :,without any difference on both sides" made no real difference. Clearly the parties contemplated that in case the buyer failed to furnish the license to import Pakistan Jute within the period 976 mentioned, the contract would be deemed to be cancelled which meant that the contract was to be treated as non est for all purposes. If the contract was deemed to be cancelled, it must mean that the right and obligations of the parties came to an end simultaneously. It was not really necessary to insert the words "with out any difference on both sides" in the bought notes and such addition in the sold notes did not make any difference to the rights of the parties. For the reasons given above we hold that there is no merit in any of the appeals. The appeals are accordingly dismissed with costs ; one hearing fee.

IN-Abs

The appellants as sellers of raw jute entered into forward contracts with the respondent jute mills to sell such jute to them. The contracts being transferable specific delivery contracts,were entered into in the standard printed forms of the East India Jute & Hessian Exchange Ltd., which was an association recognised under the Forward Contracts (Regulation) Act, 1912, and thus were subject to the rules and bye laws made by the Exchange which provided for arbitration of disputes by the tribunal of Arbitration of the 954 ,Bengal Chamber of Commerce and Industry or the Indian Chamber of Commerce in Calcutta. The appellants failed to supply the stipulated jute within the time mentioned in the guarantee clauses. The respondents exercised their option under the rules aforesaid, cancelled the contracts and charged the appellants for the difference in price between the contract rate and the market rate prevailing on the dates of cancellation and on the appellants denying their liability applied for arbitration. The appellants thereupon applied to the High Court under section 5 of the , for revoking the authority of. the arbitrator. There case in contemplated in Para 11, in Ch. IX of the Working Manual of the Exchange substance was that there was an emergency as due to scarcity of raw jute and speculation at the relevant time and the price of raw jute shot up abnormally, this placed the buyers and sellers of raw jute in two conflicting camp, and the majority of the arbitrators in the panel of arbitration of the Bengal Chamber of Commerce and Industry being connected with the buyers of raw jute, the jute mills, were disqualified from acting as impartial arbitrators. The High Court held that no such emergent condition had been proved as would justify revocation of the authority of an appointed arbitrator. Held, that the normal periodical fluctuation in the price of raw jute could not constitute an emergency within the meaning of para. 11 in Ch. IX of the Manual since such fluctuations have been taken into consideration by those who entered into forward contracts. Such an emergency must be one which is abnormal and which none could foresee. It could not, therefore, be said that in the present case there was such a conflict of interest between sellers and buyers as would tender the panel of arbitrators having a practical experience of the normal fluctuations of the market disqualified to act as impartial arbitrators. The object of sections 5 and 34 of the was the same, namely, to prevent arbitration, with this difference that an application under s.5 would lie if proceedings had not yet been commenced in Court whereas under section 34 an application lay when they had commenced. But a Court would not lightly exercise its discretion to, grant leave to revoke an arbitrator 's authority. Before it would do so it must, be satisfied that a substantial miscarriage be relieved from a tribunal of their own choice simply because they feared that its decision might go against them, 955 and the court had to base its decision on one on other of five grounds, namely, excess or refusal of jurisdiction by arbitrator, misconduct of arbitrator, disqualification of arbitrator, charges of fraud and lastly the existence of exceptional circumstances. In the instant cases there were no exceptional circumstances to justify the conclusion that the arbitrator was disqualified by bias due to conflicting class interest. Balabux Agarwala vs Lachminarain Jute Mfg. Co. Ltd. , Tolaram Nathmull vs Birla Jute Manufacturing Co. Ltd. , Dwarkadas Co. vs Keshardeo Bubna, and Bhuwalka Bros. Ltd. vs Petechand Murlidhar, , distinguished. The extension of time given to the buyers by the contracts beyond a month specified by para, 7(c) in Ch. IX of the Working Manual for delivering letter of authority did not bring the contracts materially into conflict with that provision nor could the absence of the expression "without any difference on both sides", which occurred in the sold notes, from the bought notes make any difference to the rights of the parties.

al Writ Petition No. 15 of 1962 Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights. B. Sen and K. L. Hathi for the petitioner. C. K. Daphtary, Solicitor General of India, B. B. L. Iyengar and B. H. Dhebar, for the respondents. S.Choudhury, section C. Banerjee and P. K. Chatterjee for the Intervener. May 3. The judgment of Sinha, C. J., Gajendradagkar, Wanchoo and Shah, JJ., was delivered by Gajendragadkar, J., Subba Rao, J. delivered a separate Judgment. GAJENDRAGADKAR, J. The four petitioners who are in charge of the working of the mine owned by the colliery known as Salanpur ,A" Seam Colliery in the District of Buidwan, are being prosecuted for the alleged contravention of the provisions of Regulation 127(3) of the Coal Mines Regulations, 1957, framed under the (35 of 1952) (hereinafter called the Act). By their petition filed under article 32 of the Constitution, the petitioners pray that an order or writ in the mature of prohibition should be issued quashing the said criminal proceedings on the ground that the said proceedings contravene article 20(1) of the Constitution and as such, are void. To this petition have been impleaded as opponents 1 to 4, the Union of India, the Chief Inspector of mines, Dhanbad (W.B.), the Regional Inspector of Mines, Sitarampur and the Sub Divisional Magis trate, Asansol, respectively. The prosecution of 907 the petitioners has commenced at the instance of opponents 2 and 3 and the case against them is being tried by opponent No. 4. The petitioners ' contention is that Regulation No. 127(3)whose alleged contravention has given rise to thepresent proceedings against them is invalid, ultra vires and inoperative and so, the prosecution of the petitioners contravenes article 20(1) of the Constitution. It is on this basis that they want the said proceedings to be quashed and ask for an order restraining opponents 2 and 3 from proceeding with the case and opponent No. 4 from trying it. The case in question is C. 783 of 1961 pending in the court of opponent No. 4. Regulation 127(3) is a part of the Coal Mines Regulations framed by opponent No. 1 in exercise of the powers conferred upon it by section 57 of the Act, the same having been previously published as required by sub section (1) of B. 59 of the said Act. Regulation 127(3) provides that no working which has approached within a distance of 60 metres of any disused or abandoned workings (not being workings which have been examined and found to be free from accumulation of water or other liquid matter), whether in the same mine or in an adjoining mine, shall be extended further except with the prior permission in writing of the Chief Inspector and subject to such conditions as he may specify therein. There is a proviso and explanation attached to this provision, but it is unnecessary to refer to them. The case against the petitioners is that they have contravened the provisions of Regulation 127(3) in that they extended the working of the mine further than the permitted limits without the prior permission in writing of opponent No. 2. The petitioners ' case is that this Regulation is invalid and inoperative and so, its contravention cannot validly be made 908 the basis of their prosecution having regard to the provisions of article 20(1) of the Constitution. According to the petitioners opponent No, 1 is no doubt conferred with the power of making Regulations under section 57 of the Act,but O. as it stood at the relevant time, has imposed an obligation on opponent No. 1 that the draft of the said Regulations shall not be published unless the Mining Boards therein specified have had a reason. able opportunity of reporting to it as to the expediency of making the Regulations in question and as to the suitability of its provisions. The petitioners allege that at the relevant time, 'when the Regulations were made in 1957, no Mining Boards bad been established under section 12 of the Act. Three Boards had been established under section 10 of the Indian of 1923, but as a result of the subsequent amendments made in the provisions of section 10, the composition of two of the 'said Boards became invalid with the result that two of them could not be treated as Boards validly constituted. These invalid Boards were the Madhya Pradesh Mining Board and the West Bengal Mining Board. A third Board existed at the relevant time and that is the Bihar Mining Board. This Board had been constituted on the 22nd February, 1946 under section 10 of the earlier Act as it then stood. The petitioner ' case is that it was obligatory for opponent No. 1 to consult all the three Boards and since to out of the three Boards were not properly constituted, the fact that reference was made to the individual members of the said two invalid Boards did not satisfy the requirement of section 59(3). According to the petition, a reference was made to the Bihar Mining Board, but the Board did not, make a report to opponent No. 1 as a Board but its individual members communicated their opinions to opponent No. 1. Therefore, on the whole, section 59(3) had not been complied with and that makes the whole body 909 of Regulations issued in 1957 invalid and inoperative. That, in brief, is the basis on which the petitioners want the criminal proceedings pending against them to be quashed. The respondents dispute the main contention of the petitioners that section 59(3) has not been complied with. According to them, section 59(3) has been duly complied with and the Regulations made ire valid. The respondents concede that two of the three existing Boards were invalid; but their case is that it is only the validly existing Board that had to be consulted and the Bihar Mining Board, which was the validly existing Board at the relevant time, had been duly consulted. The respondents allege that the fact that individual members of the Bihar Mining Board communicated their opinions to opponent No. 1 does not introduce any infirmity in the Regulations which were subsequently published in the Gazette and which, under section 59(5) have, in consequence, the effect as if enacted in the Act. On behalf of the petitioners, Mr. Sen contends that section 59(3) 'imposes 'an obligation on the Central Government to consult the Boards therein specified and he argues that reading section 12 of the Act in the light of section 59(3), it follows that the Central Government has to constitute Mining Boards for the areas or mines in respect of which the Regulations are intended to be made and since two of the Boards had not been validly constituted, section 12 had not been complied with and section 59(3) had been contravened. Mr. Sen suggested that his contention about the mandatory character of the provisions contained in sections 12 and 59(3) is concluded by a recent decision of this Court. On the other hand, the learned Solicitor General for the respondents contends that the said decision has no material or direct bearing on the question about the construction of section 12. He concedes that 910 the said decision has concluded the point that the requirement of a. 59(3) is mandatory. It is, therefore, necessary, in the first instance, to examine the effect of the said decision. In "Banwari Lal Agarwalla vs State of Bihar" (1), this Court had occasion to consider the validity of the prosecution launched against the appellant on the ground of the contravention of one of the Regulations made in 1957. It appears that in that case, the respondents stated before the Court that the Mining Boards constituted under s.10 of the Act of 1923 were continuing to operate at the time the relevant Regulations were framed and that there was full consultation with the said Mining Boards before the said Regulations were framed. The respondents, no doubt, contended that s.59(3) was directory and not mandatory and according to them, no obligation had been imposed upon the Central Government to consult Mining Boards even if they were in existence. Alternatively, it was suggested that the Mining Boards which had been constituted under the earlier Act were continued under the Act by virtue of s.24 of the General Clauses Act and that the said Boards bad been duly consulted. On the other hand, the appellant urged that the Boards to which the respondents referred were not validly constituted under the Act and had not been properly consulted. It was also argued on his behalf that both sections 12 and 59(3) were mandatory. It is in the light of these facts that the effect of the decision of this Court in Banwari Lal 's case (1) has to be appreciated. Das Gupta, J., who spoke for the Court set out in his judgment the argument of the appellant that both sections 12 and 59 were mandatory, but, as the judgment shows, the Court considered the question as to whether s.59 (3) was mandatory and came to (1) ; 911 the conclusion that it was. The Court did not consider whether s.12 was mandatory and in the course of the judgment, there is no reference at all either to the question of construing s.12 or to its effect. Having held that s.59 (3) was mandatory, the Court remanded the case to the learned Magistrate before whom the proceeding were pending with a direction that he should try the issue as to whether the Boards constituted under the earlier Act validly functioned under the Act and whether they had been duly consulted. It would be noticed that if the Court had considered the question about the mandatory character of the provisions of s.12, it would have construed the said provisions and would have addressed itself to the question as to whether the failure of the Central Government to constitute valid Boards as suggested by the appellant in that case itself made the impugned Regulation invalid. This course was not adopted obviously for the reason that the respondents pleaded that the requisite Boards were in existence and had been consulted and so, the controversy between the parties was narrowed down to the question as to whether section 59 (3) requires that the Central Governments must consult existing Boards or not. Apparently, the respondents contended that even if Boards have been constituted under section 1 2, it is not obligatory on the Central Government to consult them under s.59(3). The requirement about the said consultation is directory and not mandatory. It is this contention which has been rejected by the Court and having held that s.59 (3) was mandatory and that existing Board must be consulted before Regulations are framed, the question of fact which then fell to be considered was remitted to the trial Magistrate for his decision. Therefore, we are satisfied that the effect of the decision of this Court in Banwari Lal Agarwalla 's case is that if a Board is in existence at the relevant time, it is obligatory, on the Central Government to consult it before a draft 912 Regulation is published and in that sense s.59(3) is mandatory. It would, we think, not be right to assume that the contention of appellant that s.12 like a.59(3) is mandatory was decided without discussing the question about its construction and its effect. The facts pleaded by the respondents in that case made it unnecessary to decide the appellant 's contention based on the mandatory character of s.12. Therefore we do not think Mr. Sen is justified in contending that the point which he seeks to raise in the present appeal about the effect of section 12 is concluded by the decision in Banwari Lal Agarwalla 's case. That being so, we must proceed to examine Mr. Sens contention on the merits. At this stage, it is necessary to read both sections 12 and 59. Section 12 deals with the constitution of Mining Boards. Section 12(1) provides that the Central Government may constitute for any part of the territories to which the Act extends, or for any group or class of mines, a Mining Board consisting of seven persons as specified in clauses (a) to(e). The point which calls for our decision is whether the first part of section 12(.1) imposes an obligation on the Central Government to constitute Board when it is proposed to make Regulations to which s.59(3) applies. Section 59 as it stood in the Act prior to its amendment in 1959 read thus: "59 (1) The power to make regulations and rules conferred by sections 57 and 58 is subject to the condition of the regulations and rules being made after previous publication. (2) The date to be specified in accordance, with clause (3) of section 23 of the (10 of 1897), as that after which a draft of regulations or rules proposed to be 913 made will be taken under consideration, shall not be less than, three months from the date on which the draft of the proposed regulations or rules is published for general information. (3) Before the draft of any regulation is published under this section, it shall be referred to every Mining Board which is, in the opinion of the Central Government, concerned with the subject dealt with by the regulation and the regulation shall not be so published until each such Board has had a , reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions. (4) No rule shall be made unless the draft thereof has been referred to every Mining Boar( constituted in that part of the territories to which this Act extends which is affected by the rule, and unless each such , Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions. (5) Regulations and rules shall be published in the Official Gazette and, on such publication, shall have effect as if enacted in this Act. (6) The provisions of sub sections (1), (2) and( 4) shall not apply to the first occasion on which rules referred to in clause (d) or clause (e) of section 58 are made. 914 (7) The regulations and rules made under sections 57 and 58 shall be laid down before Parliament, as soon as may be, after they are made. " The petitioners ' contention is that in construing section 12, we must have regard to the provisions of s.59(3). By an amendment made in 1959 by Act 62 of 1959, sub. s(3) of section 59 has been deleted and combined provision is made both for regulations and rules by subsection (4) by making a suitable amendment in the said sub section so as to include both regulations and rules within its scope. Sub section (4) thus amended reads thus: "59(4). No regulation or rule shall be made unless the draft thereof has been referred to every Mining Board constituted in that part of the territories to which this Act extends which is affected by the regulation or rule and unless each such Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions. " Before construing s.12, it may be useful to refer to the relevant provisions of the Act which confer power on or assign some duties or functions to the said Boards. Section 14(1) provides inter alia that a Board constituted under section 12 may exercise such of the powers of an Inspector under this Act as it thinks necessary or expedient to exercise for the purpose of deciding or reporting upon any matter referred to it. Section 14(2) confers upon the Board the powers of a Civil Court for the purposes therein specified. It would thus be seen that the Boards constituted under section 12 may have occasion 915 either to make a report in respect of regulations or rules referred to them tinder section 59, or ' they may have to decide cases sent to them under section 81. Section 59 which speaks of reference of the rules and regulations to the Boards has already been cited. Section 81(1) provides that if the court trying any case instituted at the instance of the Chief Inspector or other officers therein specified is of opinion that the case is one which should, in lieu of a prosecution, be referred to a Mining Board, it may stay the criminal proceedings, and report the matter to the Central Government with a view to such reference being made. Section 81(2) authorises the Central Government either to refer the case to the Mining Board or to direct the court to proceed with the trial. Thus, if the Central Government decides to refer a pending criminal case to the Board, the Board has to decide it. That is the two fold function which may be assigned to the Board under provisions of the Act. Mr. Sen contends that if section 59(3) is mandatory, it follows that consultation with the relevant Board was treated as essential by the legislature before the Central Government finalised the regulations ; and from this obligation imposed by section 59(3), it must follow as a corollary that the relevant Boards must be constituted by the Central Government ' under section 12. In other words, the argument is that a. 59(3) postulates the existence of the relevant Boards and makes it obligatory on the Central Government to consult them and this can be satisfied only if the Central Government is compelled to constitute Boards under section 12. Prima facie. , there is some force in this contention. But, on the other hand, if section 59(3) is read as imposing an obligation on the Central Government to consult the Board if it is in existence, then no corollary would follow from the mandatory character of the said provision as 916 is suggested by Mr. Sen. Section 59(3) as it stood before the amendment of 1959, provides that every Mining Board which, in the opinion of the Central Government, is concerned with the subject dealt with by the regulation, shall be consulted ; and this means that there should be a Mining Board before it is consulted and that the said Mining Board should, in the opinion of the Central Government, be concerned with the subject dealt with by the regulation. This provision does not mean that a Mining Board must be constituted, for that is the subject matter of the provisions contained in section 12. If section 12 is not mandatory, then section 59(3) must be read in the light of the position that it is open to the Central Government to constitute the Board or not to constitute it, and that being so, section 59(3) would then mean only this and no more that if the Board is in existence and it is concerned with the subject, it must be consulted. Similarly, a. 59(4) as it stands after the amendment of 1959, requires that the draft of the rule or regulation shall be referred to every. Mining Board constituted in 'that part of the territories to which the Act extends which is affected by. the regulation or rule. That again means no more than this that if a Board is constituted in the part of the territories which is affected by the regulation, it shall be consulted. It is not as if this construction adds any words in section 59(3) or section 59(4); it merely proceeds on the basis that s.12(1) is not mandatory. Therefore. in our opinion, in construing section 12 (1) it would not be logical to assume that section 59(3) or s.59(4) imposes an obligation on the Central Government to constitute a Board, because as we have just indicated the constitution of the Boards is not the subject matter of s.59 (3) or section 59 (4) ; that is the subject matter ' of 917 the Central Government to constitute a Board must be determined in the light of the construction of section 12. Reverting then to the material words used in section 12 itself, if, it seems clear that the said words do not permit the construction for which Mr. Sen contends. It is not disputed that the context may justify the view that the use of the word "may" means " 'shall"; but if we substitute the word "shall" for "may" in section 12(1), it would be apparent that the argument about the mandatory character of the provisions of section 12(1) would just not work. To say that the Central Government shall constitute for any part of the territories to which the Act extends, or for any group or class of mines a Mining Board, would emphatically being out the contradiction between the obligation sought to be introduced by the use of the word "shall" and the obvious discretion left to the Central Government to constitute the Board for any part of the territories or any group or class of mines ' The discretion left to the Central Government in the matter of constitution of Boards which is so clearly writ large in the operative part of the said provision indicates that in the context, "may" cannot mean "shall". Section 12(1) really leaves it to the discretion of the Central Government to constitute a Board for any part of the territories and that means, it may not constitute a Board for some parts of the territories. Likewise, discretion is left to the Central Government to constitute. a Board for a group or class of mines and that means that for some groups or classes of mines, no Board need be constituted. Whether or not Boards should be constituted for parts of territories or for groups or classes of mines, has been left to be determined by the Central Government according, to the requirements of the territories or the exigencies of the groups or classes of mines. Therefore, we are 918 unable to accept the argument that a. 12(1) imposes an obligation on the Central Government to constitute Boards in order that in making regulations, there should be appropriate Boards who have to be consulted under section 59(3). The directory nat ner of the provisions of section 121(1) rather strengthen the construction placed upon section 59(3) by this Court in the case of Banwari Lal Agarwalla that if there are Boards in existence, they must be consulted before draft regulations are published under section 59. But that is very different from saving that Boards must be constituted in all areas or in respect of all groups or classes of mines which are intended to be covered by the regulations ,proposed to be made by the Central Government. Mr. Sen relied on section 5 for showing that the use of the word "may" in that section really means "shall". The said section provides that the Central Government may appoint such a person as possesses the prescribed qualifications to be the Chief Inspector of Mines for all territories to which the Act extends; and it may be conceded that the implementation of the material provisions of the Act depends upon the appointment of the Chief Inspector of Mines and so, in the context, " 'may" in a. 5 would really mean , 'shall" so far as the appointment of the Chief Inspector is concerned. But this section itself shows that "may" may not necessarily mean , 'shall" in regard to the appointment of Inspectors contemplated by the latter part "may" means "may" or it means ""shall". would inevitably depend upon the context in which the said word occurs and as we have just indicated, the context of section 12(1) is not in favour of the construction for which Mr. Sen contends. It cannot be said that like the appointment of the Chief Inspector of Mines, the constitution of the Boards 919 is essential for the working of the Act, for, without the constitution of the Boards, the working of the Act can smoothly proceed apace. We have already pointed out that there are only two functions which can be assigned to the Boards; under section 81(2) it is; discretionary for the Central Government to refer a pending criminal case to the Board or not, and under a. 59(3) consultation with the Board is necessary only if the Board is in existence. Therefore, the working of the Act is not necessarily dependent on the constitution of the Boards, and that distinguishes the context or section 12 from the context of section 5. There is another provision of the Act to which reference may be made in this connection. Section 61 deals with the making of the bye laws. Section 61(1) provides that the owner, agent or manager of a mine may, and shall, if called upon to do so by the Chief Inspector, or Inspector, frame and submit to the Chief Inspector or Inspector a draft of bye law,% in the manner indicated in the said sub section. Section 61(2), inter alia, authorises the Chief Inspector or the 'Inspector to propose amendments in the said draft. Section 61(3) then lays down that if within a period of two months from the date on which ' any draft bye laws or draft amendments are sent by the Chief Inspector or Inspector to the owner, agent or manager under sub section (2), and the Chief Inspector or Inspector and the owner, agent or manager are unable to agree as to the terms of the bye laws to be made under sub section (1), the Chief Inspector or Inspector shall refer the draft bye laws for settlement to the Mining Board, or where there is no Mining Board, to such officer or authority as the Central Government may, by general or special order, appoint in this behalf It would be noticed that this sub section assumes that there may not be in exi stence a Mining Board in the area where the mine 920 in question is situated or for the group or class of mines to which the said mine belongs. Now, if the petitioners ' construction of section 12 read with section 59(3) is accepted, it would follow that in order to make the regulations binding on all the mines situated in the whole of the country, there must be Mining .Board in respect of all the said mines either territory wise or group wise or class wise and that would not be consistent with the assumption made by section 61(3) that in certain areas or in respect of certain groups or classes of mines a Mining Board may not be in existence. It is in this indirect way that s.61(3) supports the construction which we are disposed to place on section 12(1). It is then urged that if the respondents ' construction of s.12 is upheld, section 59(3) or section 59(4) would be rendered nugatory and the whole purpose of consuiting the Boards would be defeated. We are not impressed by this argument. In testing the validity of this argument, it is necessary to recall the scheme of section 59. Section 57 confers power on the Central Government to make regulations and section 58 confers power on the said Government to make, rules as therein specified respectively. Section 59(1) requires that the power. to make regulations is subject to the condition that the said regulations would be made after previous publication. Section 59(2) then provides for the period which has to pass before the said draft can be taken into consideration. Section 59(3) refer to the consultation with the Boards. Logically, consultation with the Boards is the first step to be taken in making ,regulations; publication of the draft regulations is ' the second step; allowing the prescribed period to pass before the draft is considered is the third step and publishing the regulations after considering them is the last step. After the regulations are thus published, they shall have effect as if enacted in the Act. That is section 59,5). The 921 'first publication is the publication of the draft under section 23(3) of the and it is significant that the object of this publication is to invite objections or, suggestions from persons or bodies affected by the draft regulations. Section 23(4) of the provides that the authority having power to make the rules or, regulations shall consider any objection or suggestion which may be received with respect to the draft before the date specified therein, so that the whole object ,of publishing the draft is to give notice to the parties concerned with the regulations which are intended to be framed and the object of the requirement that the said draft will not be considered until the prescribed period has passed is to enable parties concerned to file their objections. Therefore, the scheme of section 59 clearly shows that apart from consulting the Boards to which section 59(3) refers, all parties affected, by the draft would have an opportunity to make their suggestions or objections and they would be considered before the draft is settled and regulations are finally made. Therefore, in our opinion, it would not be correct to say that the construction of section 59(3) for which the respondents contend would enable the Central Government to make regulations without consulting the opinion of persons affected by them. The result then is that section 12(1) is directory and not .mandatory and section 59(3), or a. 59(4) after the amendment in 1959 is mandatory in the sense that before the draft regulation is published, it is obligatory for the Central Government to consult the Board which is constituted under section 12. If no Board is constituted, there can be, and need be, no consultation. It is in the light of this position that the grievance made by the petitioners against the validity of their prosecution has to be judged. We have already noticed that it is common ground 922 between the parties that the Madhya Pradesh Minning Board and the West Bengal Mining Board which were constituted under a. 10 of the Act of 1923 have become invalid after the amendment of section 10 by the Amending Act 5 of 1935. Under section 10 as it originally stood, the Board was constituted by the Provincial Government and it was composed of five members. After the amendment, a Board had to be constituted by the Central Government and, it was to consist of seven members. That is why the respondents concede that the Madhya Pradesh and West Bengal Mining Boards could not be said to be validly constituted for the purpose of section 12 even by the application of section 24 of the . The position then is that at the time when the regulations were framed in 1947, there, was only one Board which properly constituted and that is the Bihar Mining Board. It was constituted in 1946 and by virtue of a. 24 of the , it continued as a valid Board under s.12. This Board has been consulted by the Central Government before the regulations were made. It is not disputed that the draft regulations were sent by the Central Government to the Bihar Mining Board through the State Government. It_ appears that after the Board received the said draft, it was circulated by the Chairman of the Board to all the members of the Board and the members communicated their opinions individually. It is argued that the communication by individual members of the Board of their opinions to the Central Government cannot be said to amount to the consulation with the Board and so, it is urged that the requirement of s.59(3) has not been complied with. We do not think there is any substance in this argument. All that s.59(3) requires is that a reasonable opportunity should be 'given to the Board to make its report as to the expediency or the suitability of the proposed regulations. How 923 the Board chooses to make its report is not a matter, which the Central Government can control. The Central Government has discharged its obligation as ' soon as it is shown that a copy of the draft regulations was sent to the Board, and if the Board thereafter, instead of making a collective report, chose ' to. sent individual opinions, that cannot be said to constitute the contravention of s.59(3). Indeed, s.59(3) does not impose an obligation on the Board to make any report at all It is true that since under s.14, the Board is empowered to make a report, it is unlikely that any Board, when consulted, would refuse to make a report. But, nevertheless, the position still remains that if the Board refused to make a report, that will not introduce any infirmity in the regulations which the Central Government may ultimately frame and publish under s.59(5). We must accordingly hold that the regulations framed in 1957 have been duly framed and published under s.59(5) and as such, they shall have effect as if enacted in the Act. The result is, the petition fails and is dismissed. SUBBA RAO, J. I regret my, inability to agree. The facts relevant to the question raised lie in a small compass. The petitioners are incharge of the working of a mine, known as Salanpur "A" Seam Colliery, in the District of Burdwan, West Bengal. On the allegation that they contravened the provisions of Regulation 127(3) of the Coal Mines Regulations, 1957 (hereinafter called the Regulations), a criminal complaint was filed against them in the Court of Sub divisional Magistrate, Asansol, and the said Magistrate has taken cognizance of the said complaint under section 190(1) (c) of the Code of Criminal Procedure, read with section 73 of the .(hereinafter called the Act). The petitioners challenge the validity of the maid Regulations on the ground that they were 924 made in contravention of the provisions of section 59(3) of the Act. Section 59(3) of the Act imposes a condition on the Central Government to give a reasonable opportunity to a Mining Board before making regulations in exercise of the power conferred on it by the Act. Under s.10 of the Indian Mines Act, 1923, the Central Government in the year 1946 constituted the Bihar Mining Board with jurisdiction over the area covered by the Province of Bihar. The Central Government sent the draft Regulations to the said Board. The Chairman of the Board circulated the said draft Regulations to all the members of the Board and the members communicated their opinions individually to the Central Government. Thereafter the Central Government made the said Regulations governing the whole of India, except Jammu and Kashmir, and to every coal mine therein, in compliance with the other provisions of section 59 of the Act. The question in this petition is whether the Regulations so made after consulting the Bihar, Board alone would be valid and in force in the West Bengal area so as to sustain a criminal prosecution on the basis of an infringement of the said Regulation in respect of a mine in that area. This question may be divided into two parts, namely (1) where the Central Government has ' not constituted a Mining Board, can it ignore the condition laid down under section 59(3) of the Act and (2) if giving a reasonable opportunity within the meaning of section 59(3) of. the Act is necessary condition for the validity of the Regulations made thereunder, can the Central Government validly make a regulation in respect of West Bengal after giving such a reasonable opportunity to a Mining Board constituted for Bihar ? In my view, the first question is directly 925 covered by the decision of this Court in Banwari Lal V. State of Bihar(,). There, Das Gupta J., delivered the judgment of the Court. As it is contended that the said decision should be confined only a case where a Mining Board has been validly constituted under the Act and should not be applied to a case where such a Board has not been constitu ted, it would be necessary to scrutinize the decision carefully to ascertain ' the exact scope of the said decision. The facts of that case where there was an accident in the Central Bhowra Colliery in Dhanbad in Bihar, as a result of which 23 persons lost their lives the Regional Inspector of Mines, Dhanbad filed a complaint against the appellant for allegedly committing an offence under section 74 of the , i.e., for contravening regulations 107 and 127 of the Coal Mines Regulations, 1957 ; after the Sub Divisional Officer took Cognizance of the complaint, the appellant made an application to the Patna High Court under article 226 of the Constitution contesting the validity of the said proceedings on the ground, inter alia, that there was no Mining Board constituted under section 12 of the Act and therefore the Central Government had made the Regulations without, consulting Mining Board as it, should do under section 59(3) of the Act. The second ground on which a prayer for quashing the proceedings was based, with which alone we are now concerned, was stated in the judgment thus : "the Coal Mines Regulations, 1957, are invalid having been framed in contravention of section 59(3) of the ." The contention of learned counsel, who elaborated this ground, was stated thus : " 'As regards the other contention that the regulations are invalid the appellant 's argument is that the provisions of section 12 and section 59 of the , are mandatory. " Then the, learned Judge quoted in extenso section 59(3) of the Act and (1) ; 926 proceeded to state the relevant basic facts and posed the question raised in the case thus: "It was not disputed before us that when the Regulations were framed, No. Board , as required under section 12 had been constituted and so, necessarily there had been no reference to any Board as required under section 59. 'the question raised is whether the omission to make such a reference make the rules invalid. " It is manifest from the question so posed that the question considered by the Court was whether the making of the Regulation without reference to a Mining Board, as it was not in existence, would be invalid. Then the learned Judge considered the language of a. 59(3) of the Act and observed at P. 851 : ". . . it is legitimate to note that the language used in. this case is emphatic and appears to be designed to express, an anxiety of the legislature that the publication of the, regulation, which it; condition precedent to the making of the regulations, should itself be subject to two conditions precedent first, a reference to the Mining Board concerned, and secondly, that sufficient opportunity to the Board to make & report as regards. the expediency and suitability of the proposed regulations. " The learned Judge then proceeded to considered the reasons for imposing such a condition and observed. "Even a cursory examination of the purposes set in the 27 clauses of section 57 shows that that most of them impinge heavily on the actual working of the mines. To mention only a few of these are sufficient to 927 show that the very purpose of the Act may will be defeated unless suitable and practical regulations are ' framed to help the achieve ment of this purpose. " Then he pointed out that section 12 of the Act unabled the Government to appoint Boards providing representations for different interests which would be in a position to help the Central Government to make suitable and practical regulations. In the words of the learned Judge, "The constitution is calculated to ensure that all aspects including on the one hand the need for securing the safety and welfare of labour and on the other hand the practicability of the provision proposed from the point of view of the likely expense and other considerations can be throughly examined. It is certainly to the public benefit that Boards thus constituted should have an opportunity of examining regulations proposed in the first place,% by an administrative department of the government and of expressing their opinion. " According to him, the constitution of the Board in the manner prescribed served a real purpose and, therefore the constitution by the Central Government with such 'a Board was made a condition of the making of the Regulations. When it was contended that the insistence upon consultation might effect the public welfare under emergent circumstances he. pointed out that under section 60 of the Act, which provided for such a contingency, the Central Government might make regulations without previous reference to Mining Boards and therefore no such 'consideration could prevent the Court from holding that ' the giving of an opportunity to the Board was a condition precedent to the exercise of the power of making regulations. The learned Judge summarised his reasoning thus: 928 " 'An examination of all the relevant circumstances viz., the language used, the scheme of the legislation, the benefit to the public on insisting on strict compliance as well as the risks to public interest on insistence on such compliance leads us to the conclusion that the legislative intent was to insist on these provisions for consultation with the Mining Board as a prerequisite for the validity of the regulations. This conclusion is strengthened by the fact that in section 60 which providing for the framing of regulations in certain cases without following the procedure enjoined in section 59, the legislature took care to add by a proviso that any regulation so made "shall not remain in force for more than two years from the making thereof ". By an amendment made in 1959 the period has been changed to one year. It is not unreasonable to read this proviso as expressing by implication the legislature 's intention that when the special circumstances mentioned in section 60 do not exist and there is no scope for the application of that section no regulation made in contravention of a. 59 will be valid for a single day. " The learned Judge concluded his discussion thus, a ' p. 853 : "For all the reasons giving above, we are of opinion that the provisions of section 59(3( of the Mining Act, 1952, are mandatory. " Pausing here for a moment, I find it very difficult to bold that this Court held, expressly or by necessary implication, that section 59(3) of the Act was mandatory only if the concerned Board was in existence. The argument advanced, the question 929 posed, the reasons given and the conclusion arrived at were all against giving such a limited scope to the said judgment, It was contended that both section 12 and section 59 were mandatory. III Posing the question to be decided, the learned Judge clearly referred to "the omission to make such a reference". The word "such" clearly refers to the omission to make a reference, as no Board was constituted under section 12 of the Act. So, as regards the posing of the question there was absolutely no ambiguity and the learned Judge had clearly in mind what the Court was asked to decide upon. The reasons given by the learned Judge for holding that it was obligatory of the Central Government to consult the Board before the making the regulation would equally apply whether the Board existed or not. The conclusion arrived at by the learned Judge that consultation with such a Board was a condition precedent for the exercise of the power would apply to both the cases. If it was a condition precedent for the exercise of the power, how could it cease to be one if a Board was not in existence? The condition is not the existence of the Board, but the consultation with a Board. In one case, the Government would not consult the Board though it existed, and in the other case it would not consult, as the Board did not exist. In either case, the condition was broken. But it is said that the last three, paragraphs of the judgment make it clear that the learned Judge was not considering the case where a Board had not been constituted. There, the learned Judge was considering the question whether the Mining Boards constituted under section 10 of the Mines Act, 1923, were continuing to operate at the time the Regulation were made and there was full consultation with the ,Mining Boards before the, Regulations were framed. put tile learned Judge was not able to decide that 930 question, as there was not sufficient material on the record. Therefore, this Court directed the Magistrate to decide that question. I fail to see how these paragraphs in any way help us to hold that this Court confined its decision only to a case where a Board has been constituted. On the other hand, the observations in the first of these three paragraphs clearly indicate to the contrary. The relevant observations are "As has been pointed out above, it was not disputed before us that at time when the regulations were framed to now Mining Board had been constituted under the and consequently no consultation with any Mining Board constituted under the 1952 Act took place. " This shows that the entire judgment up to that point proceeded on the basis that there was no consultation with the Mining Board, as no such Board was constituted. Thereafter the learned Judge was only considering the alternative contention advanced by the State, namely, that the pro existing Board was consulted and that that consultation was sufficient compliance with the provisions of section 59(3) of the Act. If I might analyse the mind of the learned Judge, the process of reasoning may be summarized thus: On behalf of the appellant it was argued that there was no consultation with the Board as it was not constituted under section 12 of the Act and, therefore, the Regulations made under the Act without such consultation were void. The learned Judge accepted the contention. Then it was argued for the Government that though there was no consultation with the Board constituted under section 12 of the Act, consultation with a pre existing Board would be enough compliance with the section. As there was no material on the record, the learned Judge could 931 not decide on that question and therefore directed it to be decided by the Magistrate. On the other hand, as it was common case that no Board under section 12 of the Act had been constituted, if the contention of the Government, now pressed before us, was correct, no other question would have arisen for, according to the State, a. 59 (3) could not be invoked in a case where no Board had been in existence. The plea that there was a consultation with the pre existing Board was taken not by the appellant but by the State and such a plea would be unnecessary if section 58 (3) of the Act did not lay down the condition of consultation with the Board when it did not exist. To my mind, the judgment of the Court is clear and unambiguous on this point and it decided that, as there was no consultation with any Mining Board under section 59(3) of the Act, as the Board was not in existence, the Regulations were bad. The present argument is an attempt to persuade us to go back on a clear pronouncement on the point by a Constitution Bench of the Court. That apart, I am satisfied on a true construction of the provisions of section 12 and a. 59(3) of the Act that the Central Government has to exercise the power under section 12 if it intends to exercise the power under a. 59 of the Act. Under section 12, ,the Central Government may constitute for any part of the territories to which this Act extends or for any group or class of mines, a Mining Board", consisting of persons with specific qualifications representing different interests in the mines. Under ,R. 59, the power to make regulation conferred by a. 57 is subject to the condition of the regulations being made after previous publication, and under sub section (3) thereof ""Before the draft of any regulations is published under this section,it shall be referred to every Mining Board which is, the opinion of the Central Government, con 932 cerned with the subject dealt with by the regulation, and the regulation shall not be so published until each such Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions". As interpreted by this Court, the said condition is a condition precedent for the making of the Regulations under the said section. If the contention of the learned Solicitor General be accepted, the condition may have to be disannexed from the power by a situation brought about the conscious withholding of the exercise of the connected power by the Central Government under section 12 of the Act. Central Government by its own default can ignore the condition imposed in public interest. The construction leading to this anomalous result can. not be accepted unless the provisions compel us to do so. It is a well settled principle of construction that when it is possible to do so, it is the duty of the Court to construe provisions which appear to conflict so that they harmonies. To put it differently, of two possible constructions, one which gives a consistent meaning to different parts of an enactment should be preferred. In the instant case, the two sections can be harmonized without doing violence to the language used. Section 12 is an enabling provision under it a power it; given to the Central Government to appoint a Mining Board. Section 57, read with section 59, confers another power on the Central Government to make regulation subject to, among others a condition that the draft of the regulations shall be referred to a Mining Board. These two powers are connected: if they are read together, as we should do in an attempt to reconcile them, it could be reason '. ably hold that the power conferred under a. 12 has to be exercised by the Central Government if it intends to make regulations under section 57 of the Act. This construction carries out the full intention of Legislature in enacting s.59 as interpreted by this 933 Court. Both the powers can be exercised without the one detracting from the other. The construction suggested by the respondents enables the Central Government to defeat the public purpose underlying the imposition of the condition under s.59 of the Act and that suggested by the petitioners enables the exercise of the two powers without the one coming into conflict with the other. I would on the principle of harmonious construction, prefer 'to accept the latter construction to the former. Let us took at the provisions from a different perspective. It is a well established doctrine that when the power is coupled with a duty of the person to whom it is given to exercise it, then the exercise of the power is imperative: see Maxwell on interpretation of Statutes, 11th Edn., p. 234. It has also been bold that "if the object for which the power is conferred contemplates giving of a right, there would then be a duty cast on person to whom the power is given to exercise it for the benefit of the party to whom the right is given when required on his behalf. " Dealing with section 51, Income tax Act, 1918 which provides that the Chief Revenue Authority may" state the case to High Court Lord Phillimore observed in Alcock Ashdown & Co. vs The Chief Revenue Authority Bombay(1). "No doubt that the section does not say that the authority "shall" state the case, it only says that it may and it is rightly urged that "may" does not mean "shall, only the capacity or power is given to the authority. But when a capacity or power is given to a public authority there may be circumstances which couple with the power a duty to exercise it, and where there is a serious (1) A. 1. R. 934 point of law to be considered there does lie a duty upon the Revenue authority to state a case for opinion of the Court and if he does not appreciate that there is such a serious point, it is in the power of the Court to con trol him and to order him to state the case. " Under the Act, there are two connected powers a power to appoint a Mining Board and a power to make regulations subject to a condition. The condition imposed on the power confers a right on a Mining Board to be consulted before a regulation is made. A combined reading of section 12 and sections 57 and 59 shows that the power or powers conferred on the Central Government are coupled with a duty to consult the Board whenever the Central Government seeks to exercise the power under s.57. I have no hesitation in holding that the power is coupled with a duty and that the power has to be exercised when the 'duty demands it. The Central Government in making the Regulations has a duty to consult the Mining Board and the Mining Board has a right to be so consulted and to discharge its duty it is incumbent upon the Central Government to exercise the connected power by appointing the Board. It is said that under section 59 of the Act, the Regulations and the Rules shall be referred to a Mining Board and that under section 58 the Central Government has the power to make a rule providing for the appointment of the Chairman and members of the Mining Board and that if section 59 is mandatory, the Government can never exercise the power under section 58(a). No such difficulty could arise under the Act before its amendment in 1959. Under a. 69(3), as it stood then, the condition of consultation with a Mining Board was imposed only on the power of the Government to make a. regulation and that s.57 of the Act which confers a 935 power on the Central Government to make regulations did not contain any. clause corresponding to cl. (a) of section 58 of the Act. That apart, section 58(a) may legitimately be invoked by the Central ' Government only after a Board had been consti tuted in regard to the future appointments. how this argument may have some bearing when this question of construction of the provisions of section 59 was raised before this Court on the last occasion and none at present, as the true construction of the said section was finally settled by this Court. That apart, a comparative study of the other provisions of the Act would also lead to the same conclusion. Under the Act, there are many enabling provisions empowering the Central Government to appoint specified authorities to discharge different duties and functions described in various sections. Should it be held that the Central Government need not appoint the authorities under any circumstances, the Act would become a dead letter. Even the appointment of 'the Chief Inspector and Inspectors is left to the discretion of the Central Government: see section 5 of the Act. If the Government need not appoint the Chief Inspector or the Inspectors, the duties and functions allotted to them could not be discharged or performed. A resonable construction would, therefore, be that if the said duties and functions have to be per. formed, the Government hat; to appoint the officers. So too, if the Central Government seeks to exercise the powers under section 57 of the Act, read with section 59 thereof, it has to appoint the Board. I therefore , hold on a fair construction of sections 12 and 59 of the Act, that ' the Central Government has a duty to appoint the, Mining Board if it seeks to exercise its power under section 57 of the Act. The next argument is that the Bihar Board has been consulted in the manner prescribed by 936 section 59(3) of the Act and, therefore. the regulation made after such consultation are valid. I cannot agree with this contention either. The said Board was appointed under section 10(1) of the Indian Mines Act, 1923 and it is not disputed that the Board must be deemed to have been duly constituted under the present Act. It is also not disputed that the said Board was only constituted to have jurisdiction over the area comprised in the present Bihar State, that is, it has no jurisdiction over West Bengal. Under section 12 of the Act, the Central Government may constitute for any part of the territories to which this Act extends or for any group or class of a Mines., a Mining Board. Under section 59, the Central Government shall refer the draft to every Mining Board which, in the opinion of the Central Government, is concerned with the subject dealt with by the regulation '. Now, can it be said that the Board constituted for a part of the territories to which the Act extends, namely, to the State of Bihar, could be a Board concerned with the subject dealt with by the regulations, namely, the mines in West Bengal area ? The entire object of section 59 is to consult the persons intimately connected with the mining operations of a particular area so that suitable regulations may be made to govern the working of those mines. It could never have been the intention of the Legislature to empower the Government to make regulations in regard to mines in one part of the country by consulting a Board constituted for another part of the country. Such an intention could not be attributed to the Legislature. Indeed, the Central Government, when it is constituted the Boards, expressly indicated its intention that all the Boards, including the Board functioning in West Bengal, should be consulted, but as the Board constituted there was not one constituted legally under the Act, the consultation with. the said Board 937 had become futile. I therefore, hold that the Regulations in so far as they purport to regulate the mines situate in West Bengal have not been validly made under the Act inasmuch as a condition precedent imposed by section 59 of the Act on the exercise of the Government 's power to make a regulation was not complied with. In the result, I direct the issue of a writ of prohibition against respondents 1 to 4 restraining them from proceeding with the criminal case launched against the petitioners. The petitioners will have their costs. By COURT : In view of the majority opinion of the Court the Writ Petition fails and is dismissed.

IN-Abs

Section 12 of the , provides that the Central Government may constitute a Mining Board for any part of the territories to which the Act extended or for any group or class of mine . In 1957 only one mining board i.e. the Bihar Mining Board was in existence and other mining boards were not constituted. Section 57 empowers the Central Government to make Regulations. Section 59(3), as it then stood, provided that before the draft of any regulation was published it should be referred to every Mining Board concerned and that it shall not be published until each such Mining Board had had a reasonable opportunity of reporting on it. The Central Government referred the draft of the Coal Mines Regulations to the Bihar Mining Board which circulated the draft to all the members of the Board and the members communicated their opinions individually to the Central Government. Thereafter, the Regulations were duly published and came into force. The petitioner 's, who were being prosecuted in Bengal for violation of the Regulations, contended that the Regulations were invalid as : (i) it was incumbent upon the Central Government under 'section 12 of the Act to constitute all the Mining Boards and to refer the draft Regulations to all the Boards before they. could be published under section 59. and (ii) the communication of opinions by individual members 'of the Bihar Mining Board did not amount to consultation with the Board within the meaning of section 59(3). Held (Per majority, Subba Rao, J., dissenting), that the 'Coal Mines Regulations, 1957, had been duly framed and published. Section 59(3) merely provided that if a Mining Board was in existence at the relevant time it was obligatory on the Central Government to consult it before 905 the draft Regulation was published. But section 12 was not mandatory and it was not obligatory on the Central Government to constitute any or all of the Mining Boards. There was nothing in the Act or. in the context which justified reading the word "may" in section 12 as "shall". The Mining Board constituted under section 12 had to perform two functions, viz., to make a report in respect of regulations or rules referred to it and to decide cases which may be referred to it under section 81. The working of the Act was not dependent on the constituting of Mining Boards. This construction of section 12 did not render the provisions of section 59(3) nugatory. Apart from consulting the Boards, all parties affected by the draft had an opportunity to make their suggestions or objections and these had to be considered before the draft was settled and the regulations were finally made. Banwarilal Agarwalla vs state of Bihar, , explained. Held, further, that the requirement of section 59(3) had been complied with in referring the draft Regulations to the Bihar Mining Board. All that section 59(3) required was that a reasonable opportunity should be given to the Board to make its report. How the Board chose to make its report, was not a matter which the Central Government could control. Per Subba Rao, J. ,The Coal Mines Regulations were not validly made. The Supreme Court had directly decided in Banwarilal vs State of Bihar that the Regulations were bad as there was no consultation with any Mining Board under section 59 (3) as the Boards were not in existence. A fair construction of sections 12 and 59 (3) of the Act ' also showed that if the Central Government wanted to ' make regulations under section 57 it had to appoint Mining Boards and to refer the regulations to them before publication. If the Central Government wanted to exercise the power under section 59 it had first to exercise the power under section 12. The power to make regulations was coupled with a duty to consult the Mining Boards, and to discharge its duty it was incumbent upon the Central Government to appoint the Mining Boards. Apart from this, the Regulations is so far as they purported to regulate mines in West Bengal had not been validly made as no Mining Board for the West Bengal area had been consulted before making the Regulations. The Act did not empower the Central Government to make regulations in regard to mines in one part of the country by consulting a Board constituted for another part of the Country. 906 Banwarilal Agarwalla vs State of Bihar. , followed. Alcock Ashdown & Co. vs The Chief Revenue Authority, Bombay, A. I. R. , referred to.

Appeal No. 168 of 1952. Appeal from a Judgment and Decree dated 23rd July, 1951, of the Court of the Judicial Commissioner, Vindhya Pradesh, in Civil First Appeal No. 26 of 1951 arising out of the Judgment and Decree dated 14th March, 1951, of the Court of the District Judge, Umaria, in Case No. 32 of 1951. N. section Bindra (section L. Chhibber, with him) for the appellants. section P. Sinha (K. B. Asthana, with him) for the respondents. March 12. The Judgment of the Court was delivered by MAHAJAN J. The suit out of which this appeal arises was instituted by the plaintiff respondents in the court of the district judge of Umaria, for recovery of Rs. 34,000 principal, and Rs. 2,626 interest, due on foot of mutual dealings. The suit was dismissed by the district judge but was decreed on appeal by the Judicial Commissioner of Vindhya Pradesh. A certificate for leave to appeal to this Court was granted as the case fulfilled all the conditions and requirements in force relating to appeals to the Supreme Court. The defendants did not admit the claim and it was pleaded that no accounts were explained to them when the signatures of Bhaiyalal and Hiralal were obtained in the plaintiffs ' ledger on 3rd September, 1949, acknowledging the suit amount as due from them. It was further pleaded that no suit could be based merely on an acknowledgment of the debt. In para graph 4 of the written statement it was alleged that the plaintiff No. 2 Dipchand having threatened to bring a suit against defendants I and 2 whose financial position was bad and having represented that plaintiff No. 1 Badkulal would be angry and abuse plaintiff No. 2, and having assured on oath by placing his hand on a deity in a temple that no suit shall be 760 brought, and that amount of interest would be reduced asked defendants 1 and 2 to sign the khata, who signed the same without going through the accounts, on the faith of these statements made by Dipchand and that the defendants were not bound by these signatures. In paragraph 9 of the written statement it was alleged that in fact Rs. 15,000 or 16,000 as principal sum were due to plaintiffs from defendants but the suit had been filed for a much larger sum than due. Issue I framed by the district judge was in these terms : " Did the defendants Hiralal and Bhaiyala I sign on Bhadon Sudi 11 Samvat 2006 in the capacity of manager and head of the family, on the khata of, the plaintiffs after understanding the debit and credit accounts and accepting Rs. 34,000 as the correct balance due to the plaintiffs. " It would have been more correct had a separate issue been framed on the two points compositely mentioned in this issue. Be that as it may, the form in which the issue was framed is not material for the decision of the appeal. Issue 7 was in these terms : " Did the plaintiff Dipchand obtain the signature of defendants 1 and 2, in their bahi under the threat of instituting a suit and giving the assurance of the suit being not filed and leaving the interest which is incorrect and very much exaggerated, by saying that Badkulal shall be very angry with him. ". The frame of the issue shows that the learned judge at this stage made no effort to ascertain or apprehend the nature of the plea taken in the written statement. He seems to have acted more as an automaton than as a judge in the discharge of his responsible duties. Before framing an issue like this it was his duty to examine the parties and to find out the precise nature of the plea involved within these facts ; in other words, whether the defendants wished to plead in defence fraud, coercion, undue influence or a mistake of fact entitling them to reopen the accounts. Mr. Bindra for the appellants was unable to tell us 761 what real plea was involved in the facts stated under this issue. The manner in which the learned judge dealt with this issue lends support to our view that he did not at all apprehend what he had to decide. It was held that the defendants did not sign the entry after understanding, settling, and adjusting of the accounts, but that plaintiff Dipchand obtained their signatures without explaining the accounts to them. The fact that the entry was signed by both the defendants who represented their family was not denied. Hiralal, defendant, in the witness box admitted that the defendants deal in gold, silver and kirana and maintain regular books of account. It was also admitted that two or three muneems are in their employ for maintaining regular books of the business dealings. Hiralal was questioned " How much money was due from the defendants firm to the plaintiffs" He couldn 't firm?". The answer was evasive, viz., say how much was due". When questioned about his accounts, he replied that he had not filed them as he was ill. He further deposed that he had looked into his accounts and Rs. 10,000 to Rs. 15,000 as principal and interest were due but he could not say what was the correct amount. When asked whether on the date of signing the acknowledgment he looked into the books to see what amount was due from him, his answer was in the negative. He further said that even after receiving notice he did not look into his own accounts to check as to what the correct balance was. A leading question was put to him Whether on Bhadon Sudi 11 Samvat 2006 there Was an entry of Rs. 34,000 in the defendants ' khata as being the balance due from them to the plaintiffs. The answer was again evasive. He said " I could not say whether there was any such entry in his books." In these circumstances there was no justification for throwing out the plaintiffs ' suit on the ground that the accounts were not explained to the defendants by the plaintiffs. The defendants had written the accounts in their own books from which the true balance could 762 be ascertained. An inference from the statement of Hiralal can easily be raised that the balance entry of Rs. 34,000 also existed in his own books. Mr. Bindra tried to get out of this situation by urging that it was no part of the defendants ' duty to produce the books unless they were called upon to do so and the onus rested on the plaintiffs to prove their case. This argument has to be negatived in view of the observations of their Lordships of the Privy Council in Murugesam Pillai vs Manickavasaka Pandara(1), which appositely apply here. This is what their Lordships observed: "A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing, accordingly, to furnish to the courts the best material for its decision. With regard to third parties this may be right enough they have no responsibility for the conduct of the suit; but with regard to the parties to the suit it is, in their Lordships ' opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the court the written evidence in their possession which would throw light upon the proposition. " This rule was again reiterated in Rameshwar Singh vs Rajit Lal Pathak(2). On the evidence of the parties it is clear that both parties are businessmen and each party has been maintaining accounts of their mutual dealings, and they met on 3rd September and in the plaintiffs ' book the defendants signed an entry on page 58 of the ledger which runs thus: `` Rs. 34,000 balance due to be received up to Bhadon Sudi 11 Samvat 2006 made by check and understanding of accounts with Hiralalji 's books. " This acknowledgment was made below a number of entries made in this khats, on the credit and debit side and the mutual dealings had continued since (1) (1917) 44 I A. 99. (2) A.I.R. 1929 P.C. 95, 763 several years. The acknowledgment is signed by Hiralal and Bhaiyalal, with the following endorsement: "After adjusting the accounts Rs. 34,000 found correct payable. " In these circumstances we are not able to understand the view of the district judge that it was not proved that the accounts were explained to the defendants by Dipchand. It was unnecessary to do so because the defendants themselves were keeping accounts and they would not have signed the balance for Rs. 34,000 with the endorsement above cited, without reference to their own books or in the manner suggested in the written statement. Plaintiff Dipchand in the witness box supported the plaintiffs ' case as laid in the plaint. He deposed that " This accounting was done by my muneem Puranlal and Ram Prasad, muneem of Hiralal. . Muneems explained and Hiralal signed after understanding it. " In cross examination he said that muneems were checking the accounts and when both the muneems said that so much was the balance, Hiralal then signed and that Hiralal and Bhaiyalal themselves did not check any account. The learned district judge and Mr. Bindra criticized the evidence of this witness and it was urged that he had made false and highly improbable statements with regard to the manner and circumstances in which the entry was signed. The discrepancies in the statement relate to matters of no consequence. In our opinion, his evidence along with the entry was sufficient to hold the plaintiffs ' case proved when the best evidence of their own books to disprove the plaintiffs ' case had been withheld by the defendants. No satisfactory explanation had been given for the non production of the defendants ' books, and the evidence given by Hiralal does not do much credit to him. Mr. Bindra contended that it should have been held that Bhaiyalal did not sign at the same time when the entry was written but he signed later on. On this point Hiralal deposed that when be signed Bhaiyalal 99 764 was not present, that he signed afterwards, that Kulai muneem came with, the bahi saying that Badkulal and Dipchand had quarrelled among themselves that there should also be the signature of Bhaiyalal, that Bhaiyalal questioned him as to why the witness had signed, that he replied that Dipchand had told him after pointing his hand towards God that he would take no action so long as he lived, so he did not check, nor any one explained him the accounts, that on this he asked Bhaiyalal to sign and on his asking he signed. It was for Bhaiyalal to explain his signature by going into the witness box but he did not give evidence in the case and there is no explanation why he did not do so. Mr. Bindra 's contention therefore that it should be held that Bhaiyalal was not present when the acknowledgment was signed cannot be sustained. The defendants tried to support their case by the statements of Kulai Prasad, muneem, and the other two muneems Ram Prasad and Puranlal. So far as Kulai Prasad is concerned, he was in the plaintiffs ' service and was dismissed by Badkulal, plaintiff, on 31st March, 1950. Much reliance cannot be placed on the statement of a dismissed and disgruntled employee. He stated that Hiralal was not made to understand any accounts and Dipchand assured him on oath that he would raise no trouble during his life and asked Hiralal to sign and that Bhaiyalal signed on a different date. This evidence is of a partisan character and no reliance can be placed on it. Rain Prasad stated that he did not check the accounts of the plaintiffs from Bhadon Samvat 2006 and that Hiralal did not sign in his presence. In cross examination he admitted that there were mutual dealings between the parties and that Hiralal might have signed after accounting was done. He pretended ignorance of what happened on Bhadon Samvat 2006. As regards Puranlal, he stated that after looking into the accounts and after mutual talk, Exhibit P 1 765 was written on Dip Chand 's asking, that accounts might have been told by Dipchand on the basis of the statement which he had with him, that no accounts were explained. He further stated that Hiralal said to Dipchand "Please see me", on which Dipchand replied after raising his hand towards the temple " I shall not do anything unfair in my lifetime. " In cross examination he admitted that the words " signed Bhurey Naik Raghunandan Prasad Bakalam Hira Lal ", and the words " after adjusting the accounts Rs. 34,000 found correctly payable signed Hiralal " were written by Hiralal himself. It was further elicited in cross examination that the witness had forged a receipt and for forging that receipt he was sentenced to one year 's imprisonment in a criminal case started by Badkulal, plaintiffs This evidence therefore is not of much consequence in this case. In these circumstances we are satisfied that the district judge not only approached the decision of the case from an erroneous point of view but he also incorrectly appreciated the material on the record. The learned Judicial Commissioner was therefore perfectly justified in reversing his decision and. in holding that on 3rd September, 1949, there was an adjustment of accounts actually done by the muneems and accepted by the principals and the story of coercion and misrepresentation was false. Mr. Bindra next urged that the plaintiff 's suit should have been dismissed because it could not be maintained merely on the basis of an acknowledgment of liability, that such an acknowledgment could only save limitation but could not furnish a cause of action on which a suit could be maintained. The Judicial Commissioner took the view that an unqualified acknowledgment like the one in the suit, and the statement of the account under which the entry had been made, were sufficient to furnish a cause of action to the plaintiffs for maintaining the present suit. We are satisfied that no exception can be taken to this conclusion. It was held by the Privy Council in 766 Maniram vs Seth Rupchand(1), that an unconditional acknowledgment implies a promise to 'pay because that is the natural inference if nothing is said to the contrary. It is what every honest man would mean to do. In Fateh Chand vs Ganga Singh(2) the same view was taken. It was held that a suit on the basis of a balance was competent. In Kahanchand Dularam vs Dayaram Amritlal(3) the same view was expressed and it Was observed that the three expressions "balance due ", " account adjusted " and "balance struck" must mean that the parties had been through the account. The defendant there accepted the statement of account contained in the plaintiff 's account book, and made it his own by signing it and it thus amounted to an " accounts stated between them " in the language of article 64 of the Limitation Act. The same happened in the present case. The acknowledgment which forms the basis of the suit was made in the ledger of the plaintiffs in which earlier mutual accounts had been entered and truly speaking, the suit was not based merely on this acknowledgment but was based on the mutual dealings and the accounts stated between them and was thus clearly maintainable. Mr. Bindra drew our attention to a decision of the Allahabad High Court in Ghulam Murtuza vs Fasihunnissa(4) , wherein it was held that even if an acknowledgment implies a promise to pay it cannot be made the basis of suit and treated as giving rise to a fresh cause of action. We have examined the decision and we are satisfied that it does not lay down good law. For the reasons stated above this appeal has no merits and we accordingly dismiss it with costs. Appeal dismissed '. CO 2,0.3 (i) (1906) 33 I.A. 165. (2) (1929) I.L.R. Io Lab 748. (3) (1929) I.L.R. to Lah. (4) All 434.

IN-Abs

Where the defendants who had dealings with the plaintiffs for several years signed the following entry in the plaintiffs ' account book underneath the earlier entries: "After adjusting the accounts Rs. 34,000 found correct payable Held, that this amounted to an unqualified acknowledgment of liability to pay and implied a promise to pay and could be made the basis of the suit and gave rise to a fresh cause of action. Maniram vs Seth Rup Chand (33 I.A. 165), Fateh Chand vs Ganga Singh (I.L.R. and Kahan Chand Dularam vs Dayalal Amritlal (I.L.R. relied on. Ghulam Murtuza vs Fasihunnissa (I.L.R. 57 All. 434) overruled. It is not a sound practice for those desiring to rely upon a certain state of facts to withhold from the court written evidence which is in their possession which could throw light upon the issues in controversy and to rely upon the mere doctrine of onus of proof. Murugesam Pillai vs Manickavasaka Pandara (44 I.A. 99) referred to.

iminal Appeal No. 50 of 1962. Appeal by special leave from the judgment and order dated September 12, 1961, of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal Appeal No. 494 of 1961. Nuruddin Ahmed, for the appellant. G.C. Mathur and 0. P. Lal, for the respondent. May 3. The Judgment of the Court was delivered by S.R. DAS, J. The learned Sessions Judge of Rae Bareli tried the appellant Prabhu on a charge of murdering his own uncle and found him guilty of the offence and sentenced him to death. There were an appeal to the High Court and the usual reference for confirmation of the sentence of death. The High Court dealt with the appeal and reference by one judgment. It accepted the reference,, dismissed the appeal and confirmed the conviction and sentence. The appellant then asked for and obtained special leave of this Court to appeal from the judgment and order of the High Court. The present appeal has come to us in pursuance of the leave granted by this Court. Shortly stated the case against the appellant was this. Bhagwan Ahir, step brother of the appellants father Budhai, was a resident of 883 village Bandi in the district of Rae Bareli, The appellant and his father Budhai lived in another village called Gulariya at a distance of about two or three miles from Bandi. Bhagwan had about four bighas of pasture land and seven bighas of cultivated land. He had no male issue, He had several daughters who were all married and resided at the places of their respective husbands. Bhagwan was old, near about 80 years of age according to the evidence of Marka, and had no male member in the family to help him with his cultivation. Budhai, it appears, did not reside in village Gulariya all the year round, but was engaged in some job at Burdwan in Bengal. Some four years before the date on, which Bhagwan was said to have been murdered the appellant and his mother came to reside with Bhagwan. The idea was that the appellant would be able to help Bhagwan with his cultivation. The appellant did not, however, render much assistance to Bhagwan and the prosecution case, was that after about a year of their stay, Bhagwan turned them out of the house. The appellant and his mother then went back to village Gulariya. The prosecution case further was that about a month and a half before the murder of Bhagwan the appellant and his father came to Bhagwan and the appellants father asked Bhagwan to transfer some of his land to the appellant. Bhagwan said that he had already kept the appellant with him for a year and had found that he was of no assistance. He, therefore, refused to give any land to the appellant. Bhagwan, it appears, had some granddaughters and one of them called Kumari Sarju aged about five years was staying with him. Bhagwan said that he would give his lands to his grand daughter Sarju. On the night between March 19 and 20 , 1961, Bhagwan was sleeping in front of his house on 884 cot with his grand daughter. One Naiku (P.W. 1) was sleeping at a short distance from Bhagwan 's house. Naiku was a neighbour of Bhagwan. At about midnight Naiku 'heard some noise and called out to Bhagwan. There was no response. Naiku then heard the sound of shoes as though somebody was running away from the place. Naiku called out certain other persons and went near the place where Bhagwan was lying on his cot. It was found that Bhagwan bad a large number of injuries on the head and neck, most of the injuries being of 'an incised nature. Bhagwan was already dead. The little girl Sarju though stained with blood which flowed from the body of Bhagwan was not herself injured. She was soundly sleeping on the cot and was not awake when Bhagwan was killed. Naiku gave an information to the police station of what he had heard and seen, the distance of the police station being about eight miles from village Bandi. The information which Naiku gave did not disclose the name of any accused person because Naiku had not seen who had killed Bhagwan. On the information given by Naiku the local police started investigation and when the dead body of Bhagwan was brought back to the village after the postmortem examination for cremation, the appellant, it is stated, came to one Brij lal (P. W. 2) of village Bandi. This was on the third day after the murder. The appellant made certain enquiries from Brij lal which roused the latter 's suspicion. The Sub Inspector of Police was then in the village and he was informed of the presence of the appellant. The appellant was then interrogated and the case of the prosecution was that the appellant made certain statements and produced from his house a kulhari, a shirt and a dhoti. These were found to be blood stained and subsequent examination by the Chemical 885 Analyst and the Serologist disclosed that they were stained with human blood, This recovery of the blood stained kulhari (axe) and the blood stained shirt and dhoti was made, according to the prosecution case, on March 22, 1961, in the presence of two witnesses, Lal Bahadur Singh and Wali Mohammad, It would appear from what we have stated above that the case against the appellant rested on the evidence relating to motive furnished by what happened, about a month and half before the occurrence when the appellant and his father asked for some land from the deceased, and the recovery of the. blood stained. axe and blood stained shirt and dhoti from the house of 'the appellant. The appellant denied that he and his father had asked for any lands from the deceased a month and a half prior to the occurrence. The appellant also denied that he had produced any blood stained axe or blood stained shirt and dhoti from his house, or had handed them over to the Sub Inspector of Police. He denied that the clothes or the axe belonged to him. His defence was that be was living with his father in Burdwan and came back to the village on March 21,1961. He said that the case against him was brought out of enmity. Learned counsel for the appellant has taken us through the evidence in the case and has submitted that apart from raising some suspicion against the appellant and his father, the evidence given by the prosecution does not establish beyond any reasonable doubt that the appellant was the murderer. He has further submitted that certain statements alleged to have been made by appellant to the Sub Inspector of Police in connection with the recovery of the blood stained axe and blood stained shirt and dhoti were inadmissible and the courts below were wrong in relying on 886 them. He has contended that if those statements are excluded from consideration, than the evidence which remains is insufficient to support the conviction of the appellant, We think that these contentions are correct and must be upheld. There can be no doubt that Bhagwan was murdered on the night in question. The postmortem examination disclosed that he had sustained as many as thirteen injuries, eleven of which were incised on different parts of the body. The injuries inflicted on the head and face had out through skull bones and the doctor who held the postmortem examination was of the opinion that Bhagwan had died as a result of fractures of the skull bones and hemorrhage and shock. There can, therefore, be no doubt that Bhagan was murdered. It is equally clear that nobody saw who ' killed Bhagwan. The evidence of Naiku (P.W.1) shows clearly enough that neither he nor other persons whom he called saw the appellant. The grand child who was sleeping with Bhagwan was also fast asleep and did not even awake when the injuries were inflicted on Bhagwan. Bhagwan might or might not have raised shouts when the injuries were caused to him. The evidence of Naiku does not disclose that he heard any other sound excepting the sound of movement of steps of a person wearing shoes. We are satisfied that the evidence as to motive is satisfactory, Both Naiku (P.W.1) and Brij Lal (P.W.2) have stated about the motive. The appellant and his mother stayed with Bhagwan about four years ago in order to render assistance to Bhagwan in his cultivation. The appellant did not, however, do any work and was turned out. This is proved by the evidence of Naiku and Brij Lal. The evidence of the aforesaid two witnesses also establishes that the appellant and his father came to Bhagwan about a month and a half before the occurrence and asked for some land. Bhagwan refused to give any land to the appellant. We 887 think that this motive has been established even though it would influence both the appellant and his father. The main difficulty in the case is that the evidence regarding the recovery of blood stained axe and blood stained. shirt and dhoti is not very satisfactory and the courts below were wrong in admitting certain statements alleged to have been made by the appellant in connection with that recovery. According to the recovery memo the two witnesses who were present when the aforesaid articles were produced by the appellant were Lal Bahadur Singh and Wali Mohamad. Lal Bahadur Singh was examined as prosecution witness No. 4. He did give evidence about the production of blood stained articles from his house by the appellant. The witness said that the appellant produced the articles from a tub on the eastern side of the house. The witness did not however, say that the appellant made any statements relating to the recovery. Wali Mohammad was not examined at all. One other witness Dodi Baksh Singh was examined as prosecution witness No. 3. This witness said that a little before the recovery the Sub Inspector of Police took the appellant into custody and interrogated him ; then the a appellant gave out that the axe with which the murder had been committed and his blood stained shirt and dhoti were in the house and the appellant was prepared to produce them. These statements to which Dobi Baksh (P.W.3) deposed were not admissible in evidence. They were incriminating statements made to a police officer and were hit by ss.25 and 26 of the Indian Evidence Act. The statement that the axe was one with which the murder had been committed was not a statement which led to any discovery within the meaning of s.27 of the Evidence Act. Nor was the alleged statement of the appellant that the blood stained shirt and dhoti belonged to him was 888 a statement which led to any discovery within the meaning of s.27. Section 27 provides that when any fact is deposed to and discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information,.whether it amounts to a confession or not, as, relates distinctly to the fact thereby discovery may be proved. In Pulukuri Kotayya vs King Emperor (1) the Privy Council considered the true interpretation of s.27 and said : "It is fallacious to treat the 'fact discove red ' within the section as equivalent to the object produced ; the fact discovered embraces the place from which the object is produced and the knowledge of the accused as to this, and the information given must relate distinc tly to this fact. Information as to past user, or the past history, of the object produced is not related to its discovery in the setting in which it is discovered. Information supplied by a person in custody that 'I will produce a knife concealed in the roof of my house ' does not lead to the discovery of a knife ; knives were discovered many years ago. It leads to the discovery of the fact that a knife is concealed in the house of the informant to his knowledge, and if the knife is proved to have been used in the commission of the offence, the fact discovered is very relevant. But if to the statement the words be added 'with which I stabbed A. ', these words are inadmissible since they do not relate to the discovery of the knife in the house of the informant." (p.77) We are, therefore, of the opinion that the courts below were wrong in admitting in evidence the alleged statement of the appellant that the axe had been used to commit murder or the statement that the blood (1) (1947) L.R. 74 I.A 65. 889 stained shirt and dhoti were his. If these statements are excluded and we think that they must be excluded, then the only evidence which remains is that the appellant produced from the house a blood stained axe and some blood stained clothes. The prosecution gave no evidence to establish whether the axe belonged to the appellant or the blood stained clothes were his. Therefore, the question before us is this. Is the production of the blood stained axe and clothes read in the light of the evidence regarding motive sufficient to lead to the conclusion that the appellant must be the murderer ? It is well settled that circumstantial evidence must be much as to lead to a conclusion which on any reasonable hypothesis in consistent only with the guilt of the accused person and not with his innocence. The motive alleged in this case would operate not only on the appellant but on his father as well. From the mere production of the blood stained articles by the appellant one cannot come to the conclusion that the appellant committed the murder. Even if somebody else had committed the murder and the blood stained articles had been kept in the house, the appellant might produce the blood stained articles when interrogated by the Sub Inspector of Police. It cannot be said that the fact of production is consistent only with the guilt of the appellant and inconstant with his innocence. We are of the opinion that the chain of circumstantial evidence is not complete in this case and the prosecution has unfortunately left missing links, probably because the prosecution adopted the shortout of ascribing certain statements to the appellant which were clearly inadmissible. Learned counsel for the respondent has submitted to us that in State of U. P. vs Deoman Upadhyaya (1) this Court accepted as sufficient evidence (i) ; 890 the production of a blood stained weapon. We are unable to agree. The circumstantial chain in that case did not depend merely on the production of the gandasa, but on other circumstance as well. The Court held in that case that the circumstantial chain was complete and the decision did not proceed merely on the production of a blood stained weapon. For the reasons given above we would allow the appeal and set aside the conviction and sentence passed against the appellant. The appellant must now be released forthwith. Appeal allowed.

IN-Abs

The appellant was tried and convicted for the murder of one B. The evidence against him was circumstantial and consisted of (1) a motive to kill B which he had in common with his father, (II) the recovery at his instance of an axe, shirt and dhoti stained with human blood and (III) his statements made to a Sub Inspector of Police before the recovery that the axe was one with which he had killed B and that the shirt and Dhoti belonged to him. No independent evidence was led to prove that the axe, shirt and dhoti belonged to the appellant. Held, that the statements made by the appellant were inadmissible and the remaining evidence was ' not sufficient to bring home the guilt to the appellant. The statements were incriminating ones made to a police officer and were bit by sections 25 and 26 of the Evidence Act. Statements were not admissible under section 27 as they did not lead to any discovery within the meaning of that section. Pulukuri Kotayya vs King Emperor, (1947) L. R. 74 I. A. 65, relied on. State of U. P. vs Deoman Upadhya, ; , distinguished.

Appeal No. 533 of 1960. Appeal from the judgment and decree dated January 28, 1959, of the Patna High Court, in Appeal from Original Decree No. 143 of 1948. B. K. Saran and K. L. Mehta, for the appellants. R. K. Garg, D. P. Singh, section C. Agarwal and M. K. Ramamurthi, for the respondents. 1962 May 4. The Judgment of the Court was delivered by 292 RAGHUBAR DAYAL, J. This appeal, on a certificate granted by the High Court of Judicature at Patna, arises in the following circumstances: The plaintiffs respondents sued the appellants for the recovery of possession of the disputed lands and mesne profits as the family of the defendants did not have any raiyat interest in the disputed lands except rehan interest under the rehan deed dated July 3, 1906, and that subsequent to the redemption of that deed, they had no right to remain in possession and occupation of the disputed lands. The plaintiffs alleged that Pranpat Bhagat and others held eight annas share of milkiat interest in village Sevathra, pargana Nonaur, tauzi No. 3879 and that the other eight annas share was held by Kunj Bihari Bhagat and others. These persons also held khudkasht lands in the village and that such lands were treated as kasht lands. In 1906 Ram Autar Bhagat, one of the members of the joint family of Pranpat Bhagat, executed the mortgage deed with respect to 15 bighas of land out of 16 bighas of kasht lands, to Sheo Dehin Ahir, on behalf of his joint family. The defendants entered into possession on the basis of that mortgage deed, they having had no connection with the land mortgaged prior to the execution of the mortgage deed. Later on, in 1912, Ram Lal Bhagat and Munni Bhagat, of Pranpat 's family, executed another mortgage deed with respect to their entire milkiat interest in favour of Jatan Ahir and Ram Saran Ahir who also belonged to the family of Sheo Dehin Ahir. They then got into possession of the fresh land which had been mortgaged. Ram Lal Bhagat and others sold their milkiat share together with the kasht lands to the plaintiffs in 1915. The plantiffs entered into possession 293 of the milkiat property and subsequently redeemed the mortgage deeds in 1913. The plaintiffs also purchased four annas share belonging to the branch ' of Kunj Bihari Bhagat, The other tour annas share of that branch was purchased by Raja Singh who then sold it to Ram Ekbal Singh, impleaded as defendant No. 6 in the plaint. The defendants, however, did not make over possession of the land in suit after the mortgage deeds had been redeemed and hence the suit was instituted for a declaration and recovery of possession. The defendants 1 to 5 did not admit the allegations made by the plaintiffs and stated the real state of affairs to be that the disputed lands were never the bakasht lands of the proprietors of the village and were really the raiyati qaimi kasht lands of the defendants. that the plaintiffs never purchased the disputed lands, that the disputed lands were the raiyati kasht lands of Ram Autar Bhagat only, who let out the disputed lands in rehan under different rehan deeds alleging them to be raiyati kasht lands, and who had earlier treated it as his exclusive raiyati kasht lands, and that, ultimately, Ram Autar Bhagat sold the disputed lands to the defendants and got their names entered as qaimi raiyati kushtkars. It was further alleged that the defendants bad acquired title to the land in suit by virtue of adverse possession. The trial Court found that the plaintiffs had no subsisting title to the lands in suit as those lands were not sold to the plantiffs who had purchased the milkiat interest including the bakasht and zerat lands, that the suit was barred by adverse possession also and that it was barred by limitation. It therefore dismissed the suit. On appeal, the High Court held that the plaintiffs did purchase the land in suit and that the defendants were in possession only as mortgagees 294 and that, after the redemption of the mortgage, they had no right to continue in possession. It therefore allowed the appeal and decreed the plain tiffs ' suit. The defendants have now filed this appeal. Learned counsel for the appellants has urged five points: (1) The record of rights supported the case of the defendants that they were the qaimi raiyats and that the High Court wrongly construed them. (2) The sale deed of 1915 in favour of the respondents did not include the land in suit. (3) Even if the plaintiffs respondents acquired right to the land in suit by purchase, they are estopped from taking any action against the defendants appellants who had been in possession for long. (4) The suit is barred by limitation as the defendants had perfected their title by adverse possession and the plaintiffs had not been in possession within limitation, (5) The plaintiffs respondents had no subsisting title to evict the appellants in view of the provisions of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950). The case set up by the defendants with respect to their acquiring the qaimi raiyati kasht rights, in their written statement, has been disbelieved by the Courts below and, we think, rightly. It follows that the defendants were in possession of the land in suit only as mortgagees as held by the Court below and. that they had no right to possession after the mortgage had been redeemed. 295 By the sale deed dated October 5, 1915, Ram Lal Bhagat and others sold the property described thus in the sale deed: "8 (eight) annas ancestral milkiat interest, out of Tauzi No. 3879, in mauza Sewathra, pergana Nanaur, thana Pito, district Shahabad, Sub registry office Jagdishpur, the Sadar Jama whereof is Rs. 190/which has been in possession and occupation of us, the executants without copartnership and interference by anybody together with all the present Zamindari rights appertaining thereto, without excluding any interest and profit, together with Zirat lands which have been recorded in the survey papers in the names of us, the executants as bakasht (lands) and new and old party lands, aam and Khas Chairmazrua lands, baharsi dih, house of the tenants ground rent, ahar, pond, reservoir, tank, orchard, fruit bearing and non fruit bearing trees and bambooclumps that is the entire lands and profit (derived from) zamindari below and above the surface existing or which may be derived in future without excluding anything." They emphasized the extent of the sale property further by saying: "We, the executants, gave up and relinquished our respective possession and occupation of vended property today. The entire interest excluding only the chaukidari chakran (service) land which has been let out in settlement with us ' the executants is being sold. The chaukidari land only is not being sound (sic). " 296 It is clear therefore, as held by the High Court, that the land in suit which is included in the milkiat share was not excepted from sale. The only property excluded from sale was the chaukidari chakran land. The long possession of the appellants therefore does not estop the respondents from recovering possession from them. The suit was instituted within 12 years of the redemption of the mortgage deed and is not therefore barred by limitation. The only other question to determine is whether the plaintiffs respondents cannot recover possession from the appellants in view of the provisions of the Bihar Land Reforms Act, 1950 (Act XXX of 1950), hereinafter called the Act, which came into force during the pendency of the appeal in the High Court. The trial Court dismissed the suit on March 8,1948. The High Court allowed the appeal on January 28, 1958. The Act came into force on September 25, 1950. Sub section (1) of section 3 of the Act empowered the State Government to declare by notification that the estates or tenures of a proprietor or tenure holder specified in the notification have passed to and become vested in the State. Such vesting took place on January 1, 1955. It is contended for the appellants that the respondents ceased to have any proprietary right in the land in suit when their estate vested in the State and therefore they had no right to recover possession from them. Section 4 of the Act mentions the Consequences which follow on the publication of the notification under sub section (1) of section 3. According to section 4(a), such estate or tenure including the interests of the, proprietor or tenure holder in the various objects mentioned therein shall, with effect from the date of vesting, vest absolutely in the State free fro., 297 all encumbrances, and such proprietor or tenureholder shall cease to have any interest in such estate or tenure other than the interest expressly saved by or under the provisions of the Act. This makes it absolutely clear that after the vesting of the estate, no interest other than that expressly saved by or under the provisions of the Act remained in the respondents. The right to recover possession from .the trespasser also got vested in the State. Subclause (f) of section 4 provides that the Collector shall take charge of such estate or tenure and of all interests vested in the State under the section. In this connection reference may be made to the decision of this Court in Haji Sk. Subhan vs Madhorao (1) which dealt with a similar question in the context of the provisions of the Madhya Pradesh Abolition of Proprietary Rights (Estate 's, Mahals, Alienated Lands) Act, 1950 (M.P. Act No. 1 of 1951). We have now to consider whether any interest in the land in suit was expressly saved by or under the provision of the Act in favour of the respondents. Section 6 of 4 the Act provides inter alia that on and from the date of vesting, all lands used for agricultural purposes which were in khas possession of a proprietor or tenure holder on the date of vesting shall be deemed to be settled by the State with such proprietor or tenure holder as the case may be and such proprietor or tenure holder shall be entitled to retain possession thereof and hold them as a raiyat under the State having occupancy rights in respect of such lands subject to the payment of such fair and equitable rent as may be determined by the Collector. The lands coming within this section included lands used for agricultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the (1) [1962] Supp. 1 S.C.R. 123. 298 intermediary is entitled to recover khas possession. thereof It follows that such lands, though not in the actual khas possession of the proprietor on the date of vesting would also be deemed to be settled with the proprietor, who would retain their possession as raiyat under the State. According to s.2(k) of the Act, " 'khas possession ' used with reference to the possession of a proprietor or tenure holder of any land used for agricultural or horticul tural purposes means the possession of such proprietor or tenure holder by cultivating such land or carrying on horticultural operations thereon himself with his own stock or by his own servants or by hired labour or with hired stock. " On the date of vesting, the respondents were not in khas possession of the land in suit as they were not in possession in any of the manner mentioned in this definition. Section 6 does not really enlarge the scope of the expression 'Khas possession but includes lands covered by cls. (a), (b) and (c) of sub. section (1) among the lands which can be deemed to be settled by the State with the proprietor. Clause (c) originally was : "lands used for agricultural or horticultural purposes and in the possession of a mortgagee which immediately before the execution of the mortgage bond were in khas possession of Such 'proprietor or tenure holder " This clause was substituted by another clause by a. 6 of the Bihar land Reforms (Amendment) Acts 1959 (Act XVI of 1959) and under that section the substituted clause shall be deemed always to have 299 been substituted, that is to say, is to be deemed to have been in the of original Act from the very beginning. The substituted el. (c) reads : "(c) lands used for agricultural or horti cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof. " It is therefore necessary for the respondents, to get advantage of the pro visions of this clause, that there be a subsisting mortgage on the date of vesting and that the land included in the subsisting mortgage be such that on the redemption of the mortgage the respondents be entitled to recover khas possession thereof. No mortgage subsisted on the date of vesting and therefore the benefit of this clause cannot be taken by the respondents. The land in suit does not come within the provisions of el. (c) or any other clause of sub section (1) of section 6 of the Act. This point was raised in the High Court which observed as follows in this connection : "In the first place the defendants were in possession as mortgages and, even section 6 of the Bihar land Reforms Act provides that, the possession of the mortgagee is the possession of the mortgagor even for the purpose of construing the meaning of Khas possession of the intermediary over the land which may be deemed to be settled with him by virtue of section 6 of the Act. The defendants ' possession being the mortgagees ' possession, the case is covered by the terms of section 6 itself. Apart from it, it has been held in the case of Brij Nandan Singh vs Jamuna Prasad Sahu and Another (First 300 Appeal No. 205 of 1948) by a Division Bench of this Court that the words 'Khas possession include subsisting title to possession as well and any proprietor, whose right to get khas possession of the land is not barred by any provision of law, will have a right to recover possession and the State of Bihar shall treat him as Raiyat with occupancy right and not the trespassers. The contention of the learned Advocate General must fail in terms of the above decision. " On the date of vesting, the appellants were not in possession as mortgagees. The mortgages had been redeemed in 1943, Thereafter, the possession of the appellants wasnot as mortgagees. It may be as trespassers or in any other capacity. The land in suit, therefore, did not come within cl. (c) of section 6 of the Act as it stood when the High Court. delivered the judgment. Reliance was placed by the High Court on the case reported as Brijnandan Singh vs Jamuna Prasad (1) for the construction put on the expression 'khas possession ' to include subsisting title to possession as well, and therefore for holding that any proprietor, whose right to get khas possession of the land is not barred by any provision of law, will have a right to recover possession and that the St .to of Bihar shall treat him as a raiyat with occupancy right and not as a trespasser. We do not agree with this view when the definition of 'khas possession ' means the possession of a proprietor or tenure holder either by cultivating such land himself with his own stock or by his own servants or by hired labour or with hired stock. The mere fact that a proprietor has a sub sisting title to possession over certain land on the date of vesting would not make that land under his 'khas possession '. (1) A. I. R. 1958 Pat. 301 It is clear therefore that the land in suit cannot de deemed to be settled with the respondents by the State in accordance with the provisions of section 6 of the Act. In the absence of any such settlement, no rights over the land in suit remained in the respondents after the date of vesting, all their rights having vested in the State by virtue of sub. section (1) of section 3 of the Act. We are therefore of opinion that the respondents lost their right to recover possession. from the appellants, even if they were trespassers, on their estate vesting in the State, by virtue of sections 3 and 4 of the Act and that therefore, thereafter, they had no subsisting right to recover possession from the appellants. The right to possession now vests in the State. The respondents being no more entitled to recover possession of the land in suit the decree of the High Court has to be set aside. We, accordingly, allow the appeal, set aside the decree. of the Court below and restore the decree of the trial Court, though for reasons other than those given by that Court in its judgment. In the circumstances of the case, we order the parties to bear their own costs. Appeal allowed.

IN-Abs

The plaintiff respondents sued the appellants for recovery of possession of the lands in dispute. The appellants had entered into possession of the lands on the strength of a mortgage deed. The mortgagors executed another mortgage with respect to their milkiat interest in favour of certain persons. The plaintiff respondents bought the milkiat rights shares together with the kasht lands from the mortgagors and entered into possession of the milkiat property and subsequently redeemed the mortgage deeds in 1943. The appellants however did not make over possession of the lands in dispute after the mortgages had been redeemed. The trial court found that the plaintiff respondents had no subsisting title to the lands and that the suit was barred by adverse possession and limitation. The High Court, on appeal filed by the plaintiff respondents, allowed the appeal on the 291 ground that the defendant appellants were in possession only as mortgagees and that after the redemption of the mortgage they had no right to continue in possession. The appellants than appealed to the Supreme Court by certificate granted by the High Court. Apart from the ques tions of estoppel and limitation by adverse possession the main point which was raised in the appeal was that the plaintiff respondent had no subsisting title to evict the appellant in view of the provisions of the Bihar Land Reforms Act, 1950. Held, that the suit was instituted within twelve years of the redemption of the mortgage deed and was not therefore barred by limitation. Section 4 of the Act vests in the State all the interests of the proprietor or tenure holder, including the right to recover possession from the trespasser, except those interests which are expressly saved by the Act. Since no mortgage subsisted on the date of the vesting in the State the respondent could not take advantage of section 6(1) (c) of the Act (as amended by Act XVI of 1959). The mere fact that a proprietor had a subsisting title to possession over certain land on the date of vesting would not make that land under his 'Khas Possession '. The res pondents lost their right to recover possession from the appellants even if they were trespassers, on their estate vesting in the State. Brijnandan Singh vs Jamuna Prasad A. I. R., 1958 Pat. 589, Haji Sk. Subhan vs Madhorao [1962] Supp. I S.C.R. 123.

Criminal Appeal No. 152/59. , xi Appeal by Special leave from the judgment and Order dated May 12, 1959 of the Allahabad High Court in Criminal Revision No. 1182 of 1957. Nur ud din Ahmed, J.,B. Dadachanji, O. C. Mathur, and Ravindar Narain for the Appellants. 852 G. C. Mathur and C.A. Lal for the Respondent. May 3. The Judgment of the Court was delivered by KAPUR, J. The appellants are father and son carring on business in vegetable ghee at Aligarh. They along with Romesh, the second son of appellant Jagannath Prasad were prosecuted under section 14 (d) of the U. P. Sales Tax Act, 1948 (U.P. 15 of 1948) hereinafter called the 'Act ' and under section 471 read with section 468 and section 417 of the Indian Penal Code. They were all acquitted of the charge under section 468. Jagannath Prasad was convicted under section 471 and 417 of the Indian Penal Code and a. 14 (d) of the Act and was sentenced to two years ' rigorous imprisonment under a. 471, to one years ' rigorous imprisonment and a fine of Rs. 1,000/ under section 417 and to a fine of Rs. 1,000 under section 14 (d) of the Act. Bhagwan Das was convicted under section 14 (d) of the Act and sentenced to a fine of Rs. 1, 000/ . Romesh was acquitted. The sentences passed on Jagannath Prasad were. concurrent. Their 'appeal to the Sessions Judge was dismissed and in revision to the High Court Jagannath Prasad was acquitted of the offence under a. 417 of the Indian Penal Code but the other convictions and sentences were upheld. Against this judgment and order of the High Court of Allahabad the appellants have come to this court by special leave. The facts leading to the appeal are these: In 1950 51, the firm of the appellants purchased vegetable ghee valued at about Rs. 3 lacs from places outside the State of U. P. in the name of four fictitious firm. The firm made its return for that year to the Sales Tax Officer Aligarh and did not include the sale proceeds of these transactions on the ground that they had purchased them from these four firms who were supposed to be carrying 853 on business in Hathras, Aligarh, and other places in U. P. By thus not including the proceeds of the sales of these transactions the firm evaded payment of sales tax for that year on those transactions. The return of sales tax made by the firm was accepted by the Sales Tax Officer with the consequence that the sale of goods covered by those transactions was not taxed. A complaint was made against the Sales Tax Officer in regard to these transactions; an enquiry was held with the result that the appellants and Romesh were prosecuted and convicted as above stated. In the High Court there was no controversy about the facts i. e. the finding of the courts below that the appellants ' firm purchased vegetable ghee from outside U. P. and did not show the sale proceeds of the sale of those goods on the ground that they had been purchased from inside the State of ' (J. P. when in reality they had been purchased from outside the State, that the statements made by the appellant Jagannath Prasad before the Sales Tax Officer were false and that the bills produced by him before the Sales Tax officer were forged. The conviction was challenged on grounds of law alone. Before us five points were raised: (1) that no sales tax was exigible on these transactions under a. 3A of the Act in 1950 51 and liability arose by the amendment of the Act in 1952 which gave retroactive operation to the section and became applicable to sales in dispute and therefore there could be no prosecution under an ex post facto amendment; (2) the trial of the appellants was illegal because of ' want of complaint by the Sales Tax Officer under a. 195 of the Criminal Procedure Code; (3) there was no offence under section 14 (d) of the Act; (4) forged invoices were produced by appellant Jagannath Prasad because they were called for by the Sales Tax Officer and therefore it cannot be said. that they were used by the appellant and (5) the Sales Tax Officer having accepted 854 he invoices as genuine no prosecution could be Entertained in regard to those invoices. Now the appellants cannot be prosecuted on the basis of any amendment subsequent to the date of the alleged offence committed by them. Both parties are agreed on that and therefore we have to see the Act as it stood on the date when the offence is alleged to have been committed. According to the charge the offence was committed on or about July 16, 1951, when forged invoices produced by the appellants before the Sales Tax Officer. So what we have to see is the law as it stood on that day. Section 3 of the Act deals with liability to tax under the Act and section 3A with single point taxation. Under section 3 every dealer was required to pay on his turnover of each assessment year a tax at the rate of three pies a rupee. Thus the tax was payable in regard to all sales but under section 3A (1) the tax was leviable only at a single point. That section provided. section 3A (1) "Notwithstanding anything contained in section 3, the State Government may, by notification in the official Gazette, declare that the turnover in respect of any goods or class of goods shall not be liable to tax except at such single point in the series of sales by successive dealers as may be prescribed". The Government could declare the tax to be payable at a single point but there were two requirements; there had to be a notification in the Official Gazette declaring the point at which the tax was payable and in the series of sales by successive dealers it had to be "as may be prescribed" i. e. as may be prescribed by rules. Section 3A was amended in 1952 with retrospective effect but retroactive provision is not applicable to the present proceedings. Under section 3A a notification No. 1 (3) was issued on 855 June 8, 1948, declaring that the proceeds of sales of vegetable ghee imported from outside shall not be included in the turnover of the dealer other than the importer himself. The effect of the notification thus was that if a dealer imported vegetable ghee from outside U. P. and sold it he was required to include the sale proceeds in his turnover but the other dealers who bought vegetable ghee from the importer in U. P. and sold it were not so required. The appellants having thus imported the vegetable ghee from outside U. P. were required by the notification to include the proceeds in their turnover and it was to avoid this that they falsely produced forged invoices that they had purchased the vegetable ghee from those fictitious dealers within the State of U. P. and thus if the notification was an effective notification the appellants successfully evaded the payment of sales tax which under the law they were required to pay. But it was agreed that the notification was ineffective in view of the words "as may be prescribed" because that could only be done by rules and no rules bad been made under section 3A which made every dealer liable to sales tax if he was an importer from outside U. P. To this, extent the contention of the appellants is well founded and therefore under a. 3A merely by notification the Government could not prescribe a single point taxation as was done by the notification but that does not help the appellants very much. Under section 3 every dealer was liable to pay sales tax on every transaction and section 3A only gave relief in regard to sales at every point and thus prevented multi point taxation. If the notification under section 3A was ineffective, as indeed it was, the appellants were required to pay tax on all their sales and in order to escape multi point taxation they took advantage of an ineffective notification and tried the false plea of the goods having been imported by fictitious persons and their having purchased those goods from those 856 fictitious dealers and in this manner the appellants escapes payment of sales tax under section 3. In other words they tried to take advantage of section 3A by producing false documents and thereby evaded payment of tax under section 3 which every dealer was required to pay on his turnover. In trying to get the benefit under the ineffective notification issued under section 3A the appellants evaded payment of tax under section 3 which they were in any case liable to pay. It cannot be said therefore that no offence was committed under section 14 (d) of the Act which provides: Section 14. ,Offences and penalties. Any person who (a). . . (b). . . (c). . . (d) fraudulently evades the payment of any tax due under this Act, shall, without prejudice to this liability under any other law for the time being in force, on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees, and where the breach is a continuing breach, to a further fine which may extend to fifty rupees for every day after the first during which the breach continues". It is no defence to say that the appellants were asked by the Sale,% Tax Officer to produce invoices. The appellants were trying to get exclusion from their turnover of the sale of goods worth about 3 lacs and had made statements before the Sales Tax Officer in regard to it on July 9, 1951, and in order to prove that the goods 857 were not required to be included .,in the turnover the invoices were produced by appellant Jagannath Prasad. When a fact has to be proved before a court or a tribunal and the court or the tribunal calls upon the person who is relying upon a fact to prove it by best evidence it can not be a defence as to the offence of forgery if that best evidence which, in this case, was the invoices turn out to be forged documents. A person who produced those documents cannot be heard to say that he was required to prove his case by the best evidence and because be was so required be produced forged documents. It was then submitted that the Sales Tax Officer was a court within a. 195 of the Criminal Procedure Code and in the absence of a complaint in writing by such an officer no cognizance could be taken of any offence punishable under section 471 of the Indian Penal Code. This, in our opinion, is an equally erroneous submission. The Sales Tax Officers are the instrumentalities of the State for collection of certain taxes. Under the Act and the Rules made thereunder certain officers are appointed as Sales Tax Officers who have certain duties assigned to them for the imposition and collection of taxes land ID the process they have to perform many duties which are of a quasijudicial nature and certain other duties, which are administrative duties. Merely because certain instrumentalities of state employed for the purpose of taxation have, in the discharge of their duties, to perform certain quasi judicial functions they are not converted into courts thereby. In a recent judgment of this Court in Shrimati Ujjam Bai vs The State of U.P. (1), all the opinions were unanimous on this point that taxing authorities are not courts even though they perform quasi judicial functions. The following observation of Lord (1) (1963) 1 S.C.R. 778. 858 Sankey L. C. in Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation (1)was quoted with approval : The authorities are clear to show that there "The authorities are clear to show that there are tribunals with many of the trappings of a court which, nevertheless are not courts in the strict sense of exercising judicial power". Lord Sankey also enumerated some negative propositions as to when a tribunal is not a court. At p. 297 his lordship said : "In that connection it may be useful to enumerate some negative propositions on this subject : 1. A tribunal is not necessarily a Court in this strict sense because it gives a final decision. Nor because it hears witnesses on oath. Nor because two or more contending parties appear before it between whom it has to decide. Nor because it gives decisions which affect the rights of subjects. Nor because there is an appeal to a Court. Nor because it is a body to which a matter is referred by another body. See Rex vs Electricity Commissioners Hidayatullah J., 'in Shrimati Ujjam Bhai(2) case described Sales tax authorities thus : "The taxing authorities are instrumentalities of the State. They are not a part of the legislature, nor are they a part of the judiciary. Their functions are the assessment and collection of taxes and in the process of assessing taxes, they follow a pattern of action which is considered Judicial. They are not thereby converted into Courts of Civil judicature. They still (1) , 283. (2) (1963) 1 S.C R. 778. 859 remain the instrumentalities of the State and are within, the definition of State" in article 12". No doubt the Sales Tax officers have certain powers which, are similar to the powers exercised by courts. but still they are not courts as understood 'in section 195 of the Criminal Procedure Code. In sub section 2 of B. 195 it is provided: section 195(2) "In clauses (b) and (e) of sub section. (1) the term "Court" includes a Civil Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877". It cannot be, mid that a Sales Tax Officer, is a I Revenue Court. Under section 2(a) of the Act an assessing authority is defined to mean any person authorised by the State Government to make assessment under the Act and under R. 2(h) 'a Sales, Tax Officer means : "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". Thus under the Act a Sales Tax Officer is only an amassing authority. Under section 7 of the Act, if the Sale*. Tax Officer, after making such enquiries,as he thinks necessary is, satisfied that a return made is correct and, complete, he shall assess the tax on the basis thereof ' and it no return is submitted he, can make such enquiries as he considers necessary and then determine the turnover of a dealer, Thus his determination depends upon enquiries he may make and which he may, consider necessary. Sections 9, 10 and 11 of the Act deal with Appeals, Revisions and Statement of the Case to the High court. Under a. 13 power. is given 860 to a Sales Tax Officer to require the production of all accounts, documents and other information relating to business and accounts and registers ,shall be open to inspection of the Sales Tax Officer at all reasonable times. He has the power to enter any office, shop, godown, vehicle or any other place in which business is done which is a power destructive of the Sales Tax Officer being a Court which is a place where justice is administered as between the parties whether the parties are private persons or one of the parties is the State. Under section 23 certain secrecy is attached to documents filed before the Sales Tax officer and information received by him. Similarly under R. 43 certain power is given to the Sales Tax Officer to calculate turnover when goods are sold for consideration other than money and this is after such enquiry as he considers necessary. All these provisions show that the Sales Tax Officer cannot be equated with a Court. In our opinion therefore the Sales Tax Officer is not a Court. In Krishna vs Goverdhansiah(1), it was held that the Income Tax Officer is not law court within the meaning of section 195 of the Criminal 's Procedure Code and this view was accepted by this court in Shrimati Ujjam Bai 's(2) case. In Brajnandan Sinha vs Jyoti Narain(3), a Commissioner appointed under the Public Enquiries Act 1950 was held not to be a court. Shell Co. of Australia vs Federal Commissioner of Taxation (4) was referred to in that case. At p. 967 the following passage from Halsbury 's Laws of England, Hailisham Edition, Vol. 8, p. 526 was approved: "Many bodies are not courts, although they have to decide questions, and in so doing have to act judicially, in the sense that the proceedings must be conducted with fairness (1) A.I.R. (1954) Mad. (2) (1963) 1 S.C.R. 778. (3) ; (4) (1931) A.C. 275,2B3. 861 and impartiality, such as assessment committees, guardian committees, the Court of referee constituted under the Unemployment Insurance Acts to decide claims made on the Insurance funds the benchers of the Inns of Courts when considering the conduct of one of their members, the General Medical Council when considering questions affecting the position of a medical man" That passage is now contained in Vol. 9 of the 3rd Edition at p. 343. But it was submitted that the Sales Tax officer while acting as an assessing authority is a court within the meaning of section 195 (2) of the Procedure Code because by the amendment of 1923 the definition of the word "court" was enlarged substituting the word "includes" in place of the word "means" and the section now reads as has been set out above. Undoubtedly by this change the legislature did mean to make the definition of the word "court" wider but that does not enlarge the definition of the words "Revenue Court". The track of decision which was pressed on our attention is based primarily on a full bench judgment of the Bombay High Court in In re Punemchand Maneklal(1). In that case an Income tax Collector was held to be a Revenue Court within the meaning of the word as used in section 195. The learned Chief Justice who gave the judgment of the court proceeded on the basis that inquiries conducted according to the Forms of judicial procedure under Chapter IV of the Incometax Act were proceedings in a Revenue Court. This was on the ground that under the law as it then stood revenue questions were generally removed from the cognizance of civil courts and the officers charged with the duty of deciding disputed question relating to revenue between an individual and the (1) , Bom. 862 Government would be invested with the functions of &,,Revenue Court". This view was followed by the Bombay High Court in State vs Nemchand Pashvir Patel After referring to the various powers which were given to the Sales Tax Officers under the B " bay Sales Tax Act that Court proceeded to say that the Sales Tax Officers under the Bombay Sales Tax Act were Revenue Courts because ' they had jurisdiction to decide Questions relating to revenue, are exclusively empowered with the powers which are normally attributes of a court or a tribunal land are authorised to adjudicate upon a disputed question of law or fact relating to the rights of the citizens. The Madras High Court in In re B. Nataraja Iyer held that a Divisional Officer hearing appeals; under the Income tax Act was a court within the meaning of a. 476 of the Criminal Procedure Code but a Tehsildar who was the original assessing authority was not because there was no lis before him. There is one passage in the judgment of Sundara Ayyar J., which is of significance. It was said: "I may observe that I am prepared agree with Dr. Swaminathan that more. authority to receive evidence would not make the officer recording it a Court". At page 84, it was said that the determination of the assessment in the first instance may not be of a court although the assessing officer may have the power to record statements. But an appeal against the assessment is dealt with by the Collector in the manner in which an appeal is ' disposed of by ' a Civil Court. In this connection reference may be; made to the statement of the law contained in the judgment of Venkatarama Ayyar J., in Shri Virinder Kumar Satyawadi vs The State of Punjab (2). There, (1) (1956)7 S.C.R. 404. (2) , 1018. 863 the, distinction between a quasi judicial tribunal and a court,was given as follows "It may be stated broadly that what disti nguished a Court from a quasi judicial tribu nal is that it is charged with a duty to decide disputes in a judicial manner and declare, the rights of parties in a definitive judgment. ,To decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. And it also imports an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law. When a question therefore arisen as to whether an authority created by an Act is a Court as, distinguished from a quasi judicial tribunal, what has to: be decided.is whether having regard to the provisions of the Act it possesses all the attributes of a Court". Dealing with quasi judicial tribunals it was observed in Gullapelli Negeswara Rao vs The State of Andhra Pradesh(1) : ",The concept of a quasi judicial act, implies that the act is not wholly judicial, it describes only a duty cast on the executive body or authority to,conform to the norms. of judicial procedure in performing some act in the, 'exercise of its executive power". It is not necessary to refer to other cases because they were decided on their own facts and related to different tribunals. In our opinion a Sales Tax Officer is not a Court within the meaning of.s. 195 of,the criminal Procedure Code and there. fore it was not necessary for a Sales Tax Officer to (1) (1959) Supp. 1 S.C.R. 319, 353 4. 864 make a complaint and the proceedings without such a complaint are not without jurisdiction. In our opinion the appellants were rightly convicted and we therefore dismiss this appeal. The appellant Jagannath Prasad must surrender to his bail bonds. Appeal dismissed.

IN-Abs

The appellants who carry on the business in vegetable ghee purchased vegetable ghee from outside U. P. in the name of four fictitious firms. In their return of sales tax they did not include the sale proceeds of these transactions on the ground that they had purchased from the four firms and that under a notification made under section 3A of the U. P. Sales Tax Act, tax was leviable only at a single point on the sale by the outside suppliers to these four firms. In support of this the appellant No. 1 made a false statement before the Sales tax Officer and also filed forged bill,. before him. The return was accepted by the Sales Tax Officer with the result that the sales covered by these transactions were not taxed. The appellants were tried and convicted for offence under section 471 Indian Penal Code for using forged documents and under section 14(d) of the Act for fraudulently evading payment of tax due under the Act. The appellants contended that the trial for the offence under section 471 was illegal as no complaint had been made by the Sales Fax Officer as required by section 14 (d) of the Act was not made out as no tax was payable under 'section 3A because the notification issued thereunder was invalid. Held, that the Sales Tax Officer was not a Court within the meaning of section 195 Code of Criminal Procedure and it was not necessary for him to make a complaint for the prosecution of the Appellants under section 471 Indian Penal Code. A Sales Tax Officer was merely an instrumentality of the State for purposes of assessment and collection of tax and even if he was required to perform certain quasi judicial functions, he was not a part of the judiciary. The nature of the functions, of a Sales Tax Officer and the manner prescribed for their 851 performance showed that he could not be equated with a Court. Nor could he be said to be a Revenue Court. Though the definition of Court in section 195 of the Code Was enlarged by the substitution of the word "include" for the word "means" by the amendment of 1923, it did not change the definition of "Revenue Court. " Smt. Ujjam Bai vs The State of U. P. (1963) 1 S.C.R. 778), Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation and Brajnandan Sinha vs Jyoti Narain ' ; , applied. Krishna vs Gocerdhanaiah, A. I. R. , approved. In re: Punamchand Maneklal (1914) 1. L. R. and State vs Nemchand Pashvir Patel, (1956) 7 section T. C. 404 not approved. In re : R. Nataraja Iyer (1914) 1. L. R. and Shri Virender, Kumar Satyawadi vs The Sate of Punjab,[1955] 2 section C. R. 1013 referred to. Held, further that the appellants were rightly convicted under section 14 (d) of the Act. Sales tax was payable under s.3 of the Act in respect of all sales. But under s.3A it was leviable only at a single point if the Government issued a notification declaring the point at which tax was payable and it was so prescribed by the rules. Under the notification issued by the Government tax was payable only by the dealer who imported the goods and sold them. The appellants having imported the ghee were liable to pay the tax on the sales of this ghee which they fraudulently evaded. Though the notification was ineffective as no rules were made under the Act prescribing the single point, it did not help the appellants, as the only effect of this was that section 3A did not come into play. In trying to get the benefit of the ineffective notification under section 3 A the appellants evaded payment of tax under section 3 which they were liable to pay.

iminal Appeal No. 72 of 1962, Appeal by special leave from the judgment and order dated February 8, 1962, of the Allahabad High Court in Criminal Appeals Nos, 1728 and 1739 of 1961 and Referred No. 125 of 1961. Jai Gopal Sethi, A.N. Mulla, J.B. Goyal, C.L. Sareen and R.L. Kohli, for the appellants, G.C. Mathur and C.P. Lal, for the respondent, 1962. May 4. The Judgment of Das. Sarkar, Dayal, JJ., was delivered by Dayal, J. The Judgment of Kapur and Hidayatullah, JJ., was delivered by Kapur, J. RAGHUBAR DAYAL, J. Raghav Prapanna Raghul Tripathi, hereinafter called Raghav, Ramanuj Das, Jai Devi, Mohan and Udham Singh, appeal by special leave against the order of the High Court of Allahabad, dismissing their appeal against their conviction by the sessions Judge, Etawah, Raghav, was convicted and sentenced to death under section 302 1. P. C. He and the other apppellants were also convicted of the offence under section 201 I. P. C. Ramanuj Das was convicted of the offence under a. 176 1. P. C. also. The prosecution case, in brief, is that Raghav shot dead his first wife Kamla, and their son Madhusudhan, aged about 4 years, at about sunset on April 5, 1961, at their house in village Hamirpur Roora, District Etawah The motive for this conduct is "id to be Raghav 's not caring for Kamla and ill treating her after his marrying one Bimla in 1954. Kamla had to go to her father 's place and stay there for about two years on account of the alleged ill treatment she got at her husband s 242 hands. She was, however, brought back by Ramanuj Das, in 1960. He assured her father that she would be well looked after and that he would transfer 90 bighas of land to her and pay her Rs. 10,000/ . It is also alleged that earlier in the day on April 5,[1961] Ramanuj Das bad ultimately promised to Lakhan Prasad that he would execute the necessary transfer deed on Monday following and that Raghav left the place during their conversation in this regard. It is alleged that he did so as he resented the idea of so much property and cash, which would have ultimately benefited him, being made over to Kamla. This resentment is said to have prompted Raghav to murder his wife and son that evening. We may now mention facts to show the connection of Ramanuj Das and other accused with Raghav which is said to have led them to be parties to the disappearance of the evidence about the murders in order to protect Raghav from legal punishment and thereby to commit the offence under section 201 1. P. C. Lachman Das was the Mahant of the temple in village Hamirpur Roora. Narayan Das, father of Raghav, and Ramanuj Das were his disciples. On Lachman Das, death, Ramanuj Das succeeded him as Mahant, though Narayan Das was the senior disciples, as Narayan Das bad taken to secular life. Ramanuj Das, Raghav, Jai Devi, mother of Raghav. Raghav 's wife Kamla, and Madhusudhan, all lived as a joint Hindu family in the house in which there was the temple. Mohan Singh was a servant of Ramanuj Das. Udham Singh was also alleged to be a servant of Ramanuj Das. Raghav mostly lived at Lucknow with Bimla and his sisters who were studying there. He is 243 a law graduate. He possessed a jeep car whose registration number was U. section J. 3807. No information was conveyed by anyone to the police about the numbers for about two days. Khushali, Chaukidar, lodged a report at 9.20 a. m. on April 7, 1961, at police station Airwa Katra, District Etawah. The Station Officer was not present at the police station. This report may be usefully quoted here: "Day before yesterday in the night Raghav of my village, who is a son of Narain Das, has murdered his wedded wife and son by firing at them with the gun of Mahant Ramanuj Das. He has gone somewhere with the two dead bodies in a car. There is a rumour about, it in the whole of the village. Having heard of it, I went to the Mahant who is also the Pradhan of my village. I asked him to give me something in writing, so that I would go to the Police Station and make a report. The Mahant then asked me to wait and to go only after Thakur Dalganjan Singh had some. I did not listen to him, although he kept on forbidding. I have come to make a report. " Sub Inspector Brij Raj Singh Tomer, Station Officer, Airwa Katra, received the copy of the first information report at 11 a. m., and immediately proceeded to the spot and reached there at 2 p. m. He inspected the house of Ramanuj Das and prepared the site plan. He suspected blood stains at about 11 places in the house and took the stained plasters from those places and put them in different packets. All the 11 packets were then sealed in a single bundle. The Chemical Examiner found the plasters in 5 of these packets to be stained with blood. The 244 Serologist could not determine the origin of the blood on account of its disintegration. The positions of the plasters found bloodstained are not clearly made out from the various documents, but, in view of the fact that 11 stained plasters were taken in possession from over the door in the front wall of the southern outer room or from its floor or its wall, that at least 2 of the blood stained plasters were from the southern outer room portions, even if the other three blood stained plasters were from the outer wall of the northern room, the roof of the temple and the floor of the southern inner room. Sub Inspeotor Brij Raj Singh Tomer did not find any of the appellants in the village. On April 12, 1961, Bashir Hussain, Deputy Superintendent of police, visited the spot and recovered suspected blood stained earth from the parnalas of the roof of the house and also from the land on which the water of the parnalas fell. He took 7 samples of such earth, put them in 7 packets and sealed them in a bundle. The Chemical Examiner found the earth of two such packets to be stained with blood. Again, the Serologist could not determine the origin of blood due to disintegration. On April 16, 1961, Bashir Hussain recovered Raghav 's shirt and pyjama from Snowhite, Cleaners & Dyers at Lucknow, as they were suspected to be stained with blood. No blood was detected on the pyjama. The Chemical Examiner found blood stains on the shirt. The Serologist could not detect the origin of the blood. The police failed to discover the dead bodies of Kamla and Madhusudhan and also the jeep car. 245 Raghav surrendered in the Court of the Magistrate at Barabanki on April 20. Mohan was arrested on April 9, Ramanuj Das surrendered in the Court of the Judicial Officer, Bidhuna, on April 24, 1961, Jai Devi applied for bail on April 27, presumably, she surrendered on that day. As a result of the investigation, the appellants were sent up for trial. All the appellants denied that they committed the offences with and stated that they had been falsely implicated. There is no direct evidence about Raghav 's committing the murder of Kamla and Madhusudhan. Neither is there direct evidence about his carrying away the dead bodies of Kamla and Madhusudhan in the jeep that night from village Hamirpar Roora as alleged for the prosecution. There is no direct evidence about Ramanuj Das or any other accused being a party to the removal of the dead bodies from the house. The entire case against the appellants depends on circumstantial evidence. We may deal with the circumstances which the learned Sessions Judge and the High Court found established and from which they concluded that Raghav murdered Kamla and Madhusudhan and that thereafter, Raghav, Mohan and Udham Singh, with the connivance of Ramanuj Das and Jai Devi, carried away the dead bodies in the jeep and disposed of them. These circumstances are 1. On April 5, 1961, Kamla and Madhusudhan were in the house of Ramanuj Das. 2. Kamla and Madhusudhan were last seen alive on April 5, 1961, in the evening. On April 5, 1961, Raghav Prapanna was also in the house of Ramanuj Das. 246 4. On April 5, 1961 at about 5 or 6 p.m. three gun shots were fired on the roof of Ramanuj Das. On April 5, 1961, at about 9 or 10 p. m. Raghav Prapanna, Mohan and Udham Singh left village Hamirpur Roora on the jeep of Raghav. On April 5, 1961, at about 11 p. m. Raghav Prapanna purchased petrol from Bidhuna Petrol Pump. On April 6, 1961, at about 8. 30 a. m. Raghav Prapanna crossed. Rawatpur barrier in Kanpur. On April 6, 1961, Raghav Prapanna got a post card sent by his sister that Kamla had reached Lucknow safely. On April 7, 1961, blood stained earth was recovered from the house of Ramanuj Das from 11 different places. On April 14, 1961, blood stained earth was recovered from the house of Ramanuj Das from 7 different places. All the accused absconded after the alleged murder. Blood stained shirt and pyjama belonging to Raghav Prapanna were recovered from the possession of Snow white Dyers and Cleaners, Lucknow. The police could not trace out the jeep of Raghav Prapanna in spite of beat efforts. On behalf of the appellants it is not dispute hat the circumstances numbered 1, 2, 7, 9, 10, 1 247 and 13 have been established. It is contended for the appellants that the other circumstances have not been proved and that, even if proved, all the aforesaid circumstances are insufficient to lead to the sole conclusion that Raghav committed the murders of Kamla and Madhusudhan and that he and the other appellants were parties to the removal of the dead bodies. Kamla and Madhusudhan were in the house on April 5, 1961. They were not seen after the evening of April 5, 1961, The third circumstance is disputed, Raghav states that he had left Hamirpur Roora on April 4. This finds support from the statement of Sri Ram, P.W. 3, that he had seen Raghav pass via Samain in a jeep that night. He saw this on Tuesday, April 4, 1961 was a Tuesday. Even if he was in the village on April 5, his presence in the house does not put him in such a position that his omission to furnish information about the whereabouts of Kamla and Madhusudhan or as to what happened to them should point to his committing their murders. He was not the only person in the house to know of what happened to them. There were other persons in the house. It is true that the circumstance of his presence in the house and the absence of any activity on his part to make enquiries about Kamla and Madhusudhan when they were not seen in the house on April 6, is a conduct which is not expected from a husband, even if the relations between the husband and the wife be strained. The fourth circumstance that three gun shots ,were fired from the roofs of Ramanuj Das at about 5 or 6 p.m. on April 5, cannot lead reasonably to the only conclusion or even to a reasonable suspicion that Raghav did fire those shots, that he 248 fired them in the room and that he shot dead his wife and son by that firing. The connection between the firing of gun shots from the side of the roof of Ramanuj Das and the alleged murders, seems to us to be too remote to arrive at the conclusion that Raghav had killed his wife and son In this connection, reference may also be made to circumstances Nos. 9 and 10, relating to the recovery of the bloodstained earth from the house. The blood stained earth has not been proved to be stained with human blood, Again we are of opinion that it would be far fetched to conclude from the mere presence of blood stained earth that that earth was stained with human blood and that the human blood was of Kamla and Madhusudhan. These circumstances have; therefore, no evidentiary value. The facts that Kamla 'and Madhusudhan have not been seen since the evening, of April 5, 1961, and that blood stains, not proved to be of human origin, were found in that room, are not sufficient for holding that they must have been murdered, however strongly one may suspect it in view of the unlikelihood of their having left the house for any other place. In this connection, reference may also be made to circumstance No. 8. Exhibit Ka 7 was addressed by Govind Kumari, sister of Raghav, to Ramanuj Das on April 6, 1961, from Lucknow. It is stated in this post card that Raghav etc., had arrived safely and that as 'bhabi ' had also arrived, it was not necessary for her to cook food etc. '. This letter, according to the post mark, reached Samrin Post Office on April 10, and was not delivered till April 13, to the addressee, as he was not present, and was ultimately handed over to 249 the Deputy Superintendent of Police, in compliance with the orders of the Magistrate. under section 95, Cr. P. C. It is alleged that this letter was written at the instigation of Raghav in order to prepare evidence about Kamla 's reaching Lucknow on April 6. There is however no evidence on record about Raghav 's having a hand in the sending of this letter by Govind Kumari. She was not examined to prove the contents of her letter and to explain to whom she referred to as bhabi ' Raghav has stated that he had gone to Lucknow along with Rama Sewak 's wife, whom he also called bhabi '. That may be true or not. The fact remains that there is no evidence that Govind Kumari wrote this postcard with a purpose and at the instigation of Raghav. The evidentiary value of this postcard is nil and the conclusions that Raghav got this. letter sent is not justified when there is no evidence to that effect and there is no definite proof that the expression bhabi ' referred to Kamla. Support for. the inference that the expression 'bhabi 'referred to Kamla has been found, by the Court below, from complete omission to Govind Kumari 's sending wishes to Kamla and Madhusudhan, as it is expected that if she knew that they were at Hamirpur Roora, she would have conveyed her wishes to them. One can normally expect this, but it is in the statement of Lakhan Prasad, P. W. 6, that there could not have been good relations between Govind Kumari and Kamla. Lakhan Prasad deposed that on his asking Kamla the cause of her unhappiness for the last four years, she told him that one Sub Inspector Iqbal visited her father in law 's place and had illicit connection with Govind Kumari and that these persons, together with Raghav, used to take wine and meat in the temple. She further told him that her complaint to her mother in law in this respect 250 went un heeded. It follows, therefore, that omission of the usual courtesies in the postcard from Govind Kumari need not lead to the conclusion that it was on account of the attempt to show, when need be, that Kamla and her son had reached Lucknow and were alive on April 6, 1961. Circumstances 5 and 6, by themselves, are not sufficient to lead to the conclusion that Raghav had taken the corpses of Kamla and Madhusudhan in the jeep from the village on the night of April 5, 1961, when there is no evidence of any witness about seeing any such things in the jeep which might reasonably lead to the inference that they contained the dead bodies. The 7th circumstance, does not in any way go against Raghav, as he himself admits to have gone to Lucknow from village Bhuwain on April 6, 1961. In doing so he would pass Rawatpur barrier. This circumstance, in a way, supports his version and has nothing incriminating in itself. The 11th circumstance, as stated, is not quite correct. All the accused did not abscond after the alleged murders. Ramanuj Das himself was in the village till the morning of April 7, according to the statement of Khushali, Chowkidar, who lodged the first information report. If he and others left the house after knowing of the report lodged by the chowkidar, that is understandable. The mere absconding, however, may lend weight to the other evidence establishing the guilt of the accused, but, by itself, is hardly any evidence of guilt. The 12th circumstance, is about Raghav 's shirt being found to be stained with blood by the Chemical 'Examiner. The bloodstain has not been proved to be of human origin. In the circumstances, this circumstance has no evidentiary value in 251 connecting Raghav with the offence of murder. Further,the shirt was recovered from the Dry Cleaners on April 16. It was given to them on April 9. The murder is said to have taken place on April 5. Bloodstain on the shirt could have been due to reasons other than Raghav 's taking part in the murder of his wife and son. In this connection, reference must be made to the statement of Babu Lal, P. W. 7, the proprietor of the Snowhite Cleaners & Dyers to the effect that when Raghav gave him the shirt for washing it was not blood stained. He has also stated that even when the Sub Inspector took it in possession, it was not blood stained. The High Court considered Babu Lal 's statement to be untrue as he had signed the recovery list which stated that the shirt had stains suspected to be washed bloodstains. There was no statement that the shirt had bloodstains on April 9 when it was given for washing. Further, if the signing of the recovery list by Babu Lal as a witness to the recovery be taken to be his statement about the correctness of its contents, that statement would be inadmissible in evidence in view of section 162, Cr. The last circumstance, as a piece of evidence against the accused, is that the police could not trace out the jeep of Raghav in spite of best efforts. The inability of the police to find the jeep does not prove that the jeep, if found, would have furnished evidence against Raghav by showing the existence of human blood stains on its parts and thereby indicating that it was used in removing the corpses. If it had been recovered and human bloodstains had been found on it, there would have been some evidence against the accused about the jeep having been used for removing the dead bodies. But it is too much to conclude from the non recovery of the jeep that if recovered 252 it would have afforded evidence of existence of human bloodstains and thus of its having been used to remove evidence of murder. This circumstance has therefore no evidentiary value. In this connection, we must refer to the unusual conduct of the Magistrate in forwarding the letter of request by the Investigating officer under a. 94 Cr. P. C., to the Jailor, requiring Raghav to convey information in whose charge he left his jeep No. 3807 while surrendering in Court at Bar& banki, and the whereabouts of the jeep at the time. The Investigating Officer could have interrogated the accused in jail, as is usually done, of course, with the permission of the Magistrate. But, to attempt to get written replies from the accused, is unusual, if not unwarranted under the Code of Criminal Procedure. Any way, any reply given by the accused to such a query of the Investigating Officer, cannot be used in evidence in view of a. 162 of the Code of Criminal Procedure. We have now dealt with the pieces of circumstantial evidence which were accepted by the Courts below and are of opinion that those circumstances are not sufficient to support the finding that Raghav committed the murder of Kamla and Madhusudhan. The facts alleged to constitute motive for Raghav to commit the murders do not necessarily provide such a motive. Raghav married Bimla in 1954 and for seven years he appears to have continued his marital relations with Kamla as well. Madhusudhan was born in 1957. He may not be showing the same affection to Kamla after his marriage with Bimla as before. There might have been something of an estrangement in his relations towards her. But all this would not afford a motive for murdering her, and also their son Madhusudhan. The suggestion to Ramanuj Das to TOY 253 Rs. 10,000/ to Kamla and also to transfer 90 Bighas of land to her, even if true, need not have caused such a resentment to Raghav as to decide on murdering his wife and son. There is nothing on the record to indicate how such a transfer of cash and property would affect the total property of Ramanuj Das, and how, ultimately, Raghav would be affected by it. Apparently, Raghav would have no claim to the property left by Ramanuj Das as a mahant of the mutt or temple. The property would go to the successor of Ramanuj Das. Raghav who was leading a secular life, will dot succeed to the Mahantship, just as his father Narain Das, though a senior disciple of Lachman Das, did not succeed to it. His leaving the place when Ramanuj Das was approached by Lakhan Das to transfer cash and land to Kamla, does not necessarily indicate that he left as he resented the suggestion. There is no evidence that he raised any protest at the time or indicated by any expression that Ramanuj Das should not do so. We do not consider it reasonable to conclude from the mere fact of his leaving the place, that be did so on account of such keen resentment as would make him commit the murders of his wife and son. Lastly, there is no such circumstantial evidence which would establish that the appellants had removed and concealed the dead bodies. We have already referred to the absence of evidence about the dead bodies being carried in the jeep that night by Raghav. There is no evidence about the part which Ramanuj Das or Jai Devi played in the removal of the dead bodies. The fact that they were in the house and could have possibly known of the removal of the dead bodies, if that was a fact, would not by itself establish that they assisted in the removal of the bodies. We are therefore of opinion that no offence under a. 201 254 I. P. C. has been established against the appellants. Further. no offence under section 176 1. P. C. can be held proved against Ramanuj Das when there is no proof that Kamla and Madhusudhan were murdered. As a member of the village Panchayat he was bound to convey information to the nearest Magistrate or Officer in charge of the nearest Police Station about the commission of an offence under section 302, 1. P. C., only when a murder. had been committed and he know about it. The conviction of the appellants for the various offences is therefore not justified on the material on record. We therefore allow the appeal, set aside their conviction and acquit them of the offences they have been convicted of. They will be released forthwith from custody, if not required to be detained under any other process of law. KAPUR, J. This is an appeal against the judgment and order of the High Court of Allahabad confirming the conviction and sentences passed on the appellants. Of the appellants Raghav Prapanna Tripathi was convicted of murdering his wife Kamla and his son Madhusudhan on the evening of April 5, 1961 at Hamirpur Roora and was sentenced to death. He and other appellants were also convicted under section 201, Indian Penal Code for causing the disappearance of the evidence of the crime and were sentenced to five years ' rigorous imprisonment. Appellant Ramanuj Das was further convicted under a. 176, Indian Penal Code and sentenced to 3 months ' rigorous imprisonment. The conviction is based on circumstantial evidence. This Court in Anant Chintaman Lagu vs The State, of Bombay has laid down the princi (1) (1960)2 S.C.R. 460. 255 ples which govern such cases. In that case Hidayatullah J., at p. 516 quoting the observations of Baron Parke in Towell 's case(1) where the learned Baron laid down the principles applicable to such cases observed that any circumstance which destroys the presumption of innocence, if properly established can be taken into account to find out if the circumstances lead to no other inference but of guilt. Thus what we have to see is whether taking the totality of circumstances which are held to have been proved against the appellants it can be said that the case is established against the appellants i.e. the facts established are inconsistent with the innocence of the appellants and incapable of explanation on any hypothesis other than that of guilt. See also Govind Reddy, State of Mysore(2). It may also be observed here that ordinarily this court does not reassess the evidence and reexamine the findings reached by the courts below particularly where there are concurrent findings of fact, but it was urged before us that this is one of those cases where the rule laid down by the Privy Council in Stephen Seneviratne vs The king (3) applies i.e. on the evidence taken as a ,whole no tribunal could as a matter of legitimate inference arrive at the conclusion that the appellants are guilty. The inference of guilt of the appellants has been drawn from a number of circumstances which, according to the appellants, do not lead to the irresistible conclution that they are guilty and which, according to the submission of the res pondent, lead to only one conclusion and one alone that the appellants have been rightly convicted and sentenced. In order to satisfy ourselves at to the guilt of the appellants we have found it expedient in this case to go into the evidence and see whether the conviction is rightly based. (1) (2) A.I.R. 1960 S.C. 29. (3) A.I.R, 1931 P. C. 289, 299. 256 In village Hamirpur Roora which is in Itawah district there is a religious institution of which Lachhman Das was the Mahant. He had two chelas (disciples) tHe elder was Narain Das and the younger Ramanuj Das who is one of the appellants in the present case. Narain Das got married and was therefore excluded from succession. His wife is Jai Devi who is also an appellant and they has several children amongst whom is their son Raghav who is another appellant in the case and they have got younger sons and some daughters amongst whom we need only mention Govind Kumari who is M.A.LL.B. of the Lucknow University but she is neither a witness nor an accused in the case. The other two accused are Mohan Singh and Udham Singh who are retainers (if the Mahant. Raghav in the year 1950 was married to Kamla who was the daughter of Rain Sarup, a well to do gentleman living in another village. In 1954 Raghav married another girl who is also an M.A., LL.B. and she and Raghav with Govind Kumari and other sisters were living at Lucknow in a flat in Shankarpuri. The case for the prosecution is that after the marriage the relations between Kamla, the first wife, and Raghav were stained and she was ill treated by her husband and Kamla had to leave her father in law 's house and to go and live with her father in his village. Before this Kamla and Raghav bad a son Madhusudhan who was born in 1957. While Kamla was staying with her father, P.W. Lakhan Prasad intervened and suggested to Ramanuj Das appellant to 'give to Kamla Rs. 10,000 in cash and 90 bighas of land and this was agreed to by Ramanuj Das and on this assurance Ramanuj Das went to Kamla 's father 's house and brought back Kamla after the Bidai ceremony was perform. It has I been stated in the evidence of Ram Sarup which has been accepted by the High Court that Ramanuj Das himself had told him (Ram Sarup) that the money and the land would be given. 257 Sometimes in February 1961 i.e. about a month and half before the date of the alleged occurrence Ram Sarup went to the house of Ramanuj Das along with Lakhan Prashad P.W, He asked Ramanuj Das to execute the document in respect of the property and also in regard to the money and they were told by Ramanuj Das that after Raghav returned from Lucknow this would be done. After having this talk Ramanuj Das, Ram Sarup and Lakhan Prasad met Kamla in the house of Ramanuj Das and apprised her of this arrrangement. On April, 4, 1961 Lakhan Prasad came to know about the arrival of Raghav and on the following day i.e. April 5, 1961 he want to Vamanuj Das as he had been instructed by Ram Sarup and there he found both Ramanuj Das and Raghav. Lakhan Prasad then asked Ramanuj Das that the promise in regard to Rs.10,000 and 90 bighas of land should be carried into effect. Thereupon it is stated that Raghav got up abruptly and left, the place but Ramanuj Das promised to execute the document on the day Ram Sarup could come. Lakhan Prasad told Ramanuj Das that he would go to Ram Sarup on Saturday i.e. April 8, 1961 and bring him on the following day i.e. April 9, 1961 and then the document could be executed on Monday, April 10,1961. This arrangement was accepted by Ramanuj Das Lakhan Prasad then went and informed Kamla about it. According to the prosecution both Kamla and Madhusudan were murdered with gun shots sometime in the evening of April 5, 1961, the day the above ' talk took place. These gunshots were heard by three witnesses. The same evening Raghav left Hamirpur Roora by jeep accompanied by appellants Mohan Singh and Udham Singh 'I hey were seen passing through the village Samain at about 9 O 'clock by P W. Sri Ram. They then proceeded to Bidhupa where petrol was purchased from the shop of one Rain Bhajan P.W. This was at about 258 11 P.M. Ram Bhajan saw two other persons in the jeep which was being driven by Raghav. They then crossed the Ganga at Kanpur at the Rawatpur Barrier at 8.30 a.m. and from there proceeded to Lucknow, A post card was sent from Lucknow on April 6, 1961 by Govind Kumari in regard to the arrival of Raghav and others. It is not disputed that Kamla and Madhusudan were not seen alive after the evening of April 5, 1961. As a matter of fact it is admitted that she became "traceless" after Raghav left Hamirpur Roora. On April 7, 1961, Khushali Chowkidar of the village made a First Information Report at the police station to the following effect. "Day before yesterday in the night Raghav of my village,, who is son of Narain Das, has murdered his wedded wife and son by firing of them with the gun of Mahant Ramanuj Das. He has gone some where with the two dead bodies in a car. There is a rumour about it in the whole of the village. Having heard of it, I went to the Mahant who is also the Pradhan of my village. I asked him to give me something in writing, so that I should go to the Police Station and make a report. The Mahant then asked me to wait and to go only after Thakur Dalganjan Singh had come. I did not listen to him, although he kept on forbidding. I have come to make a report". The Sub inspector in charge of the Police Station had gone in connection with some official duty and therefore the above information was sent to him by the police. He came to Hamirpur Roora at about 2 p.m. and inspected the house where the deceased was residing. According to his statement he did not find any one in the house; he took some witnesses along with him and made a search of the house and there he found some patches 259 which looked like blood on the terrace and in the rooms of the first floor. He prepared a site plan and made a memorandum of what he saw there. This site plan and the memorandum that he prepared have been proved. He took into possession blood stained plaster pieces from II places from inside the room, put them into separate packets and made the packets into a bundle and sealed it. On April 12, 1961 Police Deputy Superintendent Bashir Hussain took in and the investigation and came to the place of the occurrence and found seven other places where there were marks which looked like blood marks and he took the earth into possession. These included places like Parnalas (water spots). These were also made into a sealed parcel but unfortunately all these articles were not sent to the Chemical Examiner till May 25, 1961 and when examined out of 11 pieces which had been collected by the Sub lnspector five were found to be bloodstained and of out seven pieces collected by Deputy Superintendent Bashir Hussian only two were found to be bloodstained. When these articles were sent to the Serologist the origin of the blood could not be ascertained as the blood by that time had disintegrated. The Sub Inspector searched for the, accused persons but could not find any one at the house or at other places. On April 10, 1961 he arrested Mohan Singh appellant but the others could not be traced. They excepting Raghav surrendered themselves on different dates in the Magistrate 's court in the district of Etawah Ramanuj Das on April 24 and Jai Devi on April 27. The Sub Inspector started a search for Raghav, looked for him in different places in Lucknow but he could not find him nor was his jeep found. April 20, 1961 Raghav surrendered in the court of the Magistrate at 260 Nawabganj in the district of Barabanki. In the application he stated as follows: "2. That Srimati Kamla daughter of Ram Swarup of village Manchhana, P. section Kotwali District Mainpuri, residing in my house has become traceless along with her minor son and in this connection a strong rumour has been set afloat by the enemies of the applicant 's family to the effect that she has been murdered. " He also stated that his name was being associated with the murder because of enmity. AD Affidavit was filed in the court of the Magistrate by Govind Kumari sister of the appellant in which it was stated that Kamla had run away from the house of Ramanuj Das after stealing ornaments. The jeep in which Raghav had left Hamirpur Roora Was never found in spite of the best efforts of the Police. During the course of their investigations the police recovered from the laundry of on Babulal P.W. in Lucknow a shirt and a pyjama belonging, to appellant Raghav. The police thought that there were blood marks both on the shirt as well as the pyjama but the Chemical Examiner only found three minute size bloodstains on the shirt but the origin of this blood also could not be discovered as the blood had disintegrated. The appellants were then tried before the learned Sessions Judge who convicted them as has been said above. The conviction was upheld by the High Court and the appellants have come to this court by special leave. It may be remarked that the dead body of Kamla or her son Madhusudan was never found and this is a case where there is no direct proof of corpus delicti. The question is whether in a case 261 like this and on the evidence which we are going to discuss, it can be said that a ease of murder has been proved and it has also been proved as to who committed the murder and further whether a case under section 201 has been made out. There are certain facts in this case which are not in controversy. The appellant Raghav after having been married to Kamla for about four years married a second time. His second wife is Vimla who is a graduate of the Lucknow University. It is not disputed that some time in 1959 Kamla with her son Madhusudan who was born in 1957 went to live with her parents, her father being a well to do resident of another village. She stayed with her parents for about two years and was brought back to Hamirpur Roora some time in 1960. The prosecution case is that this was on the promise that she will be given Rs. 10, 00) in cash and 90 bighas of land but this is denied by the defence. The High Court has found this fact proved. There is again no dispute about their (Kamla and her son Madhasudan) being alive upto the evening of April 5, 1961. On the night between April 5 and April 6, both Kamla and Madhusudan disappeared. They were not seen at the house of Ramanuj Das where they were residing and where also were residing her father in law and his family and her husband whenever he came to the village from Lucknow where he was a University student and where he had a flat of his own for his residence and that of his second wife Vimla and his sisters. It is also clear on this record that none of the members of the family i.e. Ramanuj Das, Jai Devi or any other made the slightest attempt to trace the whereabout of Kamla and her son after their disappearance. No report was made to the Police, no search was made. On the other hand when the chowkidar of the village Khushali P. W., asked Ramanuj Das 262 to give something in writing so that he could inform the Police regarding the rumour which was afloat in the village about the murder of Kamla and her son he told him to wait till Dalgajan Singh came. It was after this that the chowkidar made a report at the Police Station. The first question is as to whether Kamla and her son were murdered and the murder was committed in the house of Ramanuj Das as alleged by the prosecution. As we have said above both Kamla and her son were seen alive till the evening of April 5, 1961 and they were not seen thereafter. Both the courts below have found and there is evidence on the record that relations between Kamla and he husband Raghav were strained and it was for that reason that she had gone away to her parents house. Ram Swarup, Kamla 's father has deposed to this and so has Lakhan Prasad who deposed that whenever he met Kamla he found her to be unhappy. Ordinarily amongst families such as that of the appellant daughters in law do not go away to stay at their parents house unless there is reason for it. , The High Court has considered this evidence in regard to the relations between the husband and the wife at great length and it is not necessary to repeat those statements of the witnesses which have been referred to in the judgment of the High Court. We are satisfied that on this evidence the High Court has rightly found that the relations between the two were unhappy. In those circumstances it has to be enquired as to how and why Kamla came back to the house of her in laws along with her son. For that the evidence again is of Ram Swarup and Lakhan Prasad. Somewhere in 1960 Lakhan Prasad went to Ram Swarup and asked him that Kamla should be sent to Hamirpur Roora and that there would be no further trouble. we also told Ram Swarup that Ramanuj Das had decided to give Kamla a sum of Rs. 10,000 in cash 263 and 90 bighas of Land for cultivation on the understanding that she would reside at Hamirpur Roora. On this condition Ramanuj Das came and took Kamla with him after the bidai ceremony. On that occasion, according to ham Swarup, Ramanuj Das told him that he would settle the money and the land as promised. Sometime in February 1961 Ram Swarup accompanied by Lakhan Prasad went to the house of Ramanuj Das and asked him to perform his part of the promise to which Ramanuj Das replied that be would do so on the arrival of Raghav from Lucknow. On April 5, 1961, the date of the alleged murder, Lakhan Prasad went to the house of Ramanuj Das and there he had a talk with Ramanuj Das, Raghav was also sitting near Ramanuj Das. When Lakhan Prasad started talking about this matter Raghav got up and went away but Ramanuj Das promised that he would execute the document on Monday April 10, 1961 and it was arranged that Ram Swarup would also be present by them and Lakhan Prasad informed Kamla of this fact. The defence has denied this part of the prosecution ease and before us the evidence of Lakhan Prasad was severely criticised and reliance was placed on the criticism of this witness by the learned Sessions Judge. It appears that the learned Sessions Judge has been unduly severe on Lakhan Prasad merely because of a post card which was produced by, Ramanuj Das and proved by defense witnesses that the marriage between Kamla and Raghav was not brought about by Lakhan Prasad but by Dafadar Singh. Lakhan Prasad had deposed that he had brought about the marriage. It was also said that Lakhan Prasad was unable to recognise the photograph of Govind Kumari and other children and thus could not be very familiar with the family. But the evidence of Lakhan Prasad gets strong corroboration from the evidence of Ram Swarup. The 264 High Court was satisfied that on that day Ramanuj Das had agreed that he would execute such a document and we see no reason to differ from the finding of the High Court, The fact that Ramanuj Das was present for the settlement of money and land in favour of Kamla is amply proved on this record and it is equally clear that when this matter was broached in the presence of Raghav he suddenly left the place from which an inference might well be and has rightly been drawn that he was not very happy about this settlement. On the same evening three shots were heard by three witnesses P. W., Narain Singh, P.W. Lallu Singh and P. W. Babu Singh. Both the courts below have accepted the testimony of these witnesses. We have gone through the evidence of these witnesses and although there may be certain points on which the testimony of. these witnesses may legitimately be subjected to criticism, those points are Dot sufficient to detract from their evidence that they did bear three shots being fired. The defence had put forward the theory that it was the firing of a toy gun by the younger brother of Raghav which these witnesses heard on that day but this plea has rightly not been accepted by the High Court. The question then arises whether Raghav was in the village on April 5, the date of the murder. The case for Raghav is that he had left on the 4th and that he was not in the village on the 5th. One fact which has been taken into consideration against this plea is the statement of Lakhan Prasad when he states that in the presence of Raghav the question of settlement of land and of money was discussed and n Raghav got up and went away. This, according to Lakhan Prasad, was on the 5th. Then 265 there is the evidence to show that the jeep of appellant Raghav was seen in the house of Ramanuj Das on the evening of th. This evidence is of P. W. Narain Singh who saw the jeep in the house and of P. W. Lallu Singh who saw the jeep of Raghav going towards the north at about 9 or 10 O 'Clock on the evening of April 5, 1961 and finally the evidence of P. W. Babu Singh who says that on the same evening he heard the sound of car at about 10 p. m. He also stated that the only person who had a jeep or a car was Raghav. These witnesses have been believed and after going through their evidence we are of the opinion that they have been rightly believed. There is then the evidence of P. W. Sri Ram who says that on April 5. at about 10 p.m. he saw the jeep of Raghav in village Samain which is at a distance of a mile and in that jeep there were the appellant Raghav and the two appellants Mohan Singh and Udham Singh and that the back curtain of the jeep was drawn. This evidence was criticised on the ground that this witness had made a mistake as to the date which was 4th and also that he did not meet the appellant 's jeep there but at another place on the canal bank and it is argued that the statement of this witness is compatible with the case of the defence. It appears to us that Sri Ram has made a mistake about the date. He was deposing after a long time but corroboration is from another source and that shows that Sri Ram must have seen the jeep on the 5th and not the 4th. The jeep was seen at Hamirpur Roora on the 5th by two witnesses. Raghav was seen at the house on the 5th by Lakhan Prasad and his further movements have been traced also. Raghav took petrol from P. W. Ram Bhajjan who states that the petrol was purchased about 10 30 P. M. or 11 p. m. and considering the distance between Bidhauna and Samain that would probably be the 266 time when Raghav would be in Bidhuna. The evidence of this witness was also criticised that he made a mistake in regard to time and that petrol was brought at 2 p. m. and not in the night. It was argued that other cash memos bad not been taken from Ram Bhajjan which, if they had been taken, would have shown that the petrol was taken not at 10 30 p. m. or 11 p. m. but earlier in the afternoon. This witness has given good reasons why he remembered the time when petrol was taken by him. He stated that two days later he heard the rumour and then remembered the time and the date on which Raghav bad bought petrol from him. He was criticised for not remembering the time when Raghav bought petrol on the 4th but then he had no reason to recall that visit. In our opinion the testimony of this witness has been rightly accepted by the courts below. On the morning of 6th the jeep was seen at the barrier at the river Ganga at Kanpur at 8 30 a. m. and then Raghav went to Lucknow. From the evidence of demand of Lakhan Prasad for the Settlement of land on Kamla on April 5, 1961 in the presence of Raghav from the fact that the jeep of Raghav was seen in the village in the evening and his jeep was seen going from village Hamirpur Roora and again at Samain and Bhidhuna an inference has rightly been drawn that appellant Raghav was present in village Hamirpur Roora on April 5 and his plea that he left that village on the 4th is false. The police was informed about the rumour in the village of the murder of Kamla and her son on April 7 and the Sub Inspector Brijraj Singh Tomar came to the house of Ramanuj Das at about 2 p.m. He went into the house and inspected the place of occurrence and prepared a site plan and memo showing as to what he saw. This, he has sworn to be correct and there is no reason to doubt his testimony. According to his statement he found 267 what appeared to be blood at different places in the rooms and be took the plaster from those places. As we have said above the origin of this blood has not been proved because of disintegration but the fact is that blood was found in the rooms. The case put forward by appellant Raghav was that he started from the village on April 4 and want to his mother 's father 's house at Shah Nagla. From there he took with him his Dada Ram Sewak and the wife of Ram Sawak whom he called Bhabhi. He started from that place on April 5, 1961 at about 12 noon, took petrol from Bidhuna and reached Samain, which he wants us to read as Bhawain, where his mother 's sister is married and where he want to condole because the father in law of his mother 's sister bad died and from there he started from Lucknow on April 6, 1961 after taking refreshments. All these facts were capable of easy proof if facts they were. Neither the Dada nor the Bhabhi were examined The two persons who saw the appellant go in the jeep are P. W. Sri Ram and P.W. Ram Bhajan. The testimony of these witnesses has been believed by the courts below and with that we have agreed. Neither of them says that they saw a woman in the jeep. If the appellant left with Mohan Singh and Udham Sinah then there should have been four individuals in the jeep besides the appellant at the petrol pump. That is not the statement of P. M. Ram Bhajan nor is there any proof that as a matter of fact the father in law of the appellant 's mother 's sister (Massi) had died or that the appellant had gone there for the purpose of condoling or that he went there at all. We are unable to accept this explanation given by the appellant in view of the testimony of the witnesses who have been discussed above. Thus after the three gunshots were fired and heard by the three witnesses, the appellant 's jeep was seen leaving the village. It was seen in Samain with 268 the two appellants Mohan Singh and Udham Singh and it was then seen at Bidbuna "with two persons sitting at the back". This was on April 5. The explanation given by the. appellant, therefore, is false. When the appellant reached Lucknow his sister wrote a letter saying that the appellant etc. had arrived and that Bhabhi had also come and "as Bhabhi has come over here so I have not to worry about cooking of food". The defence submit that what was meant by Bhabhi wag Vimla or it may be Dada s wife and therefore it cannot he said that there was any oblique motive in the writing of this post card so as to create evidence in regard to Kamla being alive on April 6. 1951. The prosecution has rightly argued that in this post card there is no mention of Kamla. The father, uncle and mother and three younger children are mentioned but not Kamla or Madbusudan. To this the reply of counsel for the appellant was that there was not much love lost between Kamla and Govind Kumari and for that reason her name was not mentioned. But there wag nothing against the little boy who could have been mentioned as the other children. Even if Govind Kumari 's distaste be true that is an additional reason for saying that Kamla was not a very welcome member of the family of her in laws. The appellant then was found to be absconding. According to Sub Inspector Tomar efforts were made to search for him in different places where he would ordinarily be in the town of Lucknow or elsewhere but he was not found. Ultimately he went to Nawabganj in the district of Barabanki where on April 20, 1961 he surrendered himself before a Magistrate. In the application that he made for surrendering himself he stated, as has been said above, that Kamla d/o Ram Swarup who was living in his house was missing and it was being 269 said by his enemies that she had murdered and that his name had been mentioned in that connection due to enmity and that a warrant had issued against him although be was wholly unaware of her disappearance. This is rather an extraordinary conduct on the part of a husband. There is nothing to indicates that any attempt was made by the hus band to search for the missing wife and the child or anything was done by him in regard to that matter. He may not have worried about the mother but what about the child? The allegation of the prosecution that he was absconding and that when they searched for him they could not find him is satisfactorily established on this record. We are aware that the burden of proving everything against the appellant is on the prosecution and there is no burden on him to disprove anything but in a case of circumstantial evidence where there are circumstance of the kind which are proved in this case the cumulative effect has to be seen by placing together proved facts any conclusion drawn therefrom and in the absence of any explanation all that one has to consider is the prosecution evidence. There is another important circumstance ' A shirt of the appellant was recovered from a laundry on April 16. It was found to be bloodstained although the origin of the blood has not been proved by the prosecution. The fact remains that at three places this shirt which was given by the appellant on April 9, 1961 was found to be blood stained. Counsel for the appellant argued that this was a most innocuous circumstance because there is no proof that there was blood on the shirt on April 9 when it was given to the laundry and that merely three specks of blood being found on the 16th i.e. seven days later is not a circumstance which can be taken against the appellant. With this we do not agree. The appellant must consider himself lucky that the shirt was washed or it would 270 have cleared him or inculpated him still more. The fact that the blood was not visible to Babulal when the shirt was taken is not a circumstance which goes against the prosecution case because books on medical jurisprudence show that bloodstains are sometimes faint and invisible by ordinary light. The shirt was given to be laundered and Babulal will look for tears and damage and not for stains or dirt for which the shirt was given to be cleaned. The colour of the shirt was khaki and it is likely that the small stains would go unnoticed. After all the shirt was given for a wash. It is true that the blood was found on April 16, 1961 and there is no proof that it was there on April 9, 1961 but we see no reason why blood should suddenly appear seven days later on the shirt of Raghav. When be was asked in regard to this bloodstained shirt, his answer was "I do not know". In the circumstances the courts were justified in taking this to be a circumstance in the chain of circumstances which have to be placed together in order to determine whether the case has been made out against the appellant or not. Another very striking circumstance against the appellant is that the jeep in which Ragbav travelled from the village to Lucknow has vanished from the face of this earth. In spite of the beat efforts of the police it has not been found. Evidently the police wanted to interrogate the appellant in regard the whereabouts of the jeep but it appears that by an order dated April 28, 1961 the Magistrate ordered that the Investigating Officer should issue a written order requiring Raghav to produce the jeep "as well as to interrogate the accused", that the accused is at liberty to say whatever be likes and he could not be compelled either to produce the thing or to tell its whereabouts as this is his privilege under the law. It is then that the police made an order calling upon the appellant (Raghav) to produce the 271 jeep and of course it was never produced nor found. His reply cannot be read under section 162 Criminal Procedure Code and we leave have it out of account altogether. Every possible place was searched and it is significant that it has not been found till today and even when the evidence was being led about its disappearance the evidence was not contradicted. by driving the jeep to the court house and saying,, here it is. This, in our opinion, is a circumstance which can be taken into consideration in order to, determine the guilt or otherwise of the appellant. In the opinion of the High Court the jeep has not been produced because it must be bloodstained, on account of the dead bodies having been carried in it. It is quite obvious that however much the jeep be washed the chances would be that in some crevice, in some joint or in some bolt nut or screw, blood may still remain adhearing. But if the jeep is not produced there can be no risk of detection and the inference from its disappearance can be countered by arguments as it has actually been. The non production of the jeep is a strong circumstance against appellant Raghav which the courts below were entitled to. take into consideration. Articles ' like jeeps do not just disappear in this air and when they do disappear and cannot be traced as they have not been traced in this cage and when the allegation is that they have been used for carrying away the dead bodies their non production or their not being found is a circumstance which a court can take into consideration in determining the guilt of an accused person. It may also he added that the other appellants were also absconding. Why the whole household went away is not just a coincidence. If the girl and the child had disappeared in innocent circumstances there was hardly reason for all of them to panic. None of them proved why they were so difficult to get at or what was the urgent business which had 272 called them away. Mohan Singh was arrested on April 9, Ramanuj Das surrendered on April 24, and in his application he stated that be bad been informed by A. P. Dubey that be was wanted. Jai Devi surrendered on April 27, 1961 and claimed to be a purdanashin lady and her appearance in court was excused and she was released on bail. Thus all the accused persons were found to be absconding and except one the other four were not arrested but they surrendered in the court of the Magistrate and of them 3 were released on bail. We have therefore the following circumstances which the Courts have taken into considerations % '1) strained relations between Raghav and his wife Kamla; (2) there was an agreement by Ramanuj Das of making a settlement of land and money in favour of Kamla and on the insistence of Ram Swarup father of Kamla, Ramanuj Das bad agreed that the document would be executed on Monday i.e April 10, 1961 ; (3) it is also proved that when the matter was discussed in the presence of appellant Raghav whose arrival was awaited for finalising the arrangement he got up and went away; and it is also established that Kamla had been brought from the house of her parents on the express condition that such a settlement would be made; (4) on April 5, 1961 appellant Raghav was in village Hamirpur Roora and on that evening three gunshots were fired and some time later Raghav left in his jeep with two other appellants Mohan Singh and Udham Singh and after Raghav left Kamla and her son were found missing from the house; (5) although this fact was discovered the next day no attempt was made to search for Kamla and her son; (6) Appellant Raghav and his two companions travelled by night from village Hamirpur Roora according to witnesses he was in a hurry and were found on the 6th morning at Kanpur and the same day they reached Lucknow as the post card written by 273 Govind Kumari shows. In that post card it is stated that the appellant and others had arrived at Lucknow. The explanation of the appellant was that he left on the 4th and took his Dada and his Bhabbi along with him but this explanation has not been accepted and is a false explanation; (7) thereafter the appellant made himself scarce and the police could not trace him till he surrendered himself in the court of a magistrate at Nawabgunj where he made an application stating that one Kamla was found missing and that he was being suspected of murdering her; (8) why he should have gone to Nawabgunj is not quite clear and of course neither he nor any of his relatives made any attempt to look for Kamla; (9) when the chowkidar of the village told Ramanuj Das about the rumour in the village of the murder of Kamla he was asked by Ramanuj Das not to make the report till Dalganjan Singh had arrived (Dalganjan Singh we are told is an Up Pradhan of the Panchayat) the report was made by the chowkidar on the 4th and the police came the same day and inspected the house of Ramanuj Das ; (10) In the rooms upstairs blood was found at 5 places. According to the memo prepared and deposed to in Court there were marks of blood having been wiped off at many places and the Chemical Examiner found the marks on these various places of plaster which had been taken into possession by the sub Inspector to be of blood but its origin could not be determined due to disintegration; (11) on April 12, D. Sp. Bashir Hussain. found the blood at 2 places more in the house of the Ramanuj Das. The origin of this blood has also not been proved due to disintegration; (12) on April 16, a bloodstained shirt of Raghav was found from a laundry; (13) no explanation is given of this blood on the shirt and (14) on April 5, 1961 both Kamla and her son disappeared from the fact of this earth and nobody has heard of them and no attempt has on made to find out as to what happened to them 274 and instead false explanation was given that Kamla had left with her child and a suggestion was made in the cross examination that she had eloped with one Chander Sekhar and thus had vanished from the house. It may be stated that there is no reasons why she should have disappeared when according to evidence she was going to get land and money and when she had her father who could look after her and was in affluent circumstances; (15) Coupled with this is the fact, of disappearance of jeep in which the appellant travelled from his village to Lucknow; (16) and a wholly false explanation was given as to the movement of the appellant Raghav. From these circumstances the courts below came to the conclusion that the murder was committed at the house of Ramanuj Das. We find no reason to disagree with the conclusions drawn from the evidence that Kamla and her son Madhusudhan are dead and they met their death by violence in the house of Ramanuj Das. In king Horry (1) the headnote states the law as follows: "At the trial of a person charged with murder, the fact of death is provable by circumstantial evidence, not withstanding that neither the body nor any trace of the body has been found and that the accused has made no confession of any participation in the crime. Before he can be convicted, the fact of death should be proved by such circumstances as render the commission of the crime morally certain and leave no ground for reasonable doubt; the circumstantial evidence should be so cogent and compelling as to convince a jury that upon no rational hypothesis other than murder can the facts be accounted for. " (1) [1952] N.Z.L.R. III. 275 This statement of the law was approved in Regina vs Onufrejczyk(1) except as to moral certainty and that statement of the law has received approval of this court in Anant Chintaman Lagu vs The State of Bombay(2). It was also said in King vs Horry (3): "That the jury, viewing the evidence as a whole, was entitled to regard the concurrence of so many separate facts and circumstances themselves established beyond all doubt, and all pointing to the fact of death on or about July 13, 1942 as excluding any reasonable hypothesis other than the death of the person alleged to have been murdered and as having, therefore sufficient probative force to establish her death. " In this connection it would be apposite ', to quote from the judgment in Lagu 's case(2) at page 506 where it was observed: "In Rex vs Horry [1952] N.Z.L.R. 111 where the entire case law in England was presented for the consideration of the Court. It was pointed out by the Court that there was no rule in England that corpus delicti must be proved by direct evidence establishing the death of the person and further the cause that death. Reference was made to Evans vs Evans 161 E.R. 466, 491. Where it was ruled that corpus delicti might be proved by direct evidence or by ",irresistible grounds of presumption". In the same case it has been pointed out that in New Zeland 'the Court, upheld numerous convictions where the body of the victim was never found. " The two cases referred to above i.e. King vs Horry(1) and Regina vs Onufrejczyk (1) are cases of conviction (1) [1955] 1 Q.B. 388. (2) (3) [1952] N.Z. L.R. III. 276 no doubt by juries on evidence which was wholly circumstantial but in both those cases neither the body was found nor any trace of the body was found and there was no confession by the accused of any participation in the crime and the conviction was based on the occurrence of so many separate facts and circumstances all pointing to the fact of death on or about a particular date and excluded any reasonable hypothesis other than the death of the person alleged to have been murdered and this was held to be of Bufficient probative force to establish death. In the present case the circumstances which have been proved and to repeat the circumstances are, strained relations between the husband and wife, motive to escape the giving of money and land or maintenance to the wife or the child, suddenly leaving the village at night with two others and almost simultaneous disappearance of Kamla and her son, no search for her and absolute callousness or the part of Raghav, subsequent false explanation being given and his absconding are all circumstances from which the courts below were justified in concluding the Kamla and her son were murdered and that Raghav had a predominent motive to commit the murder. The High Court found that Raghav had a strong motive to commit the murder and after taking all the circumstances into consideration came to the conclusion that the Sessions Judge had rightly convicted Raghav of murder. No two cases can have the same facts but the principles applied in placing the various links in the chain of events and circumstances by the High Court are, in our opinion wholly correct and they have rightly drawn the conclusion that the appellant Raghav was guilty of the offence with which he was charged. The inculpatory facts which have been proved were, in the opinion of the High Court, inconsistent with the innocence of the appellant and are not capable of explanation or any other hypothesis except his 277 guilt and as was said by this Court in Govinda vs State of Mysore(1). "In cases where the evidence is of circum stantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. Again the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent "with the innocence of the accused and it must be such as to show that within all huma n probabilities the act must have been done by the accused. The principle that the inculpatory fact must be inconsistant with the innocence of the accused and incapable of explanation on any other hypothesis than that of guilt does not mean that any extravagant hypothesis would be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable. " The evidence in this case and the inferences drawn from the evidence by the courts below do not fall in what was said by Baron Alderson in his charge to the jury in Re vs Hodge(2) where it was said: "The mind was apt to take a pleasure in adapting circumstances to one another, and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual the more likely was it, considering such matter, to overreach and .lm0 (1) A.I.R.1960 S.C.29. (2) 278 mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete. " Therefore in our view the courts below having applied correct principles and having found the circumstances, to be such which can only be explained on the hypothesis of the guilt of appellant Raghav have rightly found the appellant to be guilty. He had the immediate motive to rid himself of the wife. His child was just as undesirable and indeed the child could not be kept back and the mother murdered. Jai Devi as the murderer by gun shots was out of the question. Ramanuj ' Das was trying to placate Kamla by promising money and lands. The servants had I no reason to murder their mistress. It is manifest that the shots must have been fired by Raghav who took steps also to rid the bodies and the jeep which carried them. If the jeep was not connected it would have come forth if not in the investigation at least during the trial. We therefore dismiss the appeal of Raghav and see no reason to disagree with the opinion of the courts below that no sentence other than death was called for in this case. The murder was a venal one and had been committed to get rid of an inconvenient wife and her child. Then the question arises whether a case is made out section 201 of the Indian Penal Code and if so against whom ? The two appellants Mohan Singh and Udham Singh were with the appellant (Raghav) in his jeep and if the dead body was taken away in his jeep as it has been held by the Courts below that they were then the case against these two appel lants is proved. It is said that no one saw the dead bodies being carried. That may be so but the conclusion drawn is from circumstantial evidence i.e. series of events which lead to the conclusion of 279 guilt. We have already said that murder was committed in the house of Ramanuj Das on the evening of April 5, 1961. There was disappearance of Kamla and Madhusudan and sudden departure of Raghav and these two appellants. They were in a ,hurry and the back curtains of jeep were drawn. They travelled all night and took almost 11 hours to reach the barrier at Kanpur. There is no trace of Kamla and her child. No one has seen them since their disappearance on April 5. From these proved facts the courts drow the inference of an offence under a. 201 Indian Penal Code which in our opinion was correct. Thus these two appellants have been rightly convicted and their appeals are dismissed. In regard to the case of Ramanuj Das and Jai Devi the finding of the High Court is that the dead bodies of Kamla and her son Madbusudan were not found in the house of Ramanuj Das and they must have therefore been removed ; that an attempt was made to wash out the bloodstains from inside the rooms and also outside on the roof ; that the dead bodies could not have been removed without the knowledge and active cooperation of Ramanuj Das and Jai Devi and further that both Ramanuj Das and Jai Devi absconded. On this basis the conviction of these appellants was held by the High Court to be justified. It is true that the murder was committed in the house of Ramanuj Das and that there is the evidence to show that the blood inside and outside the living rooms was washed and an attempt was made to obliterate any sign of it though it was unsuccessful. It also may be that both Ramanuj Das and Jai Devi had knowledge of the removal of the dead bodies but what section 201 requires is causing any evidence of the commission of the offence to disappear or for giving any information respecting the offence which a person knows or believes to be false. In this case there is no evidence of either. It is not shown that 280 these two appellants caused any evidence to disappear. There may be a very strong suspicion that if from the house dead bodies are removed or blood was washed, person placed in the position of the appellants must have had. a hand in it but still that remains a suspicion even a strong suspicion at that. It is true that they were absconding but merely absconding will not fill the gap or supply the evidence which is necessary to prove the ingredients of section 201 of the Indian Penal Code. In our opinion the case against Ramanuj Das and Jai Devi has not been made out. There appeals must therefore be allowed and they be set at liberty. We have found that the murder was committed in the house of Ramanuj Das and that disappearance of the dead bodies took place from that house. Ramanuj Das did have the knowledge of the commission of the murder and he took no steps to inform the police about it. In these circumstances he has been rightly convicted under section 176 of the Indian Penal Code and his appeal in regard to conviction under that section is dismissed. By COURT. The appeal of Raghav Prapanna Tripathi, Mohan and Udham Singh is allowed by majority and that of Ramanuj Das and Jai Devi for offence under section 201 of the Indian Penal Code is allowed unanimously. The appeal of Ramanuj Das for offence under section 176 of the Indian Penal Code is allowed by majority.

IN-Abs

The appellants were prosecuted and committed to the Sessions for trial. Raghav was convicted and sentenced to death under section 302, I.P.C. He and Jai Devi, his mother, Ramanuj Das, Mohan Singh and Udham Singh were convicted under section 201 IPC. Ramanuj Das was also convicted under section 176 IPC. Their appeals were dismissed by the High Court. They came to this court by special leave. The appeal of Raghav, Mohan Singh and Udham Singh was allowed by majority, that of Ramanuj Das and jai Devi for offence under section 201, IPC was allowed unanimously and appeal of Ramanuj Das for offence under section 176 IPC was allowed by a majority. Held (Kapur and Hidayatullaha, JJ dissenting) that there was no direct evidence about Raghav committing the murder of Kamla and Madhusudan. There was no direct evidence about his carrying away their dead bodies in the jeep. There was no direct evidence about Ramanuj Das or any other accused being a party to the removal of the dead bodies from the house. The entire case was based on circumstantial evidence. The circumstances proved against Raghav were not sufficient to support the finding that he had committed the murder. The mere absconding may lend weight to the other evidence establishing the guilt of the accused but by itself that is hardly any evidence of guilt. It was too much to conclude from the non recovery of the jeep that if it had been recovered, it would have afforded evidence of existence of human blood stain and of its having been used to remove evidence of murder. That circumstance had no evidentiary value. There was no evidence about the part Ramanuj Das or Jai Devi played in the removal of the dead bodies. The .fact that they were in the house and could have possibly known of the removal of the dead bodies, if that was a fact 240 would not by itself establish that they assisted in the removal if the bodies. The conviction of the appellant was not justified on the material on record. Per Kapur and Hidayatullah JJ. The strained relations between husband and wife, the motive to escape the giving of money and land as maintenance to the wife or child, suddenly leaving the village at night with two others and almost simultaneous disappearance of Kamla and her son, no search for her and absolute callousness on the part of Raghav, giving of false explanation later on and his absconding were circumstances from which the Courts below were justified in concluding that Kamla and her son were murdered and Raghav bad a predominant motive to commit the murder. The inculpatory facts proved against Raghav were not capable of explanation on any other hypothesis except his guilt. The Courts below bad applied correct principles and found Raghav guilty and there was no reason to disagree with their conclusions. The non production of the jeep was a circumstance against Raghav which the Courts below were entitled to take into consideration. Articles like jeeps do not just disappear in thin air and when they do disappear and cannot be traced and when the allegation is that they have been used for carrying away the dead bodies, their nonproduction or their not being found is a circumstance which a Court can take into consideration in determining the guilt of an accused person. No case under section 201 of the Indian Penal Code had been made out against Ramanuj Das and jai Devi. What section 201 requires is causing any evidence of the commission of the offence to disappear or giving any information respecting the offence which a person knows or believes to be false. It was not proved that the two appellants had caused any evidence to disappear. There may be a strong suspicion that if from the house dead bodies were removed or blood was washed, the persons placed in the position of the two appellants must have had a hand in it, but still that remains a suspicion, although a strong suspicion. There mere absconding would not fill the gap or supply the evidence which was necessary to prove the ingredients of section 201. Anant Chintaman Lagu vs The State of Bombay. , ; , Govinda Reddy vs The State of Mysore, A.I.R. 1960 S.C. 29, Stephen Seneviratnan vs The King, A.I.R. 1936 P.C. 289, Towell 's case; , , Rex vs Horry, , Regina vs Onufrejczyk, , relied upon. 241 Rex V. Hodge, 7, referred to.

iminal Appeal No. 69 of 1961. Appeal by special leave from the Judgment and order dated December 23, 1960, of the Punjab High Court (Circuit; Bench) at Delhi in Criminal 'Appeal NO.: 10 D of 1960. WITH CRIMINAL APPEAL NO. 62 of 1960. Appeal from the judgment and order dated December 23, 1959, of the Allahabad High Court in Criminal Revision No. 1694 of 1958. Sarjoo Prasad and K. K. Sinha, or the appellant in Cr. A. No. 69 of 1961. B. K. Khanna and P. D. Menon., for the respondent in Cr. A. No. 69 of 1961. R. K. Garg, D. P. Singh and section C. Agarwala, for the respondent in Cr. A. No. 62 of 1960. G. C. Mathur and C. P. Lal, for the respondent in Cr. A. No. 62 of 1960. May 3. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. The appellant in Criminal Appeal 69 of 1961 Jia Lal Was searched by the Delhi Police on April 15, 1959, and was found to be in possession of ' an ' English pistol for Which he held no licence. He was then prosecuted for an offence under section 20 of the Indian Arms Act of 1878 (XI of 1878), hereinafter referred to as 'the Act ' 867 before the Additional Sessions Judge; Delhi who convicted him under section 19 (f) of the Act, and sentenced him to rigorous 'imprisonment for nine ,months. No sanction for the prosecution had been obtained as required by section 29 of the Act. the appellant then took the matter in appeal to the High Court of Punjab which confirmed his conviction but reduced the sentence to 4 1/2 months rigorous imprisonment. It is against this judgment that this appeal by special leave is directed. Bhagwana was searched by the Saharanpur Police on August 6, 1956, and was found to be in possession of a country made pistol and four cartridges for which he held no licence. He was prosecuted before the City Magistrate, Saharanpur under a. 19(f) of the Act and was convicted and sentenced to six months rigorous imprisonment. No sanction was obtained for his prosecution, obviously because under section 29 of the Act it is not required when the offence are committed in certain areas and Saharanpur is within those areas. The appellant preferred an appeal against his conviction and sentence to the Sessions Judge, Saharanpur but the appeal was dismissed and the conviction and sentence were confirmed. The appellant then took the; matter in revision to the High Court of Allahabad which rejected the same but granted certificate under article 134(1) of the Constitution. This , is how this appeal comes before us. Though the two appeals arise out of two different prosecutions un. connected with each other, they were heard together as the same questions of law arise for determination in both. The first question that arises for our decision is whether a. 29 of the Act is unconstitutional and void as contravening article 14, in that it requires sanction for prosecution for offences under the Act, 868 when they axe committed in some areas, but not in others. Section 29 of the Act is as follows: "Where an offence punishable under section 19, clause (f), has been committed within three months from the date on which this Act comes into force in any State, district or place to which section 32, clause 2 of Act XXXI of 1860 applies at such date, or where such an offence has been committed in. any part of India not being such a district, State or place, no proceedings shall be instituted against any person in respect of such offence without the previous sanction of the Magistrate of the district or in a presidency town, of the Commissioner of police. " For a correct understanding of the true scope of the section, it is necessary to refer to the history of the Legislation relating to it. The earliest enactment dealing with this subject is the Arms and Ammunition and Military Stores Act 18 of 1841 which came into force on August 30, 1841, and that prohibited the export of arms and ammunition out of the territories belonging to the East India Company and enacted certain prohibitions as regards the storing of ammunition. This Act was repealed by Act 13 of 1852. After the uprising against the British rule in 1857, the Government felt that a more stringent law was required for preventing insurrections and maintaining order and so a new Act was passed, Act 28 of 1857. This Act is a comprehensive one dealing with many matters not dealt with in previous legislation, and contains elaborate provisions as regards the manufacture, import, sale, possession and use of arms and ammunition. of particular relevance to the present discussion is P. 24 of this Act which empowered the Governor 869 General to order general search for arms and ammunition in any district. In exercise of the power conferred by this section, the Governor General issued a notification on December 21, 1858, ordering a general search and seizure of arms in in the territories north of the Jumna and Ganga then known as North Western Provinces. The reason for this was that it was this territory that was the main seat of the disturbances of 1857. Act 28 of 1857 was a temporary Act which was to be in force for a period of two years and after some extentions it finaly lapsed on October 1, 1 60. On that date a new Act, Arms and Ammunition Act 31 of 1860 came into force. This statute contains in addition to what was enacted in Act 28 of 1857, certain new provisions, of which a. 32 is material for our discussion. It is as follows: " 'Clause 1. It shall be lawful for the Governor General of India in Council or for the Executive Government of any Presidency or for any Lieutenant Governor, or with the sanction of the Gevernor General in Council for the Chief Commissioner or Commissioner of any Province, District or place subject to their administration respectively, when. ever it shall appear necessary for the public ,safety, to order that any Province, District, or place shall be disarmed. "Clause 2. In every such Province, District, or place as well as in any Province, District, or place in which an order for a general search for arms has been issued and is still in operation under Act XXVIII of 1857, it shall not be lawful for any person to have in his possession any arms of the description mentioned in section 6 of this Act, or any percussion caps, sulphur, gunpowder or other ammunition without a licence. 870 This Act ,,a, in was repealed, in 1878,and the present Indian Arms Act (XI of 1878) was enacted. Now examining section 29 in the light of the history of the legislation as aforesaid, it will be seen that it makes a distinction between the areas to which section 32 of Act 31 of 1860 applied and the other areas. The former included territories which had been disarmed under orders of the Governor General in accordance, with cl. (1) and those in which a general search had been ordered under cl. (2) which under the notification of December 1858 comprised the territories north of the Jumna and Ganga. Section 29, provides,.that for prosecution for offences committed within the rem to which section 32 applied, No. sanction was required but suoh sanction was required, for a prosecution for the same offence when committed in 'other areas. The point for decision is whether this, discrimination which is hit by article, 14 of th Constitution. Now the principles governing the application of Art 14 are ,Well, settled and there is no need to restate them. Article, 14 prohibits hostile legislation directed against individuals or groups of individuals, but it does not forbid reasonable Classiit scation. And in order that a classifcation might be valid, it must rest on an intelligent ,differentia which distinguishes it from others and that further that must ' have, a reasonable relation to the ob ject of the legislation. There can be a valid classi fication based on a geographical differentia, but even then, that differentia must be, ,pertinent to the object of the legislation. The short question before decision the are fore is whether the differentiation between the territories north of, the; Jumna and Ganga on theme band and the other Territories on the other, has any relevance to the object of 871 the legislation. As already Pointed out this differen tiation came to be made as a result of the political situation during 1857, and has reference to the fact ' that the largest opposition to the British Grovernment came from the Taluqdars to the north of the Jumna and Ganga. But more, than a ventury has since elapsed and the conditions have so radically, changed that if is impossible now to sustain any distinction between the territories, north of the Jumna and Ganga and the other territories on any ground pertinent to the object of the law in question and on the well known principles differentiation is discrimination repugnant to article 14. That was the the view taken by, the Allhabad High Court in Mehar Chand vs State(1) and we are in agreement with it. The correctness of this decision on this point has been assailed, before us. On this conclusion two questions arise,for decision: (i) Is a. 29, omitting that part, of it which" contravenes article 14, valid, and are the prosecutions in the instant cases bad for want of sanctions thereunder; and (ii) if a. 29 is void in toto whether a. 19 also 'becomes void and unenforceable. On the first question our attention has, been drawn to two decisions of the High Court of Allahabad where this Point has been considered. in Mehar Chand 's case (1) already referred to, after holding that the distinction made in section 29 between offences committed in territories to the north of the Jamuna and Ganga and those committed elsewhere was repugned to Art, 14, the learned Judges stated as its consequence that sanction for prosecution under the Act was necessary in all cases. But this decision was overruled by a Full Bench of the Allahabad High Court in Bhai Singh vs The State(2) (1) A.I.R. (1959) All. 660. (2) A.I.R. (1960) All 369. 872 where it was held that the effect of the finding that the section was in part unconstitutional was to render it void in its entirety and that accordingly no sanction was necessary for instituting prosecutions under the Act. The respondent relies on this decision, and contends that the present proceedings are not illegal for want of sanction. The position of the appellants in the two appeals in relation to this question is somewhat different. In Criminal Appeal 69 of 1961 the appellant comes from an area which is not to the north of the Jumna and Ganga and under s.29 sanction would be required for his prosecution but the appellant in Criminal Appeal 62 of 1960 comes from an area north of the Jumna and Ganga and no sanction would be required under that section for his prosecution. The arguments of learned counsel on this question therefore proceeded on somewhat different lines. Mr. Sarju Prasad appearing on behalf of the appellant in Criminal Appeal 69 of 1961 contended that the decision in Bhai Singh 's case (1) was erroneous, that the fact that the section was invalid in its operation as regards territories to the north of the Jumna and Ganga did not render it invalid in its application to the other territories, as the two parts of the section were distinct and severable and that on the principles enunciated by this Court in R.M.D. Chamarbaugwalla vs The Union of India (2), that portion of the section which requires sanction must be held to be valid. Mr. Garg appearing for the appellant in Criminal Appeal 62 of 1960 also contended that sanction was required for prosecution under the Act and his argument in support of the contention may thus be stated It "the portion of section 29 873 which offends article 14 is , struck out, what remains will read as follows: "Where an offence under section 19 clause (f) has been committed in any part of India; No proceedings shall be instituted against any, person in respect of such of offence without the previous sanction of the Magis trate of the District. " The section as thus expurgated is complete in itself and in harmony with the rest of the Act. The appropriate rule of interpretation applicable to this situation is thus stated in Chamarbaugwalla 's Case "On the other hand, if they are so distinct and separate that after striking out what is invalid, what remains is in itself a complete code independent of the rest, then it will be upheld notwithstanding that the rest has become unenforceable. " (p. 951). On this test, the part of section 29 which requires sanction must be held to be severable from the portion, under which no sanction is required, and therefore valid. This contention must fail for the simple reason, that if accepted it must result in defeating the intention clearly and unequivocally expressed in the section, that no sanction is required for prosecution for offences committed north of the Jumna and Ganga. It will be opposed to all recognised canons of interpretation, to construe a statute as forbidding what it expressly authorises. We cannot therefore so read the section as to require sanction for prosecution for offences in the areas north of the Jumna and Ganga. When once this conclusion is reached it is difficult to accept (1) ; 874 the contention, of Mr. Sarju Prasad that the section insofar as it requires sanction for prosecution for offences committed in territories other than those to the north of the Jumna and Ganga is severable from the rest and that to that extent the law is valid. If this contention is correct, it must necessarily result in discrimination between persons who commit offences in the territories to the north of the Jumna and Ganga and those who commit the same offences elsewhere in that while the latter cannot be prosecuted without sanctions the former can be. It will then be open 'to the persons who are charged with offences committed to the north of the Jumna and Ganga to assail the law on the, ground that it discriminates against them. , and there can be no answer, to it as we have held that, the classification made by the section is not valid. The fact is that it is inherent in the very vice of discrimination that it is incapable.of being broken up into what is good and what is bad. The gravemen of the charge that article 14 has been contravened is that it makes an irrational distinc tion among persons who are similarly circumstanced and where such a charge is well founded the section must in its entirety be struck down. We are accordingly of the opinion that on our conclusion that the section is repugnant to article 14 in that it discriminates between the persons who commit offence in areas north of the Jumna and Ganga and those who commit the same offences elsewhere, the whole of it ought. to to be held to be bad. It is next contended that if section 29 is void in its entirety, section 19(f) of the Act should also be held to be void, as both these provisions form integral parts of a single scheme and must stand or fall together. 'it is, argued that the policy behind section 29 was manifestly. , to give protection to innocent subjects, against, frivolous and, vexatious prose cution, and that sanction under that section must 875 therefore be regarded as one of the essential elements, which go to make the offence. Support for this contention was also sought in the statement of objects and reasons, made when the measure 'was introduced in the Legislature, wherein it was said that ample safeguards were provided "to prevent this prohibition pressing unfairly against respectable persons". It was strongly pressed on us that in view of the above statement. it ought to be inferred that the Legislature would not have enacted section 19, if it had known that section 29 was void, and on that the conclusion must follow that the two sections are inseverable. In support of this argument reliance was placed on certain observations in Daris vs Wallace (1) and Lemke vs Farmers ' Grain Company (2). In Davis Wallace (1) the point for decision was whether when a provision which is in the nature of an exception in held to be unconstitutional, the main provision which it is intended to qualify can be enforced in its own terms. In answering it in the negative the Court observed : "Here the excepting provision was in the statute when it was enacted, and there can be no doubt that the legislature intended that the meaning of the other provisions should be taken as restricted accordingly. Only with that restricted meaning did they receive the legislative sanction which was essential to make them part of the statute law of the State '; and no other authority is competent to give them a larger application." In Lemke Farmers Grain Company (2), a law of North Dakota was assailed as unconstitutional on the ground that it was one on interstate commerce which the State Legislature could not enact. One of the contentions raised was that there were certain provisions in the Act which could be sustained as within the competence of State Legislature In rejecting this contention the Court (1) ; (1921) 257 U.S. 477 ; , 329. (2) (1921) 258 V.S. 506 876 observed : ,It is insisted that the price fixing feature of the statute may be ignored, and its other regulatory features of inspection and grading sustained if not contrary to valid Federal regulations of the same subject. But the features of this act, clearly regulatory of interstate commerce, are essential and vital parts of the general plan of the statute to control the purchase of grain and to, determine the profit at which it may be sold. It is apparent that, without these sections, the State legislature would not have passed the act. Without their enforcement the plan and scope of the act fails of accomplishing its manifest purpose. We have no authority to eliminate an essential feature of the law for the purpose of saving the constitutionality of parts of it. " It is contended that on the rule of construction laid down above, a. 19 must be held to be inseverable from section 29, and must be struck down. We are unable to agree. The contention that sanction under section 29 should be regarded as an essential ingredient of the offence under a. 19 proceeds on a misconception as to the true scope of that section. The scheme of the act is that it imposes certain obligations and breaches thereof are made offences for which penalties are prescribed. These provisions pertain to the domain of substantive law. Thus with reference to the, matters involved in this appeal, sections 14 and 15, enact that no person shall have possession of arms, and ammunition, specified therein, without a licence, and under section 19(f) a contravention of these sections is an offence punishable, as provided therein. The offence is complete, when the conditions mentioned in sections 14 and 15 are satisfied, and sanction is thus not one of the elements which enter into the constitution of the offence. Then comes section 29. It is purely procedural. It comes 877 into operation only when there is an offence already completed. It cannot therefore be regarded as an ingredient of the offence, which is" to be punished under a. 19 (f) . This must be further clear from the fact that offences under the Act are punishable under a. 19, without sanction under a. 29, when they are committed in the territories to the north of the Jumna and Ganga. It cannot be contended that the contents of as. 14 and 15, for example , which are punishable under a. 19(f) differ according as they are to be applied to areas north of the Jumna and Ganga or elsewhere. We agree with the appellants that the object a. 29 was to give protection to subjects against harassment. That appears clearly on the reading of the section. There was some argument before us as to whether the statement of objects and reasons relied on for the appellants is admissible in evidence. It is well settled that proceedings 'of the Legislature cannot be called in aid for constructing a Section, vide Administrator General of Bengal, vs Prem Lal Mullick Krishna Ayyangar vs Nellapuru mal (2). "It is clear" observed Lord Wrightin Assam Railway & Trading Co. Ltd. vs Inland Revenue Commissioner (3) "that the languageof a Minister of the Crown in proposing in Parliament a measure which eventually becomes law is inadmissible. " The question whether the statement of objects and reasons admissible in evidence for construing the statue arose directly for decision In Aswini Kumar Ghosh vs Arabinda Bose (4), and it was held that it was not. It was argued that the history of a legislation Would be admissible for ascertaining the legislative intent when the question is one of severability. That is so as held by this Court in B.M.D. Chamarbaugwalla 's case (5) at pages 951 952. (1) (1895) 221.A.107,118. (2) (1919) L.R. 47 I.A. 33, 42. (3) ; , 458. (4) (1953) S.C.R. I. 28. (5) ; 878 But the statement of objects and reasons is not a part of the history of the legislation. It is merely an expression of what according to the mover of the Bill are the scope and purpose of the legislation. But the question of severability has to be judged on the intention of the legislature as expressed in the Bill as passed, and to ascertain if the statement of the mover of the Bill is no more admissible than a speech made on the floor of the House. It may be mentioned that there are observations in some of the, judgments of this Court judgments of this that the statement of objects and reasons but for Act right be admissible not for construing the Act but for ascertaining the conditions which prevailed when the legislation was enacted. Vide the State of West Bengal vs Subodh Gopal Bose (1), M. K. Ranganathan vs Government of Madras (2), A. Thangal Kunju Mudaliar vs M. Venkitachalam Potti (3) and Commissioner of Income tax, Madhya Pradesh V. Sm. Sodra Devi It is sufficient for the purpose of this case to say that the statement of objects and reasons is sought to be used by the appellants not for ascertaining the conditions which existed at the time When the statute was passed but for showing that the legislature would not have enacted the law without the protection afforded by section 29. In our opinion it is clearly not ' admissible for this purpose. But even apart from the statement of objects, it is clear on the face of the section that it has been enacted with a, view to giving protection to the subjects. But is this sufficient to support the conclusion that the legislature would not have enacted section 19 if it had known that a. 29 was void ? It is this that the appellant has to establish before he (1) ; , 628. (2) ; , 385. (3) ; , 1237. (4) ; 879 can succeed, and the policy behind a. 29 is only one element in the decision of it. Now it appears to us ' that what is really determinative of the question is what has been already stated that section 19 is a substantive provision, whereas section 29 is an adjectival one, and in general, the invalidity of a procedural enactment cannot be held to affect the validity of a substantive provision. It might be possible to conceive of oases in which the invalidity of a procedural section or rule might so react on substantive provision, as to render it ineffective. But such cases must be exceptional. And we see nothing in the present statute to take it out of the general rule. On the other hand, the paramount intention behind the law was to punish certain offences. No doubt section 29 was enacted with a view to give some measure of protection to the subjects. But if the legislature had been told that section 29 would be bad, can there be any doubt as to whether it would have enacted the statute without section 29 ? The consequence of withdrawing the protection of that section is only that the accused will have to take up his trial in a court, but there ultimately justice will be done. Therefore if the choice was given to the legislature between allowing an offence against the State to go unpunished, and failing to give protection to a subject against frivolous prosecution, it is not difficult to see where it would have fallen. We cannot, be mistaken if we conclude that the intention of the legislature was to enact the law, with section 29 if that was possible, without it, if necessary. And that is also the inference that is suggested by the provision in section 29, exempting certain areas from its operation. The American authorities cited for the appellants do not require detailed consideration, as the principles laid down therein have been approve by this Court in Chamarbaugwalla 's case (1) at pages 950 951. The question is only one of application (1) ; 880 of the rules of interpretation laid down therein to particular legislation. It is however worthy of note that in Davis V. Wallace (1) as well as Lemke vs Farmers Grain Company the point for decision was to what the effect was of holding that a substantive provision in a law was unconstitutional, on another substantive law in the same statute. We are aware that it has some times been stated that a distinction should be made in the matter ' of severability between Criminal and Civil Laws, and that a penal statute must be construed strictly against the State. But there are numerous decisions in which the same rules of construction have been applied in deciding a question of severability of a Criminal statute as in the case of a Civil Law, and on principle it is difficult to see any good ground for the distinction. "Perhaps the moist that can be said" ' says Sutherland, for the distinction between criminal and civil statutes is that the penal nature of a statute may be a make weight on the side of inseparability" Vide Statutory Construction Vol. 2 p. 197 para 2418. In the present case the fact that a. 29 is a procedural and not a substantive enactment is sufficient to turn. the scale heavily in favour of the State. On a consideration of the scheme of the Act, and its provisions, we are of opinion that section 29 is severable from the other portions of the Act, and that its invalidity does not affect the validity of 19. In Criminal Appeal 69 of 1961 a contention was also raised that the pistol of which the appellant was 'in possession was not in a fit condition to be effectively used, and it bad no chamber, and it therefore did not fall within the definition of 'Arms ' in section 4(1) of the Act. There is no force in this (1) ; 7: ; 329, (2) ; ; 881 contention which is accordingly rejected. In Criminal Appeal 62 of 1960 an argument was advanced that the State had launched prosecutions under the De Act, some with, and others without ' sanction, and that was discrimination bit by article 14. There is no substance in this contention, which also is rejected. In the result both these appeals are dismissed. Appeal dismissed.

IN-Abs

Section 29 of the Indian Arms Act, 1878, provided that for prosecution for an offence under section 19(f) of the Act com mitted in the territories north of the jumna and Ganga no sanction was required but sanction was required for the pro. section if the offence was committed in other areas. j was found in possession of an unlicensed firearm in Delhi, and though sanction under section 29 was necessary, he was tried and convicted without obtaining such sanction. B was found in possession of an unlicensed firearm in Saharanpur and as no sanction under section 29 was necessary for his prosecution he was tried and convicted without obtaining any sanction. The respondents contended that section 29 offended article 14 of the Constitution and was unconstitutional. j contended that even if section 29 was invalid in its operation as regards territories to the. ,North of the jurnna and Ganga it was not invalid in its 865 application to the other territories as the parts of section 29 were separate and severable. B contended that if the portion of section 29 which offended article 14 was struck down the remaining portion was complete in itself and required sanction for prosecution in all cases, and that if s.29 was void in toto s.19 could not stand and also become void and unenforceable. Held, that section 29 Arms Act offended article 14 and was unconstitutional and as such no sanction was necessary for the prosecution of either j or B. The differentiation between the territories north of the jumna and Ganga and the other territories had no relevance now to the object of the legislation. The differentiation had come into being an account of the fact that the largest opposition to the British Government in 1857 had come from the people to the north of the jumna and Ganga and they had been disarmed. But now after more than a century conditions have changed and the distinction could not be sustained on any ground pertinent to the object ,of the law in question. Mehar Chand vs State, A.I.R. (1959) All. 660, approved. Held, further, that it was not permissible to strike out only the offending words from section 29 and to read the section as requiring sanction for prosecution for offences in areas north of the jamna and Ganga. The section could. not be construed as for bidding what it expressly authorised. Nor could the section insofar as it required sanction for prosecution for offences committed in other territories be severed from the rest and held valid as that would necessarily again result in discrimination. The entire section 29 must be struck down. Bhai Singh vs State, A.I.R. (1960) All. 369. approved. Chamarbaugwalla vs Union of India, ; , referred to. Held, further, that section 29 was severable from the other, provisions of the Act and that its invalidity did not affect the validity of section 19. Section 19 was a substantive provision providing punishment for violation of sections 14 and 15 and section 29 was merely procedural and in general the invalidity of a procedural provision could not be held to affect the validity of a substantive provision. There was nothing in the Arm Act to take it out of the general rule. Section 29 was intended for giving protection to the subjects against frivolous and vexatious prosecutions but sanction was not one of the elements of the under offence s, 19(f). It could not be said that the legislature 866 would not have enacted the ' law without the; protection afforded by section 29. Davis vs Wallace, (1921)257 U.S. 477; ; and Lemka Parmers ' Grain Company; , ; 66 L. Ed. 458, referred to.

Appeals Nos. 98 and 99 of 1960. Appeal from the judgment and order dated April 16, 1958, and April 11, 1958, of the Calcutta High Court in Appeal from Original Order and decree Nos. 173 and 151 of 1957, respectively. H.N. Sanyal, Additional Solicitor General of Indin, M. G. Poddar and D. N. Mukherjee, for the appellant. C.B. Aggarwala and section N. Mukherjee, for the respondent. May 4. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. These are appeals against the judgment of the High Court of Calcutta, setting aside an award of the arbitrators, which directed the respondent to pay to the appellants Rs. 41,250 as compensation for breach of contract, on the ground that the said contract was in con travention of a notification of the Central Government dated October 29, 1953, and was in consequence illegal and void. The facts are that the appellants own a Jute Mill at Calcutta and carry on the business of manufacture and sale of Jute. On September 7, 1955 they entered into a contract with the respondents who are doing business as 186 dealers in jute, for the purchase of 750 bales of Jute cutting 'raw) of Pakistan at Rs. 80 per bale of 400 lbs. to be delivered in October, November and December at the rate of 250 belles every month. Clause 14 of the agreement provides that all disputes arising out of or concerning the contract should be referred to the arbitration of the Bengal Chamber of Commerce. The respondents failed to deliver the goods as agreed whereupon the appellants applied to the Bengal Chamber of Commerce for arbitration in accordance with el. 14 of the agreement. The respondents appeared before the arbitrators, and contested the claim on the merits. The arbitrators made an award in favour of the appellants for Rs. 41,250 with interest, and that was filed under section 14(2) of the Indian in the High Court of Calcutta in its original side and notice was issued to the respondents. Thereupon the respondents filed an application in the High Court, presumably under section 33 of the arbitration Act, wherein they prayed for a declaration that the contract dated September 7, 1955, was illegal, as it was in contravention of the notification of the Central Government dated October 29, 1953, and that in consequence proceedings taken thereunder before the Chamber of Commerce and the award in which they resulted were all void. The learned Judge on the original side before whom the application came up for hearing dismissed it, and passed a 'decree in terms of the award. Against both this judgment and order, the respondents preferred appeals to a Division Bench of the High Court, Appeals Nos. 154 and 173 of 1957. They were heard by Chakravartti, C. J., and Lahari, J., who hold that the contract dated September 7, 1955, was illegal as it fell within the prohibition of the notification aforesaid and accordingly allowed the appeal and set aside the award. The appellants 187 then applied for a certificate under article 133 (1) of the Constitution and the same was granted. This is how the appeals come before us. The learned Additional Solicitor General who appeared for the appellants urged the following contentions : (1)On the terms of the arbitration clause the questionwhether the contract dated September 7. 1955, isillegal is one for the arbitrator to decide and that it was not open to the respondents to raise the same in the present proceedings under section 33 of the , (2)The respondents are estopped from questioning the validity of the award by reason of their having submitted to the jurisdiction of the arbitrators. (3)The agreement dated September 7. 1955, is a non transferable specific delivery contract within section 2(f) of the Act and it is not hit by the notification dated October 29, 1953. We now proceed to discuss these questions seriatim : (1)Taking up the first questions, cl, 14 of the agreement which provides for arbitration is as follows : "All the matters, questions, disputes, differences and/ or claims arising out of and/ or concerning and/ or in connection with and/ or in consequence of or relating to this con tract including matters relating to insurance and demurrage whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and whether or not this contract has been termi nated or purported to be terminated or com 188 pleted shall be referred to the arbitration of the Bengal Chamber of Commerce and Industry under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted and any Award made by the said Tribunal under the clause. shall be final, binding and conclusive on the parties. " Now the contention of the appellants is that the clause is general in its terms and is wide enough to include dispute as to the validity of the contract that in consequence the only right of the respondents is to agitate this question before the arbitrators and if the award goes against them to move the Court either to modify it under section 15 of the or to remit it under section 16 or to set it aside under section 30 on the grounds mentioned therein and that the present application for a declaration that the contract is illegal, and that the arbitration proceedings are without jurisdiction is therefore incompetent and misconceived. it cannot be disputed that the expression "arising out of " or "concerning" or " in connection with" or "in consequence of" or "relating to this contract" occurring in el. 14 are of sufficient amplitude to take in a dispute as to the validity of the agreement dated September 7, 1955 Vide Ruby General Insurance Co. Ltd. vs Pearey Lal ,Kumar (1) But the question is not whether el. 14 is all comprehensive but whether it could be enforced when the agreement of which it forms an integral part is held to be illegal. Logically speaking, it is difficult to conceive how when an agreement found to be bad, any portion of it can held to be good. When the whole perishes, its parts also must perish. 'Ex nihilo nil fit '. On principle therefore it must be held that when an 189 agreement is invalid every part of it including the clause as to arbitration contained therein must also be invalid. That indeed is what has been laid down in the decisions which have been cited before us. The leading case on the subject is the decision of the House of Lords in Heyman vs Dacwins Ltd(1). There the question was whether repudiation of a contract by a party thereto had the effect of annulling ' the arbitration clause contained therein. It was held that it had not. It was in this context that the law as to the circumstances under which an arbitration clause in an agreement would become unenforceable came in for elaborate discussion. Summing up the law on the subject Viscount Simon, L. C. observed: "If the dispute is whether the contract which contains the clause has ever been entered into at all, that issue cannot go to arbitration under the clause, for the party who denies that he has ever entered into the contract is thereby denying that he has ever joined in the submission. Similarly, if one party to the alleged contract is contending that it is void ab initio (because, for ,example, the making of such a contract is illegal), the arbitration clause cannot operate, for on this view the clause itself also is void. But, in a situation where the parties are at one in asserting that they entered into a binding contract, but a difference has arisen between them whether there has been breach by one side or the other, or whether circumstances have arisen which have discharged one or both parties from further performance, such differences should %be regarded as differences which have arisen "in respect of" or "with regard to" or, "under" the contract, and an arbitration clause which. uses these. or similar, expressions ,should be construed accordingly." (1) 190 Lord Macmillan with whom Lord Russel agreed observed: "If it appears that the dispute is whether there has ever been a binding contract between the parties, such a dispute cannot be covered by an arbitration clause in the challenged con tract. If there has never been a contract at all, there has never been as part of it an agreement to arbitrate. The greater includes the less. Further, a claim to set aside a contract on such grounds as fraud, duress or essential error cannot be the subject matter of a reference under an arbitration clause in the contract sought to be set aside. " in the speech of Lord Wright there are the following observations on which the appellants rely: "Hence, if the question is whether the alleged contract was void for illegality or being voidable was avoided because induced by fraud or misrepresentation, or on the ground of mistake, it depends on the terms of the submission whether the dispute falls within the arbitrator 's jurisdiction. " The argument is that if the arbitration clause is general and unqualified it will include a question as to the legality of a contract also. The above observation does lend support to the view that if it was a term of the contract that a dispute as to its legality could be referred to arbitration, then it is valid. If that is what was meant by Lord Wright it maybe difficult to reconcile it with the view expressed in the passages already cited. But it is to be noted that the noble Lord wound up with the following observation "Finally, I agree with the general conclusions on the matter summarised by the Lord Chancellor in the closing paragraphs of his opinion". The appellants also rely on the following observations in the speech of Lord Porter: "If two parties purports to enter into a contract and a dispute arises whether they have done so or not, 191 or whether the alleged contract is binding on them. I see no reason why . hey should not submit that dispute to arbitration. Equally I see no reason why, if at the time when they purport, to make the contract they foresee the possibility of such a dispute arising, they should not provide in the contract itself for the submission to arbitration of a dispute whether the contract ever bound them or continues to do so. . It may require very clear language to effect this result, and it may be true to say that such a contract is really collateral to the agreement supposed to have been made, but I do not see why it should not be done". But these dicta must be read with the following observations in the same speech: "Where the contract itself is repudiated in the sense that the original existence or its binding force is challenged, e. g., where it is said that the parties never were ad idem, or where it is said that the contract is voidable ab initio (e. g., in cases of fraud, misrepresentation or mistake) and that it has been avoided, the parties are not bound by any contract and escape the obligation to perform any of its terms including the arbitration clause unless the provisions of that clause are wide enough to include the question of jurisdiction" According to Lord Porter, then; there can be an agreement to refer a dispute as to the validity of a contract to arbitration, that where such an agreement is part of the contract which is impugned as invalid, then it can have no existence apart from it and there can be no reference based thereon, but where such an agreement is distinct and separate from the impugned contract. a reference pursuant thereto will be valid and if is possible that both these agreements might be contained in one document. 192 The law is thus summarised in Halsburys Laws of England, Third Edition, Vol. 2, p. 24,. par& 56: The matter in question in the legal proceedings which it is sought to stay must be within the scope of the arbitration agreement. . . If, however, the point in dispute is whether the contract containing the clause was ever entered into at all, or was void ab initio, illegal, or obtained (for example) by fraud duress or undue influence, the clause does not apply and a stay will be refused. " This question arose incidentally for discussion in the Union of India vs Kishorilal Gupta and Brothers(1) where on an examination of the authorities, including Heyman vs Darwins Ltd. (2) this Court held that an arbitration clause embodied in an agreement is an integral part thereof and that it that agreement is non est either because. it was never legally in existence or because it was void ab initio. , then the arbitration clause would also perish with it. Similar decisions had been given in Tolaram Nathmull vs Birla Jute Mfg. Company Ltd.(3) and Hussain Kasam Dada vs Vijayanagaram Commercial Association(4). Reference might in this connection be made to section 33 of the which enacts that a party to an arbitration agreement who desires to challenge the existence or validity of an arbitration agreement should apply to the Court for determination of the question. This section represents the law on the subject as understood in England at the time of that legislation and as declared later by the House of Lords in Heyman vs Darwins Ltd. (2). The scope of section 33 came up for consideration before this Court in Shiva Jute Baling Ltd. vs Hindley & Co. Ltd. (5). There a petition had been filed under that section praying inter alia for a declaration that the contract between the parties containing an (1) ; (2) I. (3)) A.I.R. 1945 Mad. (4) ; (5) (1861) 30 Law. J. Rep. (N.S.) Banks. 193 arbitration clause, was void ab initio on the ground of uncertainty and that there was in fact no contract owing to mutual mistake and it was held that these were questions for decision by Courts and not by arbitrators. We are accordingly of the opinion that the dispute that the contract ' dated September 7, 1955, is illegal and void is not one which the arbitrators are competent to decide under cl. 14 and that inconsequence the respondents are entitled to maintain the present application under section 33 of the . (2)It is next contended for the appellants ,that even if cl. 14 should be held to be inoperative by reason of the fact that the dispute is one relating to the validity of the contract, the respondents are estopped from now challenging the award on that ground, because they appeared before the arbitrators and took part in the proceedings before them. The decision in Ex p. Wyld (1) is relied on in support of this contention. In that case a dispute between an assignee in bankruptcy and a creditor, Mr. Wyld, was referred to arbitration on the, basis of an agreement in writing between them. An award having been pronounced against Mr. Wyld, he disputed its validity on the ground that the assignee had not obtained the leave of the Court for entering into the arbitration. In rejecting this contention the Court observed that under the law the agreement was binding on Mr. Wyld even though the leave of the Court was not obtained and that therefore he was not entitled to take this objection based on the informality of the submission as he had himself acted on it. This decision is clearly of no assistance to the appellants because there was a valid and subsisting submission on which the jurisdiction of the arbitrators to bear the dispute was complete, and that was not affected by the failure of the assignee to obtain the requisite (1) (1861) 30 Law J. Ref. (N.S.) Bankr. 194 leave because that was a matter between him and the Court. But here if the agreement dated September 7, 1955, is void then there was no submission which was alive on which the arbitrators could act and the proceedings before them would be wholly without jurisdiction. If there had been another arbitration agreement apart from and independent of cl. 14 of the contract dated September 7, 1955, it might have been possible to sustain the proceedings before the arbitrators as referable to that agreement. But none such has been set up or proved in the present case. All that is alleged is that the respondents acquiesced in the proceedings. But what confers jurisdiction on the arbitrators to hear and decide a dispute is an arbitration agreement as defined in section 2(a) of the , and where there is no such agreement, there is an initial want of jurisdiction which cannot be cured by acquiescence. It may also be mentioned that the decision in exhibit p. Wyld (1) has been understood as an authority for the position that when one of the parties to the submission is under a disability that will not be a ground on which the other party can dispute the award if he was aware of it. Vide Russel on Arbitration, 16th Edn, p, 320. We are therefore Unable to accept the contention of Mr. Sanyal, that the respondents are estopped by their conduct from questioning the validity of the award. (3)We may now proceed to consider the question whether the contract dated September 7, 1955, is illegal as falling within the prohibition enacted in the notification of the Central Government dated October 29, 1953. It will be convenient to set out the relevant statutory provisions bearing on this question. Section 2(i) of the Forward Contracts (Regulation) Act, 1952, (Act 74 of 1952) hereinafter referred to as 'the Act ' (1) (1861) 30 Law J. Ref. (N.S.) Bank. 10 . 195 defines ready delivery contract ' as meaning "a contract which provides for the delivery of goods and the payment of a price therefore, either immediately or within such period not exceeding eleven days after the date of the contract". 'Forward contract ' is defined in section 2(c) as meaning "a contract for the delivery of goods at a future date and 'which is not a ready delivery contract". Section 2(m) defines specific delivery contract ' as meaning "a forward contract which provides for the actual delivery of specific qualities or types of goods during a specified future period at a price fixed thereby or to be fixed in the manner thereby agreed and in which the names of both the buyer and the seller are mentioned". Section 2(f) defines 'nontransferrable specific delivery contract ' as meaning "a specific delivery contract the rights or liabilities under which or under any delivery order, railway receipt, bill of lading, warehouse receipt or any other document of title relating thereto are not transferable" and finally section 2(n) defines transferable specific delivery contract as meaning "a specific delivery contract which is not a non transferable specific delivery contract". Chapter IV of the Act contains provisions conferring authority on the Central Government to prohibit certain classes of forward contracts. ,Section 15(1) of the Act enacts: "15(1) The Central Government may by notification in the Official Gazette, declare this section to apply to such goods or class of goods and in such areas as may be specified in the notification, and thereupon, subject to the provisions contained in section 18, every forward contract for the sale or purchase of any goods specified in the notification which is entered into in the area specified 196 therein otherwise than between members of a recognised association or through or with any such member shall be illegal. " Where a notification has been issued under 15(1) it is provided in section 16 that all forward contracts falling within the notification shall be deemed to be closed out and that the seller shall not be bound to give and the buyer shall not be bound to take delivery of the goods". Then comes section 17 which is as follows: "1711). The Central Government may, by notification in the Official Gazette, declare that no person shall, save with the permission of the Central Government, enter into any forward contract for the sale or purchase of any goods or class of goods specified in the notification and to which the provisions of section 15 have not been made applicable, except to the extent and in the manner, if any, as may be specified in the notification. (2)All forward contracts in contravention of the provisions of subsection (1) entered into after the date of publication of the notification thereunder shall be illegal. (3)Where a notification has been issued under subsection (1), the provisions of sec tion 16 shall, in the absence of anything to the contrary in the notification, apply to all forward contracts for the sale or purchase of any goods specified in the notification entered into on or before the date of the notification and remaining to be performed after the said date as they apply to all for ward contracts for the sale or purchase of any goods specified in the notification under sec tion 15. " 197 Section 18(1) provides that these provisions shall not apply to non transferable specific delivery contracts for the sale or purchase of any goods. To analyse the scheme of the Act; it divides Contracts of sale of goods into two categories, 'ready delivery contracts, and 'Forward Contracts '. Forward Contracts are classified into those which are Specific delivery contracts ' and those which are not. , Then again "specific delivery contracts ' are divided into transferable specific delivery contracts ' and non transferable specific delivery contracts. ' Section 18(1) exempts from the operation of the Act "non transferable specific delivery contracts '. The net result of these provisions is that all forward contracts except those which are non transferable specific delivery contracts can be declared illegal by notification issued under the Act. Such a notification was issued by the Central Government in exercise of the powers conferred by section 17 of the Act, on October 29, 1953. It is as follows : "No. 2(24) Jute/53 In exercise of the powers conferred by section 17 of the Forward Contracts (Regulation) Act, 1952 (LXXIV of 1952), the Central Government hereby declares that no person shall enter into any forward contract other than a nontransferable specific delivery contract for the sale or purchase of raw jute in any form, except to the extent and in the manner specified below, that is to say: (1)all forward contracts, other than non transferable specific delivery contracts for the sale or purchase of raw jute entered into before the date of this notification and repaining to be Performed after the said date 198 shall be deemed to be closed out at the rate prevailing at the time at which the Forward Market closed on the said date: (2)all differences arising out of any contracts so deemed to be closed out shall be payable on the basis of the rate specified in clause (1) of this notification and the seller shall not be bound to give and the buyer shall not be bound to take delivery of raw jute. " The contract with which we are concerned in these appeals was entered into on September 7, 1955, when the notification aforesaid was in force, and so it would be hit by it, unless it is a non transferable specific delivery contract and the point for decision is whether it is that. There is no dispute between the parties that it is a specific delivery contract. It is between named buyers and sellers the goods are specified, as also the period during which they have to be actually delivered and their price is fixed. What is in controversy is whether it is transferable or non transferable. There was considerable argument before us on the question as to assignability of a contract. The law of the subject is well settled and might be stated in simple terms. An assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well recognised distinction between these two classes of assignments. As a rule obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand rights under a contract are assignable unless the contract is personal in its nature the rights are incapable of assignment either under the law or under an agreement between the parties. 199 In the light of the principles stated above, we shall now consider whether the contract dated September, 7, 1955, is or is not transferable. As it is only a benefit under a contract that can be assigned, the discussion really centres round two questions, are the buyers entitled to assign their right to got the goods on payment of price ? And are the sellers entitled to assign their right to receive the price on delivery of the goods ? On the question as to the rights of the buyers to assign their right to the goods, the matter is clear beyond all doubts, The licence which authorises the appellants to import the goods from East Pakistan also prohibits them expressly from assigning the same. In this connection it should be noted that, owing to the exigencies of Foreign Exchange, there have been in force, at all material times, restrictions on import of goods. The nature of these restrictions and the policy behind them were examined by this Court quite recently in Daya vs Joint Controller of imports and Exports (1) and it is unnecessary to repeat them. It is sufficient for the present purpose to state that the issue of import licences by the Government was restricted to persons who had been engaged in the business of import during a specified period and there were also limitations on the extent to which they could import. Manufacture of jute occupies the pride of place among the industries of West Bengal. Raw jute required for the business is largely imported from East Pakistan, and for that purpose import licences were being granted from time to time, to manufactures of jute. During the period of the contract with which we are concerned the appellants held two import licences from the Government of India (1) No. A 062290/52 and (2) A 063733/52. The licence No. A 062291)/52 which is in the standard. (1) ; 200 form is. so far as it is material for the present dis cussion, as follows: "Import Trade Control. Office of the Joint Chief Controller of Imports, Calcutta. Licence No. A 062290152/A.U./C.C.I/C. For Exchange Control purposes only. Class of Importer. Actual User or Contract. (Valid at any Indian Port). (Not transferable except under a letter of authority from the authority who issued the licences or from any Import Trade Controller). Messrs. Khardah Co. Ltd. of 7. Wel lesley Place, Calcutta are hereby authorised to import the goods of which particulars are given below : 1. Country from which consigned . Pakistan 2. Country of origin . " 3. Description of goodsRaw Jute . Raw Jute 4. Serial No. and part of the I.T.C. Schedule . 174 IV 5, Quantity . 50,000 Mds. (Fifty thou . sant ma . unds only). This licence is issued subject to the condition that the goods will be utilised only for consumption as raw material or accessories in the licence bolder 's factory and that no portion thereof will be hold to any party. " 201 It will be noticed that the licence is non transferable and that further the goods to be imported are not to be sold to any party but to be utilised for manufacture in the factory of the licencee. In view of the terms of the licence there can be no question of assignment of the contract by the buyers. That is not disputed. Turning next to the sellers, can they assign their right to the price on delivery of the goods ? The learned Judges in the Court below held that they could, because there was noting personal in the contract, and nothing in its terms which barred the right to assign a benefit which a party had under the general law. The appellants assail the correctness of this decision. They contend the terms of the contract must be construed in the light of the surrounding circumstances, and especially of the import licence, and that if that is done, the pro.per conclusion to come to is that the agreement is not transferable. This contention must now be examined. The appellants sought, in the first instance, to establish on the basis of clauses 12 and 14 that the agreement is personal in its character, and is therefore not assignable. Now the contract in question is one for the sale of goods, and ordinary there can be nothing personal about it. It is of no consequence to the buyer as to who delivers the goods. What matters to him is that the goods delivered should be in accordance with the specifications. But it is argued that the status of the parties was a determinative factor in the making of the agreement, and that is sought to be deduced from el. 12 of the contract. That clause provides that if either or both the parties to the contract are members of the Indian Jute Mills Association and if either of them is placed in the disapproved list of Association then the contract shall be deemed to 202 have been broken by that party. That shows, it is said, that the contract was entered into on the faith of the status of the parties as members of the Jute Mills Association. But it is clear from the wording of the clause that the parties to the contract need not necessarily be members of the Association and that being so, the element of status does not enter into it. Clause 14, Which is the arbitration clause, is also relied on as an indication that the contract is personal in its character and incapable of assignment on that ground. But it is settled law that an arbitration clause does not take away the right of a party to a contract to assign it if it is otherwise assignable. Vide Shayler vs Woolf (1) and Russel on Arbitation, 16th Edition, p. 65. It is also argued that the rights conferred on the 'sellers under el. 8 are incapable of assignment in law, and that is an indication that the rights under the agreement are not transferable. Clause 8 confers on the sellers certain rights against buyers, such as the rights to resell and so forth, when the latter refuse to accept the documents. What is said is that these rights cannot be assigned in law as they are really claims founded on breach of contract by the buyers. That undoubtedly is so, but that does not conclude the question. There is in law a clear distinction between assignment of rights under a contract by a party who has performed his obligations thereunder, and assignment of a claim for compensation which one party has against the other for breach of contract. The letter is a mere claim for damages which cannot be assigned in law, the former is a benefit under an agreement, which is capable of assignment. The fact therefore that the rights under el. 8 are incapable of assignment does not stand in the way of the respondents assigning their rights to receive the ice after they had performed their obligations. Pr (1) 203 That brings us on to cl. 3 on which the appellants mainly. Under that clause the sellers are entitled to receive the price only on their delivering to the buyers the full set of shipping documents. Now the argument is that as the delivery of documents and payment of cash are to be simul taneous, it is a case of benefit under a contract being burdened with a liability, and that such a benefit is incapable of assignment under the law. The learned Judges in the Court below took the view that there was nothing in this clause which prevented the seller from transferring the documents to a third party authorising him to deliver them to the buyers, and then to receive the price from them, and they further observed. "Although in presenting the shipping documents the transferee from the seller may act as his agent, he will not be an agent in receiving payment from the buyer, because the right to receive the payment has been transferred to him and has become his own right". The respondents maintain that that is the correct view to take of the rights of the parties under this clause and rely on the statements of law in Halsbury 's Laws of England, and the decision British Waggon Co. vs Lea (1). In Halsbury 's Laws of England, 3rd Edn., Vol. 8, p. 258, para 451, the law is thus stated : "There is, however, no objection to the substituted performance by a third person of the duties of a party to the contract where the duties are disconnected from the skill, character, or other personal qualifications of the party to the contract. ID such a circumstance, however, the liability of the original contracting party is not discharged, and the only effect is that the other party may be able to look to the third party for the performance of the contractual obligations in addition to the original contracting party". In British Waggon Co. vs leg(1) the facts (1) , 154. 204 were that a company called the Parkgate Waggon Company had hired waggons to the defendant on the terms that he should pay rent for their use, and that the Company should execute the necessary, repairs for them. The company then assigned its rights under the contract to another company called the British Company, subject to the obligation to execute the repairs. In accordance with his agreement the assignee did execute the repairs. Thereafter Parkgate Waggon Co, demanded rent from the defendant, who resisted the claim on the ground that the Company had disabled itself from performing the contract, by reason of assignment to which he had not consented. In overruling this contention the Court observed that as the work to be done under the contract did not require personal skill Or confidence, the Parkgate Waggon Company could get it done by any person, and that would be sufficient performance. This decision would be in point if the respondents had arranged to deliver the jute to the appellants through another person, and then claimed the price, and that claim was disputed. But it is not an authority on the question which we have to decide, whether the assignment of the benefit under the contract burdened as it is with an obligation would itself be valid. It is true that the Court observed in passing "That a debt accruing due under a contract can, since the passing of the Judicature Acts, be assigned at law as well as equity, cannot since the decision in Brice vs Bannister(1) be disputed". But it should be noted that both the companies figured is plaintiffs, and therefore it is not possible to read chose observation as a decision that an assignment of a benefit burdened with an obligation is valid. It was argued for the respondents that it would have been open to them to first obtain the requisite certificate from the Dank in East Pakistan (1) 205 then deliver it to the appellants, and then assign their right to the price. But the question is not what could have been done by a seller in a forward contract generally, but what was in fact contemplated by the parties to this contract under el. 3, The provisions that the shipping documents in Pakistan should be taken in the name of ' the buyer that the sellers should deliver them to the buyers and receive the price, and that the goods should be delivered at the Mills of the buyers, strongly suggest that the intention of the parties was, that neither of them should assign the contract. Whatever doubts one might have as to the true import of cl, 3 it may be conceded, that it lends itself to the construction put on it by the learned Judges in the Court below, the position becomes unmistakably clear when it is construed in the light of the import licence in favour of the appellants. It has been already mentioned that it is this which authorises the appellants to import raw jute from East Pakistan. It is statedly not transferable, and further the goods imported thereunder are to be used only for consumption in the Mills of the appellants. It is contended for the respondents that they are not parties to this licence and that their rights under the general law to assign benefits under the contract remain unaffected by it. This is to take too narrow a view of the true position. Far from being strangers to the licence, the evidence clearly establishes that they are very intimately associated with it. On September 26, 1955, acting under licence No, A 062290/52 the appellants wrote to the Joint Chief Controller of Imports and Exports, Government of India, to "issue a letter of authority in favour of sellers Messrs. Raymon & Company (India) Ltd., for 2,500 maunds jute cuttings to be imported from Narayanganj, (East Pakistan), against the above (licence)." 206 The letter of authority was received by the appellants on September 29, 1956, and they sent it on to the respondents with the following letter "Dear Sirs, Contract No. 2306 We are sending. here with the Exchange Control Copy of Letter of Authority for 1250 Mds. Jute cuttings against the above." Contract No. 2306 referred to in this letter is the contract dated September 7, 1955, involved in this dispute. It is on the strength of this letter of authority that the respondents opened a letter of credit with a Bank in East Pakistan and the goods were imported. We have not overlooked the fact that while the contract is dated September 7, 1955, the licence is dated September 22, 1955, and the letter of authority to the respondents is even later, and it might strike one as an anachronism to read the licence and the letter of authority into the contract. But it should be remembered that the licences are in standard form and are renewed from time to time except as to details concerning the imports, and the course of business followed in the jute market was throughout in conformity with the conditions laid down. in the licence and was of the same pattern. Now the agreement provides that the shipping documents in Pakistan are to be taken in the name of the buyers that the sellers are "to open letter of credit" and that the goods are to be delivered ,at the buyer 's Mill siding". We have no doubt that these terms have been inserted with a view to give effect to the conditions on which licences are granted and that it was the understanding of both the sellers and buyers that the rights under the contract were not to be transferred. 207 But it is argued for the respondents that unless there is in the contract itself a specific clause prohibiting transfer, the plea that it is not transferable is not open to the appellants and that evidence aliunde is not admissible to establish it and the decision in Seetharamaswami vs Bhagwathi Oil Company(1), Hanumanthiah vs Thimanthiah(2) and Hussain Kasam Dada vs Vijayanagaram Comm. Asson. (3) are relied on in support of this position. We agree that when a contract has been reduced to writing we must look only to that writing for ascertaining the terms of the agreement between the parties but it does not follow from this that it is only what is set out expressly and in so many words in the document that can constitute a term of the contract between the parties. If on a reading of the document as a whole, it can fairly be deduced from the words actually used therein that the parties had agreed on a particular term, there is nothing in law which prevents them from setting up that term. The terms of a contract can be expressed or implied from what has been expressed. It is in the ultimate analysis a question of construction of the contract. And again it is well established that in construing a contract it would be legitimate to take into account surrounding circumstances. Therefore on the question whether there was an agreement between the parties that the contract was to be non transferable, the absence of a specific clause forbidding transfer is not conclusive. What has to be seen is whether it could be held on a reasonable interpretation of the contract, aided by such considerations as can legitimately be taken into account that the agreement of the parties was that it was not to be transferred. When once a conclusion is reached that such was the understanding of the parties, there is nothing in law which prevents effect from being given to it. That was the view (1) (2) A.I.R. 1954 Mod. 87. (3) A.I.R. 1958 Mad. 528, 531. 208 taken in Virjee Daya & Co. vs Ramakrishna Rice & oil Mills(1), and that in our opinion is correct. It remains to deal with one other question on which the parties have been at issue. It turns on a consideration of section 2(f) of the Act. A non transferable specific delivery contract is defined in section 2(f), omitting what is not material, as a specific delivery contract the rights or liabilities under which are not transferable. Now the contention of the appellants is that as admittedly the liabilities under the contract are not transferable it is a non transferable contract within section 2(f). But the res pondents argue that on that construction no forward contract will be hit by the notification because liabilities under the contract can never be transferred and so the notification would become futile. They accordingly contend that word or ' should be read as an& and that on that construction unless both the rights and liabilities under the contract are non transferable it is not a non transferable contract as defined in a. 2(f). The appellants urge that on this construction no contract would be non transferable as rights under a contract can always be transferred unless it is personal in its character and the section would become practically useless. The intention of the legislature as expressed in the section is, it must be admitted, clouded in obscurity and uncertainty. But in the view we have taken, that the contract is on its terms properly construed, non transferable, it becomes unnecessary to decide between the arrival contentions as to the true import of section 2(f). In the result the appeals are allowed with costs one set throughout and one hearing fee. Appeals allowed. (1) A.I.R. 1956 Mod.

IN-Abs

On September 7, 1955, the appellant company entered into a contract with the respondents for the purchase of certain bales of jute cuttings to be delivered by the respondents in equal installments every month in October, November and December, 1955. Under cl. 3 of the agreement the sellers were entitled to receive the price only on their delivering to the buyers the full set of shipping documents. Clause 8 conferred on the sellers certain rights against the buyers such as the right to resell if the latter refused to accept the documents. Clause 14 provided that all disputes arising out of or concerning the contract should be referred to the arbitration of the Bengal Chamber of Commerce. As the respondents failed to deliver the goods as agreed the appellants applied to the Bengal Chamber of Commerce for arbitration. The respondents appeared before the arbitrators and contested the claim, but an award was made in. favour of the appellant. Thereupon the respondents filed an application in the High Court of Calcutta under section 33 of the , 184 challenging the validity of the award on the ground that the contract dated September 7, 1955, was illegal as it was in contravention of the notification of the Central Government dated October 29, 1953, issued under section 17 of the Forward Contracts (Regulation) Act, 1952, which declared that no person shall enter into any forward contract other than a nontransferrable specific delivery contract for the sale or purchase of raw jute in any form. . . The appellant pleaded (1) that on the terms of the arbitration clause the question whether the contract dated September 7, 1955, was illegal was one for the arbitrator to decide and that it was not open to the respondents to raise the same in proceedings under section 33 of the ; (2 ) that the respondents were estopped from questioning the validity of the award by reason of their having submitted to the jurisdiction of the arbitrators ; and (3) that, in any case, the contract was a nontransferrable specific delivery contract within section 2 (f ) of the Forward Contracts (Regulation) Act and was not hit by the notification dated October 29, 1933. Held, that : (1) the dispute as to the validity of the contract dated September 7, 1955, was not one which the arbitrators were competent to decide under cl. 14 and that in consequence the respondents were entitled to maintain the application under section 33 of the . When an agreement is invalid every part of it including the clause as to arbitration contained therein must also be invalid. Leyman vs Darwins Lid. , , Union of India vs Kighorilal Gupta and Brothers, ; , Tolaram vs Birla Jute Manufacturing Company Lid., I. L. R. , relied on. (2)the respondents were not estopped by their conduct from questioning the validity of the award. Ex parte Wyld, (1861) 30 Law J. Rep. (N. section) Bank. 10, explained. (3)on the true construction of the contract dated Sep tember 7, 1955, read with the terms of the import licence in favour of the appellant, the agreement between the parties was that the contract was not to be transferred. In construing a contract it would be legitimate to take into account surrounding circumstances and, therefore, on the whether there was an agreement between the parties 185 that the contract was to be non transferable, the absence of a specific clause forbidding transfer was not conclusive. Virjee Daya & Co. vs Ramakrishna Rice & Oil Mills, A. 1. R. , approved. British Waggon Co. vs Lea, , dist inguished. Accordingly, the contract in question was not hit by the notification dated October 29, 1953.

iminal Appeal No. 72 of 1961. Appeal by special leave from the judgment and order dated December 20, 1960, of the Bombay High Court in Criminal Apeal No. 1207 of 1960. Jai Gopal Sethi, C.L. Sareen and R.L. Kohli, for the appellant, G. C. Mathur and P. D. Menon, for the respondent. July 24. The Judgment of the Court was delivered by SHAH, J. On May 1, 1962, we ordered after arguments were concluded that the appeal be allowed and the conviction of the appellant be set aside. We now proceed to record our reasons in support of the order. 398 The appellant, Ramesh Amin, and seven others were tried in the Court of Session, Aurangabad, for offences punishable under sections 366, 366A. Indian Penal Code, and abetment thereof. The appellant was the third accused at the trial. The Sessions Judge convicted accused Nos. 1 to 4 and 7 of the offences charged against them and sentenced them to suffer rigorous imprisonment for two years for each offence, and acquitted the rest. The High Court of Bombay entertained appeal of accused Nos. 1 to 4 (but not of accused No. 7) and set aside the order of conviction and sentence against them for the offences punishable under section 366 read with section 34 and section 366A of the Indian Penal Code. The High Court, however, convicted the appellant of abetting the seventh accused in inducing a minor girl, Anusaya, to go with other persons from her residence at Kabadipura to Gulzar Theatre, and then to a house known as Bohori Kathada with intent that she may or knowing that she was likely to be seduced to illicit intercourse. With special leave the appellant has appealed to this Court. The seventh accused, Patilba, is a resident of Aurangabad, and the eighth accused is his wife. Anusaya is the daughter of Shakuntala by her husband Kashinath. After the death of Kashinath, Shakuntala brought her infant daughter Anusaya to the house of Patilba and started living with him as his mistress. Sometime later Shakuntala left the house of Patilba and took up residence at Nasik but Anusaya 'continued to live with Patilba and was brought up by him. Marriage was arranged by Patilba between Anusaya and one Ramlal, but Anusaya declined to live with her husband. Pat ilba introduced Anumaya to some "customers" and she started indulging in promiscuous intercourse, for money. It was the prosecution case that on January 13, 1960, the appellant went to the residence of Patilba and asked him to bring Anusaya and 399 one Chandrakala (a woman following the profession of a prostitute) to the Gulzar Theatre, and accordingly, Patilba, the eighth accused, Chandrakala and Anusaya went to the Theatre. At the instance of the appellant, Anusaya and Chandrakala were taken by one Devidas (who has given evidence as an approver) to Bohori Kathada. Sub Inspector Pagare of the Police Station City Police Chowk, Aurangabad, had received information that some persons were consuming illicit liquor in a room at Bohori Kathada and he arranged to raid that house. Pagare found accused Nos. 1 to 5 and Devidas in a room consuming liquor. He also found Chandra kala and Anusaya in an inner apartment, Persons found in the room were arrested and sent for medical examination to the local Civil Hospital, and it was found that Anusaya had not attained the age of 18 years. Pagare then laid an information before the Judicial Magistrate, Aurangabad, for offence punishable under the Bombay Prohibition Act, 1949 (we are informed at the Bar that in respect of those offences the accused were acquitted and we are not concerned in this case with those offence) and also for offences punishable under sections 366 and 366A of the Indian Penal Code against nine persons including the appellant, Patilba and Devidas. In the course of proceedings for commitment to the Court of Session, Devidas was tendered pardon on condition of his making a full disclosure of the circumstances within his knowledge. The case was then committed to the Court of Session, Aurangabad for trial. The Court of Session held that accused Nos. 1 to 4 had in furtherance of their com mon intention kidnapped Anusaya a girl below the age of 18 years in order that she may be forced or seduced to illicit intercourse or knowing it to be likely that she would he forced or seduced to illicit intercourse, and the seventh accused Patilba had abetted the commission of that offence, and that accused Nos. 1 to 4 and 7 had induced Anusaya to 400 go from her residence to the Gulzar Theatre and from the theatre to Bohori Kathada with intent that she may be or knowing that it was likely that she would be forced or seduced to illicit intercourse. He accordingly convicted accused Nos. 1 to 4 of the offence under section 366 read with section 34 of the Indian Penal Code and also of the offence under a. 366A of the Indian Penal Code. The High Court of Bombay in appeal acquitted accused Nos. 1 to 4 of the offence of kidnapping because, in their view, accused Nos. 1 to 4 had "nothing whatever to do with the original kidnapping by Patilba (the 7th accused) and since he was not the lawful guardian of this girl, her being bro ught to this room cannot be regarded as kidnapping". The learned Judges also acquitted accused Nos, 1 to 4 of the offence under section 366A observing that ,,there is no evidence of any direct talk between any of the accused and the girl, nor even of any inducement offered through Patilba (accused No. 7). Even so far as accused No, 3 is concerned, there is no direct talk between Anusaya and accused No, 3 which can be regarded as an inducement to her to move either from the house of Patilba or from the theatre to the room in question. " But in their view the case against tile appellant "did not end with this" : They observed. "The evidence. . . . clearly indicates that accused No. 3 instigated Pat ilba and Devidas to bring the girl to the theatre and thereafter to the room in question. Patilba, as we have stated, being in custody of this girl and the girl being minor and helpless, induced or forced her to go to the cinema and thereafter to this room and actually left her there. So far Patilba was concerned, he intended that she should be forced or seduced to illicit intercourse by one or the other of 401 the accused. Accused No. 3 by asking Patilba to bring the girl to the theatre and asking Devidas and Patilba to bring the girl to the room clearly instigated Patilba in the comm ission of this offence. He must, therefore, be held clearly guilty of the offence of abet ment of this offence by Patilba. " The High Court accordingly convicted the appellant of the offence under section 366A read with section 109 of the Indian Penal Code, because, in their view, he had abetted the commission of an offence punishable under section 366A by Patilba by instigating the latter to bring Anusaya to the theatre and by by further instigating Patilba and Devidas to bring Anusaya from the theatre to Bohori Kathada. In our view, the appellant cannot in law be held guilty of abetting the commission of an offence punishable under section 366A, Indian Penal Code, by Patilba. The facts proved by the evidence are these: Anusaya at the material time had not attained the age of 18 years. She was brought up by Patilba and even though she had married Ram Lal she was at the material time and for many months before living under the guardianship of Patilba. For a long time before the date of the offence Anusaya was accustomed to indulge in promiscuous intercourse with customers" for money. She used to entertain, as she herself admitted, "one or two customers every day" and bad before the date of the offence been habituated to the life of a prostitute. On the day in question she and her companion Chandrakala went to the Gulzar Theatre accompanied by Patilba. In the theatre Anusaya and Chandrakala were seeking customers: they repaired during the break in the show to the entrance of the theatre for that purpose, but she had to return disappointed because they found a police van parked near the 402 entrance. Anusaya and the 6th accused went to Bohori Kathada for carrying on their profession as prostitutes. There is no evidence that she was not willing to go to Gulzar Theatre on the night in question nor is there any evidence that she was unwilling to go to Bohori Kathada to which she and her companion were invited for the purpose of prostitution. Do these facts make out a case against the appellant of abetment of the offence of procuration of a minor girl punishable under section 366A of the Indian Penal Code? Section 366A was enacted by Act XX of 1923 to give effect to certain Articles of the International Convention for the Suppression of Traffic in Women and Children signed by various nations at Paris on May 4, 1910. There are three principal ingredients of the offence: (a) that a minor girl below the age of 18 years is induceed by the accused, (b) that she is induced to go from any place or to do any act, and (c) that she is so induced with intent that she may be or knowing that it is likely that she will be forced or seduced to illicit intercourse with another person, The evidence clearly establishes that Anusaya had not at the material time attained the age of 18 years. But there is no evidence on the record that Patilba induced Anusaya to go to the theratre or from the theatre to Bohori Kathada. It must be assumed that when Patilba accompanied Anusaya to the theatre and from the theatre to the Bohori Kathada at the suggestion of the appellant he knew that she was going for plying her profession as a prostitute. But in our judgment a person who merely accompanies a woman going out to ply her profession of a prostitute, even if she has not attained the age of eighteen years, does not thereby commit an offence under section 366A of the Indian Penal Code. It cannot be said that thereby he induces her to go from any place or to do any act with the intent or knowledge contemplated by the section. We agree that seduction to illicit intercourse contemplated by the section does not mean merely straying from the path of virtue by a female for the first time. The verb "seduce ' is used in two senses. It is used in its ordinary and narrow, sense as inducing, a woman to stray from the path of virtue for the first time: it is also used in the wider sense of educing a woman to submit to illicit intercourse at any time or on any occasion. It is in the latter sense that the expression has been used in as. 366 and 366A of the Indian Penal Code which sections partially overlap. This view has been taken in a large number of cases by the Superior Courts in India, e. g. Prafula kumar Basu vs The Emperor (1), Emperor vs Laxman Bala (1), Krishna Maharana vs The King Emperor (3), In re Khalandar Saheb (4) Suppiah vs Emperor (5), Pessumal vs Emperor (6), King Emperor vs Nga Ni Ta (7) and Kartara vs The State (8). The view expressed to the contrary in Emperor vs Baijnath (9), Saheb Ali vs Emperor (11) Aswini Kumar Roy vs The State (10) and Nara vs Emperor (12) that the phrase used in section 366 of the Indian Penal Code is "Properly applicable to the first act of illicit intercourse, unless there be proof of a return to chastity on the part of the girl since the first act" is having regard to the object of the Legislature unduly restrictive of the content of the expression "seduce" used in the Code. But this is not a case in which a girl who had strayed from the path of virtue when she (1) Cal. 1074 (2) Bom. (3) Pat. (4) A. I. R. (5) A. I. R. 1930 Mad. (6) (7) (8) I. L. R. [1957] Punjab 2003. (9) All. (10) Col. 1457 (11) A. I. R. A. I. R. 404 was in the custody of her guardian and had with a view to carry on her affair accompanied her seducer or another person. Such a case may certainly fall within the terms of s.366 or s.366A whichever applies. But where a woman follows the profession of a prostitute, that is, she is accustomed to offer herself promiscuously for money to "customers", and in following that profession she is encouraged or assisted by someone, no offence under section 366A is committed by such person, for it cannot be said that the person who assists a girl accustomed to indulge in promiscuous intercourse for money in carrying on her profession acts with intent or knowledge that she will be forced or seduced to illicit intercourse. Intention on the part of Patilba or knowledge that Anusaya will be forced to subject herself to illicit intercourse is ruled out by the evidence: such a case was not even suggested. Seduction implies surrender of her body by a woman who is otherwise reluctant or unwilling to submit herself to illicit intercourse in consequence of persuasion, flattery, blandishment or importunity, whether such surrender is for the first time or is preceded by similar surrender on earlier occasions. But where a woman offers herself for intercourse for money not casually but in the course of her profession as a prostitute there are no scruples nor reluctance to be overcome, and surrender by her is not seduction within the Code. It would then be impossible to hold that a person who instigates another to assist a woman following the profession of a prostitute abets him to do an act with intent that she may or with knowledge that she will be seduced to illicit intercourse. Appeal allowed.

IN-Abs

The appellant was convicted of the offence under section 366A read with section 109 of the Indian Penal Code. The case against him was that A who was a minor below the age of 18 years was brought up by P and had before the date of the offence been habituated to the life of a prostitute. On the day in question the appellant went to the residence of P and asked him to bring A to a theatre, P accompanied A to the 397 theatre where the latter sought some customers. They were taken by another person to a place called Bohori Kathada at which place A was invited for the purpose of prostitution. When P accompanied A to the theatre and from there to Bohori Kathada he knew that she was going for plying her profession as a prostitute. Held, that the appellant could not in law be held guilty of abetting the commission of an offence under section 366A of the Indian Penal Code by P. A person who merely accompanies a woman going out to ply her profession of a prostitute, even if she has not attained the age of 18 years, could not be said thereby to induce her to go from any place or to do any act with the intent or knowledge that she will be forced or seduced to illicit intercourse within the meaning of section 366 A. Seduction implies surrender of her body by a woman who is otherwise reluctant or unwilling to submit herself to illicit intercourse whether such surrender is for the first time or is preceded by similar surrender on earlier occasions ; but where a person in the course of her profession as a prostitute offers herself for profession as a prostitute offers herself for intercourse, there are no sucruples nor reluctance to be overcome, and surrender by her is not seduction within the Code.

Appeal No. 620 of 1960. Appeal by special leave from the judgement and decree dated February 11, 1954, of the former Hyderabad High Court in Second Appeal Suit No. 476/4 of 1954 Fasli. Gopal Singh and B. section Narula, for the appellant. A. Banganatham Chetty, A. V. Rangam, A. Vedavali and P. C. Agarwala, for respondent No. 1. 1962. May 4. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. This is an appeal by special leave against the judgment of the High Court of Hyderabad whereby it affirmed the judgment of the Court of the Additional District Judge of Adilabad dismissing the suit of the appellant. The facts are that there was a joint family consisting of one Chakkayya and his, younger brother Rajanna. Chakkayya died in year 1923 leaving 231 behind the appellant his son who it is said was at that time a minor a few months old. On December 21, 1923, Rama Rao second defendant, sold the lands which are the subject matter of the suit to Rajanna. It appears that as there was some difficulty in Rajanna getting possession of the pro perties which were stated to have been 'usufructuarily mortgaged to the first defendant, the transaction of sale was cancelled and the same was endorsed on the sale deed. Thereafter the second defendant executed a fresh sale deed in favour of the first defendant and the latter has ever since continued in possession. The appellant filed the present suit on February 14, 1943, for recovery of possession of these properties from the first defendant on allegation that the first defendant was in management of the properties belonging to the joint family of Chakkayya and Rajanna and himself, that the sale deed in favour of Rajanna dated December 21, 1923, vested title to the suit properties in the joint family, that the first defendant had entered on the management of these properties also as manager on behalf of the joint family, that Rajanna died in 1930 as a minor, that the first defendant was discharged from the management in 1933, that he had not surrendered possession of the suit properties to the family, but was setting up a title to them in himself on the basis of a sale deed executed by the second defendant subsequent to the sale deed dated December 21, 1923 in favour of Rajanna, but that the said sale deed could confer no title on him, as the second defendant had sold the lands previously to Rajanna, and had no title which he could thereafter convey. It was further alleged that the plaintiff became a major some time in June 1940 and that the suit for possession was within three years of his attaining majority and not barred by limitation. The first defendant contested the suit. He pleaded that he was merely a jawan or servant 232 in the service of the family, that he was not in management of the joint family properties, that the suit lands had been usufructuarily mortgaged to him in 1916 for Rs. 800/ long before they were sold to Rajanna in 1923, that the sale in favour of Rajanna had been cancelled with his consent he having been paid back the consideration, that it was thereafter that the second defendant sold the properties to him, and that he had therefore acquired a good title to them, and that further as he had been in possession of the properties thereafter for over the statutory period in assertion of a title as owner, be had acquired title to them by prescription and that the suit was barred by limitation. He denied that Rajanna was a minor at the relevant dates as stated in the plain. On these pleadings the District Munsiff framed the following issues (1) Whether according to the suit (plaint), the suit lands have been sold by defendant No. 2 in favour of Padma Rajanna through registered sale deed dated 17th Bahman 1334 F (corresponding to 21st Dec. 1923) ? (2) Whether as stated by the plaintiff in his suit. , the family of the plaintiff and Padma Rajanna was joint ? And whether on account of the death of the said Rajanna, the plaintiff is entitled to the suit lands ? (3) Whether the defendant No. 2 has executed the sale deed dated 3 Farwardi 1334 F (corresponding to 4th February 1925 AD) and what is its legal effect on the sale deed dated 17th Bahman 1334 F. (corresponding to 21st December 1923) ? (4) Whether at the time of the execution of the sale deed dated 3rd Farwardi 1334 F (21. 12. 1923) the plaintiff was minor? And whether this suit is within limitation ? 233 To what relief are the parties entitled to ? The learned District Munsiff, Nirmal, who tried the suit held that as the endorsement of tHE cancellation of the sale deed in favour of Rajanna was unregistered, no title passed to the second defendant by reason of that endorsement and that accordingly the sale by him in favour of the first defendant conferred no title on him and further that the suit had been instituted within three years of the plaintiff 's attaining majority and that it was in time and so he decreed the suit. Against this Judgment and decree there was an appeal by the respondents to the Additional District Court of Adilabad, which held that the plaintiff had not established that he had attained majority within three years of the suit and on the finding the appeal was allowed. The appellant took the matter in second appeal to the High Court of Hyderabad which agreeing with the District Judge, held that the suit was instituted more than three years after the plaintiff had attained majority and dismissed the appeal. It is against this Judgment that the present appeal by special leave has been filed. The first contention that is urged on behalf of the appellant is that the finding that the plaintiff had attained majority more than three years prior to the suit was erroneous. But there are concurrent findings on what is a question of fact. and we see no sufficient reason to differ from them. The contention strongly urged by Mr. Gopal Singh in support of the appeal is that the first defendant bad been put in management of all the properties belonging to the plaintiff 's family and that having entered into the possession of the suit lands as manager on behalf of the family, it was not open to him 'to set up a title by adverse possession, unless he first surrendered possession of 234 the properties. On this point the learned Judges of the High Court held that there was no satisfactory proof that the first defendant had been in management of the properties as agent of the plaintiff and his family. The contention of the appellant is that there is a large body of evidence in support of the allegations in the plaint that the first defendant was not a mere servant but manager of the properties, that he had not gone into the box and denied them and that under the circumstances it must be held that he entered into possession of the properties as manager and it was not competent for him to set up a claim by adverse possession. The respondent argues that he was merely a jawan in the service of the family of appellant and that he had nothing to do with the management of the properties and that as there was no evidence worth the name in support of the allegations in the plaint, there was no need for him to enter into the box and give evidence that he was not in management of the land%. If the fact of this appeal turned on a determination of this question, we should. on the materials before us, feel considerable difficulty in agreeing with the decision of the learned Judges. The failure of the first defendant to go into the box would have been sufficient to shift the burden of proving that he was not the manager on to him, Vide Murugesam Pillai vs Manickavasaka Pandara(1) and Guruswami Nadar vs Gopalaswami Odayar (2). But then it is pointed out by the respondent that the suit lands had come into his possession under a usufructuary mortagage executed by the second defendant in 1916, that there was no allegation that this mortagage was obtained by him while he was the manager of the family properties or on (1) [1917] L.R. 44 I.A. 98. (2) Mad. 235 behalf of the family, and that when once his possession has been traced to the usufructuary mortgage of 1916, there could be no question thereafter of his having entered into possession of the properties as manager on behalf of the family. Before us the appellant did not dispute the truth of the usufructuary mortgage in favour of the first respondent nor did he contend that in taking that mortgage the first defendant acted on behalf of the family. Such a contention would be untenable as at that time Chakkayya the father of the plaintiff and the manager of the joint family was alive. That being so the question whether the first defendant is precluded as manager from acquiring title by adverse possession does not arise for decision because he entered into possession of the properties in his own right as usufructuary mortgagee. On the finding reached above that the first defendant entered into possession of the properties as usufructuary mortgagee in 1916, the question is what are the rights of the appellant. On the basis of the sale deed by the second defendant in favour of Rajanna he would be entitled to redeem the mortgage. But the present suit is not one for redemption of the mortgage but for ejectment. and that by itself would be a ground for dismissal of the suit. But in view of the fact that this litigation had long been pending, we consider it desirable to decide the rights of the parties on the footing that it is a suit to redeem the usufructuary mortgage, without driving the parties to a separate action. We have now to consider the defence of the first defendant to the suit, treating it as one for redemption. Now the contention of Mr. Ranganathan Chetty for the respondent Is that he had been in possession of the properties as owner ever since 1923 when the second defendant sold them to him, that he bad thereby acquired a prescriptive title to them, and that the right of the appellant to 236 redeem was thereby extinguished. It is not disputed that when a person gets into possession of properties as mortgagee, he cannot by any unilateral act declaration of his prescribe for a title by adverse possession against the mortgagor, because in law his possession is that of the mortgagor. But what is contended is that if the mortgagor and mortgagee subsequently enter into a transaction under which the mortgagee is to hold the properties thereafter not as a mortgagee but as owner that would be sufficient to start adverse possession against the mortgagor if the transaction is for any reason inoperative under the law. This contention, in our opinion, is well founded. Though there was at one time a body of judicial opinion that when a person enters into possession as a mortgagee he cannot under any circumstances acquire a title by prescription against the owner, the law is now fairly well settled that he can do so where there is a change in the character of his possession under an agreement with the owner, vide Kanda Sami Pillai vs Chinnabba (1). Now the question is was there such an arrangement ? The contention of the respondent is that the agreement between Rajanna and the two defendants under which Rajanna received back the sale consideration and made an endorsement cancelling the Bale followed, as part of the transaction, by the sale of the properties by the second defendant to the first defendant would be sufficient to start adverse possession. The endorsement of cancellation on the back of the sale deed in favour of Rajanna dated December 21, 1923, has been held, as already stated, to be inadmissible in evidence as it is not registered. The result of it is only that there was no retransfer of title by Rajanna to the second defendent, and the family would in consequence continue to be the owner, and that is why the appellant is (1) Mad. 253. 237 entitled to redeem. But the endorsement taken along with the sale deed by the second defendant in favour of the first defendant is admissible in evidence to show the character of possession of the latter. Vide Varatha Pillai vs Jeevanathammal (1). And that was clearly adverse to the owners. The answer of the appellant to this contention is that Rajanna himself was a minor at the time when this arrangement is stated to have taken place and that in consequence no title by adverse possession can be founded on it. We agree that if Rajanna was a minor when he entered into this arrangement that would not operate to alter the character of possession of the first defendant as mortgagee. The respondent contended that there could be adverse possession against a minor in certain circumstances, and relied on the decision in Sitharama Raju vs Subba Raju(2), in support of this position. That is not questioned, but the point for decision is whether possession lawful at the inception can become adverse under an arrangement entered into by a minor. Now a minor is in law incapable of giving consent, and there being no consent, there could be no change in the character of possession, which can only be by consent,. and not by any unilateral act. Therefore the crucial point for determination is whether at the time of the cancellation of the sale deed dated December 21, 1923, Rajanna was minor or major. According to the respondent he was a major and there is evidence also on record in support of this contention. According to the appellant Rajanna was a minor at that time and he died a minor in 1930. On this disputed question of fact there has been neither an issue framed nor evidence adduced. Under the circumstances we think it desirable that the matter should be remanded to the Court of District Munsiff for a fresh inquiry on this question. The plaintiff should (1) [1918] L.R. 46 I.A. 285. (2) Mad. 361. 238 on remand be required to suitably amend the plaint so, as to convert the suit into one for redemption of the usufructuary mortgage of the year 1916. The first defendant will then file his written statement in answer thereto. An issue will be framed whether Rajanna was a major at the time when the sale deed was cancelled. If it is held that he wag a major then the possession of the first defendant thereafter would be adverse and on the findings given by the Courts below the suit will have to be dismissed as barred by limitation. But if it is held that Rajanna was then a minor, then there would be no question of adverse possession and the plaintiff would be the entitled to redeem the mortgage. The decree of the lower court is accordingly set aside and the matter remanded to the Court of the District Munsiff for fresh disposal as stated above. Costs incurred throughout in all the Courts will abide the result. Case remanded.

IN-Abs

In 1961 R executed a usufructuary mortgage of the suit lands in favour of M. Later, in 1923 he executed a sale deed of the same lands in favour of Rajanna, uncle of the appel lant. The appellant and Rajanna formed a joint Hindu family. As there was difficulty in obtaining possession by Rajanna, he R and M entered into an arrangement under which the sale deed was cancelled by making endorsements on the back of it and the lands were sold by R to M. Rajanna died in 1930 as a minor, and in 1943 the apppellant brought a suit against M for possession of the lands on the ground that the cancellation of sale deed of 1923 was ineffective as it was not registered and that accordingly the sale deed in favour of M passed no title to him. M pleaded adverse possession on account of the invalid sale in his favour. The suit for possession was dismissed on the ground that the appellant had filed the suit more than three years after attaining majority. Held, that though the suit for possession was time barred the appellant could maintain a suit for redemption if M had not prescribed title by adverse possession. M who had entered into possession as a mortgagee could acquire title by prescription if there was a change in the character of his possession under an agreement with the owner. The endorsement of cancellation on the sale deed taken along with the sale deed 230 in, favour of M were admissible to show the character of possession of M. This arrangement would clearly show that the possession of M was adverse provided Rajanna was not a minor and was capable of giving his consent. Though, in certain circumstances there could be adverse possession against a minor, possession lawful at the inception could not become adverse under an arrangement with a minor. A minor was in law, incapable of giving consent, and there being no consent, there could be no change in the character of possession which could only be by consent and not by unilateral action. Kanda Sami Pillai vs Chinnabba Mad. 253 and Varatha Pillai vs Jeevarathnammal (1918) L R. 46 I.A. 285, relied on. Sitharama Raju vs Subba Raju, Mad. 361, referred to.

Appeal No. 315 of 1961. Appeal by special leave from the award dated December 29, 1960, of the Industrial Trinal Bihar it Patna in Reference No. 4 of 1960. C. K. Daphtary, Solicitor General of India. and Sardar Bhadur, for the appellants. B.P. Maheshwari, for the respondents. March 9. The Judgment of the Court was delivered by GAJENDRAGADKAR,J. This appeal by special leave, is directed against the order passed by the Industrial Tribunal,Patna, directing the appellant, the Tatanagar Foundry Co., to pay to the respondents, its workmen, 75% of the consolidated wages as compensation for having laid them off for a period of 45 days commencing from December 1.5, 1959. it is common around that the appellant laid off the respondents for the said period. The appellant 's case was that it had paid the respondents the statutory compensation for the said lay off as prescribed by s.25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). The 797 respondents, however, contended that the lay off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice. It was this dispute between the parties which was referred for adjudication by the Government of Bihar to the Industrial Tribunal on February 9, 1960. On this reference, the Tribunal has held "that the lay off could not be held to be altogether justified. " That is why it has awarded compensation to the respondents in excess of the amount statutorily fixed in that behalf. The appellant contends that the award thus made by the Tribunal is contrary to law Before dealing with the merits of the contentions raised by the appellant, it would be necessary to state some relevant facts which led to the lay off. The appellant is a Public Limited Company and has its factory in Jamshedpur. It manufactures cast iron sleepers, pipes, general engineering casting and non ferrous castings in the said factory. The raw materials mainly required for the manufacture of sleepers are pig iron, coke, limestone and moulding sand. The Railway Board is the only buyer of sleepers and the sleepers are, therefore, manufactured only on receipt of orders upon tenders from the said Board, and not otherwise. The normal procedure for procuring raw material was that after an order was received from the Railway Board, the appellant submitted its requirement of pig iron to ,the Iron & Steel Controller of the Government of India who allocates the quantity for the said commodity to the various manufactures, such as Tata Iron & Steel Co. Ltd. and Indian Iron & Steel Co. Ltd. Formerly, supply of pig iron used to come from the said two concerns to the appellant and the appellant used to ' pay cash to Tata Iron & Steel Co. Ltd. for the pig iron supplied by it and by a Letter of credit to the Indian Iron & Steel Co. Ltd. on which the said Company used to supply the raw material made by it. In 1959, both the companies 798 stopped supply of pig iron in spite of the order issued in that behalf by the Controller, and they wrote to the appellant suggesting that the appellant should request the Controller to cancel his order and place the same with some other suppliers. Correspondence followed between the said companies and the appellant and finally in November, 1959, the appellant was informed by the said companies that they could not supply its requirements of raw material. In June, 1959, the Bhilai Steel Works made their first shipment of pig iron addressed to, the appellant. In August, 1959, the said Works despatched some wagons of pig iron to the appellant, but out of 20 wagons of the consignment, 14 were lost completely, and the rest misdelivered and were subsequently found somewhere in Gomoh and some in Tatanagar and they never reached the appellant in time. In May, 1959, the appellant arranged for Letter of Credit for a sum of Rs. 1,00,000/ for the Bhilai Steel Works. In August, there was a supply of 440 tons and in September, followed a supply of 36 wagons Containing pig iron to the extent of 20 to 21 tons each roughly. In all, this latter supply came to about 760 tons. In the two subsequent months, no supply was received from Bhilai. The Letter of Credit which the appellant had opened for Bhilai Steel Works was revolving, with the result that as soon as one transaction was completed, the said letter was ready for the subsequent transaction. The effect of this revolving letter was that the value of credit of Rs.1,00,000/ continued to be outstanding all the time. In spite of this revolving letter, the Bhilai Steel Works failed to supply pig iron in the two months October and November. The appellant reminded the Works that no supply of pig iron was received from them and yet no advice of any despatch of pig iron was received from the 799 Works after July 27, 1959. Even the 20 wagons which had been sent in August and September did not arrive at the factory. These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations. In regard to the supply of pig iron from Rourkela, the appellant arranged for finance on cash basis. In fact, between August and December a total advance of Rs. 1,75,000/ was made to the Rourkela Steel Works. A supply of pig iron worth about Rs. 1,64,000/ was received by the appellant, but the balance of Rs. 11,000/ was still outstanding. ,In addition to the cash advances, the appellant also opened a Letter of Credit for Rs. 1,00,000/ in November, 1959, for financing the purchase of steel from the said Works. As early as 1959, TISCO informed the appellant that it regretted that it would not be possible for it to supply the requirements of the company regularly, while in regard to the supply from IISCO, the position was still worse. The appellant kept its employees and the Assistant Labour Commissioner fully informed of these unfortunate developments from time to time. Both the Assistant Labour Commissioner and Mr. John, President of the respondents ' Union, did what they could by moving the Government to assist the appellant in securing the raw material. Even so, when the situation did not show any signs of improvement and the appellant found that no raw material was available with which its foundry could carry on the manufacture of sleepers, it issued a notice on December 15, 1959, and laid off the ' workers of the Sleeper Factory. This lay off con tinued until September, 11, 1960 and from September 12, 1960, the appellant closed the Sleeper Foundry department and issued notice of retrenchment. Subsequently, retrenchment compensation was duly paid to the workmen who had been retrenched. 800 That, in short, is the background of the lay off, the validity of which formed the subject matter of the present reference. It appears that before the Tribunal it was urged by the respondents that the appellant had deliberately brought about a situation which led to the lay off in order to divert the relevant orders for sleepers to its Belur factory. The argument was that at Belur, the appellant gets its work done at cheaper cost with the help of contract labour. Now, if this contention had been established then it would clearly have been a case of malafides on the part of the appellant and a claim for additional compensation may have been justified. But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant. It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents. The Tribunal has rejected this case also. It has found that the evidence given by the four witnesses was unreliable and unsatisfactory and the statement made by the General Manager in cross examination on this point was sufficient to show that in the absence of pig iron, castings with scrap iron and tin could not have been made. In fact, the General Manager categorically stated that the appellant ' had not casted any sleeper without pig iron at any time. Thus, the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay off its workmen, has also been rejected by the Tribunal. The Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate 801 position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay off was not altogether justified. The Tribunal 's view appears to be that if reasonable care had been exercised by the appellant, the situation could have been avoided. It is this part, of its finding that is seriously disputed before us by the appellant. Under a. 2 (kkk), "lay off" means, inter alia, the failure, or inability of an employer on account of shortage of raw materials to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. As we have already seen, there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay off which is the subject matter of the present dispute satisfies the test prescribed by the definition. Section 25C provides for the right of workmen laid off for compensation, and it is common ground that compensation, equal to 50% of the total of the basic wages and dearness allowance, as therein prescribed has been paid by the appellant to the respondents. The issue referred to the Tribunal was whether the action of the management in laying off the workmen was justified. If not, to what relief were, the respondents entitled ? In other words, the reference shows that it was only if the Tribunal came to the conclusion that the lay off wag not justified that the question of considering what additional compensation should be paid to the respondents could arise. If the lay off is justified and it satisfies the requirements of the definition under section 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C. There is no doubt or dispute about this position. 802 It is also not in dispute that if the lay off is malafide in the sense that the employer has deliberately and maliciously brought about a situation where lay off became necessary, then it would not be a lay off which is justified under section 2(kkk) and the relief provided to the laid off workmen under a. 25C would not be the only relief to which they are entitled. Malafides of the employer in declaring a lay off really mean that no lay off, as contemplated by the definition, has in law taken place and so, a finding as to malafides of the employer in declaring a lay off naturally takes the lay off out of the definition of section 2(kkk) and as such a. 25C cannot be held to be applicable to it so as to confine the workmen 's right to the compensation therein prescribed. If the lay off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same. It would Dot be a lay off as contemplated by a. 2(kkk). But when dealing with a lay off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far sighted. That is a matter relating to the management of the undertaking and unless malafides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay off. The danger involved in permitting such jurisdiction to the Tribunal is illustrated by the present award itself. The Tribunal has found that the appellant was in financial difficulties at the relevant time ; it has found that the appellant was not actuated by any malafide intention, it has come to the conclusion that the lay off was not the result of any uleriort 803 motive, and yet it has finally come to the conclusion that if the affairs of the appellant it had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay off could have been avoided. Apart from, the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis. The appellant is, no doubt, expected to manage its affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties. That is why we think in embarking upon an enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides, as we have just indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case. In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid retrenchment compensation due to them. The result is, the appeal succeeds and the order passed by the Tribunal for the payment of compensation of 75% of the consolidated wages is set aside. There would be no order as to costs. Appeal allowed.

IN-Abs

The appellant has its factory at jamshedpur. It manu factures cast iron sleepers, pipes, etc., in the said factory. The raw materials mainly required for the manufacture of sleepers are pig iron, coke, limestone and moulding sand. The Railway Board is the only buyer of sleepers, and the sleepers are manufactured only on receipt of orders from the said Board and not otherwise. Inspite of its best efforts to secure the raw materials in 1959, the appellant failed to secure the same. As the appellant found that the manufacture of sleepers could not be carried on, it issued a notice and laid off the workers of the sleeper factory. The lay off continued from December 15, 1959 to September 11, 1960. On September 12, 1960, the appellant closed the Sleeper Foundry Department and issued notice of retrenchment. Retrenchment compensation was also paid to the workmen retrenched. The appellant paid the respondents the, statutory compensation for the lay off period as prescribed by section 25C of the . However, the respondents contended that the lay off was not justified, The dispute between the parties was referred for adjudication by the Government of Bihar to the Industrial Tribunal. The Tribunal found that the appellant was in financial difficulties at the relevant time, the appellant was not actuated by any malafide intentions and the lay off was not the result of any ulterior motive. However, it held that if the affairs of the appellant had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay off could have been avoided. Under the circumstances, the Tribunal held that the lay off could not be held to be altogether justified, and awarded compensation to the respondents in excess of the amount fixed by the statute 796 Held, that the lay off was justified as raw materials were not available to the appellant at the relevant time. The only relief to which the workmen were entitled was the statutory relief prescribed by section 25C. If the lay off is malafide in the sense that the employer has deliberately and malaciously brought about a situation where lay off becomes necessary, it is not a lay off which in justified tinder section 2(kkk) and the relief provided under section 25C is not the only relief to which the workmen are en titled. The malafides of the employer in declaring lay off really means that no lay off has in law taken place and a finding as to the malafide of the employer in declaring a layoff takes the lay off out of the definition of section 2(kkk).If lay off is declared in order to victimise workmen or for some, ulterior purpose, the position in the same.

Appeal No. 432 of 1961. Appeal by special leave form the judgment and order dated May 15 1959 of the Madhya Pradesh High Court in Miscellaneous Petition Nos. 301 of 1958 and 83 of 1959. B. Sen and section N. Mukerji for the Appellant. B. R. L. Iyengar and A. G. Ratnaparkhi for Respondent No. 1. I. N. Shroff, for Respondents Nos. 2 and 4. 1962. July 27. The Judgment of the Court was delivererd by DAS GUPTA, J. When under the Standing Orders of a Company the Company is empowered to take disciplinary action against an employee by proceeding in the prescribed manner can that power be legally delegated by the Company to any of its officers ? That is the principal question raised in this appeal. The appellant is Company incorporated under the Indian Companies Act having its registered office at 12, Mission Row, Calcutta. It is ' engaged in the generation and distribution of electricity at Jabalpur. The Company 's office at Jabalpur is in charge of a Resident Engineer. By a power of attorney given by the appellant company on June 26, 1957, Mr. Leonard Shell Macleod, the Company 's Resident Engineer at Jabalpur, was appointed "the company 's true and lawful attorney for and in the name of the Company to do exercise and perform all or any of the acts, matters, 455 discretions and things" set out in 11 clauses. The 10 th clause provided that "subject to the Standing Orders from time to time given by the Company to appoint, dismiss, suspend or terminate the services of any of the employees of the Company at Jabalpur. " On November 12, 1957, the respon dent Sambhu Prasad Srivastava was served with a charge sheet under the signature of Mr. Macleod in which it was alleged that he had substituted 13 coils of V.I.R. cable in the stores of the Company for the same quantity of cable of various makes from the local market, Sambhu Srivastava 's reply to this charge was that when the shortage of 13 coils came to his notice on the eve of the audit he remonstrated with his subordinates who actually handled these articles and that what he did was done in the best interests of the Company and that he never acted with any dishonest intention. An enquiry was then held by the Resident Engineer and ultimately on January 16, 1958, the Resident Engineer issued a letter to him in these terms : "With reference to charge sheet dated 12th November, 1957, and the subsequent investigations in the case against you,, please note that the matter has been very carefully considered, and in accordance with the interview which you had with our Chief Engineer, Mr. J. W. Fawcett, on the morning of the 15 th January, 1958, we ;hereby notify you that the Company does not find it possible to. retain yo ur services. Therefore, you are hereby discharged from the service of the Company, with immediate effect. Please call at the Company 's office on the 17th instant,to receive final settlement of your dues from the Company. " 456 Srivastava then applied to the Assistant Labour Commissioner, Jabalpur, alleging that this order was in contravention of the provision of the C. P. & Berar Industrial Tribunal Settlement Act and of the Standing Orders as the powers of the Company under the Standing Orders to hold the enquiry can be exercised only the Managing Director. It was also alleged that the order though in from an order for discharge was really an order of dismissal and that cls. 14, 18 19 and 20 of the Standing Orders had been violated. The Company pleaded in its reply that under the 'power of attorney the Resident Engineer had the power to hold an enquiry and take disciplinary action against an employee and the action by him should be considered in law to amount to an action by the Company. It was pleaded that the provisions of the Standing Orders had not been violated. The Assistant Labour Commissioner made an order on September 10, 1958, ordering reinstatement of the respondent without break in his service but without payment of back wages. The State Industrial Court which was moved both by the Company and by the employee held that the order of discharge was in substance an order of dismissal, and that misconduct alleged was not proved, and that in any case the Resident Engineer was not empowered to hold an enquiry and to issue an order of discharge. It refused to interfere with the order passed by the Assistant Labour Commissioner and rejected both the revisional applications. Both parties then moved the Madhya Pradesh High Court for relief under article 226 of the Constitution. The High Court held that the powers. under cl.19 of the Standing Orders could not be delegated to the Resident Engineer and also that th 457 general right reserved to the Company under cl. 20 of the Standing Orders was meant to be exercised by it and was not covered by the delegation under cl. 10 of the power of attorney. The High Court seems to have thought also that the order made by the Resident Engineer was not Under el. 20 of the Standing Orders. Accordingly, the High Court refused to interfere with the order of reinstatement and dismissed the Company 's application under article 226. It allowed the employee 's application under article 226, being of opinion that the Assistant Labour Commissioner had no discretion in the matter of back wages and was bound to order payment of back wages as soon an order of reinstatement was made. Before considering the question whether the Company could delegate its power to take disciplinary action against its employees it will be proper to clear the ground on the question whether the order was made under cl.19 or cl. 20 of the Standing Orders. Clause 18 of the Standing Orders mentions inter as that theft, fraud, or dishonesty in connection with the Company 's business or property will be treated as misconduct. Clause 19 provides various penalties for misconduct. The substance of these provisions is: that an employee who is adjudged by the Company on examination of the employee and of facts to be guilty of misconduct is liable to be summarily dismissed without notice or compensation in lieu of notice or alternatively to be suspended for a period not exceeding fourteen days; that the order of dismissal or suspension shall be in writing over the signature of an officer duly authorised for this pur pose, and shall also briefly mention the reason on. which it is based, and that no order for dismissal or suspension under this Standing Order shall be made unless the employee is informed in writing of 458 the misconduct alleged against him and that he shall be given an opportunity to produce evidence in his defence. Clause 20 does not deal with dismissal or suspension but provides that "the Company has at all times a general right to discharge an employee from service not only for proved misconduct but also when the employer has lost confidence in the employee. " Clause 21 provides for notice of censure to be given for certain acts or omissions. An examination of these provisions shows that for an order of dismissal under cl. 19 to be made a special procedure is to be followed and when it is made the employee is not entitled to any compensation. Examining now the order made on January 16, 1958, we find that while cl. 20 has not been mentioned it does not say that the employee has been found guilty of misconduct but merely states that " 'the Company does not find it possible to retain (this employee 's) services" and reference is made to the investigations in the case against him and to an interview he had with the chief Engineer, Mr. J. W. Fawcett, on the morning of the 15th January, 1958. The only reasonable view to take of this order, in our opinion, is that this order was being made under cl. 20 on the ground that the employer had lost con fidence in the employee and was in fact and in law an order of discharge as distinct from an order of dismissal or suspension. It appears to us that while the Resident Engineer who held the enquiry may, have been satisfied that an act of misconduct 'for which the employee was liable to dismissal had been proved he took a merciful view of has conduct in view of his previous clean record, and proceeded accordingly to act under cl. 20 of the Standing Orders instead of proceeding under cl. 19. This is a case in which the employer has acted, fairly and even generously in terminating the cases of the employee under el. 459 The question remains whether the Resident Engineer could take action under cl. 20. The employee 's argument, which found favour with the High Court was that it was the Company alone which could take action under clause 20 and the Resident Engineer in his capacity as the Resident Engineer apart from anything else, was not competent to take action under el. 20 For, cl. 20 empowers the Company and not the Resident Engineer as such to discharge an employee on the ground that the employer had lost confidence in him, In the present case, however, it was not the Resident Engineer in his capacity as the Resident Engineer that made the order of discharge. Clearly in making the order of discharge he was acting on the basis of the power of attorney executed in h0is favour on June 26, 1957. Under cl. 10 of the power of attorney he had power "subject to the Standing Orders from time to time given by the Company to appoint, dismiss, suspend or terminate the services of any of the employees of the Company at Jabalpur. " The power of the Company under el. 19 of the Standing Orders to dismiss or suspend and its power under el. 20 to discharge an employee are both covered by cl.10 of the power of attorney, If there be nothing in law to prevent these powers being delegated to the Resident Engineer there could be no escape from the conclusion that the exercise of the power cl. 20 in the present case by the Resident Engineer amounted in law to an exercise of the power by the Company itself, Is there anything in law which bars such delegation? We are unable to find any. It is obvious. and admitted that when a Company has to exercise its powers in connection with the management of its business it is not all the share holders of the Company that have to meet to exercise the power. How the Company will regulate its business is prescribed in its Articles of Association. It is nobody 's 460 case that in the Articles of Association of the Jabalpur Electric Supply Co., there is anything barring the delegation of the disciplinary powers of the Company to any of its officers. In law therefore delegation of the functions of the Company may properly be made having regard to the exigencies. of the business and the Articles of Association. It cannot be reasonably disputed that where the Head Office of the Company is at Calcutta and the main business is to be carried on at Jabalpur the exigencies of the business do require delegation of the Company 's power to take disciplinary action against its employees to a responsible Official like the Resident Engineer, But whether or not the Company might have done without such delegation is a matter which it is unnecessary for us to enquire into. The delegation was made and, neither on principle nor on authority is it possible to say that the delegation was against the provisions of law. Nor can we see that the words 'subject to the Standing Orders from time to time given by the Company" with which cl. 10 of the power of attorney opens affects the delegation. On a proper interpretation of these words their only effect is that in exercising the power to appoint, dismiss, suspend or terminate the services of the employees at Jabalpur the delegate cannot do anything beyond what the company itself can do under the Standing Orders. On no reasonable construction of the words can they mean that the delegate cannot exercise these powers at all, because under the Standing Orders the Company itself is given these powers. Whether it is the power to take action under cl.19 or under cl.20 of the Standing Orders the delegate can exercise these powers under cl. 10 of the power of attorney in the same way as if the delegate was the Company itself. 461 We therefore hold, disagreeing with the High Court, and the Courts below$ that the order of discharge made by the Resident Engineer was in exercise of the power validly delegated to him and that there, has been no breach of the Standing Orders by such action, We therefore allow the appeal, set aside the order passed by the High Court and direct that the appellant 's application under article 226 of the Constitution be allowed and the order made by the Assistant Labour Commissioner dated September 10, 1958, ordering, reinstatement of the respondent, Sambhu Prasad Srivastava be set aside. There will be no order as to costs. Appeal allowed.

IN-Abs

The appellant company had its Head Office in Calcutta generated electricity for distribution at Jabalpur. By cl. 10 of the power of attorney executed by it, it authorised its Resident Engineer at Jabalpur, "subject to the Standing Orders from, time to time, given by the Company to appoint, dismiss, suspend or terminate the services of any of the employees of the Company at jabalpur". The respondent was charge sheeted and after enquiry discharged by the Resident Engineer. He made an application to the Assistant Labour Commissioner who ordered his reinstatement without break in his service by without payment of back wages. The State Industrial Court, on revision applications by both the parties held that the Resident Engineer was not empowered to hold the enquiry and to issue an order of discharge and refused to interfere. Both the parties moved the High Court under article 226 of the Constitution. The High Court took the view that the powers of dismissal and suspension under cl. 19 of the Standing Orders and the general right to discharge an employee under cl. 20 of the Standing Orders could not be, and latter powers had not actually been, delegated to the Resident Engineer and allowed the respondent 's application with back wages. Held, that the delegation of power by the power of attorney was vailed in law and covered powers both under cl. 19 and cl. 20 of the Standing Orders. There was nothing in law, or in the Articles of the Association of the Company that forbade such delegation and the. company therefore, could, delegate the powers to meet the exigencies of its business . The opening words of cl. 10 of the power of attorney did not mean that the delegate could not at all exercise the powers since under the Standing Orders the company alone 454 could do so. Their effect is that in exercising these powers the delegate cannot do anything that the company could not do under the Standing orders.

No. 10 of 1950. Appeal from a Judgment of the High Court of Judicature at Bombay (Chagla C.J. and Tendolkar J.) dated 29th March, 1950, in Suit No. 24 of 1950. December 20. The Court delivered Judgment as follows: FAZL ALI J. I have read the judgment prepared by my brother, Mahajan J., and generally agree with his conclu sions and reasonings, but, having regard to 54 the importance of the points raised, I wish to add a short judgment of my own. There are really three questions to be decided in this appeal, and they are as follows : (1) Whether the Bombay City Civil Court Act, 1948 (Act XL of 1948), is ultra vires the Legislature of the State of Bombay; (2) Whether in any event section 4 of the above Act is ultra vires the State Legislature; and (3) Whether the Bombay High Court has jurisdicion to try the suit. The first and the third questions have been answered by the High Court in favour of the appellant and the second question has been answered in favour of the respondents. In this Court, the appellant attacked the judgment of the High Court in so far as it concerns the second question, whereas the first respondent attacked it in so far as it concerns the first and the third questions. The Bombay City Civil Court Act purports to create in additional civil court for Greater Bombay having jurisdic tion to try, receive and dispose of all suits and other proceedings of a civil nature not exceeding a certain value, subject to certain exceptions which need not be referred to here. It was contended on behalf of the respondents that the Act is ultra vires the Legislature of the State of Bombay, because it confers jurisdiction on the new court not only in respect of maters which the Provincial Legislature is compe tent to legislate upon under List II of the 7th Schedule to the Government of India Act, 1935, but also in regard to matters in respect of which only the Central or Federal Legislature can legislate under List I (such as, for in stance, promissory notes, which is one of the subjects mentioned in entry 28 of List I). To understand this argu ment, it is necessary to refer to entry 53 of List , entries 1 and 2 of List II and also entry 15 of List II. These entries run as follows : Entry 53, List I : 55 "Jurisdiction and powers of all courts except the Feder al Court, with respect to any of the matters in this List . ." Entries 1 and 2, List II : "1 . the administration of justice;constitution and organisation of all courts except the Federal Court . " "2. Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this List . " Entry 15, List III : "Jurisdiction and powers of all courts except the Feder al Court, with respect to any of the matters in this List. " The respondents ' contention may appear at the first sight to be a plausible one, but, in my opinion, it is not well founded in law. For the purpose of correctly deciding the question raised, we must first try to understand the meaning of the following items in entry 1 of List II, "administration of justice, constitution and organization of all courts except the Federal Court. " A reference to the three Legislative Lists shows that "administration of jus tice" is entirely a provincial subject on which only the Provincial Legislature can legislate. The same remark ap plies to "constitution and organization of all courts except the Federal Court. " The expression "administration of jus tice" has a wide meaning, and includes administration of civil as well as criminal justice, and in my opinion entry 1 in List II, which I have quoted, is a complete and self contained entry. In this entry, no reference is made to the jurisdiction and powers of courts, because the expressions "administration of justice" and "constitution and organi zation of courts", which have been used therein without any qualification or limitation, are wide enough to include the 'power and jurisdiction of courts, for how can justice be administered if courts have no power and jurisdiction to administer it, and how can courts function without any power or jurisdiction. Once this fact is clearly 56 grasped, it follows that, by virtue of the words used in entry 1 of List II, the Provincial Legislature can invest the courts constituted by it with power and jurisdiction to try every cause or matter that can be dealt with by a court of civil or criminal jurisdiction,and that the expression "administration of justice" must necessarily include the power to try suits and proceedings of a civil as well as criminal nature, irrespective of who the parties to the suit or proceeding or what its subject matter may be. This power must necessarily include the power of defining, enlarging, altering, amending and diminishing the jurisdiction of the courts and defining their jurisdiction territorially and pecuniarily. The question then arises as to the exact meaning of entry 2 of List II and entry 53 of List I, which are said to militate against the above construction. These entries, in my opinion, confer special powers on Provincial and Central Legislatures, as opposed to the general power conferred on the Provincial Legislature by entry 1 of List II, the spe cial powers being the logical consequence or concomitant of the power of the two Legislatures to legislate with regard to the matters included in their respective Legislative Lists. The effect of these entries is that while legislating with regard to the matters in their respective Legislative Lists, the two Legislatures are competent also to make provisions in the several Acts enacted by them, concerning the jurisdiction and powers of courts in regard to the subject matter of the Acts, because otherwise the legisla tion may not be quite complete or effective. The words used in entry 2 of List II and entry 53 of List I are wide enough to empower the two Legislatures to legislate negatively as well as affirmatively with regard to the jurisdiction of the courts in respect of the matters within their respective legislative ambits. In other words, they can exclude or bar the jurisdiction of the courts in regard to those matters, and they can also confer special jurisdiction on certain courts. They can also, apart from the general power which the courts usually exercise, confer power on the courts to 57 pass certain special orders, instances of which I shall give later. In this connection, reference may be made to section 9 of the Code of Civil Procedure, which provides that "the Courts shall have jurisdiction to try all suits of a civil nature ' excepting suits of which their cognizance is either expressly or impliedly barred. " This section obviously postulates among other things the barring of the jurisdiction of the civil courts by Legislatures with respect to particular classes of suits of a civil nature, and the statute book abounds in instances in which the jurisdiction of the civil courts is barred under Acts passed by the Central and Provincial Legislatures. There are also many Acts providing that any suit or proceed ing concerning the subjects matters of those Acts shall be triable by the court or courts specified therein. Such provisions are to be found in a number of Acts enacted both prior to and after the enactment of the Government of India Act, 1935, and there can be no doubt that the British Par liament while enacting that Act was fully aware of the existing legislative practice obtaining in this country as well as of the fact that the provisions in question were sometimes necessary and therefore it empowered the Central and Provincial Legislatures to make them under entry 53 of List I and entry 2 of List II, respectively. This, in my opinion, is the true meaning of these entries, and it also explains why a separate entry was necessary enabling the two Legislatures to legislate with regard to the power and jurisdiction of the courts in respect of the subject matters mentioned in the three Legislative Lists. But for an express provision like that made in the entries referred to above, the two Legislatures might not have been able to confer special jurisdiction on the courts in regard to the matters set out in the Legislative Lists, nor could they have been able to bar the jurisdiction of the ordinary courts in regard to them, however necessary or desirable such a course might have appeared to them. 8 58 It should be noted that the words used in these entries are: "jurisdiction and power". "Power" is a comprehensive word, which includes all the procedural and substantive powers which may be exercised by a court, but the full significance of the use of the word in the context can be grasped only by reading a large number of local and special Acts in which power has been given to Courts to pass certain special and unusual orders. For example, section 13 of the Indian , provides that " where any person is convicted of an offence punishable under any rule made under clauses . the Court by which he is convicted may direct that the aircraft or arti cle or substance, as the case may be, in respect of which the offence has been committed, shall be forfeited to His Majesty. " Reference may also be made to section 24 of the Indian Arms Act, 1878, which provides that "when any person is convicted of an offence punishable under this Act, committed by him in respect of any arms, ammunition or military stores, it shall be in the discretion of the convicting Court or Magistrate further to direct that the whole or any portion of such arms, ammunition or mili tary stores, and any vessel . . . shall be confiscated." (See also section 10 of the [Act I of 1944], and section 13 of the Food Adul teration Act, 1919 [Bengal Act VI of 1919], which are in similar terms, and the various Acts relating to money lend ers and money lending which confer special power on the courts of reopening several kinds of transactions for the relief of debtors.) It seems to me that the word "power" was added to the word "jurisdiction", in entry 53 of List I, entry 2 of List II, and entry 15 of List III, in order to enable the two Legislatures to grant special powers like those I have mentioned to the courts which are to deal with the subject matter of any special legislation. A reference to the Acts passed after the enactment of the Government of India Act, 1935, will show that 59 special provisions with regard to the jurisdiction of courts have been made even after the passing of that Act, in a large number of Central and local Acts. Confining ourselves to the Acts passed by the Bombay Legislature, since we are concerned here with one of such Acts, we find that in The Bombay Probation of Offenders Act, 1938 (Bombay Act No. XIX of 1938), section a empowers the following courts "to exer cise powers under the Act, (a) the High Court, (b) a Court of Session, (c) a District Magistrate, (d) a Sub Divisional Magistrate, (e) a salaried Magistrate . " Similarly, in the Bombay Agricultural Produce Markets Act, 1939, sec tion 23 provides that "no offence under this Act . shall be tried by a Court other than that of a Presidency Magistrate, or a Magistrate of the First Class or a Magis trate of the Second Class specially empowered in this be half. " Section 11 of the Bombay Cotton Control Act, 1942, provides that "no criminal court inferior to that of a Presidency Magistrate or a Magistrate of the Second Class shall try any offence under this Act". Section 19 of the Bombay Sales of Motor Spirit Taxation Act, 1946, and section 5 of the Bombay Harijan Temple Entry Act, 1947, are provi sions which exclude the jurisdiction of courts under certain circumstances. Similar instances may be multiplied from the Acts of the Central Legislature and other Provincial Legis latures, but, in my opinion, the instances I have quoted are sufficient to show (1) that the practice which prevailed before the Government of India Act has continued even after its enactment, and (2) that the words "jurisdiction and powers" have been consistently construed to bear the meaning which I have attributed to them. The interpretation which is sought to be put on the entries by the respondent is in my opinion open to the following objections : (1).It involves the curtailment of the meaning of the expression "administration of justice" in such a way as to rob it of its primary content the jurisdiction and powers of the court, without which justice cannot be administered. 60 (2) It makes it necessary to read entry 2 of List II as part of entry 1 of the same List, though it has been sepa rately numbered as an independent entry. This is opposed to the scheme followed in the three Legislative Lists, which seems to be that each particular entry should relate to a separate subject or group of cognate subjects, each subject or group of subjects being independent of the others (subject only to incidental overlapping). The construction suggested by the respondents makes it necessary to assume that though according to their line of reasoning the words "jurisdiction and powers of courts, etc. " occurring in entry 2 of List II should have been put in entry 1 of the same List, being intimately connected with the subject of "admin istration of justice and the constitution and organization of courts", it was without any apparent reason numbered separately and made an independent entry. (3) The suggested construction would exclude from the jurisdiction of the Provincial Courts a large number of matters which normally come before courts exercising civil or criminal jurisdiction and, if it is accepted, the courts will not be able to function in the fullest sense unless both the Provincial and Central Legislatures have by piece meal legislation or otherwise exhausted their power of legislating on all the subjects comprised in Lists II and I respectively. Even after they have exhausted such power, the courts will not be able to deal with important matters, such as contracts, transfer of property, arbitration, wills and succession, criminal law, etc., which are subjects mentioned in List III, until one of the two Legislatures has legislated in regard to those subjects, which raises two important questions: (1) Which of the two Legislatures has to do it first; and (2) How is the conflict to be avoided ? That the construction put by the respondents will lead to anomalous results which could not have been within the contemplation of the British Parliament while enacting the Government of India Act, 1935, may be illustrated by one or two examples. Reference 61 might here be made to entry 26 of List I, which deals with "carriage of passengers and goods by sea or by b air. " It should be supposed that if any of the goods carried by air are lost and a suit is instituted in regard to them, the suit will be triable by the court having jurisdiction over the matter under the Civil Procedure Code, subject to any special legislation on the subject by the Central Legisla ture, in spite of the fact that the carriage of goods and passengers by sea or by air is a subject mentioned in List I. But, on the view propounded before us by the respondent, the Provincial civil courts will not be competent to try such a suit, unless they are empowered to do so by the Central Legislature. In order to show to what absurd result this doctrine may be pushed, and in order to avoid the criticism of taking for granted what is in controversy, we may take a very extreme example, because the soundness of the respondents ' contention can be tested only by trying to find out what would happen if we were to stretch it to the utmost limit to which it can be stretched. Entry 13 in List I is: "the Banaras Hindu University and the Aligarh Muslim University." Under entry 53 of List I, the Central Legisla ture has power to legislate in regard to the jurisdiction and powers of courts in respect of the subject matter of entry 13. It may therefore be supposed, having regard to the wide language used in entry 13, that it is open to the Central Legislature to enact that suits in which these Universities are concerned as plaintiff or as defendant, will be triable only by the particular court mentioned in the enactment concerned and that no other court shall have jurisdiction in regard to such suits, It is difficult to think that until such a legislation is made, a court which would otherwise be the proper court, has no jurisdiction to try any suit in which one of these Universities is a party, no matter what the subject matter of the suit may be. I am certain that the framers of the Government of India Act did not contemplate such a result. We all know that at the date when the Government of India Act, 1935, was passed, there were in existence 62 in the different Provinces a large number of courts of law and the administration of justice throughout the Provinces was in the hands of these provincial courts. The civil courts in the Province used to try all suits and proceedings of a civil nature which are triable under section 9 of the Civil Procedure Code, and the criminal courts used to try all criminal cases which are triable under the Code of Criminal Procedure. The jurisdiction and power of the courts were not confined to cases in regard to the subjects stated in List II, nor were they debarred from dealing with cases relating to matters which have been assigned to List I. The jurisdiction of the courts depended in civil cases on a "cause of action" giving rise to a civil liability, and in criminal cases on the commission of an offence, and on the provisions made in the two Codes of Procedure as to the venue of the trial and other relevant matters. It seems to me that the Government of India Act, 1935, did not contem plate any drastic change in the existing system of adminis tration of justice, but what it contemplated was that that system should continue subject to future legislation by the proper Legislature; Central or Provincial, barring the jurisdiction of courts or conferring jurisdiction or power on special courts with regard to the matters included in the appropriate Legislative Lists, should there be any occasion for such special legislation. Under the Govern ment of India Act, 1935, every Province became more or less an autonomous unit with a complete machinery for administer ing justice to the fullest extent. In my opinion, there is nothing in the Act of 1935 to show that there was any inten tion on the part of its framers to affect the machinery so drastically as to confine it to the administration of a mere partial or truncated kind of justice relating only to mat ters specified in List II. Mr. Setalvad, the ]earned Attorney Genera], who ap peared on behalf of the appellant, in supporting the im pugned Act, argued before us that for the purpose of decid ing this appeal, we might also refer to entry 4 List III. His contention was that the impugned 63 Act having had the assent of the Governor General, it would be permissible to see what powers the Provincial Legislature could exercise under Lists II and III taken together. If the course which he suggests is adopted, then the subjects on which the Provincial Legislature can legislate would be: (1) administration of justice; (2)constitution and organiza tion of courts; and (3) civil procedure, including all matters included in the Code of Civil Procedure at the date of the passing of the Government of India Act, 1935. One of the matters included in the Civil Procedure Code is the jurisdiction of courts, Section 9 of the Code provides, as I have already stated, that the courts shall have jurisdic tion to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. There are are also provisions in the Code dealing with the territorial and pecuniary jurisdiction of the courts. The three entries will thus cover exactly the field which is covered by item 14 of section 92 of the Canadian Constitution which comprises the following matters: "administration of justice in the Provinces, including constitution, maintenance and organization of provincial courts both of civil and criminal jurisdiction including procedure in civil matters in those courts. " It has been held in Canada that the words referred to above include the power and jurisdiction of courts, and, under that item, the provincial Legislature can confer the widest power on the courts. It seems to me that the approach suggested by the learned Attorney General is useful for testing whether entry 2 of List II was intended to be treated as the sole and only basis of the power of the Provincial Legislature to confer jurisdiction on the provincial courts and whether it was really the intention of the British Parliament to empower the Provincial Legislature to confer jurisdiction of only such a limited character as can be conferred on the provin cial courts under entry 2 of List II, if that entry is treated as a self sufficient entry. In my opinion, the correct view is to hold that it is not necessary to call into aid either entry 4 of List III or any of the 64 provisions of the Canadian Constitution in this case, and that the words "administration of justice; constitution and organization of courts" are by themselves sufficient to empower the Provincial Legislature to invest a new court with all the power which has been conferred upon it by the impugned Act. It is of course open to the Central Legisla ture to bar the jurisdiction of the new court by a special enactment with regard to any of the matters in List I, but so long as such jurisdiction is not barred, the court will have jurisdiction try all suits and proceedings of a civil nature as enacted in the Act in question. I think that if the Provincial Legislature had merely enhanced the pecuniary jurisdiction of any of the existing civil courts there could have been no objection to that course. Why then should there, be any objection when, instead of investing one of the existing courts with power to try suits and proceedings of a civil nature not exceeding a certain amount, the Legis lature has created a new court and invested it with the same power. Perhaps, it will be simpler to deal at this stage with the third question, namely, whether the Bombay City Civil Court has jurisdiction to try a suit based on a promissory note. So far as this point is concerned, the respondent bases his contention on entries 28 and 33 of List I. Entry 28 relates to "cheques, bills of exchange, promissory notes and other like instruments". Entry 53, as already stated, relates to "jurisdiction and powers of courts with respect to any of the matters in List I." It is contended on behalf of the respondent that the effect of these two entries, when they are read together, is that no court can try a suit relating to a promissory note, unless it is invested with the jurisdiction to try such a suit by the Central Legisla ture by virtue of the power given by entry 53 of List I. The question so raised is covered by the answer to the first question, and I shall only add that the answer already given to that question finds some support in the case of Prafulla Kumar Mukherjee and Others vs Bank of Commerce Limited Khulnal (1), in which the arguments of the (1) [1947] F.C.R.28. 65 respondents before the Privy Council proceeded on the same lines as the arguments of the respondents before us. The question raised in that case was as to the validity of the Bengal Money lenders ' Act, 1940, which limited the amount recoverable by a money lender on his loans and interests on them, and prohibited the payments of sums larger than those permitted by the Act. The validity of the Act was questioned by the respondent Bank in certain suits brought by them to recover loans and interests alleged to be due on promisso ry notes executed by the appellants borrowers as well as in suits brought by the debtors claiming relief under the Act. The argument put forward on behalf of the Bank was that the Bengal Legislature by the impugned Act had attempted to legislate on subjects expressly forbidden to it and expressly and exclusively reserved for the Federal Legislature, that is to say, in relation to promissory notes and banking, which are reserved for the Federal Legislature exclusively, under entries 28 and 38 respectively of List I. On the other hand, the arguments put forward on behalf of the appellants was that the impugned Act was in pith and substance legislation dealing with money lending and that in so far as it dealt with promissory notes or banking that was only incidental or ancillary to the effective use of the admitted legislative powers of the Provincial Legislature to deal with money lending. 'This argument of the appellants was substantially accepted by the Privy Council. The second point raised on behalf of the respondent relates to the validity of section 4 of the Act, which runs as follows : "Subject to the exceptions specified in section 3, the Provincial Government, may by notification in the Official Gazette, invest the City Civil Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature, arising within the Greater Bombay and of such value not exceeding Rs. 25,000 as may be specified in the notification. " 9 66 It is contended that this section is invalid, because the Provincial Legislature has thereby delegated its legis lative powers to the Provincial Government which it cannot do. This contention does not appear to me to be sound. The section itself shows that the provincial Legislature having exercised its judgment and determined that the new Court should be invested with jurisdiction to try suits and pro ceedings of a civil nature of a value not exceeding Rs. 25,000, left it to the Provincial Government to determine when the Court should be invested with this larger jurisdic tion, for which the limit had been fixed. It is clear that if and when the new court has to be invested with the larger jurisdiction, that jurisdiction would be due to no other authority than the Provincial Legislature itself and the court would exercise that jurisdiction by virtue of the Act itself. As several of my learned colleagues have pointed out, the case of Queen vs Burah (1), the authority of which was not questioned before us, fully covers the contention raised, and the impugned provision is an instance of what the Privy Council has designated as conditional legislation, and does not really delegate any legislative power but merely prescribes as to how effect is to be given to what the Legislature has already decided. As the Privy Council has pointed out, legislation conditional on the use of particular powers or on the exercise of a limited discretion entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing, and in many instances it may be highly convenient and desirable. Examples of such legislation abound in England, America and other countries. As some of the American Judges have remarked, "there are many things upon which wise and useful legislation must depend which cannot be known to the law making power and must therefore be the subject of enquiry and determination outside the halls of legislation (Field vs Clark (2). Mr. Setalvad, the learned Attorney General who appeared on behalf of the appellant, contended that in this country even delegated legislation is (1) 3 A.C. 889. (2) ; , 67 permissible, but I do not consider it necessary to go into that question, because the principle enunciated in Queen vs BUrah(1) is sufficient to dispose of the contention raised here. I think that the present case stands well outside what was laid down by the Federal Court in Jitendranath Gupta vs The Province of Bihar,(2) as two of my colleagues who were parties to the majority decision in that case have pointed out. In the result, this appeal is allowed. PATANJALI SASTRI J. This appeal raises the important ques tion of the constitutional validity of the Bombay City Civil Court Act, 1948 (hereinafter referred to as the Act) and though I concur in the conclusion reached by the majority of my learned brothers I wish to state precisely the reasons which lead me to that conclusion. The first respondent brought the suit in the High Court at Bombay on its orginal side for recovery of Rs. 11,704 from the second respondent on promissory notes. Notwithstanding that the jurisdiction of the High Court to try suits cog nisable by the City Civil Court was barred under section 12 of the Act and the pecuniary limit of the jurisdiction of the latter court had been enhanced from Rs. 10,000 to Rs. 25,000 by a notification issued by the Provincial Government under section 4 of the Act, it was stated in the plaint that the High Court had jurisdiction to try the suit because the Act as well as the said notification was ultra vires and void. In view of the constitutional issues thus raised, the State of Bombay, the appellant herein was on its own motion, made a party defendant. The High Court (Chagla C.J. and Tendolkar J.) held (1) the Act was intra vires, but (2) that section 4 which autho rised the Provincial Government to enhance the jurisdiction of the City Court up to the limit of Rs. 25,000 amounted to a delegation of legislative power, and as such, was void and inoperative, with the result that the suit, which ex ceeded Rs. 10,000 in (1)5 I.A. 178. (2) 68 value and was not cognisable by the City Court apart from the impeached notification, was held to have been property laid in the High Court. Both these findings have been challenged before us as erroneous, the first by the first respondent and the second by the appellant. On the first point, learned counsel for the first re spondent urged that section 100 of the Government of india Act, 1935, read with entries 53 of List I, 2 of List II and 15 of List III, the relevant parts of which are in identical terms, namely, "jurisdiction and powers of all courts except the Federal Court with respect to any of the matters in this List", conferred power on Legislatures in British India to make laws with respect to jurisdiction of courts only in relation to matters falling within their respec tive legislative fields, and that, therefore, the expres sions "administration of justice" and "constitution and organisation of courts" in entry 1 of List II, although they might be wide enough, if that entry stood alone, to include the topic of "jurisdiction and powers of courts", should not be construed in that comprehensive sense as such construc tion would give no effect to the limiting words in entry 2 which would then become meaningless indeed if those expres sions in entry 1 included the power to legislate with re spect to jurisdiction also, there would be no need for entry 2, while, on the other hand, without including such power, they would still have ample content, as various other mat ters relating to administration of justice and constitu tion of courts would have to be provided for, The scheme disclosed by the three separate entries in identical terms in the three lists was said to be this: The, Provincial Legislatures were to have the power of constituting courts and providing for administration of justice, but the power to invest the courts with jurisdiction was to rest with the Federal Legislature in respect of the matters mentioned in List I and with the Provincial Legislature in respect of the matters mentioned in List Ii, while both the Federal and the Provincial Legislatures were to have such power with respect to 69 the matters mentioned in List III subject to the provisions of section 107. It was, therefore, submitted that the Act, in so far as it purported to provide by section 3 that the City Civil Court established thereunder "shall have juris diction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding Rs. 10,000 in value and arising within Greater Bombay" (with certain exceptions not material here) was ultra vires the Provincial Legislature, constituting as it did a direct invasion of the Federal field marked out by entry 53 of List I. As all the three entries dealt with the same topic of jurisdiction and powers of courts, there was no room, it was said, for the application of the doctrine of incidental enroachment. The argument is not without force. The Bombay High Court in Mulchand vs Raman (1), which was followed by the learned Judges in the present case, and the Attorney General who adopted the same line before us, invoked the doctrine of pith and substance in answer to the argument on behalf of the respondent. But that doctrine, while it often furnishes the key to the solution of problems arising out of the distribution of overlapping legislative powers in a Federal system, is not of much assistance in meeting the difficulty in finding any usefulness in entry 2 if under entry 1 the Provincial Legislature were intended to have the power to legislate generally with respect to the jurisdiction and powers of courts. The greater power must include the less. A similar difficulty in construing entry 4 of List III and entry 2 of List II arose in Stewart vs Brojendra Kishore (2) and led a Division Bench of the Calcutta High Court to construe the expression "civil procedure" occurring in the former entry in a "limited sense" as excluding jurisdiction and powers of courts. After referring to the decision of the Judicial Committee in In re Marriage Reference(3) where "marriage ,and divorce" in the Dominion List was construed as excluding matters relating to the "solemnisation of marriage (1) 51 B.L.R. 86. (3) 628 (2) A.I.R. 1939 Cal. 628 70 in the province" because the latter topic was specifically included in the Provincial List, the learned Judges ob served: "The position is similar here. 'Civil procedure ' in the Concurrent Legislative List must be held to exclude matters relating to jurisdiction and powers of courts since special provision is made for those matters elsewhere in the lists." "To hold otherwise", they pointed out, "would be completely to wipe out the second entry in the Provincial Legislative List." Learned counsel for the first respondent strongly relied on that decision and suggested that, if it had been brought to the notice of the learned Judges in Mulchand vs Raman (1), their decision might well have been the other way. On the other hand, the Attorney General submitted that there could be no question of conflict between two entries in the same list and that the natural meaning of one should not be restricted simply because of the presence of the other. He placed reliance on the following observations of Gwyer C.J. in Aliqa Begum 's case (4) "It would be practi cally impossible for example to define each item in the Provincial List in such a way as to make it exclusive of every item in that list and Parliament seems to have been content to take a number of comprehensive categories and to describe each of them by words of broad and general import. I think, however, that none of the items in the lists is to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. " These observations were, however, made to support the conclusion that the power to legislate with respect to" collection of rents" under entry 21 of List II includes the power to legislate with respect to any limitation on the power of a landlord to collect rents, that is to say, with respect to the remission of rents as well, and that, therefore, the United Provinces Regularisation of Remissions Act, 1933, was intra vires. General observations made in such context (4) ,134 71 do not answer the objection that the wider construction of entry 1 would deprive entry 2 of all its content and reduce it to useless lumber. I am therefore, of opinion that the words" ' administration of justice" and "constitution and organisation of courts" occurring in entry 1 must be under stood in a restricted sense excluding from their scope "jurisdiction and powers of courts" dealt with specifically in entry 2. This does not, however, compel the conclusion that it is beyond the competence of the Provincial Legislature to confer general jurisdiction on courts constituted by it, for, if entry 1 does not by itself enable the legislature to do so, entry 2 certainly does when read with entry 1. It should be remembered and this is what the argument for restricting the legislative power of provinces in regard to jurisdiction overlooks that "administration of justice" is one of the matters mentioned in List II itself. The Provin cial Legislature, therefore, is competent under entry 2 to legislate conferring jurisdiction on courts with respect to administration of justice, that is to say, general juris diction to administer justice by adjudicating on all matters brought before them, except, of course, matters excluded expressly or by implication either by an existing law con tinued in force or by a statute passed by the appropriate legislature under the entries in the three Lists relating to jurisdiction and powers of courts. In other words, though "administration of justice" in entry 1 does not authorise legislation with respect to jurisdiction and powers of courts, the legislative power under entry 2 in regard to the tatter topic, which can be legitimately exercised" with respect to any of the matters in this List," can be exer cised with respect to administration of justice, one of the matters comprised in that List, with the result that the subject of general jurisdiction is brought within the autho rised area of provincial legislation. This view thus leaves a field in which entry 2 could apply. When once the Provincial Legislature is found competent to make a law with respect to the general jurisdiction of courts, the apparent conflict with the 72 central legislative power under entry 53 of List I can be resolved in a given case by invoking the doctrine of pith and substance and incidental encroachment. For, that rule, though not of much assistance in construing entries 1 and 2 which occur in the same List II, has its legitimate applica tion in ascertaining the true character of an enactment and attributing it to the appropriate list where the Federal and the Provincial Lists happen to overlap. Accordingly, if the Legislature of Bombay was, in conferring jurisdiction on the City Civil Court to hear and determine all suits of a civil nature, really legislating on a subject which was within the ambit of its legislative power, and if in doing so, it encroached on the forbidden field marked off by entry 53 of List 1, the encroachment should be taken to be only inciden tal. It may be that such encroachment extends to the whole of that field, but that is immaterial, as pointed out by the Judicial Committee in the Khulna Bank case(1). One of the questions their Lordships put to themselves in that case was "Once it is determined that the pith and substance is money lending, is the extent to which the federal field is invaded a material matter?" Answering the question in the negative their Lordships observed: "No doubt it is an important matter, not, as their Lordships think, because the validity of an Act can be determined by discriminating between de grees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act. Its provi sions may advance so far into the federal territory as to show that its true nature is not concerned with provincial matters, but the question is not, has its trespassed, more or less, but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not money lending but promissory notes or banking ? Once that question is determined, the Act falls on one or the other side of the line and can be seen as valid or invalid accord ing to its true content". In answering the objection that that view does not give sufficient effect to the words of precedence used in section 100 of the Government of (1) [1947] F.C.R.28. 73 India Act as between the three Lists, their Lordships went on to say "No doubt where they come in conflict List I has priority over Lists III and II, and List III has priority over List II; but the question still remains priority in what respect? Does the priority ' of the Federal Legislature prevent the Provincial Legislature from dealing with any matter which may incidentally affect any item in its list or in each case has one to consider what the substance of an Act is and whatever its ancillary effect, attribute it to the appropriate list according to its true character ? In their Lordships ' opinion the latter is the true view. " The test for determining whether in pith and substance a particular enactment falls within one list or another is further elucidated in a passage quoted with approval from Lefroy 's Treatise on Canadian Constitutional Law in the judgment of the Federal Court in the Bank of Commerce case(1). "It seems quite possible" says the learned writer, summarising the effect of the Privy Council decisions on the point "that a particular Act regarded from one aspect might be intra vires of a Provincial Legislature and yet regarded from another aspect might also be intra vires of the Domin ion Parliament. In other words, what is properly to be called the subject matter of an Act may depend upon what is the true aspect of the Act. The cases which illustrated this principle show. by 'aspect ' here must be understood the aspect or point of view of the legislator in legislating the object, purpose and scope of the legisla tion. The word is used subjectively of the legislator rather than objectively of the matter legislated upon. " Applying that test there can be little doubt that the im pugned Act must, in its pith and substance, be attributed to List II. as the legislators of Bombay were certainly not conferring on the new court, which they were constituting under the Act, jurisdiction with ' respect to any of the matters in List I. They were, as section 3 clearly indi cates constituting a new court, the Bombay City Civil Court, and investing it with the (1) [1944] F.C.R.126,139. 10 74 general jurisdiction to try all suits of a civil nature within certain. pecuniary and territorial limits, and if they were acting, as I have endeavoured to show, within the scope of the legislative power conferred on them under entry 2 read with entry 1 of List II, it seems immaterial that the enactment, so far as one aspect of jurisdiction, namely, its conferment, is concerned, encroaches practically on the whole of the federal field marked out by entry 53 of List I. The encroachment, however, would still leave ample room for the exercise by the Centre of its legislative power under entry 53 in regard to other aspects of jurisdiction and powers of courts. This view is strongly reinforced by a consideration of the legislative practice prevailing in this country prior to the passing of the Government of India Act, 1935. That it is legitimate to have regard to legislative practice in deter mining the scope of legislative powers has been recognised in decisions of high authority (e.g., Croft vs Dunphy) (1), It had long been the practice in this country to constitute and organise courts with general jurisdiction over all persons and matters subject only to certain pecuniary and territorial limitations, and to confer special jurisdiction limited to certain specified cases or matters either on the ordinary courts in addition to their general jurisdiction or on tribunals set up to deal with such matters exclusively. The various Provincial Civil Court Acts as well as the provisions of the Civil and Criminal Procedure Codes invest the courts, both civil and criminal, with general jurisdic tion, that is to say, power to adjudicate in respect of all persons and all matters except those that are specifically excluded or brought within the cognisance of tribunals with special or limited jurisdiction extending only to those matters. The grading of the courts too in their heirarchy has reference to the pecuniary and territorial limits rather than to the nature and kind of the subject matter which they are empowered to deal with. It is reasonable to presume that this system of organisation of courts in (1) ,165 75 British India was known to the framers of the Government of India Act, 1935, and it cannot be readily supposed that they wanted to introduce a radical change by which the power of constituting courts and providing for administration of justice is to be vested in the Provincial Legislatures, while jurisdiction has to be conferred by piecemeal legisla tion by the Federal and Provincial Legislatures with respect to specific matters falling within their respective legisla tive fields which are by no means capable of c]ear demarca tion. The constitutional puzzles which such a system is likely to pose to the legislatures no less than to the courts and the litigant public in the country whenever a new court is constituted in finding out by searching through the legislative lists, whether jurisdiction to deal with a particular matter or power to make a particular order is validly conferred by the appropriate legislature must make one pause and examine the relevant provisions of the Govern ment of India Act to see if there is anything in them to compel the acceptance of so novel a system. After giving the matter my careful consideration, I am convinced that both the language of the provisions and the antecedent legislative practice support the conclusion that the Provin cial Legislatures which have the exclusive power of consti tuting and organising courts and of providing for the admin istration of justice in their respective provinces, have also the power of investing the courts with general juris diction. On the question whether section 4 of the Act operates as a delegation of legislative power, I entirely agree with the reasoning and conclusion of my learned brother Das who has said all I wish to say in his judgment which I have had the advantage of reading, and, like him, I reserve the larger question raised by the Attorney General as to how far it is open to the legislatures in this country, while acting within their authorised areas, to delegate their legislative powers to other agencies. I find it no more necessary in the present case to decide that point than in Jatindranath 76 Gupta 's case(I) where I preferred to rest my decision on a narrower ground. It follows that the High Court has no jurisdiction :0 hear and determine the first respondent 's suit and I agree that the appeal should be allowed. MAHAJAN J. This is an appeal from the judgment of the High Court of Judicature at Bombay dated the 29th March, 1950, in Suit No. 240 of 1950, holding that section 4 of the Bombay City Civil Court Act (Bombay Act XL of 1948) is ultra vires the Provincial Legislature. The facts are that on the 6th February, 1950, the first respondent presented a plaint to the Prothonotary and Senior Master of the High Court for filing a summary suit against the second respondent to recover a sum of Rs. 11,704 24 alleged to be due under promissory notes. This suit was instituted in the High Court, in contravention of a notifi cation dated the 20th January, 1950, issued under section 4 of the City Civil Court Act, under which suits up to the pecuniary limit of Rs. 25,000 could be heard only by the City Civil Court, and not by the High Court. As the question of jurisdiction was of importance, the matter was referred to the sitting Judge in Chambers. On 23rd February, 1950, the learned Judge admitted the plaint holding that section 4 of the Act was ultra vires the Provincial Legislature and the notification issued under it was consequently inopera tive and that the High Court had jurisdiction to hear the suit. The first respondent thereupon took out summons for judgment against the second respondent. On the application of the AdvocateGeneral, the State of Bombay was impleaded as defendant at this stage and the proceedings were trans ferred to a Division Bench of the High Court. The Division Bench upheld the view of the Judge in Chambers and returned the cause to him for disposal on the merits. The State of Bombay, dissatisfied with this decision, has preferred the present appeal. (1) 77 Two questions have been canvassed in this appeal: (1) whether the City Civil Court Act is ultra vires the legisla ture of the Province of Bombay in so far as it deals with the jurisdiction and powers of the High Court and City Civil Court with respect to matters in List I of the Seventh Schedule of the Government of India Act, 1935; and (2) whether section 4 of the Act is void as it purports to delegate to the Provincial Government legislative authority in the matter of investing the City Civil Court with ex tended jurisdiction. Bombay Act of 1948 came into force on 10th May, 1948. It was considered expedient to establish an additional civil court for Greater Bombay presumably with the object of relieving congestion of work on the original side of the Bombay High Court. Sections 3, 4 and 12 of the Act are in these terms : "3. The State Government may, by notification in the Official Gazette, establish for the Greater Bombay a court, to be called the Bombay City Civil Court. Notwithstanding anything contained in any law, such court shall have juris diction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding ten thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings which are cognisable (a) by the High Court as a Court of Admiralty or Vice Admiralty or as a Colonial Court of Admiralty, or as a Court having testamentary, intestate or matrimonial jurisdiction, or (b) by the High Court for the relief of insolvent debt ors, or (c) by the High Court under any special law other than the Letters Patent, or (d) by the Small Cause Court: Provided that the State Government may, from time to time, after consultation with the High Court, by a like notifica tion extend the jurisdiction of the City Court to any suits or proceedings which are cognisable by the High Court as a court having testamentary or 78 ntestate jurisdiction or for the relief of insolvent debt ors. Subject to the exceptions specified in section a the State Government may by notification in the Official Ga zette, invest the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature arising within the Greater Bombay and of such value not exceeding twenty five thousand rupees as may be specified in the notification. Notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognisable by the City Court: Provided that the High Court may, for any special rea son, and at any stage remove for trial by itself any suit or proceeding from the City Court. " On the second question the High Court held that section 4 of the Act was inoperative as it purported to delegate the law making powers of the legislature to an outside authority and hence the notification issued in pursuance of it had no effect whatsoever and did not take away the jurisdiction of the High Court to try the present suit. On the first ques tion the High Court placed reliance on its own earlier decision in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1), and held that the Act was intra vires the Bombay Legislature. The appellant assails the correctness of the decision of the High Court on the second point and supports the decision on the first point. The first respondent, on the other hand, while supporting the decision of the High Court on the second question, challenges its correctness in regard to the first question. The learned Attorney General contends that the High Court placed an erroneous construc tion on sections 3 and 4 of the Act; that reading the two sections together the effect is that the legislature has set up the City Civil Court with an initial jurisdiction of Rs. 10,000 and has placed an outside limit of Rs. 25,000 on its pecuniary jurisdiction and that it (1) 79 has left to the discretion of the Provincial Government the determination of the circumstances under which this exten sion of the pecuniary jurisdiction between Rs. 10,000 to Rs. 25,000 is to take place. It was said that section 4 is in the nature of a conditional legislation and that under it no legislative function has been delegated to the Provincial Government. The learned Chief Justice in the court below disposed of this contention with the following,observations: "I am also conscious of the fact that an Act must be construed in a manner which would reconcile its differ ent sections but with the best of intention in the world I do not see how it is possible to read sections 3 and 4 together so as to come to the conclusion for which the AdvocateGeneral contends. To my mind it is patent that the Legislature never applied its mind to the question as to whether the new court which it was setting up should have a jurisdiction higher than that of Rs. 10,000. It never passed any judgment on that question. It never laid down any policy with regard to that question and section 4 is not a section which merely directs the Provincial Government to carry out the policy laid down by the legislature . but it is a section which confers upon the Provincial Gov ernment the power to confer jurisdiction upon the Court, or in other words, it is a section which entitled the Provin cial Government to lay down its policy as to whether the new Court should have the increased jurisdiction up to twenty five thousand rupees. " I find it difficult to accept this view. Without apply ing its mind to the question as to whether the new Court which it was setting up should have a jurisdiction higher than Rs. 10,000, how could the legislature possibly enact in section 4 that the pecuniary jurisdiction of the new court would not exceed Rs. 25,000. The fixation of the maximum limit of the court 's pecuniary jurisdiction is the result of exercise of legislative will, as without arriving at this judgment it would not have been able to determine the out side limit of the pecuniary jurisdiction of the new 80 court. The policy of the legislature in regard to the pecuniary jurisdiction of the court that was being set up was settled by sections 3 and 4 of the Act and it was to the effect that initially its pecuniary jurisdiction will be limited to Rs. 10,000 and that in future if circumstances make it desirable and this was left to the determination of the Provincial Government it could be given jurisdiction to hear cases up to the value of Rs. 25,000. It was also determined that the extension of the pecuniary jurisdiction of the new court will be subject to the provisions contained in the exceptions to section 3. I am therefore of the opinion that the learned Chief Justice was not right in saying that the legislative mind was never applied as to the conditions subject to which and as to the amount up to which the new court could have pecuniary jurisdiction. All that was left to the discretion of the Provincial Government was the determination of the circumstances under which the new court would be clothed with enhanced pecuniary jurisdiction. The vital matters of policy having been determined, the actual execution of that policy was left to the Provincial Government and to such conditional legislation no exception could be taken. The section does not empower the Provincial Government to enact a law as regards the pecuniary jurisdic tion of the new court and it can in no sense be held to be legislation conferring legislative power on the Provincial Government. In Queen vs Burah(1), section 9 of Act XXII of 1869, which was a piece of legislation analogous to section 4 of the City Civil Court Act, was held intra vires by their Lordships of the Privy Council. By the 9th section power was conferred on the Lieutenant Governor of Bengal to deter mine whether the Act or any part of it should be applied to certain districts. In other words, authority to extend the territorial limits of the operation of the statute was conferred on the Lieutenant Governor and such extension had the result of depriving the High Court of its jurisdiction in those areas and of conferring jurisdiction in respect to them (1) 5 I.A. 178. 81 on the commissioner. Objection was taken as to the validity of section 9 on the ground that it was legislation delegat ing legislative power and was therefore void, Their Lord ships negatived this contention and held that section 9 was intra vires the Governor General 's power to make laws and was a piece of conditional legislation. That was a case of an extension of territorial limits within which an Act of the Legislature was to be in force, whereas the present is a case of extension of pecuniary limits of a court 's jurisdic tion. In principle, there seems no difference between the two cases and the present case is therefore within the rule of the decision in Queen vs Burah(1). Their Lordships in holding section9 intra vires made the following observations : "Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the Lieutenant Governor (large as they undoubtedly are) as if, when they were exer cised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Gover nor, General in Council. Their whole operation is, directly and immediately, under and by virtue of this Act (XXII of 1869) itself. The proper Legislature has exercised its judgment as to place, person, laws, powers, and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legislation is now absolute. Where plenary powers of legis lation exist as to particular subjects, whether in an Impe rial or in a Provincial Legislature, they may (in their Lordships ' judgment) be well exercised, either absolutely or conditionally. Legislation, conditional on the use of particular powers, or on the exercise of a limited discre tion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many cir cumstances. it may be highly convenient. The British Stat ute Book abounds with examples of it; and it cannot be supposed that the Imperial Parliament did not, when consti tuting the (1) 5 I A. 178, 11 82 Indian Legislature, contemplate this kind of conditional legislation as within the scrape of the legislative powers which it from time to time conferred. certainly used no words to exclude it. " These observations appositely apply to the legislative provision contained in section 4 of the impugned Act. The true distinction is between the delegation of power to make the law which necessarily involves a discretion as to what it shall be and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. Objection may be taken to the former but not to the latter. Reference in this connection may also be made to the decision of the Supreme Court of America in Field vs Clark(1) wherein referring to Locke 's case(2) the following observations were made : "To assert that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public wel fare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know. " The proper distinction the court said was this: "The Legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law making power, and, must there fore, be a subject of inquiry and determination outside of the halls of legislation. " The High Court in support of its view placed considera ble reliance on the decision of the Federal Court in Jatin dra Nath Gupta vs The Province of Bihar(3) and it was con sidered that the present case fell1 within the ambit of the rule therein laid down. It seems to me that the decision in the Bihar case has no application to the case in hand. The Federal Court there was (1) 143 U.S.649. (3) [1949] F.C.R.595. (2) 72 Pa.491. 83 dealing with an Act which contained the following provisions in section 1, sub section (3) : "The Act shall remain in force for a period of one year from the date of its commencement: Provided that the Provincial Government may, by notifi cation, on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council, direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification. " In connection with this proviso I said in my judgment in that case that the power conferred therein was much larger than was conferred on the Lieutenant Governor in Queen vs Burah(1) inasmuch as it authorised the Provincial Government to modify the Act and also to re enact it. It was pointed out that "distinction between delegation of power to make the law which necessarily involves a discretion as to what it shall be, and conferring discretion or authority as to its execution to be exercised Under and in pursuance of the law is a true one and has to be made in all cases where such a question is raised. " The following observations made by me there pointedly bring out the distinction between the two cases : "The proviso which has been assailed in this case. judged on the above test, comes within the ambit of delegat ed legislation, and is thus an improper piece of legislation and is void. To my mind, it not only amounts to abdication of legislative authority by the Provincial Legislature, it goes further and amounts to setting up a parallel Legisla ture for enacting a modified Bihar Maintenance of Public Order Act and for enacting a provision in it that that Act has to be enacted for a further period of one year. A careful analysis of the proviso bears out the above conclu sion. It may be asked what does the proviso purport to do in terms and in substance ? The answer is that it empowers the Provincial Government to issue a notification saying (1) 5 I.A. 178. 84 that the Provincial Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification . Modification of statute amounts to re enacting it partially. It involves the power to say that certain parts of it are no longer parts of the statute and that a statute with X sections is now enact ed with Y sections. In the act of modification is involved a legislative power as a discretion has to be exercised wheth er certain parts of the statute are to remain law in future or not or have to be deleted from it. The power to modify may even involve a power to repeal parts of it. A modified statute is not the same original statute. It is a new Act and logically speaking, it amounts to enacting a new law. " I have not been able to follow how these observations concerning the Bihar statute could be relied upon by the High Court in support of its decision in respect 10 the invalidity of section 4 of the Bombay City Civil Court Act. The two provisions are not analogous in any manner whatsoev er and that being so, no support can be derived by the respondent from this decision. In the concluding portion of his judgment under appeal the learned Chief Justice observed as follows: " Now applying once more these tests to the City Civil Court Act, we find that the Legislature in the exercise of its legislative power has set up a Civil Court with a limit ed jurisdiction under section 5 of the Act. It has not set up a court with jurisdiction higher than ten thousand rupees. Having set up a court of limited jurisdiction it has given to the Provincial Government under section 4 the power to center upon that court a higher jurisdiction up to twen ty five thousand rupees. Now this power which is conferred upon the Provincial Government is a power which could only have been exercised by the Legislature itself. " It seems to me that the above observations are based on a construction of sections 3 and 4 of the Act which these sections cannot legitimately bear. As already observed. the Legislature set up a Civil Court for Greater 85 Bombay and decided that, to start with, it will have pecuni ary jurisdiction up to Rs. 10,000. It also decided at the same time that it would also have jurisdiction up to Rs. 25,000 as soon as circumstances, necessitate it the Provin cial Government was constituted the judge of those circum stances. What the limit of that jurisdiction was to be was in unmistakeable terms enacted in section 4 of the Act. It was not left to the will of the Provincial Government to confer on that court any pecuniary jurisdiction that it liked to confer upon it. It would be by force of the legis lative power of section 4 that the City Civil Court will be vested with enhanced jurisdiction but that vesting cannot take place till a notification is issued by the Provincial Government. It is conditional on that event only. For the reasons given above, in my judgment, the High Court was in error in holding that section 4 of the City Civil Court Act was void and ultra vires the Provincial legislature. In this view the notification issued under section 4 must be held to be effective. That being so, it is unnecessary to go into the question raised by the learned Attorney General that assuming that section 4 of the Act was delegation of legislative power, it was still valid. The next question to decide is whether the Act is ultra vires the Bombay Legislature. In order to appreciate Mr. Seervai 's contention on this point it is necessary to set out some of the provisions of the Government of India Act, 1935. relevant to the enquiry. These are contained in sec tion 100. and in the Seventh Schedule in entries 28 and 53 of List I, entries 1 and 2 of List II, and entries 4 and 15 of List III. They are in these terms: Sec. (1) Notwithstanding anything in the two next succeeding sub sections, the Federal Legislature, has, and a Provincial Legislature has not power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act (hereinafter called the "Feder al Legislative List.") 86 (2) Notwithstanding anything in the next succeeding sub section, the Federal Legislature, and, subject to the pre ceding subsection, a Provincial Legislature also, have power to make laws with respect to any of the matters enumerated in List III in the said Schedule (hereinafter called the "Concurrent Legislative List.") (3) Subject to the two preceding sub sections, the Provin cial Legislature has, and the Federal Legislature has not, power to make laws for a Province or any part thereof with respect 10 any of the matters enumerated in List II in the said Schedule (hereinafter called the" Provincial Legis lative List.") (4) The Federal Legislature has power to make laws with respect to matters enumerated in the Provincial Legislative List except for a Province or any part thereof. List I. 23. Cheques, bills of exchange, promissory notes and other like instruments. Jurisdiction and powers of all courts, except the Federal Court, with respect to any of the matters in this list and, to such extent as is expressly authorized by Part IX of this Act, the enlargement of the appellate jurisdic tion of the Federal Court, and the conferring thereon of supplemental powers. List II. Public order (but not including the use of His Majesty 's naval, military or air forces in aid of the civil power); the administration of justice; constitu tion and organization of all courts, except the Federal Court, and fees taken therein; preventive detention for reasons connected with the maintenance of public order; persons subject to such detention. Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list; procedure in Rent and Revenue Courts. List III.4. Civil Procedure, including the Law of Limitation and all matters included in the Code of Civil Procedure at the date of the passing of this Act; the recovery in a Governor 's Province or a Chief 87 Commissioner 's Province of claims in respect of taxes and other public demands, including arrears of land revenue and sums recoverable as such, arising outside that Province. Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list. Mr. Seervat contends that section 3 of the impugned Act is void because it directly trenches on the exclusive legis lative powers of the Centre conferred on it by List I of the Seventh Schedule inasmuch as 'it confers jurisdiction on the new court in respect to all cases of a civil nature. The expression "all cases of a civil nature" presumably brings within the ambit of the Act suits in respect to subjects contained in List I. He urged that the three simi lar entries in the three is, name]y, entry 53 in List I, entry 2 in List II and entry 15 in List III indicated that in respect to the subjects covered by the three fields of legislation demarcated for the two Legislatures the Parlia ment empowered each of them respectively to make laws in respect to jurisdiction and power of courts and that in view of the provisions of section 100 of the Constitution Act the Provincial Legislature had no power to make any law confer ring jurisdiction on courts in respect to subjects covered by List I. In other words, the Federal Legislature alone could legislate on the jurisdiction and powers of a court in regard to the subjects in List I. Similarly in respect of subjects contained in the Provincial List, jurisdiction and power of courts could only be determined by a law enacted by the Provincial Legislature and that in respect of items contained in List III, both Legislatures could make laws on the subject of jurisdiction and powers of courts. It was said that the exceptions and the proviso to section 3 of the City Civil Court Act in dear terms disclosed that jurisdic tion in respect to the subjects on which the Provincial Legislature had no competence to legislate was also con ferred on the new court. Section '12 of the Act by which the High Court was deprived of all jurisdiction on matters that fell 88 within the jurisdiction of the City Civil Court was assailed on similar grounds. In regard to the legislative power conferred under entry I of List 11 on the Provincial Legis lature it was contended that this wide power stood limited by the three entries above mentioned and that under it legislation could only be made to the extent of establishing and organizing courts but no legislation under it was per missible in respect to the powers of those courts. The learned Attorney General, on the other hand, con tends that the Act is intra vires the Bombay Legislature under entry 1 of List II and under entries 4 ' and 15 of List III, it having received the assent of the Governor General. It was urged that the Provincial Legislature had exclusive legislative power on the subject of administration of jus tice and constitution and organization of all courts and that this power necessarily included the power to make a law in respect to the jurisdiction of courts established and constituted by it and that the impugned legislation in pith and substance being on the subject of administration of justice, it could not be held ultra vires even if it trenched on the field of legislation of the Federal Legisla ture. In regard to entry 53 of List I, entry 2 of List II and entry 15 of List II of the Schedule, it was said that these conferred legislative power on the respective Legisla tures to confer special jurisdiction on established courts in respect of particular subjects only if it was considered necessary to do so. In other words the argument was that the Provincial Government could create a court of general jurisdiction legislating under entry 1 of List II and that it was then open to both the Central and the Provincial Legislatures to confer special jurisdiction on courts in respect to particular matters that were covered by the respective lists. In my opinion, the contention of the learned Attorney General that the Act is intra vires the Bombay Legislature under entry 1 of List If is sound and I am in respectful agreement with the view expressed by the Chief Justice of Bombay on this point in Mulchand Kundanmal Jagtiani vs Raman Hiralal 89 Shah (1). The learned Chief Justice when dealing with this point said as follows: "If, therefore, the Act deals with administration of justice and constitutes a court for that purpose and confers ordi nary civil jurisdiction upon it, in my opinion, the legis lation clearly falls within the legislative competence of the Provincial Legislature and is covered by item 1 of List 11 of Schedule 7. That item expressly confers upon the Provincial Legislature the power to legislate with regard to the administration of justice and the constitution and organization of all courts except the Federal Court. It is difficult to imagine how a court can be constituted without any jurisdiction, and if Parliament has made the adminis tration of justice exclusively upon the Provincial Legisla ture the power to constitute and organize all courts, it must follow, that the power is given to the Provincial Legislature to confer the ordinary civil jurisdiction upon the courts to carry on with their work. Item 2 of List II deals with jurisdiction and power of all courts except the Federal Court with respect to any of the matters in this list, and Mr. Mistree 's argument is that item 1 is limited and conditioned by item 2 and what he contends is that the only power that the Provincial Legislature has is undoubted ly to create courts, but to confer upon them only such jurisdiction as relates to items comprised in List II. I am unable to accept that contention or that interpretation of List 11 in Schedule 7. Each item in List 11 is an independ ent item, supplementary of each other, and not limited by each other in any way. Item 1 having given the general power to the Provincial Legislature with regard to all matters of administration of justice and with regard to the constitution and organization of all courts, further gives the power to the Legislature to confer special juris diction, if needs be, and special power, if needs be, to these courts with regard to any of the items mentioned in List 11. It is impossible to read item 2 as curtailing (1) 12 90 and restricting the very wide power with regard to adminis tration of justice given to the Provincial "Legislature under item 1. Similarly in List I the Federal Legislature has been given the power under item 53 to confer jurisdic tion and power upon any court with regard to matters falling under any of the items in that list, and, therefore, it would be competent to the Federal Legislature to confer any special jurisdiction or power which it thought proper upon any court with regard to suits on promissory notes or mat ters arising under the Negotiable Instruments Act. ". It seems to me that the legislative power conferred on the Provincial legislature by item 1 of List II has been con ferred by use Of language which is of the widest amplitude (administration of justice and constitution and organization of all courts). It was not denied that the phrase employed would include within its ambit legislative power in respect to jurisdiction and power of courts established for the purpose of administration of justice. Moreover, the words appear to be sufficient to confer upon the Provincial Legis lature the right to regulate and provide for the whole machinery connected with the administration of justice in the PrOvince. Legislation on the subject administra tion of justice and constitution of courts of justice would be ineffective and incomplete unless and until the courts established under it were clothed with the jurisdiction and power to hear and decide causes. It is difficult to visua lise a statute dealing with administration of justice and the subject of constitution and organization of courts without a definition of the jurisdiction and powers of those courts, as without such definition such a statute would be like a body without a soul. To enact it would be an idle formality. By its own force it would not have power to clothe a court with any power or jurisdiction whatsoever. It would have to look to an outside authority and to another statute to become effective. Such an enactment is, so far as I know, unknown to legislative practice and history. The Parliament by making administration of justice a provin cial subject 91 could not be considered to have conferred power of legisla tion on the Provincial Legislature of an ineffective and useless nature. Following the line of argument taken by Mr. Mistree before the High Court of Bombay, Mr. Seervai stren uously contended that the only legislative power conferred on the Provincial Legislature by entry 1 of List II was in respect to the establishment of a court and its constitution and that no legislative power was given to it to make a law in respect to jurisdiction and power of the court estab lished by it. The argument, logically analysed, comes to this: that a statute will contain the name of the court, the number of its judges, the method of their appointment, the salaries to be drawn by them and it will then stop short at that stage and will not include any provision defining the powers of the tribunal or its other jurisdiction and that the court so constituted could acquire jurisdiction only when a law was made relating to its jurisdiction and powers by the Federal Legislature under entry 53 of List I, by the Provincial Legislature under entry 2 of List II and by either Legisla ture under entry 15 of List III. The learned counsel con tended that this peculiar result was the natural consequence of a federal constitution with divided powers, and that entries 53, 2 and 15 of the three respective lists limit and curtail the wide power conferred on the Provincial Legisla ture by item 1 of List II. It is difficult to accede to this contention because it would amount to holding that though the Provincial Legislature under item 2 of List II has been given the widest power of legislation in the matter of administration of justice and constitution and Organiza tion of courts and though that field has been demarcated for it as its exclusive field of legislation, yet all that it can do, acting within that field, is merely to establish a court without any competency to function and that in can only become an effective instrument for administering jus tice by laws enacted elsewere or under powers conferred under other items of the different lists. I am unable to read items 53, 2 and 15 of the three respective 92 lists as imposing limitations on legislative power con ferred on the Province by item 1 of List II. Such a con struction of the Act would not only do violence to the plain language of item 1 of List II but would be contrary to its scheme under which administration of justice was made a provincial subject. It is significant that no other Legis lature has been given the power to bring into existence a court. A court without powers and jurisdiction would be an anomaly as it would not be able to discharge the func tion of administration of justice and the statute estab lishing such a court could not be said to be a law on the subject of administration of justice. It is a fundamental principle of the construction of a constitution that every thing necessary for the exercise of powers is included in the grant of power. Everything necessary for the effective execution of power of legislation must therefore be taken to be conferred by the constitution with that power. It may be observed that in exercise of legislative power under item 1 of List 11 a provincial Legislature can alter the constitu tion of the existing courts, can abolish them, reorganize them and can establish new courts. If the construction contended for by Mr. Seervai is accepted, then the existing courts re established or re organised by the provincial Legislature would not be able to function till legislation under item 53 of List I, under item 2 of List II or item 15 of List III also simultaneously was made. I do not think that such a result was in the contemplation of parliament. Mr. Seervai with some force argued that it full effect is given to the comprehensive phraseology employed in item 1 of List II, then it would result in making the provisions of item 2 of List II, of item 53 of List I and item 15 of List III nugatory. in other words, if the provincial Legislature could bring into existence a court of general jurisdiction which could hear all causes on subjects concerning which legislative power was divided in the three lists, then the conferment of legislative power on the Federal Legislature under item 53 of List 1, on the provincial Legislature under item 2 in List II and on both the Legislatures under 93 item 15 of List III was purposeless. In my opinion, this argument is not a valid one and the premises on which it is based are not sound. The three lists of subjects contained in Schedule 7 have not been drawn up with any scientific precision and the various items in them overlap. The point kept in view in drawing up the lists was to see that all possible power of legislation was included ,within their ambit. By making administration of justice a provincial subject and by conferring on the Provincial Legislature power to legislate on this subject and also on the subject of constitution and organization of courts, Parliament conferred on that Legislature an effective power which included within its ambit the law making power on the sub ject of jurisdiction of courts. The Provincial Legislature could therefore bring into existence a court with general jurisdiction to administer justice on all matters coming before it within certain territorial and pecuniary limits, subject of course to the condition that such general juris diction may be expressly or impliedly taken away by the provisions of other laws. The Parliament having divided the field of legislation between the two Legislatures, naturally thought that as a corollary or a necessary consequence of this division of legislative power it was necessary to provide by way of a complementary provision a legislative power specifically on the two Legislatures in respect to the jurisdiction and powers of courts on subjects which were within their exclusive legislative field. If a Legislature could exclusively legislate in respect to particular sub jects, as a necessary consequence it should also have the power to legislate in respect to jurisdiction and power of the court dealing with that subject. It is this power that has been conferred by entries 53, 2 and 15 above mentioned on the two Legislatures. Entries 42 and 99 of List I, entries 37 and 42 of List II and entries 25 and 36 of List III are of a similar consequential character. The respective Legislatures are therefore competent to confer special powers on courts and can create special jurisdic tions acting under those powers in respect to 94 their divided fields of legislation. Instances of confer ment of powers and jurisdiction on courts to hear cases on particular subjects were well known to Parliament. Such powers had been conferred on different courts in respect of testamentary and intestate jurisdiction, admiralty jurisdic tion, under the Indian Companies Act, under the Succession Act, Guardians and Wards Act and under the various. Rent Acts and Acts dealing with relief of indebtedness. In view of the division of powers in respect to different subjects, power was given under item 53 of List I, item 2 of last II and item 15 of List III to the different Legislatures when dealing with those subjects also to legislate on the ques tion of jurisdiction and powers of the courts. This confer ment of legislative power to create special jurisdiction in respect to particular subjects does not in any way curtail the legislative power conferred on the Provincial Legisla ture under item 1 of List II. As soon as special legisla tive power under item 53 of List I, under item 2 of List II and item 15 of List III is exercised, the causes that arise in respect to those subjects would then only be heard in jurisdictions created by those statutes and not in the courts of general jurisdiction entrusted with the normal administration of justice. In the language of section 9 of the Code of Civil Procedure, jurisdiction of the general courts will then become barred by those statutes. I am therefore of the opinion that under item 1 of List II the Provincial Legislature has complete competence not only to establish courts for the administration of justice but to confer on them jurisdiction to hear all causes of a civil nature, and that this power is not curtailed or limit ed by power of legislation conferred on the two Legislatures under items 53, 2 and 15 of the three lists. On the other hand, these three items confer on the respective Legisla tures power to legislate when dealing with particular sub jects within their exclusive legislative field to make laws in respect of jurisdiction and powers of courts that will be competent to hear causes relating to those subjects; in other words, this is a power of creating special 95 jurisdictions only. This interpretation of the entries in the lists is not only in accordance with the scheme of the statute but it harmonizes the different entries in the lists and does not make any of them nugatory and in effective. The interpretation contended for by Mr. Seervai would reduce the power of the Provincial Legislature under item 1 to almost nothingness. The crux of the case is whether item 1 of List 11 should be given a limited construction which makes it nugatory or whether a limited construction is to be placed on items 53, 2 and 15 of the three lists. I have no hesitation in holding that both in the light of principles of construction of statutes and principles of legislation, the course to adopt is the one that I have indicated above. Finally, it was contended that section 12 of the Act in any case was a void piece of legislation as it deprived the High Court of its jurisdiction even in respect to subjects contained in List I of the Seventh Schedule. In view of the construction that I have placed on item 1 of List II this argument has no force. If the Legislature has power to bring into existence a court and confer jurisdiction and power on it, a fortiori it has power to take away the jurisdic tion and power that already exist in other courts. More over, the Bombay City Civil Court Act in section a has excepted from the jurisdiction of the new court all cases which the High Court can hear under any special law. Spe cial law has been defined as a law applicable to a particu lar subject. If under List 1 of the Seventh Schedule the Federal Legislature by any law determines that a case has to be heard by the High Court, section 5 will not affect the jurisdiction of that court in any manner whatsoever. The result, therefore, is that the Bombay City Civil Court Act is a statute which is wholly within the legisla tive field of the Province under item 1 of List II and its validity cannot be affected even if it incidentally trenches on other fields of legislation. It is not a statute dealing with any of the subjects mentioned in List I and therefore it cannot be said that the 96 Provincial Legislature has in any way usurped the power demarcated for the Centre. In view of this conclusion I think it unnecessary to pronounce any opinion on the other points raised by the learned Attorney General. For the reasons given above I allow the appeal preferred by the Government of Bombay and set aside the decision of the High Court holding that section 4 of the City Civil Court Act (XL of 1948) is void. In the circumstances of the case I leave the parties t9 bear their own costs of the appeal. MUKHERJEA J. In my opinion this appeal should be allowed and I concur substantially in the line of reasoning adopted by my learned brother Mahajan J. in his judgment. Having regard to the constitutional importance of the questions raised in this case, I would desire to add some observations of mine own. There are really two questions which require considera tion in this appeal. The first is whether section 4 of the Bombay City Civil Court Act, 1948, is void and inoperative by reason of its amounting to a delegation of legisltive powers by the Provincial Legislature to the Provincial Government of Bombay. The Bombay High Court has answered this question in the affirmative and it is entirely upon this ground that the judgment appealed against is based. The propriety of this decision has been challenged by the learned Attorney General who appeared on behalf of the State of Bombay in support of this appeal. On the other hand, Mr. Seervai, appearing on behalf of the respondents, has not only attempted to repel the contention ad vanced by the learned Attorney General, but has sought to support the judgment appealed against on another and a more comprehensive ground which, if accepted, would make the entire Bombay City Civil Court Act a void piece of legisla tion, as being an encroachment by the Provincial Legislature upon the field of legislation reserved for the Centre under List I of Schedule 7 to the Government of India Act, 1935. 97 As regards the first point, I agree that the contention of the appellant is sound and must prevail. I have no hesi tation in holding that the Legislature in empowering the Provincial Government to invest the City Court, by notifica tion, with jurisdiction of such value not exceeding Rs. 25,000 as may be specified in the Notification, has not delegated its legislative authority to the Provincial Gov ernment. The provision relates only to the enforcement of the policy which the Legislature itself has laid down. The law was full and complete when it left the legislative chamber permitting the Provincial Government to increase the pecuniary jurisdiction of the City Court up to a certain amount which was specified in the Statute itself. What the Provincial Government is to do is not to make any law; it has to execute the will of the Legislature by determining the time at which and the extent to which, within the limits fixed by the Legislature, the jurisdiction of the court should be extended. This is a species of conditional legis lation which comes directly within the principle enunciated by the Judicial Committee in The Queen vs Burah(1), where the taking effect of a particular provision of law is made to depend upon determination of certain facts and conditions by an outside authority. The learned Judges of the Bombay High Court in coming to their decision on the point seem to have been influenced to some extent by the pronouncement of the Federal Court in Jatindranath Gupta vs Province of Bihar(2), and the learned. Counsel for the respondents naturally placed reliance upon it. I was myself a party to the majority decision in that case and expressed my views in a separate judgment. I do not think that there is anything in my judgment which lends support to the contention which the respondents have put forward. I stated expressly in course of, my Judgment on the authority of the well known American decision in Locke 's appeal(3) that a legislature may not (1) 5 I.A. 178. (3) 13 American Reports 716. 13 98 delegate its powers to make law but "it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend "; and that the inhibition against delegation does not extend to legislation which is complete in itself, though its operation is made to depend upon contingencies the ascertainment of which is left to an external body. The subject matter of dispute in the Bihar case was the validity of a proviso engrafted upon section 1, subsection (3) of the Bihar Maintenance of Public Order Act. The sub section laid down that the Act would remain in force for a period of one year from the date of its commencement. The proviso then added "that the Provincial Government may, by notification on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification." Mr. Seervai would have been probably right in invoking the decision in that case as an authority in his favour if the proviso simply empowered the Provincial Government, upon compliance with the condi tions prescribed therein, to extend the duration of the Act for a further period of one year, the maximum period being fixed by the Legislature itself. The proviso, however, went further and authorised the Provincial Government to decide at the end of the year not merely whether the Act should be continued for another year but whether the Act itself was to be modified in any way or not. It was conceded by the learned Counsel appearing for the Province of Bihar that to authorise another body to modify a statute amounts to in vesting that body with legislative powers. What the learned Counsel contended for, was that the power of modification was severable from the power of extending the duration of the statute and the invalidity of one part of the proviso should not affect its other part. To this contention my answer was that the two provisions were inter related in such a manner in the statute that one could not be severed from the other. 99 Obvious]y, the facts of this case are quite different, and all that I need say with regard to my pronouncement in Jatindranath Gupta 's case is that the principle upon which that case was decided is not applicable and cannot be at tracted, to the present case. I may state here that a question in the broad form as to whether a Provincial Legislature exercising its legislative powers within the limits prescribed by the Imperial Parlia ment in the Government of India Act, 1935, could delegate its legislative functions in any manner to an outside au thority as it thought proper, was neither raised nor decided in Jatindranath Gupta 's case. The learned Attorney General has not very properly invited any final decision on that point in the present case and I would refrain from express ing any opinion upon it. ' The second point appears to be of some complexity and it was decided by the Bombay High Court adversely to the re spondents on the basis of an earlier pronouncement of the same Court in Mulchand vs Raman(1). The arguments of Mr. Seervai are really directed at assailing the correctness of this earlier decision which the learned Judges held to be binding on them in the present case. The contention of Mr. Seervai, in substance, is, that the Bombay City Civil Court Act, which is a piece of provincial legislation, is ultra vires the legislature inasmuch as it purports to endow the City Court, which it brings into existence, with jurisdic tion to receive, try and dispose of "all suits and other proceedings of a civil nature" with certain exceptions that are specified in the different sub sections of section 8. What is said is that the expression "all suits of a civil nature" is wide enough to include suits in respect to mat ters specified in List I of the Seventh Schedule of the Constitution Act with regard to which the Central Legisla ture alone is competent to confer jurisdiction on courts under entry 53 of the said List. It is argued that so far as the Provincial Legislature is concerned, it may empower all courts (except the Federal Court) with jurisdiction in respect to any of the matters in the Provincial List. (1) 100 and it may also be capable of exercising like powers in regard to subjects enumerated in the Concurrent List as provided for in article 15 of List III, subject to the conditions laid down in section 107 of the Act. But as the scope of section 3 of the Bombay City Civil Court Act is not limited to matters in Lists II and III only and its language can embrace subjects coming under List I as well, and fur thermore as the different subjects both within and outside the provincial and concurrent fields dealt with by section 3 are inextricably, intertwined and not capable of severance or demarcation, the whole Act must be held to be ultra vires. In answer to this, it has been urged by the learned Attorney General that amongst the subjects included in Item 1 of the Provincial List are "the administration of justice and constitution and organization of all courts except the Federal Court", and these expressions obviously include within their ambit the conferring of general jurisdiction to hear and decide cases upon courts which are set up by the Provincial Legislature, and without which they cannot func tion as courts at all. 'It is said that Item 2 of the Provincial List which mentions "jurisdiction and powers of all courts except the Federal Court with respect to any of the matters in this List" does not in any way limit or curtail the ordinary connotation of the ,expressions "admin istration of justice and constitution of courts" as used in Item I of the said List referred to above. It cannot be disputed that the words "administration of justice" occuring in Item 1 of the Provincial List, unless they are limited in any way, are of sufficient amplitude to confer upon the Provincial Legislature the right to regulate and provide for the whole machinery connected with the administration of justice. Section 92, of the North America Act deals with the exclusive powers of the Provincial Legis latures and clause (14) of the section speaks of "the admin istration of justice in the Provinces" as including "the constitution, maintenance and organization of Provincial Courts. " In interpreting this provision of the constitution it has been held in North America that the words 101 "constitution, maintenance and organization of courts" plainly include the power to define the jurisdiction of such courts territorially as well as in other respects(2). Mr. Seervai argues that this might be the normal meaning of the words if they stood alone. But if Items 1 and 2 of the Provincial List are read together, the conclusion cannot be avoided that the expressions "administration of justice and constitution of courts" do not include "jurisdiction and powers of courts" which are separately dealt with under Item 2. To find out, therefore, the extent of powers of the Provincial Legislature in respect conferring jurisdic tion upon courts, the relevant item to be looked to is not Item 1 but Item 2 of the Provincial List. The contention in this form seems to me to be plainly unacceptable. I agree with Mr. Setalvad that the different topics in the same Legislative List should not be read as exclusive of one another. As was observed by Sir Maurice Gwyer in The United Provinces vs Atiqa Begum(1), "the sub jects dealt with in the three Legislative Lists are not always set out with scientific definition. It would be practically impossible for example to define each item in the Provincial List in such a way as to make it exclusive of every other item in that List, and Parliament seems to have been content to take a number of comprehensive categories and to describe each of them by a word of broad and general import . I think that none of the items in the List is to be read in a narrow or restricted sense, and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. " As there can be no question of conflict between two items in the same List, there is no warrant for restricting the natural meaning of one for the simple reason that the same subject might in some aspect come within the purview of the other. The difficulty, however, arises when we come to entry 53 of List I. Under this entry, it is the Central (1) Re County Courts of British, Columbia 21 S.C.R. 446. (2) at p. 134. 102 Legislature that has been given the power of legislating in regard to jurisdiction and powers of all courts except the Federal Court in respect to any of the matters in List L The difficulty that one is confronted with, is that if Item 1 of the Provincial List is taken to empower the Provincial Legislature to invest a court with jurisdiction with respect to all subjects no matter in whichever List it might occur, a clear conflict is bound to arise between Item 1 of the Provincial List and Item 53 of the Central List; and a Provincial legislation trespassing upon the exclusive field of the Centre would be void and inoperative under section 100 of the Constitution Act. This being the posi tion, a way would have to be found out to avoid the conflict. As the Privy Council observed in the case of the Citizens Insurance Company of Canada vs Parsons(2) "it could not have been the intention that a conflict should exist and in order to prevent such a result the two sections must be read together and the language of the one interpreted and where necessary modified by the other." Mr. Seervai suggests that the proper way of reconciling this apparent conflict would be to read the words "adminis tration of justice and constitution of courts" occurring in entry 1 of the Provincial List as exclusive of any matter relating to jurisdiction of courts. The Provincial Legisla ture can only set up or constitute courts but their juris diction or power of deciding cases must be derived from the Central or the Provincial Legislature or, from either of them in accordance with the subjects to which such juris diction relates. The Provincial Legislature can endow the court with jurisdiction in respect to any matter in List II and the Central Legislature can do the same with regard to subjects specified in List I. So far as matters in the Concurrent List are concerned, either of the Legislatures can make provisions in respect of them subject to the condi tions laid down in section 107 the Constitution Act. (2).A.C. ,96 at p. 109. 103 This argument, though apparently plausible, cannot, in my opinion, be accepted as sound. It is to be noted that the right to set up courts and to provide for the whole machinery of administration of justice has been given exclu sively to the Provincial Legislature. Under section 101 of the North America Act, the Parliament of Canada has a re serve of power to create additional courts for better admin istration of the laws of Canada but the Indian Constitution Act of 1935 does not give any such power to the Central Legislature. Courts are to be established by the Provincial Legislature alone. The word 'court ' certainly means a place where justice is judicially administered, The appointment of Judges and officers or the mere setting apart of a place where the Judges are to meet, are not sufficient to consti tute a court. A court cannot administer justice unless it is vested with jurisdiction to decide cases and "the consti tution of a court necessarily includes its jurisdiction. "(1) If Mr. Seervai 's contention is accepted, the result will be that when a Provincial Legislature estab lishes a civil court, it can only be invested with jurisdic tion to decide cases in respect to matters coming within the Provincial List. Such court can have no power to decide cases relating to any matter which is enumerated in List I so long as the appropriate Legislature does not confer upon it the requisite authority. Thus an ordinary Provincial Court established to decide civil suits would be entitled to entertain all money claims but not a claim on a promissory note; nor could it entertain a suit for recovery of corpora tion tax, for Negotiable Instruments and corporation tax are subjects of the Central List. This certainly was not the scheme of the Constitution Act. In my opinion, the proper way to avoid a conflict would be to read entry 1 of the Provincial List, which contains the only provision relating to constitution of courts and administration of justice, along with the group of three entries, viz., entry 53 of List I, entry 2 of List II and entry 15 of List III with which it is supposed to be in conflict, (1) Vide Clement 's Canadian Consitution, 3rd Edn., p. 527, 104 and to interpret the language of one by that of the other. Entry 1 of List II uses the expressions "administration of justice and constitution of all courts" in a perfectly general manner. No particular subject is specified to which the administration of justice might relate or for which a court might be constituted. It can, therefore, be legitimately interpreted to refer to a general jurisdiction to decide cases not limited to any particular subject. The other three items on the other hand relate to particular matters appearing in the three Lists and what they contem plate is the vesting of jurisdiction in courts with regard to such specific items only. In one case the jurisdiction is 'general ' as is implied in the expression "administration of justice", while in the other three the jurisdiction is 'particular ' as limited to particular matters and hence exclusive. I agree with my learned brother Patanjali Sastri J. that one approved way of determining the scope of a legislative topic is to have regard to what has been ordi narily treated as embraced within that topic in the legisla tive practice of the country(2); and if that test is ap plied, the interpretation suggested above would appear to be perfectly legitimate. The distinction between general and particular jurisdiction has always been recognised in the legislative practice of this country prior to the passing of the Constitution Act of 1935 and also after that. There have been always in this country civil courts of certain classes and categories graded in a certain manner according to their pecuniary jurisdiction and empowered to entertain and decide all suits of a civil nature within particular localities. Particular jurisdiction again have been conferred on some one or the other of these courts to try cases relating to certain specified matters. Thus there have been special jurisdictions created for insolvency, probate or guardianship proceedings, for deciding disputes relating to compulsory acquisition of land and for dealing with cases arising under the Rent Acts or the different legislations passed in recent years (2) vide Croft vs Dunphy. 105 for scaling down exorbitant rates of interest or giving relief to rural debtors. Similar instances may be cited with regard to conferring of special jurisdiction in criminal cases. There will be no difficulty in interpreting in a proper manner the different entries in the Legislative Lists re ferred to above if this distinction between general and special jurisdiction is kept in view. The entire scheme of the Constitution Act of 1935 is to vest the power of estab lishing courts upon the Provincial Legislature. The Provin cial Legislature can endow the courts which it sets up with general jurisdiction to decide all cases which, according to the law of the land, are triable in a court of law, and all these powers can be exercised under entry I of List II. If the Central Legislature or the Provincial Legislature chooses to confer special jurisdiction on certain courts in respect to matters enumerated in their appropriate legisla tive lists, they can exercise such powers under the three entries specified above. But the exercise of any such powers by the Central Government would not m any way conflict with the powers exercisable by the Provincial Legislature under entry 1 of List II. The expression 'general ' must always be understood as being opposed to what is 'special ' or exclu sive. If the Central Legislature vests any particular juris diction upon a court in respect to a Central matter, that matter would cease to be a general matter and consequently the court having general jurisdiction would no longer deal with that, but the general jurisdiction of such courts would not be affected thereby. The contents of general jurisdic tion are always indeterminate and are not susceptible of any specific enumeration. In this view, I do not think that it would be at all necessary to invoke 'the pith and substance ' doctrine in avoiding the possibility of incidental encroach ment by the Provincial Legislature upon Central subjects in regard to conferring jurisdiction upon courts. If the expression 'jurisdiction ' in entry 53 of List I means and refers to special jurisdiction only, there cannot be even an incidental encroachment upon such special jurisdiction 14 106 by reason of the conferring of general jurisdiction upon courts by the Provincial Legislature under entry 1 of List II. As I have said already what is 'special ' or made so, will automatically cease to be in the category of what is 'general ' and no question of a conflict would at all arise. It may be pointed out in this connection that in the Canadian Constitution also, the general scheme is to carry on administration of justice throughout Canada through the medium of provincial courts. Subject to the residuary power reserved to the Dominion Parliament under section 101 of the North America Act, the Constitution has assigned to the provinces the exclusive power in relation to administration of justice including the maintenance, constitution and organization of courts. There is no limitation in any provincial court along the line of division that exists between matters within the legislative competence of the Dominion Parliament and of the Provincial Legislative Assemblies (1). There is indeed no such thing as Entry 53 in List I of the Indian Act in the Canadian Constitution, but there are judicial pronouncements to the effect that the Dominion Parliament can impose jurisdiction on provincial courts over Dominion subjects (2). It may be that the British Parliament in framing the legislative topics in the Government of India Act of 1935 in regard to administration of justice and jurisdiction of courts wanted to adopt the Canadian model with such modifications as they considered necessary. It is, however, immaterial to speculate on these matters. For the reasons given above, I am of the opinion that the decision of the Bombay High Court in Mulchand vs Raman(3) is correct, and the contention of Mr. Seervai should fail. In the result, the appeal is allowed and the judgment of the High Court is set aside. DAS J: I agree that this appeal should be allowed. In view of the importance of the questions raised in (1) Vide Clement 's Canadian Constitution p. 526. (2) Vide Lefroy 's Canada 's Federal system p. 541, (3) 107 this appeal, I consider it right to state 'my reasons for coming to that conclusion. The salient facts, as to which there is no dispute, are as follows: On May 10, 1948, the Provincial Legislature of Bombay passed Act No. XL of 1948, called the Bombay City Civil Court Act, 1948. It was passed with a view "to estab lish an additional Civil Court for Greater Bombay. " The provisions of that Act which will be relevant for the pur poses of the present appeal may now be set out: "1. (2) It shall come into force on such date as the Provincial Government may, by notification in the Official Gazette, appoint in this behalf. The Provincial Government may, by notification in the Official Gazette, establish for the Greater Bombay a Court, to be called the Bombay City Civil Court. Notwith standing anything contained in any law, such Court shall have jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding ten thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings which are cognizable (a) by the High Court as a Court of Admiralty or Vice Admiralty or as a Colonial Court of Admiralty, or as a Court having testamentary, intestate or matrimonial jurisdiction, or (b) by the High Court for the relief of insolvent debt ors, or (c) by the High Court under any special law other than the Letters Patent, or (d) by the Small Cause Court: Provided that the Provincial Government may, from time to time, after consultation with the High Court, by a like notification extend the jurisdiction of the City Court to any suits or proceedings of the nature specified in Clauses (a) and (b). Subject to the exceptions specified in section 3, the Provincial Government may, by notification in the Offi cial Gazette, invest the City Court with jurisdiction to receive, try and dispose of all suits and 108 other proceedings of a civil nature arising within the Greater Bombay and of such value not exceeding twenty five thousand rupees as may be specified in the notification. Notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognizable by the City Court: Provided that the High Court may, for any special rea son, and at any stage, remove for trial by itself any suit or proceeding from the City Court. " The Act received the assent of the Governor General about the same time. It came into force on August 16, 1948, by a notification issued by the Provincial Government and published in the Official Gazette. Simultaneously with the passing of the above Act the Bombay Legislature also enacted Act (XLI of 1948) called the Bombay High Court Letters Patent Amendment Act, 1948. By section3 of that Act Clause 12 of the Letters Patent was amended by adding the following words: "Except that the said High Court shall not have such Original jurisdiction in cases falling within the jurisdic tion of the Small Cause Court at Bombay or the Bombay City Civil Court. " Shortly after the passing of the above Acts, the validi ty of the Bombay City Civil Court Act (XL of 1948) was challenged in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1), a suit on promissory notes filed in the Original side of the High Court. A Division Bench of the Bombay High Court (Chagla C.J. and Bhagwati J.), on September 2, 1948, held that the Act was well within the legislative competence of the Provincial Legislature and was not ultra vires. Leave was given to the plaintiff in that suit under section 205 of the Government of India Act, 1935, to appeal to the Federal Court but no such appeal appears to have been filed. On January 20, 1950, the Provincial Government of Bombay issued the following notification No. 2346/5 in the Official Gazette: (1) A,I.R. 1949 Bom. 197; 109 "In exercise of the powers conferred by section 4 of the Bombay City Civil Court Act, 1948 (Bombay, Act XL of 1948), the Government of Bombay is pleased to invest, with effect from and on the date of this notification, the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding twen ty five thousand rupees in value, and arising within the Greater Bombay subject, however, to the exceptions specified in section a of the said Act. " On February 6, 1950, the first respondent Narothamdas Jethabhai presented a plaint before the Prothonotary of the Bombay High Court for recovery of Rs. 11,704 5 4 with further interest due by the second respondent Aloysious Pinto Phillips upon three several promissory notes. In paragraph 4 of this plaint it was expressly pleaded that the High Court had jurisdiction to receive, try and dispose of that suit because (1)the Bombay City Civil Court Act, 1048, was ultra vires and (2) at least section 4 of that Act and the notification issued thereunder were ultra vires. Having some doubts as to whether in view of the notification issued 1 by the Provincial Government under section 4 of the Act the plaint could be admitted in the High Court, the Prothon otary placed the matter under the rules of the Court before Bhagwati J. who was then the Judge in Chambers. By his judgment delivered on February 23, 1950, Bhagwati J. held that section 4 of the Act and the notification issued there under were ultra vires and void and that the High Court, therefore, had jurisdiction to entertain the suit. The plaint was accordingly received and admitted. The first respondent thereupon took out a summons under the rules of the Court for leave to sign judgment against the second respondent. The State of Bombay was, on its own application, added as a party to the suit. The matter was put up before a Division Bench (Chagla C.J. and Tendolkar J.) for trial of the following issues: 110 "(1) Whether Act XL of 1948 is ultra vires of the Legis lature of the State of Bombay. (2) Whether,Section 4 of Act XL of 1948 is in any event ultra rites of the Legislature of the State of Bombay. (3) Whether the Government of Bombay Notification 'No. 2346/5 dated 20th January, i1950, is ultra vires, void and inoperative in law. (4) Whether this Court has jurisdiction to try the suit. The larger point involved in issue No. 1 having been concluded by the earlier decision of the Division Bench in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1) that issue was answered in the negative without any argument but leave was reserved to the first respondent to contest the correctness of that earlier decision in this Court. The Division Bench in agreement with Bhagwati J. held that by section 4 of the Act the Provincial Legislature did not itself legislate but delegated the power of legislation to the Provincial Government which it had no power to do and, therefore, section 4 and along with it the notification No. 2346/5 issued thereunder were ultra vires, void and inoperative. Accordingly they answered issues Nos. (2), (3) and (4)in the affirmative and sent the summons for judgment back to the learned Judge taking miscellaneous matters to dispose it of on merits. The State of Bombay has now come up before us in appeal from this decision of the High Court. The Advocate General of Madras has intervened in support of this appeal and for maintaining the validity of the Madras City Civil Court Act (VII of 1892) section 3A of which inserted in 1935 by way of amendment is in identical terms with section 4 of the Bombay Act except that the amount of the value was fixed at Rs. 10,000 in section 3A of the Madras Act instead of Rs. 25,000 fixed in section 4 of the Bombay Act. The distinction between conditional legislation and delegation of legislative power has been well known (1) 51 Bom L R.86 111 ever since the decision of the Privy Council in R.v. Burah(1) and the other Privy Council cases cited in the judgments of the High Court. It is firmly established that conditional legislation is not only permissible but is indeed in many cases convenient and necessary. The difficul ty which confronts the Courts is in ascertaining whether a particular provision of a Statute constitutes a conditional legislation as explained in the decisions of the Privy Council. In the present case the High Court, on a construc tion of section 4 of the Bombay City Civil Court Act, came to the conclusion that it was not an instance of conditional legislation at all. The use of the word "invest" in section 4 was considered by the High Court to be very significant and the difference between the language in section 3 and that in section 4 appeared to them to be very marked and striking. According to the High Court while by section a the Legislature itself set up a Court with a particular pecuniary jurisdiction, under section 4 the Legislature itself did not invest the Court with any higher jurisdiction but left it to the Provincial Government to exercise the function which the Government of India Act laid down should be exercised by the Provincial Legislature. The learned Chief Justice expressed the view that the Legislature never applied its mind to the question as to whether the new Court which it was setting up should have a jurisdiction higher than that of Rs. 10,000, and that section 4 was not a sec tion which merely directed the Provincial Government to carry out the policy laid down by the Legislature, but that it was a section which conferred upon the Provincial Govern ment the power to confer jurisdiction upon the Court. Then, after referring to R.V. Baruha(1) and several other cases and purporting to apply the tests laid down in the decisions to the Act the learned Chief Justice concluded that the Legislature in the exercise of its legislative power had set up a Civil Court with a limited jurisdiction under section a of the Act, that it had not set up a Court with a jurisdiction higher than ten thousand rupees and (1) L.R 5 I. A. 178. 112 that, having set up a Court of, limited jurisdiction, it had given to the Provincial Government under section 4 the power to confer upon that Court a higher jurisdiction up to twenty five thousand rupees. This power, which was con ferred upon the Provincial Government was according to the Chief Justice, a power which could only have been exercised by the Legislature itself. I am unable to accept the afore mentioned construction of sections 3 and 4 of the Act. As I have already said, the High Court rounded their conclusions principally on the observations of their Lord ships of the Privy Council in R.v. Burah(1) and certain other Privy Council cases. It will be useful, therefore, to analyse the Privy Council decision in R.v. Burah(1). In 1869 the Indian Legislature passed an Act (No. XXII of 1869) purporting, first, to remove a district called Garo Hills from the jurisdiction of the Courts of civil and criminal jurisdiction and from the law prescribed for such Courts by Regulations and Acts and, secondly, to vest the administra tion of civil and criminal justice, within the same territo ry, in such officers as the Lieutenant Governor of Bengal might, for the purpose of tribunals of first instance, or of reference and appeal, from time to time appoint. The Act was to come into operation on such day as the Lieutenant Governor of Bengal should, by notification in the Calcutta Gazette, direct. The 8th section authorised the Lieuten ant Governor of Bengal by notification in the Calcutta Gazette to extend to the said territory, any law or any portion of any law then in force in other territories sub ject to his government or which may thereafter be enacted by the Council of the Governor General or of himself. The 9th section of that Act provided: "The said Lieutenant Governor may from time to time, by notification in the Calcutta Gazette, extend mutatis mutan dis all or any of the provisions contained in the other sections of this Act to the Jaintia Hills, the Naga Hills, and to such portion of the Khasi Hills, as for the time being forms part of British India, (1) L.R. 5 I.A. 178. 113 Every such notification shall specify the boundaries of the territories to which it applies. " On October 14, 1871, the Lieutenant Governor of Bengal issued a notification in exercise of the powers conferred on him by section 9 extending the provisions of that Act to the territory known as the Khasi and Jaintia Hills and excluded therefrom the jurisdiction of the Courts of civil and crimi nal justice. The respondent Burah and another person having been convicted by the Deputy Commissioner of the Khasi and Jaintia Hills of murder and sentenced to death, which was later on commuted to transportation for life, they from jail sent a petition of appeal against their conviction. The provisions of Act XXII of 1869 having been extended, by notification under section 9, to the Khasi and Jaintia Hills, the High Court would have no jurisdiction to enter tain the appeal, unless section 9 and the notification were ultra rites and void. The majority of the Judges of the Full Bench constituted for considering the question took the view that section 9 was really not legislation but was an in stance of delegation of legislative power. The Crown ob tained special leave to appeal to the Privy Council. In summarising the effect of the provisions of sections 1 to 8 of that Act on Garo Hills Lord Selborne who delivered the judgment of the Privy Council observed at page 194 that the Governor General in council had determined, in the due and ordinary course of legislation, to remove a particular district from the jurisdiction of the ordinary Courts and offices, and to place it under new Courts and offices, to be appointed by and responsible to the Lieutenant Governor of Bengal leaving it to the Lieutenant Governor to say at what time that change should take place, that the Legisla ture had determined that, so far, a certain change should,take place, but that it was expedient to leave the time, and the manner, of carrying it into effect to the discretion of the Lieutenant Governor and also, that the laws which were or might be in force in the other territo ries subject to the same Government were such as it might be fit and proper to apply to this 15 114 district also, but that, as it was not certain that all those laws, and every part of them, could with equal conven ience be so applied, it was expedient, on that point also, to entrust a discretion to the LieutenantGovernor. His Lordship then proceeded to state the true meaning and effect of the provisions of section 9: "This having been done as to the Garo Hills, what was done as to the Khasi and Jaintia Hills? The Legislature decided that it was fit and proper that the adjoining dis trict of the Khasi and Jaintia Hills should also be removed from the jurisdiction of the existing Courts, and brought under the same provisions with the Garo Hills, not neces sarily and at all events, but if and when the Lieutenant Governor should think it desirable to do so; and that it was also possible that it might be expedient that not all, but some only, of those provisions should be applied to that adjoining district. And accordingly the Legislature en trusted for these purposes also, a discretionary power to the Lieutenant Governor. " Finally, his Lordship concluded at p. 195: "Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the LieutenantGovernor (large as they undoubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor General in Council. Their whole operation is, directly and immediately, under and by virtue of this Act XXII of 1869 itself. The proper Legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legisla tion is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an imperial or in a provinciall Legislature, they may, in their Lordships ' judgment be well exercised, either absolutely or condition ally. Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrust ed by the Legislature to persons in whom it places confi dence, 115 is no uncommon thing; and, in many circumstances, it may be highly convenient. " If the reasonings underlying the observations of the ' Bombay High Court were correct then on those very reasonings it could be held in Burah 's case(1) that while in enacting sections 1 to 8 the Legislature had applied its mind and laid down its policy as to the exclusion of the Garo Hills from the jurisdiction of the Courts the Legislature did not apply its mind and did not lay down any policy as to the exclusion of the Khasi and Jaintia Hills rom the jurisdic tion of the Courts but had left it to the Lieutenant Gover nor to do what it alone could do. This construction quite clearly did not find favour with the Privy Council. The Privy Council by construction spelt out of the very language section 9 that the Legislature itself had decided that it was fit and proper that the Khasi and Jaintia Hills should also be removed from the jurisdiction of the existing Courts and brought under the same provisions as applied to the Garo Hills, not necessarily and at all events but if and when the LieutenantGovernor should think it desirable to do so and accordingly entrusted a discretionary power to the Lieutenant Governor. Adopting the same method of construc tion and adopting the language of Lord Selborne it may well be said that in enacting section 3 the Legislature itself has determined, in the due and ordinary course of legisla tion, to establish an additional Court of civil jurisdiction with jurisdiction to entertain suits and other proceedings arising within the Greater Bombay of the value up to Rs. 10,000 leaving it, by section 1 (2), to the Provincial Government to say at what time that change should take place. Likewise, it may be said that in enacting section 4 the Legislature itself has decided that it is fit, and proper to extend the pecuniary jurisdiction of the new Court, not necessarily and at all events or all at once but if and when the Provincial Government should think it de sirable to do so and accordingly entrusted a discretionary power to the Provincial Government. It is entirely wrong to say that the (1) L.R. 5 I.A. 178. 116 Legislature has not applied its mind or laid down any poli cy. Indeed, the very fact that the extension of pecuniary jurisdiction should not exceed twenty five thousand rupees, that the extension should be subject to the exceptions specified in section 3 clearly indicate that the Legislature itself has decided that the extension of the pecuniary jurisdiction of the new Court should be made, not necessarily or at all events or all at any one time but when the Provincial Government may consider. it desirable to do so and while entrusting a discretionary power with the Provincial Government to determine the time for investing such extended jurisdiction on the new Court, the Legislature itself has also prescribed the limits of such extension. The efficacy of the Act of extension of jurisdiction is, there fore, not due to any other legislative authority than that of the Legislature itself. The expression "invest" does not appear to me to have any special significance. It only implies or indicates the result of the fulfilment of the condition which the Legislature itself laid down. To use the language of Lord Selborne the extension of jurisdiction is directly and immediately under and by virtue of this very Act itself. Here there is no effacement of the Legislature, no abdication of the legislative power. On the contrary, the proper Legislature has exercised its judgment as to the possible necessity for the extension of the pecuniary juris diction of the new Court and the result of that judgment has been to legislate conditionally as to such extension and that the condition having been fulfilled by the issue of the notification by the Provincial Government the legislation has now become absolute. In my judgment the construction put upon sections 3 and 4 by the High Court was erroneous and cannot be supported either on principle or on authority. When properly construed in the light of the observations and decision of the Privy CounCil in R.v. Burah(1) as indi cated above section 4 does not amount to a delegation of legislative power at all but constitutes what is known as conditional legislation. (1) L.R. 5 I.A 178. 117 Reliance was placed by the High Court on the decision of the Federal Court of India in Jatindra Nath Gupta vs Prov ince of Bihar (1) in support of their conclusions. That case was concerned with the question of the validity of the proviso to section 1 (3)of the Bihar Maintenance of Public Order Act (V of 1947). Section 1 (a) provided that the Act should remain in force for a period of one year from the date of its commencement. The relevant part of the proviso was in the following terms: "Provided that the Provincial Government may, by notifi cation, on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council, direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification. " Three of the learned Judges held that the proviso and the notification thereunder were ultra vires and void They laid particular emphasis on the power given to the Provin cial Government to make any modification in the Act when extending its life as indicating that it was a delegation of legislative power. Another learned Judge did not decide this point but agreed to set aside the order of detention on another ground not material for our present purpose and the remaining learned Judge took a different view of the effect of the proviso and held that it was a conditional legisla tion within the meaning of the decision in R., vs Burah(2). I do not find it necessary, for the purposes of the present appeal, to express any view as to the correctness of the decision of the Federal Court in that case. Assuming, but without deciding, that the entrustment with the Provincial Government of the power to extend the life of an Act with such modifications as the Provincial Government in its unfettered discretion thought fit to make was nothing but a delegation of legislative powers, there is no such power of modification given to the Provincial Government by section 4 of the Bombay City Civil Court (1) A.I.R. 1949 F.C. 175, (.2) L.R. 5 I.A. 178. and, therefore, that decision of the Federal Court can have no application to the case before us. The learned Attorney General wants to go further and contend that under the Government of India Act, 1935, it was permissible for the Legislatures, Central or Provincial, while acting within their respective legislative fields, to delegate their legislative powers. In the view I have ex pressed above, namely, that section 4 of the Bombay City Civil Court Act, 1948, does not involve any delegation of legislative power, I do not consider it necessary, on this occasion, to go into that question and I reserve my right to consider and decide that question including the question of the correctness of the decision of the Federal Court in Jatindra Nath Gupta 's case(1) on that point as and when occasion may arise in future. Learned counsel for the first respondent then raises before us the larger question as to whether the Bombay City Civil Court Act, 1948, as a whole was or was not within the legislative competence of the Provincial Legislature of Bombay. Legislative powers were by section 100 of the Gov ernment of India Act, 1935, distributed amongst the Federal and the Provincial Legislatures. Under that section the Federal Legislature had, and the Provincial Legislature had not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to that Act. Likewise, the Provincial Legislature had, and the Federal Legislature had not, power to make laws the Province with respect to my of the matters enumerated in List II in that Schedule. It will be noticed that 'the section, while af firmatively giving legislative power with respect to certain matters to one Legislature, expressly excluded the legisla tive power of the other Legislature with respect to those matters. Lastly, section 100 gave concurrent power of legis lation to the Federal as well as to the Provincial Legisla ture with respect to matters enumerated in List III in that Schedule. Section 107 of that Act made provision for resolv ing the inconsistency, if any, between a Provincial law and a Federal law or the existing Indian (1) A.I.R. 1949 F.C. 175 119 law with respect to any of the matters in the Concurrent List (i.e., List III). Turning now to the three lists we find several entries relating to Courts, the relevant por tions of which are as follows : List I. Entry 53: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list . List II. Entry 1: . . the administration of justice, constitution and organisation of all Courts, except the Federal Court, and fees taken therein; . Entry 2: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list; procedure in Rent and Revenue Courts. List III. PART 1. Entry 2: Criminal Procedure, including all matters included in the Code of the Criminal Procedure at the date of the passing of this Act. Entry 4: Civil Procedure, including the law of Limita tion and all matters included in the Code of Civil Procedure at the date of the passing of this Entry 15: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list. Learned Attorney General urges that entry 1 in List II clearly indicates that administration of justice had been expressly made a provincial subject and that it was only the Provincial Legislature which could make laws with respect to administration of justice. The next steps in the argument are that there could be no administration of justice unless Courts were constituted and organised, that the constitution and organisation of Courts would be meaningless enterprises for the Provincial Legislatures to indulge in, unless the Courts so constituted and organised were 120 vitalised by being invested with jurisdiction and powers to receive, try and determine suits and other proceedings. The argument, therefore, is that entry 1 in List II by itself gave power to the Provincial Legislature not only to consti tute and organise Courts but also to confer jurisdiction and powers on them. The learned Attorney General relies on Jagtiani 's case(1) and points out that under entry 1 admin istration of justice was entirely a provincial responsibili ty and the Provincial Legislature was authorised to make laws with respect to administration of justice. Administra tion of justice, so the argument ' proceeds, is inseparable from Courts and Courts without jurisdiction is an incompre hensible notion. The conclusion sought to be established. therefore, is that under entry 1 alone of List II the Provincial Legislature had power to make a law not merely constituting a new Court but, investing such new Court with general jurisdiction and powers to receive, try and deter mine all suits and other proceedings. If entry 1 in List II stood alone and entry 53 in List I, entry 2 in List II and entry 15 in List HI were not in the Seventh Schedule, the argument would have been unanswerable. In Section 92 of the British North America Act, 1867, there was no separate provision authorising the making of laws with respect to jurisdiction and powers of Courts and, therefore, the au thority to make laws with respect to the jurisdiction and powers of Courts had of necessity to be found in and spelt out of the words ' 'administration of justice" occurring in section 92 (14) of that Act. There is, however, no such pressing or compelling necessity for giving such wide and all embracing meaning to the words "administration of jus tice" in entry 1 of List 11. The expression "administration of justice" may be an expression of wide import and may ordinarily, and in the absence of anything indicating any contrary intention, cover and include within its ambit several things as component parts of it, namely, the consti tution and organisation of Courts, jurisdiction and powers of the Courts and the laws to be administered by the Courts. But the legislative (1) 51 Bom. L.B. 86. 121 practice in England as well as in India has been to deal With these topics separately in legislative enactments: see for example Indian High Courts Act 1861. (24 and 25 Vic., c. 104) sections 2 and 19; Government of India Act, 1935, sections 220 and 223, the Letters i Patent of the Bombay High Court, 1865, and also the different Civil Courts Acts. Of these, one topic, namely, "constitution and organisa tion of Courts" had been expressly included in entry 1 of List II in addition to "administration of justice", a fact of some significance which must be noted although I do not say that the inclusion of the words "constitution and organ isation of all Courts" in entry 1 of List II by itself and in the absence of anything else cut down the generality of the meaning of the expression "administration of justice" which preceded those words, for such a construction may militate against the principle laid down by the Privy Coun cil in Meghraj vs Allah Rakhia(1). Further, entry 2 in List II would have been wholly unnecessary if the expression "administration of justice" in entry 1 in List II were to be given the wide meaning contended for by the learned Attor neyGeneral, for if under entry 1 ' in List II the Provincial Legislature had plenary powers to make laws conferring on, or taking away from, Courts, existing or newly constituted, 0jurisdiction and powers of the widest description, such power would also include the lesser power of conferring jurisdiction and powers with respect to any of the matters enumerated in List II, such as is contemplated by entry 2 in List II. The greater power would certainly have included the lesser. I do not say that the presence of entry 2 in List II by itself cut down the ambit of the expression "administration of justice" in entry 1, for if there were only entries 1 and 2 in List II and there were no entries like entry 53 in List I and entry 15 in List III, it might have been argued with some plausibility that in framing the two entries in the same list not much care was bestowed by the draftsman to prevent overlapping and that as (1) L.R. 74 I.A. 12, at p.20 16 16 122 both the entries in one and the same list gave legislative power to the same Legislature the overlapping caused no confusion or inconvenience and that it was not necessary, therefore, to construe entry 1 of List II as cut down by entry 2 in the same List. The important thing to notice is that the topic of "jUrisdiction and powers of Courts" had not been included in entry 1 in List II along with the topic of "constitUtion and organization of Courts", but the legislative powers with respect to the topic of "jurisdic tion and powers of the Courts" had been distributed between the Federal and the Provincial Legislatures in the manner set forth in entry 53 in List I, entry 2 in List II and entry 15 in List III. The inclusion of "constitution and organisation of Courts" as a separate item in entry 1 in List II, the omission of the topic of "jurisdiction and powers of Courts" from entry 1 and the deliberate distribu tion of powers to make laws with respect to jurisdiction and powers of Courts with respect to the several matters speci fied in the three lists clearly indicate to my mind that the intention of Parliament was not, by entry 1 in List II by itself, to authorise the Provincial Legislature to make any law with respect to the jurisdiction and powers of Courts. In my judgment, entry 1 in List II cannot be read as at all giving any power to the Provincial Legislature to confer any jurisdiction or power on any Court it might constitute or organise under that entry and that the expressions "admin istration of justice" and "constitution and organisation of Courts" occurring in entry 1 in List II should be read as exclusive of "the jurisdiction and powers of Courts" the powers of legislation with respect to which were distributed under entry 53 in List I, entry 2 in List II and entry 15 in List III. Such a construction will be consonant with the principle of construction laid down by, the Privy Council in the case of In re Marriage Legislation in Canada(1). It is next said that entry 1 in List II gave general powers to the Provincial Legislature to make laws (1) 123 conferring general jurisdiction and powers on Courts consti tuted by it under that entry while entry 53 in List I, entry 2 in List II and entry 15 in List III conferred special powers on the Federal and Provincial Legislatures to make laws conferring special jurisdiction and powers with respect to matters specified in their respective Lists. As I have already pointed out, if entry 1 in List II conferred plenary powers on the Provincial Legislature to make laws with respect to jurisdiction and powers of Courts in widest terms, entry 2 in List II would be wholly redundant, for the wider power itself would include the lesser power. Further,the very concession that entry 53 in List 1, entry 2 in List II and entry 15 in List III gave special powers to the Legislature to confer special jurisdiction and powers necessarily amounts to an admission that the powers conferred on the Provincial Legislature by entry 1 in List II were exclusive of the powers conferred under entry 53 in List I, entry 2 in List II and entry 15 in List III, for if entry 1 in List II gave power to the Provincial Legislature to make laws conferring general jurisdiction of the widest kind which included jurisdiction and powers with respect to all matters specified in all the Lists, then the utility of entry 53 in List I, entry 2 in List II and entry 15 in List III as giving special powers to make laws conferring special jurisdiction would vanish altogether. Special power to confer special jurisdiction would be meaningless if it were included in the general power also. This circumstance by itself should be sufficient to induce the Court to assign a limited scope and ambit to the power conferred on the Pro vincial Legislature under entry 1 in List II. We, there fore, come back to the same conclusion that entry 1 in List II should be construed and read as conferring on the Provin cial Legislature all powers with respect to administration of justice and constitution and organisation of Courts minus the power to make laws with respect to the jurisdiction and powers of Courts. It is pointed out that under entry 1 in List II it was only the Provincial Legislature which alone could 124 constitute and organise a new Court and if that entry did not empower the Provincial Legislature to vest in such new Court the general jurisdiction and power to re ceive, try and dispose of all kinds of suits and other proceedings, then no new Court of general jurisdiction could be established at all. As will be seen hereafter, the Provincial Legislature has, under entry 2 in List II, power to make laws conferring wide general jurisdiction and powers on a newly constituted Court and consequently a forced construction need not be placed on entry 1 in List II. It is said that if the Provincial Legislature could not, under entry 1 in List II, confer jurisdiction on a new Court set up by under that entry, the result would have been that the Provincial Legislature would have had to set up a new Court by one law made under entry 1 of List II without conferring on it any jurisdiction whatever and would have had to make another law with respect to ' the jurisdic tion and powers of such Court. I see no force in this, for the Provincial Legislature could by one and the same law have set up a Court under entry 1 in List II and vested in the Court jurisdiction and powers with respect to any of the matters specified in List II and, subject to section 107 of the Act, with respect to any of the matters enumerated in List III. It is wrong to assume that the Provincial Legisla ture could not make one law under both entry 1 and entry 2 in List II and entry 15 in List III at one and the same time. A good deal of argument was advanced before us as to the applicability of the doctrine of pith and substance and, indeed, the decision of the Bombay High Court in Jagtiani 's case was practically rounded on that doctrine. Shortly put, the argument, as advanced, is that under entry 1 in List II the Provincial Legislature had power to make laws with respect to administration of justice; that, therefore, the Provincial Legislature had power, under entry 1 itself, to make laws conferring general jurisdiction and powers on Courts constituted and organised by it under that entry; that if in making such law 125 the Provincial Legislature incidentally enroached upon the legislative field assigned to the Federal Legislature under entry 58 in List I with respect to the jurisdiction and powers of Court with respect to any of the matters specified in List I, such incidental encrochment did not invalidate the law, as in pith and substance it was a law within the legislative powers. In my judgment, this argu ment really begs the question. The doctrine of pith and substance postulates, for its application, that the impugned law is substantially within the legislative competence of the particular Legislature that made it, but only inciden tally encroached upon the legislative field of another Legislature. The doctrine saves this incidental en croachment if only the law is in pith and substance within the legislative field of the particular Legislature which made it. Therefore, if the Provincial Legislature under entry 1 had power to vest general jurisdiction on a newly constituted Court, then if the law made by it incidentally gave jurisdiction to the Court with respect to matters specified in List I the question of the applicability of the doctrine of pith and substance might have arisen. I have already pointed out that, on a proper construction, entry 1 of List II did not empower the Provincial Legislature to confer any jurisdiction or power on the Court and the ex pression "administration of justice" had to be read as covering matters relating to administration of justice other than jurisdiction and powers of Court and, if that were so, the discussion of the doctrine of pith and substance does not arise at all. I find it difficult to support the rea sonings adopted by the Bombay High Court in Jagtiani 's case. The argument as to the applicability of the doctrine of pith and substance to the impugned Act can, however, be well maintained in the following modified form: Under entry 2 in List II the Provincial Legislature had power to make laws with respect to the jurisdiction and powers of Courts with respect to any of the matters enumerated in List II; that "administration of justice" in entry 1 is one of the matters in 126 List II; that, therefore, the Provincial Legislature had power to confer the widest general jurisdiction on any new Court or take away the entire jurisdiction from any existing Court and there being this power, the doctrine of pith and substance applies. It is suggested that this argument cannot be formulated in view of the language used in entry 2 in List II. It is pointed out that entry 2 treats "any of the matters in this List" as subject matter "with respect to" which, i.e., "over" which the Court may be authorised to exercise jurisdiction and power. This construction of entry 2 is obviously fallacious, because jurisdiction and powers of the Court "over" administration of justice as a subject matter is meaningless and entry 2 can never be read with entry 1. This circumstance alone shows that the words ' 'with respect to" occurring in entry 2 in List 11 when applied to entry 1 did not mean "over" but really meant "relating to" or "touching" or "concerning" or "for" admin istration of justice, and so read and understood, entry 2, read with entry 1 in List 11, clearly authorised the Provin cial Legislature to make a law conferring on or taking away from a Court general jurisdiction and powers relating to or touching or concerning or for administration of justice. This line of reasoning has been so very fully and lucidly dealt with by my brother Sastri J. that I have nothing to add thereto and I respectfully adopt his reasonings and conclusion on the point. This argument, in my opinion, resolves all difficulties by vesting power in the Provincial Legislature to confer general jurisdiction on Courts consti tuted and organised by it for effective administration of justice which was made its special responsibility. Any argument as to deliberate encroachment that might have been rounded on the Proviso to section 3 of the Act which ena bled the Provincial Government to give to the City Court even Admiralty jurisdiction which was a matter in List I has been set at rest by the amendment of the Proviso by Bombay Act XXVI of 1950. The impugned Bombay Act may, in my judg ment, be well supported as a law made by the Provincial Legislature under 127 entry 2 read with entry 1 in List II and I hold accordingly. I, therefore, concur in the order that this appeal be al lowed. In the view I have taken, it is not necessary to discuss the contention of the learned Attorney General that the Bombay City Civil Court Act may be supported as a piece of legislation made by the Provincial Legislature of Bombay under entry 4 read with entry 15 in Part I of List III and I express no opinion on that point. Appeal allowed.

IN-Abs

The Bombay City Civil Court Act of 1948, an Act passed by the Provincial Legislature of Bombay, provided by section 3 that the Provincial Government may, by notification in the official Gazette, establish for the Greater Bombay a court to be called the Bombay City Civil Court, and that this court shall, notwithstanding anything contained in any law, have jurisdiction to receive, try ' and dispose of all suits and other proceedings of a civil nature nob exceeding Rs. 10,000 in value arising within Greater Bombay except certain kinds of suits which were specified in the section. Section 4 of the Act provided that subject to the exceptions speci fied in 8. 3 the Provincial Government may, by notification in the official Gazette, invest the City Civil Court with jurisdiction to 52 receive, try and dispose of all suits and other proceedings of civil nature arising within the Greater Bombay and of such value not exceeding Rs. 25,000 as may be specified in the notification. Section 12 barred the jurisdiction of the Bombay High Court to try suits and proceedings cognizable by the City Civil Court. In exercise of the powers conferred by section 4 the Provincial Government invested the City Civil Court with jurisdiction to receive, try and dispose of all suits and proceedings of a civil nature not exceeding Rs. 25,000 in value. The first respondent instituted a suit in the High Court of Bombay for recovery of Rs. 11,704 on the basis of a promissory note, contending that the Provincial Legislature had no power to make laws with respect to juris diction of courts in regard to suits on promissory notes which was a matter covered by item 53 of List I, and the Bombay City Civil Court Act of 1948 was therefore ultra vires. It was further contended on his behalf that in any event section 4 of the Act was invalid as it involved a delega tion of legislative powers to the Provincial Government and that the suit was therefore cognisable by the High Court. Held by the Full Court. (i) that the impugned Act was a law with respect to a matter enumerated in List II and was not ultra vires; (ii)that, as the legislature had exercised its judgment and determined that the City Civil Court should be invested with pecuniary jurisdiction up to Rs. 9,5,000 and all that was left to the discretion of the Provincial Government was the determination of the conditions under which the court should be invested with the enhanced juris diction, section 4 did not involve any delegation of legislative powers but was only an instance of conditional legislation and was not ultra vires or invalid on this ground; (iii) inasmuch as the impugned Act was in pith and substance a law with respect to a matter covered by List II, the fact that it incidentally affected suits relating to promissory notes (a subject falling within items 28 and 53 of List I) would not affect its validity and the suit was accordingly not cognisable by the High. Court. Per FAZL ALI, MEHR CHAND MAHAJAN and MUKHERJEA JJ. The power of the Provincial Legislature to make laws with re spect to "administration of justice" and "constitution and organisation of all courts" under item 1 of List II is wide enough to include the power to make laws with regard to the jurisdiction of courts established by the Provincial Legis lature; the object of item 53 of List I, item 9, of List II and item 15 of List III is to confer special powers on the Central and the Provincial Legislatures to make laws relat ing to the jurisdiction of courts with respect the particu lar matters that are referred to in Lists I and II respec tively and the Concurrent List, and these provisions do not in any way curtail the power of Provincial Legislature under Item I of List II to make laws with regard to juris diction of courts and to confer jurisdiction on courts established by it to try all causes of a civil nature sub ject to the power of the Central and 53 Provincial Legislatures to make special provisions relating to particular subjects referred to in the Lists. Per PATANJALI SASTRI and DAS JJ. The words" adminis tration of justice" and "constitution and organisation of all courts" in item 1 of List II must be understood in a restricted sense excluding from their scope "jurisdiction and powers of courts" as the latter subject is specifically dealt with in item 2 List II. Item 1 of List II does not therefore by itself authorise legislation with respect to jurisdiction and powers of courts, and the legisltive power under item 9. in regard to "jurisdiction 'and powers of courts ", which can legitimately be exercised with respect to any of the matters in List II, can be exercised with respect to administration of justice as this is one of the matters enumerated in that List, with the result that the subject of general jurisdiction of courts is brought within the authorised area of provincial legislation; and as the Provincial Legislature is thus competant to make a law with respect to the general jurisdiction of the court, the apparent conflict with the central legislative power under item 53 of List I can be resolved by invoking the doctrine of pith and substance and incidental encroachment. [The legislative practice which prevailed in India before 1935 was relied on in this case in support of the view that the Provincial Legislatures had power under the constitution of 1935 to invest courts constituted by them with general pecuniary jurisdiction]. Quaere: Whether it was not open to the Legislatures of India under the Government of India Act of 1935 to delegate their legislative powers to other agencies. Queen vs Burah (59. A 178).applied. Jatindra Nath Gupta vs Province of Bihar distinguished. Mulchand Kundanmmal Jagtiani vs Raman (51 Born. L.R. 86 :, United Provinces vs Atiqa Begum Prafulla Kumar Mukherjea and Others vs Bank of Commerce, Khulna referred

54 of 1953. Petition under Article 32 of the Constitution for a writ in the nature of habeas corpus. Jai Gopal Sethi and Veda Vyas (section K. Kapur, A. K. Datt, A. N. Chona, B. Pathnaik and A. AT. Sinha, with them) for the petitioners. C.K. Daphtary, Solicitor General for India (Porus A.Mehta, with him) for the respondents. March 12. PATANJALI SASTRI C. J. This is a petition for a writ of habeas corpus filed by one ham Narayan Singh on behalf of four gentlemen, namely, Dr. section P. Mukerjee, Shri N. C. Chatterjee, Pandit Nandial Sharma and Pandit Guru Dutt Vaid, who are the real petitioners in the case. These persons were 653 arrested on the evening of the 6th March, 1953, and they are now being prosecuted for alleged defiance of an order prohibiting meetings and processions in the area in question, an offence punishable under section 188 of the Indian Penal Code. Their detention is sought to be justified on the basis of two remand orders, the one alleged to have been passed by Mr. Dhillon, Additional District Magistrate, Delhi, at about 8 p. m. on the 6th March, 1953, and the other alleged to have been passed by the trying Magistrate at about 3 p. m. on the 9th March while adjourning the case on the representation made before him that a habeas "pus petition was being moved in this Court. Various questions of law and fact have been argued before us by Mr. Sethi on behalf of the petitioner, but we consider it unnecessary to enter upon a discussion of those questions, as it is now conceded that the first order of remand dated the 6th March even assuming it was a valid one expired on the 9th March and is no longer in force. As regards the order of remand alleged to have been made by the trying Magistrate on the 9th March, the position is as follows: The trying Magistrate was obviously proceeding at that stage under section 344 of the Criminal Procedure Code, which requires him, if he chooses to adjourn the case pending before him, " to remand by warrant the accused if in custody," and it goes on to provide: Every order made under this section by a court other than a High Court shall be in writing signed by the presiding Judge or Magistrate. The order of the Magistrate under this section was produced before us in compliance with an order of this Court made on the 10th March, which directed the production in this Court as early as possible of the records before the Additional District Magistrate and the trying Magistrate together with the remand papers for inspection by Counsel for the petitioner. The order produced merely directs the adjournment of the case till the 11th March and contains no direction for, remanding the accused to custody till that date. Last 85 654 evening, four slips of paper were handed to the Registrar of this Court at 5 20 p. m. On one side they purport to be warrants of detention dated 6th March and addressed to the Superintendent of Jail, Delhi, directing the accused to be kept in judicial lock up and to be produced in court on the 9th March 1953. These warrants contain on their back the following endorsements: Remanded to judicial till 11th March, 1953" In a question of habeas corpus, when the lawfulness or otherwise of the custody of the persons concerned is in question, it is obvious that these documents, if genuine would be of vital importance, but they were not produced, notwithstanding the clear direction contained in our order of the 10th March. The court records produced before us do not contain any order of remand made on the 9th March. As we have already observed, we have the order of the trying Magistrate merely adjourning the case to the 11th. The Solicitor General appearing on behalf of the Government explains that these slips of paper,which would be of crucial importance to the case, were with a police officer who was present in court yesterday, but after the Court rose in the evening the latter thought that their production might be of some importance and therefore they were filed before the Registrar at 5 20 p. m. We cannot take notice of documents produced in such circumstances, and we are not satisfied that there was any order of remand committing the accused to further custody till the 11th March. It has been held by this Court that in habeas corpus proceedings, the Court is to have regard to the legality or otherwise of the detention at the time of the return and not with reference to the institution of the proceedings. The material date on the facts of this case is the 10th March, when the affidavit on behalf of the Government was filed justifying the detention as a lawful one. But the position, as we have stated, is that on that date there was no order remanding the four persons to custody. This Court has often reiterated before that those who 655 feel called upon to deprive other persons of their personal liberty in the discharge of what they conceive to be their duty, must strictly and scrupulously observe the forms and rules of the law. That has not been done in this case. The petitioners now before us are therefore entitled to be released, and they are set at liberty forthwith. Petition allowed.

IN-Abs

In habeas corpus proceedings the Court is to have regard to the legality or otherwise of the detention at the time of the return and not with reference to the institution of the proceedings. Section 344 of the Criminal Procedure Code requires a Magistrate, if he chooses to adjourn a case, " to remand by warrant the accused if in custody " and provides further that every order made under this section by a Court other than a High Court shall be in writing. Where a trying Magistrate adjourned a case by an order in writing but there was nothing in writing on the record to show that he made an order remanding the accused to custody: Held, that the detention of the accused after the order of adjournment was illegal. Those who feel called upon to deprive other persons of their personal liberty in the discharge of what they conceive to be their duty, must strictly and scrupulously observe the forms and rules of the law.

minal Appeal No.56 '61. Appeal by special leave from the judgment and order dated August 16, 1960, of the Bombay High Court in Cr. A. No. 225 of 59. B. B. Tawakley and A. G. Ratnaparkhi, for the appellants. M. section K. Sastri and P. D. Menon, for the respondent. July 24. The judgment of the Court was delivered by SHAH, J. With special leave, the two appellants Bhagwanbhai Dulabai Jadav and Haribhai Maganbhai Bhandare hereinafter referred to as accused Nos. 1 and 5 respectively have appealed against the order passed by the High Court of Judicature at Bombay setting aside the order of the Judicial Magistrate, First Class, Thana acquitting them and three others of offences punishable under sections 65(a), 66 (b), 81 and 83 of the Bombay Prohibition Act, 25 of 1949 hereinafter called the Act. The case of the prosecution may briefly be stated: On August 25, 1957, a "wireless message" alerting the officers posted on "watch duty" at Kasheli Naka, District Thana that a motor car bearing No BMY 1068 belonging to the first appeal lant was carrying "contraband goods", was received. This motor car reached,the Kasheli Naka at about 388 2 30 p.m. on August 28. The first accused was then driving the car the second accused was sitting by his side and accused 3 to 5 were sitting in the rear seats. Panchas were called by the Sub Inspector of police Deshpande from a village nearby and in their presence the vehicle was searched and from the luggage compartment (which was opened with the key found on search on the person of the 5th accused), 43 sealed bottles of foreign liquor and a large number of packets of tobacco were found. A search list was prepared and the five occupants of the vehicle were arrested. The vehicle and the articles found therein were attached. The vehicle was handed over to the Central Excise Authorities together with the ignition key and the key of the luggage compartment for taking proceedings in respect of packets of tobacco which were attached. A charge sheet was then filed in the Court of the Judicial Magistrate, First Class, Thana against the five accused charging them with offences punishable under so. 65 (a), 66 (b), 81 and 83 of the Act. The accused pleaded not guilty to the charge: they stated that the case was "false and entirely got up", that no "liquor or other contreband" was found in the motor. car and ,,the whole plot was engineered by the enemies of the 1st accused". They denied that the motor car was searched in their presence. The fifth accused denied that the key of the luggage compartment was found on his person. The trial Magistrate held that the brosecution evidence was insufficient to establish that the persons accused before him were acting in conspiracy or were abetting each other in transporting contraband articles in the car and acquitted them. Against the order of aquittal, the State of Bombay appealed to the High Court of Bombay. The High Court observed that the trial court treated the case as "a mathematical problem", and 389 examined the evidence giving undue importance to minor discrepanies. In the view of the High Court the evidence established that in consequence of information received from police station Vapi, motor oar No. BMY 1068 was stopped at 2 30 p.m. on August 28, 1957, near Kasheli Naka, that at that time the 1st accused was driving the motor car which belonged to him, that accused No. 2 was sitting near him and accused Nos. 3 to 5 were sitting in the rear seats, that the key of the luggage compartment was found on the person of the 5th accused, that on opening that compartment in the presence of the Panchas, 43 bottles of foreign liquor and a large number of packets of tobacco were found, and that the evidence warranted the conviction of all the accused for offences punishable under as. 65(a), 66(b), 81 and 83 of the Bombay Prohibition Act. The High Court accordingly allowed the appeal against accused Nos. 1, 2 and 5 of all the offences and directed each of them to undergo rigorous imprisonment for one year and pay a fine of Rs. 500/ for each of the offences; and in default of payment of fine to rigorous imprisonment for 3 months in respect of each offence, and directed that the substantive sentences do run concurrently. The appeal against accused Nos. 3 and 4 was dismissed because they could not be served with the notice of appeal. The High Court was undoubtedly dealing with an appeal against an order of a quittal but the Code of Criminal Procedure placed no special limitation upon the powers of the High Court in dealing with an appeal against an order of aquittal. The High Court is entrusted with power to review evidence and to arrive at its own conclusion on the evidence. There are certainly restrictions inherent in the exercise of the power, but those restrictions arise from the nature of the jurisdiction which the High Court exercises. In a Criminal trial the burden 390 always lies on the prosecution to establish the case against the accused and the accused is presumed to be innocent of the offence charged till the contrary is established. The burden lies upon the prosecution, and the presumption of innocence applies with equal, if not greater, force in an appeal to the High Court against an order of acquittal. In applying the presumption of innocence the High Court is undoubtedly slow to disturb findings based on appreciation of oral evidence for the court which has the opportunity of seeing the witnesses is always in a better position to evaluate their evidence than the court which merely persued the record. In the present case, the High Court in our judgment, was right in holding that the trial court ignored the broad features of the prosecution case, and restricted itself to a consideration of minor discrepancies. The Magistrate meticulously juxtaposed the evidence of different witnesses on disputed points and discarded the evidence in its entirety when discrepancies were found. That method was rightly criticised by the High Court as fallacious. The Magistrate had to consider whether there was any reliable evidence on question which had to be established by the prosecution. Undoubtedly, in considering whether the evidence was realiable he would be justified in directing his attention to other evidence which contradicted or was inconsistent with the evidence relied upon by the prosecution. But to discard all evidence because there were discrepancies without any attempt at evaluation of the inherent quality of the evidence was unwarranted. Sub Inspector Deshpande spoke about the wireless message received at the Kasheli Naka, about the arrival of the motor oar of the first accused at 2 30 in the afternoon of August 28, 1957, about the search of the car in the presence of the Panchas and the discovery of 43 'bottle of foreign 391 liquor and packets of tobacco in the luggage compartment of the motor car. Nothing was elicited in the cross examination which threw any doubt upon the truth of the story, and no adequate reason was suggested why he should be willing falsely to involve the accused, in the commission of a serious offence by fabricating false evidence. He was corroborated by the contents of the "Panchnama", which was a written record contemporaneously made about the search, and the evidence of the Panch witness Pandu Kamliya. Deshpande was also partially supported by headconstable Chodabrey. The latter witness deposed that the motor oar driven by the lot accused was stopped at Kaheli Naka and panchas were called, but according to him, search was made before the panchas arrived and the bottles were taken out of the luggage compartment and placed near the car. We agree with the view of High Court that the evidence of Head Constable Codabrey though some what inconsistent with the evidence of Sub Inspector Deshpande and the panch witness, accorded with their story that the liquor bottles were in the motor oar when it was stopped near the Kasheli Naka on the day in question. That evidence by itself is sufficient to establish that the accused possessed the bottles of foreign liquor. It was urged, however, that under the law making of a search in the presence of independent witnesses of the locality called for that purpose was obligatory, and as according to the evidence of Head Constable Chodabrey and Panch witness Laxman Ganpat the search was held without complying with the formalities prescribed by section 103 of the Criminal Procedure Code, the panchnama about the search of the motor car, and the evidence of the finding of the articles therein must be discarded and the rest of the evidence was not sufficient to displace the presumption of innocence which 392 by the order of acquittal was reinforced. We are unable to agree with this contention. Section 117 of the Act provides, "Save as otherwise expressly provided in this Act, all investigations, arrests, detentions in custody and searches shall be made in accordance with the provisions of the Code of Criminal procedure, 1898: provided that no search shall be deemed to be illegal by reason only of the fact that witnesses for the search were not inhabitants of the locality in which the place searched is situated". In view of that provision it is obligatory upon a police officer about to make a search to call upon two or more respectable inhabitants of the locality in which the place to be searched is situate to attend and witness the search. But a motor car is not a place within the meaning of as. 102 and 103 of the Code of Criminal Procedure; nor is there anything in the Act by which a motor car would be so regarded for purposes of a search. The provisions relating to searches contained in a. 103 of the Code of Criminal procedure have therefore no application and in making a search of a motor vehicle, it was not obligatory upon the police officer to comply with the requirements thereof. This is not, however, to say that the practice which is generally followed by police officers when investigating offences under the Act to keep respectable persons present on the occasion of the search of a suspected person or of a vehicle may be discarded. Even though the statute does not make it obligatory, the police officers wisely carry out the search, if it is possible for them to secure the presence of respectable witnesses, in their presence. This is a healthy practice which leads to cleaner investigation and is a guarantee against the oft repeated charge against police officers of planting articles. It was strenuously urged by counsel for the appellants that the High Court did not attach suffi 393 cient importance to a piece of evidence which strongly militated against the truth of the prosecution case. This piece of evidence. , it was contended, related to the ignition key and the luggage compartment key, produced at the trial. As we have already observed, the motor car together with the ignition key and luggage compartment key which were attached were handed over to the Excise Authorities for investigating the case in respect of tobacco which was attached with liquor. The motor car and the keys were produced by the Excise Authorities at the instance of the accused before the Magistrate. An attempt was made to open the luggage compartment of the motor car by using one of the keys and the trial Magistrate recorded his observations in that behalf. He has stated that the keys were produced by the Sub Inspector of Central Excise and "with the white key the look of the carrier was tried for thirty minutes. Oil was allowed to be put. Even then the lock was not opened. The yellow key was ,,.hen tried on the petrol tank and was opened immediately. " It appears, however, from the evidence of Inspector Jambekar that the " 'white key was the ignition key and the yellow was the key of the luggage compartment". It is true that Head Constable Chodabrey say, that the " 'white key" was the key of the luggage compartment and with that key the first accused bad opened the luggage compartment. But we fail to appreciate why no attempt was made by the Trial Magistrate to ascertain whether the yellow key could be used for opening the luggage compartment and whether the white key fitted the ignition switch. In view of this infirmity it is difficult to hold that the story of the finding of the key and the attachment of liquor after opening the luggage compartment of the motor oar was untrue. 394 The case tried by the Trial Magistrate was simple. Thers is no dispute that the police officers had attached 43 bottles of foreign liquor at the kasheli Naka on the day in question. It was the case of the accused that these bottles of liquor were not in their possession and Sub Inspector Deshpand made a false panchnama showing that these bottles were found in the luggage compartment of the motor car belonging to the first accused. The primary question which the trial Magistrate had to consider was about the credibi lity of the prosecution evidence in the light of the defence set up by the accused. The bottles of foreign liquor attached by the police exceeded Rs.2000/. in value: the trial Magistrate had to consider whether it was reasonably possible that the police officers could procure the bottles to falsely involve the accused, or having attached them from some other person, allow that person to escape and plant them in the motor car of the accused and then make a false panchnama. No. attempt appears to have been made to examine the evidence in the light of the defence set up or suggested. It was urged that one Inspector Mane of police station Bhilad was an enemy of the 1st accused. But that does not explain the conduct of Sub Inspector Deshpande. It would indeed be difficult for Deshpande to secure this large quantity of foreign liquor, and even if it could be secured no rational ground if; suggested why Deshpande would keep it with him on the possible chance of the first accused arriving at the Kasheli Naka. The High Court has on a consideration of the evidence of Sub Inspecter Deshpande, the Panch witness Pandu Kamaliya and Head Constable Chodabrey come to the conclusion that the accused Nos. 1, 2 and 5 were guilty of possessing liquor in contravention of the provisions of the Act, and in our view the High Court was right in so holding. 395 But the order of conviction passed by the High Court and the sentence imposed are not according to law. Section 65 of the Act penalises a person who in contravention of the provisions of the Act, or of any rule, regulation or order made or of any licence, pass, permit or authorization there under (a) imports or exports any intoxicant (other than opium) or hemp, and the expression "import" is defined in section 2(20) as meaning "to bring into the State otherwise than across a customs frontier. " There is no evidence on the record that the accused or any of them imported the bottles of foreign liquor into the State. The circumstance that the bottles contained foreign liquor and the accused were residents of the former Portuguese territory of Daman or a locality near about, was not, in our judgment, sufficient to prove that the accused bad imported those bottles. The High Court was there fore, in our judgment, in error in convicting the accused of the offence under section 65(a). Again, there is no evidence, and the High Court has considered none, which establishes that two or more persons had agreed to commit or caused to commit any offence under the Act. Section 83 of the Bombay Prohibition Act provides punishment for conspiracy to commit or cause to commit an offence under the Act. But an inference of conspiracy cannot be made from the facts proved in this case, viz. that the five accused Were, found in a motorcar which contained in its luggage compartment a number of foreign liquor bottles and some of the accused were blood relations, Conviction for the offence under a. 83 is therefore not warranted by the evidence. Again, if accused Nos. 1 and 5 are proved to have committed the substantive offence punishable under section 66 (b) of the Act it is difficult to appreciate how they can also be convicted of abetting the commission of that offence. The offence under section 81 of the Act is therefore also not made out. The appellants 396 were accordingly liable to be convicted only of the offence under a. 66(b) of the Act, and the maximum term of imprisonment for a first offence punishable under that section is rigorous imprisonment for six months and a fine of Rs. 1, 000/ . We accordingly modify the order passed by the High Court and maintain the conviction of accused Nos. 1 and 5 under a. 66 (b) and set aside the order of conviction under as. 65 (a), 81 and 83 of the Act and the sentence passed in respect of those offences. We also modify the sentence imposed by the High Court for the offence under a. 66 (b) of the Act, and direct that each appellant do suffer rigorous imprisonment for six months and pay a fine of Rs. 500/ , and in default of payment of fine do suffer rigorous imprisonment for one month and fifteen days. Subject to that modification the appeal is dismissed.

IN-Abs

The two appellants, who were tried along with there others, were acquitted by the Judicial Magistrate of charges under sections 65(a),66(b),81 and 83 of the Bombay Prohibition Act, 1949, but were convicted by the High Court in appeal by the State. The Magistrate found that the prosecution evidence was insufficient to establish conspiracy or abetment in transporting the contraband liquor and tobacco found in the car on search. The High Court took a different view of the evidence and allowed the appeal so far as the appellants and another were concerned. It was urged on behalf of the appellants that the search was in contravention of section 103 of the Code of Criminal Procedure and the finding of the contraband articles had not been proved. Held, that a motor car was not a 'place ' within the meaning of sections 102 and 103 of the Code of Criminal Procedure or the Bombay Prohibition Act, 1949, and section 103 of the Code had therefore no application to a search of a motor vehicle. Consequently, it was not obligatory upon the Police Officer to comply with the formalities prescribed by that section nor upon the Court to discard the Panchnama or the evidence of the finding of the articles where no witnesses of the locality could be called. Although the High Court in the convicting the appellants under section 66 (b) of the Prohibitiuontion Act, conviction under sections Act was not sustainable and must rate was in error in discarding the entire evidence because discrepancies therein without appraising its intrinsic value. 387 Held, further that the Code of Criminal Procedure places no special limitation on the powers of the High Court in deal ing with an appeal against acquittal, It can review the evi dence and arrive at its own conclusion. The presumption of innocence applies with equal, if not greater force in such an appeal and the burden of proving its own case lying as always on the prosecution. The High Court would not therefore lightly disturb findings arrived at by the trial court on appreciation of the oral evidences

riminal Apeal No. 6 of 1960. Appeal by special leave from the judgment and order dated July 1, 1959, of the Andhra Pradesh High Court in Cr. Revision Case No. 403 of 1958 and Criminal Revision Petn. No. 337 of 1957. P. Ram Reddy, for the appellant. K.R. Choudhuri, and P. D. M for respondent No. 1. K. R. Chaudhuri, for respondent No. 2. 1962. July 25. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave against the judgment of the Andhra Pradesh High Court. The appellant was convicted under section 411 of the Indian Penal Code by the Assistant Sessions Judge of Kurnool. Along with him, another person Hussain Saheb was also tried and was convicted under so. 457 and 380 of the Indian Penal Code. The case for the prosecution briefly was that the house of Rahayya in Dudyia was burgied on the night of April 20, 1957. Ramayya and his wife were sleeping outside and on waking in the morning they found that the house had been burgled and valuable property stolen. The matter was reported to the police and during the course of investigation the police recovered 17 ornaments on the information given by the appellant. The other accused had also given information on the basis of which another stolen ornament was recovered. The Assistant Sessions Judge on a consideration of the evidence came to the conclusion that the other accused had actually committed house breaking and had removed ornaments from the house of Ramayya and had handed over 17 ornaments out 415 of that property to the appellant. He also came to the conclusion that the seventeen ornaments recovered at the instance of the appellant were in his possession and he therefore found him guilty under section 411 of the Indian Penal Code. The appellant and the other accused went in appeal to the Sessions Judge. The Sessions Judge held that the appellant had not been proved to be in possession of the seventeen ornaments which were recovered at his instance from a garden. The statement of the appellant in this respect was that "he would show the place where he had hidden them (the ornaments)". Thereafter he went to the garden and dug out two bundles containing the seventeen ornaments from there. The Sessions Judge held that the recovery of ornaments from the garden at the instance of the appellant was proved; but he further held that that part of the statement of the appellant where he said that he had hidden the ornaments was not admissible in evidence. Therefore, he took the view that as the ornaments were recovered from a place which was accessible to all and sundry and there was no other evidence to show that the appellant had hidden them, it could not be held that the ornaments were in the appellant 's possession. He therefore gave the benefit of doubt to the appellant and ordered his acquittal. He also acquitted the other accused at whose instance one of the stolen ornaments was recovered. This accused had stated that he given the ornaments to Bada Sab (P. W. 5) and took the police party to Bada Sab and asked him to return the ornaments, which Bada Sab did. The Sessions Judge, however, on a consideration of the evidence against the other accused thought the case against him was also doubtful and ordered his acquittal, though he ordered the return of ornaments to Ramayya. This was followed by a revision by Ramayya against the appellant and the other accused. The 416 High Court has allowed the revision and directed that the matter should go back to the Sessions Judge so that the accused should be re tried on the charges on which they had been brought to trial on the former occasion. It is against this order of the High Court directing retrial that the present appeal by special leave is directed. It may be mentioned, however, that only Chinnaswamy Reddy has appealed while the other accused has not appealed against the order of the High Court. The main contention of the appellant before us is that this was a revision by a private party. There were no exceptional circumstances in this case which would justify the High Court in interfering with an order of acquittal at the instance of a private party. Further, it is urged that a. 439 (4) of the Code of Criminal Procedure specifically forbids the High Court from converting a finding of acquittal into one of conviction and that a reading of the judgment of the High Court shows that by the indirect method of retrial the High Court has practically directed the Sessions Court to convict the appellant and thus indirectly converted finding of acquittal into one of conviction, through it has not been done and could not be done directly. The extent of the jurisdiction of the High Court in the matter of interfering in revision against an order of acquittal has been considered by this Court on a number of occasions. In D, Stephens vs Nosibolla (1) this Court observed "The revisional jurisdiction conferred on the High Court under section 439 of the Code of Criminal Procedure is not to be lightly exer cised when it in invoked by a private comp lainant against an order of acquittal, against which the Government has a right of appeal under a. 417. It could be exercised only (1) ; 417 in exceptional cases where the interests of public justice require interference for the correction of a manifest illegality or the prevention of a gross miscarriage of justice. This jurisdiction is not ordinarily invoked or used merely because the lower Court has taken a wrong view of the law or misappreciated the evidence on the record." Again, in Logendranath Jha vs Shri Polailal Biswas(1), this Court observed "Though sub section (1) of section 439 of the Criminal Procedure Code authorises the High Court to exercise in its discretion any of the powers conferred on a court of appeal by section 423, yet sub a. (4) specifically excludes the power to " 'convert a finding of acquittal into one of conviction". This does not mean that in dealing with a revision petition by a private party against an order of acquittal, the High Court can in the absence of any error on a point of law reappraise the evidence and reverse the findings of facts on which the acquittal was based, provided only it stops short of finding the accused guilty and passing, sentence on him by ordering a re trial. " These two cases clearly lay down the limits of the High Court 's jurisdiction to interfere with an order of acquittal in revision; in particular, Logendranath Jha 's case (1) stresses that it is not open to a High Court to convert a finding of acquittal into one of conviction in view of the provisions of section 439 (4) and that the High Court cannot do this even indirectly by ordering re trial. What had happened in that case was that the High Court reversed pure findings of facts based on the trial court 's appreciation of evidence but formally (1) ; 418 complied with sub a. (4) by directing only a retrial of the appellants without convicting them, and warned that the court retrying the case should not be influenced by any expression of opinion contained in the judgment of the High Court. In that connection this Court observed that there could be little doubt that the dice was loaded against the appellants of that case and it might prove difficult for any subordinate judicial officer dealing with the case to put aside altogether the strong views expressed in the judgment as to the credibility of the prosecution witnesses and the circumstances of the case in general. It is true that it is open to a High Court in revision to set aside an order of acquittal even at the instance of private parties, though the State may not have thought fit to appeal; but this jurisdiction should in our opinion be exercised by the High Court only in exceptional cases, when there is some glaring defect in the procedure or there is a manifest error on a point of law and consequently there has been a flagrant miscarriage of justice. Sub section (4) of a. 439 forbids a High Court from converting a finding of acquittal into one of conviction and that makes it all the more incumbent on the High Court to see that it does not convert the finding of acquittal into one of conviction by the indirect method of ordering retrial, when it cannot itself directly convert a finding of acquittal into a finding of conviction. This places limitations on the power of the High Court to set aside a finding of acquittal in revision and it is only in exceptional cases that this power should be exercised. It is not possible to lay down the criteria for determining such exceptional cases which would cover all contingencies. We may however indicate some cases of this kind, which would in our opinion justify the High Court in interfering with a finding of acquittal in revision. These cases 419 may be: where the trial court has no jurisdiction to try the case but has still acquitted the accused, or where the trial court has wrongly shut out evidence which the prosecution wished to produce, or where the appeal court has wrongly held evidence.which was admitted by the trial court to be inadmissible, or where material evidence has been overlooked either by the trial court or by the appeal court, or where the acquittal is based on a compounding of the offence, which is invalid under the law. These and other cases of similar nature can properly be held to be cases of exceptional nature, where the High Court can justifiably interfere with an order of acquittal; and in such a case it is obvious that it cannot be said that the High Court was doing indirectly what it could not do directly in view of the provisions of a. 439 (4). We have therefore to see whether the order 'of the High Court setting aside the order of acquittal in this case can be upheld on these principles. A perusal of the judgment of the High Court shows that the High Court has gone into the evidence in great detail so far as the case against the appellant was concerned. In our opinion, the High Court should not have dealt with evidence in such detail when it was going to order a retrial, for such detailed consideration of evidence, as pointed out in Logendranath 's case (1) amounts to loading the dice against the appellant, when the case goes back for retrial. If the matter stood at this only, we would have no hesitation in setting aside the order of the High Court directing a retrial; but there is one important circumstance in this case to which the High Court has adverted in passing, which, in our opinion, was sufficient to enable the High Court to set aside the acquittal in this case. It would then have been unnecessary to consider the evidence in that detail in which the High Court has gone into it, and thus load the (1) [1951] S.C.R.676. 420 dice against the appellant, when the case goes back for retrial. That circumstance is that the Assistant Sessions Judge had admitted in evidence that part of the statement of the appellant in which he stated that he would show the place where he had hidden the ornaments and relying on it he held that the appellant was in possession of the seventeen ornaments, he had dug out from the garden which he owned along with others. The Sessions Judge however held that that part of the statement of the appellant where he stated that he had hidden the ornaments was inadmissible in evidence. The same applies to the case against the other accused, 'who had stated that he had given one ornament to Bada Sab and would get it recovered from him. Though the Sessions Judge has not in specific trems ruled out that part of the other accused 's statement where he said that he had given the ornament to Bada Sab, he did not consistently with what be said with respect to the appellant, attach importance to this statement of the other accused. If therefore this part of the statement of the appellant and the other accused which led to discovery of ornaments is admissible, it must be held that the appeal court wrongly ruled out evidence which was admissible. In these circumstances, the case would clearly be covered by the principles we have set out above in as much as relevant evidence was ruled out as inadmissible and the High Court would be justified in interfering with the order of acquittal so that the evidence may be reappraised after taking into account the evidence which was wrongly ruled out as inadmissible. It seems that the High Court was conscious of this aspect of the matter, for it says in one part of the judgment that the only possible inference that could be drawn was that the appellant was in possession of stolen goods before they were put in that secret spot, as admitted by the appellant in his statement, part of which 421 is admissible under section 27 of the Indian Evidence Act. If the High Court had confined itself only to the admissibility of this part of the statement, it would have been justified in interfering with the order of acquittal. Unfortunately, the High Court went further and appraised the evidence also which it should not have done, as held by this Court in Logendranath 's case. However, if admissible evidence was ruled out and was not taken into consideration, that would in our opinion be a ground for interfering with the order of acquittal in revision. Let us then turn to the question whether the statement of the appellant to the effect that ,he had hidden them (the ornaments)" and "would point out the place" where they were, is wholly admissible in evidence under section 27 or only that part of it is admissible where he stated that he would point out the place but not that part where he stated that he had hidden the ornaments. The Sessions Judge in this connection relied on Pulukuri Kotayya vs King Emperor (2) where a part of the statement leading to the recovery of a knife in a murder case was held inadmissible by the Judicial Committee. In that case the Judicial Committee considered section 27 of the Indian Evidence Act, which is in these terms : "Provided that, when any fact is deposed to as discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information, whether it amounts to a confession or not, as relates distinctly to the fact thereby discovered, may be proved. " This section is an exception to sections 25 and 26, which prohibit the proof of a confession made to a police officer or a confession made while a person is in (1) ; (2) [1946] L.R. 74 I.A. 65. 422 police custody, unless it is made in immediate presence of a magistrate. Section 27 allows that part of the statement made by the accused to the police "whether it amounts to a confession or not" which relates distinctly to the fact thereby discovered to be proved. Thus even a confessional statement before the police which distinctly relates to the discovery of a fact may be proved under section 87. The Judicial Committee had in that case to consider how much of the information given by the accused to the police would be admissible under a. 17 and laid stress on the words "so much of such information as relates distinctly to the fact thereby discovered" in that connection. It held that the extent of the information admissible must depend on the exact nature of the discovered to which such information is required to relate. It was further pointed out that "the fact discovered embraces the place from which the object is produced and the knowledge of the accused as to this, and the information given must relate distinctly to this fact. " It was further observed. that "Information as to past user, or the past history of the object produced is not related to its discovery in the setting in which it is discovered. " This was exemplified further by the Judicial Committee by observing "Information supplied by a person in custody that 'I will produce a knife concealed in the roof of my house ' leads to the discovery of the fact that a knife is concealed in the house of the informant to his knowledge, and if the knife is proved to have been used in the commission of the offence. , the fact discovered is very relevant. If however to the statement the words be added with which 423 I stabbed A ', these words are inadmissible since they do not relate to the discovery of the knife in the house of the informant. " If we may respectfully say so, this case clearly brings out what part of the statement is admissible under a. 27. It is only that part which distinctly relates to the discovery which is admissible; but if any part of the statement distinctly relates to the discovery it will be admissible wholly and the court cannot say that it will excise one part of the statement because it is of a confessional nature. Section 27 makes that part of the statement which is distinctly related to the discovery admissible as a whole, whether it be in the nature of confession or not. Now the statement in this case is said to be that the appellant stated that he would show the place where he had hidden the ornaments. The Sessions Judge has held that part of this statement which is to the effect 'where he had hidden them" is not admissible. It is clear that if that part of the statement is excised the remaining statement (namely, that he would show the place) would be completely meaningless. The whole of this statement in our opinion relates distinctly to the discovery of ornaments and is admissible under section 27 of the Indian Evidence Act. The words "where he had hidden them" are not on a par with the words "with which I stabbed the deceased" in the example given in the judgment of the Judicial Committee. These words (namely, where he had hidden them) have nothing to do with the past history of the crime and axe distinctly related to the actual discovery that took place by virtue of that statement. It is however urged that in a case where the offence consists of possession even the words "where he had hidden them " would be inadmissible as they would amount to an admission by the accused that he was in possession. There are in our opinion two answers to this argument. In the first place, 424 s 27 itself says that where the statement distinctly relates to the discovery it will be admissible whether it amounts to a confession or not. In the second place, these words by themselves though they may show possession of the appellants would not prove the offence, for after the articles have been recovered, the prosecution has still to show that the articles recovered are connected with the crime, i. e. in this case, the prosecution will have to show that they are stolen property. We are therefore of opinion that the entire statement of the appellant (2) as well as of the other accused Who stated that he had given the ornament to Bada Sab and would have it recovered from him) would be admissible in evidence and the Sessions Judge was wrong in ruling out part of it. Therefore, as relevant and admissible evidence was ruled out by. the Sessions Judge, this is,% fit case where the High Court would be entitled to set aside the finding of acquittal in revision, though it is unfortunate that the High Court did not confine itself only to this point and went on to make rather strong remarks about other parts of the evidence. The next question is what order should be passed in a case like the present. The High Court also considered this aspect of the matter. Two contingencies arise in such a case. In the first place there may be an acquittal by the trial court. In such a case if the High Court is justified, on principles we have enunciated above, to interfere with the order of acquittal in revision, the only course open to it is to set aside the acquittal and send the case back to the trial court !or retrial. But there may be another type of case, namely, where the trial court has convicted the accused while the appeal court has acquitted him. In such a case if the conclusion of the High Court is that the order of the appeal court must be set aside, the question is whether the appeal court should be 425 ordered to re hear the appeal after admitting the statement it had ruled out or whether there should K necessarily be a retrial. So far asthis is concerned, we are of opinion that it in open to the High Court to take either of the two courses. It may order a retrial or it may order the appeal court to re hear the appeal. It will depend upon the facts of each case whether the High Court would order the appeal court to re hear the appeal or would order a retrial by the trial court. Where, as in this case, the entire evidence is there and it was the appeal court which ruled out the evidence that had been admitted by the trial court, the proper course in our opinion is to send back the appeal for rehearing to the appeal court. In such a case the order of the trial court would stand subject to the decision of the appeal court on re hearing. In the present case it is not disputed that the entire evidence has been led and the only defect is that the appeal court wrongly ruled out evidence which was admitted by the trial court. In the circumstances we are of opinion that the proper course is to direct the appeal court to re hear the appeal and either maintain the conviction after taking into consideration the evidence which was ruled out by it previously or to acquit the accused if that is the just course to take. We should like to add that the appeal court when it re hears the appeal should not be influenced by any observations of the High Court on the appreciation of the evidence and should bring to bear its own mind on the evidence after taking into consideration that part of the evidence which was, considered inadmissible previously by it. We therefore allow the appeal subject to the modification indicated above. This leaves the case of the other accused. We are of opinion that as we are directing the appeal court to re hear the appeal with respect to the appellant it is only proper that the order relating to the 426 other accused should also be set aside and his appeal should also be re heard in the manner indicated above. We therefore set aside the order of the High Court with respect to the retrial of the other accused and direct that his appeal will also be re heard along with the appeal of the appellant. Appeal allowed.

IN-Abs

The appellant, tried with another, was convicted under section 411 Indian Penal Code while the other was convicted under sections 457 and 380 of the Code by the Assistant Sessions judge. The appellant had stated to the police during investigation that she would show the place where he had hidden them (the ornaments)" and thereafter went to the garden and dug out two bundles containing the ornaments. The other accused person had also similarly stated that he had given the 413 ornaments to one Bada Sab, took the police party to Bada Sab and asked him to return the ornament which he did. The Sessions Judge on appeal took the view that that part of the statement of the appellant where he said that he 'had hidden the ornaments was not admissible in evidence and in the absence of any other evidence possession of the ornament could not be said to have been proved. He, therefore, held that the appellant was entitled to the benefit of doubt and acquitted him. He also took a similar view with regard to the other accused person and acquitted him. The order of acquittal was set aside by the High Court in revision under section 439 of the Code of Criminal Procedure and a retrial was directed. It was against the order of retrial that the appeal was directed. Held, that it was open to a High Court in revision and at the instance of a private party to set aside an order of acquittal though the State might not have appealed. But such jurisdiction should be exercised only in exceptional cases, as where a glaring defect in the procedure or a manifest error of law leading to a flagrant miscarriage of justice has taken place. When section 439(4) of the Code forbids the High Court from converting a finding of acquittal into one of conviction, it is not proper that the High Court should do the same indirectly by ordering a retrial. It was not possible to lay down the criteria for by which to judge such exceptional cases. It was, however, clear that the High Court would be justified in interfering in cases such as (1) where the trial court had wrongly shut out evidence sought to be adduced by the prosecution, (2) where the appeal court had wrongly held evidence admitted by the trial court to be inadmissible, (3) where material evidence has been overlooked either by the trial court or the court of appeal or, (4) where the acquittal was based on a compounding of the offence not permitted by law and cases similar to the above. D. Stephens vs Nosibolla, ; and Logendra nath Jha, vs Shri Polailal Biswas, ; , referred to. There could be no doubt in the instant case that the entire statements of the appellant as well as of the other accused person would be admissible tinder section 27 of the Indian Evidence Act and the Sessions judge was in error in ruling out parts of them and the High Court was clearly justified in setting aside the acquittal in revision. Pulukuri Kotayya vs King Emperor, (1946) L.R. 74 I.A. 65, referred to. 414

iminal Appeals Nos. 56 and 57 of 1962. Appeals by special leave from the judgment and order dated October 4, 1961, of the Punjab High Court in Criminal Appeals Nos. 635 and 636 of 1961 and Murder Reference No. 59 of 1961. Frank Anthony, Ghanshiam and P.C. Aggarwala for the appellants. N.S. Bindra, Kartar Singh, Assistant Advocate General for the State of Punjab and P. D. Menon, for the respondents. July 30. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The two appellants Jai Dev and Hari Singh along with four others Yudhbir Singh, Dhanpat Singh, Sajjan Singh and Parbhati were charged with having committed offences under s.148 and ss 302 and 326 both read with s.149 of the 491 Indian Penal Code. The case against them was that on September 14, 1960, they formed themselves into an unlawful assembly in the area of Dhani Khord and that the common object of this unlawful assembly was to commit the offence of rioting while armed with deadly weapons and that in pursuance of the said common object the offence of rioting was committed. That is how the charge under section 148 was framed. The prosecution further alleged that on the same day and at the same time and place, while the accused persons were members of an unlawful assembly, they had another common object of committing the murders of Hukma, Jai Narain, Jai Dev, Amin Lal, Mst. Sagroli and Mst. Dil Kaur and that in pursuance of the said common object, the said persons were murdered. Dhanpat Singh killed Hukma, Sajjan Singh attacked Hukma, Yudhbir Singh shot at Amin Lal, Jai Dev shot at Mst. Sagroli and victim Jaidev, and Hari Singh shot at Jai Narain and Parbhati killed Mst. Dil Kaur. It is the murder of these six victims which gave rise to the charge against the six accused persons under section 302/149 of the Indian. Penal Code. An assault made by the members of the said assembly on Rama Chander, Jug Lal, Mst. Chan Kaur, Sirya, Murti and Murli gave rise to a similar charge under section 326/149. At the same trial along with these six persons, Basti Ram was tried on the charge that he had abetted the commission of the offence of murder by the members of the unlawful assembly and thus rendered himself liable to be punished under section 302/109 of the Indian Penal Code. The case against these seven accused persons was tried by the learned Addl. Sessions Judge, Gurgaon. He held that the charges against Parbhati and Basti Ram had not been proved beyond a reasonable doubte ; so, he acquitted both the said accused persons. In respect of the remaining five accused persons, the learned Judge held that all the three 492 charges framed against them had been proved, beyond a reasonable doubt. For the offence of murder, the learned Judge directed that all the five should be hanged; for the offence under section 326/149 he sentenced each one of them two years rigorous imprisonment and for the offence under is. 148 he sentenced each one to suffer R. I. for one year. These two latter sentences were ordered to run concurrently and that too if the death penalty imposed on them was not confirmed by the High Court. Against this order of conviction and sentence, three appeals were prefered on behalf of the five condemned persons. The sentences of death imposed on them were also submitted for confirmation. The Punjab High Court dealt with the confirmation proceedings and the three appeals together and held that the conviction of Yudhbir Singh, Dhanpat Singh and Sajjan Singh was not justified and so, the said order of conviction was set aside and consequently, they were ordered to be acquitted and discharged. In regard to Jai Dev and Hari Singh the High Court differed from the view taken by the trial Court and held that they were guilty not under section 302/149 but only under section 302, of the Indian Penal Code. In the result, the appeals preferred by them were dismissed and their conviction for the offence of murder and the sentences of death imposed on them were confirmed. It is this order which is challenged by the two appellants before us in their appeals Nos. 56 and 57 of 1962. These two appeals have brought to this Court by special leave. The incident which has given rise to the present criminal proceedings occurred in Khosra No.388 in Mauza Ahrod known as 'Inamwala field ' on September 14, 1960, at about 10.30 A.M. This incident has led to the death of six persons already 493 mentioned as well as the death of Ram Pat who belonged to the faction of the appellants. It has also resulted in injuries to nine persons three of whom belonged to the side of the appellants and six to the side of the complainants. The incident itself was in a sense a tragic and gruesome culmination of the battle for possession of the land which was waged between the appellants on the one hand and the faction of the complainants on the other. One of the principal points which fell to be considered in the courts below was : who was in possession of the said field at the material time ? The appellants pleaded that they were in possession of the field and were cultivating the field at the time of the incident, whereas the prosecution contends that the complainants ' party was in possession of the field and the appellants virtually invaded the field and caused this massacre. The prosecution case is that between 9 and 10 A.M. on the date of the offence, the appellants and, their brothers Ram Pat and Basti Ram came to the field with their tractor and started ploughing the bajra crop which had been sown by the villagers who were tenants in possession. Jug Lal, Amin Lal, Ram Chander, Sunda, Jai Dev, Hukma and others remonstrated with the appellants that the crops raised by them should not be destroyed. Dhanpat Singh who was driving the tractor was armed with pharsi while the appellants were standing armed with rifles. Yudhbir Singh had a pistol. Sajjan Singh and Parbhati had phars is and Ram Pat had a bhalla. Thus all the appellants were armed with deadly weapons and three of them had fire arm. According to the prosecution, the remonstrance made by Juglal and others did not help and the appellants told them that they had got possession of the land and that they would not permit any interference in their ploughing operations. That invitably led to an 494 altercation and an attempt was made to stop the working of the tractor. This immediately led to the terrible souffle which resulted in so many deaths. Sajjan Singh gave a pharsi blow to Juglal whose left arm was touched. Thereupon, Ram Pat raised his bhalla against Juglal causing injuries to the latter on the left side of the abdomen and on the right hand wrist. Hukma then snatched the bhalla from the hands of Ram Pat and gave a blow to him in self defence. As a result, Ram Pat fell on the ground and died. Sajjan Singh, Dhanpat Singh and Parbhati then gave blows to Hukma with pharsis, Hukma fell on the ground unconscious. At this stage, Amin Lal asked the appellants and their friends not to kill people but the only result of this intercession was that he was shot by the pistol of Yudhbir Singh. Then everybody on the complaints; side started to run away. Thereafter Jai Narain was shot dead by the appel lant Hari Singh. Dil Kaur was killed by Parbhati and others, and victim Jai Dev and Met. Sagroli were shot dead by the appellant Jai Dev. That, in substance, is the prosecution case. On the other hand, the defence was that all the accused persons had gone to Inamwala field at about 8.30 A.M. on September 14, 1960, and were engaged in the lawful act of ploughing the land of which they had taken possession. They had put the tractor on the portion of the bajra crop which was 'kharaba ' with the object of using it for manure. After this operation had gone on for nearly two hours, a large number of residents of Dhani Sobha and Ahrod, including women, came on the spot armed with deadly weapons and they started abusing and assaulting the accused persons with the weapons which they carried. The accused persons then used jellies, kassi and lathi in self defenoe. Amin Lal from the complainants ' party was armed with a pistol which he aimed at the accused persons, 495 Sajjan Singh then gave a lathi blow to Amin Lal and in consequence, the pistol fell down on the ground from his hands. It was then picked up by Yodhbir Singh and he used it is retaliation against the assailants and fired five or six rounds. Basti Ram who was charged with abetment of the principal offences denied his presence, while the six other accused persons admitted their presence on the spot and pleaded self defence. The prosecution sought to prove its case by leading oral evidence of the witnesses who were present at the scene and some of whom had received injuries themselves. It also relied on documentary evidence and the evidence of the Investigating Officer. Soon after the incident, First Information Report was filed by the appellant Jai Dev in which the version of the accused persons was set out and a case was made out against the villagers. In fact, it was by resson of this F.I.R. that the investigation originally commenced. Subsequently, when it was discovered that on the scene of the offence six persons on the complainants ' side had been killed and six injured, information wag lodged setting out the contrary version and that led to two cross proceedings. In one proceeding the members of the complainants party were the accused, whereas in the other proceeding the appellants and their companions were the accused persons. since the trial ended in the conviction of the appellants and their companions, the case made out in the complaint filed by the appellant Jai Dev has been held to be not proved. At this stage, it would be convenient to refer very briefly to the findings recorded by the trial Court and the conclusions reached by the. High Court in appeal. The trial Court found that the evidence adduced by the accused persons in support of their case that they had obtained possession of 496 the land before the date of the offence, was not satisfactory and that the documents and the entries made in the revenue papers were no more than paper entries and were not "as good as they looked". According to the learned trial Judge, the actual possession of the land all along remained with the complaints ' party Jug Lal and his compa nions and that the crop standing at the spot at the time of the incident had been sown by and belonged to the complaints party. This finding necessarily meant that the ploughing of the land by the accused persons was without any lawful justification and constituted an act of trespass. The trial Court accordingly held that the accused persons were the aggressors and that the complainants! party in fact had a right of private defence. That is how it came to the conclusion that the six accused persons were members of an unlawful assembly and had gone to the field in question armed with deadly weapons with a common object of committing the offences which were charged against them. Dealing with the case on this basis, the trial Judge did not think it necessary to enquire which of the victims had been killed by which of the particular accused persons. As we have already indicated, he was not satisfied that the charge had been proved against Parbhati or against Basti Rama; but in regard to the remaining five persons, he held that the evidence conclusively established the charges under section 148 and sections 302 and 326/149. In dealing with the defence, the trial Judge has categorically rejected the defence version that Amin Lal was armed with a pistol and that after the said pistol fell down from his hands it was picked up by Yudhbir Singh. According to the trial Court, no one on the complainants, side was armed with fire arms, whereas three persons on the side of the accused were armed with fire arms. Yudhbir Singh had a pistol and the appellants Jai Dev and Hari Singh had rifles. 497 When the matter was argued before the High Court, the High Court was not inclined to accept the finding of the trial Court on the question of possession. In its judgment, the High Court has referred in detail to the disputes which preceded the commission of these offences in regard to the possession of the land. It appears that this land was given as a charitable gift by the proprietary body. 'of the village Ahrod to one Baba Kanhar Dass many, years ago. Thereafter, it continued in the cultivation of Amin Lal, Jug Lal, Charanji Lal and Duli Chand as tenants. Kanhar Dass subsequently sold the entire piece of land to the appellants and their brothers Basti Ram and Ram Pat on May 30, 1958, for a sum of Rs.25,000/ . These purchasers belonged to the village Kulana and so, the villagers of Ahrod treated them as strangers and they were annoyed that the land which had been gifted by the villagers to Kanbar Dass by way of a charitable gift had been sold by him to strangers. In their resentment, the proprietary body of Ahrod filed a declaratory suit challenging the sale deed soon after the sale deed was executed. When that sent failed, two pre emption suits were filed but they were also dismissed. The appellants and their two brothers then filed a suit for possession. In that suit a decree was passed and the documentary evidence produced in the case shows that in execution of the decree possession was delivered to the decree holders. It appears that some persons offered resentence to the delivery of possession and 15 bighas of land was claimed by the resisters. Litigation followed in respect of that and whatever may be the position with regard to those 15 bighas, &wording to the High Court, possession of 56 bighas and 6 bighas of land was definitely delivered over 'to Basti Ram and his brothers on December 23, 1959. In other words, reversing the finding of the trial Court on this point, the High Court came to the conclusion that the field where the offences 498 took place was in the possession of the appellants and their companions. The High Court has also found that the crop in the field had been ploughed by the appellants and their companions and that the operations which were carried on by them on the morning of September 14. 1960, did not constitute trespass in any sense. On the evidence, the High Court has come to the conclusion that the villagers who did Dot tolerate that the strangers should take possession of the land had come to the filed to take possession and they were armed. It appears that the number of villagers was much larger than the number of persons on the side of the accused party, though the weapons carried by the latter included fire arms and so, the latter party had superiority, in arms. The High Court has, therefore, come to the conclusion that the party of the accused persons was entitled to exercise its right of private defence. The property of which they were in possession was threatened by persons who were 'armed with weapons and so, the right to defend their property against an assault whih threatened grievous hurt, if not death, gave them the right to use force even the extent of causing death to the assailants. It is substantially as a result of this finding that the High Court took the view that Sajjan Singh, Yudhbir Singh and Dhanpat Singh who were responsible for the death of the three of the victims were not guilty of any offence. In the circumstances, they were entitled to defend their property against assailants, who threatened them with death, even by causing their death. That is how these three accused persons have been acquitted in appeal. In regard to the appellants Jai Dev and Hari Singh, the High Court has held that at the time when these two appellants caused the deaths of Jai Dev and Jai Narain respectively, there was no apprehension of any danger at all. 499 As soon as Amin Lal was shot dead, all the villagers who had come to the field ran away and there was no longer any justification whatever for using any force against the running villagers. Since at the relevant time the property had been saved form the trespass and the assailants bad been completely dispersed, the right of private defence ceased to exist and so, the appellants who were proved to have caused the two deaths could not claim protection either of the right of private defence or could not even plead that they had merely exceeded the right of private defence; so, they are guilty of the offence of murder under section 302. That is how the appellants have been convicted of the said offence and have been ordered to be hanged. The question which the appeal raises for our decision thus lies within a very narrow compass. The findings of fact recorded by the High Court in favour of the appellants would be accepted as binding on the parties for the purpose of this appeal. In other words, we would deal with the case of the appellants on the basis that initially they and their companions had the right of private defence. Mr. Anthony contends that having regard to the circu. mstances under which the appellants fired from their rifles, it would be erroneous to hold that the right of private defence had come to an end, According to him, allowance must be made in favour of the appellants in determining the issue. because it is now found that they were faced with an angry mob whose members were armed with weapons and who appeared determined to dispossess the appellants and their friends of the field in question. The decision of the point thus raised by Mr. Anthony would substantially depend upon the scope and effect of the provisions of section 100 of the Indian Penal Code. Section 100 provides, inter alia, that the right of private defence of the body extends under the 500 restrictions mentioned in section 99, to the voluntary causing of death if the offence which occasions the exercise of the right be an assault as may reasonably cause the apprehension that grievous hurt will otherwise be the consequence of such assault. In other words, if the person claiming the right of private defence has to face assailants who can be reasonably apprehended to cause grievous hurt to him, it would be open to him to defend himself by causing the death of the assailant. In appreciating the validity of the appellants ' argument, it would be necessary to recall the basic assumptions underlying the law of self defence, In a well ordered civilised society it is generally assumed that the State would take care of the persons and properties of individual citizens and that normally it is the function of the State to afford protection to such persons and their properties. This, however, does not mean that a person suddenly called upon to face an assault must run away and thus protect himself, He is entitled to resist the attack and defend himself. The same is the position if he has to meet an attack on his property, In other words, where an individual citizen or his property is faced with a danger and immediate aid from the State machinery is not readily available, the individual citizen is entitled to protect himself and his property. That being so, it is a. necessary corollary to the doctrine ' of private defence that the violence which the citizen predefending himself or his property is entitled to use must not be unduly disproportionate to the injury which is to be averted or which is reasonably prehended and should not exceed its legitimate purpose. The exercise of the right of private defence must never be vindictive or malicious. There can be no doubt that in judging the conduct of a person who proves that he had a right of 501 private defence, allowance has necessarily to be made for his feelings at the relevant time. Ile is faced with an assault which causes a reasonable apprehension of death or grievous hurt and that inevitably creates in his mind some excitement and confusion. At such a moment, the uppermost feeling in his mind would be toward off the danger and to save himself or his property, and so, he would naturally be anxious to strike a decisive blow in exercise of his right. It is no doubt true that in striking a decisive blow, he must not use more force than appears to be reasonably necessary. But in dealing with the question as to whether more force is used than is necessary or than was justified by the prevailing circumstances, it would be inappro, priate to adopt tests of detached objectivity which would be so natural in a court room, for instance, long after the incident has taken place. That is why in some judicial decisions it has been observed that the means which a threatened person adopts of the force which be uses should not be weighed in golden scales. To begin with, the person exercising a right of private defence must consider whether the threat to his person or his property is real and immediate. If he reaches the conclusion reasonably that the threat is immediate and real, he is entitled to exercise his right. In the exercise of his right, he must use force necessary for the purpose and he must stop using the force as soon as the threat has disappeared. So long as the threat lasts and the right of private defence can be legitimately exercised, it would not be fair to require, as Mayne has observed, that "he should modulate his defence step by step. according to the attack, before there is reason to believe the attack is over" (1). The law of private defence does not require that the person assaulted or facing an apprehension of an assault must run away for safety. It entitles him to defend himself and law gives him the right to (1) Mayne s Criminal law of Indians 4th Ed. P.23.1 502 secure his victory over his assailant by using the necessary force. This necessarily postulates that as soon as the cause for the reasonable apprehension has disappeared and the threat has either been destroyed or has been put to rout, there can be no occasion to exercise the right of private defence. If the danger is continuing, the right is there; if the danger or the apprehension about it has ceased to exist, there is no longer the right of private defence, (vide sections 102 and 105 of the Indian Penal Code). This position cannot be and has not been disputed before us and so, the narrow question which we must proceed to examine is whether in the light of this legal position, the appellants could be said, to have had a right of private defence at the time when the appellant Jai Dev fired at the victim Jai Dev and the appllant Hari Singh fired at the victim Jai Narain. In dealing with this question, the most significant circumstance against the appellants is that both the victims were at a long distance from appellants when they were shot dead. We will take the case of victim Jai Dev first. According to Gurbux Singh (P. W. 37), Assistant Sub Inspector, the dead body of Jai Dev was found at a distance of 70 paces from the place of the tractor, but it was discovered that it had been dragged from a place at a longer distance where Jai Dev stood when he was fired dead. From that place to the place where his dead holy was actually found there was a trail of blood which unambiguously showed that Jai Dev fell down at a more distant place and that he was dragged nearer the scene of the offence after he fell down. This statement is corroborated by the memo prepared on September 14, 1960 (item No. 104). Blood stained earth was taken from both these spots. Roughly stated, the spot where Jai Dev was shot at can be said to be about 300 paces away from the tractror where the appellant Jai Dev stood. It is 503 true that Gurbux Singh made no express reference to the trail of blood in rough site plan which he had prepared on the day of the offence. But iten 8 in the plan, we were told, does refer to the dragging and that is enough corroboration to the evidence of Gurbux Singh. Besides, in considering the effect of the omission to mention the trail of blood in the rough plan, we cannot ignore the fact that at that time Gurbux Singh 's mind was really concentrated on the F. I. R. received by the Police from the appellant Jai Dev himself and that means that at that time the impression in the mind of Gurbux Singh must have been that the deceased Jai Dev belonged to the party of the aggressors and so, blood marks caused by the dragging of his body may not have appeared to him to be of any significance. However that may be, the sworn testimony of Gurbux Singh is corroborated by the memo contemporaneously prepared and it would be idle to suggest that this evidence should be disbelieved because the rough site plan prepared by Gurbux Singh does not refer to the trail of blood. Mr. Anthony has, however, strongly relied on the statement of Juglal (P. W. 13) who has narrated the incident as it took place, and in that connection has stated that the accused Jai Dev then opened fire from his rifle killing Jai Dev deceased at the spot. It is suggested that the words "at the spot" show that the victim Jai Dev was standing at the spot when the appellant Jai Dev shot at him. We are not inclined to accept this contention. What the witness obviously meant was that from the spot where the appellant Jai Dev was standing, he fired at the victim Jai Dev. Besides, reading the account given by Juglal as a 504 whole, it would not be fair to treat the, words 'fat the spot" in that technical way. Similarly, the. argument that according to Jai Dev all the show, were fired almost simultaneously, is also not wellfounded. When a witness gives an account. off on incident like this, he is bound to, refer to one event after another. That does not mean, that, these two appellants and their companions fired almost simultaneously. Therefore, we are not. satisfied that the evidence of Juglal supports the argument that the victim Jai Dev was near the scene of the offence when the, appellant Jai Dev fired at him, Mr. Anthony has also relied on the statement of Chuni Lal (P.W. 16), in support of the same argument. But it is clear this witness was obviously making a mistake between the two documents P.N.F. and P.N.E. A statement like this which is the result of confusion cannot legitimately be pressed into service for the purpose of showing that victim Jai Dev was near about the scene of the offence. Then again, the statement of Hira Lal (P.W. 5) on which Mr. Anthony relies shows that in the committing Court he had said that Jai Dev had been injured at the spot; but he has added that, he,, had said so because subsequently after the occurrence,, he saw the dead body of Jai Dev near the scene of the offence. Therefore, in our opinion, having regard to the evidence on the record, the High Court was right in coming to the conclusion that Jai Dev deceased was standing at a fairly long distance from the scene of the offence when he was shot at. That takes us to the case of the victim JaiNarain. Jai Narain was in fact not in the Inamwala field at all. According to the prosecution, he was on the machan in the adjoining field which he was cultivating and it was whilst he was in his own field that the appellant Hari Singh fired at him. The distance between 505 the appellant and the victim has been found to be about 400 paces. Now this conclusion is also supported by evidence on the record. Jai Narain 's mother, Chand Kaur (P.W. 10) says that she saw her son falling on the ground from the machan, and that clearly means the machan in the field of which Jai Narain was in possession. The position of this field is shown in the rough plan and sketch prepared by the Sub Inspector (P.A.J.). The evidence of Hira Lal (P.W. 5) supports the same conclusion, and Gurbux Singh swears to the same fact. He says that the dead body of Jainarain was found lying at a distance of more than 400 spaces from the point where the tractor was said to be standing at the time of the occurrence. That is the effect of the evidence of Juglal (P. W. 13) also. Thus, there can be no doubt that the victim Jainarain was at a long distance from the field in question and like the appellant Jai Dev who took a clean aim. at the victim Jai Dev who was standing a distance and shot him dead, the appellant Hari Singh also took a clean aim at the victim Jai Narain who was away from him and shot him dead. That is the conclusion of the High Court and we see no reason to interfere with it. In the course of his arguments, Mr. Anthony relied on the fact that some of the prosecution witnesses on whose evidence the High Court has relied were not accepted by the trial Court as truthful witnesses, and he contends that the High Court should not have differed from the appreciation of evidence recorded by the trial Court. There are two obvious answers to this point. In the first place it is not wholly accurate to say that the trial Court has completely disbelieved the evidence given by the prosecution witnesses. It may be conceded in favour of Mr. Anthony that in dealing with a part of a prosecution case relating to Parbhati and Basti Ram, the trial Court did not accept the evidence of 506 the witnesses which incriminated them, and in that connection, he has referred to the criticism made by the defence against those witnesses and has observed that there is force in that criticism. But, while appreciating the effect of the observations made by the trial Court in dealing with that particular aspect of the matter, we cannot lose sight of the fact that as to the actual occurrence the trial Court, in substance, has believed the major part of the prosecution evidence and has stated that the said evidence is quite consistent with medical evidence. In other words, the sequence of events, the part played by the assailants as against the specific victims and the rest of the prosecution story have, on the whole, been believed by the trial Court. In this connection, we ought to add that the trial Court did not feel called upon to consider the individual case of each one of the accused persons because it held that a charge under section 149 had been proved. But when the High Court came to a contrary conclusion on that point, it became necessary for the High Court to examine the case against each one of the accused persons before it, and so, it would not be accurate to say that the High Court has believed the witnesses whom the trial court had entirely disbelieved. That is the first answer to Mr. Anthony 's contention. The second answer to the said contention is that even if the trial Court had disbelieved the evidence, it was open to the High Court, on a reconsideration of the matter, to come to a contrary conclusion. It is true that in dealing with oral evidence a Court of Appeal would normally be reluctant to differ from the appreciation of oral evidence by the trial Court, because obviously the trial Court has the advantage of watching the demeanor of the witnesses; but that is not to say that even in a proper case, the Appeal Court cannot interfere with such appreciation. Besides, the criticism made by the trial Court is not so much in relation to the demeanour of the witnesses as in 507 regard to their partisan character and the over. statements which they made as partisan witnesses are generally apt to do. Therefore, we see no justification for contending that the finding of the High Court as to the distances at which the Victims Jai Dev and Jai Narain were shot at should not be accepted. Mr. Anthony then argued that the fact that the victims were at a long distance from the assailants when they were fired at, will not really be decisive of the point which we are called upon to consider in the present appeal. He contends that if the assailants were surrounded by a very big mob some of whom were armed with deadly weapons and all of whom were determined to dispossess them at any cost, it was open to the appellants and their companions to shoot at the mob because they were themselves reasonably apprehensive of an assault by the mob which would have led at least to grievous hurt, if not death; and he argues that if three of the assailants who had fire arms fired almost simultaneously,that would be within the legitimate exercise of the right of private defence and the fact that somebody was killed who was standing at a distance, would make no difference in law. The argument thus presented is no doubt prima facie attractive; but the assumption of fact on which it is based is not justified in the circumstances of this case. The High Court has found that at the time when the appellants fired shots from their rifles, the villagers had already started running away and there was no danger either to the property or to the bodies of the assailants. In this connection, it is important to remember that the defence version that Amin Lal had a pistol had been rejected by both the courts, so that whereas the crowd that threatened the appellants and their friends was larger in number, the weap ons in the hands of the assailants were far more 508 powerful than the weapons in the hands of the crowd. Having regard to the events that took place and the nature of the assault as, it developed, it is clear that Amin Lal who was one of the leaders of the villagers was shot dead and that, according to the evidence, competely frightened the villagers who began to run away helterskelter. Sunda (P. W.4) has described how Amin Lal stepped forward for the help of Hukma, but he was fired at from the pistol by Yudhbir Singh, and having received a fatal injury on big chest Amin Lal fell down dead on the ground. This witness adds " 'the members of the complainant party feeling frightened because of the firing opened by Yudhbir Singh ran in the direction of the village abadi". Similarly, the statement of Mst. Sarian (P. W. 12) would seem to show that when the victim Jai Dev was fired at, he had run away. On the probabilities, it is very easy to believe that when the villagers found that the appellants and their friends were inclined to use their firearms, they must have been frightened, even the large number of the villagers would have meant nothing. The large number would have merely led to a large number of deaths that is about all. Therefore, as soon as fire arms were used for the first time killing Amin Lal on the spot, the villagers must have run away. That is the evidence given by some of the witnesses and that is the conclusion of the High Court. It is in the light of this conclusion that we have to deal with the point raised by Mr. Anthony. If, at the time when the two appellants used their rifles against their respective victims standing at considerable distances from them, all the villagers had run away, there was obviously no threat continuing and so, the right of private defence bad clearly and unambiguously come to an end. That is why 509 we think the High Court was right in holding that the appellants were guilty of murder under section 302 of the Indian Penal code. That leave two minor question to be considered. Mr. Anthony has contended that the examination of the appellant Hari Singh under section 342 of the Code of Criminal Procedure has been very defective in regard to the question of distance on which the prosecution strongly relied against him before the High Court, and he argues that this defect in the examination of the appellant Hari Singh really vitiates the trial. It is true that in asking him questions, the learned trial Judge did not put the point of distance between him and the victim Jai Narain clearly; but that in our opinion, cannot by itself necessarily vitiage the trial or affect the conclusion of the High Court. In dealing with this point, we must have regard to all the questions put by the trial Judge to the appellant. Besides, it is not so much the point of distance by itself which goes against the appellant Hari Singh as the conclusion that at the time when he fired at Jai Narain, the threat had ceased; and if the threat had ceased and there was no justification for using the firearms. , the appellant would be guilty of murder even if Jai Narain was not far away from him. It is unnecessary to emphasize that it is for the party pleading self defence to prove the circumstances giving rise to the exercise of the right of self defence, and this right cannot be said to be proved as soon as we reach the conclusion that at the relevant time there was no threat either to the person of the appellant or the person or property of his companions. In support of his contention that the failure to put the relevant point against the appellant Hari Singh would affect the final conclusion of the High Court, Mr. Anthony has relied on a decision 510 of this Court in Hate Singh Bhagat Singh vs State of Madhya Bharat (1). In that case, this Court has no doubt referred to the fact that it was important to put to the accused each material fact which is intended to be used against him and to afford him a chance of explaining it if he can. But these observations must be read in the light of the other conclusions reached by this Court in that case. It would, we think, be incorrect to suggest that these observations are intended to lay down a general and inexorable rule that wherever it is found that one of the point used against the accused person has not been put to him, either the trial in vitiated or his conviction is rendered bad. The examination of the accused person under a. 342 is undoubtedly intended to give him an opportunity to explain any circumstances appearing in the evidence against him. In exercising its powers under section 342, the Court must take care to put all relevant circumstances appearing in the evidence to the accused person. It would not be enough to put a few general and broad questions to the accused, for by adopting such a course the accused may not get opportunity of explaining all the relevant circumstances. On the other hand, it would not be fair or right that the Court should put to the accused person detailed questions which may amount to his cross examination. The ultimate test in determining whether or not the amused has been fairly examined under a. 342 would be to enquire whether, having regard to all the questions put to him, he did get an opportunity to say what he wanted to say in respect of prosecution case against him. If it appears that the examination of the accused person was defective and thereby a prejudice has been caused to him, that would no doubt be a serious infirmity. It is obvious that no general rule can be laid down in regard to the manner in which (1) A. I. R. 511 the accused person should be examined under section 342. Broadly stated. however, the true position appears to be that passion for brevity which may be content ' with asking a few omnibus general questions is as much inconsistent with the requirements of section 342 as anxiety for thoroughness which may dictate an unduly detailed and large number of questions which may amount to the cross examination of the accused person. Besides, in the present case. as we have already shown, failure to put the specific point of distance is really not very material. The last argument which Mr. Anthony has urged before us is that the prosecution should have examined a ballistic expert in this case and since no expert has been examined, it cannot be said that the projection has proved its case that the appellants caused the deaths of the two victims by shooting from the rifles which they carried. In support of this argument, Mr. Anthony has referred us to the decision of this Court in Mohinder Singh vs The State (1). In that case. it has been observed by this Court that it has always been considered to be duty of the prosecution, in a case where death is due to injuries or wounds caused by a lethal weapon, to prove by expert evidence that it was likely or at least possible for the injuries to have been caused with the weapon with which and in the manner in which they are alleged to have been caused. We do not see bow this principle can be invoked by Mr. Anthony in the present case. The rifles which the appellants are alleged to have used have not been recovered and so, there was no occasion to examine any expert in respect of the injuries caused to the two victims by the appellants. What Mr. Anthony suggests is that an expert should have been examined for the purpose of determining whether any of the injuries found on the persons of the several victims could (1) A. I. R. 512 have been inflicted by the revolver which had been recovered in this case. Now, the story about the recovery of this revolver is very interesting. According to the defence, Amin Lal was carrying a revolver and when he was hit with a lathi by Sajjan Singh, the revolver fell down from his hands and Yudhbir Singh picked it up and fired it at Amin Lal. Now this revolver was carried away by Yudhbir Singh to his house and he says that he produced the same before the Polio ') Investigating Officer. On the other hand, according to Gurbux Singh, it was the accused Sajjan Singh who after his arrest produced the pistol and two live cartridges before him. It would thus appear that the revolver had been produced by one of the accused persons on the allegation that it was carried by Amin Lal and had been used by Yudhbir Singh in self defence after it had fallen down from Amin Lal 's hands. It has not been the prosecution case that it is this revolver which had been used by Yudhbir Singh. It may well be that the revolver has been deliberately surrendered by the accused in order to introduce complications in the case. We think, in such a case it is difficult to understand for what purpose the prosecution was expected to examine the expert. Therefore, in our opinion, the decision in the case of Mohinder Singh vs The State (1) has no application to the case before us. In the result, we agree with the High Court in holding that the two appellants are guilty of murder under section 302. The only question which now remains to be considered is one of sentence. Mr. Bindra for the State has left this question to us since, presumably, he did not feel justified in pressing for the imposition of the sentence of death. We have carefully (1) A. I. R. 513 considered all the facts leading to the commission of this offence and we are not inclined to accept the view of the High Court that the circumstances of this case require the imposition of the maximum penalty on the two offenders. On the question of sentence, it would be relevant to take into account the background of the incident, the nature and extent of the threat held out by the crowd of villagers. the excitement which must have been caused at the time of the incident, and. so, though we have felt no difficulty in agreeing with the decision of the High Court that at the time when the two appellants fired shots from their rifles the threat had ceased to exist, it would not be unreasonable to take into account the fact that, the excitement in their minds may have continued, and that, in the special circumstances of this case, may be regarded as an extenuating circumstance. We, therefore, think that the ends of justice would be met if the sentence of death imposed on the two appellants is set aside and instead, an order is passed directing that they should suffer impri sonment for life. Accordingly, we confirm the conviction of the appellants under section 302 and convert the sentence of death. imposed on them into one of imprisonment, for life. Conviction confirmed. Sentence reduced.

IN-Abs

The appellants along with four others were charged with having committed offences under section 148 and sections 202 and 326, read with section 149, of the Indian Penal Code. The incident which gave rise to the present criminal proceedings related to a cultivable field in respect of which a dispute arose as to its possession between the appellants and the faction of the complainants. On September 14, 1960, a rioting took place in the field which resulted in the death of six persons and injuries to nine persons. The appellant 's case was that they were in possessions of the field and were cultivating it at the time of the incident whereas the prosecution contended that the complainant 's party was in possession and that the appellants virtually invaded it and caused a massacre. The High Court found that the crop in the field had been ploughed by the appellants and their companions and that when the operations were being carried on by them on the day of rioting, the villagers, who did not tolerate the strangers, came to the field armed with weapons to take forcible Possession of the field, that as soon as fire arms were used for the first time killing a person, the villagers started running away and that after all the villagers had run away, the appellants used their rifles against their respective victims when the latter were standing at a considerable distance from them. The High Court took the view that as at the relevant time the property had been saved from the trespass, there was no justification for using any force against the running villagers and so, the appellants who were proved to have caused the deaths of the victims could not claim protection of the right of private defence and were guilty of the offence of murder under s 302. Held, that the appellants were rightly convicted under s.302 of the Indian Penal Code on the findings given by the High Court. 490 In exercising the right of private defence, the force which a person defending himself or his property is entitled to use must not be unduly disproportionate to the injury which is to be averted or which is reasonably apprehended and should not exceed its legitimate purpose. The use of the force must be stopped as soon as the threat has disappeared. The exercise of the right of private defence must never be vindictive or malicious, In exercising its powers under section 342 of the Code of Criminal Procedure the Court must take care to put all the relevant circumstances appearing in the evidence to the accused, so that he might get an opportunity, to say what he wanted to do so in respect of the prosecution case against him, but it is not necessary that the Court should put to the accused detailed questions which may amount to his cross. examination. Held, that the failure to put the specific point of the distance from which the appellants used their rifles, under section 342 of the Code of Criminal Procedure, did not vitiate the trial or affect the conclusion of the High Court.

Appeal No. 254 of 1962. 572 Appeal by special leave from the Award dated May 1, 1961, of the Industrial Tribunal (111), U.P. at Allahabad in Reference No. 69 of 1959. G.S. Pathak, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants. B. P. Maheshwari, for the respondents. 1962, August 3 The Judgment of the court was delivered by MUDHOLKAR, J. The only point for consideration in this appeal by special leave from an award of the Industrial Tribunal at Allahabad is whether the "crushing season" of 1958 59 must be deemed to have ended on March 12, 1959 when the actual crushing of sugar cane stopped or on March 16, 1959 when all ancillary operations in the factory came to an end and the entire machinery was at a standstill. According to the appellants the "crushing season" came to an end on the latter date while according to the respondents who are the employees of the factory it came to an end on the former date. The importance of determining the date on which the season terminated arises out of the admitted position that only those seasonal workers who are borne on the muster roll of the factory on the day next to the date on which the crushing season ended would be entitled to three days ' clos ure holidays. It is the case of the respondents that the appellants employ about 1,600 seasonal workers and about 650 permanent workers. It is common ground that the crushing process terminated on March 12, 1959, and on that day about 1,000 of the 1,600 seasonal workers left for their homes by the evening after receiving all their dues. The remaining seasonal workers continued to work in the factory till March 16, 1959, and, therefore, under 573 a term of an award of the Industrial Tribunal in reference No. 33 of 53 and dated April 15, 1953, they are entitled to three days ' closure holidays. The case of the appellants, however, is that the crushing season must be regarded as having ended on March 16, 1959 which was the last day on which the factory was worked and that only those seasonal workers who were borne on the muster roll of the factory on March 17, 1959 would be entitled to three days ' closure holidays. The 600 seasonal workers who worked till the evening of March 16, 1959, would therefore, according to them not be entitled to closure holidays. During arguments Mr. Pathak also suggested that the fact that between March 12 and March 16,1959, 600 seasonal workers continued to work in the factory has not been established in this case. Taking up the last point it is sufficient to point out that the evidence of W. W. 1, B. section Chauhan, who is a member of the executive of the U. P. Trade Union Congress, Kanpur, shows that the seasonal workers other than those who left on the evening of March 12, 1959, were borne on the muster roll of the appellants on March 13, 1959. His evidence on the point has not been challenged in the cross examination. Nor have the appellants examined any witness for the purpose of showing how many seasonal workers were borne on the muster roll on March 13, 1959. The only witness examined by them, Shri K. K. Sinha, who is working as Manufacturing Chemist, has no knowledge about the matter because, as admitted by him in his cross examination, he was not working in the mills in the 1958 59 crushing season. Since the total number of seasonal workers was 1,600 and nearly a thousand had left on March 12, 1959 the number of those, who continued to work till March 16, 1959 must be six hundred. We must, therefore. proceed on the basis that the names of about 600 574 seasonal workers continued to be borne on the muster roll of the appellants on March 13, 1959. What has to be considered then is what was the date on which the crushing season of 1958 59 ended. It seems to us clear that the crushing season must be deemed ' to have ended on the date on which the crushing operations in the factory came to an end and not on the date on which the manu facturing processes in the factory came to an end. We must give to the expression crushing season" its ordinary meaning, unless it is shown that in. the industry it has acquired some other meaning There was no evidence before the Tribunal to the effect that crushing season" meant the period during which the factory was actually working and not merely the period during which the crushing operations were being carried on. Clause (3), of the Award of 1953 runs as follows:"All permanent workers and such seasonal employees as are on the factory 's roll on the day following the close of the crushing season will be entitled to the clos ure holidays. " There is nothing in the Award to indicate that according to the Tribunal "crushing season" meant anything else than the period during which Crushing operations were carried on. Since, as already pointed out the operations came to an end on March 12,1959 the crushing season must be held to have ended on that day. Those seasonal workers who were borne on the muster roll on March 13, 1959 would be entitled to, three days, closure holidays. Agreeing with the Tribunal we therefore, uphold the Award and dismiss the appeal with costs. Appeal dismissed.

IN-Abs

The appellants employed about 1,600 seasonal workers and about 650 permanent workers. The cane crushing process terminated on March 1,2, 1959, and on that day about 1,000 of the 1,600 seasonal workers left for their homes by the evening after receiving their dues. The remaining seasonal workers continued to work in the factory till March 16, 1959. Under the term of a previous award, they were entitled to three days ' closure holidays. According to the Appellant the crushing season must be regarded as having ended on ' March 16, 1959, which was the last day on which the factory was worked and that only those seasonal workers who were borne on the muster roll of the factory on March 17, 1959, would be entitled to three days ' closure holidays. The point for consideration was whether the "Crushing season" of 1958 59 must be deemed to have ended on March 12, 1959, when the actual crushing of sugar cane stopped, or on March 16, 1959. when all ancillary operations in the factory came to an end and the entire machinery was at a stand still. Held, that the expression "Crushing Season" must be given its ordinary meaning unless it is shown that in the industry in question it has acquired some other meaning. There was no evidence, before the tribunal to the effect that "crushing season" meant the period during which the factory was actually working and not merely the period during which the crushing operations were being carried on. Since the operations came to an end on March 12, 1959, the crushing must be held to have ended on that day, and, therefore, the seasonal workers borne on the muster roll on March 13, 1959, were entitled to three days ' closure holidays.

minal Appeal No. 119 of 1961. Appeal from the judgment and order dated December 21, 1961, of the Calcutta High Court in Cr. A. No. 423 of 1958. P. K. Chakravarty, for the appellant. section C. Mazumdar, for respondent No. 1. D. N. Mukherjee, P. K. Mukherjee for P. K. Bose, for the respondent No. 2. 1962. August 3. The Judgment of the Court was delivered by SINHA, C.J. This appeal on a certificate of fitness granted by the High Court under Act 134(1), (c). 566 of the Constitution, is directed against the order of a Division Bench of the Calcutta High Court dated December 21, 1960, setting aside the order of acquittal passed by the trial Magistrate, dated July 2, 1958. We heard this appeal on the eve of the long vacation and pronounced our order to the effect that the appeal was allowed and the order of acquittal was to stand, and that reasons would be given later. It appears that the appellant, who it; a practising lawyer, had been employed by the respondent to work for him to investigate the title to some property which the latter was about to purchase, sometime in October 1952. The prosecution case was that the respondent had entrusted the. sum of Rs. 5000/ to the appellant for depositing in Court in connection with an application in respect of the proposed transaction, under the Bengal Money Lenders ' Act, and that the appellant having been so entrusted with the money, in breach of trust, misappropriated the amount, thus causing loss to his client. The appellant was, therefore, charged under section 409 of the Indian Penal Code, with having committed criminal breach of trust in respect of the sum of Rs. 5000/ , which had been entrusted to him as a lawyer on behalf of the respondent. The appellant defense was that the case, against him was false and that he had been falsely implicated for reasons which need not be stated. In order to substantiate the charge against him, the complainant (now respondents examined himself and a number of witnesses. He also adduced in evidence a certain document, marketed exhibit 1, purporting to be a letter in the handwriting of the appellant, to show that Rs. 4200/ being a portion of the amount of Rs. 5000/ required for the deposit, had been asked for by the appellant. It also con tained writings in the hand of the complainant &owing that there was correspondence in the matter 567 of the deposit. That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant. But the appellant challenged the document as a forgery in material parts, and cross examined the complainant who had produced the document. In spite of the fact that the complainant was very pointedly cross examined with a view to showing that the document placed before the Court was a forgery in material parts, the complainant did not take any steps to get an expert on handwriting examined. The trial Court, on an examination of the evidence, oral and documentary, came to the conclusion that the case against the accused had not been proved and acquitted him. The complainant preferred an appeal to the High Court against the order of acquittal, which was heard by a Division Bench, The High Court took the view that, in the circumstances of the case, there should be retrial by another magistrate, who should give an opportunity to the complainant to adduce the evidence of a handwriting expert in order to establish the genuineness of the questioned document. Apparently, the High court, sitting in appeal on the judgment of the acquittal, passed by the learned Magistrate, was not satisfied as to the genuineness of the questioned document. Otherwise it could have pronounced its judgment one way or the other, on the merits of the controversy, whether or not the prosecution had succeeded in bringing the charge home to the accused. If it were not a case between a lawyer as an accused and his client as the complainant, perhaps the High Court may not have taken the unusual course of giving a fresh 'opportunity to the complainant to have second round of litigation, to the great prejudice of the accused. In this connection, the following observations of the High Court may be extracted in order to show the reasons.for the unusual course it took in this case: 568 "Thus there can be no doubt that this was a document of considerable importance. According to the prosecution it clearly showed the respondent 's connection with the sum of Rs. 4200/ which was a part of the sum of Rs. 5000/ , the subject matter of the charge. According to the respondent, the figures 4200 and the Bengali word 'sankranta ' were for geries just as at the bottom of the document the word yes ' and the signature of the res pondent with date were also forgeries. This case was clearly put by the respondent to Bimla, Krishna Ben and it was suggested to him that the impugned portions of the document were clear forgeries made by the appellant in order to falsely implicate the respondent. It must be said that inspite of this challenge, the appellant took no steps what. ever to produce expert evidence to aid the court in coming to a conclusion as to the authorship of the impugned portion of the document. It is true that expert evidence cannot always be a final settler; still in a call of this kind, it is eminently desirable that the court should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent. . Comment was also made by the Magistrate on the appellant 's failure to call expert evidence. In one sense that comment was justified; but in a case of this kind between lawyer and client we think the matter cannot be left, where it is. In view of the fiduciary relation. ship between the parties it is as much necessary in the interest of, the prosecution as in. the interest of the accused that the whole matter should be cleared ' up, and no steps 569 should be spared which might ensure complete justice between the parties. If it were an ordinary case between one litigant and another, we might have hesitated at this dis tance of time to send the case back even though the prosecution did not avail of the opportunity of proving its own case. " In all civilised countries, criminal jurisprudence has firmly established the rule that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances. In this case, the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. It was not that he proved for the examination of an expert and that opportunity had been denied to him. The prosecution took its chance of having a decision in its favour on the evidence adduced by it before the trial Court. That Court was not satisfied that evidence was adequately reliable to bring the charge home to the accused. The accused was thus acquitted. On appeal, it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court. If the High Court could come to the conclusion, it could have reversed the judgment and converted the order of acquittal into an order of conviction. But it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the evidence that should, and could, have been brought before the Court of first instance. It is not a case where it in open to the Court of Appeal, against an order of acquittal, to order a retrial for the reasons that 570 the trial Court has not given the prosecution full opportunity to adduce all available evidence in support of the prosecution case. It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce. That being so, the High Court, in our judgment, entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by another Magistrate, simply on the ground that the case was between a lawyer and his client. Simply because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him. In our opinion, the High Court gave way to considerations which were not relevant to a criminal trial. The High Court was not sitting on a disciplinary proceeding for professional misconduct. It had to apply the same rules of criminal jurisprudence as. apply to all criminal trials, and, in our opinion, the only. reason given by the High Court for ordering retrial is against all well established rules of criminal jurisprudence. The fact that the appellant is a practising lawyer does not entitle him to any preferential treatment when he is hauled up on a criminal charge, even as he is not subject to any additional disability because the cam was between a lawyer and his client. There was no relationship of lawyer and client so far as the criminal case was concerned. Hence, in our opinion, the order of retrial passed by the High Court is entirely erroneous and must be set aside. Appeal allowed.

IN-Abs

The appellant, a practising lawyer engaged by. the respondent to investigate title in respect of a property when the latter wanted to purchase, was prosecuted by him on a charge under a. 409 & the Indian Penal Code for misappro printing a sum of Rs. 50001 entrusted to him for that purpose. The prosecution mainly depended on a letter written by the appellant which would show that a sum of Rs. 4200/ out of the said amount of Rs. 5000/ had been asked for by the appellant. This letter was challenged as a forgery by the 565 appellant. The respondent did not call a hand writing expert nor was he denied an opportunity to do so. The trial Magistrate held that the prosecution case had not been proved and acquitted the appellant. The High Court on appeal by the respondent set aside the order of acquittal on the ground that the appellant was a practicing lawyer in fiduciary relationship with his client and directed that the appellant be retried, by smother Magistrate with opportunity to the respondent to examine a hand writing expert in order to establish the genuineness of the said letter. It held that since the case was one not between ordinary litigants but between a lawyer and his client, involving a fiduciary relationship, no steps should be spared to ensure complete justice between the parties and the case must be sent back even though the prosecution did not avail of the opportunity of proving its own case. Held, that the order of the High Court were entirely erroneous and must, be set aside. There was no ground for directing a retrial and the appellant could not be put to a second trial for the same offence simply because of the failure of the complainant to adduce all the evidence that should and could, have been adduced. The fact that the appellant was a lawyer could make no difference and the same rules of criminal, jurisprudence that applied to all must apply to him. Further, the High Court was not exercising disciplinary jurisdiction and no relationship of lawyer and client was involved in the criminal case.

minal Appeal No. 218 of 1959. Appeal by special leave from the Judgment and order dated September 8, 1959, of the Punjab High Court in Criminal Appeal No.354 of 1959. ' Frank Anthony, K. C. Agarwala and P. C. Agarwala for the appellant. B.K. Khanna and P. D. Menon, for the respondent. August 21. The Judgment of the Court was delivered by 680 SHAH, J. After arguments were concluded in this appeal we ordered that the appellant Narain Singh be acquitted of the offence under section 304 Part II of the Indian Penal Code of which he wag convicted and the sentence passed on him be set aside. We proceed to set out our reasons in support of the order. Narain Singh and his three nephews Mehar Singh, Mewa Singh and Pakhar Singh were tried before the Court of Session, Ludhiana for offences punishable under section 302 read with section 34. of the Indian Penal Code, on the charge that on October 31, 1958, they had in furtherance of their common intention caused the death of one Bachan Singh by making a murderous assault on him. The prosecution case was that in the evening of October 31, 1958, when Narain Singh and his three nephews were irrigating their field, Bachan Singh diverted the flow of water into his own filed. Narain Singh and his nephews were thereupon enraged, and there was a quarrel between them and Bachan Singh. Narain Singh and his nephews made an attack upon Bachan Singh with a kaholi, caused him serious injuries. According to the prosecution, Mehar Singh at the time of the assault was armed with a spear, Pakhar Singh with a Kaholi, Mewa Singh with a salang and Narain Singh with a stick. A Complaint was lodged about the assault with the Notice, and Bachan Singh was removed to the Civil Hospital, Ludhiana. The Sub Inspector of Police investigating the case recorded the statement of Bachan Singh, and a First Class Magistrate of Ludhiana recorded his declaration on the evening of November 2, 1958. Bachan Singh died on November 3, 1958. Narain Singh and his nephwes were then prosecuted before the Court of Session Ludhiana for the offence of murder. At the trial, Narain 681 Singh pleaded that he bad acted in exercise of the right of self defence and had caused injuries 'to Bachan Singh because the latter had thrown him down and had attempted to strangulate him. His statement in the Court of Session, on which he was convicted, was as follows : "The correct facts are that when I objected to the deceased cutting the nakka he caught hold of me and threw me on the ground. I was alone at the time. The other three co accused were not with me. After I had fallen on the ground the deceased attempted to strangulate me. I was then wearing small kirpan. I unsheathed it and used it in self defence causing a couple of injuries to the deceased on the alarm raised by me, Mehar Singh (my co accused) who was coming from the khal nearby, came to the spot and rescued me. He was armless and did not cause any injury to the deceased. I did not carry any stick but was wearing a small kirpan as usual. " Pakhar Singh and Mews Singh denied their presence at the scene of offence. Mehar Singh claimed that he was present at the scene, and he had tried to intervene and separate Bachan Singh and Narain Singh. Narain Singh and Mehar Singh relied upon the circumstance that they also bad injuries on their person which were noticed when they were medically examined. Narain Singh had six contused injuries and Mehr Singh had one incised injury and four abraded contusions. Before the Court of Session, Jagir Singh a witness for the prosecution made important variations in his story as originally related by him in his complaint at the police station. Kaka, who, it was claimed by the prosecution, was an eye witness, did not support the case for the prosecution. Hakku, another witness, was 682 not examined by the prosecutor, but was merely " 'tendered for cross examination". One Johri whose name was not mentioned in the complaint was also examined by the prosecutor. Two statements of Bachan Singh which were in view of his ' death admissible as dying declarations one recorded by the Investigating Officer and the other by the First Class Magistrate, Ludhiana were also tendered in evidence. The Sessions Judge held that the evidence of Jagir Singh was unreliable and That Johri could not have witnessed the assault. The two dying declarations were. in the view of the Judge, unreliable, for Bachan Singh had before he made the statements ample opportunity to know how the investigation was proceeding, had consulted Jagir Singh and had opportunity of discussing with him the case to be set up. Again, the story set up in the dying declarations furnished no explanation of the injuries received by Narain Singh and Mehar Singh. The medical evidence was also not helpful to the case for the prosecution. Bachan Singh had four incised injuries on his person, three on the cheat, and the fourth on the ,,ring finger left side". None of these injuries could be caused with a salang or a kaholi: the incised injuries could be caused by a spear and also by kirpan. Therefore in the view of the Sessions Judge the oral and other evidence was insufficient to sustain the charge of .murder against the three nephews of Narain Singh. Relying, however, upon the statement made by Narain Singh he held that the injuries on the person of Bachan Singh were caused by the former. He observed that the marks of injuries on the person of Narain Singh "bore out his suggestion that Bachan Singh had obtained strong hold upon him with a view to strangulate him". ' But there was not an iota of evidence on the record to ' prove that Bachan Singh had attempted to strangulate him". In the view of the Sessions Judge 683 there being no marks of injury, however slight, around the throat of Narain Singh and that he had not made a complaint to the medical officer who had examined him shortly after the assault "it was apparent that Narain Singh could have no apprehension of death or grievous hurt. x x x x x The only apprehension which Narain Singh had was simple hurt and this certainly gave him no right to take the life of Bachan Singh. " The Sessions Judge, therefore, hold that Narain Singh was justified in resisting Bachan Singh in exercise of the right of defence of person, but was not justified in using " 'the kirpan in such a. manner and with such force as to cause the death of Bachan Singh by piercing one of his lungs". The Sessions Judge accordingly acquitted Mewa Singh, , Mehar Singh and Pakhar Singh of the offence charged and convicted Narain Singh of the offence punishable under a. 304 Part Tr of the Indian Penal (ode and sentenced him to suffer rigorous imprisonment for five years. Against the order of conviction and sentence Narain Singh preferred an appeal to the High Court of Punjab. The High Court agreed with the view of the Sessions Court that the evidence was insufficient to establish the case for the prosecution, the High Court also held that the Sessions Court was justified in relying upon the statement made by Narain Singh under section 342 of the Code of Criminal Procedure and in holding that Narain Singh "had exceeded the right of self defence by causing the death of Bachan Singh by stabbing him with a kirpan. had committed an off nee punishable under s 304 part 11 Indian Penal Code. The High Court, however, reduced the sentence imposed upon Narain Singh to rigorous imprisonment for 3 years and subject to that modification dismissed the 684 appeal against the order of conviction and sentence. With special leave Narain Singh had appealed to this Court. The case for the prosecution was that Narain Singh, when he participated in the assault on Bachan Singh, was armed with a stick. but the evidence of the witnesses about the assault on Bachan Singh has not been accepted by the Court of Session and the High Court. In the view of the Courts injuries on the person of Bachan Singh were caused by Narain Singh by striking him with a kirpan, and the three nephews of Narain Singh had not participated in the assault. In finding Narain Singh guilty of the offence under s.304 Part II for causing injuries to the victim Bachan Singh with a, kirpan the Court of Session and the High Court have accepted a case which was not the case of the prosecution, but have relied only upon the statement Narain Singh made in his defence. Under s.342 of the Code of Criminal Procedure by the first subsection, insofar as it is meterial, the Court may at any stage of the enquiry or trial and after the witnesses for the prosecution have been examined and before the accused is called upon for his defence shall put questions to the accused person for the purpose of enabling him to explain any circumstance appearing in the evidence against him. Examination under s.342 is primarily to be directed to those matters on which evidence has been led for the prosecution to ascertain from the accused his version or explanation if any, of the incident which forms the subject matter of the charge and his defence. By sub section (3), the answers given by the accused may "be taken into consideration" at the enquiry or the trial. If the accused person in his examination under 9.342 confesses to the commission of the offence charged against him the court may, relying, upon that confession, proceed to convict him, but if he does not confess and in 685 explaining circumstance appearing in the evidence against him sets up his own version and seeks to explain his conduct pleading that he has committed no offence, the statement of the accused can only be taken into consideration in its entirety. It is not open to the Court to dissect the statement and to pick out a part of the statement which may be incriminative, and then to examine whether the explanation furnished by the accused for his conduct is supported by the evidence on the record. If the accused admits to have done an act which would but for the explanation furnished by him be an offence, the admission cannot be used against him divorced from the explanation. The courts below were of the view that the prosecution evidence as it stood, was insufficient to bring home the charge against Narain Singh and his nephews. The case for the prosecution that Narain Singh was armed with a stick and joined in the assault upon Bachan Singh was sought to be established by affirmative evidence. The case failed because the evidence in support of the case was unreliable. Narain Singh admitted that he had caused injuries to Bachan Singh with a Kirpan carried by him, but he explained that lie caused the injuries when he was thrown down and Bhchan Singh was attempting to strangulate him. There can be no doubt that if a person reasonably apprehends that his assailant is attempting to strangulate him, exercise of the right of defence of person extends even to causing death of the assailant. Narain Singh pleaded that he had fallen down and Bachan Singh attempted to strangulate him and therefore he caused injuries to Bachan Singh in exercise of the right of self defence. This plea had to be considered as a composite plea. , it was not open the court to investigate whether Narain Singh could have reasonably apprehended such injury to 686 himself as justified him in causing the death of Bach in Singh. Where a person accused of committing an offence sets up at his trial a plea that he is protected by one of the exceptions, general or special, in the Indian Penal Code, or any other law defining the offence the burden of proving the exception undoubtedly lies upon him. But this burden is only undertaken by the accused if the prosecution case establishes that in the absence of such a plea he would be guilty of the offence charged. The prosecution case, however, did not by reliable evidence establish affirmatively that Narain Singh had done any act which rendered him liable for the offence of murder. His responsibility, if any, arose only out of the plea raised by him: if the plea .amounted to a confession of guilt the court could convict him relying upon that plea, but if it amounted to admission of facts and raised a plea of justi fiction, the court could not proceed to deal with the case as if the admission of facts which were not part of the prosecution case was true, and the evidence did not warrant the plea of justification. The courts below were, therefore, in our judgment, in error in convicting Narain Singh of the offence under s.304 Part II of the Indian Penal Code. Appeal allowed.

IN-Abs

The appellant and three others 'were charged with the murder of B. The prosecution case was that there was a dispute between B and the accused over diverting the flow of water in the fields, that the appellant armed with a stick and the others with spear, kaholi and salang assaulted B and B died of the injuries infliced. In his statement under section 342 Code of Criminal Procedure the appelant stated that B had thrown him on the ground and had 679 attempted to strangulate him whereupon the took out his kirpan and struck B in self defence. The Sessions Judge disbelieved the prosecution evidence and acquitted the three other accused persons ; but he convicted the appellant under s.304 Part 11 Indian Penal Code relying on a part of his statement in which he admitted having strick blows but rejecting the part that B attempted to strangulate him. He had that the only apprehension which the appellant could have was of simple hurt which did not give him the right to cause the death of B. On appeal the High Court confirmed the conviction. Held, that the conviction of the appellant under s.304 Part 11 Indian Penal Code could not it and. In convicting the appellant the courts below had accepted A case which was not the case of the prosecution but had relied only upon a part of the statement of the appellant made in his defence. It was not open to the courts to dissect the statement and to pick out the incriminating part and to reject the excul patory part on the ground that it was not supported by evidence. If in his statement the accused confesses to the commission of the offence charged he may be convicted upon that confession, but if he does not confess and sets up his own version and seeks to explain his conduct pleading that he has committed no offence, the statement can only be taken into consideration in its entirety. Taking the statement of the appellant in its entirety, he had an apprehension that B was attempting to strangulate him and this gave him the right of defence of person extending even to causing the death of the assailant.

iminal Appeal No. 87 of 1962. Appeal by special leave from the judgment and order dated February 21, 1962, of the Punjab High Court in Cr. A. No. 1231 of 1961 and Murder Reference No. 98 of 1961. ' 587 Purushottam Trikamdas, C. L. Sareen and R. L. Kohli, for the appellants. N.S. Bindra and P. D. Menon, for the respondent. August 10. The two appellants Gurcharan Singh and Surjit Singh along with three others, Baland Singh, Daljit Singh and Ajit singh, were tried before the 2nd Addl. Sessions Judge Ferozepore for offences under Section 148 and section 302/149 I.P.C. The prosecution case against these five persons was that on or about the 18th May, 1961, they formed an unlawful assembly at the village Jhote with the common object of killing Arjan Singh, Sukhjit Singh Gurdial Singh and Piara Singh alias Balo, and that in prosecution of the said common object, they committed the offence of rioting when they were armed with deadly weapons. That is the essence of the charge under section 148. It was further alleged that on the same day and at the same time and place the said members of the unlawful assembly carried out its unlawful object and in so doing, the appellant Gurcharan Singh murdered Gurdial Singh and Sukhjit Singh, while the appellant Surjit Singh murdered Arjan singh and Piara Singh. That is how all the five accused persons were charged under section 302/149 of the Indian Penal Code. The trial Judge held that the charges against Daljit Singh had not been proved beyond a reasonable doubt and so, according to him, the prosecution case under section 148 had not been proved and that charge under section 149 bad not been sustained. In regard to the four other accused persons, he held that they were guilty under section 302/34 I.P.C. Having thus convicted them of the said offence, the learned Judge sentenced Gurcharan Singh, Baland Singh 588 and Surjit Singh to death and directed that Ajit Sigh should suffer imprisonment for life. The sentence of death imposed by the learned trial Judge was submitted to the Punjab High Court for confirmation, while all the four convicted persons preferred an appeal challenging their convictions and sentences imposed on them. The High Court considered both the matters together and has come to the conclusion that the charge under section 302/34 had not been proved against Baland Singh and Ajit Singh. That is why the said two accused persons have been acquitted, whereas the conviction of the appellants Gurcharan Singh and Surjit Singh as well as the sentence of death imposed on them have been confirmed. It is against this order that the two appellants have come to this Court by special leave. The incident which has given rise to the present criminal proceedings against the appellants took place on May 18, 1961, and as a result, four persons have been murdered they are Arjan Singh, Sukhjit Singh. Gurdial Singh and Piara Singh. The prosecution case is that on May 18, 1961, at about 6.30 A.M., the appellant Gurcharan Singh was pro ceeding to the house of his friend, Ajit Singh. GurCharan Singh, Surjit Singh and Daljit Singh are the sons of Baland Singh. Whilst Gurcharan Singh was thus proceeding to the house of Ajit Singh, he had to pass by the house of Saudagar Singh. Saudagar Singh objected to Gurcharan Singh paying by his house and that led to an altercation. In this altercation, Saudagar Singh and his two sow Kulwant Singh and Darshan Singh inflicted some injuries on Gurcharan Singh as well as on Ajit Singh who came on the scene. Gurcharan Singh and Ajit Singh thereupon ran away. This is the first incident which took place on that day. About half an hour after this incident, another incident took place. It appears that the five 589 accused persons got together and wanted to avenge the beating given by Saudagar Singh and his sons to Gurcharan Singh and Ajit Singh. Gurcharan Singh and Daljit Singh armed themselves with gandasas, Surjit Singh carried a gun for which his Gaj brother Daljit Singh had a licence, Ajit Singh carried a 'dang ', while Baland Singh, the appellants ' father, headed the party, but was not armed. This partly came across Arjan Singh near the house of Jarnail Singh. It appears that Arjan Singh was afraid of these men and so, he used to carry with him a licensed gun. As soon as Arjan Singh was sighted, Baland Singh told his sons and Ajit Singh to assault him, and the party began to assault Arjan Singh. A gandasa blow was given on his forearm as a result of which Arjan Singh lost his grip on the gun and it fell down. Immediately thereafter, Gurcharan Singh picked it up. Arjan Singh then implored his assailants not to beat him and offered to go to the Gurdwara to take an oath that the allegation against him was untrue. It is suggested that Baland Singh was satisfied with this offer and so persuaded his sons and their friend not to harass him any more. This is the second incident which took place as a result of the first incident. It is the epilogue of the second incident which followed soon after that led to the murder of the four victims. It appears in evidence that while Arjan Singh was imploring his assailants not to attack him and soon after the attack stopped, Gurdev Singh, the son of Arjan Singh, happened to come, out of the Gurdwara and saw his father facing a dangerous crowd. So, he ran to his house and asked his brothers to come and help him to rescue their father. While Arjan Singh was returning to his house, on the way. he met his sons Gurdev Singh, Gurdial Singh and Gurcharan Singh who had armed themselves, and were. proceeding towards 590 the spot where he had been encircled by his opponents. At that time, Rekha Ram also come on the spot and he was being followed by his brother Piara. Sukhjit Singh and Jagjit Singh also came on the scene. Arjan Singh told them all to go back and assured them that his offer to take the oath in the Gurdwara had pacified his opponents and he was no longer in any difficult situation. As a result of this statement of Arjan Singh, the persons who were going to the spot to help him desisted from going any further. At that time, all the five accused persons spotted Arjan Singh 's sons coming to the spot and that infuriated Baland Singh. He then rene wed his exhortation to his companions and asked them to finish their enemies Soon thereafter, Gurcharan Singh fired a shot from the gun which hit Gurdial Singh on his forehead and in consequence, he fell down dead on the spot. Surjit Singh fired two shots in quick succession which hit Arjan Singh and killed him. Gurcharan Singh fired another shot which hit Sukhjit Singh who fell down with serious injuries. Surjit Singh again fired another shot which hit Piara and. he fell down dead on the spot. All the five accused persons then indulged in lalkaras and abused their enemies. This occurrence was witnessed by Gurdev Singh (P.W. 2), Sukhdev Singh (P.W. 3, Gurcharan Singh (P.W. 4), Rakha Ram (p.w.5) and Jagjit Singh (P.W. 6). sukhjit Singh who lay seriously injured was taken to the hospital at Ferozepure for medical treatment, but not withstanding the treatment, he succumbed to his injuries. I at, in brief, is the prosecution case against the appellants. The prosecution attempted to prove its case by examining the eye witnesses, Gurdev Singh, Sukhdev Singh, Gurcharan Singh and Rekha Ram, Jagjit Singh was tendered for cross examination. The defence admitted that Guroharan Singh and Ajit Singh were present on the scene and,that 591 Gurcharan Singh fired twice from a gun, but that was in self defence. The remaining three accused persons denied their presence on the scene of the offence and alleged that they had been falsely implicated. It does appear that there was bitter enmity between the two parties for several years past. Criminal proceedings had taken place between them and there is no doubt ' about the existence of hostility between them. Sometime before this occurrence, Kulwant Singh (P.W. 7) was arrested in an excise case for running a still, and in that case, the appellant Gurcharan Singh was a prosecution witness. Besides, the appellant Gurcharan Singh had opposed Arjan Singh for the office of Sarpaneh but had failed. The defence, therefore, was that it is out of enmity and hostility that the three accused persons who were not present had been falsely involved in this case and that in respect of Gurcharan Singh and Ajit Singh who were present, the truth was that they had been attacked by the persons belonging to the party of Arjan Singh, and Gurcharan, Singh had fired in exercise of his right of private defeence. The trial Judge examined the evidence adduced before him, considered the arguments raised by the defence and came to the conclusion that the charge of murder under section 302/34 had been proved against Baland Singh, Gurcharan Singh, Surjit Singh and Ajit Singh. The High Court, in substance. has agreed with the conclusions of the trial Court in respect of the prosecution case against the two appellants Gurcharan Singh and Surjit Singh. It has, however held that the evidence about the exhortation alleged to have been given by Baland Singh was not proved by satisfactory evidence and the main charge against Baland Singh and Ajit Singh had not been proved beyond a reasonable doubt. It is on this 592 finding that the said two accused persons were acquitted, whereas the appellants ' conviction 'and sentence have been confirmed. Mr. Purushotam for the appellants contends that the judgment of the High Court suffers from some serious infirmities and so, he argues that in the interest of justice, we ought to examine the evidence ourselves. It is, therefore, necessary to examine the broad arguments on which the judgment under appeal has been attacked by Mr. Purushotam. The first point which has been urged before us is that the High court has not properly considered the pies of self defence raised by Gurcharan Singh, and it is pointed out that in rejecting the said theory, the High Court had relied on a prior statement of Gurcharan Singh which had been excluded from evidence by the trial Judge. It appears that Gurcharan Singh had filed a complaint against the prosecution witnesses and that complaint was admitted at the trial as Exbt. The said document first describes the injuries inflicted on Gurcharan Singh and then proceeds to give a detailed account of the incident which led to the said injuries. This document was proved by Sub Inspector Udham Singh by the defence in cross examination. When this document was tendered, the part of the document which referred to the injuries on Gurcharan Singh was marked and admitted in evidence. The remaining portion of the document was excluded. When the High Court considered the theory of self defence urged on behalf of Gurcharan Singh, it took the view that the said theory could not be accepted because it was inconsistent with Gurcharan Singh 's version about the incident contained in Exbt. Mr. Purushotam objects to this part of the judgment and we think, rightly. It is unfortunate that the attention of the High Court was not drawn to the fact that the portion of document DE on which it was basing its criticism against the defence theory 593 of self defence had not been admitted in evidence. That no doubt is a serious infirmity in the reasoning and so, Mr. Purushotam is entitled to say that the conclusion of the High Court on this part of the defence case cannot be accepted without examination of its merits by us. The other contention which Mr. Purushotam has raised before us is that in dealing with the case of Self defence, the High Court has not referred to the injuries on the person of Gurcharan Singh. The evidence adduced in the case shows that Gurcharan Singh had 13 injuries on his person, 12 of which were. contusions and one was a grievous hurt as disclosed by X ray. It was an injury on the foot and it may be that there was a fracture or a crack. Whether these injuries decisively helped the defence version or not is a different matter. The argument is that these injuries should have been considered by the High Court when it was called upon to decide the validity of the defence claim of the exercise of the right of private defence. There is some force even in this contention. Since we are satisfied that these two contentions are well founded, we have examined the plea of self defence ourselves and in that connection, we have considered the oral evidence adduced by the prosecution. It is true that Gurdev Singh and Gurcharan Singh can be said to be interested witnesses and in that sense, their evidence is the evidence of parti san witnesses and has to be carefully examined. On the other band, Sukhdev Singh and Rekha Ram are not shown to be hostile to the appellants and their evidence cannot, therefore, be characterised as partisan. It is true that Rekha Ram 's brother Piara has been murdered, but Piara has apparently died as a result of reckless shooting and it is not shown that either Piara was the enemy of the appellants or Rekha Ram is hostile to them. The attempt made 594 in the cross examination of Sukhdev Singh to show that he was related to the complainants ' party has failed, and so, Sukhdev Singh must be held to be disinterestedwitness. Purushotam fairly conceded that the account given by all these witnesses about the occurrence is consistent and cogent and the only criticism he had to make against that evidence was that it is partisan evidence. We have consi dered the whole of this evidence, and we are satisfied that the courts below were right in substantially accepting it against the appellants. If this evidence is believed, then the sequence of events that took place is clearly disclosed and that shows that the plea of self,defence urged by the appellant Gurcharan Singh cannot be accepted. Injuries on his person are of a minor character and they may have been inflicted while some of the victims may have beaten him with a stick. However that may be, having regard to the sequence of events, it is impossible to accede to the argument that Gurcharan Singh fired twice from the fire arm in order to save himself. In this connection, it is relevant to recall that the party of the appellants was armed with deadly weapons. Gurcharan Singh had picked up the gun which fell down from the hands of Arjan Singh and Surjit Singh had a gun for which his brother Daljit Singh had a licence. The others were armed with gandasas and similar deadly weapons. Therefore, when the incident took place, the two appellants were armed with fire arms and on the evidence which is believed) aggression proceeded from them and not from Arjan Singh or his friends. That also shows that the theory of self defence cannot be accepted. Therefore, though the High Court has not considered this point as well as it should have, and though a part of the reasoning 595 adopted by the High Court in dealing with this point suffers from the infirmity to which we have referred. in the result, its conclusion on this point seems to be right. Incidentally, it may be pointed out, that this plea of self defence was not seriously pressed before the High Court. That takes us to the next broad criticism made by Mr. Purushotam against the judgment of the High Court. It is urged that the High Court did not take into account the fact that Gurcharan Singh who had been charged under section 19 (f) of the Indian Arms Act has been acquitted by the same learned Sessions Judge who convicted him for the offence of murder under section 302/149. It appears that the prosecution case is that Gurcharan Singh produced the fire arm when he surrender and since he had no licence to keep a fire arm and indeed, the fire arm in question belonged to Arjan Singh, a charge under section 19(f) had been framed against him. The learned trial Judge believed the evidence of the two witnesses Puran Singh and Sohan Singh as well as the evidence of the Sub Inspector Udham Singh, and held that about 6.30 P.M. on May 18, 1961, Gurcharan Singh produced the fire arm. The evidence shows that Arjan Singh Sarpanch of Valtoha took Gurcharan Singh and Ajit Singh to Udham Singh and the two of them then surrendered. The document containing the memo, about this surrender has been duly proved (Ext.P.21). The trial Judge delivered his judgment in the principal case on November 18, 1961. It appears that on the same day, he delivered his judgment in the companion case in which Gurcharn Singh was charged under section 19(f) of the Indian Arms Act and held that the said charge had not been proved and so, he acquitted him of that charge. It may be conceded that in this judgment, the same evidence about the production 596 of the weapon by Gurucharan Singh has been dis believed. On these facts. Mr. Purushotam contends that this matter was argued before the High Court and it was urged that the finding of the trial Court in the principal case about the recovery of the weapon from Gurcharan Singh should not be accepted, and this argument has not been considered by the High Court. It would be noticed that this argument is based on the decision of. this Court in Pritam Singh vs State of Punjab(1). There is no doubt that if the order of acquittal under s.19(f) had been pronounced before the judgment in the principal case was delivered, then in the latter case the prosecution will not be entitled to contend that Gurcharan Singh was in illegal possession of the fire arm. This position cannot be and is not disputed. The question, however, still remains as to whether the judgment in the fire arm case was pronounced first or the judgment in the murder case was pronounced first. Mr. Purushotam frankly stated before us that he was not in a position to contend that the judgment on which he reliefs was pronounced in point of fact before the judgment in the murder case. The manner in which this judgment has been produced before this Court is very irregular. The judgment does not appear to have been filed in the High Court as it should have been if it was intended to rely upon it But the petition for special leave states that it was utilised for the purpose of raising the point in appeal before the High Court. This judgment was not filed before this Court along with the; petition for special leave. It has been tendered at a later stage when the index of papers was settled for inclusion in the paper book in this Court. In our opinion, this (1) A.I.R. (1956) S.C. 415. 597 method of producing this document is irregular. But apart from this, unless it is shown that the judgment on which the defence relies was pronounced first, no argument can be raised about the invalidity of the conclusion in the murder case that Gurcharan Singh surrendered the gun. Prima facie, the judgment in the murder case must have been delivered fir at. It is numbered as 88 and 93 of 1961, whereas the arms case is numbered as 89 and 94 of 1961. Therefore, we do not think it is open to the appellants to contend that the acquittal of Gurcharan Singh under a. 19(f) was prior to his conviction under s 302/149 and so, the finding that he surrendered the weapon should not be accepted. It is to be regretted that the same learned Judge should have rendered two inconsistent findings in two companion cases in judgments pronounced on the same day. This is a matter to which his attention ought to be drawn by the High Court. Though the point sought to be raised on the strength of this judgment cannot technically arise, we thought it necessary to examine the evidence about the production of the weapon ourselves. We have accordingly gone through the evidence of Puran Singh, Sohan Singh and Udham Singh and we have taken into account the fact that Gurcharan Singh was produced by Arjan Singh who is a Sarpanch of Valtoha. We feel no hesitation in holding that this evidence clearly establishes the fact that Gurcharan Singh produced the weapon, as disclosed by the production memo. In this connection, we may recall the fact that Gurcharan Singh in fact admitted that he had used a fire arm and had fired twice in self defence. He, did not admit that was the gun which was snatched from the hand of Arjan Singh ; but that is another matter. Therefore, the argument that the acquittal of Gurcharan Singh in arms case affects 598 the finding as to the surrender of the gun by him cannot be sustained. The last argument on which the judgment on the High Court was attacked by Mr. Purushotam arises from the fact that a ballistic expert has not been examined in this case. , It is urged that this ground was taken before this High Court and has not been considered by it. Petition for special leave makes a definite averment to that effect. As the argument was presented before us by Mr. Purushotam, it assumed that a report had been received from the ballistic expert, but that report had not been proved, because it was apprehended by the prosecution that it would destroy its case. There is no doubt that the two fire arms along with two empty cartridges were sent to the Scientific Laboratory. , Chandigarh (Ext. P. Z.) on June 28, 1961. Of the two guns which were sent for examination, one was used by Gurcharan Singh which he picked up as soon as it fell down from the hand of Arjan Singh and the other was used by Surjit Singh which was taken by him from Daljit Singh. It appears that Daljit Singh produced that gun and surrendered it on. May 27, 1961, i.e., nearly a week after the incident took place. Mr. Purushotam contended that since these weapons had been sent for examination by a ballistic expert and a report had been received, it was the duty of the prosecution to examine the ballistic expert. We were impressed by this argument, and so, we adjourned the hearing of the case and called upon Mr. Bindra to produce that report before us. Accordingly, the report has been produced and it shows that according to the expert opinion, out of the two fired cartridges sent for expert examination one had been fired from the right barrel of the gun contained in parcel No. 1 and the other had been fired from the left barrel of the same gun. in other words, this reports shows 'that two empties found near the scene of the offence had been fired 599 from the same gun. After this report was received and a copy of it was served on Mr. Purushotam, he fairly conceded that the said report was not inconsistent with the prosecution case, though he argued that it did not corroborate it either. This report has not been proved and no ballistic expert has been examined in this case. But having regard to the fact that the report prima facie is not inconsistent with the prosecution case, we do not see bow it would be urged that the failure of the prosecution to examine a ballistic expert is due to the 'fact that it was apprehended that the expert opinion would be against the prosecution case. That is the. only argument which it was alleged had been urged before the High Court but had not been considered by it. We are inclined to think that this argument may not have been pressed before the High Court and in any event, now it is conceded that there is no substance in that argument. That is why we do not think any useful purpose would be served by examining the ballistic expert at this stage. Whilst we are on this point, we may briefly indicate the nature of the prosecution case so far as the use of the guns is concerned. The appellant Gurcharan Singh has fired two shots, one of which killed Sukhjit Singh and the other Gurdial Singh. The appellant Surjit Singh had fired three shots, two at Arjan Singh and one at Piara. The evidence seems, to show that Surjit Singh loaded the gun once in the presence of the witnesses and whilst so doing, he put two cartridges in the gun and the spent cartridges in his pocket. The two empties which had been sent for expert examination were found and picked up on a thoroughfare in front of the house of Jarnail Singh. Apparently, the prosecution case is that these two cartridges had been fired by the appellant Gurcharan Singh from Arjan Singh gun picked up by him. In any event, the report shows that the two cartridges had been 600 fired from the same gun. That is why the failure to prove the report cannot be said to have prejudiced the appellants ' case at all. Mr. Purushotam, however, argued that a ballistic expert should have been examined in order to ascertain whether the gun surrendered by Daljit Singh had been used at all. But this argument is obviously untenable for the simple reason that this gun was surrendered more than a week after the incident and it takes imagination to realise that when Daljit Singh surrendered the gun, he must have cleaned it so as to remove any evidence about its user on the date of the incident. It has, however, been argued that in every case where an accused person is charged with having committed the offence of murder by a lethal weapon, it is the duty of the prosecution to prove by expert evidence that it was likely or at least possible for the injuries to have been caused with the weapon with which, and in the manner in which, they have been alleged to have been caused; and in support of this proposition, reliance has been placed on the decision of this court in Mohinder Sinqh vs The State (1). In that case, this court has held that where the prosecution case was that the accused shot the deceased with a gun, but it appeared likely that the injuries on the deceased were inflicted by a rifle and there was no evidence of a duly qualified expert to prove that the injuries were caused by a gun, and the nature of the injuries was also such that the photo must have been fired by more than one person and not by one person only, and there was no evidence to show that another person also shot, and the oral evidence was such which was not disinterested, the failure to examine an expert would be a serious infirmity in the prosecution case. It would be noticed that these observation were made in a case where the prosecution (1) ; 601 evidence suffered from serious infirmities and in determining the effect of 'these observations, it would not be fair or reasonable to forget the facts in respect of which they came to be made. These observations do not purport to lay down an inflexible rule that in every case where an accused person is charged with murder caused by a lethal weapon, the prosecution case can succeed in proving the charge only if an expert is examind. It is possible to imagine cases where the direct evidence is of such an unimpeachable character and the nature of the injuries disclosed by post mortem notes is so clearly consistent with the direct evidence that the examination of a ballistic expert may not be regarded as essential. Where the direct evidence is not satisfactory or disinterested or where the injuries are alleged to have been caused with a gun and they prima facie appear to have been inflicted by a rifle, undoubtedly the apparent inconsistency can be cured or the oral evidence can be corroborated by leading the evidence of a ballistic expert. In what cases the examination of a ballistic expert is essential for the proof of the prosecution case, must naturally depend upon the circumstances of each case. Therefore, we do not think that Mr. Purushotam is right in contending as a general proposition that in every case where a fire arm is alleged to have been used by an accused person, in addition to the direct evidence, prosecution must lead the evidence of a ballistic expert, however good the direct evidence may be and though on the record there may be no reason to doubt the said direct evidence. In the present case, no useful purpose could have been served by examining an expert for the purpose of showing that the gun had been used by Surjit Singh, because, as we have already pointed out, Daljit Singh took care to keep the gun with himself for over a week and. then surrendered it. It would be idle in ouch a case to suggest that it was 602 necessary for the prosecution to examine an expert even though it is extremely unlikely that traces of its use had not been removed by Daljit Singh before he surrendered it. Then, as to Gurcharan Singh, it is admitted that he fired twice and there is nothing on the record to show that the injuries disclosed by the post mortem notes and deposed to by the doctor could not have been caused by a gun which, it was alleged, belonged to Arjun Singh and which was picked up by Gurcharan Singh after it fell down from his hands. Therefore. , in the circumstances of this case, we do not think it would be possible to accept the plea that the failure of the prosecution to examine a ballistic expert has introduced a serious infirmity in the prosecution case. Even so, since we were satisfied that the judgment of the High Court suffered from some infirmities and was not as satisfactory as it should have been, we have read the evidence with Mr. Purushotam and heard his comments on it. Having carefully considered the said evidence, we see no reason to differ from the conclusion reached by the Courts below that broadly stated, the incident took place as it has been deposed to by the prosecution witnesses and that eliminates the exercise of the right of private defence by the appellants and establishes that they used their fire arms aggressively and thus committed the offence of murder under section 302/34. Before we part with this case, however, we would like to observe that in dealing with confirmation cases, the High Court should consider the evidence carefully and record its conclusions clearly after dealing with all the points urged before it by the counsel for the defence. In all criminal appeals, the findings recorded by the High Court bind the 603 parties and this Court is generally reluctant to interfere with them. This principle is usually followed even in confirmation cases, but it is hardly necessary to emphasise that in dealing with confirmation cases, judicial approach both at the trial and in appeal has to be careful and thorough and so,it is of utmost importance that no room should be left for any legitimate complaint by the defence that important points were argued before the High Court and were not considered by it. In the present appeal, we have come to the conclusion that some of the reasons given by the High Court are erroneous and apparently, some of the arguments urged before it have not been duly considered. That is why we had to go through the evidence for ourselves. In the result, the appeal fails and the order of confiction and sentences passed against the appellants is confirmed. Appeal dismissed.

IN-Abs

The two appellants G and S together with three others B, D and A were tried for the muder of four persons by shooting them with guns. Two spent cartridges were recovered at the spot; G produced a gun on the very day of occurrence and D produced a gun one week after the occurrence. The cartridges and guns were sent for examination to the ballistic expert but neither he nor his report was produced before the Sessions judge. The Sessions judge convicted the appellants and B and D but acquitted A. The same judge tried G under s.19(f) Arms Act for being in possession of the unlicensed gun which G had surrendered but acquitted him of the charge. On appeal against the conviction for murder the High Court confirmed the conviction and sentence of, death passed against the appellants but acquitted B and D. The appellants contended (i) that in view of his acquittal in the s.19(f) Arms Act case, the allegation of the recovery of the gun from G in the murder case could not be accepted, (ii) that the failure to produce the ballistic expert and his report had introduced a serious infirmity in the prosecution case, and (iii) that the High Court had failed to deal with these and other points raised before it. Held, that the conviction of the appellants was not vitiated by any infirmities. The acquittal of G in section 19(f) Arms Act case did not affect his conviction in the murder case. If the order of acquittal under s.19(f) had been pronounced before the judgment in the murder case, then in the latter case the prosecution could not contend that G was in illegal possession of the firearm. Though the two judgment were pronounced on the same day there was nothing to show that the judgment in the s.19(f) Arms Act case was pronounced earlier. On the other hand there were indications that it was pronounced 586 after the judgment in the murder case. The evidence clearly established that G bad produced the gun. Pritam Singh vs State of Punjab, A.I.R. 1956 section C. 415, referred to. There is no inflexible rule that in every case when a person is charged with murder caused by a firearm, the prosecution can succeed only by examining an expert to prove that the in juries could be caused by the weapon alleged to have been used. Where the direct evidence is not satisfactory or disinterested or where the injuries are alleged to have been caused with a gun and they prima facie appear to have been inflicted by a rifle, the apparent inconsistency can be cured or the oral evidence can be corroborated by the evidence of a ballistic expert. In the present case there was no necessity to examine an expert. Admittedly, G had fired twice and there was nothing to show that the injuries could not have been caused by the pun which was in his hands. D had kept the gun with him for a week before surrendering it and it was unlike that D had not removed tracks of its use. The report of the ballistic examiner, which was sent for by the Supreme Court did not help the defence and no inference could be drawn against the prosecution from its failure to produce it at the trial. Mohinder Singh vs The State, 1, referred to. In dealing with confirmation cases the High Court should consider the evidence carefully and record its conclusions clearly after dealing with all the points urged before it by the defence. In all criminal appeals before it the Supreme Court is reluctant to interfere with the findings of fact recorded by the High Court. In the present case some of the reasons given by the High Court were erroneous and some of the arguments urged before it were not duly considered and the Supreme Court had therefore to go into the evidence.

Civil Appeal No. 504 of 1961. Appeal by special leave from the judgment and order dated October 17, 1959, of the Bombay High Court at Nagpur in Special Civil Application No, 59 of 1959. M. C. Setalvad, Attorney General for India, F. J. Mohrir, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant, B. A. Masodkar Bishambar Lal and Ganpat Rai, for the respondent No. 3. 652 1962. August 21. The Judgment of the Court was delivered by DAS GUPTA, J. This appeal by special leave is.against an order of the High Court of Bombay at Nagpur rejecting an application made by this appellant under articles 226 and 227 of the Constitution for quashing an order made by the State Industrial Court, Nagpur, in the matter of dismissal by the appellant of its employee, Kundlik Tulsiram Bhosle. Kundik Tulairam Bhosle, who is the third respondent before us, was engaged as a temporary Motor driver in the service of the appellant. He was appointed on December 22, 1954, and it was expressly mentioned in the letter of appointment that until such time as he was confirmed by an order in writing his services were liable to be terminated at any time without notice or compensation and without assigning any reason. It was also stated that his case would be considered for confirmation one year after the date of appointment, 'provided a suitable permanent post fell vacant and his work was found satisfactory. By an order dated December 19, 1955, he was dismissed from service from December 20, 1955. It appears that before this step was taken by the management, Kundlik had been served with a charge sheet that on November 14, when he was in charge of a Bus as a driver he allowed Conductor Vyankati to carry five passengers without ticket and also allowed an unauthorized driver Sheikh Akbar to drive the Bus. The charge sheet was served on Kundlik on November 9,and on November 19, he submitted an explantion. 'According to the management an enquiry was thereafter held by the Depot Manager and the charges were found established. Accordingly he was dismissed. Kundlik, the employee made an application under s,16 of the C. P. & Berar Industrial Disputes Settlement Act, 1947, before the Labour Commissioner, Madhya Pradesh, Nagpur, alleging that his dismissal had not 653 been preceded by an enquiry, that he had been illegally dismissed and praying for reinstatement The appellant pleaded in its written statement that an enquiry had been properly held and that ,the order of dismissal was legally made. The Assistant Labour Commissioner, who has the powers of the Labour Commissioner, under s.16, dealt with the application. He was of opinion that there were "sufficient grounds to doubt whether an enquiry was really made by the Non.;applicant Management and if at all one was held, whether the applicant as an accused person, had the chance to put questions to the witnesses who deposed against him. " On the basis of the evidence adduced before him the Assistant Labour Commissioner came to the conclusion that the employee could, not be held guilty of the charge of allowing an unauthorised person to drive the vehicle as Sheikh Akbar was a fully licensed driver of the Company but that his guilt on the other charge that he carried five passengers without tickets was fully established. Accordingly he dismissed the applications. Against this order the employee moved the State Industrial Court, Nagpur. That Court felt that it would not be justified in interfering with the findings of the Labour Commissioner that no enquiry had been held by the Management and that the Assistant Labour Commissioner had no juris diction to hold an enquiry. In this view. the Court set aside the order of the Labour Commissioner and made an order directing reinstatement of the employee with back wages. It was against this order that the employer moved the High Court of Bombay on the ground that the Assistant Labour Commissioner and the State Industrial Court had erred in thinking that no enquiry had been held by the management and 654 that the said Industrial Court was also wrong in thinking that the Assistant Labour Commissioner had no jurisdiction to hold an enquiry himself. The High Court was of opinion that it could not exercise its powers under articles 226. and 227 of the Constitution to interfere with the finding of the Assistant Labour Commissioner and the Revisional Court that no enquiry had been held. Proceeding on that basis the High Court also agreed with the Industrial Court that the Assistant Labour Commissioner had no jurisdiction to hold the enquiry him self. The High Court concluded that there was no error in the decision of the Industrial Court and so refused the application. Three points have been urged on behalf of the appellant. The first is that it was not necessary in law to hold an enquiry before dismissing the employee in view of the terms of his employment and so in exercising jurisdiction under s 16 of the C. P. & Berar Industrial Disputes Settlement Act, the Industrial Court was not justified in interfering with the order of dismissal. Secondly, it was urged that in any case, if it be held that an enquiry by the management was necessary in law it should be proper to hold that the Assistant Labour Commissioner had jurisdiction to hold enquiry himself. Thirdly, it was urged that the view taken by the Assistant Labour Commissioner that no enquiry had been held was perverse and the High Court ought to have set aside that finding and given relief on the basis that an enquiry had been properly held. For a proper understanding of the first contention raised it is necessary to remember briefly the scheme of, the jurisdiction conferred by s.16. Section 16(1) authorises the State Government to make a reference to the ' Labour Commissioner in 655 disputes touching, inter alia, the dismissal of an employee. Section 16 (2) provides that if the Labour Commissioner finds "after such enquiry as may be prescribed" that the dismissal was "in contravention of any of the provisions of this Act or in contravention of the Standing orders made or sanctioned under the Act," he may give certain reliefs to the employee. According to the employee the order of dismissal was in contravention of the provisions of s.31 of the Act. That section provides inter alia that if any employer intends to effect a change in respect of any indus trial matter mentioned in Schedule 2 he shall, give 14 days ' notice of such intention in the prescribed form to the representative of the employees. Among the industrial matters mentioned in Schedule 2 is included 'dismissal of any employee except in accordance with law or ad provided for in the Standing Orders settled under s.30 of this Act. " Admittedly, the appellant concern had no standing order on the matter of dismissal. The question is whether the dismissal of the employee without an enquiry was "in accordance with law". If it is not, the Labour Commissioner would have jurisdiction. If the dismissal without such an enquiry be in accordance with law the Labour Commissioner would have no jurisdiction to interfere with the order of dismissal made by the management. The learned Attorney General argues that a dismissal made in accordance with the ordinary law of contract as between Master and Servant must be held to be "in accordance with law" within the meaning of this Schedule, and the fact that any industrial law as evolved by the courts in industrial adjudication under the Industrial Disputes Act should not colour our consideration of the matter. As at present advised, we are unable to see why the word ,law" in this phrase "in accordance with law" as used in Schedule 2 should be given a 656 restricted connotation so as to leave out industrial law as evolved by the courts. In dealing with industrial disputes under the Industrial Disputes Act and other similar legislation, Industrial Tribunals, Labour Courts, Appellate Tribunals and finally this Court have by a series of decisions laid down the law that even though under contract law, pure and simple, an employee may by liable to dismissal, without anything more, industrial adjudication would set aside the order of dismissal and direct reinstatement of the workman where dismissal was made without proper and fair enquiry by the management or where even if such enquiry had been held the decision on of the Enquring Officer Was perverse or the action of the management was mala fide or amounted to unfair labour practice or victimisation, subject to this that even where no enquiry had been held or the enquiry had not been properly held the employer would have an opportunity of establishing its case for the dismissal of the workman by adducing evidence before an Industrial Tribunal. It seems to us reasonable to think that all this body of law was well known to those who were responsible for enacting the C. P. & Berar Industrial Disputes Settlement Act, 1947, and that when they used the word "in accordance with law" in cl.3 of Schedule 2 of the Act they did not intend to exclude the law as settled by the Industrial Courts and this Court as regards where a dismissal would be set aside and reinstatement of the dismissed workman ordered. If the word "law" in Sch.2 include not only enacted or statutory law but also common law it is difficult to see why it would not include industrial law as it has been evolved by industrial decisions. We are therefore primafacie indeed to think that the first contention raised by the learned Attorney General that it was not necessary in law to hold an enquiry before dismissing this employee in view of the terms of his employment, cannot be accepted. At the same time we are inclined to think that there is considerable force in the second contention that even though a proper enquiry was not held by the management the Labour Commissioner had jurisdiction to hold an enquiry himself. This would prima facie be sufficient ground for holding that the Industrial Court was wrong in interfering with the order made by the Assistant Labour Commissioner and the High Court ought to have issued an appropriate writ to quash the order made by the Industrial Court. We are aware of the view taken by the Bombay High Court in Prov. Transp. Services vs Assist. Commr. (1) and Maroti vs Member, State Industrial Court (2) that the ', 'Law" in the phrase "in accordance. with law" in Schedule 2 does not include Industrial law. For the reasons mentioned above, we are inclined to think, with respect, that this view is not correct. We think it unnecessary however to discuss this matter more closely or record our definite and final conclusion on these questions as for the reasons to be presently stated we are of opinion that in any case the third ground raised on behalf of the appellant should succeed. As has already been stated the employee 's case was that no enquiry had been held by the management. This was denied by the management and it was alleged that an enquiry had been held. The management produced before the Assistant Labour Commissioner papers showing the evidence that was claimed to have ' been recorded during such enquiry. According to this record, three persons were examined during the enquiry the employee Kundalik himself, one Conductor Surewar and the Conductor Vyankati. At the bottom of (1) IX Bombay Law Reporter. (2) IX Bombay Law Reporter, 1422. 658 this, paper there is Kundalik 's signature and also Vyankati 's signature. The employee 's case was that his signature had been obtained on a blank paper and the document was then written up. In the absence of any evidence, it is impossible however for any reasonable judge of facts to persuade himself that the management would descend to this step of forgery for the purpose of getting rid of an employee in the position of Kundalik. The Assistant Labour Commissioner himself has not said that he believes the explanation of the employee that his signature had been obtained on a blank paper. He was however impressed by the fact that signature of Kandalik and Vyankati only were obtained and the Enquiring Officer 's signature doei not appear on the paper While it would certainly have been better if the Enquiring Officer had also, put his signature on the paper containing the statements, that omission cannot possibly be a ground for thinking that he did not hold the enquiry. The conclusion of the Assistant Labour Commissioner that "there are sufficient ground to doubt whether an enquiry was really made" must therefore be held to be perverse. It has often been pointed out by eminent judges that when it appears to an appellate court that no person properly instructed in law and acting judicially could have reached the particular decision the Court may proceed on the assumption that mis conception of law has been responsible for the wrong decision. The decision of the Assistant Labour Commissioner that no enquiry had been, held by the management amounts therefore, in our opinion, to a clear error in law. The Industrial Court erred in thinking that it was bound by this decision of the Labour Commissioner and this error on its part was, in our opinion, an error so apparent on the face of the record that was proper and reasonable for the High Court to correct that error. 659 On behalf of the respondent it was sought to be argued,that even if an enquiry had been held it has not been shown that the employee bad an opportunity of cross examining. witnesses or adducing evidence of his own. It is not open however for the learned Counsel to raise the question in view of the fact that the employee did not ever make any such case himself. His case, as already statated, was that no enquiry had been held at all. No alternative case that the enquiry held was improper because he had not been allowed to crossexamine witnesses or to adduce evidence was made by him. It does not appear that in the present proceedings the employee stated clearly that he wanted to lead evidence and was not allowed to do so or that he wanted to crosts examine witnesses and was denied an opportunity to do so. It is not open to him therefore to raise this question for the first time before us. We have accordingly come to the conclusion that the High Court ought to have held that there was a proper enquiry held against this employee and the management dismissed him on finding on that enquiry that the two charges against him had been fully proved, and that there was no reason to think that the management acted mala fide. The appellant was therefore entitled to an order for setting aside the order of the Industrial Court. Accordingly, we allow the appeal, set aside the order of the High Court and order that the appellant 's application under articles 226 and 227 of the Constitution be allowed and the order of the State Industrial Court be set aside and the order of the Assistant Labour Commissioner dismission the employee 's application be restored. There will be no order as to costs. Appeal allowed.

IN-Abs

The appellant employed as a temporary motor driver On the express condition that until such time as he was confirmed his services were liable to be terminated without notice or compensation and without assigning any reason. Sometime afterwards, the appellant served a charge sheet upon K and after holding an enquiry dismissed him. K made an application before the Labour Commissioner under section 16 C. P. for reinstatement alleging that the dismissal was illegal as it was not preceded by an enquiry. The Labour Commissioner was doubtful whether any enquiry was held by the appellant but on the basis of evidence adduced before him he held the charges proved and accordingly dismissed the application. On appeal, the Industrial Court held that the Labour Commissioner had no jurisdiction to hold the enquiry and made an order directing reinstatement of K with 651 back wages. Thereupon, the appellant filed a writ petition before the High Court for quashing the order of the Indus trial Court but the High Court dismissed the application. The appellant contended (i) that in view of the terms of em ployment the appellant could dismiss K without holding an enquiry, (ii) that the Labour Commissioner had jurisdiction to ' hold the equiry and (iii) that the finding of the Labour Commissioner that no enquiry had been held by the appellant was perverse and the High Court should have intervened, Held, that the finding that no enquiry had been held by the appellant before dismissing K was perverse and the appellant was entitled to a writ quashing the order of the Industrial Court and restoring that of the Labour Commissioner. The appellant had produced before the Labour Commissioner the evidence recorded at the enquiry which consisted of the statement of K himself signed by him and the statements of two conductors. The explanation of K that he had been made to sign on a blank paper was unacceptable. The finding of the Labour Commissioner amounted to a clear error of law, the industrial Court erred in thinking that it was bound by this finding and this error on its part was so apparent on the face of the record that it was proper and reasonable for the High Court to correct the error. Semble, Inspite of the terms of employment the appellant could not dismiss k without holding an enquiry and that even if the appellant had failed to hold the enquiry it was open to the Labour Commissioner to hold one.

Appeals Nos. 466 and 407 of 1960. Appeals by special leave 'from the judgment and decree dated October 30, 1956, of the former Nagpur High Court (Now Madhya Pradesh ' in F. A. Nos. 79 and 95 of 1949. C. K. Daphtary, Solicitor general of India, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants (in C. A. No. 406/60) and Respondent Nos, 12 and 14 to 17 (in C.A. No. 407/60). C. K. Daphtary, Solicitor General of India, J.B. Dadachanji, Rameshwar Nath, section N. Andley and P.L. Vohra, for the appellants (in C. A. No. 407/60) and respondent Nos. 1 to 3 (in C. A. No. 406/60). B. Sen and I. N. Shroff, for respondent Nos. 5 and 6 (in C. A. No. 406/60) and Respondent Nos. 1 and 2 (in C. A. No. 407 of 60). August 17. The Judgment of the Court was delivered by DAS GUPTA, J. This unfortunate litigation over a school which was started sixty years ago is one of the unhappy consequences of a feud that raised its ugly head in the Daudi Bohra Community many years ago. The school was started at Burhanpur by certain members of the Daudi Bohra Community of Burhanpur in the year 1902. It was named Madrasai Faize Hakimia and its object was to 625 impart religious and secular education to boys of the Daudi Bohra Community. Funds were collected for the purpose of the school from the members of that community for the maintenance of the school. In the year 1908 English classes were added to the school and in 1911 it was raised to the status of a High School under the name "Madrasai Hakimia and Coronation High School". Some time before this on May 24, 1909 one Daudi Bohra of Surat of the name of Abdul Hussain Abdullali Faizullabhai Muchhala made a was of certain properties in Bombay for the benefit and advantage of this school at Burhanpur. For the management of this, trust he appointed as trustees 12 gentlemen whom he mentioned as persons who had already been appointed trustees of the school. Only a few months after this another trust came into existence for the benefit of the same school, by a deed executed by six persons, all Daudi Bohras and all belonging to Burhanpur describing themselves as managers of the school. They created by the deed "Waqf and trust of their properties" which were mentioned in detail in the body of the deed. Eighty persons, including themselves were named as the trustees. It is further stated by the executants of the deed that all movable and immovable properties connected with the school shall vest in these trustees. It is provided in the deed that the trustees hall be entitled to govern, manage and administer the affairs of the school and shall have the power of framing rules and regulations from time to time for the benefit and efficient running of the school ; and also have the power to appoint new trustees from time to time in accordance with such rules and regulations. These trustees managed the school and also the properties belonging, to the school including the properties of which waqf was made in its favour by the trust deed of September 15, 1909 without any trouble till March 1917. In the course of such management 626 some of the original trust properties were converted into new properties by the trustees with the help of additional donations received from members of the Daudi Bohra Community. Trouble started in 1917 when some members of the Community started declaring that Mullaji Taher Saifuddin Saheb who, according to the main body of the Community was the Dai ul Mutalaq was not a Dai ul Mutalaq. About the same time four out of the 18 who were appointed by the trust deed of September 15, 1909 joined three other members of the Daudi Bohra Community of Burhanpur to form a society by the name of "Madrasai Hakimia & Coronation Society", the main purpose of which was to run the Hakimia & Coronation High and Primary Schools at Burhanpur. Among other objects were mentioned the development of branches of the school at different places ; opening library or libraries at suitable centres ; conducting newspaper or newspapers ; editing and compiling and publishing books. In the Memorandum of Association it was provided that 12 persons named therein would form the governing body to whom the management of the affairs of the society shall be entrusted. It was further provided that properties of each and every description acquired for or given to Madrasai Hakimia & Coronation High School shall be vested in this governing body. The 10 persons who have been impleaded as defendants 2 to 11 ,ire members of the governing, body of the Society. From the time they assumed the management of the Madrasai Hakimia & Coronation High School as members of the Society they have been administering the properties of which waqf was made in favour of the school by the six gentlemen who executed the trust deed of September 15, 1909. The suit out of which these appeals have arisen was started under s.92 of the Code of Civil Procedure 627 by 4 Daudi Bohra muslims who claimed to be interested in the trust properties set out in the Schedule to the plaint as members of the Daudi Bohra Community. Their main contention in the plaint is that the first defendant, the Hakimia Society and the 10 defendants, defendants Nos. 2 to 11 were not validly appointed trustees in respect of these trust properties. They prayed in this suit for a declaration that these defendants are not vaildly appointed trustees ; for their removal from the management of these properties and for an order on them to render accounts on their administration of these properties. There was also a prayer for the appointment of proper and fit persons for the management of these properties in accordance with the provisions of the trust deed of September 15, 1909, and for the framing of a scheme for the administration of the trust to which we shall latter refer as the Burhanpur Trust if it was necessary. The ground on which the plaint claimed that these defendants were not validly appointed trustees was that they had not been appointed as such in accordance with the terms and conditions of the trust deed of September 15, 1909. According to the plaint, whatever entrustment took place by the constitution of the Hakimia Society was invalid in law as the persons who got this registered as the Hakimia Society had no right in law to vest these properties in the Society or the members of the governing body of that Society. As further ground for removal of these defendants from the management of these properties the plaint set out a number of acts said to have been committed by them which it was alleged amounted to a breach of trust. One such act was the defendants ' action in throwing open the Madrasai Hakimia & Coronation High School to students other than the Daudi Bohra Community. 628 The trustees of the trust created by Mr. Muchhala were impleaded as defendants 12 to r7. No relief was however asked for against defendants 12 to 17. The main defences of defendants 1 to 11 were that they had been validly appointed trustees of the properties mentioned in the plaint under the trust deed. of September 1909 in accordance with the rules framed under the trust deed. They claimed that the properties of the institution vested in them and continued to remain vested after the registration of the Society. The allegation of breach of trust was denied. In that connection it was pleaded that the admission of non Bohra students did not amount to a breach of trust. A large number of issues were framed; but it would be unnecessary to consider most of these for the decision of ' these appeals. The principal question in controversy was whether defendants 1 to 11 were validly appointed trustees of the properties claimed as trust properties in the plaint. The second question was as regards the allegation of breach of trust. The first question was embodied in Issue No. 9 thus : "Are defendants 2 to 11 duly appointed trustees under the trust deed dated 15 9 1909 ?" The Trial Court answered this question in the affirmative. Relying on the provisions of Para. 6 of the trust deed (of September 1909) for the framing of rules and regulations for management of the school and properties connected with the school, the Court held that the persons who were already trustees under the trust deed "had the power by a resolution" passed by the majority of the trustees at their meeting to (i) appoint new trustees,. (ii) to appoint a charge of the trust properties, (iii) to get the body registered and, (iv) to frame rules and regulations such as were embodied in the Memorandum of, Association of the Hakimia Society. It pointed out 629 that a majority of the trustees present at a meeting had passed a resolution regarding registration of the society and regarding the rules and regulations embodied in the Memorandum of Association. This .registration in the opinion of the Court and the ' formation of the Committee of its management for the registered society was "one ' of the acts done by the trustees in the course of the managements 'and was in fact an act to secure more efficient management of the trust property and the trustees had the power to do it. The Court further held that while it was true that the property which existed at the time the resolution to register the society was passed was then vested in the trustees then existing, there was nothing to prevent those trustees " 'who under the exhibit P 3 had the power to frame rules and regulations for the management of the school and the properties connected with it, from providing for the vesting of the property in the members of the governing body by a rule framed by them at a meeting of the trustees held according to the terms of exhibit P 3. " According to the Court "the trustees had the power to vest the existing property in a governing body consisting of only some of them by a resolution passed at a meeting of trustees. " Accordingly the Court held that defendants 2. to II who were members of the governing body of the Hakimia Society must be held to be validly appointed trustees according to the terms of the trust deed of September 15, in respect of all the properties endowed for the benefit of the school with the exception of Muchhala trust property. The question of breach of trust by defendants 2 to 11. was embodied in Issue No. 6 in these words "(a) Did the governing body of the School use the trust properties (mentioned in the plaintiffs ' list M) or any income therefrom for fighting out litigation in 1925 (C. section No. 32 of 1925)? 630 (b) Did they misappropriate the trust property or income therefrom? (c) Was the litigation for the benefit of the school" '? Another part of the allegation of breach of trust finds place in Issue No. 11 (c) thus : "Is the admission of the students who do not belong to the Daudi Bohra Community inconsistent with the object of the trust"? The Trial Court answered questions 6 (a) and (e) in the negative i.e., it found that the governing body did use trust properties or income therefrom for fighting out litigation in C. section No. 32 of 1925 and that the litigation was not for the benefit of the school. Yet the Court answered Issue No. 6 (c) in the negative, finding that such expenditure did not amount to misappropriation. The basis of this last finding is that though some part of the trust fund was misapplied in meetings part of the expenses of litigation which was not for the benefit of the school the defendants 2 to 11 believed, though wrongly, that by this litigation they would be safeguarding the rights of boys who were receiving education in the school and so the litigation was in the interests of the institution. The Trial Court refused to make a declaration that defendants 1 to 11 were not validly appointed or for their removal. It however gave a decree for the removal of defendants 12 to 72 to 17, the trustees of the Muchhala Trust. Defendants 12 to 17 were further ordered to deposit into the Court the amount collected by them from the Muchhala trust property and were forbidden to recover any income from that property after the date of the decree. The defendants 2 to 11 were ordered to deposit the sum of Rs. 15,596 5 8 which they were found to have misapplied. It was ordered that if this amount was not paid by them they shall be removed and a: 631 scheme would be framed and a now trustee would be appointed to take charge of and manage the Madrasai Hakimia & Coronation High School and the properties endowed for its benefit. A Commissioner was directed to be appointed to ascertain the amount paid by the managers of the Muchhala trust property to the trustees defendents 12 to 17 and to determine the amount in the hands of these defendants. The same Commissioner was also directed to determine the amount spent by defendants 2 to 11 on religious education in accordance with the directions of the trust deed. The amount was found due to be paid to defendants 2 to 11 to be then deposited, by them in a recognised bank for the benefit to the school. Against this decree of the Trial Court the plaintiffs preferred an appeal to the High Court of Judicature at Nagpur. Another appeal was preferred by defendants 12 to 17 against the Trial Court 's judgment in so far as it directed their removal and gave other reliefs against them. Defendants 1,2,4,5, 9 and 10 filed cross objections in which they challenged the correctness of the Trial Court 's finding that there had been misapplication of the trust fund to the extent of Rs. 15,596 5 8 and Rs.900/ . The High Court dismissed both the appeals as also the cross objections and affirmed the decision of the Trial Court in full. Against the High Court 's decision two appeals have been filed before this Court one by the plaintiffs and the other by defendants 12, and 14 to 17 by special leave granted by this Court. The appeal by defendants 12, and 14 to 17 can be easily disposed of. Their contention is that the Trial Court as also the High Court erred in granting a decree against them when the plaintiffs in the suit had not asked for any such relief. In our 632 opinion, this contention must be accepted as correct. While it is true that these five appellants, Sheikh Abdul Kayum, Seth Abdulabhai, Mulla Abdulla Bhai, Mulla Mohammed, Bhai and Seth Hasanali along with Sheikh Fida Ali were impleaded as defendants no relief was sought against them nor was any averments made for that purpose. The prayers in para. 26 asked for a declaration that "defendants" ' are not validly appointed trustees, that ." 'defendants" maybe removed from the management of the properties and that the 'defendants" may be ordered to render an account of their administration of the trust properties. In para. 20 also the word "defendants" was used without any qualification when it was said that it was absolutely necessary in the interest of the said trust that the "defendants" are not properly appointed trustees of the said trust and that the "defendants" are trustees de sontort. But when the plaint is read as a whole, especially the statements in para. 19 it becomes quite clear that the plaintiffs in the present suit are seeking relief only against defendant, 1, Hakimia Society and the defendants Nos. 2 and 11, the members of the Society. The averments on which the case that defendants are not validly appointed trustees and are trustees de sontort are made. in respect only of these 11 defendants. The allegations of breach of trust are also made only against these defendants. Paragraph 10 puts the matter in clear perspective in these words : "The plaintiffs say that defendant No. 1 and defendants 2 to 11 who are the present members of defendant No.1 Society are liable ' to be removed on the following grounds. " This statement is followed by.an enumeration of six grounds all of which clearly and unmistakably refer only to these 11 defendants. Common sense and ordinary rules of grammar therefore compel us to read the words "defendants" 633 in Paras 20 and 26 to mean only defendants Nos. 1 to 11. We have no doubt therefore that the courts below misdirected themselves in thinking that the plaintiffs had asked for any relief as against defendants 12 to 17. It was stated before us that the Muchhala trust was outside the jurisdiction of the Trial Court and ' that even if any relief had been asked for against defendants 12 to 17 the Trial Court would not have been competent in law to give such relief. It is unnecessary for us to consider that aspect of the matter as it is abundantly clear that the plaintiffs did not ask for any relief against defendants 12 to 17 and for that reason alone the courts below acted illegally in passing any decree as against those defendants. In the two appeals filed respectively by the plaintiffs and defendants 12, and 14 to 17 the appellants are represented by the learned Solicitor General and it is conceded by him for the plaintiffs that the plaint did not claim any relief against defts. 12 to 17. The appeal No. 406 of 1960 which is by the original defendants 12 & 14 to 17 must therefore be allowed. The appeal which has been numbered as 407 of 1960 is by the four plaintiffs. The first contention raised on their behalf by the learned Solicitor Genera) is that the original trustees of the Burhanpur trust had no power in law to divest themselves of the property vested in them by the trust deed or to vest these properties in any society or its governing body, even though the society or the governing body might include some or all of the old trustees. In the present case it was contended in the plaint and urged before us on behalf of the appellants that the evidence would show that all the old trustees had not joined in the act of 634 formation of the Hakimia Society and transfering the property vested in them to the society or its members. Assuming, however, for the purpose of the present question that what was done should be deemed in law to be the act. of the entire old body of the trustees, even so, the learned Counsel argues, the act had no legal validity and did not produce in law the consequence of constituting the Hakimia Society or its members trustees in place of the old trustees. In our judgment, this contention must succeed. There cannot, in our opinion, be any doubt about the correctness of the legal position that trustees cannot transfer their duties, functions and powers to some other body of men and create them trustees in their own place unless this is clearly permitted by the trust deed, or agreed to by the entire body of beneficiaries. A person who is appointed a trustee is not bound to accept the trust, but having once entered upon the trust he cannot renounce the duties and liabilities except with the permission of the Court or with the consent of the beneficiaries or by the authority of the trust deed itself. Nor can a trustee delegate his office or any of his functions except in some specified cases, The rules against renunciation of the trust by a trustee and against delegation of his functions by a trustee are embodied, in respect of trusts to which the Indian Trusts Act applies, in sa. 46 and 47 of that Act. These sections run thus "46, A trustee who has accepted the trust can not afterwards renonce it except (a) with the permission of a principal Civil Court of Original Jurisdiction, or(b) if the beneficiary is competent to contract, with his consent, or (c) by virtue of a special power in the instrument of trust. 635 47. A trustee cannot delegate his office or any of his duties either to a co trustee or to a stranger, unless (a) the instrument of trust so provides, or(b) the delegation is in the regular course of business, or (c) the delegation is necessary, or (d) the beneficiary, being competent to contract, consents to the delegation. " It is true that section I of the Indian Trusts Act makes provisions of the Act inapplicable to public or private religious or charitable endowments; and so, these sections may not in terms apply to the trust now in question. These sections however embody nothing more or less than the principles which have been applied to all trusts in all countries. The principle of the rule against delegation with which we are concerned in the present case, is clear; a fiduciary relationship having been created, it is against the interests of society in general that such relationship should be allowed to be terminated unlilaterally. That is why the law does not permit delegation by a trustee of his functions, except in cases of necessity or with the consent of the beneficiary or the authority of the trust deed itself; apart from delegation "in the regular course of business", that is, all such functions which a prudent man of business would ordinarily delegate in connection with his own affairs. What we have got in the present case is not delegation of some functions only, but delegation of all functions and of all powers and is nothing short of abdication in favour of a new body of men. Necessarily there is also the attempt by the old trustees to divest themselves of all properties vested in them by the settlor and vesting them in another body of persons. We know of no principle of law and of no authority which permits such abdication of trust in favour of another body of persons. 636 In the deed itself there is no thing which contemplates or allows such an abdication and the substitution of the old trustees by a new body of trustees. It is necessary in this connection to consider the terms of cl.5 of the trust deed, That clause is in these words: "5. All the aforesaid trustees 3hall be entitled to govern, manage and administer the affairs of the school above. These trustees shall have the power of framing rules and regulations from time to time for the benefit and the efficient running of the school, and they shall have the power to appoint new trustees from time to time in accordance with the rules and regulations on behalf hereof. All the movable and immovable properties connected with the said school shall come to vest in the trustees and they shall be managed and administered in accordance with the rules and regulations framed on that behalf. The trustees for the time being shall have the power to alter and cancel the rules and regulations and to frame new ones instead thereof at the time when necessary. The treasurer shall have the power to open the cash account in some reliable bank and he shall always arrange for cash dealings to the benefit of the said school in accordance with the holy law of Islam. (Shariat). " The provisions for the appointment of new trustees cannot by any stretch of imagination be hold to mean the substitution of the old body of trustees by a new body. That provision only permits the old trustees to add to their number. Nor does the power to frame rules and regulations for the benefit and efficient running of the school authorise the trustees to give up the management of the school themselves or to divest themselves of the 637 properties entrusted to them by the trust deed and vest them in other persons. We are satisfied therefore that cl.5 of the trust deed does not in any manner authorise the trustees appointed by deed to abdicat in favour of anthor body of persons or to constitute that body as trustees in their own place. There is no question here also of the beneficiary, i.e., the school consenting to such abdication. There is therefore no escape from the conclusion that the act of the trustees, who were appointed by the trust deed, in handing over the management of the school to the Hakimia Society and the properties of the school to the members of the governing body of the Hakima Society was illegal and void in law. The members of the Society or the members of the governing body did not therefore be. come trustees in respect of the properties which are covered by the Burbanpur trust. This position in law is not seriously disputed by Mr. Son, who appeared before us on behalf of the respondents. He has however taken before us a noval line for suporting the decision of the courts below. He has tried to persuade us that the trust deed of September 1909 creates a trust only in respect of the properties that belonged to the six persons who executed the trust deed. These properties have been set out in cls. 7 to 12 of the deed. This deed therefore has not created any trust in respect of such of the properties mentioned in the plaint which do not fall within the properties mentioned in these clauses of the trust deed. As regards cl.5 of the trust deed which has been set out above and which states that " 'All the movable and immovable properties connected with the said school shall come to vest in the trustees," the learned Counsel states that the six settlors who executed this trust deed of September 1909 have not been shown to have bad any title to these 638 movable and immovable properties connected with the school. The school, argues the learned Counsel, is merely a beneficiary of the trust and the properties of the school do not become trust properties entrusted to these trustees merely because the settlors have createated a trust in respect of other properties. There is no question therefore of any property other than the properties mentioned in Paras. 7 to 12 of the deed having been vested in the trustees appointed by the deed, or their divesting themselves of the same. It is only in so far as the defendants 1 to 11 claim to be the trustees of the properties mentioned in cls. 7 to 12 of this deed that they can be considered to be not validly appointed trustees. Mr. Sen submits that his clients do not claim to be trustees in respect of these properties, viz., those which are mentioned in cls. 7 to 12 of the deed. In so far as they manage these properties an order, may be made against them removing them from the management of these and they may be asked to render accounts in respect of these properties, only. In respect of other properties which according to Mr. Sen are the properties belongining to the beneficiary school, however, no order could properly be made, as they are outside the Burhanpur trust that came into existence by the trust deed of September 1909. The argument appears attractive at first sight and even plausible. Unfortunately, however, for the respondents, this case which their Counsel now seeks to make was never their case in the courts below. Far from saying that some of the properties mentioned in the plaint as trust properties of the Burhanpur trust are not in fact covered by the trust deed, these respondents have all along made the definite case that they were validly appointed trustees of those properties in accordance with the trust deed of September, 1909. Their case in this matter may 639 best be described in the words used in Para. 4 of the written statement thus "It is admitted that on or about 19th March, 1917, seven persons signed a memorandum of Association and registered themselves as members of the Society under Act XXI of 1860. Defendant says that all these persons were the trustees and in the management of be trust properties under trust deed dated 15 9 1909 and were either appointed under that trust or under the rules framed thereunder, and in whom the properties of the institution vested and the same continued to be vested after the registration of the Society. " This paragraph unambiguously accepts the plaintiffs ' case that all the properties specified in the Schedule M attached to the plaint are properties covered by the trust in question and it pleads that defendants 2 to ' 11 are validly appointed trustees of the said trust. The Judgment of the Trial Court and the High Court also clearly show that before them, these defendants claimed to be trustees validly appointed in accordance with the trust deed of September 1909 of all the properties that were mentioned as trust properties of that deed in the plaint. Nothing appears to have been pleaded either in the written statement or at the trial or during the arguments that the settlors of this deed of September 1909 could not create a trust in respect of "all the movable and immovable properties connected with the said school", as those properties ' did not belong to them. On the contrary. the respondents claimed all along to have become trustees in respect of. not only of the properties mentioned in cls. 7 to 12 of the deed but also of all other properties of the school, on the strength of this very trust deed, Mr. Sen 's 640 contention that some items of the properties mentioned in the plaint as trust properties covered by the trust deed of September 15, 1909 were not so covered cannot therefore be accepted, We find it established therefore that defendants 1 to 11 were not validly appointed trustees in respect of the trust properties mentioned in the plaint. Their possession and management of these properties must therefore be held to be only in the character of trustee de sontort. They are liable there fore to account for their entire period of management. From the very fact that they have no legal right to remain in possession of the trust properties, not having been validly appointed as trustees, it is equally clear that the plaintiffs are entitled to a decree that those defendants 1 to 11 be removed from the management of the properties. The learned Solicitor General challenged the correctness of the findings of the courts below that these defendants (defendants 1 to 11 ) did not by their misapplication of trust funds to the extent of Rs. 15,596 5 8 and Rs. 9001 commit misappropriation and also that the admission of students who did not belong to the Daudi Bohra Community was not inconsistent with the object of the trust, We think it unnecessary however to consider these matters inasmuch as even if these findings of the courts below are correct the plaintiffs are entitled to the reliefs they have asked for in this suit. Besides the amount of Rs. 15,000/ and odd has been already paid by defendants 2 to 11 under the decree of the Trial Courts. It is necessary to mention the fact that an assurance was given to by the learned Solicitor General that in any case the interest of the non Bohra students will be safeguarded in this school. Accordingly, we allow the appeal and order that it be declared that the defendants 1 to 11 are 641 not validly appointed trustees in respect of the trust properties mentioned in the list M annexed to the plaint ; that the defendants be removed from the management of these properties and they be ordered to render an account of their administration of these properties. Necessary directions for the rendering of accounts will be made by the Trial Court and in doing so, credit will be given to defendants 2 to 11 of Rs. 15,000/and odd already paid by them. The plaintiffs appellants admit that it is not necessary to frame any scheme for the administration of the trust and we agree that this is not necessary at least for the present. It is necessary however that new trustees be appointed for the administration of the trust. of the original 18 trustees all except one are dead and sole survivor is admittedly too old to carry on the administration successfully. The very fact that for many year 's he has not discharged any functions as a trustee also makes it necessary that new trustees should be appointed. We therefore direct that suitable persons be appointed by the Trial Court as new trustees after giving an opportunity to the plaintiffs and other responsible members of the Daudi Bohra Community to place their recomendations and objections in this matter. Both the appeals are accordingly allowed, The Plaintiffs will get their costs here and also in the Trial Court and the High Court from defendants 1 to 11. There will be one set of hearing fee for the two appeals. Appeals allowed.

IN-Abs

In 1909 six persons created the Burhanpur Trust for governing, managing and administering the affairs of a school in Burhanpur. Under the Trust deed 18 persons were appointed as the trustees and all movable and immovable properties connected with the school were vested in them. Clause 5 of the Trust deed empowered the trustees "to appoint new trustees from time to time" and to frame rules and regulations for the benefit and efficient running of the school. In 1917 the Hakimia Society was formed by the trustees for the purpose of running the school and 12 persons were named members of the governing council in which all the properties of the school were vested. Since then ten members of the governing council have been administering the properties in respect of which a trust was created in 1909. A suit under s.92 Code of Civil Procedure was filed for removal of the ten members of the governing council, inter alia, on the ground the Hakimia Society and the ten members of the governing council had not been validly appointed trustees of the trust properties. Held, that the ten members of the governing council of the Hakimia Society were not validity appointed trustees of the Trust properties and were liable to be removed from the management thereof, The trustees of the Burhanpur Trust had no power to create another body of men as trustees in their own place. Trustees who have once entered upon the trust cannot renounce their duties and liabilities except with the permission of the Court or with the consent of the beneficiaries or by the authority of the trust deed itself. Nor can trustees delegate their offices or any of their functions except in some specified cases. In the present case there was delegation of all the powers and functions of the trustees amounting to abdication in favour of a new body of men. The trustees sought to divest themselves of the properties vested in them by the trust deed and to vest them in the 624 new body. Such abdication could not be permitted. There was nothing in. the trust deed which allowed such an abdication and substitution of trustees. , The provision in cl. 5 for appointment of new trustees only permitted the old trustees to add to their number. Nor did the power to frame rules and regulations authorise the trustees to give up the management of the school themselves or to divest them. selves of the properties entrusted to them by the trust deed and vest them in other persons.

Appeal No. 25 of 1961. Appeal by special leave from the judgment and decree dated November 26, 1957, of the Allahabad High Court in Special Appeal No. 235 of 1957. 3 C.B. Agarwala and C. P. Lal, for the appellants. H. N. Sanyal, Additional Solicitor General of India, section K. Kapur, Bishamber Lal and. K. K. Jain, for the respondent. March 26. The Judgment of Sinha, C.J., Subba Rao and Ayyangar, JJ. was delivered by Subba Rao, J., Mudholkar, J., delivered separate Judgment. SUBBA RAO, J. This appeal by special leave is directed against the judgment and order of a division Bench of the Allahabad High Court confirming those of a single Judge of that court dismissing the application filed by the appellant to review the order of the High Court dated November 22, 1958. The facts leading up to the filing of this appeal may be briefly stated. The respondent held certain zamindari and agricultural properties in different districts of the State of Uttar Pradesh. On December 22, 1952, the Additional Collector, Banaras, in exercise of the powers conferred on him under the provisions of the U. P. Agricultural Income Tax Act (Act III of 1949), assessed the respondent to an agricultural income tax of Rs. 99,964 12 0 for the year 1359 fasli. On September 30, 1955, the respondent filed a petition before the High Court under article 226 of the Constitution for quashing the said order on the ground that the Additional Collector, Banaras, had no jurisdiction to make the said assessment. 'On November 22, 1955, Mehrotra J., allowed the writ petition quashing the said assessment. The State of Uttar Pradesh did not prefer an appeal against the said order and allowed it to become final. On February 9, 1956, the State of Uttar Pradesh promulgated an Ordinance, being Ordinance No. 11 of 1956, which was subsequently replaced by U. P. Act No. XIV of 1956, Under the provisions of the Ordinance, the assessments made 4 by the Additional Collector were retrospectively validated and, under s.6 thereof, a right was conferred upon any party to the proceedings under the U.P. Agricultural Income tax Act, 1948, (hereinafter called the principal Act), wherein any assessment made by an Additional Collector or Additional Assistant Collector was set aside merely on the ground that the assessing authority had no jurisdiction to make the assessment, to apply within 90 days from the date of the commencement of the said Ordinance for a review of the said, proceedings in the light of the provisions of the Ordinance, and a statutory injunction was imposed upon a court to review the said order accordingly. Pursuant to the provisions of s.6 of the said Ordinance, on March 14, 1956, the appellants filed an application in the High Court at Allahabad for review of its order dated November 22, 1956. Subsequently as stated earlier, the. Ordinance was replaced by the U. P. Act XIV of 1956 hereinafter called the Act. In the course of the judgment we shall refer only to the provision of the Act. The said application was heard, in the first instance, by Mehrotra, J.,. and he held that section II of the Act, which corresponds to s.6 of the Ordinance, did not entitle the appellant to file an application for review of an order made by the High Court under article 226 of the Constitution. The appellant 's petition was dismissed on that ground. The appellants preferred an appeal against the said order to a division Bench of that court. Nootham, C.J., and Srivastava, J., who heard the appeal, dismissed it on two grounds, namely, (1) under Ch. VIII r.5 of the Rules of Court, a special appeal against an order of a single Judge of the court can be maintained only if that order amounts to a "Judgment," and an order refusing an application for review not being a "Judgment" cannot be the subject of an appeal, (2) on merits, that is on the construction of section II of the Act, the view taken by Mehrotra, J. was correct. The present appeal, as already stated, was preferred against the said order. 5 Mr. C. B. Aggarwala, learned counsel for the appellants, has raised before us the following points: (1) The order of Mehrotra, J.,, dismissing the application for review of his earlier order is a ,Judgment within the meaning of Ch. VIII r. 5 of the Rules of Court and, therefore, an appeal lies against that order to a division Bench of that court. (2) The terms of section 11 of the Act are comprehensive enough to take in an order made by the High Court under article 226 of the Constitution quashing the order of assessment and even if there is some lacuna, the provisions shall be so construed as to carry out clear intention of the Legislature. (3) In any view, the application for review filed by the appellants could be treated as one filed under Order 47 of the Code of Civil Procedure, and the earlier order reviewed on the ground that there is an error apparent on the face of the record,. We shall take the questions in the order they were argued. The first question is whether an appeal Jay against the order of Mehrotra, J., rejecting the application for review filed by the appellants to a division Bench of the High Court. Chapter VIII r.5 of the Rules of Court provides for an appeal against an order of a single judge. Under that rule a special appeal against an order of a single judge of the court can be maintained only if that order amounts to a "judgement". That rule gives effect to cl. 10 of the letters Patent for the High Court of Allahabad, which gives a right _ of appeal against a judgment of a single judge subject to the conditions mentioned therein. The said cl.10 corresponds to cl.15 of the letters Patent for the High Courts of Calcutta, Bombay and Madras. The scope of the expression "judgment" came under the judicial scrutiny of the various High Courts: there is a cleavage of opinion on that question. We shall briefly no" ,ice the leading decisions of the various High Courts on the subject. Couch, C.J., 6 in The Justices of the Peace for Calcuttu vs The Oriental Gas CO. (1) defines the word "judgment" in el. 15 of the Letters Patent thus: "We think 'judgment ' in clause 15 means a decision which affects the merits of the question between the parties by determining ,some right or liability. It may be either final, or preliminary, or interlocutory,, the difference between them being that a final judgment determines the whole cause or suit and a preliminary or interlocutory judgment determines only a part of it, leaving other metters to be determined". The same High Court in Hadjee Ismael vs Hadjee Mahommed (2 ) held that an appeal lay under the said clause from an order refusing to set aside an order granting leave to sue to the plaintiff under cl.12 of the Letters Patent. Therein Couch, C.J., observed: "It is not a mere formal order, or an order merely regulating the procedure in the suit, but on that has the effect of giving a jurisdiction to the court it otherwise would not have. And it may fairly be said to determine some right between them, viz., the right to sue in a particular Court, and to compel the defendants who are not within its jurisdiction to come in and defend the suit, or if they do not, to make them liable to have a decree passed against them in their absence." The Bombay High Court followed the Calcutta view. The leading judgment of the Madras High Court is that in Tuljaram vs Alagappa (3), where it was held that an order of a single Judge in the Original Side refusing to frame an issue asked for by one of the parties is not a 'judgment ' within (1) , 452. (2) , 101. (3) (1912) 1.L.R. , 7, 15. 7 the meaning of cl.15 of the Letters Patent. White, C.J., laid down the following tests: "The test seems to me to be not what is the form of the adjudication, but what is its effect in the suit or proceeding in which it is made. If its effect, whatever its form may be, and whatever be the nature of the appli cation on which it is made, is to put an end to the suit or proceeding so far as the Court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, I think the adjudication is a 'judgment ' within the meaning of the clause. " Referring to the decisions of the Calcutta High Court the learned Chief Justice proceeded to state: "On the other hand I am not prepared to say as was held in The Justices of the Peace for Calcutta vs The Oriental Gas Company (1) and in Sonbai vs Ahamedbhai Habibhai (2), it must be a decision which affects the merits by determining some right or liability. think the decision may be a judgment for the purposes of the section though it does not affect the merits of the suit or proceeding and does not determine any question of right raised in the suit or proceeding. Krishnaswami Ayyar, J., observed much to the same effect: "I would only stop here to remark that a decision which determines the cause or proceeding so far as the particular court is concerned, though it refused to adjudge the merits, must also be deemed to be a judgement: far otherwise the rejection of a plaint for defect of form or insufficiency of Court (1) (2) (1872) 9 B.H.C.R. 398. 8 fee or a return of it for want of jurisdiction would be outside the definition of the learned Chief Justice which could hardly have been his meaning. I may also observe that the "Part" which is determined may be a part of the claim separable from the rest or a determination of liability generally though the actual measure of liability may be a matter of account". The Lahore High Court generally followed the view expressed by the Madras High Court. The Allahabad High Court in Muhammad Naim Ullah Khan vs Ihsan Ullah Khan (1) expressed the view that an order which is not appealable under 0.43 r. 1 of the Code of Civil Procedure is not appealable under cl. 10 of the Letters Patent. This view has been followed by a division Bench of the same High Court in Tirmal Singh vs Kanhayia Singh (2). But the said decisions do not attempt to lay down a definition of the. expression "judgment" in the Letters Patent. The Nagpur High Court in Manohar vs Baliram(3) by a majority, after considering the case law on the subject, laid down the following definition. Hidayatullah, J., who delivered the leading judgment, laid down the test at p. 522 thus: "A judgment means a decision in an action whether final, preliminary, or interlocutory which decides either wholly or partially, but conclusively in so far as the Court is concerned, the controversy which is the subject of the action. It does not include a decision which is on a matter of procedure, nor one which is ancillary to the action even though it may either imperil the ultimate decision or tend to make it effective. The decision need not be immediately executable per 88 but if left untouched, must result inevitably without anything further, save the determination of (1) [1892] 1. L. R. 14 All. 226 (2) [1923] 1. L. R. 45 All. 535. (3) 1. L. R. 9 consequential details, in a decree or decretal order, that is to say, an executive document directing something to be done or not to be done in relation to the facts of the contro versy. The decision may itself order that thing to be done or not to be done or it may leave that over till after the ascertainment of some details but it must not be interlocutory having for its purpose the ascertainment of some matters or details prior to the determination of the whole or any part of the controversy. " The foregoing brief analysis of judgment shown that the definition given by the Madras High Court is wider than that given by the Calcutta and Nagpur High Courts. It is not necessary in this case to attempt to reconcile the said decision or to give a definition of our own, for on the facts of the present case the order of Mehrotra, J., would be a judgment within the meaning of the narrower definition of that expression. The appellants filed an application to review the order of the High Court quashing the order of assessment made by the Additional Collector. It was alleged in the affidavit that the impugned assessment had been validated under the Ordinance and that the applicants had the right to have the order of Mehrotra, J., reviewed in the light of the provisions of section 6 thereof. The assessee denied that the appellants had any such right. The appellants ' statutory right to have the order of the High Court reviewed was denied by the other side and was put in issue before the High Court. The relevant provisions of the Act read : Section 2. "In Section 2 of the U. P. Agricultural Income Tax Act, 1948 (hereinafter called the Principal Act), for clause (4), the following shall be and be deemed always to have been substituted 10 "(4 a) 'Collector ' shall have the meaning as in the U, P. Land Revenue Act, 1901, and will include an Additional Collector appointed under the said Act. " Section 10. Validation (1) For the removal of doubts it is hereby declared that (a) in rule 18 of the, U. P. Agricultural Income Tax Rules, 1949, the expression "Collector" and "Assistant Collector in charge of a sub division" shall respectively include and be deemed always to have included an "Additional Collector" and an "Additional Assistant Collector in charge of a sub divisional". (b) all orders, actions or proceedings taken, directions issued or jurisdiction exercised or in accordance with the provisions of the Principal Act or of any rule framed thereunder prior to the amendment of that Act by 'Section 2 of this Act shall be deemed to be as good and valid in law as if Section 2 aforesaid had been in force at all material dates. (2) Where any question arises as to the validity or legality of anuy assessment made by an Additional Collector in charge of a sub division or by an Additional Collector in pur ported exercise of the powers under Section 14 or of the rules framed under clause (c) of sub section (2) of Section 44 of the Principal Act, the same shall be determined as if the provisions of Section 2 of this Act had been in force at all material dates. Section 11 Review of Proceedings : Where before the commencement of this Act any court or authority had, in any proceedings under the Principal Act, set aside any assessment made by an Additional Collector or 11 Additional Assistant Collector in charge of a subdivision merely on the ground that the assessing authority had no jurisdiction to make an assessment, any party to the proceedings may, at any time within ninety days from the date of commencement of this Act apply to the Court or authority for a view of the proceedings in the light of the provisions of this Act, and the Court or authority to which the application is made shall review the proceedings accordingly and make such order, if any, varying or revising the order previously made as may be necessary to give effect to the pro. visions of the Principal Act as amended by Sections 2 and 8 of this Act. Under the aforesaid provisions the assessments made by the Additional Collector were retrospectively validated and a right was conferred on a party to the proceedings under the Principal Act, wherein the assessments were set aside merely on the ground that the assessing authority bad no jurisdiction to make an assessment, to apply to the court to have that order reviewed. A statutory injunction was also issued to the court which set aside the assessment on the ground of want of jurisdiction to review its order and to give effect to the provisions of the Principal Act, as amended by sections 2 and 4 of the Act, that is to say, a fresh right has been conferred upon a party to the earlier proceedings to have the previous order set aside and to have decision from the court on the basis of the amended Act. This is a valuable and substantive right conferred upon a party to the proceeding. On the rival contentions, the question of the fresh right conferred upon a party to the proceeding and the jurisdiction of the court to enforce the said right would be in issue and any decision thereon could legitimately be said to be a decision determining the rights of parties. But for the 12 amending Act, the order of the High Court admittedly would have become final; but, because of the amending Act there was, a controversy whether the binding decision could be reopened and the rights of the parties decided in accordance with the amending Act. The decision of Mehrotra, J., dismissing the application was certainly a decision denying the right of the appellants alleged to have been conferred under the amending Act. We therefore, hold that the order of Mehrotra, J., dismissing the application, filed for review of his earlier order, on the ground that section 11 of the Act did not confer any such right on the appellants was a 'judgment ' within the meaning of cl.10 of the Letters Patent as well as Ch. VIII r.5 of the Rules of Court. If so, we must hold that the division Bench of the High Court went wrong in holding that no appeal lay against the order of Mehrotra, J. Even so, the appellants would not be entitled to succeed, unless we hold, differing from the High Court, that s.11 of the Act confers a right on the appellants to have the order of Mehrotra, J., reviewed. We have already extracted the provisions of a. 11. Section 11 is in two parts: the first part of the section confers a right on a party to the proceedings under the Principal Act to apply to the court or authority for a review of the proceeding in the light of the provisions of the Act within 90 days from the commencement of the Act, and the second part issues a statutory injunction on such a court or authority to review the proceedings accordingly and to make an order as may be necessary to give effect to the provisions of the Principal Act, as amended by ss.2 and 4 of the Act. The first question, therefore, is whether the order of Mehrotra, J., in an application under article 226 of the Constitution was in any proceeding under the Principal Act. Obviously a petition under article 226 of the Constitution cannot be a proceeding under the Act: it is a proceeding 13 under the Constitution. But it is said, relying upon certain passages in Maxwell on the Interpretation of Statutes, at p, 68, and in Crawford on "Statutory Construction ' at p. 492, that it is the duty of the Judge "to make such construction of a statute as shall suppress the mischief and advance the remedy," and for that purpose the more extended meaning could be attributed to the words so as to bring all matters fairly within the scope of such a statute even though outside the letter, if within its spirit or reason. But both Maxwell and Crawford administered a caution in resorting to such a construction. Maxwell says at p.68 of his book: "The construction must not, of course, be strained to include cases plainly omitted from the natural meaning of the words." Crawford says that a liberal construction does not justify an extension of the statute 's scope beyond the contemplation of the Legislature. The fundamental and elementary rule of construction is that the words and phrases used by the Legislature shall be given their ordinary meaning and shall be constructed according to the rules of grammar. When the language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises, for the Act speaks for itself. It is a well recognized rule of construction that the meaning must be collected from the expressed intention of the Legislature. So construed, there cannot be two possible views on the interpretation of the first part of the section. Learned counsel suggested that we should read the relevant portion of the first part thus: "in any proceedings to set aside any assessment made on the basis of the Principal Act". To accept this argument is to rewrite the section. While the section says that the order sought to be reviewed is that made in a proceeding under 14 the Principal Act, the argument seeks to remove the qualification attached to the proceeding and add the same to the assessment. The alternative argument, namely, that without changing the position of the words as they stand in the section, the expression ,on the basis of" may be substituted for the expression "under" does Dot also yield the results expected by the learned counsel. It cannot be held with any justification, without doing violence to the language used, that a proceeding under article 226 of the Constitution is either one under the Principal Act or on the basis of the Principal Act, for it is a proceeding under article 226 of the Constitution to quash the order on the ground that it was made in violation of the Act. An attempt is then made to contend that a proceeding under article 226 of the Constitution is a continuation of the proceedings before the Additional Collector and, therefore, the said proceedi ings are proceedings under the Act. This leads us to the consideration of the question of the scope of the proceedings under article 226 of the Constitution. Article 226 confers a power on a High Court to issue the writs, orders, or directions mentioned therein for the enforcement of any of the rights conferred by Part III or for any other purpose. This is neither an appellate nor a revisional jurisdiction of the High Court. Though the power is not confined to the prerogative writs issued by the English Courts, it is modeled on the said writs mainly to enable the High Courts to keep the subordinate tribunals within bounds. Before the Constitution, the chartered High Court, that is, the High Courts at Bombay, Calcutta and Mad ras, were issuing prerogative writs similar to those issued by the King 's Bench Division, subject to the same limitations imposed on the said. writs. In Venkataratnam vs Secretary of State for India(1), (1) (1930) I.L.P. 15 a division Bench of the Madras High Court, consisting of Venkatasubba Rao and Madhavan Nair, JJ,; held that the jurisdiction to issue a writ of certiorari was original jurisdiction. In Ryots of Garabandha vs The Zamindar of Parlakimedi (1), another division Bench of the same High Court, consisting of Leach, C. J., and Madhavan Nair J., considered the question again incidentally and came to the same conclusion "and held that a writ of certiorari is issued only in exercise of the original jurisdiction of the High Court. In Ramayya vs State of Madras (2), a division Bench, consisting of Govinda Menon and Ramaswami Oounder, JJ,, considered the question whether the proceedings under article 226 of the Constitution are in exercise of the original Jurisdiction or revisional jurisdiction of the High Court, and the learned Judges held that the power to issue writs under article 226 of the Constitution is original and the jurisdiction exercised is original jurisdiction. In Moulvi Hamid Hassan Nomani vs Banwarilal Boy (3), the Privy Council was considering the question whether the original civil jurisdiction which the Supreme Court of Calcutta possessed over certain classes of persons outside the territorial limits of that jurisdiction has been inherited by the High Court. In that context the Judicial Committee. observed. "It cannot be disputed that the issue of such writs is a matter of original jurisdiction". The Calcutta. High Court, in Budge Budge Munici pality vs Mangru(4) came to the same conclusion, namely, that the jurisdiction exercised under article 226 of the Constitution is original as distinguished from appellate or revisional jurisdiction; but the High Court pointed out that the jurisdiction, though original, is a special jurisdiction and should not be (1) I.L.R (2) A.I.R. 1952 Nad. 300. (3) (1942) It M. L. J. 32, 35. (4) 16 confused with ordinary civil jurisdiction under the Letters Patent. The Andhra High Court in Satyanarayanamurthi vs 1. T. Appellate Tribunal (1) described it as an extraordinary original jurisdiction. It is, therefore, clear from the nature of the power conferred under article 226 of the Constitution and the decisions on the subject that the High Court in exercise of its power under article 226 of the Constitution exercises original jurisdiction, though the said jurisdiction shall not be confused with the ordinary civil jurisdiction of the High Court. This jurisdiction, though original in character as contrasted with its appellate and revisional jurisdictions, is exercisable throughout the territories in relation to which it exercises jurisdiction and may. for convenience, be described as extraordinary original jurisdiction. If that be so, it cannot be contended that a petition under article 226 of the Constitution is a continuation of the proceedings under the Act. There is another insurmountable difficulty in accepting the construction suggested by learned counsel. Under the second part of the section a party to the earlier proceedings may within the prescribed time apply to the court or authority for a review of the proceedings in the light of the pro visions of the Act, and the court or authority to which the application is made shall review the proceedings accordingly, and make such order, if any, varying or revising the order previously made as may be necessary to give effect to the Principal Act, as amended by section 2 of the Act. Should it be held that this section applies to an order made by a High Court under article 226 of the Constitution, the statutory mandatory injunction issued under the second part of the section to the High Court to make an order in a particular way would be constitutionally void. Under the Constitution the Legislature of a (1) A. 1. R. 1957 Andhra 123. 17 State derives its authority to make laws under article 245 of the Constitution, which reads: (1) " 'Subject to the provisions of this Con stitution, Parliament may make laws for the whole or any part of the territory of India, and the, Legislature of a State may make laws for the whole or any part of the State. " Article 245 is, therefore, subject to article 226 of the Constitution. It follows that no law made by the Legislature of a State can be in derogation of the powers of the High Court under article 226 of the Constitution. It is well settled that article 226 confers a discretionary power on the High Courts to make or issue appropriate orders and writs for the enforcement of any of the rights conferred by Part III of the Constitution or for any other purpose. While article 226 confers a discretionary power on the High Court, the second part of section 11 of the Act enjoins on the High Court to make an order in a particular way. We should not give such a construction to the section as would bring it into conflict with article 226 of the Constitution and which ,would have the effect of invalidating it to that extent. On the other hand, the construction adopted by us would be consistent with the second part of the section, for, if the first part is confined only to an order made by any court or authority, other, than the High Court in exercise of its jurisdiction under article 226 of the Constitution, both the parts fall in a piece, and we would not only be giving a natural meaning to the express words used in the section but we would also be saving the section from the vice of constitutional invalidity. Learned counsel for the appellants seeks to got over this obvious difficulty by contending that the word "shall" may be treated as 'may" so that the discretion of High Court under article 226 may be maintained. Alternatively, he contends that the second part of the section comprises two parts the 18 first empowers an aggrieved party only to file an application, and the second imposes a statutory duty, and that the first may conveniently be served from the second and its validity to that extent sustained. The first argument is contrary to the express words used and the intention of the Legislature. If we read "shall" as ', 'may" the same discretion will have to be given even to authorities, and courts other than the High Court, with the result the purpose of the section would be defeated. On the other hand, if the expression "shall" is given its natural meaning, the section carries out the intention of the Legislature, viz., the mandatory injunction imposed on courts and authorities to restore the assessment declared invalid. The decisions cited by the learned counsel in support of his construction are not of any help, for they were based upon the construction of the relevant provisions under consideration in those cases. The second argument, if accepted, would be rewriting the section. While the dominant intention of the Legislature is to issue a mandatory injunction on the courts or authorities to review their orders on a suitable application made to them, we would be deleting it and thus defeating the object of the Legislature. For the foregoing reasons, we have no hesitation in holding that, on a plain reading of the clear words used in the section, it does not apply to an order made by the High Court under article 226 of the Constitution. Lastly it is contended that even if section 11 does not apply, we should treat the application filed by the appellants before the High Court as one made under Order 47 of the Code of Civil Procedure. There are. many objections for allowing the appellants to do so at this very late stage of the Proceedings. The application was filed only under section 11 of the Act and no attempt was made either before Mehrotra, J., or before the division Bench of the High Court to ask for an amendment 19 or to sustain the petition under Order 47 of the Code, of Civil Procedure; nor did the appellants raise this plea in the petition filed for special leave or even in the statement of case as originally filed by them. After the case was argued for sometime on an observation casually made by the Court, time was taken and for the first time this plea was taken in the additional statement of case filed by the appellants. This is, therefore, a highly belated attempt to convert the application filed on one basis into that on another. Further, the plea, if allowed, is not so innocuous or smooth sailing as it appears to be, but is brimming with many controversial questions. It raises the following questions : (1) Whether the application treated as one made under order 47 of the Code of Civil Procedure was within time ; (2) if it was out of time, could the delay be excused without the appellant filing an application for excusing it and giving valid reasons for the same ; (3) whether an order made by the High Court in exercise of its powers under article 226 of the Constitution could be reviewed under Order 47 of the Code of Civil Procedure, and, if not, under section 151 of the said Code ; (4) whether the amendment 'of an Act with retrospective effect could be treated as an error on the face of the record or as a sufficient cause within the meaning of Order 47 of the Code of Civil Procedure for reviewing the final orders and decrees made by courts on the basis of the law obtaining at the time the said orders or decrees were made ; and (5) if the order of Mehrotra, J., was one made under Order 47 of the Code of Civil Procedure, would an appeal lie to a division Bench of the High Court under Order 43 of the Code. We do not propose to express any opinion on the aforesaid questions. It would be enough to say that we are not justified to allow the appellants to convert their petition to one made under Order 47 of the Code of Civil Pro 20 cedure at this very late stage, in view of the foregoing reasons. In the result we hold that the order of the High Court is correct. The appeal fails and is dismissed with costs. MUDHOLKAR, J. I agree with my learned brother that the appeal should be dismissed for the reasons stated in his judgment. I, however, express no opinion on the question regarding the maintainability of the appeal under the Letters Patent against the decision of a single Judge in a case of this kind. Appeal dismissed.

IN-Abs

The respondent, who owned agricultural properties in the different districts of Uttar Pradesh, was assessed to agri cultural income tax by the Additional Collector of Banaras. On challenge by way of a petition under article 226 of the Constitution, assessment was quashed by the Allahabad High Court on the ground that the assessing authority had no ,jurisdiction to assess. Under section 6 of the U.P. Act No. XIV of 1956 the assessments by the Additional Collector were validated and a party to the proceedings under Agricultural Income tax Act was given the right to move the Court or authority within the prescribed period to review the proceedings where in the assessments had been set aside on the ground that the assessing authority had no jurisdiction to make the assessment. By section 11 the authority or court so moved was bound to review the order. The State of Uttar Pradesh applied to the High Court for review of its earlier order quashing the assessment. The single judge of the High Court held that section II of the Act did not apply to writ pro ceedings under article 226 of the Constitution. On appeal the Division Bench held that the order for the single judge did not amount to a 'judgment ' under Ch. VIII r.5 cl.10 of the Letter Patent and the Rules of Allahabad High Court and that section 11 of the Act did not apply to proceedings. by way of a writ before the High Court. On appeal by special leave by the State it was contended that the Division Bench was wrong and by an additional statement of case it was sought to be urged that the application for review should be treated as one under order 47 of the Code of Civil Procedure, 2 Held (per Sinha, C. J, Subba Rao, Ayyangar and Aiyar, jj.), that under cl. IO of the Letters Patent of the Allahabad High Court and the Rules of the Court the expression 'judgment ' would even on the narrow view of the expression include the order in the present case whereby the statutory right given to the party was finally negatived and that the Division Bench was in error in holding that it was not a 'judgment '. Held, further, that the proceeding under article 226 of the constitution were neither 'proceedings ' under the Act nor proceedings on the basis of the Act. The proceedings under article 226 of the Constitution were independent and original proceeding and not a continuation of the assessment proceedings. Venkataratnam vs Secretary of State for India, (1930) I.L.R.53 Mad. 979, Ryots of Garabandha vs The Zamindar of Parlakimedi I.L.R. , Ramayya vs State of Madras, A.I.R. 1952 Mad. 300, Moulvi Hamid Hassan Nomani vs Banwarilal Coy. (1947) II M.L.J. 32, Budge Budge Municipality vs Mangru (1952) 57 C.W.N.25 and Satyanarayanamurthi vs 1.T. Appellate Tribunal, A.I.R.1957 Andhra 123, referred to. The Act had to be interpreted consistently with the Constitution and there was no power in the State Legislature to compel the High Court to act in a particular way in exercise of its jurisdiction under article 226 of the Constitu tion. Section, II could only apply to cases 'Where any court or authority other than the High Court in exercise of its jurisdiction under article 226 of the Constitution, had decided the matter. Held, further, that construing shall ' in section II of the Act as `may ' would defeat the very provisions of the Act. Held, also, that the contention that the application under s.11 of the Act may be treated as one order 47 of the Code of Civil Procedure, was highly belated and further there were many possible objections to such a course and it cannot be acceded to.

iminal Appeal No. 23 of 1952. Appeal from an Order dated 18th January, 1952, of the High Court of Judicature at Calcutta (Chunder J.) in Criminal Reference Case No. 110 of 1951. N.C. Talukdar and A. D. Dutt for the appellant. Ajit Kumar Dutta, and section N. Mukherjee for the respondents. March 12. The Judgment of the Court was delivered by BHAGWATI J. This is an appeal under article 134(c) of the Constitution and raises the point whether a single Judge of the High Court of Judicature at Calcutta could bear a reference from an order under sections 431 and 432 of the Bengal Municipal Act XV of 1932. The jurisdiction of a single Judge of the High Court in criminal matters is defined in the proviso to 768 rule 9, Chapter II, Part I of the Rules of the High Court and the relevant portion of the proviso runs as under: "Provided that a single Judge may hear any Ap.peal, Reference, or Application for revision other than the following: (1 )One relating to an order of sentence of death, transportation, penal servitude, forfeiture of property or of imprisonment, not being an order of imprisonment in default of payment of fine. . . . . " A single Judge therefore has no jurisdiction to deal with any reference or application for revision which relates to an order of forfeiture of property, and the question that arises in this appeal is whether the order passed by the learned District Magistrate, Baukura, under sections 431 and 432 of the Bengal Municipal Act, 1932, amounted to an order of forfeiture of property within the meaning of the above proviso. The relevant, facts may be shortly stated as follows. The respondents are the proprietors of several oil mills in the town of Bankura within the Bankura Municipality. The Sanitary Inspector of the Municipality received on 6th March, 1950, information that the Manager of the Sree Gouranga Oil Mill, belonging to the respondents had deposited about 300 bags of rotten, decomposed, unwholesome mustard seeds in the courtyard of the Rice Mill of Sree Hanseswar Maji and about 600 bags of unwholesome mustard seeds in the mill godown of the respondents for sale and for the preparation of oil therefrom for sale. On an application made by him in that behalf the Sub Divisional Officer, Bankura, duly issued a search warrant and the Sanitary Inspector on the same day found in possession of the respondents a huge quantity of mustard seeds which were found to be highly unsound, unwholesome and unfit for human consumption. He seized the said seeds between the 6th March, 1950, and the 8th March, 1950, and after the completion of the seizure asked for written consent of the 769 respondents for destruction of the said mustard seeds which they refused. The Sanitary Inspector therefore kept all the bags thus seized, viz., 951 1/2 bags, in ,the mill godowns of the respondents with their consent. After several proceedings which it is not necessary to mention for the purpose of this appeal, the District Magistrate, Bankura, in M. P. No. 58 of 1950 under sections 431 and 432 of the Bengal Municipal Act on the 14th August, 1951, found that the stock of mustard seeds which was seized on the 6th March, 1950, was on that date and still was unfit for human consumption. But in so far as no oil was coming out of the seeds and the seeds were capable of being used is manure or for cattle food he would not direct their destruction but directed that they should be disposed of by the Commissioners of the Bankura Municipality as manure or as cattle food ensuring before such disposal that the stocks in question bad been rendered incapable of being used as human food. The respondents filed a petition under section 435 of the Criminal Procedure Code before the Additional Sessions Judge, Bankura, against the order of the District Magistrate, for a reference to the High Court. The Additional Sessions Judge held that the seizure of the mustard seeds was illegal and that there was no evidence to show that the seeds in question were deposited in or brought to the places for the purpose of their sale or of preparation of oil for human consumption. He therefore made a reference under section 438 of the Criminal Procedure Code to the High Court for quashing the proceedings. Chunder J. accepted the reference, set aside the order of the District Magistrate and remanded the case for retrial by some other Magistrate, as in the opinion of the learned Judge, the District Magistrate had decided the matter upon his own observations formed during the inspection of the mustard seeds and not on the material in the record. An application was made to a Bench of the High Court and leave was allowed on the point whether Chunder J. had jurisdiction sitting singly to bear the reference in view of the rule cited above. 770 Sri N.C.Taluqdar for the appellants urged that the order made by the District Magistrate, Bankura, under sections 431 and 432 of the Bengal Municipal Act, 1932, was an order for forfeiture of property within the meaning of the proviso to the rule and Chunder J. had no jurisdiction to deal with the reference and his order should be quashed. Section 431 provides: "(1) Where any living thing, article of food, drug seized under section 428 is not destroyed by consent under sub section (1) of section 429, or where an article of food so seized which is perishable is not dealt with under sub section(2) of that section, it shall be taken before a Magistrate as soon as may be after such seizure. (2)If it appears to the Magistrate that any such living thing is diseased or unsound or that any such food or drug is unsound, unwholesome or unfit for human food or for medicine, as the case may be. . . he shall cause the same to be destroyed at the expense of the person in whose possession it was at the time of its seizure, or to be otherwise disposed of by the Commissioners so as not to be capable of being used as human food or medicine Section 432 provides : "When any ' authority directs in exercise of any powers conferred by this chapter, the destruction of any living thing, food or any drug, or the disposal of the same so as to prevent its being used as food or medicine, the same shall thereupon be deemed to be the property of the Commissioners. " The word "forfeiture" is defined in Murray 's Oxford Dictionary: " The fact of losing or becoming liable to deprivation of goods in consequence of a crime, offence, or breach of engagement the penalty of the transgression" or a "punishment for an offence". It was contended that in so far as section 432 provided for the vesting of the condemned food or drug in the Commissioners the owner of the property was divested or deprived of the proprietary 771 rights therein and that the order made by the Magistrate under section 431 (2) was thus an order of forfeiture of the property. This contention in our opinion is unsound. According to the dictionary meaning of the word "forfeiture" the loss or the deprivation of goods has got to be in consequence of a crime, offence or breach of engagement or has to be by way of penalty of the transgression or a punishment for an off once. Unless the loss or deprivation of the goods is by way of a penalty or punishment for a crime, offence or breach of engagement it would not come within the definition of for. feiture. What is provided under section 431(2) is the destruction of the food or drug which is unsound, unwholesome or unfit for human food or medicine or the otherwise disposal of the same by the Commissioners so as not to be capable of being used as human food or medicine. The vesting of such condemned food or drug in the Commissioners which is provided by section 432 is with a view to facilitate the destruction or the otherwise disposal of such food or drug by the Commissioners and is in no way a forfeiture of such food or drug by the Municipality. The condemned food or drug by reason of its being found unsound, unwholesome or unfit for human food or medicine cannot be dealt with by the owner. It must be destroyed or otherwise disposed of so as to prevent its being used as human food or medicine. What the Municipal Commissioners are empowered to do therefore is what the owner himself would be expected to do and what is ordered to be done therefore cannot amount to a forfeiture of the property. The order is not a punishment for a crime but is a measure to ensure that the condemned food or drug is not used as human food or medicine. That this is the true position is clear from the pro visions of Chapter XXIV of the Act which provides for penalties. Sections 501 to 504 prescribe penalties for specific offences and section 500 prescribes generally penalties for the several offences therein mentioned. Section 431 however does not figure therein. 100 772 Forfeiture of property is thus not one of the penalties or punishments for any of the offences mentioned in the Bengal Municipal Act. In the relevant provision in the rule of the ' High Court an order of sentence of death, transportation, penal servitude, forfeiture of property or of imprisonment are grouped together. These orders are purely orders by way of penalty or punishment for the commission of crimes or offences and the forfeiture of property mentioned there is no other than the one which is entailed as a consequence of the commission of a crime or offence. In order that such forfeiture of property would bar the jurisdiction of the single Judge it has to be a forfeiture of property which is provided by way of penalty or punishment for the commission of a crime or offence. In spite of his labours Shri N. C. Taluqdar has not been able to point out to us any provision of the Bengal Municipal Act, 1932, which constitutes what is contemplated under section 431(2), a penalty or punishment for the commission of a crime or offence. The offence that the respondent could be charged with is defined in section 421 of the Act and the punishment for that offence provided in section 500 is fine and not forfeiture. We are therefore of the opinion that the order of the District Magistrate, Bankura, under sections 431 and 432 of the Bengal Municipal Act, 1932, dated 14th August, 1951, was not an order of forfeiture of property within the meaning of the proviso to rule 9, Chapter II, Part I, of the Rules of the High Court, and Chunder J. had the jurisdiction to entertain and decide the reference. The result is that the appeal fails and is dismissed. Appeal dismissed. Agent for the appellant : Sukumar Ghose. Agent for respondent: B. B. Biswas.

IN-Abs

An order of a District Magistrate under sections 431 and 432 of the Bengal Municipal Act (XV of 1932) for the disposal of an article of food which has been seized under section 428 of the said Act is not an order of forfeiture of property within the meaning of the proviso to rule 9 of Chap. II of Part II of the Calcutta High Court Rules, and a Single Judge of the said High Court has jurisdiction to hear a reference from such an order. Unless the loss or deprivation of property is by way of penalty or punishment for a crime, offence or breach of engagement it would not amount to a "forfeiture" of property.

Appeal No. 329 of 1960. 717 Appeal from the judgment and order dated October 28, 1958, of the Punjab High Court in L. P. A. No. 72 of 1958. N. N. Keswani, for the appellant. N. section Bindra and P. D. Menon, for the respondents. August 27. delivered by SHAH, J. The appellant Madan Gopal was appointed an Inspector of Consolidation by order dated October 5, 1953 of the Settlement Commissioner of the Patiala and East Punjab States Union. The appointment was ,on temporary basis and terminable with one Month 's notice". On February 5, 1955, the appellant was served with a "charge sheet" by the Settlement Officer, Bhatinda that he (the appellant) had received Rs. 150/ as illegal gratification from one Darbara Singh and bad demanded Rs. 30/ as illegal gratification from one Ude Singh. The appellant was called upon to show cause why disciplinary action should not be taken against him if the allegations in the charge sheet were proved. The appellant submitted his explanation to the charge sheet. On February 22, 1955, the Settlement Officer submitted his report to the Deputy Commissioner Bhatinda, that the chage relating to recept of illegal gratification from Darbara Singh was proved. The Deputy Commissioner by order dated March 17, 1955 ordered that the services of Madan Gopal Inspector be terminated forthwith and that in lieu of notice be will get one month 's pay as required by the Rules. The appellant requested the Deputy Commissioner to review the order, and also submitted a memorial to the Minister for Revenue affairs. Having failed to obtain relief, the appellant applied to 718 to the High Court of Pepsu for a writ under article 226 of the Constitution quashing the order dated March 17, 1965 on the"ground inter alia that the order of dismissal from service was in contravention of article 311 of the Constitution as no reasonable opportunity to show . cause against the order of dismissal was at all given. He also challenged the authority of the Settlement Officer to hold the enquiry and submitted that the procedure followed by that Officer in making the enquiry was irregular. The petition was transferred to the High Court of Punjab on the reorganization of the State of Punjab. Mr. Justice Bishan Narain who heard the application issued the writ prayed for, because, in his view, the order of termination of employment was in the nature of an order of punishment and an the provisions of article 311(2) had not been complied with by the Enquiry Officer, the. Deputy Commis sioner or the Settlement Commissioner, the order was invalid. In appeal under the Letters Patent, the order was reversed by, a Division Bench of the High Court. The High Court held that the appellant was a temporary servant and had no right to hold the post he was occupying and by the impugned order the appellant was not dismissed or removed from service, but his employment was terminated ,in exercise of authority reserved under the terms of employment, and no penalty was imposed upon the appellant, The appellant was a temporary employee, and hill employment was liable to be terminated by ,, 'notice of one mouth," without assigning. any reason ' The Deputy Commissioner, however, did not act in exercise of this authority : the appellant was served, with a charge sheet setting out his mis demeanour, an enquiry was held in respect of the alleged misdemeanour and his employment was terminated because in the view of the Settlement Officer with 719 which view the Deputy Commissioner agreed. the misdemeanor was proved. Such a termination amounted to casting a ,,stigma affecting his future career". In State of Bihar vs Gopi Kishore Prasad (1), the learned Chief Justice in dealing with cases of termination of service or discharge of public servant on probation set out five propositions of which the 3rd is enunciated thus "But. if instead of terminating such a person 's service without any enquiry, the employer chooses to hold an enquiry into his alleged misconduct, or inefficiency, or for some similar reason, the termination of service is by way of punishment, because it puts a stigma on his competence and thus affects his future career. In such a case, he is entitled to the protection or article 311 (2) of the Constitution. " It is true that in that case the Court was dealing with the case of a public servant on probation whereas the appellant was a temporary employee, but, in principle, it will make no difference whether the appellant was a probationer or a temporary employee. The appellant had been served with a charge sheet that he. had received illegal gratification from one person and had demanded illegal gratification from another. The appellant was given an opportunity to make his defence and it appears that witnesses in support of the charge and in defence were examined before the Settlement Officer. The Settlement Officer reported that on the evidence he was satisfied that the appellant had received Rs. 150/ as illegal gratification and that the appellant did not ,enjoy good reputation and was a person of doubtful integrity". It is now well settled that the protection of article 311 (2) of the Constitution applies as much to a temporary public (1) A.I.R. 1960 S.C. 689, 720 servant as to permanent public servants. By virtue of article 311 of the Constitution the appellant was not liable to be dismissed or removed from service until he had been given reasonable opportunity against the action proposed to be taken in regard to him. The appellant was given no such opportunity and article 311 of the Constitution was therefore not complied with. Counsel appearing for the State of Punjab contended that the order dated March 17, 1955, was not the order pursuant to which employment ' of the appellant was terminated, the effective order being one passed by the Settlement Officer on March 30, 1955. No such order is however found on the record, and it appears that in the written statement filed by the State in the High Court it was expressly admitted that the employment of the appellant was terminated on March 17, 1955. Counsel also contended that enquiry was made by the Settlement Officer for the purpose of ascertaining whether the appellant who was a temporary employee should be continued in service or should be discharged under the terms of his employment, and to "a termination made pursuant to such an enquiry the protection of article 311 (2) of the. Constitution was not attracted, and in support of his submission counsel relied upon a judgment of this Court in the State of Orissa vs Ram Narayan Das (1). In Ram Narayan Das 's case enquiry was made pursuant to Rules governing the conduct of public servants for ascertaining whether the probation of the public servant concerned should be con tinued and a notice to show cause in that behalf was served upon him. On the report of the enquiry officer that the work and conduct of the public servant *as unsatisfactory, an order of termination of employment was passed without affording him an (1) ; 721 opportunity of showing cause against the action proposed to be taken in regard to him. This Court pointed out that the public servant had no right to the post he occupied and under the terms of his appointment he was liable to be discharged at any time during the period of probation. It was observed that mere termination of employment ;does not carry with it "any evil consequences" such as forfeiture of his pay or allowances, loss of seniority, stoppage or postponement of future chances of promotion etc. and, therefore, there was no stigma affecting the future career of the public servant by the order terminating his employment for unsatisfactory work and conduct. "The enquiry against the respondent was for ascertaining whether he was fit to be confirmed. An order discharging a public servant, even if a probationer, in an enquiry on charges of misconduct. negligence, inefficiency or other disqualification, may appropriately be regarded as one by way of punishment. , but an order discharging a probationer following upon an enquiry to ascertain whether he should be confirmed, is not of that nature x x x x x The third proposition in the latter (Gopi Kishore Prasad 's) case refers to an enquiry into allegations of misconduct or inefficiency with a view, if they were found established, to imposing punishment and not to an enquiry whether a probationer should be confirmed. Therefore, the fact of the holding of an enquiry is not decisive of the question. What is decisive is whether the order is by way of punishment, in the light of the tests laid down in Parshotam Lal Dhingra case (1). " In this case the enquiry made by the Settlement Officer was made with the object of ascertaining whether disciplinary action should be taken against the appellant for his alleged misdemeanour. It was clearly an enquiry for the purpose of taking (1) (1958) S.C.R.828. 722 punitive action including dismissal or removal from service if the appellant was found to have committed the misdemeanour charged against him. Such an enquiry and order consequent upon the report made in the enquiry will not fall within the principle of Ram Narayan Das 's case The appeal is therefore allowed and the order passed by the High Court is set aside and the order passed by Mr. Justice Bishan Narain is restored with costs in this Court and the High Court. Appeal allowed.

IN-Abs

The appellant, a temporary Government servant, was served with a charge sheet alleging misconduct. An enquiry was held on the charges by the Settlement Officer and the appellant was found guilty. The Deputy Commissioner accepting the findings of the Settlement Officer and without giving a reasonable opportunity to the appellant of showing cause against the action proposed to be taken in regard to him terminated his services after giving him one month 's pay in lieu of one month 's notice. The appellant changed the termination of his service by way of a writ petition before the Punjab High Court. The Single judge granted the writ quashing the order. The Division Bench reversed the Single Judge 's order. Held, that the termination of the appellant 's service which was preceded by an enquiry into his alleged misconduct and based on the finding of misconduct, amounted to casting a stigma affecting his future career, and, then being non compliance with article 311(2) of the Constitution of India in that the appellant was not afforded the opportunity to show cause against the proposed punishment, the order contravened article 311(2) of the Constitution. Purushottam Lal Dhingra vs Union of India, (1958) S, C. R. 828, referred to. State of Bihar vs Gopi Kishore Prasad A. 1. R. 1960 section C. 689, followed. State of Orisa vs Ram Narain Das, ; , distinguished.

Appeal No. 255 of 1961. Appeal from the judgment and order dated March 21, 1960, of the Mysore High Court in Writ Petition No. 147 of 1958. B. J. Kolah, J. B. DadachanJi, O. C. Mathur and Ravinder Narain, for the appellants. 779 C. K. Daphtary, Solicitor General of India, B. R. L. Iyengar and P. D. Menon, for respondents. August. KAPUR, J This is an appeal against the judgment and order of the High Court of Mysore in Writ Petition No. 147 of 1958 dismissing the appellant 's petition under articles 226 and 227 of the Constitution for quashing the order of assessment for the period of assessment 1955 56 i.e, from April 1, 1955, to March 31, 1956. In this appeal because of the Validating Act (VII of 1956) the appellants did not challenge their liability for the period April 1, 1955, to September 6, 1955. The facts necessary for the decision of this appeal are these : Appellant No. 1 The Cement Marketing Co. Ltd are the Sales Managers of the second appellant The Associated Cement Co. Ltd. appointed under an agreement dated April 21, 1954. The High Court has described the first appellant to be the Distributors of the second apppellant. The second appellant is a manufacturer of cement and at the material time it had over a dozen factories in different parts of India, none of which was in the State of Mysore. The head office of first appellant is at Bombay and it had then a branch office at Bangalore in the State of Mysore. The first appellant was registered as a dealer under the Mysore Sales Tax Act 1948, hereinafter called the "Mysore Act". At all material times cement was and still is a controlled article. Whether the sale was to a Government Department i.e. to the Director General of Supplies & Disposal, Government of India, New Delhi, or to a person authorised by the said Officer or to the ' public it was effected on authorisations given to the buyers by appropriate Government authorities and 780 produced by them in the office of the first appellant. Both in regard to purchases by the public and the Government the Modus operandi was more or less identical. It was this Every one wishing to buy cement had to get an authorisation in a standard form which authorised the first appellant to sell cement in quantities mentioned, therein and the cement had to be supplied from the factory therein mentioned. That document was in the following form which actually ralates to a sale to a Government contractor. "Government of India Ministrary of Commerce & Industry. Office of the Regional Honorary Cement Adviser 4/12 Race Course Road, Coimbatore. Central Quota. Dated 8 10 1955. Authorisation No. RA/CT/28/CMI/1 7 2 CQ. (CENTELEC) Period IV/55 The Cement Marketing, Name of Suppliers Co. of India P. Box No.613, Sugar Company Bulding Bangalore 2. You are authorised to sell cement in quantity mentioned below under this authorisation. The sale will be a direct deal between yourself and 781 the purchaser. The Government undertakes no responsibility of any nature whatsoever: Name and Name of the Quan Name of Rly. Re address of the person factory or cement is to in whose companybe booked. favour required to authorisation supply is issued. cement. 1 2 3 4 5 M/s. G. section Mudhukkarai300 Bangalore Duggal & Co Shababadtons Ltd Engineers & Contractors, Jalhalli P.O. Bangalore. No. J/1 17/115 date 29 9 55 from the above indentors For manufacture of the tiles for the Bharat Electronics Ltd. Supply recommended by the Commander Works Engineers(B.E.I.P.), Jalahalli. Full details of the purpose for which and the place at which cement will actually be consumed; Priority, Defence work. C.C. Ramanath, Reg, Hon. Cement Advisor (Coimbatore) Copy to 1. The indentor. The Dy. Development Officer, Govt. of India, Ministry of Commerce & Industry, Development Wing,(Chemicals 1, Mineral Industries) Shahjehan Road, Now Delhi. The Controller of Civil Supplies in My sore Bangalore for information". 782 This authorisation was subject to the following conditions: It was to be utilised within 15 days; the cement released could be used only for the purpose for which it was given; the authorisation was not transferable; the issuing authority could, if necessary, revoke the authorisation at any time and even the orders booked under the authorisation could be cancelled. The purchaser or the indentor had then to place an order with the first appellant as Sales Managers of the second appellant stating the requirement, where the goods were to be sent and how they were to be sent. The seller entered into a contract with the first appellant. This contract is in a standard form and gives conditions of sale. Thereupon the first appellant instructed its Bombay office to despatch the cement in accordance with the instructions of the buyer and the authorisation. In this letter they had to mention the number of the authorisation and the person who had issued it and also to whom the goods were to be sent and how and certain other details which are not necessary for the purposes of this appeal were also to be given. Each instruction indicates that it was issued for and on behalf of appellant No. 2 by appellant No. 1 as its Sales Managers. A copy of the letter of instruction was sent to the factory from where the goods were to be despatched and the particulars of the authorisation had to be mentioned therein. Thereafter the first appellant sent an advice to 783 the purchaser enclosing therewith the Railway Receipt for the goods and this advice also mentioned the goods were being sent. Both the contract of sale and the advice above mentioned stated that the goods were being despatched at the buyer 's risk from the time the delivery was made by the factory to the carriers and the railway receipt was obtained for the goods. In the present case all the goods were sent, as indeed they had to be sent, against the authorisations from the various factories belonging to the second appellant which at the relevant time were all situate outside the State of Mysore and were received in the State of Mysore by the various purchasers. The position of the first appellant is as was accepted by the Sales tax Officer in his order dated March 31, 1958, that of Sales Managers of the second appellant but in regard to the nature of the transactions the Sales tax Officer found: " Though the property in the goods pass to the dealers and consumers outside the State immediately the goods are handed over to the carriers outside the state and railway receipt is taken out since the goods have actually been delivered In Mysore State as a direct result of such sale for purposes of consumption in the State, sale is deemed to have taken place in Mysore State". and again he said: "Thus the sales of cement manufactured by A.C.C. Factories situated outside Mysore .State effected by the dealers M/s. Cement Marketing Company of India Ltd. Bangalore, to dealers and customers in Mysore State amounts to intrastate sales and therefore liable to Mysore Sales Tax Act 48". 784 In its judgment the High Court took into consideration the fact that the first appellant had a branch office at Bangalore within the State of Mysore and that the public placed their orders with the first appellant for supplies of cement against permits granted to them; that the first appellant, who after accepting the offer for the supplies of cement, collected the price from the intending purchasers and then directed one of the factories of the second appellant to supply cement to the purchasers and actual delivery to the purchaser was within the State) of Mysore and therefore the contention that cement was loaded outside the State of Mysore and despatched to the purchaser did not not convert sales into inter State sales but were intra state sales. It appears that the true nature of the transaction was not correctly considered by the High Court, The modus operandi above mentioned shows that before an intending purchaser could obtain cement he had to get what is called an authorisation from a Government authority which nominated the factory from which the intending purchaser had to get his supplies of cement. That authorisation with an order had to be given to the first appellant; and after a contract in the standard form was entered into the first appellant sent the order to the factory named in the authorisation and that factory then supplied the requisite goods to the purchaser. The factory from where the cement was to be supplied was not in the hands or at the option of the first appellant, but was entirely a matter for the Government authority to decide, so that the cement which was supplied from a particular factory was supplied not at the choice of the first appellant but pursuant to the authorisation. It was contended that the sales which took place in the present case in which the movement of 785 goods was from one State to another as a result of a covenant or incident of the contract of sale fell within article 286(2) of the Constitution and therefore the imposition 'of Sales tax on such sales was unconstitutional. The Article applicable at the relevant time i.e., before its amendment was as follows: 286 (1) "No law of a State shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place. (a) outside the State; or (b) in the course of the import of the goods into or export of the goods out of, the territory of India. Explanation . . . . . (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State or commerce: Provided. . . . . . " The Article had since been repealed and another substituted in its place by the Constitution (Sixth Amendment) Act but the sales in question were prior to the amendment. In the present case the contract itself involved the movement of goods from the factory to the purchaser i. e. across the broder from one State to another because the factories were outside the State of Mysore and therefore transactions were 786 clearly transactions of sale of goods in the course of inter State trade or commerce. Taking the nature of the transaction and preliminaries which are necessary for the sale or purchase of cement it cannot be said that the sale itself did not occasion the movement of goods from one State to another. The essential features of the contracts proved in the present case are analogous to those in M/s. Mohan Lai Hargovind vs The State of Madhya Pradesh.(1) In that case the assessees were a firm carrying on business of making and selling birds in Madhya Pradesh. In the course of their business they imported finished tobacco from dealers in Bombay State, rolled it into biris and exported the biris to various other States. Both the exporters of tobacco from Bombay State who supplied the assessees and the assessees were registered dealers under the C. P. & Berar Sales Tax Act., 1947. It was held that the asessees imported the finished tobacco into Madhya Pradesh from persons who were carrying on in the State of Bombay business of processing tobacco and selling the goods and there was, as a result of these transactions movement of goods from the State of Bombay to the State of Madhya Pradesh and therefore the transactions involved movement of goods across the State border and they were not liable to be taxed by virtue of article 286 (2) of the Constitution. In The State of Pravancore Cochin & Others vs The Bombay Co Ltd. (1) which was a case under article 286 (1) (b) i. e. sale and purchase in the course of export trade, Patanjali Sastri, C. J., observed: "A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the (1) (2) (1952) section C. R. III2. 787 country by land or sea. Such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export from parts of a single transactions. At p. 1120 the learned Chief Justice again observed: "We accordingly hold that whatever else may or may not fall within article 286 (1) sales and purchases which themselves occasion the export or the import of the goods, as the case may be, out of or into the territory of India come within the exemption and that is enough to dispose of these appeals". Thus a sale to fall within article 286 (1) (b) has to be a sale which occasions the export. Again in the, State of Travancore Cochin & Other8 vs Shammugha Vilas Cashew Nut Factory & Other8 (1) the words "in the course of" were interpreted to mean a sale taking place not only during the activities directed to the end of exportation of the goods out of the contury but also as a part of or connected with such activities. At p. 63 the learned Chief Justice explained the words "integrated activities" as follows: "The phrase "integrated activities" was used in the previous decision to denote that "such a sale" (i. e. a sale which occasions the export) "cannot be dissociated from the export without which it cannot be affectuated, and the sale and the resultant export form parts of a single transaction '. It is in that sense that the two activities the sale and the export were said to be integrated". In Endu puri Narasiham & Son vs The State of Orissa, it was held in the case of sales covered (1) ; (2) ; 788 by article 286 (1) (b) that only Bale or purchase 'of goods which occasions the export or import of the goods out of or into the territory of India were exempt from the imposition of tax on the sale or purchase of goods and in regard to prohibition against imposition of tax on inter State sales the test, it was said, was that in order that a sale or purchase might be inter State it is essential that there must be transport of goods from one State to another under the contract of sale or purchase. The following observatins from the Bengal Immunity Co. Ltd. vs The State of Bihar (1) were quoted with approval in support of the position: "A sale could be said to be in the course of inter State trade only if two conditions concur: (1) A sale of goods, and (2) a transport of those goods from one State to another under the contract of sale. Unless both these conditions are satisfied, there can be no sale in the course of inter State trade". Thus the tests which have been laid down to bring a sale within inter State sales are that the transaction must involve movement of goods across the border (Mohanlal Hargovind 's case (2) ); transactions are inter State in which as a direct result of such sales the goods are actually delivered for consumption in another State; M/s Ram Narain It Ssns V. Assistant Commissioner of Sales tax (3) a contract of sale must involve transport of goods from one State to another under the contract of sale; Bengal Immunity Co ' case (1). in the case of sales in the course of export or import the test laid down was a series of integrated activitiesm commencing from an agreement of sale and ending with the delivery of goods to a common (1) , 784 5 (2) (1965) 2 S.G R. 509. (3) ; , 504. 789 carrier for export by land or by sea ; The Bombay Co. Ltd, case (1). "In the course of" was explained to mean a sale taking place not only during the activities directed to the end of the exportation of the goods out of the country but also as part of or connected with such activities and "integrated activities" was explained in similar langauage. This Court again accepted these tests in Endupuri Narasim ham 's case (2). In a. 3 of the (Act 74 of 1956), the legislature has accepted the principal governing inter State sales as laid down in mohan Hargovind 's case (3). The principles for determining when a sale or purchase of goods takes place in the course of inter state sale or commerce outside the state are : "S.3 A sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or pur chase (a) occasions the movement of goods from one State to another ; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another". In Tata Iron & Steel Co. Ltd, Bombay vs S.R. Sarkar & Another (4) Shah, J., in explaining what sales are covered by el. (a) of s.3 above said : "Cl. (a) of a. 3 covers sales, other than those included in Cl. (b), in which the movement of goods from one state to another is the result of a convenant or incident of the contract of sale. and property in the goods passes in either State . " As stated above under the contracts of sale in the present case there was transport of goods from (1) (3) (1955) 2 S.G.R. 509. (2) ; (4) ; ,391, 790 outside the State of Mysore into the State of Mysore and the transactions themselves involved movement of goods across the border. Thus if the goods moved under the contract of sale, it cannot be said that they were intrastate sales. It was not the volition of the first appellant to supply to the purchaser the goods from any of the factories of the second appellant. The factories were nominated by the Government by authorisations which formed the basis of the contract between the buyer and the seller. Applying these tests to the facts of the present case we are of the opinion that the sales were in the nature of inter State sales and were exempt from Sales tax. In these circumstances the contracts of sale in the present case have been erroneously considered to be intrastate sales. The decision in Rohtas Industrieg Ltd. vs The State of Bihar (1) to which reference was made by the respondent does not apply to the facts of the present case because the agreement between the first appellant and the second appellant is different from that which existed between Rohtas Industries Ltd. and the Cement Marketing Co of India in the case above cited. (in an examination of the agreement between those two companies this court held that the rotation. ship which existed between the two was of seller and buyer and not of principal agent. In the present case the agreement is quite different. In the first clause of the agreement between the two appellants and the Patimia Cement Co. dated April 21, 1954, the first appellant was appointed the sole and exclusive Sales Manager of the second appellant and as such the first appellant was entitled to enter into contracts of sale, receive payment of the same and do all seta and things necessary for the effective management in connection with the contracts of sale entered into on behalf of the principals. The sale price and the terms and conditions of sale were to be (1) (1961) 12 S.T.C. 615. 791 determined by the principals. The Sales Manager was to keep its administrative and technical staff at such places in India as was determined by the principals. All the establishment charges and other expenses of the Sales Managers were for and on behalf of the principals and were to be defrayed by the principals in proportion to their annual sales. At the end of every mouth the Sales Managers were to submit to the principals accounts showing sales con tracts by it on behalf of each one of the principals. At the end of each financial year ending July 31 the Sales Managers had to make a. proper account of all their operations during the year and after submitting them for confirmation to the principals had to pay the price of annual sales realizations to each of the principals to whom they happened to relate. Clause to provided that subject to instructions of the principals the Sales Managers were to make all necessary arrangements to secure speedy and economicial transport of cement. These terms are quite different from those in the case of Rohtas Industries Ltd. and therefore that decision has no application to the facts of the present case. In the result, the imposition of the Sales tax on the appellant for the year of assessment except for the period April 1, 1955, to September 6, 1955, was illegal and was not leviable for that period. The appeal is therefore allowed to that extent and the petition of the appellants succeeds but it will not effect the tax paid for the period abovementioned. In view of the partial success of appellants they will be entitled to half costs of the appeal. Appeal allowed in part. (1) (1961) 12 S.T.C. 615.

IN-Abs

The second appellant was a manufacturer of cement and at the material time it had over a dozen factories in different parts of India none of which was in the State of Mysore. The first appellant was its sales manager and had its head office in Bombay with a branch office at Bangalore in the State of Mysore ' Cement was a controlled article and every one wishing to buy cement. had to get an authorisation from the appropriate Government authorities in a standard form which authorised the first appellant to sell cement in quantities mentioned therein and the cement had to be supplied from the factory therein mentioned. The purchaser had to place an order with the first appellant. stating the requirement, where the goods were to be sent and how they were to be sent. In the present case, all the goods were sent against the authorisations from the various factories belonging to the second appellant which were all outside the State of Mysore and were received in the State of Mysore by the various 778 purchasers. The Sales Tax Officer by his order dated March 31, 1958, took the view that though the property in the goods passed to the dealers and consumers outside the State, of Mysore, since the goods had actually been delivered in the State of Mysore as a direct result of such sales for purposes of consumption in the State, the sales must be deemed to have taken place in that State and, therefore, the sales effected by the first appellant as the sales manager of the second appellant, to customers in Mysore State amounted to intrastate sales and liable to tax under provisions of the Mysore Sales Tax Act, 1948. The High Court held that as the actual delivery to the purchasers was within the State of Mysore, the cement loaded outside the State and despatched to the purchaser did not convert the sales into inter State sales but were intrastate Wes. Held, that the sales which took place in the present case in which the movement of goods was from one State to another as a result of a convenant or incident of the contract of sale, were in the course of inter State trade or commerce and fell within Art ' 286(2) of the Constitution of India, Consequently, the imposition of sales tax on such sales was unconstitutional. M/S. Mohan Lai Hargobind vs The State of Madhya Pradesh, ; , followed. Endapuri Narasimhan & son vs The State of Orissa; , , Bengal Immunity Co. Ltd. vs The State of Bihar, M/s. Ram Narain & Sons vs Assistant Commissioner of Sales Tax, ; and Tata Iron and Steel Co. Ltd. Bombay vs section R Sarkar, [1961] 1 S.C.R. 379, relied on. Rohtas Industries Ltd. vs The State of Bihar, [1961] 12 S.T.C. 615, distinguished.

Appeals Nos. 139, 147, 214 and 510 of 1961. Appeals by special leave from the judgment and decrees dated October 8, 21. 1959, and March 4,1959, of the Punjab High Court in R. section A. No. 473 of 1959, L.P.A. No. 332 of 1959, R.S.A. Nos. 921 of 1959 and 508 of 1953. J. P. Goyal, for the appellant (in C. A. No. 139 of 1962). 861 Nanak Chand, for respondent No. 1. (in C. A. No. 139 of 1962). Hardyal Hardy and N. N. Keswani, for the appellants (in C. A. No. 147 of 1961). Dayal Swarup Mehra and K. R. Choudhuri, for respondent No. 1 (in C. A. No. 147 of 1961). Hardev Singh and Y. Kumar, for appellants Nos. 2 to 5 'in C. A, No. 214 of 1961). K. L. Gosain and M. L. Aggrawala, for respondents Nos. 1 to 4 (in C. A. No. 214 of 1961). P. section Safeer, for the appellant (in C. A. No. 510 of 1961). Achhru Ram and B. D. Jain, for the respondent (in C. A. No. 510 of 1961). August 30. The Judgment of the Court was delivered by AYYANGAR, J. These four appeals which have been filed pursuant to special leave granted by this Court principally raise for consideration the constitutional validity of section 15 of the Punjab Preemption Act (Act 1 of 1913), hereinafter referred to as the Act. The property involved in these appeals are agricultural lands and in each one of them decrees have been passed in favour of the preemptors whose claim to preempt was based on different sub clauses of section 15, and the vendees who are the appellants in the several appeals challenge the constitutional validity of the law under which the suits have been decreed. One of the appeals Civil Appeal No. 214 of 1961 however could be decided without considering the constitutional point regarding the validity 862 of section 15 of the Act and it would therefore be convenient to dispose it of first. The facts giving rise to the appeal are briefly as follows The 5th and 6th respondents before us owned certain agricultural land in village Dugri which they sold to the appellants by a deed dated April 25, 1957. Res pondents 1 to 4 instituted a suit against the appellants to which the vendors respondents 5 & 6 were also impleaded as co defendants. The right of preemption was based on the plaintiffs being the nearest collaterals of the vendors and heirs according to the rule of succession. There were certain points of dispute on the facts but these are not now material and it is sufficient to state that the suit was decreed by the Subordinate Judge on December 10, 1958. This judgment in favour of respondents 1 to 4 was affirmed by the District Judge on appeal and on further appeal, by the High Court. It is from this judgment and decree of the High Court that the vendees who are the appellants before us have brought the matter to this Court. The appellants were five in number. They fell into two groups constituted respectively by the 1st and 2nd appellants who are brothers and by appellants 3, 4 and 5. While the appeal was pending in this Court the 1 at appellant Mehar Singh died on May 18, 1960, leaving a widow and five children four daughters and a son, as his heirs. No application was, however, made to bring on record the legal representatives of the deceased 1st appellant Mehar Singh and learned Counsel appearing for the other four appellants informed the office that the legal representatives were not being brought on record and that he would proceed with the appeal on behalf of the four surviving appellants. At the hearing of the appeal learned Counsel for the respondents submitted that the appeal ought 863 to be dismissed as incompetent since the same had abated on the death of the first appellant without his legal representatives being brought on record. Learned Counsel for the appellants, however, contended that whatever might be the position as regards the share to which Mehar Singh was entitled in the property purchased, the interest of the deceased was distinct and separate from that of the others and that the abatement could be in any event only partial and would not affect the continuance of the appeal by the surviving appellants at least as regards their share in the property. As the deed of sale under which the appellants purchased the property was not among the printed records of this Court, the appeal was adjourned in order to enable learned Counsel for the appellants to produce. it and substantiate his contention that the interest of the deceased Mehar Singh wag distinct and separate. An English translation of the deed of sale has now been produced before us and a perusal of it indicates that the submission made on behalf of the appellants is not sustainable. The consideration for the sale is a sum of Rs.22,750/and the conveyance recites that Mehar Singh and the second appellant bad paid one half amounting to Rs. 11,375/ while the other three appellants had paid the other half It is therefore not a case of a sale of any separated item of property in favour of the deceased appellant but of one entire set of properties to be enjoyed by two sets of vendees in equal shares. It is clear law that there can be no partial pre emption because preemption is the substitution of the pre emptor in place of the vender and if the decree in favour of the preemptors in respect of the share of the deceased Mehar Singh has become final it is manifest that there would be two conflicting decrees if the appeal should be allowed and a decree for 864 preemption insofar as appellants 2 to 5 are concerned is interfered with. Where a decree is a joint one and a part of the decree has become final by reason of abatement, the entire appeal must be held to be abated. It is not necessary to cite authority for so obvious a position but we might refer to the decision of this court in Jhanda Singh vs Gurmukh Singh (deceased) (1). The result is that the appeal fails as having abated and is dismissed with costs. Civil appeal No. 139 of 1961 The material provision of section 15 of the Act relevant for the consideration of the constitutional point raised in this appeal is section 15(a), but as the validity of other clauses of the same section are challenged in the other appeals, we consider it convenient to set out the other relevant ones also: "15. Subject to the provisions of section 14 the right of preemption in respect of agricultural land and village immoveable property shall vest (a) where the sale is by a sole owner or occupancy tenant or, in the case of land or property jointly owned or held, is by all the co sharers jointly, in the persons in order of succession, who but for such sale would be entitled, on the death of the vendor or vendors, to inherit the land or property sold: (b) where the sale is of a share out of joint land or property, and is not made by all the co sharers jointly,firstly, in the lineal, descendants of the vendor in order of succession; (1) Civil Appeal No. 344 of 1956, decided on April IO, 1962. 865 secondly, in the co sharers, if any, who are agnates, in order of succession; (c) If no person having a right of pre emption under clause (a) or clause (b) seeks to exercise it : . . . . . . . thirdly, in the owners of the estate; The following few facts are necessary to be stated to appreciate the manner in which the question arises. One Ram Nath sold certain agricultural land of an area of about 65 bighas in village Durjanpur in District Sangrur of Punjab to the second respondent Pooran by a deed of sale dated December 12, 1957. The vendee Pooransold the land he had purchased, in favour of Ram Sarup appellant before us. Subsequently Munshi the first respondent brought a suit Suit 297 of 1958 in the Court of the Subordinate Judge First Class at Narwana stating that he was the son of vendor Ram Nath and claiming preemption under is. 15 of the Act. There were rival claims for preempting the same property and another suit was filed in regard to it which was tried along with the suit by Munshi, but this failed and is no longer of relevance. The main contest to the suit by Munshi was based upon a denial of the fact that be was the son of Ram Nath. This issue was found in favour of the respondent by the Subordinate Judge who decreed the suit, which judgment was confirmed successively by the District Judge on appeal and thereafter by the High Court on second appeal. It was therefore common ground that if section 15(a) was constitutionally valid, the sale by Ram Nath was subject to the right of Munshi, to preempt and that consequently his suit was properly decreed. 866 The constitutional validity of section 15 was not contested before the High Court because of the decision of a Full Bench of that Court which had upheld its validity. It was only at the stage of an application for a review of the Judgment of the High Court that this point was raised but the learned Judges rejected it and it was on the ground of this constitutional point that special leave was granted and that is the only point for consideration in this appeal. Before adverting to the points urged by learned Counsel as regards the constitutional validity of section 15 it is necessary to notice an argument urged on behalf of the appellant for sustaining a contention that even apart from the unconstitutionality of the provision the right of pre emption conferred by section 15(a) has ceased to be enforceable. The argument under this head was rested on the opening words of section 15 and certain other provisions to which we shall immediately advert. It would be noticed that a. 15 opens with the words "Subject to the provisions of section 14 the right of preemption in respect of agricultural land. . shall vest". Section 14 runs in these terms: "14. No person other than a person who was at the date of sale a member of an agricultural tribe in the same group of agricultural tribes as the vendor shall have a right of pre emption in respect of agricultural land sold by a member of an agricultural tribe. " The expression "agricultural tribe" referred to in section 14 is defined in section 3(4) of the Act thus: "member of an agricultural tribe and group of agricultural tribes shall have the meanings assigned to them respectively under the Punjab Alienation of Land Act, 1900. " 867 Next it would be seen that a. 15 employs the words "in respect of agricultural land". "Agricultural land" is defined in section 3(1) of the Act thus: " 'agricultural land ' shall mean land as defined in the Punjab Alienation of Land Act, 1900 (as amended by Act 1 of 1907), but shall not include the rights of a mortgagee whether usufructuary or not, in such land,; Section 6 of the Act enacts; "6. A right of preemption shall exist in respect of agricultural land and village immoveable property, but every such right shall be subject to all the provisions and limitations in this Act contained". , and section 23 enacts: "No decree shall be granted in a suit for pre emption in respect of the sale of agricultural land until the plaintiff has satisfied the Court (a) that the sale in respect of which pre emption is claimed is riot in contravention of the Punjab Alienation of Land Act, 1900: and (b) that he is not debarred by tile provisions of section 14 of this Act from exercising the right of preemption." Now, by the Adaptation of Laws (Third Amendment) Order, 1951, the Punjab Alienation of Land Act, 1900, has been repealed and the argument urged by the learned Counsel for the appellant was that by reason of the repeal of that Act the right of preemption granted by section 15(a) has become unavailable. The argument was somewhat on these lines. It is under section 6 that the right of preemption is recognised and granted, though section 15 868 sets out the circumstances in which it arises. Under section 6 the right is (a) in respect of "agricultural land ", and (b) the right conferred by the Act is subject to every provision and limitation contained in it. In the Act, as originally framed before the amendment effected by the Adaptation of Laws (Third Amendment) Order, 1951 i. e., before the repeal of the Punjab Alienation of Land Act, 1900, there were two principal limitations on the right of preemption in respect of "agricultural land:" (1) it applied only to such land as was defined in the Punjab Alienation of Land Act, and (2) by virtue of section 14 there was a limitation of the group of persons who might claim the right of preemption if a sale took place by "a member of an agricultural tribe", and the expression "member of an agricultural tribe" was as defined by the Punjab Alienation of Land Act. Section 15 therefore was subject to the limitations of section 14 and to the definition of 'agricultural land ' and 'agricultural tribe ' and this read in conjunction with the positive provision in s.23 has become wholly inapplicable and unworkable after the repeal of the Punjab Alienation of Land Act of 1900. The problem here raised is dependent upon the construction which the several provisions which we have set out earlier would bear after the repeal of the Punjab Alienation of Land Act, 1900. One thing is clear and that is that the authority which effected the repeal of the Punjab Alienation of Land Act did not consider that Punjab Act 1 of 1913 had itself to be repealed. We shall now consider the effect of the repeal of the Punjab Alienation of Land Act with reference to each of the provisions: Definition of "agricultural land ' under 8.3(1): Where the provisions of an Act are incorporated by reference in a later Act the repeal of the earlier Act 869 has, in general, no effect upon the construction or effect of the Act in which its provisions have been incorporated. The effect of incorporation is stated by Brett, L. J., in Clarke vs Bradlaugh: (1) "Where a statute is incorporated, by reference, into a second statute the repeal of the first statute by a third does not affect the second. " In the circumstances, therefore, the repeal of the Punjab Alienation of Land Act of 1900 has no effect on the continued operation of the Preemption Act and the expression 'agricultural land ' in the later Act has to be read as if the definition in the Alienation of Land Act had been bodily transposed into it. Section 2 of the Punjab Alienation of Land Act, 1900, as amended by Act 1 of 1907 defined `Land ' as follows: "The expression 'land ' means land which is not occupied as the site of any building in a town or village and is occupied or let for agricultural purposes or for purposes sub servient to agricultural or for pasture, and includes. . . . . " It is not in dispute that the land concerned in the claim for preemption made in the appeal satisfies this definition. We shall next take up the effect of the repeal of the Punjab Alienation of Land Act, 1900, on s.14 of the Act and of the definition contained in a. 3 (4) thereof of the expression "member of an agricultural tribe" and the effect of these on the right of preemption conferred by section 15(a). With the repeal of the Punjab Alienation of Land Act, 1900, it is manifest that s.14 would lose all (1) 870 significance, but this does not help, in any manner, the contentions urged by learned Counsel for the appellant. It would be seen that section 14 is restrictive, in that in the case of the alienations by persons referred to in that section the right of preemption is conferred upon a limited group. With the repeal of the Punjab Alienation of Land Act, 1900, the restriction imposed by section 14 as regards the availability of the right of preemption to particular agricultural tribes would disappear. In other words, the effect of the removal of the limitation of section 14 would only be that the opening words of section 15 cease to operate. In such circumstances section 14 would lose all significance because the post Constitution law does not recognise membership of tribes as conferring any special rights and consequently the elimination of section 14 would leave a. 15 without the limitation originally imposed upon it. In the same manner the restriction imposed upon the passing of decrees by section 23 could also not operate after the repeal of the Punjab Alienation of Land Act but that would leave the Court with an unfettered power to grant decrees under the provisions of the Act, i. e., without the limitations imposed by a. 23. We are therefore clearly of the opinion that neither the repeal of the Punjab Alienation of Land Act, 1900, nor the consequential removal of the fetters imposed by sections 14 and 23 have the effect of rendering the substantive provision contained in section 15 not available to those who satisfy its terms. In these circumstances we have necessarily to consider the main question raised by learned Counsel for the appellant, viz., that the rights conferred upon the pre emptor is an unreasonable restriction on the right of vendors "to hold and dispose of property)" and of prospective vendees to acquire property" guaranteed to citizens of India by article 19(1) (f) of the Constitution. 871 Before proceeding to consider the question about the constitutional validity of a. 15(a) of the Act, it is necessary to mention that section 15 of the Act has been the subject of very substantial amendments effected by the Punjab Preemption (Amendment) Act of 1960 (Act 10 of 1960). This however makes no difference to the present appeal since the relevant portion of section 15 as amended reads : "15. (1) The right of preemption in respect of agricultural land and village immoveable property shall vest (a) where the sale is by a sole owner FIRST, in the son or daughter or son 's son or daughter 's son of the vendor;" In view of this feature, it is needless to consider in this appeal as to whether the amending Act is retrospective and if so, the degree of retrospectivity a question which falls for decision only in Civil Appeal No. 510 of 1961. It is common ground that the right of preemption granted by the statute is a restriction on the right "to hold and dispose of property" on the part of the vendor the right guaranteed by Art.19(1)(f) of the Constitution. The question, however, is whether the restriction imposed is reasonable and in the interest of the general public within article 19(5) of the Constitution. The general question about the impact of the right conferred by article 19(1)(f) on the right of preemption has been dealt with exhaustively in the judgment of this Court in Bhau Ram vs Baij Nath (1) and it is (1) (1952) Supp. 3 S.C.R. 724. 872 unnecessary to cover the ground again. The proper approach to the question would be as to whether the grounds which are stated to underlie the provision are reasonable judged in the light of present day standards and needs of the community and are in the interests of the general public. The question about the reasonableness of this restriction contained in 3. 15 of the Act was considered by a Full Bench of the High Court of Punjab in Uttam Singh vs Kartar Singh (1) and as the grounds stated there have been referred to with approval in subsequent decisions of the Punjab High Court and were relied on before us by learned Counsel for the respondent we might as well extract the passage in full : "It is plain that the objects underlying as. 15 and 16 of the Act may be briefly enumerated as follows : (1) to preserve the integrity of the village and the village community; (2) to avoid fragmentation of holdings; (3) to implement the agnatic theory of the law of succession; (4) to reduce the chances of litigation and friction and to promote public order and domestic_comfort; and (5) to promote private and public decency and convenience. " The reference here in the above passage to "the promotion of public order and domestic comfort" and to "Private and public decency and convenience" obviously have relevance to urban immoveable property dealt with in section 16. The (1) A. 1. R. 1954 Punjab 55. 873 grounds on which the reasonableness of the right of pre emption granted by law in regard to agricultural property dealt with in section 15 would therefore appear to be the first four of the above. Among them much stress could not be laid on the avoidance of chances of litigation and friction because the existence of the right of preemption could also give rise to litigation which otherwise might not exist. Nor can the ground of avoidance of fragmentation of holdings afford assistance to sustain the claim of a son to preempt in the event of a sale by a sole owner father, for that criterion has primary relevance to the right of preemption enjoyed by co sharers and the like. The grounds for upholding section 15(a) as reasonable and in the interest of the general public therefore finally resolve themselves into two: (1) to preserve the integrity of the village and the village community; and (2) to implement the agnatic rule of succession. The objective underlying the first ground is prima facie reasonable and calculated to further the interest of the general public. It was however pointed out by learned Counsel for the appellant that with the large scale migration of population into Punjab consequent on the problems created by partition there has been a disintegration of the village community and that in the circumstances, what is at the present date imperatively required is not the keeping out of strangers from rural areas but rather for their being absorbed into the village community and that in that context the existence of a law which prevented such absorption could not be characterized as being either reasonable or in the interests of the general public. Though we see some force in this submission of learned 874 Counsel we are unable to accept it as a final and conclusive answer to the argument against the reasonableness of the provision for we find that in the schemes for rehabilitation of the refugees the principle of the integrity of the village community and the need to maintain some degree of cohesion as regards the population in each village has been observed and, indeed, forms the basis of the methods by which different groups of refugees were settled in various parts of the Punjab. It has thus been possible to reconcile somewhat the needs of the refugees being settled in India, with the preservation of the integrity of the village community. Even if this ground cannot serve to sustain the constitutionality of the provision, we consider that the other ground viz., that the next in succession should have the chance of retaining the property in the family, would suffice to render the restriction reasonable and in the interest of the general public within article 19(5). In this connection we might refer to the reasoning in the decision of the Rajasthan High Court in Siremal vs Kantilal(1) where the learned Judges struck down as unconstitutional a provision in a. 3 of the Marwar Preemption Act which granted a right of preemption "to persons related within three degrees to the vendor of the house or building plot provided that the nearer in degree shall have priority over one more remote" as an unreasonable restriction on the right conferred by article 19(1)(f) of the Constitution. The basis of this ruling was that the impugned enactment conferred the right of preemption on all relations within three degrees and did not restrict it to the members of the family. Under s.15 of the Act, particularly after the amendment effected by Act 10 of 1960, the right of preemption is confined to the members of the family (1) A.I.R. 1954 Rajastban 195. 875 of the vendor, i. e., those who would have succeeded to the property in the absence of any alienation. The relevant portion of section 15 (1) after amendment reads: "15. (1) The right of preemption in respect of agricultural land and village immoveable property shall vest (a) where the sale is by a sole owner,FIRST, in the son or daughter or son 's son or daughter 's son of the vendor; SECONDLY, in the brother or brother 's son of the vendor; THIRDLY, in the father 's brother or father 's brother 's son of the vendor; FOURTHLY,. . . " No doubt, the son and the other members of the family would not have been entitled to a present interest in the property alienated and consequently would not have a right to prevent the alienation (in which event, however, it is needless to add that a right to preempt wan wholly unnecessary as a means of preserving the property), but they would have a legitimate expectation of succeeding to the property an expectation founded on and promoted by the consciousness of the community. If the social consciousness did engender such feelings, and taking into account the very strong sentimental value that is attached to the continued possession of family property in the Punjab, it could not be said that the restriction on the right of free alienation imposed by section 15(1)(a) limited as it is to small class of near relations of the vendor is either unreasonable or not in the interest of the general public. The result is the appeal fails and is dismissed with costs. 876 Civil Appeal No. 147 of 1961. The facts giving rise to this appeal are briefly as follows : The appellant Dalip Singh purchased under a deed dated June 1,, 1957, agricultural land measuring 98 bighas and 10 biswas situated in village Bailerkha in district Sangrur under a registered deed of sale. The vendors were Nihal Singh, Wazir Singh and Gurdial Singh who are respondents 2 to 4 before us. Sunder Singh brother of respondents 2 & 3 and uncle of the 4th respondent filed a suit in the Court of the Sub Judge, Narwana, for preemption basing his claim under section 15(a) of the Act. It is manifest that even under the amended section 15 a person in the position of the first respondent has a right to preempt. It would be seen that under section 15(a), as it originally stood, the right of pre emption is conferred upon persons who would succeed as heir to the vendor in the event of his death. In other words, preemption in such cases is the grant of an option to the heirs to retain property in the family. As we have already pointed out in dealing with the claim by a vendor 's son in Appeal 139 of 1961, we consider that the provisions contained in section 15(a), as it originally stood, as well as in the modified form in which it has been reenacted do not transgress the limits of reasonableness required by Art.19(5) of the Constitution. As the constitutionality of s.15(a) was the only ground which was or could be canvassed before us in this appeal and as we are rejecting it follows that the appeal fails. It is accordingly dismissed with costs. Civil Appeal No. 510 of 1961 What now remains to be dealt with is Civil Appeal 510 of 1961. This appeal arises out of a suit filed by the first respondent as plaintiff for preemption of certain agricultural land in village 877 Fatehabad in Amritsar district. The sale which gave rise to the suit was under a deed dated December 29, 1949, in favour of the appellate Singh. The claim to preempt was based on section 15 (c) "thirdly" of the Punjab Preemption Act, 1913, which has already been set out. The expression " estate" which is used in cl. (c) "thirdly" is not defined by the Act but by reason of its section 3 (6) the definition in section 3 of the Punjab Land Revenue Act, 1887, is attracted to it. Turning now to section 3 of the Punjab Land Revenue Act (Act XVII of 1887), it defines an 'estate ' as meaning, inter alia, "any area for which a separate record of rights has been made. " It was the case of the plaintiff first respondent before us that he owned land in the "estate" whereas the under the appellant before us did not own any land there. The defendant while not disputing that the plaintiff owned land in the village or the correctness of the allegation that the land was in an "estate", sought to prove that he too owned land in the same village and "estate" but in this he failed. As the case of the plaintiff was directly covered by the terms of the statute his suit was decreed by the trial Court on November 8, 1951, and an appeal and second appeal there from were also dismissed. It was from this judgment of the High Court that this appeal has been brought and the principal point on which leave was granted related to the constitutionality of the provision in section 15 of the Pre emption Act upon which the respondent based his claim to preempt. In regard to the point about the Considerational validity of section 15 (c) "thirdly" we consider that the case is clearly covered by the judgment of this Court in Bhau Ram vs Baij Nath (1) where the Court upheld the validity of the right of preemption granted under Ch, XIV of the Berar Land Revenue Code (Appeal 430 of 1958). In the (1) [1962] Supp 3 section C.R 724. 878 case of an estate within section 3 of the Punjab Land Revenue Act of 1887, section 61 of the Act enacts: "61 (1) In the case of every estate, the entire estate and the landowner or, if there are more than one, the landowners jointly and severally, shall be liable for the land revenue for the time being assessed on the estate : Provided that. (a) the State Government may by notification declare that in any estate a holding or its owner shall not be liable for any part of the land revenue for the time being assessed on the estate except that part which is payable in respect of the holding; and (b). . . . (2) A notification under proviso (a) to sub section (1) may have reference to any single estate or to any class of estates or estates generally in any local area. " Thus it will be seen that an "estate" is an unit of assessment and there is a joint and several liability on persons owning land within the "estate ', to pay the entire assessment due on the estate. Thus though it is not really the case of a co sharer, it is somewhat akin to that of a co sharer because of the joint liability for payment of land revenue. We therefore consider that the restriction on the right of a vendor in such a case is a reasonable one and not repugnant to article 19 of the Constitution. As learned Counsel for the appellant desired to have time to ascertain whether there had been a notification of the Local Government such as is referred to in a. 61 of the Punjab Land Revenue 879 Code, we adjourned the case to enable him to produce the notification, if there was one, and we were informed that there was none. If therefore the matters had stood as under the law as enacted in section 15 of the Act the appeal would have to be dismissed. The Punjab Legislature, however, effected substantial amendments to the Punjab Preemption Act of 1913 by Punjab Act 10 of 1960 and it is the impact of this later legislation on the rights of the parties to this appeal that now requires to be considered. Punjab Act 10 of 1960 received the assent of the Governor on February 2, 1960, and was published in the Punjab Government Gazette two days later. By section 4 of the Amending Act section 15 of the parent Act was repealed and in its place was substituted a new provision which omitted to confer a right of Preemption in the case of persons "owning land in the estate )I as the original section 15 (c) "thirdly" had done. Retrospective effect was giving to the provisions contained in the Amending Act by the insertion of a new section 31 in the parent Act Which read: "31. No court shall pass a decree in a suit for preemption whether instituted before or after the commencement of the Punjab Pre emption (Amendment) Act, 1959, which is inconsistent with the provisions of the said Act". It may be mentioned that the figure 1959 in section 31 is an obvious mistake for 1960 which is the correct year of the Amending Act. The question now for consideration is whether by reason of this amendment in the law, the respondent is entitled to the benefit of the decree which he obtained under the previously existing enactment. That section 31 is plainly retrospective and that it affects 880 rights to preemption which had accrued before the coming into force of the Amending Act is not in controversy for section 31, in plain terms, makes the substantive provisions of the enactment applicable to suits whether instituted "before or after" the commencement of the Amending Act. It was urged before us by learned Counsel for the appellant that in view of the plain language of section 31 this Court should apply the substantive law enacted by the Punjab Legislature in the amended section 15 of the Preemption Act and set aside the decree for preemption passed in favour of the first respondent. In this connection learned Counsel referred us to the judgment of the Federal Court in Lachmeshwar Prasad Shukul vs Keshwar Lal Chaudhuri(1) as to the course which this Court would adopt in giving effect to Amending legislation interfering with the. rights of parties in pending appeals, and to the decision of a Division Bench of the Punjab High Court in Ram Lal vs Raja Ram(2) where the learned Judges, on a construction of section 31 of the Act set aside a decree for pre emption passed in favour of the respondent before the Court, giving effect to the provisions contained in Punjab Act 10 of 1960. Mr. Achhru Ram, learned Counsel for the respondent, however, submitted that the language employed in the new section 31 was not sufficient to permit a decree passed in favour of a pre emptor being set aside by an appellate Court merely because the ground on which preemption had been claimed and decreed was not one that was included within the amended provisions. He placed reliance on the principle that besides the rule of construction that retrospective operation is not, in the absence of express words therefore, to be given to a statute so as to impair existing rights except as regards matters of procedure, there was a further (1) (2) 881 well recognised rule that a statute was not to be construed to have a greater retrospective operation than its language rendered strictly necessary. The argument was that though by the use, in section 31, of the words "Suit for preemption instituted before or after the commencement of the Act" a certain amount of retrospective effect was intended, still the retrospectivity was but partial in its operation and that the words used did not permit the setting aside by an appellate Court of a decree which was validly passed under the substantive law applicable to the facts at the date of the original decree,. In this connection he placed considerable reliance on the employment of the words "no decree shall be passed" in the opening words of section 31 as indicative of a ban only on the passing of a decree an event which be contended would occur, firstly when a trial Court passed a decree and secondly when the trial Court having refused a decree, the appellate Court is called upon to pass a decree which the trial Court should properly have done and in no other Contingency. On this reasoning the contention was urged that where a trial Court had passed a decree and that decree gave effect to the law as it stood up to the date of that decree, the words of section 31 did not enable an appellate Court to set aside that decree on the ground of a change in the substantive law effected by the Amending Act. Through we agree that there is a presumption against the retrospective operation of a statute and also the related principle that a statute will not be construed to have a greater retrospective operation than its language renders necessary, we consider that in the present case the language used in section 31 is plain and comprehensive so as to require an appellate court to give effect, to the substantive provisions of the Amending Act whether the appeal before it is one against a decree granting preemption or one refusing that relief. The decision of the 882 Federal Court in Lachmeshwar Prasad vs Keshwar Lal (1) on which learned Counsel for the appellant relied fully covers this case. The question there raised related to the duty of the Federal Court when an amending Act enacted after the decree appealed from was passed adversely interfered with the rights of the respondent before the Court. The learned Judges held. that the provisions of the Act were clearly retrospective and should be applied to the decree which was the subject matter of appeal before it and the appeal was accordingly allowed and remitted to the High Court for effect being given to the new legislation. Mr. Achhru Ram, however, sought to suggest that the language of section 7 of the Bihar Moneylenders Act, 1939 which was the subject of construction before the Federal Court was differently worded and was of wider amplitude. That section ran: "7. Notwithstanding anything to the contrary contained in any other law or in anything having the force of law or in any agreement, no Court shall, in any suit brought by a money lender before or after the commencement of this Act in respect of a loan advanced before or after the commencement of this Act or in any appeal or proceedings in revision arising out of such suit, pass a decree for an amount of interest for the period preceding the institution of the suit, which, together with any amount already realised as interest through the Court or otherwise, is greater than the amount of loan advanced, or, if the loan is based on a document, the amount of loan mentioned in, or evidenced by such document." In particular learned counsel stressed the fact that unlike in section 31 of the Act now under consideration, in the Bihar Act there were specific references to (1) 883 "appeals" and "revision" and that this made a difference. But in our opinion this makes no difference since it is admitted that section 31 even according to the respondent has to be given effect to, not merely by a trial Court but also by an appellate Court, only learned Counsel could urge that the appellate Court could give effect to the Amending Act only in cases where the trial Court has refused a decree for pre emption. No distinction can, therefore, be rested on the ground that the Bihar Act specifically referred to ",appeals" and "revisions" seeing that the relevant operative words in section 7 of the Bihar Act were "no Court shall pass a decree" words which occur in section 31 of the Act as well. On the other hand the reasoning of the learned Judges of the Court which was based on the nature of an appeal under the Indian procedural law as a rehearing and a court of appeal being not a court of error merely, and the view expressed that when an appeal was filed the finality which attached to the decree of the trial court disappeared, all these lines of reasoning point to the fact that even when an appellate court dismisses an appeal it also is passing a decree. In this connection we consider that the reasoning and the conclusion of the Division Bench of the Punjab High Court in Ram Lal vs Raja Ram (1) correctly sets out the principles underlying the scope of an appeal as well as the proper construction of section 31 of the Amending Act. It was not suggested that if the provisions of section 15 as amended by Punjab Act 10 of '1960 had to be applied the decree in favour of the respondent could be sustained. The result therefore is that the appeal has to be allowed, the decree in favour of the respondent set aside and the respondent 's suit for preemption dismissed. In view, however, of (1) 884 the circumstances that the appellant has succeeded only by virtue of subsequent legislation, we direct that there shall be no order as to costs in the appeal. Appeals Nos. 139, 147 and 214 dismissed. Appeal No. 510 Allowed.

IN-Abs

The owner of certain agricultural land in Punjab sold it to the second respondent by a deed dated December 12, 1957 The son of the vendor claimed that he had a right of Pre. emption and instituted a suit against the appellant who pur chased the land from the first respondent, and relied upon the provisions in s.15 (a) of the Punjab Pre emption Act, 1913. The appellant pleaded (1) that the right of Pre emption conferred by section 15(a) of the Punjab Pre emption Act, 1913, had ceased to be enforceable on the repeal of the Punjab Alienation of Land Act, 1900, by the Adaptation of Laws (Third Amend. ment ) Order, 1951, in view of sections 3(a),3(4), 6,14,23 of the Pre emption Act of 1913, and (2) that, in any case, s 15(a) of the Punjab Pre emption Act, 1913, was repugnant to article 19(1)(f) of the Constitution of India. Held, that (1) the repeal of the Punjab Alienation of Land Act, 1900, 'had no effect on the continued operation of the Punjab Pre emption Act, 1913, and that the expression ,,agricultural land" in the later Act had to be read as if the definition of the Alienation of Land Act had been bodily transposed into it. Clark vs Bradlaugh,(1881)8 Q.B.D. 63, relied on. 859 (2) the effect of the repeal of the Punjab Alienation of Land Act, 1900, was that the restrictions imposed by sections 14 and 23 of the Punjab Pre emption Act, 1913, would disappear, leaving the court with an unfettered power to grant decrees to those who satisfied the terms of s.15. (3) the restriction on the right of free alienation imposed by section 15(a)being intended (i) to preserve the integrity of the village and the village community, and (ii) to implement the agnatic rule of succession, are reasonable and culculated to further the interest of the general public. The provisions contained in section 15(a) as it originally stood as well as in the modified form after the amendment effected by Act 10 of 1960 do not transgress the limits of reasonableness required by article 19(5) of the Constitution and are valid, Bhau Ram vs Baij Nath, (1962) Supp. 3 section C.R. 734 and Uttam Singh vs Kartar Singh & Others, A.I.R. 1954 Punjab 55, relied on. In Civil Appeal No. 510 of 1961, the sale which give rise to the suit was under a deed dated December 29, 1949, in favour of the appellant and the first respondent 's claim to pre empt was based on section 15(c)"thirdly" of the Punjab Preemption Act, 1913. The suit was decreed by the trial court on November 8,1951 and when the matter was under appeal in which the question of the constitutional validity of s.15(c) "thirdly" was raised, the Act was amended by Punjab Act 10 of 1960, by which, inter alia, (1)s.15 of the original Act was repealed and in its place was substituted a new provision which omitted to confer a right of pre emption in the case of persons "owning land in the estate" as the original section 15(c) thirdly" had done, and(2) retrospective effect was given to the provisions contained in the Amending Act by the insertion of a new section 31, which provided that "no court shall pass a decree in a suit for pre emption whether instituted before or after the commencement of the Punjab Pre emption (Amendment) Act, 1960, which is inconsistent with the provisions of the said Act. " Held, (1) the restriction on the right of a vendor in cases arising out of s.19 (c)"thirdly" of the Punjab Pre emption Act 1913, was a reasonable one and that the provisions in the section were not repugnant to article 19(1)(f) of the Constitution. Bhau Ram vs Baij Nath & Others. (1962) Supp. 3 S.C.R. 724 followed. 860 (2) the language used in s, 31 was comprehensive enough so as to require an appellate court to give effect to the substantive provisions of the amending Act whether the appeal before it was one against a decree granting pre emption or one refusing that relief. Consequently) in view of section 31, the decree for preemption passed by the trial court could not be sustained. Lachmeshwar Prasad Shukul vs Keshwar Lal Chaudhuri, , relied on. Ram Lal vs Raja Ram, approved. In Civil Appeal No. 214 of 1961, the properties in respect of which respondents 1 to 4 bad instituted a suit claiming a right of preemption had been sold to the appellants by a deed dated April 25, 1957, for a consideration of Rs. 22,750, out of which appellants 1 and 2 had paid one half amounting to Rs. 11,375, while the other three appellants had paid the other half. The recitals showed that it was not a case of sale of separated items of the properties in favour of the two sets of the vendees but that they were to be enjoyed by them in equal shares. A decree for pre emption was passed against the vendees who took the matter on appeal. While the appeal was pending the first appellant died but no application was made to bring on record his legal representatives. that the appeal must be dismissed as having abated on the death of the first appellant without legal representatives being brought on record. Where a decree is a joint one and a part of the decree has become final by reason of abatement, the entire appeal must be held to be abated.

Appeal No. 328 of 1962. Appeal by special leave from the judgment and order dated September 4, 1961, of the Allahabad High Court in Civil Misc. writ No. 3469 of 1960. K. L. Misra, Advocate General for the State of U. P., C. B. Agarwala, K. section Hajela and C. P. Lal, for the appellants. section P. Sinha and M. 1. Khowaja, for respondent No. 1. 1962. August 27. The Judgement of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises out of a Writ Petition filed by the respondent Bagleshwar Prasad against the Board of High School and Intermediate Education, U. P., Allahabad, and its Secretary, appellants 1 & 2, and another. By his petition, the respondent challenged the validity of the order passed by appellant No. 1 on December 5, 1960, cancelling the respondent 's result at the High School Examination held in 1960. It appears that the respondent appeared for the said examination from the Nehru Intermediate College Centre, Bindki. He was declared to have passed the said examination in the 11 Division with distinction in article Thereafter, he joined Intermediate first year class in the Kulbaskar Ashram Agriculture College at Allahabad. On the 3rd September, 1960, he received a letter from the Principal, Adarsh Higher Secondary School, Kora Jahanabad, from where he had appeared for the High School examination, calling upon him to appear before a Sub Committee to answer the charge of having used unfair means in English, 769 Mathematics and Hindi papers. Accordingly, he appeared before the said Sub Committee. A charge was given to him and his explanation was obtained on the said charge. This charge was based on the fact that in Hindi 3rd paper set at the said examination, the respondent had given wrong answers to Question No. 4 in precisely the same firm in which the said answers had been given by a candidate whose Roll No. was 91733. The respondont 's Roll No. was 91731. The respondent was shown the identical wrong answers to the said Question which were found in the two papers, and he was asked to explaining about the said identity of the wrong answers. He admitted that the wrong answers appeared to be identical, but he denied that he had used any unfair means. The Sub Committee however, was not satisfied with the explanation and reported that both the respondent and the candidate whose Roll No. was 94733 had used unfair means. As a result of the report made by the Sub Committee, the first appellant passed an order cancelling the results of both the candidates. Both the said candidates disputed the validity of the said order, in the Allahabad High Court. The petition filed by the candidate whose Roll No. was 94733 was dismissed, but that of the respondent was allowed, and the impugned order passed by appellant No 1 cancelling, the result of the respondent in the High School examination for 1960, has been set aside. It is against this order that the appellants have come to this Court by special leave. From the petition field by the the High Court (W. P. No. 3469 of 1960) it appears that he challenged the validity of the impugned order on several grounds. The principal contentions raised by the petitioner against the competence and the authority of appellant No.1 and against the regularity and fairness of the enquiry held, srose for decision before the High Court in the companion W. P. No. 3196 of 1960 also. The High 770 Court rejected the said contentions of law in that W. P. and for the reasons recorded in the judgment in that petition, the said contentions were rejected even in the present petition. Thus, the challenge to the validity of the order made on points of law was not sustained. The High Court then proceeded to examine the narrow ground of attack against the validity of the order which was made on the basis that the impugned order was not supported by any evidence at all. It appears from the judgment of the High Court that the High court was inclined to accept this argument and it has set aside the order on the ground that it is not supported by any evidence. The correctness of this finding is seriously disputed before us by the learned Advocate General who appears for the appellants. It is common ground that the proceed in taken against the respondent in respect of the unfair means alleged to have been adopted by him at the examination, are in the nature of quasi judicial proceedings, and as such, in a proper case, orders passed as a result of the said proceedings would be liable to be challenged under Art.226 of the Constitution. It is also common ground that the High Court would be justified in quashing the impugned order if it is satisfied that the said order is not based on any evidence at all. An order passed by a Tribunal holding a quasi judicial enquiry which is not supported by any evidence, is an order which is erroneous on the face of it and as such, is liable to be quashed by the High Court in exercise of its high prerogative jurisdiction to issue a writ under article 226. In the present case, the High Court has found that the conclusion of the enquiry Committee that the respondent had copied either from the answer book of the candidate bearing Roll No 947 3 or 771 from a common source, was not supported by any evidence In coming to this conclusion, the High Court has assumed that the charge against the respondent was that he had copied from the candidate bearing Roll No. 94733. Having made this assumption, the High Court has observed that there was no charge against the respondent that he connived in the act of copying by the other candidate ,from his answer book, and it has added that there is no evidence in proof of such connivance. The High Court has also stated that no evidence had been shown to justify the allegations that any outsider had helped the candidate, including the respondent. That, in brief, is the genesis of the final conclusion of the High Court. It appears that the High Court was in error in assuming that the only charge against the respondent was that he had copied from the paper of the candidate bearing Roll No. 94733 and this error is basically responsible for the other observations made by the High Court. The translation of the charge as it has been printed in the record before us, no doubt, seems to support the assumption made by the High Court in regard to the nature of the charge ' But the charge was framed in Hindi and it is common ground before us that the Hindi charge has not been properly translated from the record when it seems to show that what was alleged against the respondent was only that he had copied out from candidate bearing Roll No. 94733. The charge, in terms, was that having regard to the identity of the mistaken answers, the apprehension was that there had been copying, and that is very different from saying that the only charge was that the respondent had copied from the other candidate. This position is made very clear when we consider the explanation given by the respondent. In his explanation, the respondent bad 772 stated that he had not copied out from the answer , book of any candidate, nor had he allowed anyone to copy out from his answer book, so far as he could. He admitted that the mistaken answers in the two papers were identical and he pleaded 'that he could not say any thing as to why this happened. He was also asked whether he had got any help from outside and he gave an answer in the negative. It would thus be seen that at the enquiry, the charge against the respondent was, either that he copied from candidate bearing Roll No. 94733, or that he connived at the said candidate copying from his answer book, or that both of them had copied from a common source. In either case, 'it would amount to the adoption, of unfair means. Therefore, in our opinion, the High Court was in error in assuming that the charge was very narrow and did not include the two other alternatives on which the adoption of unfair means was sought to be established. There is another circumstance which is relevant and significant and that has been ignored by the High Court in dealing with this petition: It appears that at the examination held at Bindki Centre, unfair means were adopted on a very large scale by a large number of students and the examination appears to have been conducted in an atmosphere which was not at all congenial to the enforcement of the discipline which has to be observed in conducting examinations. It appears that there are rivalries and party politics in the Municipal Board of Bindki that runs the institution at which this examination was held, and there are rivalries and party politics even amongst the members of the staff. The members of the Municipal Board and other influential people of the locality bring undue pressure on the Principal and the Invigilators to help their wards or the wards 773 of their friends and relatives in the Board 's Examination. As a result of this unhealthy atmosphere, the Centre at Bindki for High School examination had been abolished for some years, but on account of public pressure it was re started in 1960, and the result was very unfortunate. It also appears that on the day of English paper, while students were answering the paper in Room No. 3, an answer paper by some outsider was dropped into the room 15 minutes before the time to answer questions was over. ' This paper was thrown in room No. 3 from room No. 18. It was a typed paper giving answers to all the Questions. The Assistant teacher, Khajuha, who was one of the Invigilators, complained that the Parcha was typed in the office of the Superintendent of the Centre, but this allegation was denied. Indeed, from the reports made by the invigilators and the findings made by the Enquiry Committee, it appears that the Invigilators themselves were so much frightened by the prevailing rowdyism and by pressure from influential people that they found themselves powerless to maintain discipline in the examination hall. It is, therefore, not surprising that some invigilators could not prevent copying and in fact, six of them had to be warned to be careful in future. The report of the enquiry committee also shows that the complaints which they were to investigate referred to copying on a large scale in several papers besides Hindi, and it is after examining all the complaints in the light of the evidence available to them that the Committee made its final report; and in that report, it held that the respondent and candidate bearing Roll No. 94733 were guilty of having used unfair means. 774 In dealing with the question as to whether the Committee was justified in coming to this conclusion against the respondent, it would not be reasonable to exclude from consideration the circumstances under which the whole enquiry came to be hold and the general background of the prevailing disturbed and riotous atmosphere in the Examination Hall during the days that the High School Examination was held at the Centre in 1960. Unfortunately, the High Court has ignored this background altogether. Before the High Court, a statement was filed showing the seating arrangement in Room No. 10 where the respondent was sitting for writing his answers. It appears that he was No. 3 in the 3rd row, whereas the other candidate with Roll No. 94733 was No. 4 in the second row. The High Court was very much impressed by the fact that the respondent could not have looked back and copied from the answer. book of the other candidate, and the High Court did not think that there was any evidence to show that the other candidate could have copied from the respondents paper with his connivance. We have looked at the incorrect answers ourselves and we are not prepared to hold that the identical incorrect answers were given by the two candidates either by accident or by coincidence. Some of the incorrect answers, and, particularly, the manner in which they have been given, clearly suggest that they were the result of either one candidate copying from the other, or both candidates copying from a common source. The significance of this fact has been completely missed by the High Court. The question before the Enquiry Committee had to be decided by it in the light of the nature of the incorrect answers themselves, and that is what the Enquiry Committee has done. It would, we think 775 be inappropriate in such a case to require direct evidence to show that the respondent could have looked back and copied from the answer written by the other candidate who was sitting behind him. There was still the alternative possibility that the candidate sitting behind may have copied from the respondent with his connivance. It is also not unlikely that the two candidates may have talked to each other. The atmosphere prevailing in the Examination Hall does not rule out this possibility. These are all matters which the Enquiry Committee had to consider, and the fact. that the Enquiry Committee did not write an elaborate report, does not mean that it did not consider all the relevant facts before it came to the conclusion that the respondent had used unfair ' means. In dealing with petitions of this type, it is necessary to bear in mind that educational institutions like the Universities or appellant No. 1 set up Enquiry Committees to deal with the problem posed by the adoption of unfair means by candidates, and normally it is within the jurisdiction of such domestic Tribunals to decide all relevant questions in the light of the evidence adduced before them. In the matter of the adoption of unfair means, direct evidence may sometimes be available, but cases may arise where direct evidence is not available and the question will have to be considered in the light of probabilities and circumstantial evidence. This problem which educational institutions have to face from time to time is a serious problem and unless there is justification to do so, courts should be slow to interfere with the decisions of domestic Tribunals appointed by educational bodies like the Universities. In dealing with the validity of the impugned orders passed by Universities under article 226, the High Court is not sitting in appeal over the decision in question; its jurisdiction is limited and though, 776 it is true that if the impugned order is not supported by any evidence, at all, the High Court would be justified to quash that order. But the conclusion that the impugned order is not supported by any evidence must be reached after considering the question as to whether probabilities and circumstantial evidence do not justify the said conclusion. Enquiries held by domestic Tribunals in such cases must, no doubt, be fair and students against whom charges are framed must be given adequate opportunities to defend themselves and in holding such enquiries, the Tribunal, must scrupulously follow rules of natural justice; but it would, we think, not be reasonable to import into these enquiries all considerations which govern criminal trials in ordinary courts of law. In the present case, no animus is suggested and no malafides have been pleaded. The enquiry has been fair and the respondent has had an opportunity of making his defence. That being so, we think the High Court was not justified in interfering with the order passed against the respondent. We ought, however, to add that though we are inclined to accept the argument raised by the learned Advocate General against the decision of the High Court, we do not propose to make any consequential order is favour of the appellants, because the learned Advocate General has fairly conceded that he does not want any such order in the present appeal. It appears that the respondent has, in June, 1962, passed his Intermediate Examination and it has been fairly conceded that there is no intention to disturb his career under the present circumstances. The learned Advocate General wanted a decision from us in this appeal because he apprehended that the reasoning adopted by the High Court in setting aside the order passed against the respondent may be construed to mean that 777 under article 226, the High Court can examine the merits of the order passed by appellant No. 1 in such cases. The result is, though we agree with the appellants that the order passed by the High Court was not justified, we refrain from setting it aside for the reasons just explained. There would be no order as to costs.

IN-Abs

The appellant Board cancelled the declaration of the result of the respondent in the High School Certificate Examination held in 1960 accepting the findings of the subcommittee appointed by it to enquire into the charges made against the respondent and another candidate of having used unfair means in answering the English, Mathematics and Hindi papers. The charges were based upon the fact that in the Hindi 3rd paper set at the said examination, the respondent gave wrong answers to Question No. 4 in precisely the same form in which the answers had been given by the candidate whose Roll number was consecutive with that of the respondent. The High Court interpreting the charge as confined to that the respondent had copied either from the answer book of the candidate bearing the consecutive Roll Number or from a common source held that the findings of the enquiry committee were based on no evidence and quashed the cancellation of the result. On appeal by special leave. Held, that in the circumstances of the case, the identity of the wrong answers given by the respondent with that of the other candidate bearing the consecutive Roll Number rendered the charge of the respondent having employed unfair means highly probable and that the findings of the enquiry committee based upon such probabilities and circumstantial evidence could not be said to be based on no evidence as in such matters direct evidence quite often cannot be available. Held, further, that in dealing with cases like those of educational institutions dealing with matters of discipline like employing unfair means, the problem faced by the educational institutions should be appreciated by the 'High Court and so long as the enquiry held is fair and affords the candidate an opportunity to defend himself, the matter should 768 not be examined with the same strictness as applicable to criminal trials in the ordinary courts of law.

ivil Appeals Nos. 243, 344 and 45 of 59. Appeals from the judgment and order dated January 12, 195O of the Madras High Court in A. A. O. Nos. 288 to 290 of 1946. Alladi Kuppuswamy, section B. Jathar and K. B. Choudhuri, for the appellants, A. V. Viswnatha Sastri,V. Vedantachari and T. Satyanarayona, for respondent No. 2 (]in C. A. No. 345 of 59.) 923 T.V. R. Tatachari, for respondents Nos. 3 to 6 (in C. A. Nos. 343 and 344 of 59) and respondents Nos. 5 to 8 (in C. A. No. 345 of 1959.) 1962. September 4. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. [ After disposing of Civil Appeals Nos. 343 and 344 of 1959, his Lordship proceeded as follows]. That takes us to Civil Appeal No. 345 of 1959 in which the appellant wants liberty to proceed against the surety, respondents Nos. 2 and 3. This claim has been rejected by both the High Court. But the decision of the High Court proceeds on the basis that the appellant was himself a defaulter and so, he could not be permitted to enforce his remedy against the sureties. Since on the question of default, we have come to a contrary conclusion, it becomes necessary to examine whether the appellant is entitled to seek his remedy against the surety. In determining this question, it is necessary first to enquire into the nature and extent of the liability undertaken by respondents Nos. 2 and 3 in executing the surety bond. The surety bond was executed on the 29th Sept. 1935. Clause 5 of the surety bond which is relevant provides that the sureties covenant that if the order of the High Court in C. M. A. No. 362/1929 be reversed or varied by the Privy Council and as a result of the said variation or reversal respondent No. 1 becomes liable to pay by way of restitution any amount to the said appellant in the Privy Council, the sureties would pay whatever sum may become payable by the said respondent and that if they failed therein, then any sum payable shall be realised in the man ner specified in the said clause. This bond was executed in the favour of the court. 924 The appellant contends that as a result of the decision of the Privy Council, the matter was remitted to the trial Court for ascertaining the amount due to the appellant and it was during the pendency of the appeals which were pending in the Madras High Court against the decision of the trial Court on the applications made by the respective parties in the remanded proceedings that the compromise decree was passed between the appellant and respondent No. 1 and so whatever is claimable by the appellant by virtue of the said compromise decree must attract the operative portion of clause 5 of the surety bond. On the other hand, Mr. Sastri for the surety agrees that the surety bond must be strictly construed and it is only if the amount claimed by appellant from respondent No. 1 can be said to be the result of the reversal or variation by the Privy Council of the orders under appeal before it that the surety bond can be proceeded against. Mr. Sastri urges that when disputes were pending between the appellant and respondent No. 1 before the Madras High Court, the parties compromised the disputes and the compromise decree which followed acts as a discharge of the liability of the sureties. In support of this argument, reliance is placed on the equitable principles underlying section 135 of the Indian Contract Act. Mr. Kuppuswamy contests this position and urges that section 135 is inapplicable to a surety bond executed in favour of a court and he argues that appellants remedy against the surety is not affected by the fact that the dispute between the appellant and respondent No. 1 was amicably settled and terminated in a compromise decree. This controversy raises the question as to whether section 135 of the Indian Contract Act or principles underlying it apply to surety bonds executed in favour of the court. Section 135 provides that a contract between the creditor and the principal debtor, by which the creditor makes 925 a composition with or promises to give time to, or not to sue, the principal debtor discharges the surety, unless the surety assents to such contract. There can thus be no doubt that a contract of suretyship to which section 135 applies would be unenforceable if the debt in question is compromised between the debtor and the creditor without the assent of the surety. But this provision in terms cannot apply to a surety who has executed a bond in favour of the court, because such a contract of guarantee of suretyship does not fall within the scope of section 126 of the Contract Act. A contract of guarantee under the said section postulates the existence of the surety, the principal debtor and the creditor, and this requirement is not satisfied the case of a bond executed in favour of the court. Such a bond is given to the court and not to the creditor and it is in the discretion of the court to enforce the bond or not. Therefore, there cannot be any doubt that in terms, the provisions of section 135 cannot apply to a court bond. It is also clear that the equitable principles underlying the provisions of section 135 apply to such a bond. If, for instance, the decree holder gives time to the judgment debtor and promises not to seek his remedy against him during that period, there is no reason why the extension of time granted by the creditor to the debtor should not discharge the surety even where the surety bond is executed in favour of the court. The reason for the equitable rule which entitles the surety to a discharge in such circumstances is that the surety should be able at any time to require the creditor to call upon the principal debtor to pay off his debt or himself pay off the debt and seek his remedy against the principal debtor. If the creditor has bound himself not to claim the debt from his principal debtor, that materially affects the right 926 of the surety and so, whenever time it; granted to the debtor by the creditor without the consent of the surety, the surety can claim discharge. This equitable principle would apply as much to a surety bond to which section 126. of the Contract Act applies as to a surety bond executed in favour of the court. Therefore, we see no justification for the argument that even the equitable principles underlying the provisions of section 135 of the contract Act should not apply to surety bonds executed in favour of the court. In determining the question as to whether liability under such a 'surety bond is discharged by reason of the fact that a compromise decree had been passed in the judicial proceedings in which the surety bond came to be executed, it will always be necessary to examine the terms of the bond itself. Did the surety contemplate when he executed the bond that the dispute pending between the debtor and the creditor may be compromised, or did be contemplate that the dispute would, and must be settled by the court and not compromised by the parties? If the terms of the bond indicate that the surety undertook the liability on the basis that the dispute would be decided on the merits by the court in invitium and would not be amicably settled, then the compromise of the dispute would discharge the liability of the surety (vide The Official Liquidators, The Travancore National & Quilon Bank Ltd. vs The Official Assignee of Madras,(1) Parvatibai vs Vinayak Balvant (2); Mahomedalli Ibrahimji vs Laxmibai, (3); Narsingh Mahton vs Nirpat Singh (4) and Muhammad Yusaf vs Ram Gobinda Ojha. (5) If, on the other hand, from the terms of the bond it appears that it was within the contemplation of the parties including the surety (1) I.L.R, (2) I.L.R. (3) (1929) I.L.R. LIV Bom. (4) (1932) I.I.R. XI Patna 590. (5) (1927) I.L.R. LV Cal. 927 that the dispute may be amicably settled and the surety executed the bond knowing that his liability may arise even under the compromise decree, then the passing of the compromise decree will not entitle him to claim discharge vide Haji Ahmed vs Maruti Ramji; (6) Appunni Nair vs Isack Mackadan, (7) and Kanailal Mookerjee vs Kali Mohan Chatterjee (3). The question would thus always be one of construing the surety bond in order to decide whether a compromise decree discharges the surety or not. Turning to the bond passed by respondents Nos. 2 and 3 in the present case, it is impossible to, hold that it was within the contemplation of the sureties when they executed the bond that the parties would amicably settle their dispute in the manner they have done. At the time when the surety bond was executed, the dispute pending between the parties was the money dispute the decision of which would have ended in an order directing one party to pay another a certain specified amount. The compromise decree has introduced complicated provisions for the satisfaction of the appellants claim against respondent No. 1. Under the compromise decree, the appellant would have been entitled to take possession of the properties in suit and in that process, rival claims of both the parties would have been adjusted. We are satisfied that the material terms in clause 5 of the surety bond could not be said to be attracted when the parties chose to settle their dispute in accordance with the terms of the compromise agreement. Besides, it is clear that the compromise agreement gave time to respondent No. 1 and the decree was, therefore, not 'executable immediately after it was passed. In substance, by the decree, time was granted though it is true that time was granted to both the parties to discharge their respective obligations under (6) (1930) I.L R. LV Bom 97. (7) Mad. (8) A.I.R. 1957 Cal 645. 928 the compromise. That is another reason why we think the liability of respondents No. 2 and 3 under the surety bond is discharged as a result of the Compromise decree. There is yet another consideration which is relevant in dealing with this point. It is common ground that amongst the disputes which were settled between the parties was included the claim made by respondent No. 1 for damages on account of the fact that the appellant had created occupancy rights in favour of strangers in respect of the properties which were in his possession as a mortgagee. This claim is plainly outside the proceedings contemplated and permitted by the order passed by the Privy Council, and yet this dispute has been settled by the compromise decree which means that a matter which was strictly not germane to the judicial proceedings in which the surety bond was executed has been introduced by the parties in their final settlement. Therefore, we are satisfied that though the appellant succeeds in showing that he was not a defaulter, he cannot seek his remedy against the surety, respondents Nos. 2 and 3. An attempt was made by Mr. Kuppuswamy to suggest that respondents Nos. 2 and 3 should not have been allowed to raise ibis point before the High Court, because no such point bad been taken by them in the trial Court. We do not think there is any substance in this argument. It is true that respondents No. 2 and 3 did not take any such contention in the trial Court, but that may be because parties had then concentrated on the issue as to who was the defaulter. But when the appeals were argued before the High Court, this point was specifically urged by respondent No. 2 and it has been considered by the High Court. No doubt Mr. Kuppuswamy ingeniously suggested that this was not a pure question of law and so, the High Court 929 should not have allowed it to be raised for the first time in appeal. The argument is that if the point had been raised in the Court of first instance, the appellant would have shown that respondents Nos. 2 and 3 bad consented to the compromise agreement between the appellant and respondent No . 1. This is clearly an afterthought. If the appellant 's case was that respondents Nos. 2 and 3 were not discharged by the compromise decree because they were consenting parties to the compromise agreement, they should have stated so before the High Court and the High Court would then have either called for a finding on that issue or would have refused permission to respondents Nos. 2 and 3 to raise that point. The result is, Civil Appeal No. 345 of 1959 fails and is dismissed with costs, Appeal dismissed.

IN-Abs

Although section 135 of the Indian Contract Act does not in terms apply to a surety bond executed in favour of the court, there can be no doubt that the equitable rule underlying that section must apply to it. The reason for the said rule which entitles the surety to a discharge is that he must be able at any time either to require the creditor to call upon the principal debtor to pay off his debt, or himself to pay the debt and seek his remedy against the principal debtor. The question as to whether the liability of the surety is discharged by a compromise in the judicial proceeding in which the surety bond is executed must depend on the terms of the bond itself. If the terms indicate that the surety undertook the liability on the basis that the dispute should be 922 decided on the merits by the court and not amicably settled, the compromise will effect a discharge of the surety. The Official Liquidators, The Travancore National & Quilon Bank Ltd. vs The Official Assignee of Madras 1. L. R , Parvatibai vs Vinayak Balvant, 1. L. R. 1938 Bom. Mahomedalli Ibrahimji vs Laxmibai, (1929) I. L. R. LIV Bom. II 8, Narsingh on vs Nirpat Singh, (1932) I. L. R. XI Patna 590 and Muhammad Yusaf vs Ram GobindaOjha, (1927) 1. L. R. LV Cal. 91, referred to. But if the terms show that the parties and the surety contemplated that there might be an amicable settlement as well, anti the surety executed the bond knowing that he might be liable under the compromise decree, there can be no discharge and the surety will be liable under the compromise decree. Haji Ahmed vs Maruti Ramji, (1930) 1. L. R. LV Bom. Appunni Nair vs Isack Mackadan,(1919) 1. L. R. 43 Mad. 272 and Kanailal Mookerjee vs Kali Mohan Chatterjee, A. 1. R. , referred to. Consequently, in the present case where the surety bond was executed in favour of court and by it the sureties undertook to pay certain amount of money on behalf of the respondent if decreed by the court and the compromise decree between the parties introduced complicated provisions enabling the e appellant to take possession of the properties in adjustment of rival claims, granted time, albeit to both the parties, to discharge their obligations thereunder and included matters extraneous to the judicial proceedings in which the surety bond was executed. Held, that the sureties stood discharged by the compromise decree.

Appeals Nos. 484 to 489 of 1958. Appeals by special leave from the judgement and order dated August 6, 1954, of the U.P. Board of Revenue, Allahabad, in petitions Nos. 203 to 208 of 1947 48. G. C. Mathur, for the appellants. M. L.Agarwala, for the respondents (in. C. As. 484 &485 of 1958) and respondent No.3 (In C.A No. 488. of 1958). August 31. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. These appeals, by special leave, against the orders of the Board of Revenue, Utter Pradesh, arise in the following circumstances : The appellants presented applications against each set of the respondents in these six appeals under s.175, U.P. Tenancy Act, 1939 U.P. XVII of 1939, hereinafter called the Act, for ejectment stating that they were the sir bolders of the land occupied by the respondents as non occupancy tenants and that the period of five years during which the respondents were entitled to retain possession under s.20 of the Act had expired. The respondents contested the notice of ejectment alleging that the land in suit was not air, that the appellants were not sir holders, that appellants paid local rate exceeding Rs. 25/ in the United Provinces, Agra and Oudh, and held more than 50 acres of sir land. They claimed to be hereditary tenants of the land in dispute, in accordance with sections 14, 15 and 16 of the Act. The paper were thereafter forwarded by the Tehsilder to the Assistant Collector in charge of the sub division, in accordance with the provisions of section 179 of the Act 907 The applications which were presented for the ejectment of the respondents were deemed to be plaints and the proceedings continued as suits, in view of sub section (2) of a. 179 of the Act. The Court called upon the appellants to file necessary extracts of papers and to join all tenants of air as parties. The sub Divisional Officer did not accept the contention of the respondents and decreed the suits on February 28, 1946, holding that the land in suit was air, that the appellants were air holders, that each of them did not pay a local rate exceeding Rs. 25/ either in 1938 or in 1940, that he did not hold more than fifty acres of air land or more than fifty acres of air and khudkasht land which had not been sublet in 1317 F., corresponding to the period from July 1, 1939 to June 30,1940. The respondents appealed against the decree to the Additional Commissioner, Benaras, and repeated their contentions which had not found favour in the Trial Court. They also contended that the appellants had not complied with the requirements of s, 19 of the Act as amended by the U.P. Tenancy (Amendment) Act, 1947 (U.P. X of 1947) which came in to force on June 14. 1947 after the appeals had been instituted. The Additional Commissioner confirmed the findings of the Sub Divisional Officer and further hold that there had been substantial compliance with the spiritof the law as laid down in the amended a. 19 of the Act. He accordingly dismissed the appeals. The respondents then instituted second appeals in the Board of Revenue. The Board of Revenue did not agree with the additional Commissioner about there having been sufficient compliance with the provisions of amended a. 19 of 908 the Act and of the rules framed thereunder. It therefore set aside the decree against the respondents and remanded the cases for fresh disposal in accordance with law and further directed the Trial Court to decide the further contention raised by the respondents before the Board to the effect that they had acquired adivasi rights in the land in suit after the coming into force of the U. P. Zamindari Abolition and Land Reforms Act, 1950 (U. P. 1 of 1951). It is against these orders of the Board of Revenue that these six appeals have been filed after obtaining special leave from this Court. It appears that there was no particular procedure laid down for the progress of the proceedings in the suit before the Sub Divisional Officer after the papers had been sent to him in accordance with the provisions of section 179 of the Act. The ordinary procedure for the conduct of suits was followed. The Sub Divisional Officer therefore called upon the appellants to file necessary extracts of documents. Naturally evidence had to be led, documentary or oral, to substantiate the allegations made by the parties and, especially by the appellants, who bad to prove their right to eject the respondents. They had to prove that the land in suit was sir and that they were sir holders. Section 6 of the Act defines `sir '. This section reads: "Sir" means (a) land which immediately before the commencement of this Act was air under the provisions of the Agra Tenancy Act, 1926, or the Oudh Rent Act, 1886: Provided that if at the commencement of this Act, the sir holder is assessed in the United Provinces to a local rate of more than 909 twenty five rupees, land which was sir, under the provisions of clause (d) or clause (e) of Section 4 of the Agra Tenancy Act, 1926, or of clause (c) or clause (d) of sub Section (17) of Section 3 of the Oudh Rent Act, 1886, ,shall on this Act coming into force cease to be sir unless it was (i)before the first day of July, 1938, received otherwise than in accordance with the provisions of Section 122 of the United Provinces Land Revenue Act, 1901, or (ii)before the commencement of this Act, received in accordance with the provisions of that section, in exchange for land which was sir under the provisions of clause (a) or clause (b) or clause (c) of Section 4 of the Agra Tenancy Act, 1926, or of clause (a) or clause (b) of sub Section (17) of Section 3 of the Oudh Rent Act, 1886. Provided further that the provisions of the first proviso shall apply to a sir holder who was not at the commencement of this Act assessed in the United Provinces to a local rate of more than twenty five rupees if be or his predecessor in interest was so assessed on the 30th June, 1938 unless the local rate assessed on him has been decreased by resettlement or by revision of settlement or unless since that day he obtained his sir rights by succession or survivorship Provided also that if the land to which the provisions of the first proviso apply was joint air of several air holders and all, such joint air holders are not air holders to whom such provisions apply, such land shall not 910 cease to be sir at the commencement of this Act, but shall remain sir until that portion of it which is the sir of those joint holders to whom such provisions apply is demarcated under the provisions of this Act; (b) land which was khudkasht and which is demarcated as sir under the provisions of this Act. Explanation If any portion of the land revenue assessed on the sir holder 's land has been remitted owing to a fall in the price of agricultural produce, the local rate payable by him shall, for the purposes of this section, be deemed to have been reduced in the same proportion. " It follows from these provisions that the appellants bad to establish the following facts : (i) The land in suit was `sir ' on January 1, 1940, when the Act came into force. (ii) Each sir holder was not assessed in the United Provinces to a local rate of more than Rs. 25/ . (iii) The sir holder or his predecessor in interest was not assessed to a local rate exceeding Rs. 25/ on June 30, 1938. The appellants proved these facts and the trial Court held that the land in suit did not cease to be 'sir '. Further, if the finding had been that the first proviso to section 6 applied, section 16 would have come into play and it would have been necessary for the Court to determine whether each of the sir holders possessed more than fifty acres of sir or of sir and khudkasht land which had not been let. On this point too, the finding of the Trial Court, however, is that each sir holder bad less than fifty acres of sir and khudkasht land. Section 19 of the Act, before its amendment, in 1947, provided that if a sir bolder could apply under the provisions of B. 15 or 16 of the Act, the 911 Court was to take action under those sections. The amended section also repeated these provisions in its sub section Its sub sections (1) and (2) were, however new and read as follows. "(1) In a suit or proceeding for the ejectment of a tenant of sir the sir holder shall before the first date fixed for recording evidence,furnish to the court such particulars as the Board may by rule made in this behalf prescribe for ascertaining ' (a) whether the sir holder is a person to whom the provisions of the first proviso to clause (a) of Section 6 apply; and (b) the total area and nature of the sir holder 's air and. khudkasht: Provided that if the sir holder satisfied the Court that he had sufficient cause for not filing the particulars before the date fixed, it way, subject to the payment of costs to the opposite party, extend the time. (2)If the. sir holder does not file the particulars mentioned in sub Section (1) within the time fixed thereunder, or deliberately furnishes inaccurate particulars, the Court shall dismiss the suit or proceeding, as the case may be, and shall declareare the tenant to be hereditary tenant. " It is tobe noticed I that sub section (1) requires a air holder tofurnish particulars prescribed by the Board and ' that the purpose of furnishing those particulars 'is to assist the Court in ascertaining whether the provisions of the first proviso to clause (a) of section 6 apply to the sir holder and what is the total area and nature of the sir holder 's sir and khudkasht. Section 19 ' therefore, did not bring 912 about any real change in the substantive law affecting the question whether certain land is `sir ' or not, according to the definition of 'sir ' in section 6 of the Act. After the amendment, a sir holder, in order to succeed in his suit, had to establish the same facts which he had to establish prior to the amendment, What proof he had to lead to support his case, he has to give even after the amendment. The only difference brought about by the amendment is in the procedural conduct of the suit and is that prior to the amendment the sir holder had simply to lead evidence to prove his case, without informing the Court before hand about the material on which he would rely to establish that the provisions of the proviso (a) of section 6 did not apply to him and in case they applied how effect would be given to the provisions of s 16. The amended Section made it incumbent on the sir bolder to furnish such information to the Court and thereby to the tenant before the parties proceeded to lead evidence. Such information has to be furnished according to sub section (1) of amended section 19, before the first date fixed for recording evidence. The time for furnishing such information can be extended under the proviso to that sub section. Great importance however, has been attached to the new provision as sub section (2) of amended s.19 provides that the consequences of not filing those particulars, or filing those particulars inaccurately, would be that the Court shall dismiss the suit or proceeding and also declare the tenant to be a hereditary tenant. Now, it is contended for the appellants, that the provisions of amended s.19 do not apply to the facts of this case as the amended section was enacted long after the first date of recording evidence and that therefore it could not have been possible for the appellant to furnish the necessary particulars in accordance with its provisions and that if its provisions apply to the facts of this case 913 the appellants have substantially complied with those provisions inasmuch as they had actually filed in Court documents which gave the necessary particulars required under rr. 239A and 239B made by the Boara of Revenue under s 19. The contention for the respondents is that amended section 19 is retrospective in view of the provisions of section 31 of the Amendment Act of 197 and that the appellants had not complied with requirements of section 19 (1) and rules framed thereunder. The aforesaid section 31 reads : "Disposal of pending suits and appeals (1)All proceedings, suits; appeals and revisions pending under the said Act on the date of the commencement of this Act and all appeals and revisions filed after that date against orders or decrees passed under that Act and all decrees and 'orders passed there under which have not been satisfied in full, shall be decided or executed, as the case may be, and where necessary such decrees and orders shall be amended, in accordance with the provisions of the said Act as amended by this Act: Provided firstly that if such a decree or order cannot be so amended, or the execution of or the appeal or revision from such an amended decree or order cannot be proceeded with, it shall be quashed. In such a case the aggrieved party shall, notwithstanding any law of limitation be entitled to claim, within six months from the date on which such decree or order is quashed such rights and remedies as he had on the date of the institution of the suit or proceedings in which such decree or order was passed, except in so far as such rights or remedies are, inconsistent with 914 the provisions of the said Act as amended by this Act: Provided secondly that the proceedings under Section 53 between a landlord and his tenant and all proceedings under section 54 shall be quashed: Provided thirdly that appeals and revisions arising out of the proceedings under Section 53 between a landholder and his tenant or out of those under section 54 shall be so decided as to place the parties in the same position in which th ey were immediately before the institution of such proceedings Provided fourthly that all suits, appeals and revisions pending under Section 180 of the said Act, on the date of the commencement of this Act for the ejectment of any person who was recorded as an occupant on or after the first day of January, 1938, in a record revised under Chapter IV of the United Provinces Land Revenue Act, 1901, or corrected by an officer specialty appointed for the correction of annual registers in any tract shall be dismissed, and all decrees and orders for the ejectment of such persons, which have not been satisfied in full on the date of the commencement of this Act shall be quashed . Provided fifthly that nothing in this subsection shall affect the forum of appeal or revision from a decree or order passed by a Civil Court under the said Act. (2)In counting the period of limitation in respect of an application for the execution of a decree or order which was passed under the said Act and the execution of which was 915 stayed pending the enactment of this Act, the period during which execution was so stayed shall be excluded. " In view of this section, the appeals which. were pending before the additional Commissioner when the amendment Act came into force bad to be decided in accordance with the provisions of the Act as amended. It has been stated above that no change in the substantive law affecting the rights of the parties has been brought about by the Amendment Act. The only provision which could affect the rights of the parties is contained in sub s.(2) of amended s.19 and provides the consequences of the failure of the sir holder to furnish the necessary particulars. It follows therefore that if the necessary particulars had been furnished in this case even prior to the Amendment Act coming into force, there could be no difficulty in deciding the appeals by the Additional Commissioner in accordance with the provisions of the Act as amended by the Amending Act. This is exactly what the Additional Commissioner did. He held that subs tantial compliance has been made with the provisions of the amended section and the rules framed thereunder. The Board of Revenue is itself of the opinion that if substantial compliance bad been made of those provisions that would have been sufficient. It however did riot agree with the Additional Commissioner 's view that the appellants had sufficiently complied with the provisions of amended s.19 aid the rules framed thereunder. We are of opinion that in this the Board of Revenue was wrong. Rules 239A and 239B framed by the Board are: "239A. In a suit or proceeding for the ejectment of a tenant of sir, the sir holder shall before the first date fixed for recording 916 evidence, furnish to the Court the following particulars: (1)The amount of local rate to which the sir holder was assessed on 1st January, 1940, in the United Provinces. (2) If the amount shown under the preceding subclause (1) is Rs. 25, or less, then (a) the amount of local rate to which the sir holder or his predecessor in interest was assessed on June 30, 1938. (b)Whether the local rate assessed on 30th June, 1938, was decreased before 1st January, 1940, as a result of resettlement or revision 'of settlement, and if so, the amount by which it was decreased; (c)Whether the sir holder obtained his sir rights by succession or survivorship between 30th June, 1938, and 1st January, 1940. (1)The area and khasra numbers of the plots, if any, held by him in severally or jointly with others, on 31st December, 1939, as sir in the United Provinces under the provisions of clause (d) or clause (e) of section 4 of the Agra Tenancy Act 1926, or of clause (c) or clause (d) of sub section (17) of section 3 of the Avadh Rent Act, 1886. (2) Such of the plots, if any shown under the preceding sub clause (1) along with their areas, as were received by him in exchange for the land which was his sir under the provi sions of clause (a) or clause (b) or 917 clause (c) of Section 4 of the Agra Tenancy Act, 1926, or clause (a) or clause (b) of, subsection (17) of the Avadh Rent Act, 1886 (a) before the first day of July 1938 otherwise than in accordance with the provisions of Section 122 of the United Provinces Land Revenue Act, 1901, or (b) before the first day of January, 1940, in accordance with the provisions of that section. (3) The area and: khasra numbers of the plots, if any, held by him in severally or jointly with others and khudkasht in the United Provinces, along with the period of cultivation and nature of khudkasht of each such plot. (4) The extent of his share in the joint air and khudkasht, if any shown under the preceding sub clauses (1) and (3). The particulars furnished in accordance with rule 239A shall be accompanied by the following documents: (1) If the local rate payable by the sir holder in the United Provinces is claimed to be Rs.25 or less, copies of the khewat khatas of 1345 Fasli and of 1347 Fasli, in which he was recorded as a co sharer; 918 (2) a certified copy of the khatauni khatas of his air and khudkasht; (3) a certified copy of the khewat to which such sir or khudkasht appertains, unless such copy is filed under sub rule (1); (4) a list giving the amount of local rate to which each co sharer of the sir holder in the joint sir and khudkasht, if any, is assessed; (5) in the case of sir or khudkasht of a joint Hindu family, a genealogical table and a list showing the share of each living member of the family having an interest in such sir or khudkasht and the share of local rate which each member would be liable to pay on ratable distribution. " The documents filed by the appellants in the Trial Court consisted of (1) khewats of the various villages for the years 1345, 1346 and 1347 Fasli, i.e. for the periods between July 1, 1937 to June 30, 1940 (2) khatauni jamabandis of the various villages for the years 1345 and 1347 Fasli, corresponding to July 1, 1937 to June 30, 1938 and July 1, 1939 to June 30, 1940, respectively; (3) (a) a statement showing the shares of the appellants as recorded in the khewats and khataunis of 1347 Fasli, this statement showed the total of the air area held by the appellants to be 152.33 acres, their khudkasht area to be 19.93 acres and the total of the local rate payable by them to be Rs. 75.5.11; (b) a statement showing the air, khudkasht and local rate of each plain in 1317 Fasli. This shows that none of them held sir or sir and khudkasht in excess of 50 919 acres, or was assessed to local rate exceeding Rs. 25/ (4) Copy of the pedigree. These documents clearly furnish the particulars required by the rules as the periods covered by these documents include June 30, 1938, December 31, 1939 and January 1, 1940. Rule 239AI required particulars regarding the amount of local rates on June 30, 1938 and January 1, 1940 and also about sir holders ' obtaining sir rights by succession or survivorship during the period. The particulars required under sub rules (3) and (4) of rule 239AII were available from these documents. Rule 239B required copies of the khewat khatas of 1345 Fasli and of 1347 Fasli; certified copies of khatauni khatas of sir and khudkasht; certified copies of the khewats to which that sir or khudkasht appertained; a list giving the amount of local rate to which each co sharer of the sir holder was assessed and a genealogical table in the case of sir or khudkasht of a joint Hindu family showing the share of each living member of the family. The only particulars which can possibly be not had directly from the documents on record are those required by sub rules (1) and (2) of rule 239AII. These require particulars about such sir which was the sir of the appellants under the provisions of cls. (d) and (e) of s.4 of the Agra Tenancy Act, 1926 i.e., land which became sir on account of the landlord 's cultivation at the commencement of that Act, i.e., on September 7, 1926, and had been recorded as khudkasht in the previous agricultural year, i.e, in 1333 Fasli, or land which became air on account of the landlord 's continuously cultivating it for a period of ten years subsequent to the enforcement of the Agra Tenancy Act. It is clear from the findings of the Trial Court that the land in suit had been sir from the time of 920 the settlement, presumably, the first settlement, which took place in the Nineties of the last Century. This seems to be based on the fact that khatauni jamabandhis of 1345 and 1347 Fasli did not record a period of cultivation against the sir entry, indicating thereby that the sir is not of the kind mentioned in cls. (d) and (e) of s.4 of the Agra Tenancy Act, 1926. The Trial Court could and did record findings on all the facts which had to be proved by the appellants to establish their case. The first Appellate Court confirmed them. The particulars required by sub section (1) of amended section 19 of the Act and the rules framed thereunder, were for the purpose of ascertaining those facts. In the circumstances it is reasonable to hold that there had been substantial compliance with the provisions of amended section 19 and the rules framed thereunder. The Board of Revenue was therefore in error in stating that the appellants had not given the amount of local rate to which they were assessed in U.P. on January 1, 1940, and that compliance did not appear to have been made of rule 239AII of the Revenue Court Manual and that there had not been sufficient compliance with the mandatory provisions of rules 239A and 239B. From the judgment of the Board it is clear that its attention was not drawn to the several relevant documents filed by the appellants in the trial Court. We have no doubt that if the Board had considered the said document it would not have held that section 19 had not been substantially complied with. We therefore hold that the Board of Revenue was in error in setting aside the decree of the Additional Commissioner and remanding the case for fresh trial on the ground that there had not been compliance with the provisions of amended section 19 of the Act and the rules framed thereunder. 921 We accordingly allow the appeals, set aside the order of the Board of Revenue and remand the cases to it for decision in accordance with law. We further direct it to decide itself the contention raised by the respondents about their having acquired adivasi rights under the U.P. Zamindari Abolition and Reforms Act. In case the Board takes the view that for deciding the said issue any finding of fact is necessary, it. may call for the said finding from the Trial Court and, on receiving it, proceed to deal with the appeals on the merits. In the circumstances of these cases, we direct that the parties on either side bear their own costs. Appeals allowed.

IN-Abs

The appellants filed suit under the U.P Tenancy Act, 1939. for the ejectment of the respondents who were tenants of sir. The appellants filed the necessary extracts of papers in support of their case. The trial court decreed the suits 905 holding the land in suit was sir, that the appellants were sirholders, that each of them did not pay a local rate exceeding Rs 25, that he did not hold more then 50 acres of sir land or more than 50 acres of sir and khudkast land which had not been sublet and that the respondents had not become hereditary tenants. The respondents preferred appeals before the Commissioner. During the pendency of the appeals the U.P Tenancy (Amendment) Act.1947, amended s.19 of the Act Amended section 19 provided that in suits for ejectment of tenants of sir the sir holder shall, before the first day fixed for recording evidence, furnish such particulars as may be prescribed and further provided that for failure to file such particulars the suit shall be dismissed. Section 31 of the Amending Act provided that its provision shall apply to pending suits, appeals etc. The respondents contended that the appellants had failed to comply with the provisions of amended section 19 and that the suits should be dismissed. The Commissioner confirmed all the findings of the trial court and held that there had been sufficient compliance with the provisions of amended section 19 and according dismissed the appeals. The respondents preferred second appeals before the Board of Revenue. The Board held that the provisions of amended section 19 and of the rules framed thereunder had not been complied with and remanded the case to the trial court for compliance therewith and retrial. Held, that there had been sufficient compliance with the provisions of amended section 19 and the rules framed thereunder and that the Board was riot justified in remanding the cases for retrial. Section 19 did not bring about any real change in the substantive law affecting the question whether land was sir or not. Even after the amendment, a sir holder, in order to succeed in his suit, had to establish the same facts which he had to establish prior to the amendment. The only difference brought about by the amendment was in procedure and whereas prior to the amendment a sir holder could lead his evidence without informing the Court before hand about the material he would produce, after the amendment it was incumbent upon him to furnish such information to the Court before the date fixed for recording evidence, The necessary particulars had been furnished even prior to the amendment and the Commissioner could decide the appeals in accordance with the provisions of the Act as amended by the amending Act. The attention of the Board was not drawn to the relevant documents filed by the appellants and it erred in stating that there had been no substantial compliance with the provisions of amended section 19 and of the rules framed thereunder.

Appeal No. 20 of 62. Appeal by special leave from the award dated September 29, 1960, of the Industrial Tribunal Punjab, Patiala in reference No. 13 of 1960. C.K. Daphtary, Solicitor General of India, Bhagirath Das and B. P. Maheshewari, for the appellants. M. K. Ramamurthi, B. K. Gary, D. P. Singh and section C. Aggarwal, for the respondent No. 2(i). September 7. The Judgment of Gajendragadkar and Das Gupta, JJ., was delivered by Gajendragadkar, J. Mudholkar J. delivered a dissenting judgment. GAJENDRAGADKAR, J. This appeal by special leave arises out of an industrial dispute in relation to a comparatively minor demand made against the appellants by the respondents their employees but in challenging the validity of the award passed by the Industrial Tribunal in favour of the 933 respondents on that demand the learned Solicitor General has raised a general question before us. He contends that in granting the demand made by the respondents, the award has illegitimately and unjustifiably trespassed on the appellants ' freedom of contract. The appellants as employers, are entitled tofix the terms of employment on which they would be willing to employ workmen and it is open to the workmen either to accept those terms or not; industrial adjudication should not interfere in such a matter. That is the nature of the general contention which has been raised before us in the present appeal. The facts leading to the dispute are few and they lie within a very narrow compass. The appellants are the Trustees of the Tribune Press and paper and the Trust is being worked in accordance with the terms of the will executed by Dyal Singh Majithia on June 15, 1895. In carrying out the policy of the Trust, the five appellants have executed a power of Attorney in favour of Mr. R. R. Sharma and the Press is managed and the paper is conducted to carry out the policy laid down by the will. It appears that before July 1, 1956, for the purposes of leave, the appellants had divided their employees into two categories (1) the Linooperators and (2) the rest of the workmen in the Press Section; and Rule 57 made provision for leave on the basis of the said classification. The effect of the said rule was that no Press worker other than the lino operator was entitled to any kind of paid leave although he was given the right to claim 30 days ' wages plus dearness allowance payable in January every year if he had worked for 11 Months. In addition, the said press worker was entitled to Quarantine leave on the terms mentioned in Rule 53. 934 This position was substantially altered on the July 12 1956, when the appellants framed a new Rule in respect of earned leave. This rule abolished the two categories of workers on which the earlier rule 57 was based and divided the workers into two categories (i) workers who were employed on or before 1.7.1956 and (ii) those who were employed after 1.7. 1956. In respect of the former category of workmen, the new Rule made the following provision: "Subject to the provisions of the Indian , every workman in the service of the Tribune on the 1st July, 1956, will be entitled to 30 days ' leave with wages after having worked for a period of 11 months. This leave shall cease to be earned, when it amounts to 60 days" In regard to the workmen falling under the latter category, earned leave was to be governed by the provisions of section 79 of the Indian . It is common ground that the provision for earned leave made by the said section is a provision for minimum earned leave which the employer is bound to give: whether or not additional leave should be granted by way of earned leave is a matter within the discretion of the employer. As a result of the new rule, the position was that the employees who had joined the service of the appellants on or before July 1, 1956, were entitled to 30 days ' earned leave with wages, whereas those who joined after the said date became entitled to the statutory minimum of 21 days of earned leave. At the time when this rule came into force there were 94 old employees to whom the rule applied and 27 new employees to them by virtue of the new Rule, section 79 of the was made 935 applicable. Gradually, new hands have also been employed and to all such new employees section 79 is applicable. It appears that by its resolution passed on January 8, 1960, the Tribune employees union sent to the Management a charter embodying about 20 demands. Attempts at conciliation were made but they failed and so, on April 4, 1960, eight of the said demands were referred by the Punjab Government to the Industrial Tribunal for its adjudication under section 10 of the Industrial Disputes Act. One of these demands was in rela tion to earned leave. The demand was that the employees in the Press Section should be allowed 30 days ' earned leave with full wages for every months ' service without any discrimination. The Tribunal has allowed this demand and it bad held that all workmen of the Press are entitled to 30 days ' earned leave without making any distinction a between workmen who joined before July 1, 1956, and those who joined subsequently. It is the validity of this award which is questioned before us by the appellants. The broad and general question raised by the learned Solicitor General on the basis of the employer 's freedom of contract has been frequently raised in industrial adjudication, and it has consistently been held that the said right is now subject to certain principles which have been evolved by industrial adjudication in advancing the cause of social justice. It will be recalled that as early as 1949, it was urged before the Federal Court in Western India Automobile Association vs The Industrial Tribunal Bombay(1) that the industrial Tribunal had no jurisdiction to direct an employer to reinstate his dismissed employees and the plea made was that such a direction was contrary to the known principles which govern the relationship between master and servant. This contention was negatived by the Federal Court. (1) ,120. 936 Speaking for the Court, Mahajan J. as he then was, observed that the award of the Tribunal may contain provisions for the settlement of a dispute which no Court could order if it was bound by ordinary law, but the Tribunal is not fettered in any way by these limitations. The same plea was again raised before this Court in The Bharat Bank Ltd., Delhi. vs The. Employees of The Bharat Bank Ltd., Delhi (1) and Mukherjea J. as he then was, emphatically rejected it. "Insettling the disputes between the employers and the workmen", observed the learned Judge, "the function of the Tribunal is not confined to administration of justice in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any, existing agreement. It has not merely to interpret or to give effect to the contractual rights and obligations of the parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace. " This view has been consistently accepted by industrial adjudication since 1949. The doctrine of the absolute freedom of contract has thus to yield to the higher claims for social justice. Take, for instance, the case where an employer wants to exercise his right to employ industrial labour on any wages he likes. It is not unlikely that in an economically under developed country where unemployment looms very large. for Industrial work, employees may be found willing to take employment on terms which do not amount to a minimum basic wage. Industrial adjudication does not recognise the employer 's right to employ labour on terms below the terms of minimum basic wage. This, no doubt, is an interference with the employer 's (1) ; , 513. 937 right to hire labour, but social justice requires that the right should be controlled. Similarly the right to dismiss an employee is also controlled subject to well reorganised limits in order to guarantee security of tenure to industrial employees. In the matter of earned leave, s.79 of the prescribes a minimum in regard to establishments to which the Act applies. In the matter of bonus which is not regarded as an item of deferred wages, industrial adjudication has evolved a formula by the working of which employees are entitled to claim bonus, We have referred to these illustration to show bow under the impact of the demand of social justice, the doctrine of absolute freedom of contract has been regulated. It is, however, necessary to add that the general question about the employer 's right to manage his own affairs in the best way he chooses cannot be answered in the abstract without reference to the facts and circumstances in regard to which the question is raised. If a general question is posed and an answer must be given to it, the answer would be both yes and No. The right would be recognised and industrial adjudication would not be permitted or would be reluctant to trespass on that right or on the field of management functions unless compelled by over riding consi derations of social justice. The right would not be recognised and would be controlled if social justice and industrial peace require such regulation. That is why we think industrial adjudication always attempts not to answer questions in the abstract in order to evolve any general or inflexible principles. The eat course to adopt in dealing with industrial disputes is to consider the facts of the case, the nature of the demand made by employees, the nature of the defence raised by 938 the employer and decide the dispute without unduly enlarging the scope of the enquiry. If in the decision of the dispute, some principles have to be followed or evolved, that must be done: but care must be taken not to evolve larger principles which would tend to prejudge issues not directly raised in the case before the Industrial Tribunal. That is why we think we would not be justified in giving any general answer to the broad contention raised by the learned Solicitor General before us in the present appeal. The development and growth of industrial law during the last decade presents a close analogy to the development and growth of constitutional law during the same period. In some respects, itis well know that article 19 of the Constitutionhag guaranteed fundamental rights to individualcitizens and at the same time, has provided forthe regulation of the said fundamental rights subject to the provisions of cls. (2) to (6) of the said Article. Where a conflict arises between the citizen 's fundamental right to hold property and a restriction sought to be imposed upon that right in the interest of the general public, courts take the precaution of confining their decision to the points raised before them and not to lay down unduly broad and generaI propositions. As in the decision of constitutional questions of this kind, so in industrial adjudication it is always a matter of making a reasonable adjustment between two competing claims. The fundamental right of the individual citizen is guaranteed and its reasonable restriction is permissible in the interest of the general public, so, the claims of the interest of the general public have to be weighed and balanced against the claims of the individual citizen in regard to his fundamental right. So too, in the case of industrial adjudication 939 the claims of the employer based on the freedom of contract have to be adjusted with the claims of industrial employees for social justice. The process of making a reasonable adjustment is not always easy, and so, in reaching conclusions in such a matter, it is essential not to decide more than ' is necessary. If industrial adjudication pur ports to lay down broad general principles, it is likely ;to make its approach in future case#; inflexible and that must always be avoided. In order that industrial adjudication should be completely free from the tyranny of dogmas or the sub conscious pressure of pro conceived notion, it is of utmost 'importance that the temptation to lay down broad principles should be avoided. In these matters, there are no absolutes and no formula can be evolved which would invariably give an answer to different problems which may be posed in different cases on different facts. Let us, therefore, revert to the facts of this case and decide whether the appellant 's attack against the validity of the propriety of the award can be sustained. In dealing with the narrow dispute presented by this appeal, it is necessary to remember that all the employees of the appellants are governed by the same terms and conditions of ,service, except in regard to earned leave. It is only in respect of this term and condition of service that a distinction is made between workmen employed on or before 1.7. 56 and those employed after that date. Generally, in the matter of providing leave rules, industrial adjudication prefers to have similar conditions of service in the same industry situated in the same region. There is no evidence adduced in this case in regard to the condition of earned leave prevailing in the comparable industry in this region. But we cannot ignore the fact that this 940 very concern provides for better facilities of earned leave to a section of its employees when other terms and conditions of service are the same in respect of both the categories of employees. It is not difficult to imagine that the continuance of these two different provisions in the same concern is likely to lead to dissatisfaction and frustration amongst the new employees. It cannot be denied that the existence of industrial peace and harmony and the continuance of the said peace and harmony are relevant factors, but their importance should not be unduly exaggerated. If a frivolous demand is made by the employees and it is accompanied by a threat that non compliance with the demand would lead to industrial disharmony or absence of peace, it would be unreasonable to treat the thrust as relevant in deciding the merits of the demand. In this connection, it is necessary to remember that the continuance of harmonious relations between the employer and his employees is treated as relevant by industrial adjudication, because it leads to more production and thereby has a healthy impact on national economy, and so it is necessary that in dealing with several industrial disputes, industrial adjudication has to bear in mind the effect of its decisions on national economy. In their zest to fight for their respective claims, the parties may choose to ignore the demand of national economy, but industrial adjudication cannot. If the demand is plainly frivolous, it has to be rejected whatever the consequences may be. In the present case, the argument that the continuance of two different provisions would lead to disharmony cannot, however, be treated as frivolous. It is difficult to understand on what principle the discrimination is based. The only argument urged in support of the discrimination is the employer 's right to provide for new terms of service to the new entrants in service. In our 941 opinion, the validity of this argument cannot be accepted in the circumstances of this case. Take the case of the wages or dearness allowance which the Appellants paid to their employees. Would the appellants be justified in assertion of their right of freedom of contract to offer less favourable terms of wages or dearness allowance to employees who would be employed after a certain date ? If the general point raised by the learned Solicitor General is upheld without any qualifications, then it would be open to the employer to fix different wages for different sets of workmen who are doing the same kind of work in his concern. We have rarely come across A case where such a claim has either been made or has been upheld. It is well known that both industrial legislation and industrial adjudication seek to attain similarity or uniformity of terms of service in the same industry existing in the same region, as far as it may be practicable or possible, without doing injustice or farm to any particular employer or a group of employers That being so, we do not think the Tribunal was in error in holding that in the matter of earned leave, there should be uniformity of conditions of service governing all the employees in the service of the appellants. There is another aspect of this question to which reference must be made. This is not a case in which the financial liability imposed on the employer by the award when it directed the employer to grant the earned leave of 30 days to all the employees, is very heavy; and so, having regard to the fact that the appellants have been conducting their business in a profitable way and their financial position is distinctly good, no attempt has been made before us and rightly, to suggest that the burden imposed by the award is beyond their means. it is not disputed that the total annual liability which 942 may accrue as a result of the award may not exceed Rs. 1,000/ , and it is also common ground that the appellants are a flourishing concern and their not profits which were in the neighbourhood of a lac of rupees in 1949, have shown an upward tendency and have reached almost rupees eight lacs in 1959. That is another factor which has to be borne in mind in dealing with the present dispute. It is not suggested by the appellants that the provision made by them for earned leave in respect of old employees is unduly generous of extravagant and so, it has become necessary to invoke the provisions of section 79 of the in respect of new employees. On the other hand, earned leave provided by section 79 is the minimum statutory leave to which employees are entitled and if the appellants thought it necessary to provide for additional earned leave to their old employees, there is no reason why they should not make a similar provision in respect of the new employeesas well. We ought to add to that on the record, it does appear that the appellants are good employees and they are treating their employees in a liberal manner. It, however, appears that they have brought the present dispute to this Court more for asserting the general principle of the employer 's right to fix conditions of service with his new employees than for vindicating any real or substantial grievance against the award which would prejudicially affect their interest. In our opinion, having regard to the nature of the dispute raised in the present appeal and the other relevant facts and circumstances, it cannot be said that the Industrial Tribunal erred in law in directing the appellants to provide for the same uniform rule as to earned leave for all their employees. We are satisfied that the award under appeal cannot be set aside only on the academic or abstract point of law raised by the appellants. 943 The result is, the appeal fails and is dismissed with costs. MUDHOLKAR, J. This is an appeal by special leave from the award of the Industrial Tribunal, Punjab. The appellants before us are the trustees of 'The Tribune ' Ambala Cantt. and the opposite party to the appeal consists of the workmen of the Tribune through their two unions, one the Tribune Employees ' Union and the other the Tribune Workers ' Union. The Trust was founded in Lahore by the late Sardar Dayal Singh Majithia on February 1, 1881. It publishes the newspaper "Tribune". By the will of the founder dated June 15, 1895 the Management of the Tribune was vested in a public trust in September, 1898. After the partition of India the offices of the newspaper had to be shifted from Lahore and they are now located at Ambala. The Trust naturally had to leave the entire machinery and other equipment of the Tribune Trust along with its immovable property in Lahore. The value of that property is stated by the appellants to be Rs. 25 lakhs or so. The Trust was however, able to transfer its bank accounts and Government securities to India a few days before the partition. With the help of these assets it reestablished the Tribune Press and office at Ambala and established new machinery at a cost of Rs. 15 lakhs or so. Gradually the Trust has been able to rehabilitate its fortunes. It is not disputed before us that despite the heavy loss entailed by the Trust by reason of being uprooted from Pakistan, the employees quite a number of whom are old employees who were able to migrate to India, have been treated with a great deal of consideration. After the Tribune started making profits the employees are being given bonus every year. Moreover even before the Employees Provident Fund scheme applicable to newspaper 944 industry and even before the scheme of gratuity for all categories of employees were enforced by statute be Tribune had provided for both provident fund and gratuity to its employees. In addition to this it has provided free housing accommodation to its workmen in two colonies, one built in 1955 with the help of subsidy from the Government of India and the other in the year 1958 at a cost of Rs. 6 lakhs. The quarters in the two colonies are provided with modern sanitation Besides that, there are extensive recreation grounds, lawns etc., in these colonies. Even electricity is supplied free to the employees. Several other amenities are also provided by the Trust. It would thus appear that the welfare of the employees has been kept prominently in mind by the trustees. Even so, some disputes arose between the management and the employees. Ultimately eight demands made by the employees were referred by the Government of Punjab for adjudication under section 10(1) of the industrial Disputes Act, 1947 (14 of 1947) to the Industrial Tribunal, Punjab, Patiala constituted under s.7A of the Act. Four demands were rejected by the Tribunal as having been withdrawn, one was settled amicably and on the remaining three the Tribunal has made its award. One of those three demands is : "Whether the employees in the Press Section should be allowed 30 days ' earned leave with full wages for every 11 months ' service without discrimination ?" The Tribunal hold in favour of the workmen and it is only against this part of the award of the Tribunal that the trustees have come up in appeal before us. Certain facts have to be stated in connection with this demand. The Trust had framed certain rules governing the conditions of service of 945 its employees. Rule 57 of those rules deals with leave and reads thus : "The Lino Operators shall be entitled to 30 days ' leave of all description (luring the course of a calendar year, which will be with pay plus all allowances. Press employees, other than the Lino operators may be granted leave by the competent authority from time to time as the authority may determine. Such leave shall be without pay or allowance. They shall, however, be entitled to in the month of January every year to receive a sum amounting to the leave pay plus ordinary dearness allowance for the preceding month of December for the period of II months ' service or to a proportionate amount for a lesser period. In addition, Press workers will be entitled to quarantine leave on the terms mentioned in Rule 53". On July 1, 1956 a new rule was framed which reads as follows : "(1) Subject to the provisions of the Indian , every workman in the service of the Tribune on the 1st July, 1956, will be entitled to 31 days ' leave with wages,, after having worked for a period of II months. This leave shall cease to be earned, when it amounts to 60 days. (2) A workman joining the service of the Tribune after the 1st July, 1956 will be entitled to leave, in accordance with the provisions of section 79 of the Indian . " Under the old rule the Lino Operators in the press section were allowed 30 days ' leave on full wages 946 including dearness allowance. The other workers in the press section were, however, allowed not leave with pay, but 30 days ' wages in the month of January calculated on the basis of the full wages drawn in the preceding month provided that an employee had served for a period of II months till the beginning of the month of January. If he had served for a lesser period he was to be paid propor tionately less amount. Bearing in mind the fact that in industries leave, vacation and holidays with pay are regarded as supplemental pay practices (see Collective Bargaining principles and Cases by John T. Dunlop and James J. Healy, revised edn., p. 433), in substance even the employees in the press section other than lino operators got the same money equivalent of the leave allowed to lino operators. It may be mentioned that these other press section employees were also entitled to take leave but the rule provided that they will Dot be paid any pay and allowances for such leave. That was perfectly reasonable because they got pay in lieu of paid leave for an additional period in the month of January. However, even this slight distinction in the mode of conferring benefits on the two categories of employees was abolished by the new rule which came into force on July 1, 1956, and all employees in the press section upto that date were made eligible for the grant of 30 days ' leave with wages after having worked for a period of 11 months. It 'May be mentioned here that the of 1948 provided in a. 79 that every worker who has worked for a period of 240 days or more in a calendar year shall be given at least one days ' leave for every 20 days of service. No doubt this was the minimum provided by the Act but since the press section is governed by the it was open to the Trust to modify its rules with regard to all employees of this section and grant leave according to the provisions of this 947 section. There is no prohibition in law against doing so but still it did not wish to revise unfavourably its rules regarding the quantum of leave to its existing employees. It, however, felt that in view of the statutory provision there was no obligation upon it to provide for a longer leave than that laid down in section 79 of the . It was for this reason that it provided that all employees engaged on or after July 1, 1956, will be granted leave according to the provisions of section 79 of the , the idea being that eventually all employees should be governed by the rules. Apparantly, to forestall this consequence the employees contend that the new rule has introduced discrimination. That is why they raised a dispute relating to this matter and it was referred to the Tribunal along with the other disputes they had raised. The Tribunal, dealing with this matter, has observed as follows : "It may be of some importance to note that till 1st July, 1956 the workmen who had entered service before that date and those who had been employed thereafter were in the matter of leave compensation, treated alike. It was on 1st July, 1956 for the first time that the workmen who had been in service before that date were given 30 days ' paid leave but for now entrants the number of days of that leave was reduced to that permitted by section 79 of the . The Union 's contention is that to allow 3 days ' earned leave with full wages in an year to a certain group of workmen in Press Section and to deny that benefit to the rest of the workmen of that section simply on the score of their having entered service after 1st July, 1956, is to acknowledge the prominent element of discrimination which has been res 948 ponsible for the heart burning, resentment and dissatisfaction of the workmen. It is further urged with emphasis that all workers for the Press Section should in the matter of earned leave be treated equally. For the long space of seven years even after the had come into force the management had continued to treat all workmen of the Press Section alike irrespective of the date of their employment. There is no reason why a distinction of a discriminatory nature and effect be made between the two artificially created sets of workmen belonging to the same section. " It seems to me that the Tribunal 's ultimate finding is vitiated by a misconception entertained by it. The first sentence in the above quotation would show that the Tribunal thought that those persons who were employed after July 1, 1956 were treated in the matter of leave on par with those employed before July 1, 1956, ,till July 1, 1956" but were sought to be discriminated against only thereafter. It is difficult to understand how persons who were employed after July 1, 1956, could possibly be treated before July 1, 1956, equally with employees who were in service on that day. Apparently it is this confusion in the mind of the Tribunal which has influenced its ultimate conclusion. That apart, it is quite clear that what the Trust has done is to put in one category persons who enjoyed in substance the same kind of benefit uptil July 1, 1956 and permit them to enjoy the benefit they bad hitherto enjoyed. Then it put in a separate category those persons who could never possibly lay any claim to have enjoyed a similar benefit because they were not its employees till July 1, 1956, and decided that they will get leave only as provided in section 79 of the . All persons in each category are intended to be alike and, therefore the 949 question of discrimination does not in fact arise. It was, in my opinion, open to the management to offer to the new entrants now terms. When the new entrants entered service accepting the new terms and knowing fully well that one of those terms i. e., the one relating to annual leave was different and less beneficial from the one which obtained in the case of the old employees, it is not reasonable for them now to say that they are being discriminated against. The Tribunal, however, thinks otherwise. It has held that the Trust, by treating the now entrants less favourably in the matter of leave than its old employees has practiced discrimination and that this discrimination has caused heart burning. Presumably, therefore, the Tribunal felt impelled to interfere and direct that the new entrants should be treated ' in the matter of leave on par with the old employees in ' order to avoid industrial unrest which may result 'from ' heart burning amongst the new entrants. What we must first consider is whether the existing of heart burning has at all been established in this case. It is said that the continuance of different provisions in the same concern has caused heart burning, dissatisfaction and frustration among the new employees and this would lead to unrest in the industry. For one thing, there is no evidence before us to show that the new employees are making a very serious grievance of the fact that they would get a few days less of leave than the old employees. All that Mr. Ramamurti could point out to us was the statement in the evidence of Som Nath, A. W. 7. that he should also be given 30 days, privilege leave in a year. Merely saying that he should be given privilege leave does not mean that he is harbouring bitterness in his mind. Apart from that it would be extremely unreasonable to take notice of bitterness, if any, in the minds of 950 these new employees in regard to this matter because. as already stated, they voluntarily took up employment knowing that they would got less leave than the old employees. Som Nath 's statement is no evidence of the fact that there is any heart burning. To say that the very fact that two sets of people are governed by different rules will necessarily lead to heartburning, without establishing anything more, such as inadequacy of the benefit enjoyed by one set will be to ignore that such differences are a matter of common occurrence and no reasonable person is expected to magnify their consequences. It seems to me, further, that the workers as a body did not think much of the distinction between the extent of leave enjoyed by old and new employees because during all the four years while the rule has been in force they raised no protests. No doubt they did ultimately make a protest in the year 1960 when the dispute was referred to the Tribunal. But then, this was not the sole dispute but was one of eight disputes, at least four of which were withdrawn by the Unions, apparently after realising that there was no substance in them. The mere fact that they did not withdraw this dispute would not of itself indicate that they regarded it as of great importance. It may well be that they did not withdraw it in an erroneous belief that anything which is characterised as discrimination will at once earn the sympathy of Industrial Tribunals and the Courts. Even assuming that is creating heartburning amongst the employees the question arises whether they have a real grievance. They say that the Trust has discriminated against the new entrants and this is their grievance. In this connection it may be observed that the more refusal or failure of an employer to treat equally all its employees doing a particular kind of work would not necessarily amount to discrimination. The subject of is d 951 crimination has come up for consideration before this Court in a largo number of cases in which a complaint has been made that the equality clause of the Constitution, article 14, has been violated. This Court has held that It is open to the State to make reasonable classification both as regards persons and as regards things (see in particular Budhan vs State of Bihar(1) ; Khandige Sham Bhatt vs Agricultural Income tax Officer (2); This Court has laid down that a classification made by the, State will be reasonable provided that (1) it is founded on an intelligible differentia which distinguishes persons or things that are grouped together from other left out of the group; and (2) that the differentia has a rational relation to the object sought to be achieved by the statute. In the State of Madhya Pradesh vs Gwalior Sugar Co. Ltd. (4); it has been held that it is permissible to make classification on historical grounds, by putting in one class one set of persons or things and in 'other all those left out from the first class Court. In Ramjilal vs Income tax Officer, Mohindargarh(5) this Court has held that a taxing law may provide that a law imposing a new rate shall not apply to pending proceedings. In other words this Court has upheld the law where one rate of income tax shall be applicable to persons whose cases were pending for assessment and another rate to persons whose cases were not so pending. Thus, this Court has hold as reasonable classification made by reference to difference in time. In Sardar Inder Singh vs The State of Rajasthan (6) this Court has held that it is open to the legislature to decide the date from which a law should be given operation and that the law made by it cannot be challenged as discriminatory because it (1) ; (2) ; (3) C A. Nos. 98 & 98 of 1959 decided on November 30, 1960. (4) ; (5) ; 952 does not apply to prior transactions. Thus in this case also classification made on the basis of difference in time has been upheld. Finally in Hathising Mfg. Co. vs Union of (India (1) this Court has held that there is no discrimination if the law applies generally to all persons who come within its ambit as from the date on which it is made operative. This case likewise accepts that it will not amount to discrimination if one set of persons is treated differently from another by reference to a point of time. It would follow from these decisions that if the State as an employer provided that persons entering its service after a certain date will be governed by a set of condition which will be different and, may be less favourable than those governing the existing entrants that law will not be open to attack under article 14 of the Constitution on the ground that it discriminates between one set of employees and another. In my judgment the principle laid down by this Court that reasonable classification does not amount to discrimination is of general application. Therefore, when an employer 's action is challenged before an Industrial Tribunal as discriminatory, the Tribunal will also have to bear it in mind. For if an action cannot be regarded as discriminatory and violative of article 14 of the Constitution because it is based on a reasonable classification an identical action of a private employer affecting his employees can also not be regarded as discriminatory. The content and meaning of 'discrimination ', wherever the term is used, must necessarily be the same and we cannot adopt one standard for judging whether an action when it emanates from the State, is discriminatory or not and another standard for judging an identical action, when it emanates from a private citizen. Looked at this way, I have no doubt that the Trust has not practised what can in law be regarded as discrimination against its now entrants (1) A.I.R. 1960 S.C. 931. 953 by allowing them lesser leave than it has allowed to its old entrants. I may point out that it is not an unusual thing even in Government service to find new entrants being treated differently in the matter of leave, emoluments etc., from the old entrants. It is a well know fact that in most of the provinces of India in the year 1932 or 1933 pay scales in various categories of Government service were revised and new scales less favourable than the old ones were introduced. Therefore, a largo body of men were performing the same duties as other large body of men but were getting lesser pay than the latter. That happens often, is happening today in several of the recently reorganised States and may happen hereafter also. But merely because new terms of service are less favourable than the old ones, would it be correct to say that there is discrimination between the new entrants and the old entrants? As already pointed out, it is open to the employer to offer different and even less favourable terms to new entrants and if the new entrants entered service with their eyes wide open they cannot reasonably complain of being discriminated against. Mr. Ramamurthi who appears for the employees, however, contends that it is open to an employee to take up employment on the existing conditions of service and immediately start clamouring for improving his conditions of service. It is sufficient to say that without establishing that there was a change in circumstances subsequent to the time when a workman accepted service a demand for improvement in the conditions of service cannot, with justice, be entertained unless of course the original conditions of service were plainly unfair. Mr. Ramamurthi does not say that the term regarding leave in the rule applicable to the new entrants is unfair in the sense that the 954 leave allowed is inadequate. But, Mr. Ramamurthi said that where a service condition causes heartburning amongst two sections of employees discontent and unrest would be its natural outcome and so it is open to the Tribunal to revise the condition and thus eliminate that discontent. I am unable to accept the argument. No doubt, the provisions of the Industrial Disputes Act are wide enough, like those of other legislative enactments placed on the statute book, for promoting the welfare of the employees to permit an Industrial Tribunal to override the contract between an employer and his employees governing conditions of service of the employees. But it does not follow from this that no sooner a reference of a dispute is made to a Tribunal for adjudication than the contract of service ceases to have any force. The power to interfere with a contract of service can only be resorted to in certain limited circumstances. As has been pointed out by this Court in State of Madras vs C. P. Sarathy(1), the adjudication by a Tribunal is only an alternative form of settlement of disputes on a fair and just basis, having regard to the prevailing conditions of the industry. Bearing in mind this principle, it would follow that it is only for securing a fair and just settlement of an industrial dispute that the Tribunal can over ride the contract between the parties. For deciding what is fair and just, it is not enough for the Tribunal to say that a particular demand be granted for doing social justice. What it must ascertain is whether the grievance is a real one and whether it is of a type of which the employees can justly complain. In Muir Mills Co., Ltd. vs Suti Mills Mazdoor Union, Kanpur (2) it has been pointed out social justice is a very vague and indeterminate expression and no clear cut definition can be laid down which will cover all the situations and that the fancy of an (1) (2) ; 955 individual adjudicator is not social justice. But, of course. , that does not mean that social justice has no place in the settlement of industrial disputes. It is indeed a relevant consideration but it is well to bear in mind that doing social justice in an industrial dispute is not merely doing justice between the employer and the employee. The question of doing anything in the interest of social justice comes in when the State has a social interest in a situation or in an activity because of its repercussions on the community at large. Therefore, when the social interest of the community is involved in a situation or an activity, the interests of all parties who are affected by it have to be borne in mind, the parties being not merely the employers and the employees but also the community at large which includes also the consumers. So, where a direction in an award is sought to be sustained on the ground that it was made with the intention of promoting social justice it must be shown that the adjudicator had borne in mind also the interests of the community. This aspect of the matter has not been borne in mind by the Tribunal and, therefore, the relevant direction in its award cannot be sustained on the ground that it is actuated by the need of promoting social justice. The ground given by the Tribunal, as already stated, is that there is discrimination and the existence of the discrimination will be a perpetual source of unrest. Granting, again, that there is discrimination it is difficult to appreciate now it can be a perpetual source of bitterness for. with the efflux of time, the old employees will gradually be fading out till at last there will be left only that category of workers to which the provisions of is. 79 of the apply. 956 Nor again. do I think the fact that a dispute a comparatively of minor character and that the financial burden entailed on the employer is inconsiderable, a matter which would entitle the Tribunal to alter a contract between an employer and his employees. In fact these factors are not relevant for consideration. If the leave terms offered to new employees were on their face unfair, the mere fact that the employer did not have the capacity to pay would not have been allowed to influence the determination of the issue. I would go further and say that since the Trust has provided for its new entrants such leave facilities as are recognised by the itself as fair, it was not open to the Tribunal to revise the relevant term of the contract,. For all these reasons I am of opinion that the appeal must succeed and the award of the Tribunal should beset aside in so far as it refers to the demand made by the employees for grant of the same leave to new entrants as is being granted to old employees. By COURT. In accordance with the opinion, of the majority, the appeal fails and is dismissed with costs.

IN-Abs

On July 1, 1956, the appellants made a rule that every workman employed on or before that date would be entitled to 30 days leave with wages after working for II months and workmen employed after that date would be entitled to earned leave in accordance with the provisions of s.79 of the Indian . The State Government referred for adjudication to the Industrial Tribunal the question whether all the employees should be allowed 30 days earned leave with full wages for every II months ' service without discrimination. The Tribunal held that ail the workmen were entitled to 30 days earned leave without making any distinc tion between workmen who joined before July 1, 1956, and those who joined subsequently. The appellants contended that they were entitled to fix the terms of employment on which they would employ the workmen and it was open to the workmen to accept those terms or not and the tribunal was not justified in interfering in such a matter. Held, per Gajendragadkar and Das Gupta, JJ., that the Tribunal was justified in directing the appellants to provide for the same uniform rule as to earned leave for all their employees. The doctrine of absolute freedom of contract had to yield to the higher claims for social justice and had to be regulated. In industrial adjudication no attempt should be made to answer questions in the abstract for evolving any general or inflexible principles. Each dispute has to be decided on its own facts without enlarging the scope of the enquiry. If some principles have to be followed or evolved, care has to be taken not to evolve larger 931 principles. In order that industrial adjudication should be free from the tyranny of dogmas or the sub conscious pressure of preconceived notions it is important that the temptation to lay down broad principles should be avoided. Accordingly it is not necessary to decide the broad contention whether industrial adjudication can interfere with the contract between the employers and the employees. In the present case, all the workmen were governed b the same terms and conditions of service, except in regard to earned leave. The discrimination was not based upon any principle and was bound to lead to disaffection amongst the new employees. The financial burden imposed by the award on the employers was slight. The provisions for earned leave in respect of old employees were not unduly generous or extravagant. Earned leave provided for by s.79 was the minimum statutory leave. If the appellants thought it necessary to provide for additional earned leave for their old employees, there was no reason why they should not make a similar provision in respect of new employees as well. Western Indian Automobile Association vs Industrial Tribunal, Bombay, and Bharat Bank Ltd. vs The Employees of Bharat Bank Ltd. , referred to. Per Mudholkar, J. The Tribunal was not justified in interfering with the rule made by the appellants. It was open to the appellants to grant leave according to s.79 , to all the employees but still they did not wish to reduce the leave of 30 days which they were already giving to the old employees. The appellants have put into one category persons who enjoyed the same kind of benefits until July 1, 1956, and have put in another category persons who did not enjoy such benefits. All persons in each category were treated alike, and the question of dis crimination did not in fact arise. If the State had pro vided that persons entering its service after a certain date would be governed by a set of conditions which were different and less favorable than those governing the existing servants its action would not be open to an attack under article 14 of the Constitution. An identical action of a private employer could also not be regarded as discriminatory. An award made with the intention of promoting social justice must take into consideration the interests of the community. Even if there was discrimination it could not be a perpetual source of bitterness as gradually the old employees would fade out 932 till only one category of workers would remain. The facts that the dispute was comparatively of a minor character and that the financial burden imposed on the appellants was small did not entitle the tribunal to alter the contract between the employer and employees. Since the appellant had provided for its new entrants such leave facilities as were recognised by the itself as fair, it was not open to the Tribunal to revise the relevant term of the contract. Budhan vs State of Bihar, A.I.R. 1956 section C. 191, Khandige Sham Bhat vs Agricultural Income Tax Officer [1963] 3 S.C.R. 809, State of M.P. vs Gwalior Sugar Co. Ltd. C.A. Nos. 98 & 99 of 1959, dated 30.1 1.60, Ramjilal vs Income tax Officer, Mohindargarh, ; , Sardar Inder Singh vs The State, of Rajasthan, ; and Hathisingh .Mfg. Co. vs Union of India, A.1 R. 1960S. C. 931 referred to.

Appeals Nos. 10 to 12 of 1962. Appeals from the judgment and order dated February 5, 1960 of the Punjab High Court in T. R. No. 20 of 1956. 895 A.V. Viswanath Sastri and R. Gopalakrishnan for the Appellant. Gopal Singh and R. N. Sachthey for the Respondent. August 31. The Judgment of the Court was delivered by SARKAR, J. In certain assessment proceedings under the Indian Income tax Act, 1922, the assessee was charged with interest under sub see. (8) of P. 18A of that Act, That sub section provided that in the cases there mentioned interest calculated in the manner laid down in sub sec. (6) of a. 18A shall be added to the tax assessed. The assessee contends that he could not be made liable to pay the interest as in his case it could not be calculated in the manner indicated. The only question that arises in this appeal is whether this contention is right. The assessee 's contention was rejected by the Appellate Commissioner but not by the Appellate Tribunal. The respondent Commissioner thereupon obtained a reference of the following question to the High Court of Punjab for its decision : "Whether, on a true construction of sub Sections(6),(8) and(9 of Section 18A of the Indian Income tax Act, the interest referred to in sub Section (8) is chargeable for failure on the part of an assessee to submit an estimate of his income and pay tax, as required by the terms of sub Section (3) of that Section". The High Court answered that question against the assessee. Hence the present appeals by him. There are three appeals because there are three 896 orders charging interest under s 18A(8), one in respect of each of three assessment years. It would help now to refer briefly to some of the provisions of section 18A. That Section deals with advance payment of income tax and Super tax, that is, payment of such taxes on income of the year in which taxes are paid and therefore before assessment Sub section (1) of this section gives power in certain cases to an Income tax Officer to make an order directing a person to make an advance payment of tax of an amount equal to the amount of the tax payable for the latest previous year in respect of which he has been assessed. Sub section (2) gives an assessee on whom an orders under sub see. (1) has been make, power to make his own estimate of the advance tax payable by him and to pay according to such estimate instead of according to that order. Sub section (3) deals with the case of a person who has not been assessed before and requires him to make his own estimate of the tax payable by him in advance and pay accordingly. This sub section applies to the assessee in the present case for he had not been assessed earlier. The assessee however neither submitted any estimate nor paid any tax. It remains now to states that the payment of tax in advance has to be made on June 15, September 15, December 15, and March 15 in each financial year or on such of these dates as may not have expired in the cases contemplated by sub secs. (2) and (3), and that the income on which tax is payable in advance under the section does not include income in respect of which provision is made by section 18 for deduction of the tax at the source of the income. Now we shall take up Sub secs. (6) and (8) of section 18A both of which have to be considered in some detail as the decision in this case depends on the words used in them Sub section (6) is the 897 sub section which has created the difficulty felt in this case and the relevant portion of it is in these terms "Where in any year an assessee has paid tax under sub section (2) or sub section (3) on the basis of his own estimate, and the tax so paid is less than eighty per cent of the tax determined on the basis of regular assessment simple interest at the rate of six per cent per annum from the 1st day of January, in the financial year in which the tax was paid up to the date of the said regular assessment shal l be payable by the assessee upon the amount by which the tax so paid fails short of the said eighty per cent". It is designed to apply to cases 'where tax has been paid by the assessee according to his own estimate but that estimate is on regular assessment found to be deficient. Under this sub section interest has to be calculated from January 1, in the financial year in which the tax mentioned was paid and such calculation has to be made on the shortfall between the amount paid and eighty per cent of the tax which was found payable on the regular assessment sub section (8) provides: " where, on making the, regular assessment the income tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub section (6) shall be added to the tax as determined on the basis of the regular assessment. The assessee does not dispute that sub secs (3)of section 18A applies to him and that he should have made an estimate and paid tax according to it but he has not done either. He admits that he is a person to whom sub sec. (8)applies. His contention is that in 898 his case since he has not paid tax at all, it is not possible to calculate interest in the manner laid down in sub sec.(6). Now sub sec. (8) by its terms applies to a case where no payment of tax has been made and, therefore, there is no first day of January of a financial year in which tax was paid, from which day the calculation of interest has to commence. Neither, the assessee contends, can any question of a shortfall between eighty per cent of the tax payable on regular assessment and the amount paid arise where nothing had been paid. The assessee really says that as the language of sub sec. (6) stands, it can have no operation in his case and therefore he has been wrongly charged with interest. To clear the ground we may state before proceeding further that the assessee has no other objection to the orders under sub sec. (8) making him liable for interest. The question thus raised is one of construction of sub secs. (6)and (8). The assessee relies on a rule of construction applicable to taxing statutes which has been variously stated. Rowlatt J.put it in these words in Cape Brandy Syndicate vs Inland Revenue Commission, (1). "In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. " The object of this rule is to prevent a taxing statute being construed "according to its intent, though not according to its words": In re Bethlem Hospital (2). This Court has accepted this rule. (1) , 71. (2) , 459. 899 Bhagwati J. in A. V. Fernandez vs The State of Kerala (1) said, "If. . the case is not covered within the four corners of the provisions of the tax ing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. " It has been said that "If the provision is so wanting in clarity that no meaning is responsibly clear, the courts will be unable to regard it at; of any effect." : see Inland Revenue Commissioners vs Baldnoch Distillery Co. Ltd. (2) The assessee therefore contends that on the plain words of sub as. (8) and (6) he cannot be charged any interest and in fact in a case like his, subsection (8) has to be regarded as of no effect. Now it is well recognised that the rule of construction on which the assessee relies applies only to a taxing provision and has no application to all provisions in a taxing statue. It does not, for example, apply to a provision not creating a charge for the tax but laying down the machinery for its calculation or procedure for its collection. The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective. Reference may be made to a few oases laying down this distinction. In Commissioner of Income tax vs Mahaliram Ramjidas (3) it was said, "The Section, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of (1) 7, 847. (2) , 625. (3) A.I.R. (1940) P.C. 124.126 127. 900 assessment. In interpreting provisions of this kind the rule is that construction should be preferred which make the machinery workable utres valeat potius quam pereat." In India United Mills Ltd. vs Commissioner of Excess Profits Tax (1) This Court observed, "That section is, it should be emphasised, not a charging section, but a machinery section. And a machinery section should be so construed as to effectuate the charging sections. " We may now profitably read what Lord Dunedin said in Whitney vs Commissioners(2) of Inland Revenue : "My Lords, I shall now permit myself a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable and the interpreta tion thereof by a Court should be to secure that object, unless crucial omission or clear direction makes that end unattainable. Now there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment, Liability does not depend on assessment. That, ex hypothesis, has already been fixed. But assessment particularises the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay." (1) ; , 816. (2) , 110. 901 There is one other case to which we think it useful to refer and that is Allen vs Trehearne where section 45(5) of the English Finance Act, 1927 which laid down that "Where in any year of assessment a person ceases to hold an office or employment. chargeable under Schedule 'E ' tax shall be charged for that year on the amount of his emoluments for the period beginning on the sixth day of April in that year and ending on the date of the cessation" came up for construction. It was contended that a sum of pound 10,000 which became payable to the assessee as the executor of the deceased holder of an office under the terms on which the office was held was not liable to tax under the section as it could not be said to be " his emoluments" since it was payable after his death. It was observed by Scott L.J., "the rules. in Section 45, Sub section (5) and (6), are rules affecting assessment and collection, and that if there is any difficulty in the precise applicability of the language of those Sub sections, it should be interpreted largely and generously in order not to defeat the main object of liability laid down by Rule 1 of Schedule E." Dealing with the words "his emoluments occurring in the subsection the learned Lord Justice said, "It is quite true that strictly speaking the emoluments in question never became his in the sense that the quantitative amount of pound 10,000 became his property, It never became payable to him, because he died. But that it was his emoluments under the agreement with the Company in a broad sense seems to me to be obvious, and in order to prevent the Revenue 's failure to get the tax which was intended b Rule 1 of schedule E, it appears to me to be legitimate to treat the words in (1) , 26 27. 902 question as meaning on the amount of the emoluments attaching to the office which he held '. " On this interpretation of Sub section (5) tax was assessed in this case. Now it seems to us that we are dealing here with a provision which lays down the machinery for the assessment of interest. That sub section (8) intended to and did in the clearest term impose a charge for interest seems to us to be beyond dispute. It says that interest calculated in a certain mariner "shall be added to the tax. " We do not here have to resort to any equitable rule of constructing or to alter the meaning of the language used or to add to or vary it in order to arrive at the conclusion that the provision intended to impose a liability to pay interest. That is the plain affect of the language used. But the Subsection also provides that the interest for which liability was created, has to be calculated in a certain manner. It is this provision which has given rise to the difficulty. But obviously this provision only lays down the machinery for assessing the amount of interest for which liability was clearly created; it in substance says that in calculating the amount of interest the machinery of calculation laid down in sub, sec. (6) shall be applied. The proper way to deal with such a provision is to give it an interpretation which, to use the words of the Privy Council in Mahairam Kamjidas 's(1)case ', 'makes the machinery workable, utres valeat potius quam pereat". We, therefore, think that we should read sub sec.(6), according to the provision of which interest has to be calculated as provided in sub sec.(8) in a manner which makes it workable and thereby prevent the clear intention of sub sec.(8) being defeated. Now, how is that best done? As we have (1) ,126 127. 903 earlier said sub sec.(6) deals with a case in which tax has been pail and therefore it says that interest would be calculated "from the I at day of January in the financial year in which the tax was paid". This obviously cannot literarily be applied to a case where no tax has been paid. If however the portion of sub see. (6) which we have quoted above is read as, "from the 1st day of January in the finan cial ear in which the tax ought to have been paid", the provisions becomes workable. It would not be doing too much violence to the words used to read them in this way. The tax ought to have been paid on one or other of the dates earlier mentioned. The intention was that interest should be charged from January 1 of the financial year in which the tax ought to have been paid. Those who paid the tax but a smaller amount and those who did not pay tax at all would than be put in the same position substantially which is obviously fair and was clearly intended. Which is the precise financial year in any case would depend on its facts and this, would make no difference in the construction of the provision. With regard to the other question about there being no shortfall between eighty per cent. of the amount of tax found payable on the regular assessment and the amount of tax paid in a case where no tax was paid, it seems to us the position is much simpler. If no tax is paid, the amount of such shortfall will naturally be the entire eighty per cent. We also think that the case before us is very near to Allen 's case(1) It remains now to refer to sub s,(9) of section 18A. That subsection provides for payment of penalty in terms of section 28 upon submission of estimates under sub sees. (2) and (3) known or reasonably believed to be untrue or upon failure without (1) (138) 16, 17. 904 reasonable cause to comply with the provisions of sub sec.(3). We are unable to see that this provision in any way affects the construction of sub secs.(6) or (8) or assists in the solution of the, difficulty which has arisen in this case. The penalty under sub sec.(9) is in addition to the liability under sub sec. (6) and (8) which his not penalty in the real sence, and is leviable for reasons different from those on which the levy of interest under sub secs. (6) and (8) is besad. The result, therefore, is that these appeals are dismissed and the decision of the High Court answering the question framed is upheld for the reasons earlier mentioned. The respondent will get the costs of these appeals. Appeals dismissed.

IN-Abs

By Sub section (8) of section 18 A, " where on making the regular assessment, the Income tax Officer finds that no payment of the tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub section (6) shall be added to the tax as determined on the basis of the regular assessment". section (6) of section 18A provided, "where in any year an assessee has paid tax under . sub section(3) on the basis of his own estimate, and the tax so paid is less than eighty percent of the tax determined on the basis of regular assessment. . simple interest at the rate of six per cent per annum from the first day of. ' January in the financial year in which the tax was paid up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said eighty per cent. " The assessee should have under sub s.(3) of s.18A made an estimate of his income and paid tax according to it but he did neither. He was thereupon charged with interest under sub s.(8) of s.18A. He contended that interest could 894 not be so charged because under sub s.(8) interest could be charged only in the manner laid down in sub section (6) that is, from January 1. of a year in which tax was paid and on the shortfall between eighty per cent of the tax payable on regular assessment and the amount actually paid, neither of which could be done in his case as he had not paid any tax at all. Held, the rule that in a taxing statute one has to look merely at what is clearly said and that in such a statute there is no room for any intendment applies only to a taxing provision and does not apply to a provision not creating a charge for the tax but laying down the machinery for its calculation or procedure for its collection. The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective. Commissioner of Income tax vs Mahaliram Ramjidas, A.I.R. , Indian United Mills Ltd. vs Commissioner of Excess Profits Tax, ; Whitney vs Commissioners of Inland Revenue, (1925) 10 'C. 88 and Allen vs Trehearne, , referred to. Sub s of section 18A is a provision which lays down the machinery for(8) the assessment of interest. Its plain affect is to impose a liability to pay interest and then it provides that in calculating the interest the machinery laid down in sub section (6) should be applied. Sub section (6) should therefore be read in a manner which makes it workable and prevents the clear intention of the legislature from being defeated. That sub. section should, where it is to be applied because of sub section (8), therefore, be read, as "from the 1st day of January in the financial year in which the tax ought to have been paid" and in such a case the shortfall contemplated in sub section (6) would be the entire eighty per cent. The penalty under sub section (9) of section 18A is in addition to the liability under sub ss (6) and (8). Sub section (9) does not arise in the construction of sub sections (6) and (8).

Appeal No, 110 of 1960. Appeal by special leave from the judgment and decree dated April 13, 1956, of the former Nagpur High Court in F.A. No. 99 of 1947. Naunit lal, for the appellants. B. A. Masodkar, B. D. Najbile and Ganpat Rai, for the respondents. September 12. The judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave raises a short question about the construction of section 149 (2) of the C. P. Land Revenue Act, 1917 (No II of 1917) (hereinafter called the Act). The validity of a revenue sale of their properties held on February 27, 1941 under section 128(f) of the Act was challenged by the appellants by their suit 30 . filed in the Court of the Additional judge, Nagpur on November 12, 1946. Ganpatrao Vishwanathji Deshmukh who had purchased the properties at the said auction sale was impleaded as defendant No. 1 to the said suit. During the pendency of the litigation, the said Ganpatrao has died and his heirs have been brought on the record. They will be referred to as respondent No. 1 in the course of this judgment. The appellants challenged the impugned sale on five different grounds. They alleged that the sale was without jurisdiction; that as the final bid was not accepted by the Dy. Commissioner, it was invalid; that as the sale was brought about fraudulently by respondent No. 1 in collusion with the Revenue Clerk, it was invalid; that as the Commissioner was not competent to confirm the sale on November 13 1945, it was invalid; and that the sale could not be held validly for the recovery of Rs. 1,354/9/ which was shown in the proclamation of sale as the arrear for which the property was put to sale. The trial court rejected all the contentions raised by the appellants in impeaching the validity of the sale and so, the relief claimed by the appellants against respondent No. 1 by way of injunction restraining him from recovering possession of the property and disturbing the appellants ' possession thereof was rejected. The appellants then preferred an appeal in the Nagpur High Court. The High Court has confirmed the findings of the trial court and accordingly, the appeal has been dismissed. It is against this decree that the appellants have come to this Court by special leave; and the only point which has been raised on their behalf by Mr. Naunit Lal is that the view taken by the courts below that the impugned sale could not be effectively challenged by the appellants under s.149 (2) is not justified on a fair and reasonable construction of the said provisions. The material facts leading to this point are very few, and they are not in dispute. The appellants are Lambardars of Mahal No. 2 of Mouza Gujarkhedi, 31 Tehsil Saoner, District Nagpur, and they held therein an undivided interest of As. /11/ . On or about October 4, 1940, they were found to be in arrears of land revenue to the extent of Rs. 730/13/ in respect of the suspended Rabi kist of 1938 39 and the Rabi kist of 1939 40. The Tehsildar of Saoner .made a report on October 4, 1940 to the Dy. Commissioner that the said arrears were due from the appellants and asked for sanction to sell by auction the property in suit. 'Along with this report, a draft of the sale proclamation containing the relevant details was also submitted for the signature of the S.D.O. in case the Dy. Commissioner sanctioned the sale. The S.D.O. forwarded the said report to the Dy. Commissioner who accorded sanction to the proposal of the Tehsildar on December 17, 1940. Thereafter, on December 23, 1940. the S.D.O. signed the said proclamation and on getting the said documents back, the Tehsildar ordered on January 7, 1941 that the sale proclamation should be published and that the sale should be held on February 26, 1941. On that date, the sale was adjourned to February 27, 1941 for want of adequate bids. On the next day the sale was held and the property was sold to respondent No. 1 for Rs. 600/ . Ultimately, the said sale was confirmed. It is common ground that though at the relevant time, arrears due from the appellants amounted only to Rs. 730/13/ , in the Parchanama the said amount was shown as Rs. 1,354/9/ and the property in fact was sold to recover the said amount of arrears under section 128(f) of the Act. The appellants ' contention is that the arrear, Rs. 1,354/9/ , for which his property has been sold under section 128(f) was not due; what was due was the lesser amount of, Rs. 730/13/ and so, the sale in question is invalid under section 149 (2) of the Act. In dealing with this point, it is necessary to refer to the relevant provisions of the Act. Chapter X of the Act deals with the collection of land revenue, and it consists of sections 122 to 160. Section 124 32 confers power on the State Government to regulate payment of sums payable under the Act and provides for the number and amount of the instalments, and the time, place and manner of payment of any sum payable under a settlement or sub settlement, or otherwise under an assessment made under this Act. Sub section (2) of section 124 requires that unless the State Government otherwise directs, all such payments shall be made as prescribed under sub section A notice of demand can be issued by Tehsildar or Naib Tehsildar under section 127 and it may be served on any defaulter before the issue of any process under section 128 for the recovery of an arrear. Section 128 provides for the process for recovery of an arrear and it prescribes that an arrear payable to Government may be recovered, inter alia,. (f) by selling such estate, mahal or land, or the share or land of any co sharer who has not paid the portion of the land revenue which, as between him and the other co sharers, is payable by him. Section 131 prescribes the procedure for attachment and sale of movables and attachment of immovable property. Then section 132 provides for holding enquiry into claims of third persons in respect of property attached or proceeded against. Section 138 (1) provides that the purchaser of any estate, mahal, share or land sold for arrears of land revenue due in respect thereof shall acquire it free of all encumbrances imposed on it, and all grants and contracts. made in respect of it, by any person other than the purchaser. Sub sections (2), (3) and (4) make other provisions, but it is unnecessary to refer to them. Section 143 lays down that if the arrear in respect of which the property is to be sold is paid at any time before the lot is knocked down, the sale shall be stayed. Section 145 provides for application to set aside sale on deposit of arrear, and section 146 provides for application to set aside sale for irregularity. Under section 148 it is provided that on the expiry of 30 days from the date of sale if no application has been made under section 145 or 146 or no claim has been made under section 151, or if 33 such application or claim has been made. and rejected, the Dy. Commissioner shall pass an order confirming the sale. Section 151 refers to claims of pre emptions. That takes us to section 149. Section reads as follows : "(1) if no application under section 146 is made within the time allowed therefor, all claims on the grounds of irregularity or mistake shall be barred. (2) Nothing in sub section (1) shall bar the institution of a suit in the Civil Court to set aside a sale on the ground of fraud or on the ground that the arrear for which the property is sold is not due. " It would thus be seen that the scheme of the relevant provisions of the Act in relation to revenue sales appears to be self contained. The revenue process for recovering arrears begins with the report as to the arrears and ends with the confirmation of sale. Provision is made for the examination of claims of third parties as well as for setting aside sales on account of deposit or on account of irregularities committed in conducting the sales. , It is in the light of this self contained scheme that section 149 (1) provides that if no application under section 146 is made within the time prescribed, all claims on the grounds of irregularity or mistake shall be barred. In other. words '. the effect of this provision is that if a party aggrieved by a revenue sale of his property wants to challenge the validity of the said sale on grounds of irregularity or mistake, the Act has provided a remedy for him by s.146 and it he fails to avail himself of that remedy, it would not be open to him to challenge the impugned sale on the said grounds by a separate suit. The grounds of irregularity or mistake must be urged by an application made under section 146 and if no such application is made, then the party is precluded from taking the said grounds otherwise. Thus far there is no difficulty or dispute. 34 Sub section (2) of section 149 provides an exception to sections (1), and it says that the institution of a suit would not be barred in a Civil Court to set aside 'a sale on two grounds; if the sale is challenged on the ground of fraud, a suit will lie; similarly, if a sale is challenged on the ground that the arrear for which the property is sold is not due, a suit will lie. The effect of this provision is that if fraud is proved in regard to a revenue sale, a suit will lie and the sale will be set aside; similarly, if it is shown that the arrear for which the property is sold was not due, a suit will lie and the sale will be set aside. There is no difficulty or dispute about this position also. The question on which the parties are at issue before us is in regard to the interpretation of the clause "the arrear for which the property is sold. " It has been held by the High Court that what this clause requires is not that the arrear for which the property is sold should be stated with meticulous accuracy, if a mistake is made in showing the actual amount of arrear due from the defaulter for which the property is sold, that mistake would not render the sale invalid; it would be a mistake within the meaning of ss.(1) and so, to cases of that kind sub section (2) will not apply. On the other hand, Mr. Naunit Lal contends that the clause "the arrear for which the property is sold" is plain and unambiguous. In considering the question as to whether this clause is attracted or not, one has to look at the proclamation of sale and enquire whether the amount shown as arrears due from the defaulter was in fact due or not. If the said amount was not due, the clause will apply notwithstanding the fact that a lesser amount may have been due from the said defaulter. In construing section 149(2) it is relevant to remember that the provision in question is made in relation to revenue sales and there is no doubt that the revenue sales are authorised to be held under the summary procedure prescribed by the relevant sections of the 35 Act, and so, it would not be unreasonable to construe these provisions strictly. That is why we are not inclined to accept the view that in interpreting the relevant clause, we should assume that the Legislature did not expect the authorities to specify the arrear for which the property is sold with meticulous care. If the defaulter 's property is being sold under revenue sale and the object of issuing the proclamation is to show for what arrear it is being sold, it is, we think, fair to assume that the said arrear must be stated with absolute accuracy. It would not be enough to say that some arrear was due and so, the sale should be upheld though it was purported to be held for recovery of a much larger arrear. Nor is this consideration purely academic. As we have seen, section 143 provides that if the arrear in respect of which the property is to be sold is paid before the lot is knocked down, the sale shall be stayed. In the present case, if the arrear had been properly shown at Rs. 730113/ , it is theoretically possible that the appellants may have been in a position to deposit this amount before the lot was knocked down and the sale would have been stayed. Since the arrear was shown to be much larger, it is theoretically possible that the appellants could not make a successful attempt to deposit the said amount. Now, in working out the provisions of section 143, there should be no difficulty in determining the amount which the defaulter has to deposit to avoid the revenue sale. The arrear in question must be correctly stated in the proclamation so that everybody concerned knows the exact amount for which the revenue sale is held. That is another consideration which supports the construction for which the appellants contend. Mr. Masodkar for respondent No. 1 argued that the construction for which the appellants contend is mechanical and it may lead to anomalies. In support of this argument, he took the illustration of a case where the amount of arrears is accurately shown in the proclamation, but after the proclamation is 36 issued, a part of it is paid by the defaulter; (as in fact Rs. 291/ were deposited by the appellants in the present case) the contention is that in such a case, if the original amount ,of arrears continues to be shown in the proclamation, the sale would be invalid on the construction suggested by the appellants. We are not impressed by this argument. Our attention has not been drawn to any specific provision of the Act under which a partial payment of the arrear due is allowed +lo be made by the defaulter. If such a payment is made, it may, at best be treated as deposited on account, and no deduction would be made from the arrear notified to be due from him in the proclamation at that stage. The only provision which has been cited before us in that behalf is section 143 and section 143 expressly provides for the payment of the whole of the arrear due and lays down that on such payment before the lot is knocked down, the sale shall be stayed. Therefore, the complication sought to be introduced by Mr. Masodkar by taking a hypothetical case of a part payment of the arrears due from the defaulter, does not affect the construction of section 149(2). It is then argued that the impugned sale cannot be said to be irregular in the present case, because on the date when it was, actually held, the amount of Rs. 1,354 /9/ was in fact due from the appellants as arrears. It is common ground that after the proclamation was issued, a further amount of arrears became due from the appellants and on the date of the sale, the total amount came to be Rs. 1,354/9/ . In our opinion, arrears accumulating. after an order for sale has been passed and the proclamation in that behalf has been issued, cannot come into the calculation while construing s.149 (2). Every arrear for which the sale is ordered must be specifically dealt with as provided by the Act. It is not open to the authorities to deal with a specific arrear as prescribed by the Act and to pass an order for sale of the defaulter 's property on the 37 basis of that arrear and then add to it subsequently accruing arrears without following the procedure prescribed in that behalf. Once the amount of arrear is determined and sale is ordered by reference to it, it is that amount which must be shown in the proclamation and it is for that amount of arrear for which the property must be sold. That, in our opinion, is clearly the effect of the relevant clause in section 149 (2). We must, therefore, hold that the High Court was in error in coming to the conclusion that the sale of the appellants ' property on the 27th February, 1941 was valid. We are satisfied that the arrear for which the appellants ' property was sold was not due within the meaning of s.149 (2), and so, the sale must be set aside. In support of his argument that the impugned sale cannot be held to be invalid, Mr. Masodkar relied on a decision of the Privy Council in Rewa Mahton vs Ram Kishen Singh(1). In that case, the Privy Council was dealing with a question which had reference to the true construction of section 246 of the Civil Procedure Code of 1877 (Act X of 1877). The said section had provided that if cross decrees between the same parties and for the payment of money be produced in the Court, execution shall be taken out only by the party who holds the decree for the larger sum, and for so much only as remains after deducting the smaller sum. It appears that contrary to the provisions of this section, an auction sale was held and when the title of the auction purchaser was challenged, it became necessary to consider that the effect of noncompliance with the provisions of section 246 would be on the title of the auction purchaser. The Privy Council held that a purchaser under a sale in execution is not bound to inquire whether the judgment debtor had a cross judgment of a higher amount such as would have rendered the order for execution incorrect. If the Court has jurisdiction, such purchaser is no more bound to inquire into the correctness of an (1) (1886) L. R. 13 I. A. 106. 38 order for execution than he is as to the correctness of the judgment upon which execution issues. In other words, the effect of this decision is that if in contravention of the provisions of section 246 an executing Court orders a sale to be held, the auction purchaser gets a good title notwithstanding non compliance with section 246. We do not see how this case can assist Mr. Masodkar in the present appeal. The decision turned upon the construction of section 246. But the present dispute has to be decided on a construction of section 149 (2). It is wellknown that execution sales held under the Code of Civil Procedure can be challenged only in the manner prescribed and for the reasons specified, say, for instance, by O. XXI r. 89, 90 and 91. The fact that certain irregularities committed during the conduct of execution sales would not render the sales invalid, flows from the relevant provisions of the Code and so, it would not be reasonable to invoke the assistance of the decisions dealing with irregularities committed in execution sales in support of the argument that a revenue sale held under section 128 (f) should be judged by the same principles. The question as to whether the revenue sale is valid or not must obviously be determined in the light of the relevant provisions of the Act and that again takes us to the construction of section 149 (2). Mr. Masodkar had also relied on the decision of the Calcutta High Court in Ram Prosad Choudhury vs Ram Jadu Lahiri (1)in support of his argument that a revenue sale held under section 128 (f) of the Act would not be rendered invalid merely because the amount of arrears shown in the proclamation is not accurate. In the case of Ram Prosad Choudhury, the sale had been held under the provisions of the Bengal Land Revenue Sales Act (Act XI of 1859). Under section 5 of the said Act, notice had to be issued before the sale could be held. In the notice. issued prior to the sale had been shown a sum which had then not become due as an arrear along with other sums (1) 39 which had become arrears, and the subsequent sale was held on the footing of the total amount thus shown being the arrears due. It was urged that the sale was invalid because of the irregularity committed in the issue of the notice under section 5. This argument was rejected and it was held that despite the said irregularity, the sale was valid. Now, in appreciating the effect of this decision ' it is necessary to refer to the provisions of section 33 of the said Act under which the sale was challenged. We have already referred to the fact that section 5 required a notice to be issued prior to the sale. The notice provided for by this section had to specify the nature and amount of arrear or demand, and the latest date on which payment thereof shall be received. Section 33 provides that no sale for arrears of revenue shall be annulled, except upon the ground of its having been made contrary to the provisions of this Act, and then only on proof that the plaintiff has sustained substantial injury by reason of the irregularity complained of '; with the rest of the section we are not concerned. The argument which was urged in the case of Ram Prosad Choudhury was that the notice under section 5 having been irregularly issued, the sale should be deemed to have been held contrary to the provisions of the said Act, and this argument was not accepted. It would be noticed that section 33 justifies a claim for annulling the sale only if two conditions are satisfied; that the sale should have been made contrary to the provisions of the Act and that the plaintiff must show that he has sustained substantial injury by reason of the irregularity complained of. It is in the context of these requirements that the Calcutta High Court held that the inclusion of an amount in the notice which had not become an arrear on the date of the notice did not render the impugned sale invalid. We do not think that this decision can assist us in interpreting section 149 (2) with which we are concerned. The scope and effect of the relevant provisions of section 149(2) are not at all similar to the scope and effect of 40 s.33 of the Bengal Act. Therefore, we are not inclined to accept Mr. Masodkar 's argument that the defect in the sale on which the appellants rely would not render the sale invalid. The result is, the appeal is allowed, the decree passed by the High Court is set aside and the appellants ' suit decreed, There would be no order as to cost throughout. Appeal allowed.

IN-Abs

The appellants are Lambardars of Mahal No.2 of Mouza Gujarkhedi, and they held therein an undivided share of As. /II / and as they were found in arrears of land revenue to the extent of Rs. 730/13/ , the property was sold for Rs. 600/ but the sale proclamation recited the amount of arrears due as Rs. 1345 9 0 and that the properties were being sold for 29 recovering that amount. It was contended by the appellants, that it was open to them to have the sale set aside in the Civil Court on the ground that the arrear for which the property was sold was not due. The trial court dismissed the suit on the ground that the suit did not lie and the High Court affirmed the decision. Held, that section 149 (2) of the Act was plain and unambiguous and that if the arrear in respect of which the sale was held was not due it gave a right to the owner of the property to have the sale set aside in a Civil Court. The fact that subsequent to the sale proclamation but on the date of the sale further amounts towards land revenue had become due was not material, the scheme of the Act being that in respect of each specific arrear separate proceedings had to be taken. Held, further, that mistakes and irregularities contemplated by the Act which would not furnish grounds for invalidating and setting aside the sale were of a different kind and from the scheme of the Act it is clear that a sale for an arrear that was not due was put in a separate category. Rewa Mahten vs Ram Kishan Singh (1886) L.R. 13 I.A. 106 and Ram Prosad Choudhury vs Ram Jadu Lahiri, (1936) 40 C.W.N. 1054, distinguished.

Appeal No. 128 of 1960. Appeal by special leave from the judgment and decree dated November 4, 1955, of the Punjab High Court in R. section A. No. 493 of 1950. K. C. Sarpal, section K. Mehta and K. L. Mehta, for appellant. Anant Ram Whig and J. B. Agarwal, for respondent No. 1. 1962. September 14. The judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave is filed against the judgment and decree of the High Court of Punjab, at Chandigarh, in Second Appeal No. 493 of 1950 setting aside the order of the Subordinate judge, Amritsar, confirming that of the Revenue Officer, Amritsar, decreeing the appellant 's suit. The subject matter of the appeal is land measuring 9 kanals and 2 marlas bearing Khasra Nos. 292 and 296 in mauza Kot Syed Mahmud,in the District of Amritsar; the previous corresponding Khasra Nos. of the land were 324 and 328. This land formed part of a larger area which originally belonged to a number of co sharers, including Teja Singh and jhandha Singh. There was a partition among the said co sharers and pursuant to that partition, on April 20, 1929 an application was filed before the Revenue Authorities 57 for mutation of the names in accordance with the terms of the partition; and the petition was signed by all the co sharers including Teja Singh and jhandha Singh. It was stated in the petition, marked as exhibit D 6 in the case, that in respect of the said Khasra numbers one share should be entered in the name of Teja Singh and 7 shares in the name of jhandha Singh. This fact is not admitted. But in the mutation that was effected on August 26, 1929 the entire extent of the said Khasra numbers was shown against Teja 'Singh alone. The mutation number was 960. On August 10, 1934, jhandha Singh, discovering the mistake committed in the revenue record, applied to the Revenue Authorities for correcting the said mistake. The Revenue Authorities enquired into the matter from August 10, 1934, to October 31. The record of that enquiry discloses that Mula Singh, the brother of Teja Singh Teja Singh died and Mula Singh was his heir admitted the mistake made in the revenue record before the concerned authorities. That apart, they had before them a report of the enquiry made by a subordinate officer of the revenue department tracing the history of the said Khasra numbers and 'also giving the relevant facts, namely, the partition between the co sharers and the joint Application filed by them for mutation of their names in respect of the plots allotted to each one of them. On the material so placed before them, the Revenue Authorities corrected the mistake, and against mutation ,No. 1490 the correct shares of Teja Singh and Jhandha Singh, namely, 1/8 and 7/8 respectively were given. On October 24, 1934, i.e., after jhandha ,Singh had filed the application for correcting the mutation No. 960, Mula Singh executed a sale deed conveying the said land bearing Khasra numbers 324 and 328 in favour of Gurbaksh Singh, the appellant, i.e., on the very date when Mula Singh had to appear before the Revenue Authorities. The appellant obtained a security bond from Mula Singh to indemnify him against any loss that might be caused to him in 58 respect of the said property; he also paid the bulk of the consideration only on October 22, 1937, i.e., after three years of the sale deed. jhandha Singh in his turn sold his 7/8 share in the said Khasra numbers, along with others, to Gopal Singh from whom Nikka Singh, the first respondent, purchased the said share by a sale deed dated October 27, 1936. The appellant filed a suit under section 117 of the Punjab Land Revenue Act, 1887, out of which the present appeal arises, in the revenue court for a declaration of his exclusive title to the said two Khasra numbers, and in that suit Nikka Singh, the first respondent, and Mula Singh, the second respondent, were the defendants. The suit has had a chequered career and it. is not necessary to trace it. It would be enough if we start with the decision of the Subordinate judge dated February 14, 1949, to whose file the suit was transferred from the file of the revenue court by the District judge after it was remanded by the High Court on an earlier occasion. The learned Subordinate judge expressed his opinion on the relevant issue thus: . . so far as the land in suit is concerned. , Mula Singh had sold it to the plaintiff on 24th October, 1934, and any admission by him made on 10th August, 1936 would not affect the plaintiff. Under Section 37 of the Land Revenue Act, a mutation can be based either on facts proved or admitted. No facts had been proved before the Officer who attested mutation No. 1490, and Mula Singh was nobody to admit any facts in relation to land which he had sold two years before to the plaintiff. The mutation entry 1490 was therefore not properly made and I decide issue No. 11 accordingly. " It will be seen from the aforesaid observations that the learned Subordinate Judge based his finding on the assumption that the admission of Mula Singh 59 could not bind the appellant who purchased his property before the said admission and that there was no the mutation entry No. 1490. On appeal the learned District judge, though he made certain observations indicating his line of thought, did not give any definite finding on the question of title, but he dismissed the appeal on the finding that the appellant was a bona fide purchaser in good faith. The first respondent preferred a second appeal to the High Court. The High Court held that the correction of the earlier mutation No. 960 was made with the consent of both the parties and there is a presumption attached to the correctness of the later mutation and that the appellant was fully cognizant of the real state of affairs, namely, that Mula Singh had only 1/8 share in the said Khasra numbers. On those findings, the decree of the learned Subordinate judge was set aside and the plaintiff 's suit was dismissed with costs throughout. Hence the appeal. Learned counsel for the appellant raised before us the following points: (1) The High Court has no jurisdiction under sections 100 and 101 of the Code of Civil Procedure to set aside concurrent findings arrived at by the two lower courts. (2) Under section 37 of the Punjab Land Revenue Act there is a presumption in favour of an entry in the revenue record if it is made in accordance with the facts proved or admitted to have occurred; but, as in the present case the entry was corrected on the admission of Mula Singh after he transferred his interest in favour of the appellant, the said admission could not constitute a legal basis for the said entry and therefore no presumption under that section would attach to that entry. It is true that as early as 1931 the Privy Council held that the High Court had no jurisdiction to entertain a second appeal on the ground of erroneous findings of fact however gross the error may seem to be, and the said ruling has since been followed by all the 60 courts in India and accepted by this Court in a number of decisions. But in this case the learned District judge has not given any finding on the question of title, but contented himself to dispose of the appeal on the ground that the appellant purchased the land in good faith from Mula Singh. The question of title was , therefore, left open and the High Court was certainly within its right in giving its own finding thereon. The finding given by the learned District judge that the appellant was a bona fide purchaser in good faith was not based on the evidence in the case, but was merely an ipsi dixit, Nor did the District judge 'consider the impact of the provisions of section 41 of the Transfer of Property Act on the facts of the case. Such a finding arrived at without evidence and without applying the correct principles of law cannot obviously bind the High Court. Section 41 of the Transfer of Property Act reads: " 'Where, with the consent, express or implied, of the persons interested in immoveable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not. be voidable on the ground that the transferor was not authorised to make it: provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith. " The general rule is that a person cannot confer a better title than he has. This section is an exception to that rule. Being an exception, the onus certainly is on the transferee to show that the transferor was the ostensible owner of the property and that he had, after taking reasonable care to ascertain that the transferor had power to make the transfer, acted in good faith. In this case the facts are tell tale and they establish beyond doubt that the appellant had 61 the knowledge that the title of his transferor was in dispute and he had taken a risk in purchasing the same. The appellant and Mula Singh belong to the same village Kot Syed Mahmud. Mula Singh sold his property, to the appellant on the very date on which he had to appear before the Revenue Authorities. Though the sale deed was executed on October 24, 1934, the consideration was actually paid only three years thereafter i.e., on October 22, 1937. The appellant also took a security bond from Mula Singh to indemnify himself against any loss that might be caused to, him in the property in dispute. These facts show that the appellant had knowledge of the defect in the title of Mula Singh. It is, therefore, not possible to hold that he had purchased it in good faith. The High Court, having regard to the aforesaid circumstances, held that the appellant knew that the transaction was in respect of a property of which the title was extremely doubtful. There are no permissible grounds for challenging the correctness of that finding before us in an appeal under article 136 of the Constitution. Nor do we see any merits in the contention that . no presumption can be drawn in favour of the correctness of the impugned entry in the revenue record on the ground that the condition given in the section are not satisfied. Section 37 of the Punjab Land Revenue Act reads: "Entries in records of rights or in annual records, except entries made in annual records by patwaris under clause (a) of section 35 with respect to undisputed acquisitions of interest referred to in that section, shall not be varied in. subsequent records otherwise than by (a) making entries in accordance with facts proved or admitted to have occurred; (b) making such entries as are agreed to by all the parties interested therein or are supported 62 by a decree or order binding on those parties; x x x x Section 44 says that an entry made in a record of rights in accordance with the law for the time being in force or in an annual record in accordance with the provisions of that Chapter and the rules thereunder, shall be presumed to be true until the contrary is proved or a new entry is lawfully substituted therefor. If the entry No. 1490 substituting entry No. 960 had been made in strict compliance with section 37 of the Punjab Land Revenue Act, it cannot be disputed that there would be a presumption that the new entry was lawfully substituted for the old. In that event the old entry should yield to the new entry. This presumption is no doubt rebuttable. There is force in the contention of learned counsel that Mula Singh, having parted with the interest in the property, could not have admitted the correctness of the new entry or agreed to have the old entry corrected in the manner done so as to bind a purchaser. But that contention does not avail him in the present case as we are satisfied on a perusal of the record that mutation entry 1490 had been made in accordance with the facts proved before the Revenue Authorities. There were the following pieces of evidence before the Revenue Authorities, among others: (1) evidence of Mula Singh; (2) the report of the subordinate revenue officer with all the connected annexures, including exhibit D 6, wherein the terms of the partition were recited. On the said evidence the Revenue Authorities corrected the entry in the record in the manner they did. It must, there fore, be held that the provisions of section 37(a) of the Punjab Land Revenue Act were satisfied. If so, there is a presumption that the later entry was correct. The appellant did not adduce any evidence to rebut the said presumption. On the other hand, exhibit D 6, the application dated April 20, 1929, for mutation of names in the revenue record, signed by all the cosharers contained the following recital: 63 "Entries with respect to the following Khasra Nos. may be made in the revenue papers in the name of Teja Singh, co sharer No. 5 to the tune of one share and Bhai jhandha Singh co sharer No. 2, to the tune of seven shares: 324 3.16, 328/5.06 etc. The High Court was, therefore, right in holding that there was a presumption in favour of the correctness of the entry and the appellant had failed to rebut the same. The judgment of the High Court is correct and the appeal fails and is dismissed with costs. Appeal dismissed.

IN-Abs

Teja Singh and Jhandha Singh were co sharers in certain agricultural land. They partitioned the land taking 1 and 7 shares respectively and applied for mutation of names to the revenue authorities. In the mutation by mistake the entire land was shown against the name of Teja Singh. On discovering the mistake jhandha Singh applied for correction of the entry. During the pendency of these proceedings Teja Singh died and his brother and heir Mula Singh sold the entire land in favour of the appellant. Mula Singh appeared before the revenue authorities and admitted the mistake. On this admission and on the report of an enquiry made into the matter by a subordinate revenue officer the authorities corrected the mistake and the correct shares of Teja Singh and jhandha Singh were shown as 1/8 and 7/8. The appellant filed a suit for declaration of his exclusive title to the land. The trial court decreed the suit holding that the corrected mutation entry which was made on the admission of Mula Singh after he had already sold the property was not properly made. On appeal the first appellate court upheld the decree, holding that Gurbaksh Singh was a bonafide purchaser in good faith but without giving any finding on the question of title. In second appeal the High Court reversed the findings and dismissed the suit. The appellant contended that the High Court had no jurisdiction to set aside concurrent findings of fact in second appeal and that no presumption could arise in favour of the corrected entry. Held, that the High Court was justified in interfering in second appeal as the first appellate court had given no finding on the question of title. The finding that the appellant was a bonafide purchaser in good faith was not based upon any evidence and the onus was on the transferee to show that the transferor was the ostensible owner. The appellant had full knowledge of the defect in the title of Mula Singh. 56 Held, further, that the presumption under section 44 of the Punjab Land Revenue Act arose that the corrected entry was true as the entry was made in accordance with law. Section 37 provided that such an entry could be made in accordance with facts proved or admitted to have occurred. Though Mula Singh 's admission after he had parted with the interest in the property, could not have been relied upon, the entry was made in accordance with the facts proved before the revenue authorities by the report of the subordinate revenue officer which recited the, terms of the partition also. The appellant did not adduce any evidence to rebut the presumption.

Appeal No. 205 of 1952. Appeal from the Judgment and Order dated the 16th September, 1952, of the High Court of Judicature at Madras (Subba Rao J.) in Writ Petition No. 599 of 1952 filed under the Special Original Jurisdiction of the High Court under article 226 of the Constitution of India. M.C. Setalvad, Attorney General.for India (G. N. Joshi, with him) for the appellant and Intervener. Mohan Kumaramangalam, for the respondent. February 27. The judgment of the court was delivered by PATANJALI SASTRI C.J. This is an appeal from an order of a Single Judge of the High Court of Judicature at Madras issuing a writ of prohibition restraining the 1146 Election Commission, a statutory authority constituted by the President and having its offices permanently located at New Delhi, from enquiring into the alleged disqualification of the respondent for membership of the Madras Legislative Assembly. The respondent was convicted by the Sessions Judge of East Godavari and sentenced to a term of seven years ' rigorous imprisonment in 1942, and he was released on the occasion of the celebration of the ludependence Day on 15th August, 1947. In June, 1952, there was to be a by election to a reserved seat in the Kakinada constituency of the Madras Legislative Assembly, and the respondent, desiring to offer himself as a candidate but finding himself disqualified under section 7 (b) of the Representation of the People Act, 1951, as five years had not elapsed from his release, applied to the Commission on 2nd April, 1952, for exemp tion so as to enable him to contest the election. No reply to the application having been received till 5th May, 1952, the last day for filing nominations, the respondent filed his nomination on that day, but no exception was taken to it either by the Returning Officer or any other candidate at the scrutiny of the nomination papers. The election was held on 14th June, 1952, and the respondent, who secured the largest number of votes, was declared elected on 16th June, 1952. The result of the election was published in the Fort St. George Gazette (Extraordinary) on 19th June, 1952, and the respondent took his seat as a member of the Assembly on 27th June, 1952. Meanwhile, the Commission rejected the respondent 's application for exemption and communicated such rejection to the respondent by its letter dated 13th May, 1952, which however was not received by him. On 3rd July, 1952, the Speaker of the Assembly read out to the House a communication received from the Commission bringing to his notice "for such action as he may think fit to take", the fact that the respondent 's application for exemption had been rejected. A question as to the respondent 's disqualification having thus been raised, the Speaker referred the question to the Governor of 1147 Madras who forwarded the case to the Commission for its "opinion" as required by article 192 of the Constitution. The respondent having thereupon challenged the competency of the reference and the action taken thereon by the Governor, the Commission notified the respondent that his case would be heard on 21st August, 1952. Accordingly, the Chief Election Commissioner (who wag the sole Member of the Commission for the time being) went down to Madras and heard the respondent 's counsel and the Advocate General of Madras on 21th August, 1952, when it was agreed that, in case the petitioner 's counsel desired to put forward any further representations or arguments, the same should be sent in writing so as to reach the Commission in Delhi by 28th August, 1952, and the Commission should take them into consideration before giving its opinion to the Governor. On the same day (21st August, 1952) the respondent applied to the High Court under article 226 of the Constitution contending that article 192 thereof was applicable only where a member became subject to a disqualification after he was elected but not where, as here, the disqualification arose long before the election, in which case the only remedy was to challenge the validity of the election before an Election Tribunal. He accordingly prayed for the issue of a writ of mandamus or of prohibition directing the Commission to forbear from proceeding with the reference made by the Governor of Madras who was not, however, made a party to the proceeding. On receipt of the rule nisi issued by the High Court, the Commission demurred to the jurisdiction of the court to issue the writs asked for, on the ground that the Commission was not "with in the territory in relation to which the High Court exercised jurisdiction". A further objection to the maintainability of the application was also raised to the effect that the action of the Governor in seeking the opinion of the Commission could not be challenged in view of the immunity provided under article 361 (1), and that the Commission itself, which had not to "decide" the question of disqualification, but had merely to give its 1148 "opinion", could not be proceeded against under article 226. On the merits, the Commission contended that article 192 was, on its true construction, applicable to cases of disqualification arising both before and after the election and that both the reference of the question as to the respondent 's disqualification to the Governor of Madras and the latter 's reference of the same to the Commission for its opinion were competent and valid. The application was heard by Subba Rao J. who overruled the preliminary objections and held that article 192 on its true construction applied only to cases of supervening disqualifications and that the Commission had, therefore, no jurisdiction to deal with the respondent 's disqualification which arose long before the election took place. He accordingly issued a writ prohibiting the Commission from proceeding with the enquiry in regard to the question referred to it by the Governor under article 192. The learned Judge, however, granted a certificate under article 132 that the case involved substantial questions of law as to the interpretation of the Constitution, and the Commission has accordingly preferred this appeal. A preliminary objection was raised by Mr. Mohan Kumaramangalam, who argued the case for the respondent with marked ability, that the appeal brought from the judgment of a single Judge was barred under article 133(3) of the Constitution despite the certificate granted by the learned Judge overruling the same objection which was also raised before him. It has been urged that, so far as civil matters are concerned, the more comprehensive provisions in article 133(1) (c) for the grant of a certificate of fitness for appeal to the Supreme Court completely overlap article 132(1) which relates only to one specific ground, namely, a substantial question of law being involved as to the interpretation of the Constitution, and that the court 's power, therefore, to grant a certificate of fitness on any ground including the ground referred to above, must be deem ed to arise under article 133(1) (c), with the result that the exercise of such power is excluded by the opening 1149 words of clause (3) of that article which bars an appeal from the judgment, decree or final order of one Judge of a High Court. The argument was sought to be reinforced by reference to clause (2) of that article and the proviso to article 145(3) both of which contemplate appeals involving substantial questions of law as to the interpretation of the Constitution being brought without a certificate having been obtained under article 132. The argument has no force. While it is true that constitutional questions could be raised in appeals filed without a certificate under article 132, the terms of that article make it clear that an appeal is allowed from "any judgment, decree or final order of a High Court" provided, of course, the requisite certificate is given, and no restriction is placed on the right of appeal having reference to the number of Judges by whom such judgment, decree or final order was passed. Had it been intended to exclude the right of appeal in the case of a judgment etc., by one Judge, it would have been easy to include a reference to article 132 also in the opening words of article 133(3), as in the immediately preceding clause. If the respondent 's contention were accepted, not only would article 132 become redundant so far as it relates to civil proceedings, but the object of the Explanation to that article, which was designed to supersede the decision of the Federal Court in section Kuppuswami Rao vs The King (1) and thus to secure a speedy determination of constitutional issues going to the root of a case, would be defeated, as the Explanation is not made applicable to the same expression "final order" used in article 133(1). The whole scheme of the appellate jurisdiction of the Supreme Court clearly indicates that questions relating to the interpretation of the Constitution are placed in a special category irrespec tive of the nature of the proceedings in which they may arise, and a right of appeal of the widest amplitude is allowed in cases involving such questions. We accordingly overrule the preliminary objection and hold that the appeal is maintainable. (1) 149 1150 Turning now to the question as to the powers of a High Court under article 226, it will be noticed that article 225 continues to the existing High Courts the same jurisdiction and powers as they possessed immediately before the commencement of the Constitution. Though there had been some conflict of judicial opinion on the point it was authoritatively decided by the Privy Council in the Parlakimedi case(1) that the High Court of Madras the High Courts of Bombay and Calcutta were in the same position had no power to issue what were known as high prerogative writs beyond the local limits of its original civil jurisdiction, and the power to issue such writs within those limits was derived by the court as successor of the Supreme Court which had been exercising jurisdiction over the Presidency Town of Madras and was replaced by the High Court established in pursuance of the Charter Act of 1861. The other, High Courts in India had no power to issue such writs at all. In that situation, the makers of the Constitution, having decided to provide for certain basic safeguards for the people in the new set up, which they called fundamental rights, evidently thought it necessary to provide also a quick and inexpensive remedy for the enforcement of such rights and, finding that the prerogative writs which the Courts in England had developed and used whenever urgent necessity demanded immediate and decisive interposition, were peculiarly suited for the purpose, they conferred, in the States ' sphere, new and wide powers on the High Courts of issuing directions, orders, or writs primarily for the enforcement of fundamental rights, the power to issue such directions, etc., "for any other purpose" being also included with a view apparently to place all the High Courts in this country in somewhat the same position as the Court of King 's Bench in England. But wide as were the powers thus conferred, a two fold limitation was placed upon their exercise. In the first place, the power is to be exercised "throughout the territories in relation to which it exercises jurisdiction", that is to say, the writs issued (1) 70 I.A, 129 1151 by the court cannot run beyond the territories subject to its jurisdiction. Secondly, the person or authority to whom the High Court is empowered to issue such writs must be "within those territories", which clearly implies that they must be amenable to its jurisdiction either by residence or location within those territories. Such limitation is indeed a logical consequence of the origin and development of the power to issue prerogative writs as a special remedy in England. Such power formed no part of the original or the appellate jurisdiction of the Court of King 's Bench. As pointed out by Prof. Holdsworth (History of English Law, Vol. 1, p. 212 et seq.) these writs had their origin in the exercise of the King 's prerogative power of superintendence over the due observance of the law by his officials and tribunals, and were issued by the Court of King 's Bench habeas corpus, that the King may know whether his subjects were lawfully imprisoned or not; certiorari, that he may know whether any proceedings commenced against them are conformable to the law; mandamus, to ensure that his officials did such acts as they were bound to do under the law, and prohibition, to oblige the inferior tribunals in his realm to function within the limits of their respective jurisdiction. See also the introductory remarks in the judgment in the Parlakimedi case(1). These writs were thus specifically directed to the persons or authorities against whom redress was sought and were made returnable in the court issuing them and, in case of disobedience, were enforceable by attachment for contempt. These characteristics of the special form of remedy rendered it necessary for its effective use that the persons or authorities to whom the court was asked to issue these writs should be within the limits of its territorial jurisdiction. We are unable to agree with the learned Judge below that if a tribunal or authority permanently located and normally carrying on its activities elsewhere exercises jurisdiction within those territorial (1) 70 I.A. 129, 140. 1152 limits so as to affect the rights of parties therein, such tribunal or authority must be regarded as "function 'mg" within the territorial limits of the High Court and being therefore amenable to its jurisdiction under article 226. It was, however, urged by the respondent 's counsel that the High Court had jurisdiction to issue a writ to the Commission at New Delhi because the question referred to it for decision related to the respondent 's right to sit and vote in the Legislative Assembly at Madras and the parties to the dispute also resided in the State of Madras. The position, it was claimed, was analogous to the court exercising jurisdiction over persons outside the limits of its jurisdiction, provided the cause of action arose within those limits. Reliance was placed upon the following observations of the Privy Council in the Parlakimedi case(1): "The question of jurisdiction must be regarded as one of substance and that it would not have been within the competence of the Supreme Court to claim juisdiction over such a matter as the present of issuing certiorari to the Board of Revenue on the strength of its location in the town. Such a view would give jurisdiction to the Supreme Court in the matter of the settlement of rents of ryoti holdings in Ganges between parties not otherwise subject to its jurisdiction, which it would not have had over the Revenue Officer who dealt with the matter at first instance. " We cannot accede to this argument. , The rule that cause of action attracts jurisdiction in suits is based on statutory enactment and cannot apply to writs issuable under article 226 which makes no reference to any cause of action or where it arises but insists on the presence of the person or authority within the territories" in relation to which the High Court exercises jurisdiction. Nor is much assistance to be derived from the observations quoted above. That case arose out of proceedings before a special Revenue Officer for settlement of fair rent for certain holdings within the zemindary estate of Parlakimedi situated beyond the local limits of the original civil jurisdiction of the Madras High Court. Dissatisfied (1) 70 I.A. 129. 1153 with the settlement made by the Revenue Officer, the ryots appealed to the Board of Revenue which had its offices at Madras. The appeal was accepted by a single member of the Board who reduced the rent as desired by the ryots. The zemindar appealed by way of revision to the Collective Board which sanctioned an enhancement. Thereupon the ryots applied to the High Court for the issue of a writ of certiorari to bring up and quash the proceedings of the Collective Board which passed the order complained of in the town of Madras. The Privy Council considered the question of jurisdiction from two separate standpoints: "(a) independently of the local civil jurisdiction which the High Court exercises over the Presidency town; or (b)solely by reason thereof, as an incident of the location of the Board of Revenue within the town. " On question (a), they examined the powers of the Supreme Court at Madras to issue certiorari beyond the Presidency Town under clause 8 of the Charter of 1800, as it was suggested that the High Court succeeded to the jurisdiction and powers of the Supreme Court which had been granted the same powers of issuing prerogative writs as the Court of King 's Bench in England throughout the Province, and they recorded their conclusion thus: " Their Lordships are not of opinion that the Supreme Court would have had any jurisdiction to correct or control a country court of the company deciding a dispute between Indian inhabitants of Ganjam about the rent payable for land in that district. " Then, dealing with question (b) and referring to their decision in Besants case(1) that the High Courts of Calcutta, Madras and Bombay had power to issue certiorari in the exercise of their local jurisdiction, they held that the principle could not be applied "to the settlement of rent for land in Ganjam merely on the basis of the location of the Board of Revenue as a body which is ordinarily resident or located within (1) 46 I.A. I 76. 1154 the town of Madras, or on the basis that the order complained of was made within the town. if SO, it would seem to follow that the jurisdiction of the High Court would be avoided by the removal of the Board of Revenue beyond the outskirts of the town and that it would never attach but for the circumstance that an appeal is brought to, or proceedings in revision taken by, the Board of Revenue. " Then followed the passage already quoted on which the respondent 's counsel laid special stress. It will thus be seen that the decision is no authority for dispensing with the necessity of the presence or location, within the local limits of the court 's jurisdiction, of the person or authority to whom the writ is to be issued, as the basis of its power to issue it. Their Lordships considered, in the peculiar situation they were dealing with, that the mere location of the appellate authority alone in the town of Madras was not a sufficient basis for the exercise of jurisdiction whereas both the subject matter, viz., the settlement of rent for lands in Ganjam, and the Revenue Officer authorized to make the settlement at first instance were outside the local limits of the jurisdiction of the High Court. If the court in Madras were, recognised as having jurisdiction to issue the writ of certiorari to the appellate authority in Madras, it would practically be recognising the court 's jurisdiction over the Revenue Officer in Ganjam and the settlement of rents for lands there, which their Lordships held it never had. That was the "substance" of the matter they were looking at, and their observations lend no support to the view that if the subject matter or the cause of action and the parties concerned were within the territorial limits of the jurisdiction, the High Court could issue prerogative writs to persons or authorities who are not within those limits. In any case, the decision did not turn on the construction of a statutory provision similar in scope ' purpose or wording to article 226 of the Constitution, and is not of much assistance in the construction of that article. 1155 It was said that it could not have been contemplated that an inhabitant of the State of Madras, feeling aggrieved by a threatened interference with the exercise of his rights in that State by an authority located in Delhi and acting without jurisdiction, should seek his remedy under article 226 in the Punjab High Court. It is a sufficient answer to this argument of inconvenience to say that, the language of the article being reasonably plain, it is idle to speculate as to what was or was not contemplated. Our attention has been called to certain decisions of High Courts dealing with the situation where the authority claiming to exercise jurisdiction over a matter at first instance is located in one State and the appellate authority is located in another State. It is not necessary for the purposes of this appeal to decide which High Court would have jurisdiction in such circumstances to issue prerogative writs under article 226. In the view we have expressed above as to the applicability of article 226 to the present case, it is unnecessary to enter upon a discussion of the question whether article 192(1) applies only to members who, having been already elected, have become subject to a disqualification by reason of events happening after their election; but having heard the point fully argued before us, we think it right to express our opinion thereon, especially as both sides have invited us to do so in view of its general importance. The relevant provisions of the Constitution on which the determination of the question turns are as follows: 190. (3) If a member of a House of the Legislature of a State (a) becomes subject to any of the disqualifications mentioned in clause (1) of article 191 ; or (b) resigns his seat by writing under his hand addressed to the Speaker or the Chairman, as the case may be, his seat shall thereupon become vacant, 1156 191. (1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State (a) if he holds any office of profit under the Government of India or the Government of any State, specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder; (b) if he is of unsound mind and stands so declared by a competent court; (c) if he is an undischarged insolvent; (d) if he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State; (e) if he is so disqualified by or under any law made by Parliament. (1) 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 the decision of the Governor and his decision shall be final. (2) Before giving any decision on any such question, the Governor shall obtain the opinion of the Election Commission and shall act according to such opinion. If a person sits or votes as a member of the Legislative Assembly or the Legislative Council of a State. . when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament or the Legislature of the State, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the State. As has been stated already, the respondent 's conviction and sentence in 1942 disqualified him both for being chosen as, and for being, a member of the Legislative Assembly under article, 191 (1) (e) read with section 7 of the Representation of the People Act, 1951, 1157 passed by Parliament, the period of five years since his release on 15th August, 1947, not having elapsed before the date of the election. The respondent having thus been under a disqualification since before his nomination on 15th March, 1952, could he be said to have "become" subject to that disqualification within the meaning of article 192 ? The rival contentions of the parties centred round the true interpretation to be placed on that word in the context of the provisions quoted above. The Attorney General argued that the whole fasciculus of the provisions dealing with "disqualifications of members", viz., articles.190 to 193, should be read together, and as articles 191 and 193 clearly cover both preexisting and supervening disqualifications, articles 190 and 192 should also be similarly understood as relating to both kinds of disqualification. According to him all these provisions together constitute an integral scheme whereby disqualifications are laid down and machinery for determining questions arising in regard to them is also provided. The use of the word "become" in articles 190 (3) and 192 (1) is not inapt, in the context, to include within its scope preexisting disqualifications also, as becoming subject to a disqualification is predicated of "a member of a House of Legislature", and a person who, being already disqualified, gets elected, can, not inappropriately, be said to "become" subject to the disqualification as a member as soon as he is elected. The argument is more ingenious than sound. Article 191, which lays down the same set of disqualifications for election as well as for continuing as a member, and article 193 which prescribes the penalty for sitting and voting when disqualified, are naturally phrased in terms wide enough to cover both preexisting and supervening disqualifications; but it does not necessarily follow that articles 190 (3) and 192 (1) must also be taken to cover both. Their meaning must de end on the language used which, we think, is reasonably plain. In our opinion these two articles go together and 150 1158 provide a remedy when a member incurs a disqualification after he is elected as a member. Not only do the words " becomes subject" in article 190(3) and "has become subject" in article 192(1) indicate a change in the position of the member after he was elected, but the provision that his seat is to become thereupon vacant, that is to say, the seat which the member was filling theretofore becomes vacant on his becoming disqualified, further reinforces the view that the article contemplates only a sitting member incurring the disability while so sitting. The suggestion that the language used in article 190(3) can equally be applied to a pre existing disqualification as a member can be supposed to vacate his seat the moment he is elected is a strained and farfetched construction and cannot be accepted. The Attorney General admitted that if the word " is " were substituted for "becomes" or " has become ", it would more appropriately convey the meaning contended for by him, but he was unable to say why it was not used. It was said that on the view that articles 190(3) and 192(1) deal with disqualifications incurred after election as a member, there would be no way of unseating a member who became subject to a disqualification after his nomination and before his election, for, such a disqualification is no ground for challenging the election by an election petition under article 329 of the Constitution read with section 100 of the Representation of the People Act, 1951. If this is an anomaly, it arises out of a lacuna in the latter enactment which could easily have provided for such a contingency, and it cannot be pressed as an argument against the respondent 's construction of the constitutional provisions. On the other hand, the Attorney General 's contention might, if accepted, lead to conflicting decisions by the Governor dealing with a reference under article 192 and by the Election Tribunal inquiring into an election petition under section 100 of the Parliamentary statute referrred to above. For the reasons indicated we agree with the learned Judge below in holding that articles 190(3) and 192(1) 1159 are applicable only to disqualifications to which a member becomes subject after he is elected as such, and that neither the Governor nor the Commission has jurisdiction to enquire into the respondent 's disqualification which arose long before his election. As, however, we have held that the High Court was not competent under article 226 to issue any prerogative writ to the appellant Commission, the appeal is allowed and the writ of prohibition issued by the learned Judge is quashed. We make no order as to costs. Appeal allowed. Agent for the appellant and the Intervener: G. H. Rajadhyaksha.

IN-Abs

The respondent, who had been convicted and sentenced to rigorous imprisonment for seven years, was elected a member of Madras Legislative Assembly. At the instance of the Speaker the Assembly, the Governor of Madras referred to the Election Commission, which had its offices permanently located at New Delhi, the question whether the respondent was disqualified and could be allowed to sit and vote in the Assembly. The respondent thereupon applied to the High Court of Madras under article 226 of the Constitution for a writ restraining the Election Commission from enquiring into his alleged disqualification for membership of the Assembly: Held, that the power of the High Court to issue writs under article 226 of the Constitution is subject to the two fold limitation 1145 that such writs cannot run beyond the territories subject to its jurisdiction and the person or authority to whom the High Court is empowered to issue such writs must be amenable to the jurisdiction of the High Court either by residence or location within the territories subject to its jurisdiction. The High Court of Madras bad therefore no jurisdiction to issue a writ under article 226 of the Constitution against the Election Commission. Held further, that articles 190(3) and 192(1) are applicable only to disqualifications to which a member becomes subject after heis elected as such, and neither the Governor nor the Election Commission had jurisdiction to enquire into the respondent 's disqualification which arose long before his election. A tribunal or authority permanently located and normally carrying on its activities outside the territorial limits of a High Court cannot be regarded as functioning within those territorial limits and therefore amenable to the jurisdiction of that High Court, merely because it exercises jurisdiction within those territorial limits so as to affect the rights of parties therein. The fact that the matter referred to it for decision related to the opposite party 's right to sit and vote in the Legislative Assembly at Madras and the parties to the dispute resided in the State of Madras could not give jurisdiction to the High Court of Madras to issue such a writ against the Election Commission. An appeal lies to the Supreme Court under article 132 of the Constitution even from a judgment, decree or final order of a Single Judge of a High Court, provided the requisite certificate is given.

minal Appeal No. 170 of 1961. Appeal by special leave from the judgment and order dated August 28, 1961, of the Allahabad High Court (Lucknow Bench) at Lucknow in Cr. Case No. 125 of 1961. A.S. R. Chari, B. Parthasarathy, R. K. Garg, section C.Aggarwal, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. G. C. Mathur and C. P. Lal, for respondent No. 2. 1962. September 13. The judgment of the Court was de livered by DAS GUPTA, J. This appeal by special leave is against an order of the High Court at Allahabad rejecting on August 28, 1961 an application made by the present appellant. For a proper appreciation of the contention raised in the appeal it is necessary to set out in some detail the complicated. facts which gave rise to her application. It appears that on January 23, 1938 the appellant 's mother Mrs. A. E. Forbes executed a will leaving all her property to her three children, viz., the appellant, Mrs. V. G. Paterson, Mrs. E. D. Earle and Mr. 0. V. Forbes. The testatrix died on June 6, 1939 and this appellant applied for a probate. The probate was granted on November 30, 1939. On May, 4, 1943 when Criminal Appeal No. 9 of 1943 was being argued before a, Single Judge of the Oudh Chief Court the Counsel for the State brought it to the notice of the judge that Mr. 0. V. Forbes brother of the present appellant had made in his application before the Trial Court and in other ways certain aspersions against the conduct of the Trial Court which amounted to contempt of Court. The 43 learned judge ordered the issue of notice against Mr. O. V. Forbes in this matter. On May 6 1943 the present appellant also filed an application for similar action under the Contempt of Courts Act against her brother Mr. Forbes. On this also notice was issued to Mr. Forbes. As the notices are not on record we do not know the actual terms of the notice; but it does not appear to be disputed that by these notices Mr. Forbes was asked to appear be ore the Oudh Chief Court to show cause why he should not be proceeded against for contempt of court. Mr. Forbes however did not appear. Some time after this a bailable warrant appears to have been issued for the arrest of Mr. Forbes. The warrant was returned unexecuted. A registered notice was thereafter issued under the orders of the Court asking Mr. Forbes to attend the Oudh Chief Court on September 23, 1943. On that date also he did not appear. The learned judges of the Chief Court being of opinion that Mr. Forbes was concealing himself only to avoid the execution of the warrant, made the following order : "Accordingly we order that action be taken under section 87 of the Code of Criminal Procedure against Mr. Forbes and direct the issue of a written proclamation requiring him to appear in this Court on the 25th November, 1943 at 10 a.m. This proclamation will be issued in strict accordance with the requirements of section 87 Cr. P.C. The proclamation will also be published once in the Pioneer of Lucknow and the Daily Statesman of Calcutta. Under section 88 of the Code of Criminal Procedure We further order attachment of the moveable and immoveable property belonging to Mr. Forbes within the jurisdiction of this Court including : 1. G.P. Notes and bonds for Rs.1,070,000/ in the hands of the Registrar of this Court. Rs. 12,250/ deposited in this Court in the Personal Ledger, Trustees and Stake Hol ders Fund; 3. G.P. Notes belonging to Mr. Forbes of the face value of Rs. 55,000/ attached in Execution Case No. 16 of 1942 in the Court of the Civil judge, Lucknow : Dr. Hari Shanker Dube vs O. V. Forbes. " The proclamation was duly published and certain property was attached on the basis that it was the property of Mr. 0. V. Forbes. On March 30, 1 '944, the Oudh Chief Court recorded an order stating that as Mr. Forbes did not appear within the time specified in the proclamation and under sub section (7) of section 88 of the Code of Criminal Procedure the property under attachment was at the disposal of the Provincial Government. As regards the two applications for contempt the Court made the following order: ""These applications will therefore be adjourned sine ded until Mr. Forbes appears or is arrested. " On September 21, 1944, the Court made an order withdrawing the prohibitory order it had earlier issued against the Registrar and the Civil judge, Lucknow. It appears that after the Oudh Chief Court made the order on March 30, 1944 stating that the attached property was at the disposal of the Provincial Government under sub section 7 of section 88 of the Code of Criminal Procedure the Provincial Government directed the City Magistrate to take suitable action for the disposal of the attached property. It was to facilitate such action by the City 'Magistrate that the prohibitory orders were withdrawn. The Chief Court also made an order directing the Registrar and the Civil judge to send the attached property to the City Magistrate for disposal according to law. On the same date Mrs. Paterson was also directed to hand over all the property in her possession which she may be 45 holding a custodian for 'Mr. O.V. Forbes to the City Magistrate. It, appears that in August 1943 the City Magistrate forwarded to the U.P. Government at Lucknow promissory notes of the total value of Rs. 2,28,800/ said to be the attached property adding"these G. P. Notes to the total value of Rs. 2,28,800/ have been ordered to be forfeited to the U. P. Government by the Chief Court of Oudh under order dated 21st September 1944 in Criminal Miscellaneous Application No. 47 of 1943". It was further stated that : "It is requested that necessary action may be taken ' by you to credit the sum under the head Fines and Forfeitures Apparently this has been done. Mr. Forbes died in 1953. On April 4. 1960 the present appellant made an application to the U.P. Government in which she stated that Mr. Forbes had died intestate and that his only heirs were his two sifters, the appellant herself and her sister Mrs. E. D. Earle for whom she was the trustee and prayed that as the Government was " 'only in the position of a receiver or a trustee of the property of Mr. Forbes this trusteeship having ceased with Mr. Forbes death .the government should return the property to the appellant and her sister". On September 3, 1960 the Government rejected this prayer stating ""that this was a confiscated property of Mr. Forbes and that on legal grounds her claim was Wholey untenable" but added these, words : " 'If however she has any special reasons for invoking the compassion of Government `she may indicate the same to Government and also furnish convincing evidence that Mr. Forbes actually has died and that she is his sole heir or one of the heirs entitled to his assets. " The appellant pointed out to the Government in her letter dated September 12, 1960 that the property of Mr. Forbes has not been confiscated bet merely attached and emphasised that the Government had no proprietary right to the attached property but 46 could retain it only as a custodian or trustee for the time being. She asked the Government to re consider the whole situation. The reply of Government, if any was apparently unsatisfactory and so on November 29, 1960 the appellant filed an application under article 226 of the Constitution in the High Court at Allahabad in which after stating the several facts as regards the attachment of the property and the action taken by the Government, she prayed for a writ of certiorari to quash the Government 's order of September 3,1960 and also for a writ of Mandamus ordering the Government to hand over the Government promissory notes and cash money which had been attached. On March 29, 1961 the ' High Court rejected this application. The High Court pointed out that the applicant had not shown that the State Government had failed to carry out any duty imposed by law and further that the order dated September 5, 1960 could not be said to be either judicial or a quasi judicial order or even an administrative order passed without jurisdiction. It was then that ' on May 1, 1961 the appellant made to the High Court at Allahabad the application out of which the present appeal has arisen. By this application the appellant asked for four relilfs : (a) for an order terminating the contempt of court proceedings; (b) for an order vacating the orders of attachment made by the Chief Court; (c) for a direction on the Finance Secretary, U. P. Government, to restore the attached property to the applicant as executrix of the estate of late Mrs. A. E. Forbes. A copy of the writ petition dated the 29th November, 1960 in which it had been mentioned that the proceedings under section 87 and section 88 of the Code of Criminal Procedure were illegal because the code was applicable to proceedings for contempt, was attached to the application. It was further stated in the present application that in any case the attachment was void inasmuch as the property that was attached 47 was at the time of attachment an undistributed part of the estate of late Mrs. A. E. Forbes and so vested in this appellant as executrix. By separate but concuring judgments Mr. Justice Mulla and Mr. justice Nigam, who heard this application rejected the applicant 's prayer for vacating the order of attachment or for any direction to the Finance Secretary, U.P. Government for restoration of the attached property. Mr. Justice Mulla based his decision mainly on the point that the appellant had herself acted in an unclean way, and she having been responsible for getting warrants under sections 87 and 88 of the Code of Criminal Procedure issued against Mr. Forbes it did not lie in her mouth to say now that the issue of these processes was without jurisdiction and held that as she was instrumental in getting the order now complained of passed, the discretionary powers of the Court should not be exercised in her favour, especially, as she had made the application after a long delay. The learned judge also expressed the opinion that the judges of the Chief Court acted within their jurisdiction in issuing processes under sections 87 and 88 of the Code of Criminal Procedure that this order was just and legal and the State had come into the custody of the property under the due process of law. In the opinion Of the learned judge "Mr. Forbes was willing to give away this property rather than, face a prosecution for contempt of Court" and added "if he took up that attitude it cannot be said by the heirs of Mr. Forbes that now the property should be released in their favour". Mr. Justice Nigam stressed the point that the Court had attached the property belonging to ',Mr. Forbes and the present appellant had handed over the property " treating it to be the property of Mr. O.V. Forbes. " According to this learned Judge if the property that was attached did not belong to Mr. 0. V. Forbes this appellant should have " 'never handed over the property voluntarily". He was further 48 of opinion that "the fact that she voluntarily handed a property over as belonging to Mr. Forbes and actually suggested that this particular property be attached clearly amounted to. . . an admission of 'the ownership of the property vesting in Mr. 0. V. Forbes and the property not being part of the undistributed assets in the possession of '. Mrs. Peterson as executrix to Mrs. A. E. Forbes. " After holding that the Code of Criminal Procedure was not directly learned Judge expressed the opinion that "the Bench could adopt its own procedure for enforcing the attendance of the delinqent" and added 'if it adopted the procedure prescribed in the Code of Criminal Procedure, I can see no warrant for the contention that the procedure adopted was wrong, improper and beyond the jurisdiction of the Court. " Finally, he held that it would be contrary to the interests of justice to review the order " 'after a lapse of about 18 years. " The learned Judge also held that the Court was no longer in possession of the attached property, the same having been handed over to the City Magistrate for being passed on to the State Government and could not therefore pass any orders in respect of the property. He also expressed the view that prima facie it appeared to him that the appellant 's remedy, if any, was by a civil suit. The contempt proceedings were however directed to be consigned to the record as abated. The present appeal is directed against the High Court 's decision refusing to give the plaintiff the substantial relief asked for in the application, viz., a direction on the Finance Secretary, U. P. Government to restore the attached property to her. The first question for consideration is whether at the time of attachment the property formed . part of the unadministered estate of Mrs. A. E. Forbes. If that was the correct legal position there could not be in law attachment of that property as the property 49 of Mr. Forbes, even if section 87 and s.88 could be applied to secure the arrest of a person alleged to have committed contempt. Mr. justice Mulla has not dealt with this question. Justice Nigam has however formed the definite conclusion that the property had vested in Mr. O.V. Forbes on the date of attachment and was not part of the undistributed assets of Mrs. A. E. Forbes in the hand of the executrix. In coming to this conclusion the learned Judge appears to have relied on what he described as " 'the fact that she (Mrs. Paterson) voluntarily handed the property over as belonging to Mr. Forbes and actually suggested that this particular property be attached". It is not clear from the record of this case on what materials the learned judge thought that Mrs. Paterson actually suggested that this particular property be attached. That she really handed the property over appears to be correct. It appears reasonable to think that she did so in obedience to the order of the Court. The matter was stated thus by her in Para. 8 of the Writ Petition: "8. That under the orders of the Hon 'ble Chief Court of Avadh the petitioner deposited with the Registrar of that Court and finally with the City Magistrate, Lucknow, unadministered assets consisting of Government Promissory Notes and each totalling Rupees 2,41,300/ detailed in the list attached to this petition which the then City Magistrate, Sri section G. Bose Mullick was pleased to transfer the same to the Finance Secretary to the U. P. Government, Lucknow, in August, 1948. " In the counter affidavit filed on behalf of the State of O. P. in the writ petition the statements made in this paragraph was admitted to be true. It appears clear therefore that the petitioner made over the securities and cash the property which was attached tinder the orders of the Chief Court of Oudh. It is further to be borne in mind that the petitioner made the 50 definite statement in this Para. 8 of the writ Petition that the property that was made over by her formed part of the unadministered assets in her hand and the truth of this statement was admitted by the State of U.P It is difficult to see how it can be reasonably here that merely because the executrix banded over certain assets in her hand to the Registrar and the City Magistrate in obedience to the orders of the Chief Court thereby become vested in Mr. 0. V. Forbes. The property in the hands of the executrix could become vested in Mr. O. V. Forbes only on her handing over the same to him or to somebody on his behalf. Delivering the property to the Registrar of the Court or to the City Magistrate could not amount to handing over to the legatee. For, obviously the Registrar of the Chief Court or the City Magistrate, Lucknow, were not acting on behalf of the legatee Mr. 0. V. Forbes but indeed acting against his inte rests. In our opinion, the property did not cease to be unadministered assets of the estates of Mrs. A. E. Forbes merely because under the orders of the Court this appellant, who was the executrix, had the assets in her hand deposited with the Registrar or the City Magistrate. It must therefore be held that the property which was attached was at the time of attachment not the property of Mr. O. V. Forbes but formed part of the unadministered assets of Mrs. A. E. Forbes. This property could not be legally attached in any proceedings for securing the arrest of Mr. O. V. Forbes. If what was attached did not form part of the property of Mr. 0. V. Forbes, the order of attachment was invalid; and there would be no scope for the operation of section 88 (7) of the Code of Criminal Procedure. Assuming that the property was of Mr. 0. V. Forbes, the question arises whether it would, as a result of the attachment, be at the disposal of 51 Government under s.88 (7) of the Code of Criminal Procedure. In Sukhdev Singh Sodhi vs The Chief Justice and Judges of the Pepsu High Court(1) it was held that the Code of Criminal Procedure does not apply to proceedings for contempt. On this authority it must be held that the provisions of sections 87 and 88 would also not be available to securing 'the presence of a person who is alleged to have committed contempt. It may be mentioned that on behelf of the appellant, 'Mr. Chari had urged that even if the property was of Mr. 0. V. Forbes, the a leged contemner, the Chief Court of Oudh had no power to attach it. The High Court seems to think that the Chief Court could choose any procedure it liked in the matter of punishing people for contempt and so if it thought that it would not finally dispose of contempt proceedings without the alleged contemner being present before it, it had the inherent right of first issuing a warrant of arrest and next, if that was not successful, by proclamation for his appearance and also by attachment of his property. It seems to us that the Chief Court as a Court of record had the right to punish persons for contempt and for the proper exercise of that power it will have all other powers necessary and incidental to it. It is however unnecessary to decide whether such necessary and incidental powers include the power of arrest and of attaching the alleged contemner 's property in an attempt to secure his presence. But assuming they do, we are of opinion that the Chief Court had still no right to make over the attached property to Government. The right of the Government to have any control over the attached property flows from the provisions of section 88 of the Criminal Procedure Code ' As no attachment could legally be made under section 88, Criminal Procedure Code, in any proceeding for contempt, the provisions of section 88 (7) of the Code of Criminal Procedure, under which (1) ; 52 the property under attachment shall be at the disposal of the State Government, if the proclaimed person does not appear within the time prescribed in the proclamation cannot come into operation. The position therefore is that Government is in possession of the property that was attached under the orders of the Chief Court; but the possession is, without any authority of law. The question then arises : whether the Court can or should direct restoration of the property to the rightful owner. On behalf of the State of V., P. it is argued that if the Government is in unlawful possession of the property the proper remedy for the rightful owner is to seek his remedy in a civil suit. In such a suit he will have to pay the necessary court fee, and it will be open to Government to take the plea of limitation or such other defences as may be available to it. This would ordinarily be a correct statement of the position in law. In the present case, we have however the special circumstance that it is by reason of an error on the part of the Chief Court that the property has found its way to the State Government. Proceedings taken by the Chief Court against Mr. 0. V. Forbes for alleged contempt of the Court must be taken to be fully justified , as such action is necessary not only to uphold the dignity of the Court but also to keep the administration of justice free from calumny. When however we find that Court acted without jurisdiction in attaching the property, and in any case, in ordering such property to be handed over to Government we have to remember the other great principle which was stated many years ago in these words by Cairns, L. C. in Rodger vs Comptoir D ' Escompte Da Paris(1): "One of the first and highest duties of all courts is to take care that the act of the Court does no injury to any of the suitors. . . To say that we arc aware, is not to say that whenever a court after wrongly deciding a case between two parties discovers that the decision was wrong it has the (1) [1871] L. R. 3 P. C. 465,475. 53 inherent jurisdiction to re open the matter and to set matters right by altering the decision. In many cases when the Court has made a mistake the party who has suffered for that mistake is without any remedy except what he can get in accordance with the provisions Of appeal, revision or review. As the courts are careful to point out again and again, courts of law have the jurisdiction to decide wrongly as well as rightly and the mere fact that the decision is wrong does not give a party a remedy. Those considerations against the use of inherent jurisdiction to: correct errors made by the courts in the exercise of its jurisdiction have, however, no application to cases like the present. Here, the Court for the purpose of exercising its jurisdiction in a matter of contempt took steps to attach certain properties. This is not a case where there are conflicting claims between two parties which have been decided by a judgment or order of the Court as between the parties. The question really is whether the rightful owner of the property would have it or the Government which has come into possession of the property without being a claimant to it because of an erroneous order of the court should retain it, if it is found that the order was wrong. In our opinion, this question must be answered in favour of the rightful owner of the property. We have assumed that the Court had the power to attach the properties of the alleged contemner; but have held that it had no power in law to make these over to the Government. The attachment however could only subsist so long as the contemner was alive. On the contemner 's death the attachment could not in law or equity continue. For, the purpose for which the attachment was made, viz., to secure the presence of the allegead contemner could no longer be achieved. Obviously, in such a case, the rightful owner of the property would be entitled to restoration of the property on the contemner 's death. It would not be proper for the Court to say then that it 54 cannot do anything in the matter because the property has passed into the hands of the Government by the Court 's own mistakes. In our opinion, the court will be failing to perform its primary function of doing justice if in such circumstances the court, on discovering its mistake refuses to correct that mistake. As it is plain here that it is the mistaken act of the Court which has put Government in possession of the property even though without being a claimant to it, it is only right and proper that the Court should correct that error and restore the property to the person from whom it was wrongly taken. We cannot see what legitimate grievance the State of U. P. can have against this. It had no title to the attached property and it would have had no control over it., except for the mistaken application of the provisions of section 88 (7) of the Code of Criminal Procedure. If now it is found that the Court had made a mistake, first, in attaching the property in question, and secondly, even apart from that, in directing the property to be made over to Government, the Government cannot legitimately object to the Court correcting this mistake. It would be deplorable if in circumstances like these the Court would find itself helpless to correct its mistake and to order restoration on an application being made to it in that behalf. In our opinion, the applicant is entitled to an order for restoration of the attached property. We accordingly allow the appeal, and order that tile Finance Secretary, U. P. Government be directed to restore to this appellant, the attached property which is in the possession of the Government. In the peculiar circumstances of the case, we make no order as to costs. Appeal allowed.

IN-Abs

The appellant 's mother died leaving a will executed in favour of the appellant her sister and her brother. The appellant applied for a probate and it was granted to her. Subsequently in connection with a criminal appeal before the Oudh Chief Court applications were filed by the counsel for the State as well as the appellant for proceeding against her brother one Mr. Forbes under the Contempt of Courts Act. On the failure of Mr. Forbes to appear in pursuance of notices issued by the Court, a proclamation under s.87 of Code of Criminal Procedure was published and certain properties were attached under s.88 of the Code of Criminal Procedure. These properties were assumed to belong to Mr. Forbes and they were under the custody of the appellant. Finding that Mr. Forbes did not even then appear the Court recorded an order that the attached properties were at the disposal of the Government and the contempt proceedings would be adjourned sine die until Mr. Forbes appears or is arrested. On directions from the Court the appellant handed over the properties to the City Magistrate who in turn forwarded them to the Government. Thereafter Mr. Forbes died. After his death the appellant made an application to the 41 Government for the return of the properties. The Government refused to comply with this request and following an abortive writ petition filed by the appellant before the High Court for the issue of a writ of Mandamus against the Government, she filed before the High Court an application for a direction on the Secretary to the U. P. Government to restore the attached property. The High Court dismissed the application and the appellant appealed to the Supreme Court by way of special leave. The main questions which were raised in the appeal were whether at the time of the attachment the properties formed part of the administered estate of the appellant 's mother, whether the properties could be legally attached for securing the arrest of Mr. Forbes and whether the provisions of the Code of Criminal Procedure applied to contempt proceedings. A .further question raised was whether the property attached under section 88(7) of the Code of Criminal Procedure would be at the disposal of the Government. Held, that the properties in the hands of the executrix could become vested in Mr. Forbes only on her handing over the same to him or to somebody on his behalf. The properties did not cease to be unadministered assets of the estate of the appellant 's mother merely because under the orders of the Court the appellant who was the executrix handed over the properties to the Magistrate. The properties therefore could not be legally attached in any proceeding for securing the arrest of Mr. Forbes. The order of attachment being invalid there is no question of the application of section 88(7) of the Code of Criminal Procedure and the properties being at the disposal of the Government. Even if the properties belonged to Mr. Forbes the provisions of sections 87 and 88 of the Criminal Procedure would not be available for securing the presence of a person who is alleged to have committed contempt. Assuming that apart from the Criminal Procedure Code, the Court had the power to attach the contemner 's property it had no right to make over the attached property to the Government. The possession of the properties by the Government is therefore without the authority of law. It was further held that even if the attachment order was valid and the Government came into possession of the properties under the authority of law the courts attachment order can only subsist so long as the contemner was alive and the rightful owner of the property would be entitled to restoration of the property on the contemmner 's death. The Court will be failing in its duty if on discovering its mistake of ordering an illegal attachment and wrongful delivery to the Government refused to correct the mistake. Sukhdev Singh Sodhi vs The Chief Justice and Judges of the, Pepsu High Court; , , followed. 42 Bodgar vs Comptoir d ' Escomute di Paris, 3 P. C. 465, referred to.

iminal Appeal No. 88 of 1962. Appeal by special leave from the judgment and order dated November 30, 1961, of the Calcutta High Court in Cr. R. No. 1117 of 1961. D. R. Prem, R. N. Sachthey and R. H. Dhebar, for the appellant. A. section R. Chari, Ravinder Narain, J. B. Dadachanji and 0. C. Mathur, for the respondent. September 11. The judgment of the Court was delivered by GAJENDRAGADKAR, J. The principal point which the appellant, the State of West Bengal, has raised for our decision in the present appeal, is whether the provisions of section 540 of the Code of Criminal Procedure apply to a case tried by the Magistrate under section 207A of the Code. That question arises in this way. On the 7th July, 1960, a charge sheet was submitted under section 173 of the Code by Inspector Bhuromal of the Special Police Establishment, New Delhi, in the Court of the Chief Presidency 'Magistrate, Calcutta, against Hari Das Mundhra, accused No. 1, and the respondent Tulsidas Mundhra, accused No. 2, under section 12OB/409 and sections 409 and 477 A of the Indian Penal Code. On the 5th August, 1960, both the accused persons appeared before the learned Chief Presidency Magistrate and furnished bail. Thereafter, the case was transferred to M. Roy, the Presidency Magistrate 5th Court for further proceedings. On the 10th October, 1960, copies of the documents were furnished to the accused persons, and since the record was voluminous, the hearing of the case was adjourned to the 7th December, 1960. On the 1st March, 1961 parties were heard and in view of the nature of the offences and the amounts involved, 3 the Magistrate took the view that the proper course to follow would be to adopt the commitment proceedings as laid down in section 207A of the Code. Subsequently, the procedure prescribed by the said section was followed. It appears that accused No. 1 who had in the meanwhile been, convicted in another case was undergoing a sentence of imprisonment in the District jail at Kanpur and so, he could not be produced before the Magistrate until the 7th July, 1961. That is why the case had to be adjourned on some occasions and effective hearings did not make a material progress until the 7th July. On the 6th July, 1961, the respondent filed a petition before the Magistrate alleging that amongst the documentary evidence sought to be relied upon against him by the prosecution were included three cheques and the prosecution case was that the writing on the cheques was in the handwriting of the respondent. The respondent disputed this allegation Pan prayed that he should be allowed an opportunity to examine defence witnesses to prove that the impugned handwriting was not his. On the 7th July, 1961, when the case was taken up for hearing before the Magistrate, he first considered the application made by the respondent to call defence witnesses and on the merits, he rejected the said application. Then he proceeded to make an order of commitment. In rejecting the application of the respondent for examining defence witnesses, the Magistrate took into account the fact that the application had been deliberately made at a very late stage in order to prolong the proceedings in his Court and so, that was one reason why he thought that an unconsciousably delayed petition which had been made solely with the object of gaining time should not be granted. He also held that the application was misconceived. It was urged before the Magistrate that he could examine the said witnesses and in support of this argument, reliance was placed on a 4 decision of the Bombay High Court in the case of Arunachalam Swami vs State of Bombay (1). The learned Magistrate took the view that the said decision was distinguishable on facts. Whilst the learned Magistrate was delivering this order, an application was made before him that the respondent wanted to move the higher Court for a transfer of the case, and though the learned Magistrate felt that this application also was intended merely to prolong the proceedings in his Court, he adjourned the case because under section 526(8) it was obligatory on him to do so. That is why he adjourned the hearing of the case to the 20th July, 1961, for passing the remaining portion of the final order in case the respondent failed to obtain from the higher Court ' the necessary order of transfer. This order was challenged by the respondent by moving the Calcutta High Court in its criminal revisional jurisdiction. The High Court took the view that section 540 applied to cases tried under section 207A and it directed the Magistrate to consider afresh whether he should summon and examine the defence witnesses mentioned by the respondent in his application of the 6th July, '61 under the provisions of the said section. Incidentally, the High Court also observed that the accused persons had not been examined under s.362 and so, it thought that an opportunity should be given to them to explain the circumstances appearing against them by asking them questions under section 342, This observation was made even though the High Court did not think it necessary to decide the general question whether in a commitment enquiry, examination of the accused under s.342 is compulsory or not. In the result, the order passed by the '.Magistrate on the 7th July, 1961, was set aside and the matter was sent back to his Court for disposal in accordance with law. It is against this order that the appellant has come to this Court by special leave and on its behalf (1) A. 1. R. 5 Mr. Prem has contended that the High Court was in ' error in holding that section 540 of the Code applied to proceedings under section 207A. In the alternative, he has argued that the Magistrate had himself considered the question as to whether the witnesses should be examined in the light of his powers under section 540 and so, even if his first point failed, he was entitled to contend that the High Court was not justified in sending the case back to the Magistrate. There is no point, he argues, in asking the Magistrate to consider the question once again. There is no doubt that the new provisions under s.207A have been introduced for the purpose of expediting the commitment proceedings so as to shorten the duration of criminal cases which are exclusively triable by the Court of Session or High Court. Section 206, inter alia, confers powers on the Magistrates specified in the section to commit any person for trial to the Court of Session or High Court for any offence triable by such Court. Under s.207, it is provided that in regard to a case which is triable exclusively by a Court of Session or High Court, or which, in the opinion of the Magistrate, ought to be tried by such Court, the Magistrate shall : (a) in any proceeding instituted on a Police report follow the procedure specified in s.207A; and (b) in any other proceeding, follow the procedure specified in the other provisions of this Chapter. Thus, section 207A is applicable to proceedings in respect of offences which are exclusively triable by the Court of Session or High Court, or which, in the opinion of the Magistrate, ought to be tried by such Court. This section consists of 16 subsections which, in a sense, constitute a self contained Code which has to be followed in dealing with cases under the said section. Sub section (2) authorises the Magistrate to issue a process to compel the attendance of any witness or the production of any document or thing. Under sub section (3), the Magistrate has to satisfy himself that 6 the documents referred to in section 173 have been furnished to the accused and if they are not so furnished, he has to cause the same to be so furnished. Sub section (4) then deals with the stage where the Magistrate proceeds to take evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual commission of the offence alleged, and it adds that if the Magistrate is of opinion that it is necessary in the interests of justice to take the evidence of any one or more of the other witnesses for the prosecution, he may take such evidence also. By sub section (5), the accused is given liberty to cross examine the witnesses examined under sub section (4). Sub section (6) then lays down that if evidence is recorded under sub section (4) and the Magistrate has considered all the documents referred to in s.173 and has, if necessary, examined the accused for the purpose of enabling him to explain any circumstances appearing in the evidence against him and given the prosecution and the accused an opportunity of being heard, he shall, if he is of opinion that such evidence and documents disclose no grounds for committing the accused person for trial, record his reasons and discharge him, unless he thinks that such person should be tried before himself or some other Magistrate, in which case he shall proceed accordingly. Sub section (7) deals with a case where on considering the evidence and the documents produced and after giving opportunity to the prosecution and the accused to be heard, the Magistrate is of opinion that the accused should be committed for trial, "he shall frame a charge under his hand, declaring with what offence the accused is charged". Sub section (8) then lays down that as soon as the charge has been framed, it shall be read and explained to the accused and a copy thereof given to him free of cost. Under sub section (9), the accused shall be required at once to give in, orally or in writing, a list of the persons, if any, whom he wishes to be summoned to give evidence on 7 his trial. There is, a proviso to this sub section which entitles the Magistrate in his discretion to allow such list to be given later, but we are not concerned with that proviso in the present appeal. The rest of the clauses are not relevant for our purpose. It will thus be seen that before the Magistrate decides either to discharge the accused person, or to direct that he should he tried by himself or by any other Magistrate, or to commit him to the Court of Session or High Court, he has to consider the evidence recorded before him under sub section (4) and the documents referred to in section 173. It is open to him to examine the accused person also if he thinks it necessary to do so for the purpose of enabling him to explain circumstances appearing against him in the evidence. He has, of course, to hear the prosecution and the accused person before making the order. The scheme of section 207A thus does not appear to provide for a defence witness to be examined before an order is passed either under sub section (6) or sub section(7), and that may be because it was thought by the Legislature that in dealing with criminal cases instituted on a police report, it may ordinarily not be necessary to prolong the enquiry by allowing the accused person to lead evidence in defence and so, no provision in that behalf has been made. Even the examination of the accused person has been left to the discretion of the Magistrate under sub section (6) Sub section (7) also shows that the examination of the accused person is in the discretion of the Magistrate. As we have already seen, it is after the charge is framed and read and explained to the accused person under sections (8) that the stage is reached for him to give in a list of person,, whom he wants to examine under ss.(9). This position shows a striking contrast to the relevant provisions of section 208. Section 208 deals with cases where proceedings are instituted otherwise than on a police report, and it provides that when the accused 8 person is brought before . the Magistrate, he shall proceed to hear the complainant, if any, and take all such evidence as may be produced in support of the prosecution or on behalf of the accused, or as may be called for by the Magistrate. Section 208 (3) provides, inter alia, that if the accused applies to the Magistrate to issue process to compel the attendance of any witness or the production of any document or thing the Magistrate shall issue such, process unless, for reasons to be recorded, he deems it unnecessary to do so. In other words, in regard to the proceedings tried under section 208, an accused person is entitled to lead evidence in defence and the 'Magistrate is bound to allow such evidence to be led, except, of course, where he comes to the conclusion that such evidence need not be led in which case he has to record his reasons for. coming to that conclusion. When we consider the relevant provisions of section 207A and contrast them with the corresponding provisions of section 208, it becomes clear that an accused person has no right to lead evidence in defence in proceedings governed by section 207A, whereas he has a right to call for such evidence in proceedings governed by section 208. This position, however, does not affect the question as to whether section 540 applies even to the proceedings governed by section 207A. Section 540 gives power to the Court to summon material witness or examine a per son in attendance, though not summoned as a witness, or recall and re examine any person already examined, and the section specifically provides that the Court shall summon and examine or recall and re examine any such person if his evidence appears to it essential to the just decision of the case. It would be noticed that this section confers on criminal courts very wide powers. It is no doubt for the court to consider whether its power under this section should be exercised or not. But if it is satisfied that the evidence of any person not examined or further evidence of any person already examined is essential to 9 the just decision of the case, it is its duty to take such evidence. The exercise of the power conferred by section 540 is conditioned by the requirement that such exercise would be essential to the just decision of the case. That being so, it is difficult to appreciate the argument that the scheme of section 207A excludes the application of section 540 to the proceedings governed by the former section. It is true that s.207A does not give an accused person a right to lead evidence in defence, and so, he would not be entitled to make an application in that behalf; but that is very different from saying that in proceedings under section 207A the Magistrate has no jurisdiction to examine a witness by exercising his powers under section 540. The denial to the accused person of the right to lead evidence in defence has no material bearing on the question as to whether the Magistrate can exercise his powers under section 540. We do not think that the scheme of the special provisions contained in section 207A legitimately leads to the inference that the applicability of section 540 is thereby excluded. Sometimes, if a statute contains a special or particular provision dealing with a special or particular case or topic and also includes a general provision dealing with the said special or particular topic or case as well as others, the particular or the special provision excludes the application of the general provision in respect of the topic or case covered by the former. That, however, is not the position in the present case, because section 207A suggests, by necessary implication, for the. exclusion of the accused person 's right to lead evidence, whereas section 540 does not refer to the right of the accused person or the prosecution to lead any evidence, but deals with the court 's power to examine witnesses as court witnesses in the interest of justice. Section 540 in terms applies at any stage of any enquiry, trial or other proceeding under this Code. This section is wide enough to include a proceeding under section 207A and so, it would be unreasonable to contend that the scheme of s.207A makes section 540 inapplicable to the proceedings 10 governed by section 207A. The power of the court under section 540 can be exercised as much in regard to cases governed by section 207A as in regard to other proceedings governed by the other relevant provisions of the Code. Therefore, we are satisfied that Mr. Prem is not justified in arguing that the Magistrate had no jurisdiction to examine witnesses as court witnesses even if he had held that the examination of such witnesses would be essential to the just decision of the case. The alternative argument urged by Mr. Prem still remains to be considered. The High Court seems to have thought that in rejecting the application of the respondent for examining defence witnesses, the Magistrate took the view that he had no power to do so in the present proceedings because his jurisdiction was circumscribed by the provisions of section 207 A. That appears to be the sole basis of the decision of the High Court in reversing the order of the Magistrate and sending the proceedings back to his court. In our opinion, the High Court was in error in assuming that the Magistrate had not considered the question on the basis of the applicability of section 540. In fact, as we have already pointed out, when the Magistrate 's attention was drawn to the decision of the Bombay High Court in the case of Arunachalam Swami(1) he observed that the case was distin guishable on facts; he did not say that the case was irrelevant because s.540 was inapplicable to the proceedings before him. If he had taken the view that s.540 did not apply at all, the Magistrate would obviously have said that the Bombay decision had no relevance. The reason given by the Magistrate that the case was distinguishable on facts postulates that s.540 was applicable, but in his opinion, the particular decision was of no assistance to the respon dent, having regard to the difference of facts between the case before the Magistrate and the Bombay case. Therefore, the order passed by the Magistrate cannot be successfully challenged on the ground that the (1) A. I. R. 11 Magistrate did not consider the question under section 540 of the Code. It appears from the order passed by the learned Magistrate that he took the view that having regard to the voluminous evidence adduced by the prosecution, there was no substance in the allegation of the respondent that the evidence of the witnesses whom he proposed to examine was material or would be decisive. He has observed that the documentary evidence adduced by the prosecution was voluminous and it clearly showed a prima facie case against both the accused persons. In that connection, he has also commented on the conduct of the respondent. The photostat copies of the disputed cheques had been given to both the accused persons nearly nine months before the 6th July, 1961. Arguments in respect of these documents were urged before the Magistrate nearly two months before the said date. At no stage was it ever suggested to the Magistrate that the respondent wanted to lead evidence to show that the writings on the cheques were not in his handwriting and that the said fact, if proved would materially affect the prosecution case. The conclusion of the Magistrate was that the application made by the respondent was vexatious and so, was intended merely to delay the proceedings in his court. In view of the reasons given by the learned Magistrate in rejecting the application of the respondent, it is very difficult to sustain the view taken by the High Court that the Magistrate was inclined to hold that s.540 did not apply to the proceedings in the present case. The High Court has also referred to the fact that the accused persons have not been examined under s.342 of the Code, and it has apparently asked the Magistrate to examine the accused persons under that section, without considering the question as to whether it was necessary that the Magistrate should 12 examine them at this stage. We have already referred to the relevant provisions of s.207 A (6). Sub section (6) provides that the Magistrate can examine the accused if he thinks it necessary to do SO. Besides, even according to the judgment of the High Court, the failure to examine the accused persons under s.342 did not amount to a material irregularity and could not by itself, therefore, justify the reversal of the order passed by the learned Magistrate. The result is, the appeal is allowed, the order passed by the High Court is set aside and that passed by the learned Magistrate on the 7th July, 1961, is restored. It is to be regretted that the proceedings taken by the respondent in the High Court and those taken by the appellant after the decision of the High Court have added to the length of the life of this criminal case; and so, it is desirable that the Magistrate should proceed to pronounce his final orders as expeditiously as possible and the case should thereafter be tried by the Court of Session without unnecessary delay. Appeal allowed.

IN-Abs

Although an accused person is not entitled to lead evidence in his defence in a proceeding under section 207A of the Code of criminal Procedure, that does not affect the wide powers a Criminal Court has under section 540 of the Code to summon and examine persons as court witnesses where it considers such examination essential for a just decision of the case. Section 540 of the Code is wide enough to include a proceeding under section 207A of the Code and its operation is not excluded by the scheme of section 207A of the Code. Arunachalam Swami vs State, of Bombay, A.I.R. 1956 Bom. 695 referred to. Sub section (6) of section 207A of, the Code does not make it incumbent on the Magistrate to examine an accused person unless he thinks it necessary to do so. Consequently, in the present case, where the Magistrate in a proceeding under section 207A of the Code rejected the applica tion of the accused persons for examination of witnesses in defence not because he had no power under section 540 of the Code to do so but on the ground that the application was vexatious and was intended to delay the proceeding and the High Court in revision on an erroneous view of the Magistrate 's order set it aside and directed examination of the accused person under s.342 of the Code. Held, that the order of the High Court must be set aside.

Appeal No. 67 of 1956. Appeal from the judgment and decree dated March 20, 1950, of the Bombay High Court in first Appeals Nos. 142 and 211 of 1947. S.P. Varma, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant. 324 H.R. Khanna, R. H. Dhebar and T. M. Sen, for the respondent No. 1. C.B. Agarwala and Naunit Lal, for the respondents Nos. 2 and 5. 1962. September 26. The judgment of the Court was delivered by AYYANGAR, J. This appeal comes before us on a certificate of fitness granted by the High Court of Bombay under article 133 (1) (a) of the Constitution. The appeal was heard by us in November last and judgment was reserved on 9/11/1961. Within a short time thereafter, learned Counsel for the Appellant intimated the Registry that the 2nd respondent had died on November 5, 1961, and that steps were being taken to have the legal representative brought on record. The certificate under O. XVI r.13 was received by this Court and on its basis substitution was ordered at the end of August 1962. The appeal was subse quently reported for hearing and we have now heard the learned Counsel for the parties. The facts giving rise to the appeal are briefly as follows: The plaintiff who is the appellant brought a suit in the Court of the Civil judge at Jalgaon for a declaration that the sale of certain of his lands which were held by the Revenue Authorities in circumstances which we shall detail later was void, and to recover possession of the lands from the defendants who had purchased these lands in revenue auction. In view of the prayer for the declaration regarding the invalidity of the sale, the Province of Bombay was impleaded as a defendant to the suit. The plaintiff 's father was an excise contractor and he and the plaintiff were licensees of certain opium shops in 1931 32. By the end of March 1934 a sum of about Rs. 8,500/ were due to the Government in respect of the excise dues from these opium shops. For the realisation of these dues the lands 325 belonging to the plaintiff were brought to sale and among others Survey Field No. 35, 40 and 80 in Mauje Therole, Peta Edalabad and a house bearing Survey No, 23A in the village of Kurhe was brought to sale and sold. The three items of lands were purchased by government at the sale for a nominal bid of Re. 1/ for each item for realisation of these dues. The sale was confirmed and possession taken by government of these lands. Later the government sold the land bearing Survey No. 80 to the second defendant for Rs. 2,000/ and Survey Nos. 35 and 40 to the fifth defendant for Rs. 1,750/ . Possession of these properties was delivered to the respective defendants in 1939. As substantially the arrears due to government still remained undischarged, because the sales were for nominal amounts, the house property at Kurhe was attached and brought to sale and was sold on November 6, 1940, but the purchase in the case of the house was not by the government but the property was bid for and purchased by the second defendant for Rs. 76/ . A certificate of sale was issued to him on February 13, 1941. It was the validity of these sales that was challenged in the suit which has given rise to this appeal. The suit was substantially decreed in favour of the plaintiff by the trial judge but on appeal the plaintiff 's suit was dismissed in respect of the relief in regard to the three plots above named which were the subject of sale on September 21, 1938, and of the house which was sold on November 6, 1940. The learned trial judge had held that these sales were not in accordance with the provisions of the Bombay Land Revenue Code and were consequently void. The learned judges of the High Court, on the other hand, were of the opinion that the sales and the purchase by government for a nominal sum of Re. 1/ for each of the plots were authorized by the Code and were therefore valid and binding on the plaintiff. It is the correctness of this view of the High Court that is raised for consideration in the appeal. 326 Before dealing with the arguments addressed to us regarding the validity of the sales it is necessary to set out the statutory provisions which bear upon the power of government to effect sales for the realisation of arrears due to them. Section 34 of the Bombay Abkari Act enables arrears of excise revenue to be recovered as an " arrear of land revenue". Chapter XI of the Bombay Land Revenue Code lays down the procedure for the realisation of land revenue and other revenue demands. Among the provisions of this Chapter it is necessary to refer to s.155 reading : "155. The Collector may also cause the right, title and interest of the defaulter in any immovable property other than the land on which the arrear is due to be sold. " Section 165 directs the Collector to issue a proclamation, in the vernacular language of the district of the intended sale, specifying the time and place of sale, while the section following requires that a written notice of the intended sale should be affixed in the public offices named therein. Section 167 enacts that sales shall be made by auction by such persons as the Collector may direct. Section 171 is the next relevant section and this reads: "When the sale is finally concluded by the officer conducting the same, the price of every lot shall be paid for at the time of sale, or as soon after as the said officer shall direct, and in default of such payment the property shall forthwith be again put up and sold. On payment of the purchase money the officer holding the sale shall grant a receipt for the same, and the sale shall become absolute as against all per sons whomsoever. " As some point was made before us of a violation in the instant case of the provisions of sections 172 and 173, we shall read these also 327 "172. When the sale is. subject to confirma tion, the party who is declared to be the pur chaser shall be required to deposit imme diately twenty five per centum on the amount of his bid, and in default of such deposit the property shall forthwith be again put up and sold. The full amount ' of purchase money shall be paid by the purchaser before sunset of the day after he is informed of the sale having been confirmed, or, if the said day be a Sunday or other authorized holiday, then be fore sunset of the first office day after such day. On payment of such full amount of the purchase money, the purchaser shall be granted. , a receipt for the same, and the sale shall become absolute as against all persons whomsoever." "173. In all cases of sale of immovable pro perty, the party who is declared to be the purchaser shall be required to deposit imme diately twenty five per centum on the amount of his bid, and in default of such deposit the property shall forthwith be again put up and sold. " Section 175 sets out the effect of a default in payment of purchase money and this runs: "175. In default of payment within the prescribed period of the full amount of pur chase money, whether of movable or immovable property, the deposit, after defraying therefore the expenses of the sale, shall be forfeited to the Provincial Government, and the property shall be resold, and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold. " Section 178 enables sales to be set aside for irregularity and this section runs 328 "178. At any time within thirty days from the date of the sale of immovable property application may be made to the Collector to set aside the sale on the ground of some material irregularity, or mistake, or fraud, in publishing or conducting it; but, except as is otherwise provided in the next following section, no sale shall be set aside on the ground of any such irregularity or mistake, unless the applicant proves to the satisfaction of the Collector that he has sustained substantial injury by reason thereof. If the application be allowed, the Collector shall set aside the same and direct a fresh one. " The consequential provision is in section 179 which reads: "179. On the expiration of thirty days from the date of the sale, if no such application as is mentioned in the last preceding section has been made, or if such application has been made and rejected, the Collector shall make an order confirming the sale; provided that, if he shall have reason to think that the sale ought to be set aside notwithstanding that no such application has been made, or on grounds other than those alleged in any application which has been made and rejected, he may, after recording his reasons in writing, set aside the sale." and section 182 enacts : "182. The certificate shall state the name of the person declared at the time of sale to be the actual purchaser; and any suit brought in a Civil Court against the certified purchaser on the ground that the purchase was made on behalf of another person not the certified purchaser, though by agreement the name of the certified purchaser was used, shall be dismissed. " 329 Section 214 of the Code empowers a State Government by a notification published in the official gazette to make rules not inconsistent with the provisions of the Act to carry out the purposes and objects of the Act and for the guidance of all persons in matters connected with the enforcement of the Act or in cases not expressly provided for therein. In the Rules framed under the Code Ch. XVIII is concerned with making provision for sales. Rule 128 which is the second of the Rules in this Chapter. prescribes "Where any land or other property is sold by public auction, an upset price shall, if the Collector thinks fit, be placed thereon; Provided that where in the opinion of the Collector difficulty is likely to be experienced in effecting speedy recovery of the arrears or bidders are likely to be deterred from offering bids, no such upset price shall be placed. " Rule 129 has a new sub r. (4) added after the sales which are now in controversy were effected reading : "Where in the opinion of the Collector difficulty is likely to be experienced in effecting speedy recovery of the arrears or bidders are likely to be deterred from offering bids, it shall be lawful for the Collector or his nominee to bid at the auctio n and purchase the land or other property for a bid of rupee one. " We shall now proceed to narrate the proceedings that preceded the impugned sales where are stated to be in contravention of statutory provisions. Before doing so, however, we might point out that in regard to the sale of the house in the village of Kurhe no irregularity which would vitiate the sale as pointed out, and the only complaint was that the house which was estimated to the worth about Rs. 200/ was sold for an inadequate sum of Rs. 76/ . Obviously standing alone this could not be a ground for holding 330 the sale void. In the rest of this judgment, therefore, we shall confine our attention to the sale of the three plots bearing Survey Nos. 35, 40 and 80 which were purchased by the Government for a nominal bid of Re. 1/ . The relevant facts in relation to the sale of these three plots were these: In January 1934 the Mahalkari of Edalabad brought to the notice of the Collector of East Khandesh that an amount of over Rs. 9,000/ was due in respect of excise transactions from the plaintiff and his father and he pointed out that the amount remained unrecovered notwithstanding that the defaulter 's movable property was put up for sale eighteen times and his immovable property eight times. He suggested to the Collector that " 'in order to bring home a sense of responsibility to the defaulters and to make them realise the need for quickly paying up the arrears", the procedure laid down in a Government order dated August 30, 1933, might be applied to them. The procedure indicated was that contained in a Government resolution in the Revenue department bearing No. 474 of 1933 that "if defaulters were contumacious the Collector would have authority to purchase on behalf of Government the defaulter 's property on a nominal bid. " By this letter the Mahalkari desired to have the permission of the Collector to make a nominal bid of Re. 1/ at the next auction of ' the defaulter 's property. The principal question raised in this appeal is whether or not the procedure indicated in this resolution is in accordance with the provisions of the Land Revenue Code. Before continuing the narrative it is necessary to refer to a further resolution No. 4135 of April 16, 1936, which ran "The procedure of purchasing on behalf of Government a defaulter 's property nominal bid should be adopted in order a speedy recovery of Government by offering a order to effect dues in cases where a real difficulty is experienced in making 331 such recoveries and no purchaser is forthcoming to buy the land. . It should not be adopted except as a last resort when various remedies for the recovery of dues have failed or unless it is clear that bidders are deterred from offering bids by other reasons than purely economic considerations. " The reason for the adoption of this procedure was stated to be that it would produce a good deterrent effect and would put a stop to any obstructive tactics on behalf of defaulting licensees. The permission sought was granted by the Collector enabling the Mahalkari to bid at the auction. Thereafter the Mahalkari intimated the defaulters the plaintiff and his father that if no bidder came forward at the time of the public auction sale and nobody bid, the lands mentioned in the proclamation would be sold at a nominal price of Re. 1/ and it was after this notice that the purchase by Government on the above terms was effected. The sales were held, no stranger bid at the sale and thereupon the Mahalkari acting under the resolution of Government and the terms of the permission granted by the Collector, made a nominal bid of Re. 1/ for each lot on behalf of the Government and the bids were accepted and thereafter the sales were confirmed. The validity of the sale was attacked before us on several grounds : (1) that under r. 128 the Collector was bound to have fixed an upset price and that his failure to do so rendered the sale void. , (2) Rather inconsistently with this that the Collector had actually fixed an upset price and that in the face of this fixation the purchase by the Mahalkari on behalf of the Government for a nominal sum of Re. 1/ was illegal and rendered the sale void. , (3) that on the terms of section 171, the sale price had to be paid for at the time of the sale and that as this was not done, the sale officer was statutorily bound to have put up 332 the property for sale again, (4) that sections 172 and 173 laid an obligation on the purchaser to deposit 25 per cent of the sale price immediately the bid was knocked down and further required him to pay the balance within 15 days thereafter and also prescribed the consequences of default, viz., the sale shall be avoided and that a resale shall take place and that in the present case the Mahalkari who bid on behalf of the Government, or the Government itself had not made either the deposit or the final payment with the result that the purchase stood automatically cancelled by reason of that default and (5) that the purchase by the Government on a nominal bid of Re.1/ was not a sale by public auction as was contemplated by section 167 of the Code and in consequence the sale was void and that no title passed by reason of that sale. As regards the first four of the objections set out above, they have, in our opinion, no substance on the facts of the present case. We do not however consider it necessary to deal with them because they were raised for the first time in this Court and they involve questions of fact which were not the subject of pleading or investigation in the Courts below. We intimated to the learned Counsel that we would not permit him to urge those grounds before us. It is only the last of these grounds that therefore requires to be considered. This raises a question of some importance in the law relating to revenue sales. The question of the validity of such sales was raised before the High Court of Bombay on an earlier occasion and the judgment of the Court is reported in Pumdu Dhansing vs Government for the Province of Bombay (1). The Court was then concerned with an auction sale conducted by the Mamlatdar a revenue officer of the Government by which a property of a substantial value belonging to a surety for a toll contractor was sold to the Revenue Patel acting for and on behalf of the government for a nominal sum of Re. 1/ . The (1) I. L. R. 333 contractor was in default and for the recovery of the amount due from him the provisions of Ch. XI of the Bombay Land Revenue Code became applicable. Several attempts were made to sell the property of the defaulter and the reserve prices which were fixed for the lots were never reached. Subsequently at 'the next auction when no bids were forthcoming, the Patel acting under the orders of the Collector made a bid on behalf of Government, of Re. 1/ for each lot and this was accepted by the Mamlatdar who was conducting the auction, and this sale was confirmed later by the Collector and possession was thereafter taken of the property thus purchased. It was the validity of this sale that was challenged in a suit filed by the defaulter. Support for the validity of the sale was sought in the resolutions of the Government of 1933 and 1936 which we have extracted earlier. On the facts of the case before the Court there were certain special features to which attention was drawn by the learned judges : (1) The first was that the proclamation of sale set out that a reserve price had been fixed and where a sale was subject to such a condition, "the conditions of sale" which are prescribed by the rules made a special provision invalidating the acceptance of bids below the reserve price, (2) there was no evidence that the defaulter had been served with any special notice that the different procedure of the purchase for a nominal price by government would be resorted to. Though the learned judges pointed out these two features, the reasoning by which they held the sale void rested on wider grounds. Stone C.J. speaking for the Court said: "The production of the nominal one rupee for all the property, cannot be regarded as bid at an auction sale for property lotted into five lots with a separate reserve price on each. The word "nominal ' shows that there was nothing of substance about the offer and the endorsements 334 and formalities by which an attempt was made to give some semblance regularity to what was done cannot in my opinion cloak in legal guise that which was nothing better than a device to vest the appellant 's property in a Revenue Officer holding on behalf of Government. The Bombay Land Revenue Code contains no power either to forfeit or to foreclose a defaulter 's property. Yet the scheme formulated by the Resolutions referred to at the commencement of this judgment aims in effect at bringing about such a result, for, if effective it would achieve the extinguishment in favour of Government of all the appellant 's rights and ownership in his land. In my judgment what took place at the alleged auction sale was of no effect and did not give to the Revenue Pail or to Government any right, estate or interest in the appellant 's property. " When the present appeal was before the learned judges of the Bombay High Court it was pressed before the Division Bench which heard the appeal in the first instance that the reasoning of the decision in Tumdu Dhansing vs Government for the Province of Bombay (1) governed the present case also and entitled the plaintiff to succeed and that the appeal should be dismissed. The learned judges observed: "It must be conceded that if the decision in Tumdu Dhansing vs Government for the Province of Bombay represents good law, the decision of the trial Court is correct". They however, went on to say : "With respect however, to the learned judges who decided that case (Tumdu Dhansing vs Government for the Province of Bombay) we find great difficulty in understanding the reason ing and doubt whether the conclusion is correct". (1) I. L. R. 335 They therefore suggested a reference to a Full Bench for an answer to the question : "Whether when at a sale held under section 153 of the Bombay Land Revenue Code the land is pur chased by the Government under a nominal bid the sale is either void or voidable": The learned Judges of the Full Bench however without deciding whether the decision in Tumdu Dhansing vs Government for the Province of Bombay was right or wrong, upheld the sale in the present case on certain distinguishing features : (1) the sale proclamation in the present case did not fix a reserveprice and therefore there was no purchase for a nominal sum in disregard of the price so fixed, (2) Before the bid for a nominal sum and a sale by the acceptance of such a bid notice had been given to the defaulter stating that the Government intended to pursue that course. Though on these grounds they held the sale not to be void, the learned judges proceeded to point out that this practice of purchasing property for nominal bids was neither fair nor equitable. With this answer the case came back to the Division Bench where the appeal by the defendant was allowed. The question now for our consideration is whether a sale for a "nominal" bid of Re. 1/ is "a sale by auction" within the provisions of the Bombay Land Revenue Code. Before entering on a discussion of the relevant provisions it is necessary to state that the Government Resolutions of 1933 and 1936 do not purport to have and have no statutory force at all. They cannot authorise or render valid the transaction if otherwise it lacked a legal basis. A further matter which requires to be pointed out is that para. (4) of r. 129, already set out, which authorises the purchase by Government for a nominal price was added only in 1946 long after the sales in the present case and cannot serve as any basis for sustaining the validity (1) I. L. R. 336 of the sale. In the circumstances it is not necessary to consider the scope or validity of this rule or its legal efficacy for authorising such a sale or purchase. It is common ground that the power of Government to effect a sale by summary process for the recovery of amounts due to them has to be gathered from the four comers of Ch. XI of the Code read in conjunction with the relevant rules in Ch. XVIII. Section 155 of the Code enables the Collector to cause the right, title and interest of the defaulter in the immovable property to be sold. The manner in which those sales might take place is provided for by section 167 which enacts that "sales shall be by public auction by such person as the Collector may direct. " Leaving aside for the moment the provisions which detail the procedure to be followed in the conduct of these sales, the point to be observed is that the realisation of the dues has to be by "sates" by public auction to be held in the manner prescribed. This therefore does not and cannot authorise a forfeiture of the immovable property of a defaulter because of his contumacious conduct in not paying up his dues when demanded. Nor does the Land Revenue Code contemplate or provide for any punishment of defaulters because of their conduct in either not paying up their dues or in not facilitating the realisation of the dues payable by them by co operating with the Government and securing a proper price for their property such as would be sufficient for the discharge of their dues. While on this point it might be interesting to point out that section 58 of the Revenue Sale Law (Bengal Revenue Sale Law) Act 11. of 1 859 enacts: " 'When an estate is put up for sale under this Act for the recovery of arrears of revenue due thereon, if there be no bid the Collector or other officer as aforesaid may purchase the estate on account of the Government for one rupee . . . . " 337 There is no provision corresponding to this in the Bombay Code. The question then arises whether a purchase for a predetermined nominal price of rupee one for property, whatever its actual market value, is a sale by public auction within section 167 of the Code. An auction has been described as " 'the proceeding at which people are invited to compete for the purchase of property by successive offers of advancing sums" and a sale by auction is a means of ascertaining what the thing is worth, viz., its fair market price. If at the sale there are no bids there cannot be a sale. A sale for a predetermined nominal sum cannot, in our opinion, be held to be a "sale by public auction" in the absence of any provision for such sales in the statute. Such a sale appears to us to be somewhat analogous to what Sir Richard Couch described, though in a slightly different context. " 'The offer and acceptance of a rupee was a colorable attempt to obtain a title without paying for the land. Virtually it was a present which it was not open to the authorities to make". (vide Luchmeswar Singh vs the Chairman, of the Darbhanga Municipality(1). It may not also be out of place to point out that it is the Collector who on behalf of Government sets in motion the machinery for the realisation of the arrears by bringing the defaulter 's property to sale and it is he who is by the Land Revenue Code invested with the power to make arrangements for the sale and section 178 constitutes him the authority to determine judicially any allegation about the irregularity in the conduct of the sale. In these circumstances it looks to us somewhat anomalous that the Collector should of his own motion and without the authority of any statutory power claim the right to bid at the auction which his deputy is conducting on his behalf for the realisation of the dues which he as the executive authority is to recover and particularly when he is constituted the authority to consider the validity or irregularity in the auction conducted at his instance and the purchase made at his instance. (1) (1890) 1. R. , 106. 338 The next question for consideration is whether the fact that the defaulter was appraised that Government would bid for a nominal sum of one rupee for the property at the auction renders the sale valid. We do not find it easy to discover the precise legal basis upon which prior notice to the defaulter would have the effect of validating the sale. If a sale for a nominal bid of one rupee were "a sale by public auction" within section 167 of the Code, notice to the defaulter that such a procedure would be followed would be legally unnecessary and would not add to the legal efficacy of the sale. If, on the other hand, such a sale or a sale in such circumstances was not a sale by public auction then notice to the defaulter could be of value only if (a) it operated as a waiver of the requirement of section 167, or (b) created an estoppel which precluded him from questioning the legality of the proceeding. First as to waiver, the power of Government to effect the sale by summary process is a special provision resting on public grounds and being so very special it is clear that the limitations on the power thus conferred should be strictly construed. In our opinion, it is an essential condition of the passing of property from the defaulter in invitem that there should be a sale by public auction and if a sale in the manner in which it has been conducted in the present case does not amount to a sale by public auction there is no question of the title to property passing by virtue of such a sale. The plea of waiver cannot therefore be of any avail. Nor is there any basis for any argument that by reason of the notice the defaulter is estopped from questioning the legality of the sale. If waiver cannot cure the defect there is still less scope for invoking the rule as to estoppel, for the essential condition of estoppel, viz., representation by the person sought to be estopped and prejudice to the person seeking the benefit of the rule, would both be absent. We therefore 339 come to the conclusion that the fact that the defaulter was informed that the Government would make a nominal bid of rupee one and purchase the property is really irrelevant for considering the validity of the sale. The conclusion we have indicated earlier is in accord with the decision of the Bombay High Court in Tumdu Dhansing vs Government for the Province of Bombay(1) and we consider that that case is correctly decided. We are further of opinion that the ratio of that decision would also cover the case where notice was served on the defaulter of the Govern ment 's intention to purchase the property for a nominal price. Learned Counsel for the respondent raised several defenses besides seeking to support the judgment of the High Court on the reasoning of the learned judges and sought to sustain the impugned sale on various grounds. His first submission was that the sale was at the worst irregular which rendered it voidable and that no suit having been brought within one year of the sale, the suit was barred by article 11 of the Indian Limitation Act. We consider however that there is no substance in this contention because if, as we hold, a sale of the type now impugned was not authorised by the statutory provision in that regard then it was not a question of any mere irregularity in the conduct of a sale but a case where there was no sale at all with the consequence that no pro perty passed from the defaulter. It was not disputed that article II of the Indian Limitation Act would only apply to a case where there is need for the setting aside of a sale and that it has no application to cases where no sale as contemplated by law has taken place. It was next submitted that the appellants ' suit was barred by sections 4 (c) and II of the Bombay Revenue (1) 1. L. R. 340 jurisdiction Act, 1876. Section 4(c) runs: "4. Subject to the exceptions hereinafter ' appearing, no Civil Court shall exercise jurisdiction as to any of the following matters: (a). . . . . . . (b). . . . . . . . (c). . . . . . . . claims to set aside, on account of irregularity, mistake or any other ground except fraud, sales for arrears of land revenue; and section 11 enacts: "11. No Civil Court shall entertain any suit against the Government on account of any act or omission of any Revenue Officer unless the plaintiff first proves that previously to bringing his suit, he has presented all such appeals allowed by the law for the time being in force, as within the period of limitation allowed for bringing such suit, it was possible to present." As to the applicability of section 4 (c), it would be noticed that resort to the Civil Courts is barred only as regards certain specified classes of suits in which the validity of sales for arrears Land Revenue are impugned. The classes so specified are those in which the plaintiff seeks to set aside a sale on account of irregularities etc. , other than fraud. The provision obviously assumes that there is in existence a sale though irregular under which title has passed to the purchaser and that sale has to be set side, on grounds other than fraud, before the plaintiff can obtain relief. Where however there is only a purported sale which does not pass title and the suit is for recovery of possession of property ignoring 341 such a sale, the provision and the bar that it creates have no application. Nor is there any scope on the facts of the present case to attract the application of section 11. The section is based on the principle that a party must exhaust the remedies provided by the Act before he can seek the assistance of the Civil Court in respect of a claim against the Government. It therefore posits three matters before its protection could be invoked. (1) There must be an act or omission of a revenue officer which gives rise to a claim against the Government; (2) the Act must provide for appeals against the said act or omission; and (3) lastly the party should have failed to avail himself of the remedy by way of appeal to obtain redress for his grievance. The only "act" of which, on the facts, the appellant could be said to complain would be the direction by the Collector anthorising the Mahalkari to offer the nominal bid of Re. 1/ and purchase the property. The question that next arises is whether the Statute had provided an appeal against this "act" It was admitted that there was no such specific provision. Learned Counsel for the respondent however drew our attention to section 203 of the Bombay Land Revenue Code. In the absence of any express provision of this Act or of any law for the time being in force to the contrary, an appeal shall lie from any decision or order passed by a revenue officer under this Act or any other law for the time being in force, to that officer 's immediate superior, whether such decision or order may itself have been passed on appeal from a subordinate officer 's decision or order or not." In the present case however, there was no order by any authority which could be the subject of any appeal under section 203. The Collector authorised administratively the Mahalkari to offer the bid and that is certainly not " 'a decision" which is capable of 342 appeal within section 203. No other order which could by any stretch of language be construed to be a decision was pointed out in respect of which an appeal could have been filed. In fact, there was no decision and except the sale which is complained of as void and of no effect nothing took place. If section 203 is not attracted it was not suggested that section 1 1 of the Revenue jurisdiction Act created any bar to the entertainment of the present suit. It was then suggested that the plaintiff was disentitled to any relief by reason of an estoppel raised by section 41 of the Transfer of Property Act. The basis for this argument was that some time after the sale the second defendant had purchased the plot bearing Survey No. 80 for Rs. 2,600/ from the Government while the fifth defendant similarly purchased plots bearing Survey Nos. 35 and 40 for Rs. 1,750/ and that the inaction of the plaintiff without taking proceedings to set aside the sale constituted a representation to the world that the Government were properly the owners of the property which they had purchased for nominal bids and this was the reasoning by which section 41 of the Transfer of Property Act was sought to be invoked. The argument has only to be stated to be rejected. The respondent did not rely on any representation or any act or conduct on the part of the appellant but their belief that Government had acquired title by reason of their purchase at the revenue sale. If the Government had no title to convey, it is manifest the respondents cannot acquire any. They would clearly be trespassers. In the circumstances we consider there is no scope for invoking the rule as to estoppel contained in section 41 of the Transfer of Property Act. Lastly, it was submitted that the respondents had made improvements to the property since they had purchased them for which they were entitled to compensation under section 51 of the Transfer of Property Act. But no basis was laid for this plea which is 343 one of pure fact. No evidence was led and no issues struck before the trial judge and we do not therefore think it proper to entertain this point at this stage. The Government of Bombay did not file any Written Statement before the trial judge, nor did they seek to support the sale before the High Court. As we have stated, they were impleaded as the first respondent in the appeal before this Court. In their statement of the case which they filed they did not oppose the appeal but left it to the Court to decide the matter and they took no part in the hearing except that learned Counsel appearing on their behalf made a statement that no order as to costs might be passed against them. In the result the appeal is allowed and the suit decreed as regards the three items of land bearing Survey Nos. 35, 40 and 80. The appeal will however stand dismissed as regards the,house in village Kurhe. In view of the partial success of the appellant the appellant will be entitled to half of the costs of the appeal here to be paid by the respondents other than the State of Bombay (now Maharashtra). Appeal partly allowed.

IN-Abs

A sum of about Rs. 9,000 was due from the appellant to the Government on account of excise dues. The movable and immovable property of the appellant was several times put for sale by auction under Ch. XI Bombay Land Revenue Code but the amount remained unrecovered and three items of lands remained unsold. In view of a Government Order dated August, 30, 1933, which prescribed such a course, the Mahalkari sought permission of the Collector to make a nominal bid of Re. 1/for each item of land in the next auction. The permission was granted and the Mahalkari informed the appellant that if no bidders came forward at the next auction the lands would be sold at the nominal price of Re. 1. The auction was held and as no stranger came to bid the Mahalkari made the nominal bid of Re. 1 for each item of land. The bid was accepted and the sales were later confirmed. Subsequently, the Collector sold these lands for adequate consideration and the purchasers were put in possession. The appellant filed a suit challenging the validity of these sales. The purchasers contended that the suit not having been brought within one year of the sales was time barred, that the suit was barred by sections 4(c) and 1 1 of the Bombay Revenue jurisdiction Act and, that the appellant was disentitled to relief on the ground of acquiescence and estoppel. Held, that the Sales were invalid and the suit was liable to be decreed. The purchase for a predetermined nominal price of Re 1, irrespective of the actual market value was not a sale by public auction as contemplated by section 167 of the Bombay Land Revenue Code. An auction is. a proceeding at which people are invited to compete for purchase of property by successive offers of advancing sums and a sale by auction is a means of ascertaining what the property is worth i.e. its fair 323 market price If at the sale there are no bids there cannot be a sale. The Government Order had no statutory force at all, and could not authorise or render valid the transaction if otherwise it lacked a legal basis. There was no provision in the Code which authorised such a course which amounted to forfeiture of the property of a defaulter. It was anomalous that the Collector who moved the machinery for realisation of arrears by sale and who was constituted the authority to determine judicially allegation of irregularity in the conduct of the sale should, without authority of any statutory power, bid at the auction conducted by his deputy. The mere fact that the appellant had been informed before hand of the nominal bid did not render the sales valid. Nor was the appellant estopped from questioning the legality of the sales. Tumdu Dhansing vs Government for the Province of Bombay, I.L.R. , approved. The suit was not barred by article 11 of the Limitation Act. The article was applicable only to cases where there was need for setting aside a sale and not to cases where no sale as contemplated by law had taken place. The provisions section 4(c) Bombay Revenue jurisdiction Act, 1876 applied to cases where there was a sale and it was sought to be set aside on the ground of irregularities other than fraud. They did not apply where there was only a purported sale which did not pass title, Section 1 1 barred a suit when there was an appeal provided against the act or omission of a revenue officer and the party failed to avail of the remedy. in the present case there was no order which was appealable under section 203 and section 1 I could not be applied. There was no scope for invoking the aid of section 41 Transfer of Property Act. The purchasers had not relied upon any representation, act or conduct of the appellants but on the belief that Government had acquired a good title to the lands. If the Government had no title the purchasers could not acquire any.

Appeals Nos. 228 and 229 of 1962. Appeals from the judgment and order dated June 26, 1961 of the Madras High Court in W. P. Nos. 829 and 833 of 1960. A. V. Viswanatha Sastri, G. Ramaswami, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants. 284 section Kothandarama Nayanar and M. section K, Aiyanyar,for the respondent No. 1. A. Ranganadham Chetty and A. V. Rangam,for Intervener No. 1 (iii both the appeals.) R.Thiagarajan, for Intervener No. 2 (in C. A. No. 228 of 1962). September 26. The judgment of the Court was delivered by SUBBA RAO, J. These two appeals, on certificate raise the same points and arise out of a common order made by the High Court. of judicature at 'Madras in Writ Petitions Nos. 829 and 830 of 1960. Both of them may conveniently be disposed of together. The facts in Civil Appeal No. 228 of 1962 are briefly as follows : The first appellant is a limited company carrying on transport business. The second appellant is its managing director. The first appellant took over the business of Swami Motor Service Company, of which the second appellant was the Managing Partner. In his capacity as Managing Partner of the said company, the second appellant took a lease of a vacant site, being survey No. 2770, belonging to the first respondent. After the first appellant took over the business of the said partnership company ' including its leasehold interest in the said site, the first respondent recognized him ;is his tenant and was receiving the rent from him. It is alleged that the appellants constructed many valuable structures on the said site. The first responder i.e., ' Sri Sankaraswamigal Mutt, through its trustee, filed a suit, O. section No. 103 of 1953, in the court of the District Munsif, Tanjore. for evicting the appellant company from the site; and on July 30, 1954 a compromise decree for eviction was made therein giving six month 's time for the appellant company to vacate the site. The decree holder filed an execution petition 285 in the. said court against the first appellant for executing the decree. Pending the execution petition, Madras Act XIX of 1955 was passed empowering the State Government to extend the Madras City Tenants ' Protection Act, 1921 (III of 1922), hereinafter called the "Principal Act", to any municipal town by notification in the Fort St. George Gazette. In exercise of the powers confer red by Act XIX of 1955, the Government made an order notifying the Town of Tanjore to have come within the purview of the Principal Act. Under the provisions of the Principal Act, the appellants filed Original Petition No. 39 of 1956 in the said court for an order directing the execution of a conveyance of the said site in favour of the company on payment of a price fixed by the court. Those proceedings took a tortuous course mainly, it is alleged, on account of obstructive tactics adopted by the respondents in anticipation of , an expected legislation withdrawing the benefits conferred on tenants of non residential buildings in the Town of Tanjore. As anticipated the State Legislature passed Act XIII of 1960, amending the Principal Act : the effect of the amendment was to withdraw the protection given to tenants of non resi dential buildings in the municipal town of Tanjore and certain other towns. Under the provisions of the impugned Act, proceedings instituted under the provisions of the Principal Act relating to non residential buildings 'situated in towns other than those ,preferred would abate. The appellants filed a petition under article 226 of the Constitution in the High Court of judicature at Madras for the issue of a writ of mandamus directing the District Munsif to dispose of the petition in accordance with the provisions of section 9 of the Principal Act, as it stood before its amendment by Act XIII of 1960. In Civil Appeal No. 229 of 1962 the subject matter is a site, being survey No. 74, Railway Road, Tanjore belonging to the first respondent to this 286 appeal. The appellant 's father executed a lease deed in favour of the first respondent in respect of some parts of the said site; the lease deed contained a clause giving an option to the tenant to renew the lease for a further period of 10 years. It is alleged that the appellant 's father had erected substantial structures at heavy cost on the site even before the said lease as he was in possessions of the said site as a tenant under the predecessor of the first respondent. After the expiry of 10 years, the appellant 's father. exercised the option and continued to be in possession of the property as tenant. The first respondent filed a suit (O. section No. 315 of 1950) in the Court of the District Munsif, Tanjore, for evicting the appellant from the property, and obtained a compromise decree dated January 10, 1952. Under the compromise decree the tenancy was extended to 12 years from January 1, 1952 and after the expiry of that period the first respondent was entitled to execute the decree and take possession of the site after removing the superstructures. Subsequently as already noticed, the provisions of the Principal Act were extended to the Town of Tanjore. Thereupon the appellant 's father filed O. P. No. 43 of 1956 in the Court of the District Munsif, Tanjore, for an order directing the first respondent to convey the site in his favour on payment of the price to be fixed by the court. As in the first case, in this case also the proceedings dragged on till the Act of 1955 was passed. The appellant filed a petition under article 226 of the Constitution in the High Court of judicature at Madras for the issue of a writ of mandamus directing the District Munsif, Tanjore, to dispose of the application in accordance with the provisions of the Principal Act prior to its amendment by Act XIII of 1960. In both the petitions the appellants attacked the constitutional validity of Act XIII of 1960. The High Court, by a common order, upheld the 287 constitutional validity of the said Act following the decision of a, division Bench of the same Court, in Suaminathan vs Sundara (1). These two appeals, as aforesaid, have been preferred on certificate issued by the High Court. Mr. A. V. Viswanatha Sastri, learned counsel for the appellants in both the appeals, raised before us the following points: (1) The 1960 Act infringes the fundamental right of the appellants under article 14 of the Constitution for two reasons, namely, (i) while the object of enacting the 1960 Act was for safeguarding ' tenants from eviction from residential buildings, its provisions introduce a classification between non residential buildings in different municipal areas and gives relief to tenants of non residential buildings in some towns and refuses to give the same relief to similar tenants of such buildings in other towns in the State and such a classification has abso lutely no relevance to the object sought to be achieved by the Act; and (ii) the 1960 Act makes a distinction between non residential buildings in Madras, Salem, Madurai, Coimbatore and Tiruchirappalli on the one hand and those in other towns, including Tanjore, on the other and gives protection to the tenants of such buildings in the former group and denies the same to tenants of similar buildings in the latter group, though the alleged differences between the two sets of localities have no reasonable relation to the object sought to be achieved, namely, the protection of tenants who have built substantial structures from eviction. (2) The 1960 Act also offends articles 19 (1)(f) and 31(1) of the Constitution as it is not a reasonable restriction in the interest of the public on the proprietary rights acquired by the appellants under the earlier Act XIX of 1955. Mr. Nayanar, appearing for the first respondents in both the appeals, contends that sections 3 and 9 of the Principal Act could not be invoked by the appellants, as the lease deeds executed by them contain a (1) I. L. R. 288 clear covenant that they would vacate their lands within a prescribed period and as they had put up their buildings subsequent to the execution of the lease deeds. He sustains the constitutional validity of the 1960 Act on the ground that it neither offends article 14 nor article 19 of the Constitution. Mr. A. Ranganadham Chetty, appearing for the State of Madras, to which notice was given, elaborates the second contention advanced by learned counsel for the respondents by placing before us some statistical data which, according So him, affords a reasonable basis for the classification. As regards the contention based on article 19, he contends that the rights conferred under Act XIX of 1955, namely, right to compensation on eviction under section 3 of the said Act and the right to obtain a sale deed under section 9 thereof, are only analogous to a right to sue or a right to purchase a property and they could not in any sense of the term be equated with property rights. Before we consider the arguments, it would be convenient to notice the scope of the relevant provisions of the Principal Act, Act XIX of 1955 and Act XIII of 1960. The Principal Act, as amended by Act XIX of 1955, was enacted, as its preamble shows, to give protection to certain classes of tenants who in municipal towns and adjoining areas in the State of Madras have constructed buildings on others ' lands in the hope that they would not be evicted so long as they paid a fair rent for the land. The gist of the relevant provisions of the Principal Act, as amended by Act XIX of 1955, may be stated thus: The Act applies to any building whether it is residential or non residential. Every tenant shall on ejectment be entitled to be paid as compensation the value of any building, which may have been erected by him and also the value of trees which may have been planted by him; in a suit for ejectment the court shall ascertain the amount of compensation payable 289 by the landlord to the tenant and the decree shall direct that the landlord shall be put in possession of the land only on payment of the said amount in court within the prescribed time; if the landlord is unable or unwilling to pay the compensation within the prescribed time, he may apply for fixing a reasonable rent for the occupation of the land by the tenant; a tenant, who is entitled to compensation and against whom a suit for ejectment has been instituted, may apply for an order that the landlord may be directed to sell the land to him for a price to be fixed by the court, and thereupon the court shall fix the price in the manner prescribed in section 9 and direct the said amount to be paid to the landlord by the tenant within a particular time and in default his application shall stand dismissed. Nothing contained in the Act shall affect any stipulations made by the tenant in writing registered as to the erection of buildings, in so far as they relate to buildings erected after the date of the contract : the provisions of the Act apply to suits for ejectment which are pending and in which decrees for ejectment have been passed but have not been executed before the coming into force of the Act: vide sections 2(1), 2(1 A), 3, 4, 6, 9 and 12 of the Act. It is, therefore, clear that under the Principal Act tenants in the Madras City acquired valuable rights which they did not have before the said Act was passed. Prior to the Principal Act a tenant of a land over which he had put up buildings for residential or non residential purposes was liable to be evicted in accordance with law and his only right was to remove the superstructure put up by him on the land before delivering vacant possession. But after the Principal Act, a tenant similarly situated has an option to claim either compensation for the superstructure put up by him or to apply to the court to have the land sold to him for a consideration to be fixed by it. The Principal Act was amended by the Madras Act XIX of 1955 empowering the State Government 290 to extend, by notification in the Official Gazette, the protection given by the Principal Act to tenants of any other municipal town in the State of Madras and any specified village within five miles of the City of Madras or such municipal towns who have constructed buildings in others ' lands with the hope that they would not be evicted so long as they paid fair rent. In exercise of the power so conferred, the State Government issued on March 28, 1956, a notification extending the Principal Act to the municipal town of Tanjore. The result of the notification was that tenants like the appellants who were tenants of land over which they had put up non residential buildings acquired a right to ask for compensation for the buildings so erected on ejectment or to apply to court for directing the decree holder. to sell the land to the tenants after fixing the price in the manner prescribed in the Act. This Act was also extended to various other towns like Madurai, Coimbatore, Salem and Tiruchirappalli. The Legislature again changed its mind and passed Act XIII of 1960. By section 3 of that Act the following amendments were made in section 2 of the Principal Act: "(i) for clause (1), the following clause shall be substituted, namely: (1) 'Building ' means any building, hut or other structure, whether of masonry, bricks, wood, mud, metal or any other material whatsoever used (i)for residential or non residential purposes, in the City of Madras, in the municipal towns of Coimbatore, Madurai, Salem and Tiruchirappalli and in any village within five miles of the City of Madras or of the municipal towns aforesaid and 291 (ii) for residential purposes only, in any other area, and includes the appurtenance thereto. " Section 9. Every proceeding pending before any Court, other than a proceeding relating to any property situated in (i)the City of Madras, (ii)the municipal towns of Coimbatore, Madurai, Salem and Tiruchirappalli, and (iii)any village within five miles of the City of Madras or of the municipal towns aforesaid, on the date of the publication of this Act in the Fort St. George Gazette, and instituted under the provisions of the Principal Act, shall in so far as such proceeding relates to non residential buildings, abate, and all rights and privileges which may have accrued immediately before such date to any person in respect of any property situated in any area other than the areas referred to above by virtue of the Principal Act, shall, in so far as they relate to non residential buildings, cease and determine and shall not be enforceable: Provided that nothing contained in this section shall be deemed to invalidate any suit or proceeding in which the decree or order passed has been executed or satisfied in full before the date mentioned in this section. The result of this amending Act in respect of non residential buildings in places other than the City of Madras and the other specified municipal towns is that all proceedings pending in courts in respect of those buildings abated and the rights acquired by tenants under the 1955 Act in respect of the said buildings are extinguished. The rights, so far relevant to the present enquiry, which the tenants 292 had acquired under the 1955 Act were: (i) they were entitled on ejectment to be paid as compensation the value of the buildings erected by them or by their predecessorsin in terest, (ii) the court before issuing a decree for eviction should ascertain the amount due to a tenant and the decree for eviction. should be made conditional on the payment of the decree amount, (iii) in suits where decree for ejectment had been passed before the 1955 Act came into force, a tenant could file an application for ascertainment of the compensation due in execution and for a fresh decree to be passed in accordance with section 4 of the Principal Act, and (iv) he had also a right, at his option, to apply within the prescribed time to the court for an order directing the landlord to sell the land to him for a price fixed by the court, whether a decree for ejectment had or had not been passed. The tenants of non residential buildings in places other than the City of Madras and the specified municipal towns lost the said rights after the 1960 Act came into force. The first question is whether the 1960 Act, in so far as it withdrew the rights conferred upon the tenants of non residential buildings in Tanjore, offends article 14 of the Constitution, or whether it can be justified on the doctrine of classification. The law on the subject is so well settled that it does not call for an extensive restatement : it would be enough if the relevant propositions in the judgment of this Court in Shri Ram Krishna, Dalmia vs Shri Justice section R. Tendolkar(1) are noticed, and they are : "(1) there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles 2 it must be presumed that the legislature understands and correctly appreciates the need (1) ; , 297 298. of its own people, that its laws arc directed to problems made manifest by experience and that its discrimination are based on adequate grounds ; (3) in order to sustain the presumption of constitutionality the court may take into con sideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation ; and (4) while good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. " All the said propositions are subject to the main principle of classification, namely, that classification must be founded on intelligible differential and the differential must have a rational relation to the object sought to be achieved by the statute in question ; and that the classification may be founded on different bases, such as, geographical, or according to objects or occupations or the like : see Budhan Chaudhry vs The State of Bihar(1) and The State of West Bengal vs Anwar Ali Sarkar. (2) Bearing the said well settled principles in mind, let us now proceed to consider them in relation to the facts of this case. The first contention is that the object of the Act is to safeguard the tenants from eviction from residential quarters, but it affords (1) ; (2) ; 294 protection to tenants of non residential buildings in the City of Madras, in the municipal towns of Coimbatore Madurai, Salem and Tiruchirappalli and in any village within five miles of the aforesaid City and municipal towns, and there is no rational relation between the said classification and the object of the Act. The object of the Act, the argument proceeds, is to protect the tenants of residential buildings, whereas the Act protects also the tenants of non residential buildings in the aforesaid City and municipal towns. So stated the argument appears to be plausible, but a closer scrutiny reveals that the object of the Act is to protect not only tenants of residential buildings but also of other buildings, though it is mainly conceived to protect the tenants of residential buildings. The following is the statement of objects and reasons attached to Act XIII of 1960: " 'The Madras City Tenants ' Protection Act, 1921, was enacted with the main object of safeguarding the tenants from eviction from residential quarters. In consistence with this object it is proposed to restrict the application of the Madras City Tenants ' Protection Act, 1921 (Madras Act III of 1922) to residential buildings only. " It will be noticed from the above that the main object of the Act is to safeguard 'the tenants of residential buildings from eviction but it is not the sole object of that legislation. The objects of the 1960 Act only refer to the objects of the Principal Act. The objects and reasons of the Principal Act are given in the Fort St. George Gazette dated July 26, 1921, at p. 1491. The relevant part of the objects reads thus : "In many parts of the City of Madras dwelling houses and other buildings have, from time to time, been erected by tenants on land belonging to others in full expectation that subject to 295 payment of fair ground rent, they would be left undisturbed in possession, notwithstanding the absence of any specific contract as to the duration of the lease or the terms on which the buildings were to be erected. Recently attempts made or steps taken to evict a large number of such tenants, have shown that such expectations are likely to be defeated. . . . . The Bill provides for the payment of compensation to the tenant in case of ejectment for the value of any buildings which may have been erected by him or by his predecessors in intercst. It also provides for settlement of fair rent at the instance of the landlord. " The object of the said Act was to protect the tenants not only of dwelling houses in the City of Madras but also of other buildings in that City. The provisions of the Principal Act also, it is not disputed, apply both to residential and non residential buildings. So too the 1955 Act. Therefore, when in the " objects and reasons" attached to Act XIII of 1960 the authors of that Act stated that it was enacted with the main object of safeguarding the tenants from eviction from residential quarters, they were only emphasizing upon the main object but were not excluding the operation of that Act to non residential buildings. So it is not correct to state that the object of the Act is only to protect the tenants of residential buildings. There are no merits in this contention. The more serious contention is that there is no rational basis for classifying the tenants of non residential buildings in the City of Madras and the municipal towns of Madurai, Goimbatore Salem and Tiruchirappalli and those of similar buildings in other towns like Tanjore. It is said that if protection is necessary for the tenants of non residential buildings in the said City and towns, the same protection is equally necessary for tenants of similar buildings 296 in Tanjore and other towns. To state it differently, the argument is that there are no intelligible differences between the non residential buildings located in the City of Madras and the municipal towns of Madurai, Coimbatore, Salem and Tiruchirappalli and those situated in other towns. The learned judges of the High Court in Swaminathan vs Sundara (1),which was followed in ' the present case, adverting to this argument observed at p. 987 : "It is apparent that having regard to the large population in the first five areas and the large scale commercial activities in these areas, the Legislature thought fit that non residential quarters occupied by tenants on lands belonging to others should also be offered relief from being evicted summarily and arbitrarily. " This passage was criticized by learned counsel for the appellants and it was asked, what was the relevancy between the population of the different towns in the matter of eviction of tenants from non residential buildings ? The population of a town is not a relevant circumstance though its density may be : the pressure on the buildings or on the sites suitable for building purposes does not depend solely upon population without reference to the area available for building purposes, so the argument proceeds. Mr. A. Ranganadhm Chetty, appearing for the state of Madras, attempted to place before us statistics to establish that towns preferred under. the Act are highly populated industrial and commercial centers of the State compared to other towns like Tanjore and, therefore, there would necessarily be high pressure on non residential buildings in the said localities and consequently a spate of evictions. Before looking into the statistics it would be convenient to notice the allegations made in the affidavits. On behalf of the State of Madras, J. Sivanandam, Secretary to Government, has filed an affidavit, wherein he says in paragraph 8 : (1) 1. L. R. 297 " 'On facts the position is that these four towns of Madurai, Tiruchirappalli, Salem and Coimbatore ranked the first four next to the City of Madras in population, income and commercial activities and a very large number of tenants had been enjoying the protection afforded by the then existing provision of this Act, in respect of residential and non residential buildings as well. It was therefore thought that it would not be proper to deprive these tenants of the protection in respect of non residential buildings. It may at once be noticed that the industrial potential of the preferred towns is not specifically mentioned. But it appears to us that the expression "commercial activities" is used in a comprehensive sense so as to take in industrial activities. This statement is sought to be supported in the affidavit by the proceedings of relevant authorities and the correspondence that passed between the State and the Union Governments. The following extract from the Select Committee 's proceedings throws further light on the subject : ". . . on the reports received from Collectors, the Act was extended to certain Municipalities. But it was found that such extension caused inconvenience to public bodies and other institutions which owned the lands inasmuch as they were not able to get sufficient returns from these to carry on their activities under present conditions. . . . . However it was represented that in the case of Madras City such a restriction would cause considerable hardship to the large number of small business establishments and the privilege and concession enjoyed by them over such a long period should not be interfered with. While the Government felt the reasonableness of this demand that in the City non residential buildings should not be excluded from the protection afforded by the 298 Act, they were of the view that in place where the provisions were being extended they should apply only to residential buildings." ". . having regard to the wishes of certain Hon. members that not only in the City but in other municipalities also there should be no distinction between residential and non residential buildings, he (the Chairman) proposed to add the four municipalities of Madurai, Tiruchirappalli, Salem and Coimbatore, in sub clause (1) of the proposed clause (1). " These passages disclose not only the legislative objects but also the political pressures for certain amendments. But we are not concerned with the political aspects of the legislation but only with its objects. The special treatment given to the City of Madras and the other specified town is based upon the fact that there are a number of small business establishments in Madras and other specified towns implying thereby that there are not so many such establishments in other towns. The correspondence between the Government of India and the Government of Madras throws light on this question. It is stated therein "Most of the tenancies of non residential buildings which enjoyed protection from eviction are in the City of Madras and the Municipal towns of Madurai, Coimbatore ' Salem and Tiruchirappalli which have been classed as Special Grade or Selection Grade municipalities on the basis of income and population ; "This concession is considered necessary because in the City of Madras and in the said four Municipal towns there are a large number of such tenants to whom denial of the protection will cause great hardship. They have been enjoying this protection for some time past and they have invested large sums of money in the hope 299 that they will not be evicted so long as they pay the rent due. " This again emphasizes the fact that the preferred towns are of special importance and that comparatively a large number of non residential buildings are situated in the said City and towns. G. O. No. 331, L. A., dated February 18, 1953, passed by the Government of Madras also shows the com parative importance of the said towns. It is stated therein : "They (Government) consider, however, that in view of the size and importance of the thre e municipalities (Tiruchirappalli, Coimbatore and Vijayawada) referred to above and also of those of the Salem Municipality, the four municipalities stand distinctly apart from the other first grade municipalities, excluding of course Madurai Municipality which stands in a class by itself. The Government accordingly direct that with effect from 1 4 1953 the municipalities of Coimbatore, Salem and Tiruchirappalli And Vijayawada be classified as selection grade municipalities. . . . ". In the reply affidavit many of the factual assertions made in the counter affidavit have been denied. It is alleged that the number of tenants of non residential buildings who enjoyed the benefit of the provisions of the Act in municipal towns like Tanjore, Vellore and Connors is also large. It is denied that the preferred towns other than the City of Madras have been enjoying the protection for a long time, for the amending Act itself was passed only in 1955. It is pointed out that the population of a town is irrele vant but density of population matters and that the density of population in Tanjore, Coimbatore, Madurai and Salem is the same. Out of the allegations and counter allegations the following facts emerge (1) Madras is a city of large population and 300 commercial importance; (2) Madurai is classified as a special grade municipality and the municipalities of Coimbatore, Salem and Tiruchirappalli as selection grade municipalities on account of their size and importance: they have comparatively larger population and commercial potentialities; (3) in the said towns there are a large number of nonresidential buildings; and (4) except for some vague averments made in the reply affidavit, there is nothing on record to establish that the number of non residential buildings in Tanjore compares favorably with that in the preferred towns. These facts are, to some extent, supported by the statistical data furnished before us from authorized Government publications. In ",Madras District Gazetteers, Madurai" it is stated at p. 172: "Madurai is one of the very few districts in this State in which a comparatively large portion of the population, about 37 per cent., lives by industries, trade and other avocations. I This is no wonder, seeing that it has never had, in spite of irrigation works, any facilities like Tanjore for absorbing the great bulk of its population in agriculture. In fact it stands next to the Coimbatore district in possessing a considerable proportion of the non agricultural population". Though the statement refers to the districts as a whole, it is well known that most of the industries are concentrated in the municipal towns of Madurai and Coimbatore. In "India, 1962" the following figures of population in some Towns of Madras State are given: Madurai . 4,24,975 Coimbatore 2,85,263 Tiruchirappalli. . 2,49,933 Salem 2,49,084 Tuticorin 1,24,273 Vellore. 1,13,580 301 Tanjore . 1,10,968 Nagercoil . .1,06,497 It is not necessary to pursue the matter further. it is true that population alone cannot be a basis for the classification made under the Act, but concentration of large population is generally found only in towns where there are commerce and industries. Though it is possible that a smaller town with a lesser population may also 'have heavy industries and commercial activities, that is an exception rather than the rule. But in this case the Gazetteer supports the averment made by the State in the affidavit that the municipal towns selected for preferential treatment are more advanced commercially than other towns in the State. Though the Government, at the earlier stages 'of this litigation or even before the 1960 Act was passed, did not bring out these differences based upon commercial and industry as prominently as its counsel now seeks to do before us, we cannot brush aside the argument as an afterthought. That apart, the Government of Madras was not a party in the High Court and it had no opportunity to put forward its case before that Court. On the basis of the allegations made in the affidavit filed on behalf of the State of Madras, supported as it is by the statistical data furnished before us, we hold that there are real differences between non residential buildings in the towns of Madurai, Coimbatore, Salem and Tiruchirappalli and those in other towns of the Madras State which have reasonable nexus to the object sought to be achieved by the Act. The more difficult point is the impact of articles 19 (1) (f) and 31 (1) of the Constitution on the impugned provisions of the Act. The relevant Articles of the Constitution read thus: Article 19 (1) (f). All citizens shall have the right to acquire, hold and dispose of property. 302 Article 31. No person shall be deprived of his property save by authority of law. To seek the protection of either of these Articles it must be established that the tenants of residential buildings in Tanjore had acquired a right to property, for unless they had acquired such a right, the 1960 Act could not have deprived them of such a right or imposed any restrictions thereon. The question, therefore, is whether the rights created by the 1955 Act by extending the provisions of sections 3 and 9 of the Principal Act to such tenants had given them a right to property. The argument of learned counsel for the State of Madras may be summarized thus: article 19(1) (f) deals with abstract rights of property, while article 31 (1) with concrete rights; under Art.31(1) there is no limitation on the power of the appropriate Legislature to make a law depriving a person of his property; the only restriction in the case of deprivation of property by a State is that it can be done only by a statutory law; if so, on the assumption that the Act of 1955 conferred a concrete right of property on the appellants, they have been validly deprived of it by the 1960 Act and, therefore, no fundamental right of the appellant had been infringed; if, on the other hand, the argument proceeds, articles 19 (1) (f) and 31(1) are both held to relate to concrete rights of property, it would lead to two anomalies, namely, (i) article 31(1) would become otiose, and (ii) as deprivation of property cannot possibly be a restriction on the right to hold property, every law depriving a person of his property would invariably infringe Art.19 and, therefore, would be void. In support of his contentions he relies upon the observations of Patanjali Sastri, C. J., and Das, J., as he then was, in The State of West Bengal vs Subodh Gopal Bose(1). In that case Patanjali Sastri, C. J., made the following observations: " 'I have no doubt that the framers of our Constitution drew the same distinction and classed (1). [1954] section C. R. 587. 597. 303 the natural right or capacity of a citizen " 'to acquire hold and dispose of property" with; other natural rights and freedoms inherent in the status of a free citizen and embodies them in article 19(1), while they provided for the protection of concrete rights of property owned by a person in article 31. " These observations no doubt support learned counsel 's contention, but this Court in a later decision in The Commissioner, Hindu Religious Endowment '3, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(1) considered the said observations and remarked: "This, it may be noted, was an expression of ,Opinion by the learned Chief justice alone and it was not the decision of the court; for out of the other four learned judges who together with the Chief justice constituted the Bench, two did not definitely agree with this view, while the remaining two did not express any opinion one way or the other. This point was not raised before us by the Advocate General for Madras, who appeared in support of the appeal. , nor by any of the other counsel appearing in this case. The learned Attorney General himself stated candidly that he was not prepared to support the view taken by the late Chief justice as mentioned above and he only raised the point to get an authoritative pronouncement upon it by the court. In our opinion, it would not be proper to express any final opinion upon the point in the present case when we had not the advantage of any arguments addressed to us upon it. We would prefer to proceed, as this court has proceeded all along, in dealing with similar cases in the past, on the footing that article 19 (1) (f) applies equally to concrete as well as abstract rights of property." (1) ; , 1020. 304 Though this Court has not finally expressed its opinion on the question raised, it has pointed out that it has proceeded all through on the basis that article 19(1) applies equally to concrete as well as abstract rights of property. In Chiranjit Lal Chowdhuri vs The Union of India(1), Mukherjea, J., as he then was, held that the right to hold property under article 19 (1) (f)meant the right to possess as well as enjoy all the benefits which were ordinarily attached to ownership of property. jagannadhadas, J., in The State of West Bengal vs Subodh Gopal Bose(2). dealing with this point observed at pp. 668 669: "To me, it appears, that article 19(1) (f), while probably meant to relate to the natural rights of the citizen, comprehends within its scope also concrete property rights. That, I believe, is how it has been generally understood without question in various cases these nearly four years in this Court and in the High Courts". The phraseology used in article 19(1)(f) is wide and prima facie it takes in its sweep both abstract and concrete rights of property. To suggest that abstract rights of a citizen in property cannot be infringed by the State but his concrete rights can be, is to deprive article 19(1)(f) of its real content. It would mean that the State could not make a law declaring generally that a citizen cannot acquire, hold and dispose of property, but it could make a law taking away the property acquired or held by him and preventing him from disposing it of It would mean that the Constitution makers declared platitudes in the Constitution while they gave unrestricted liberty to the Legislature to interfere with impunity with property rights of citizens. If this meaning was given to article 19(1)(f), the same meaning would have to be given to other clauses of article 19(1) with the result that the Legislature cannot make a law preventing generally citizens from expressing their views, assembling peacefully, forming associations, and moving (1) [1950] section C. R. 869. (2) ; , 597. 305 freely throughout the country, but can make a law curbing their activities when they are speaking, when they are assembling and when they are moving freely in the country. Such an intention shall not be attributed to the Constituent Assembly, unless the Article is clear to that effect. Indeed, the words, as we have stated, are comprehensive and take in both the rights. Though there is no final expression of opinion by this Court on this question, as has been pointed out, this Court and the High Courts all through since the date of promulgation of the Constitution proceeded on the assumption that article 19 applied to both the rights. We hold that article 19 applies both to concrete as well as to abstract rights of property. It is said that if this construction be given to article 19(1)(f), article 31(1) would become otiose. We do not see how it becomes an unnecessary provision. Article 31(1) is couched in a negative form. It says that no person shall be deprived of his property save by authority of law. In effect it declares a fundamental right against deprivation of property by executive action ; but it does not either expressly or by necessary implication take the law out of the limitations imp limit in article 19(1)(f) of the Constitu tion. The law in article 31(1) must be a valid law and to be a valid law it must stand the test of other fundamental rights. All the other points urged in support of the contention have been considered by this Court in Kavalappara Kottarathil Kochuni vs The State of Madra 's(1), where it was held that a law depriving a person of his property must be a valid law and, therefore, it should not infringe article 19 of the Constitution. We have no reason to differ from the view expressed therein. Indeed that view has been followed in later decisions. We, therefore, hold that a law depriving a person of his property would be bad unless it amounts to a reasonable restriction in the (1) 306 interest of the general public or for the protection of the interests of Scheduled Tribes. We now come to the last question, namely, whether the 1960 Act deprived the appellants of their right in property. To state it differently, the question is whether a tenant of a non residential building in Tanjore had acquired a right of property under the 1955 Act and whether he was deprived of that right or otherwise restricted in the enjoyment thereof by the 1960 Act. The 1955 Act, as we have already noticed, conferred two rights on such a tenant, namely, (i) every tenant on ejectment would be entitled to be paid as compensation the value of any building erected by him, and (ii) such a tenant against whom a suit in ejectment has been instituted has an option to apply to the court for an order directing the landlord to sell the land to him for a price to be fixed by the court. We are not concerned here with the rights conferred under section 3 of the Act, for the simple reason that neither of the appellants claimed a right thereunder. Both of them have taken proceedings only under section 9 of the Act and they have approached the High Court for a writ of mandamus that the petition should be disposed of under the provisions of section 9 of the Act. This Court 's opinion on the question of the constitutional validity of the Act in so far as it deprived the appellants of their right under section 3 of the Principal Act is not called for : that will have to be decided in an appropriate case. The question that falls to be considered is whether the second right, namely, the right of a tenant to apply to the court for an order directing the landlord to sell the land to him for a price to be fixed by it, under section 9 of the Principal Act is a right to property. The law of India does not recognize equitable 'estates. No authority has been cited in support of the contention that a statutory right to purchase land is, or confers, an interest or a right in property. The fact that the right is created not by 307 contract but by a statute cannot make a difference in the content or the incidents of the right: that depends upon the nature and the scope of the right conferred. The right conferred is a right to purchase land. If such a right conferred under a contract is not a right of property, the fact that such a right stems from a statute cannot obviously expand its content or make it any the less a non proprietary right. In our view, a statutory right to apply for the purchase land is not a right of property. It is settled law that a contract to purchase a property does not create an interest in immovable property. Different consideration may arise when a statutory sale has been effected and title passed to a tenant : that was the basis of the judgment of this Court in Jayvantsinghji vs State of Gujarat(1), on which Mr. Viswanatha Sastri relied. But we are not concerned here with such a situation. It is said that the appellants have acquired a right under the 1955 Act to hold and enjoy the buildings erected by them by exercising their right to purchase the site of the said buildings and that the impugned Act indirectly deprived them of their right to hold the said buildings. This argument mixes up two concepts, namely, (i) the scope and content of the right, and (ii) the effect and consequences of the deprivation of that right on the other properties of the appellants. Section 9 of the Principal Act, extended by the 1955 Act, only confers a right in respect of the land and not of the superstructure. If that Act held the field, the appellants could have purchased the land, but by reason of the 1960 Act they could no longer do so. Neither the 1955 Act conferred any right as to the superstructure under section 9 of the Principal Act nor did the 1960 Act take that right away. If this distinction between the land and the superstructure is borne in mind the untenability of the argument would become obvious. The 1960 Act does not in any way affect the appellants ' fundamental right. Therefore, their prayer that the District Munsif should be directed to proceed with the (1). [1962] Supp. 2 section C. R. 41 1. 308 disposal of the applications filed by them under section 9 of the Principal Act could not be granted. In this view it is not necessary to express our opinion on the question whether the appellants. , by reason of the specific stipulation in their lease deeds, would not be entitled to any relief even under the 1955 Act. In the result, the appeals fail and are dismissed with costs. One hearing fee. Appeals dismissed.

IN-Abs

Each of the appellants in the two appeals who were tenants of land in Tanjore on which non residential premises had been constructed by them, applied to the Munsif under section 9 of the Madras City Tenants Protection Act, 1921 (111 of 1922) to have the respective sites conveyed to them after fixing the sale price as contemplated by the Act. Pending the decision of he applications by the Munsif, the protection and rights given to the tenants who had constructed buildings on leased and by the Principal Act was withdrawn by Act XIII of 1960, in respect of non residential buildings in Tanjore but with regard to the cities of Madras, Salem, Madurai, Coimbatore and Tiruchirappalli the protection and rights were retained both as regards residential buildings and non residential buildings. The appellants applied under article 226 of the Constitution to the High Court of Madras praying for a mandamus directing the Munsif to determine their applications under section 9 of the Principal Act as extended to the town of Tanjore by Notification and the Act of 1955 ignoring Act XIII of 1960 which was impugned as offending articles 14, 19 and 31 of the Constitution. The High Court upheld the validity of the Act following the earlier decision of that Court. Held that confining the protection to residential buildings only in the town of Tanjore while giving protection to tenants of both residential and non residential buildings in the other 283 towns was based upon real differences between Tanjore and the other towns regarding the pressure on non residential accommodation and other relevant factors including population and that the differentiation was related to the object namely protecting tenants of residential buildings principally and also of nonresidential buildings where the need was most felt. Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar ; , Bhudan Choudhury vs State of Bihar, ; and The State of West Bengal. vs Anuwar Ali, ; , referred to. Held, further, that article 19(1) (f) guarantees both abstract as well as concrete rights of property and that property has the same meaning in article 19(1) (f) and article 31 (1). State of West Bengal vs Subodh Gopal Bose ; , The Commissioner Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Nutt, ; and Chiranjit Lal Choudhury vs Union of India, [1950] 869, referred to. Held, further, that law ' under article 31 must be a valid law and to be valid it must stand the test of other fundamental rights including article 19(1) (f) of the Constitution. Kavalappara Kottarathil Kochuni vs State of Madras, referred to. Held, further, that the right to purchase property conferred by a Statute is in its nature the same as the right of purchase conferred by contract and in neither event could it amount to a right of property. Maharana Shri Jayvantsinghji Ranmalsinghji etc. vs The, State of Gujrat, [1662] Supp. 2 section C. R. 41 1. Held, also that the principal Act did not confer a right on the tenant to the superstructure and therefore, the impugned Act did riot take away any such right.

minal Appeal No. 174 of 1961. Appeal by special leave from the judgment and order dated April 12113, 1961, of the Bombay High Court in Cr. A. No. 308 of 1961. G. C. Mathur, for the appellant. section B. Jathar and R. N. Sachthey, for the respondents. August 29. , J. This is an appeal against the judgment and order of the High Court of Bombay confirming the conviction of the appellant for an offence under section 302, Indian Penal Code, read with section 34 for the murder of one Lahu Vithu Patil on the night between May 23, and 24, 1960 at village Pasarde. Four persons Rama Krishna Patil accused No. 1, Bhiva Doulu Patil accused No. 2 (now appellant before us), Lahu Santu Patil accused No. 3 and Deoba approver P.W.5 are alleged to have taken part in murder of Lahu Vithu Patil. Rama 832 Krishna Patil accused No.1 was convicted of murder and sentenced to death but on appeal his sentence was reduced to one of imprisonment for life. The appellant was convicted as above stated and sentenced to imprisonment for life. The third accused Lahu Santu Patil was acquitted and the 4th participant Deoba turned approver and is P.W.5. The case for the prosecution was that the appellant had a suspicion that the deceased bad a liaison with his wife. He, the appellant, approached the approver and suggested that the deceased should be killed. This was on March 16, 1960. On March 17, 1960, Rama Krishna Patil accused No. 1 and appellant got a knife prepared by Nanu Santu Sutar P.W.7 from a crowbar. The deceased was a wrestler and he and his brother used to sleep in the fields and they also had dogs and for that reason the murder could not be committed for sometime. When rains set in, the deceased started sleeping at Patil 's Talim (gymnasium). There, on the night of the murder the deceased was killed with the knife which was used by Rama Krishna Patil accused No.1. At that time the appellant had a torch and two others Lahu Santu Patil and Deoba were unarmed. Two blows ware given by accused No.1 one on the throat and the second one on the left side of the chest. At the place of the occurrence the assailants left a towel and a patka(turban). Both these articles have been found to belong to accused No. 1 Rama Krishna Patil. Hearing the noise and growing of the deceased, Lahu Vithu Patil, other persons who were sleeping were awakened and one of them went and informed the brother of the deceased and then the first information report was made to the police but no names were mentioned therein. On June 6, 1960, Deoba was arrested on information received by police Sub Inspector Nandke. On June 25, 1960, 833 as a result of a statement made by accused No.1 the knife which is alleged to have been used for the murder was recovered. This knife is stated to be stained with blood but it has not been proved to be human blood. It may be stated that the knife was of rather unusually large dimensions The two injuries on the deceased were very extensive and according to the medical evidence they could have been caused with the knife which was recovered. The question that arises in the present case is whether the statement of the approver has been corroborated in material particulars and qua the appellant. The trial court convicted the appellant on the testimony of the approver and found corroboration for the approver 's testimony in the statement of Nanu Sintu Sutar, P.W. 7 who had prepared the knife alleged to have be, been used for the offence on March 17, 1960, and hi,; motive to commit the murder because of the suspicion he had about his wife having a liaison with the deceased. These facts according to the learned Judge were sufficient to convict the appellant. The High Court on appeal found corroboration in material particulars; from the evidence of Santu 1 .W. 6 brother of Deoba to whom Deoba had made a confession of his participation in the offence the discovery of the 'knife at the instance of accused No. 1 and the knife being found blood stained and the unusual character of the knife which fitted in with the dimensions of the injurious caused to the deceased. From those facts the learned Judges came to the conclusion that the approver Deoba was giving a true version of the occurrence. With great respect to the High Court we are unable to agree because without corroboration of the approver qua the appellant the conviction is unsustainable, the law being that there should be corroboration of the approver in material particulars and qua each accused. 834 The statement of Santu, brother of the approver is no corroboration of the approver. it only means that approver made a confessional statement to his brother. That cannot be called, in the circumstances of this case, to be a corroboration of the approver. The evidence of Nanu Santu Sutar P.W. 7 also cannot operate as a corroboration of the approver 's story because the knife was got prepared by accused No. 1 and the appellant nine weeks before the murder and that fact by itself will not corroborate the charge under section 302 read with section 34 of the Indian Penal Code against the appellant. The time gap between the preparation of the knife and murder is great and it is possible in such circumstances that the appellant might have cemented and not proceeded with the commission of the offence. The finding of the knife at the instance of the first accused also is no corroboration of the approver 's story which would be sufficient to connect the appellant with the murder, under section 34 of the Indian Penal Code. It may be that in this case the approver 's evidence was sufficiently corroborated for the conviction of the first accused upon which we express no opinion but so far as the appellant is concerned we find that there is no corroboration of the approver 's story and it is not sufficient that there is evidence to corroborate the participation of the first accused in the murder. It is also necessary for there being independent corroboration of the participation of the appellant in the offence with which he has been charged. In these circumstances the conviction of the appellant is not sustainable. In coming to the above conclusion we have not been unmindful of the provisions of section 133 of the Evidence Act which reads : section 133 "An accomplice shall be a competent witness against an accused person; 835 and a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice". It cannot be doubted that under that section a conviction based merely on the uncorroborated testimony of an accomplice may not be illegal, the courts nevertheless cannot lose sight of the rule of prudence and practice which in the words of Martin B in Res. vs Boyes (1) (has become so hallowed as to be deserving of respect" and in the words of Lord Abinger "it deserves to have all the reverence of the law". This rule of guidance is to be found in illustration (b) to section 114 of the Evidence which is as follows : "The court may presume that an accomplice is unworthy of credit unless he is corroborated in material particulars". Both sections are part of one subject and have to be considered together. The Privy Council in Bhuboni Sahu vs The King (2) when its attention was drawn to the judgment of Madras High Court in re Rajagopal(3) where conviction was based upon the evidence of an accomplice supported by the statement of a co accused, said as follows : "Their Lordships. . . . would nevertheless observe that Courts should be slow to depart from the rule of prudence, based on long experience, which requires some independent evidence, implicating the particular accused. The danger of acting upon accomplice evidence is not merely that the accomplice is on his own admission a man of bad character who took part in the offence and afterwards to save himself betrayed his former associates, and who has placed himself in a (1) (2) (1949) L.R. 76. I.A. Mad. 308. 836 position in which he can hardly fail to have a strong bias in favour of the prosecution ; the real danger is that he is telling a story which in its general outline is true, and it is easy for him to work into the story matter which is untrue". The combined effect of sections 133 and 114, illustration (b) may be stated as follows : According to the former, which is a rule of law, an accomplice is competent to give evidence and according to the latter which is a rule of practice it is almost always unsafe to convict upon his testimony alone. Therefore though the conviction of an accused on the testimony of an accomplice cannot be said to be illegal yet the Courts will, as a matter of practice, not accept the evidence of such a witness without corroboration in material particulars. The law may be stated in the words of Lord Reading C. J. in R. vs Baskerville (1) as follows "There is Do doubt that the uncorroborated evidence of an accomplice is admissible in law (R. v Attwood; , But it has been Ion(,, a rule of practice at common law for the judge to warn the jury of the danger of convicting a prisoner on the uncorroborated testimony of an accomplice, and in the discre tion of the Judge, to advise them not to convict upon such evidence, but the judge should point out to the jury that it is within their legal province to convict upon such unconfirmed evidence (R. v Stubbs, Dears 555 In re Heunier, We, therefore, allow this appeal, set aside the order of conviction and direct that the appellant be released forthwith. Appeal allowed (1) [1916] 2. K.B.658.

IN-Abs

The appellant and R were convicted for murder on the testimony of an approver Corroborated by the recovery at the instance of R of the knife with which the murder was committed and of the evidence that the appellant and R had got the knife prepared nine weeks before the murder. The appellant contended that his conviction was illegal as there was no corroboration of the testimony of the approver so far as he was concerned. Held, that the conviction of the appellant was not sustainable. The law required that there should be corroboration of the approver in material particulars and qua each accused. The combined effect of sections 133 and 114 illustration (b) is that though the conviction of an accused on the testimony of an accomplice could not be said to be illegal, the courts will not accept such evidence without corroboration in 831 material particulars. In the present case there was no corroboration of the testimony of the approver qua the appellant. The preparation of the knife nine weeks before the occurrence was no corroboration of the approver as within that time gap the appellant might have recanted; nor was the discovery of the knife at the instance of R sufficient to connect the appellant with the murder. The fact that the approver had made a confessional statement to his brother could not be called corroboration of the approver. It was not sufficient for the conviction of the appellant that there was evidence to corroborate the participation of R in the murder. vs Boyes,(1861)9 Cox, crim. cas.32, Bhuboni Sahu vs The King, (1949) L. R. 76 1. A. 147 and R. vs Baskerville, , referred to.

Appeal No. 124 of 1962. Appeal by special leave from the judgment and order dated November 14, 1960, of the Punjab High Court (Circuit Bench), Delhi in Civil Revision Case No. 224 D of 1959. Janardan Sharma, for the appellant. R.Ganapathy Iyer and P. D. Menon, for the respondents. September 25. The judgment of the Court was delivered by 231 DAS GUPTA J. This appeal by special leave raises the question of validity of r. 12(4) of the Central Civil Services (Classification, Control and Appeal) Rules, 1957, that were framed by the President and published by a notification dated February 28, 1957. Rule 12(4) is in these words : "12(4). Where a penalty of dismissal, removal or compulsory retirement from service imposed upon a Government servant is set aside or declared or rendered void in consequence of or by a decision of a court of law and the disciplinary authority on a consideration of the circumstances of the case, decides to hold a further inquiry against him, on the allegations on which the penalty of dismissal, removal or compulsory retirement was originally imposed, the Government servant shall be deemed to have been placed under suspension by the Appointing Authority from the date of the original order of dismissal, removal or compulsory retirement and shall continue to remain under suspension until further orders. " The question arises in this way. On July 1, 1949, the appellant, who was a permanent Sub Inspector of Co operative Societies, Delhi, was suspended by the Deputy Commissioner, Delhi,. On July 9 he was served with a charge sheet under r. 6(1) of the Rules which had been framed by the Chief Commissioner, Delhi. On a consideration of the report made by the officers, who had held an enquiry into the several charges against him the Deputy Commissioner, Delhi, made an order on December 17, 1951, dismissing this appellant. The appellant filed a suit on May 20, 1953, praying for a declaration that the order of dismissal made against him was invalid in law being in violation of article 311 of the Constitution of India and for a further declaration that, he still continued to be in service of the Government. 232 The Trial Court decreed the suit on May 3 1, 1954, declaring that the plaintiff 's dismissal was void and inoperative and that the plaintiff continued to be in service of the State of Delhi at the date of the institution of the suit. The appeal by the Government of India was dismissed by the Senior Subordinate judge, Delhi on December 31, 1954. The decree was however set aside by the Punjab High Court on November 1, 1955, in Second Appeal by the State and the suit was dismissed. Against this decision of the High Court, the appellant preferred an appeal by special leave to this Court. This Court held that the provisions of article 311(2) had not been fully complied with and the appellant had not had the benefit of all the constitutional protections and accordingly, his dismissal could not be supported. The Court then passed the following order : "We, therefore, accept this appeal and set aside the order of the Single judge and decree the appellant 's suit by making a declaration that the order of dismissal passed by the Deputy Commissioner on December 17, 1951 purporting to dismiss the appellant from service was inoperative that the appellant was a member the service at the date of the institution of the suit out of which, this appeal has arisen. The appellant will get costs throughout in all courts. Under Order XIV Rule 7 of the Supreme Court Rules, we direct that the appellant should be paid his fees which we assess at Rs. 250". The judgment of this Court wag delivered on December 13, 1957, and is reported in [1958] Supreme Court Reports at page 1080. 233 On April 20, 1955, i.e., shortly after the Government appeal had been dismissed by the Senior Subordinate judge, the appellant instituted a suit in the Court of the Senior Sub judge, Delhi, out of which the present appeal has arisen. The defendants in this suit are: 1. The Union of India; 2. The State of Delhi; and 3. The Collector and Registrar, Co operative Societies, Delhi. In this suit the plaintiff claims, on the basis of the decree obtained by him in the earlier suit, a sum of Rs. 14,042/8/ as arrears of salary 'and allowances. The hearing of the suit was however stayed by the Trial Court on December 26, 1955, in view of the pendency of the appellant 's appeal in this Court against the decision of the Punjab High Court dismissing the earlier suit. As already stated, this Court delivered the judgment in that appeal on December 13, 1957. On December 26, 1957, the appellant made an application to the Trial Court praying that the hearing of the suit be taken up. Before, however, the suit could be disposed of, the defendants made an application to the Subordinate judge, on August 7, 1958 stating that the disciplinary authority had on a consideration of the circumstances of the case, decided to hold a further enquiries against this appellant on the allegations on which he had been originally dismissed and that, consequently, the appellant should be deemed to have been placed under suspension by the appointing authority from December 17, 1951, the date of the original order of dismissal. Accordingly, it was contended by the defendants that the plaintiff 's claim in the present suit was untenable. On February 14, 1959, the Trial Court made an order in these terms " 'It is hereby ordered that the proceedings in the case shall remain stayed until the time the order of suspension is revoked under Rule (5) of the Central Civil Service (Classification, Control and Appeal) Rules, 1957 referred to above 234 or its being set aside by a competent tribunal or authority whichever event occurs earlier. The hearing of the suit is adjourned sine die and the proceedings shall be revived on the application of the plaintiff after the occurrence of any of the two events referred to above. " Against this order the appellant filed a revisional application in the Punjab High Court challenging the validity of r. 12(4) of the Central Civil Service (Classi fication, Control and Appeal) Rules, 1957. A Division Bench of the High Court dismissed the revision petition rejecting the appellant 's contention against the validity of r. 12(4). Against that decision of the High Court the appellant has filed the present appeal after obtaining special leave from this Court. It is clear that if r. 12(4) of the Central Civil Service (Classification, Control and Appeal) Rules, 1957,is valid the appellant must be deemed to have been placed under suspension from December 17, 1951. For, it is not disputed that after the penalty, of dismissal imposed on him had been rendered void by the decision of this Court, the disciplinary authority did in fact decide to hold a further enquiry against him on the allegations on which this penalty of dismissal had originally been imposed. It is equally clear that if the appellant be deemed to have been placed under suspension from December 17, 1951, the order made by the Trial Court staying the hearing of the suit and the order of the High Court rejecting the revisional application are not open to challenge. The sole question therefore is whether r. 12(4) is valid in law. This rule forms part of the rules made by the President in exercise of the powers conferred on him by the proviso to article 309 and cl. 5 of article 148; of the Constitution. The main provisions of article 309 is that subject to the provisions of the Constitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of per sons appointed, to public services and posts in connection 235 with the affairs of the Union or of any State. The proviso to this Article makes it competent for the President or such other person as he may direct, in the case of services and posts in connection with the affairs of the Union, to make rules regulating the recruitment and the conditions of service of persons appointed to such services and posts until provision in that behalf is made by or under an Act of the appropriate Legislature under this Article. Clause 5 of article 148 makes a similar provision in respect of ' the conditions of service in the Indian Audit and Accounts Department and provides inter alia that subject to the provisions of the Constitution and of any law made by Parliament, the conditions of service of persons serving in the Indian Audit and Accounts Department shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor General. Mr. janardan Sharma rightly contends that this lower of the President to make rules is subject to all the provisions of the Constitution and consequently if in making the rule the rule making authority has contravened any of the provisions of the Constitution the rule is invalid to the extent of such contravention. According to Mr. Sharma r. 12(4) contravenes the provisions of article 142, article 144, article 19(1) (f), article 31 and also article 14 of the Constitution. The argument that the impugned Rule contravenes article 142 and article 144 is practically the same. Article 142 provides inter alia that any decree passed by the Supreme Court in the exercise of its jurisdiction shall be enforceable throughout the, territory of India in such manner as may be prescribed by or under any law made by Parliament and until provision in that behalf is so made, in such manner as the President may by order prescribe. Article 144 provides that all authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court. Mr. Sharma 's argument as far as we could 236 understand it is that under these provisions of articles 142 and 144 a duty lay on the President to do all that was necessary to give effect to the decree made by this Court in the earlier appeal and that by framing r. 12(4) the President has, in effect, gone against the directions of this Court as contained in that decree. In our judgment, there is no substance in this contention. If the decree of this Court had directed payment of arrears of appellant 's salary and allowances and the effect of the rule made by the President was to deprive him of that right there might perhaps have been scope for an argument that the rule contravened the provisions of article 144. The decree made by this Court did not however contain any direction as regards payment of salary and allowances. It did contain a direction that the appellant will get his costs throughout in all courts. Quite clearly, however, the impugned rule does not in any way affect that right of the appellant. The only other relief granted by the decree was the making of a declaration that the order of dismissal passed by the Deputy Commissioner, Delhi, on December 17, 1951, purporting to dismiss the appellant from service was inoperative and that the appellant was a member of the service at the date of the institution of the suit out of which the appeal had arisen. Does the impugned rule go against this declaration? The answer, in our opinion, must be in the negative. The provision in the rule that the Government servant shall be deemed to have been placed under suspension from the date of the original order of dismissal does not seek to affect the position that the order of dismissal previously passed was inoperative and that the appellant was a member of the service on May 25, 1953, when the first, suit was instituted by the appellant. An order of suspension of a government servant does not put an end to his service under the Government. He continues to be a member of the service inspite of the order of suspension. There was a termination of the appellant '$ service when the order of dismissal was I 'made on 237 December 17, 1951. When that order of dismissal was act aside: the appellant 's service revived; and so long as another order of dismissal is not made or the service of the appellant is not terminated by some other means, the appellant continues to be a member of the service and the order of suspension in no way affects this position. The real effect of the order of suspension is that though he continued to be a member of the Government service he was not permitted to work, and further, during the period of his suspension he was paid only some allowance generally called, ""subsistence allowance" which is normally less than his salary instead of the pay and allowances he would have been entitled to if he had not been suspended. There is no doubt that the order of suspension affects a government servant injuriously. There is no basis for thinking however that because of the order of suspension he ceases to be a member of the service. The provision in r. 12(4) that in certain circumstances the Government servant shall be deemed to have been placed under suspension from the date of the original order of dismissal and shall continue to remain under suspension until further orders, does not in any way go against the declaration made by this Court. The contention that the impugned Rule contravenes articles 142 or 144 is therefore untenable. Equally untenable is the appellant 's next contention that the impugned rule contravenes the provisions of article 19(1)(f) of the Constitution. The argument is that as a result of this Court 's decree the appellant had a right to his arrears of pay and allowances. This right constituted his property; and as the effect of the impugned Rule is that he would not, for some time at least, get those arrears it restricts his right. It may be conceded that the right to arrears of pay and allowances constituted property within the meaning of article 19(1)(f) of the Constitution and further, that the effect of r. 12(4) is a 238 substantial restriction of his right in respect of that property under article 19(1)(f). The question remains whether this restriction is a reasonable restriction in the interests of the general public. No body can seriously doubt the importance and necessity of proper disciplinary action being taken against government servants for inefficiency, dishonesty or other suitable reasons. Such action is certainly against the immediate interests of the Government servant concerned; but is absolutely necessary in the interests. of the general public for serving whose interests the government machinery exists and functions. Suspension of a government servant pending an enquiry is a necessary part of the procedure for taking disciplinary action against him. It follows, therefore, that when the penalty of dismissal has been set aside but the disciplinary authority decides to hold a further enquiry on the same facts against him a fresh order of suspension till the enquiry can be completed, in accordance with law, is a reasonable step of the, procedure. We have no hesitation in holding, therefore, that in so far as r.12(4) restricts the appellant 's right under article 19(1)(f) of the Constitution, it is a reasonable restriction in the interests of the general public. Rule 12(4) is therefore within the saving provisions of article 19(6), so that there is no contravention of the constitutional provisions. Mr. Sharma drew our attention to the decision of this Court in Devendra Pratap vs State of Uttar Pradesh(1) where the effect of r. 54 of the Fundamental Rules framed by the State of U. P. under article 309 was considered. It was held that while r. 54 undoubtedly enabled the State Government to fix the pay of a public servant where dismissal is set aside in a departmental appeal, the rule has no application to cases in which the dismissal of a public servant is declared invalid by a civil court and he is reinstated and that it would not in such a contingency be open to the authority to deprive the (1) [1962] Supp. 1 section C. R. 315. 239 public servant of the remuneration which he would have earned had he been permitted to work. This decision has however no application to a case like the present, where because of the operation of r. 12 (4) of ,the Central Civil Service (Classification, Control & Appeal) Rules, 1957, the public servant is deemed to be placed under suspension from the date of the original order of dismissal. This brings us to the attack on the rule on the basis of article 14. According to Mr. Sharma the result of the impugned rule is that where a penalty of dismissal, removal or compulsory retirement from service imposed on a government servant is set aside or declared or rendered void in consequence of or by a decision of a court of law and the disciplinary authority decides to hold a further enquiry against 'him on the allegations on which the penalty was originally imposed, the consequence will follow that the government servant shall be deemed to have been placed under suspension from the date of the original imposition of penalty, whereas no such consequence will follow where a similar penalty is set aside not by a court of law but by the departmental disciplinary authority. According to Mr. Sharma, therefore, there is a discrimination between a government servant the penalty of dismissal, removal or com pulsory retirement on whom is set aside by a decision of a court of law and another government servant a similar,penalty on whom is set aside on appeal by the departmental disciplinary authority. The argument however ignores the result of rule 30 (2) and rule 12 (3) of these rules. Rule 30 (2) provides inter alia that in the case of an appeal against an order imposing any of the penalties specified in rule 13, i.e., the penalty of dismissal, removal or compulsory retirement and certain other penalties, the appellate authority shall pass orders: "(1)setting aside, reducing, confirming or enhancing the penalty; or (ii) remitting the case to. the authority which imposed the penalty 240 or to any other authority with such direction as it may deem fit in the circumstances of the case. " Rule 12 (3) provides that "where a penalty of dismissal, removal or compulsory retirement from service imposed upon a Government servant under suspension is set aside in appeal or on review under 'these rules and the case is remitted for further enquiry or action or with any other directions, the order of his suspension shall be deemed to have continued in force on and from the date of the original order of dismissal, removal or compulsory retirement and shall remain in force until further orders. " Where a penalty of dismissal, removal or compulsory retirement imposed upon a government servant is set aside by the departmental authority on appeal, it may or may not order further enquiry; just as where a similar penalty is set aside by a decision of a court of law the disciplinary authority may or may not direct a further enquiry. Where the appellate authority after setting aside a penalty of dismissal, removal or compulsory retirement makes an order under r. 30 (2) (ii) remitting the case to the authority which imposed the penalty, for further enquiry, rule 12 (3) will come into operation and so the order of suspension which in almost all cases is likely to be made where a disciplinary proceeding is contemplated or is pending r. 12 (3) shall be deemed to have continued in force on and from the date of the original order of dismissal and shall remain in force until further orders. There is therefore no difference worth the name between the effect of rule 12 (4) on a government servant the penalty of dismissal, removal or compulsory retirement on whom is set aside by a decision of a court of law and a further enquiry is decided upon and the effect of r. 12 (4) on an other government servant a similar penalty on whom is set aside in appeal or on review by the departmental authority and a further enquiry is decided upon. In both cases the government servant will be deemed to be under suspension from the date of the. original order of dismissal, except 241 that where in a departmental enquiry a government servant was not placed under suspension prior to the date when the penalty was imposed, this result will not follow, as r. 12 (3) would not then have any operation. It is entirely unlikely however that ordinarily a government servant will not be placed under suspension prior to the date of his dismissal. Rule 12 (1) provides that the appointing authority or any authority to which it is subordinate or any other authority empowered by the President in that behalf may place a government servant under suspension : (a) where a disciplinary proceeding against him is contemplated or is pending, or (b) where a case against him in respect of any criminal offence is under investigation or trial. Mr. Sharma does not say that ordinarily any cases occur where a government servant is visited with a penalty of dismissal, removal or compulsory retirement, in a departmental proceeding, without there being a previous order of suspension under the provisions of r. 12(1) and we do not think any such case ordinarily occurs. Consequently, the effect of r. 12(3) will be the same on a government servant a penalty of dismissal, removal or compulsory retirement on whom is set aside in appeal by the departmental authority as the effect of r. 12(4) on a government servant a similar penalty on whom is set aside by a decision of a court of law. The contention that r. 12(4) contravenes article 14 of the Constitution must therefore be rejected. As we find that all the above attacks on the validity of r. 12(4) fail, the further attack on the Rule on the basis of article 31(1) of the Constitution also necessarily fails. For, whatever deprivation of property may result from r. 12(4) would be by authority of law the law being r. 12(4). We have therefore come to the conclusion that the High Court. is right in holding that r. 12(4) is 242 valid and consequently, in rejecting the appellant 's revisional application. The appeal is dismissed. But, in view of the circumstances of the case we make no order as to costs. Though the appellant has failed in this appeal which was brought by him as a pauper, we make no order against him to pay the court fee which would have been paid by him if he had not been permitted to appeal as a pauper. Appeal dismissed.

IN-Abs

The appellant a public servant was served with a charge sheet and after enquiry was dismissed. The filed a suit for a declaration that the order of dismissal was invalid and for a further declaration that he still continued to be in service. The suit was ultimately decreed by the Supreme Court by making the declarations sought. In the meantime the appellant filed another suit for recovery of arrears of salary and allowances. The suit was stayed pending the disposal of the appeal before the Supreme Court. After the judgment of the Supreme Court, the authorities decided to hold a further enquiry against the appellant on the original allegations. In view of r. 12(4) Central Civil Services (Classification, Control and Appeal) Rules, 1957, the trial court ordered that the proceedings shall remain stayed till the order of suspension was revoked or set aside. Rule 12(4) provides that where a penalty of dismissal, removal or compulsory retirement is set aside by a court of law and the authorities decide to hold a further enquiry on the same allegations, the public servant shall be deemed to have been placed under suspension from the date of the original order of dismissal, removal or compulsory retirement. The appellant contended that r. 12 (4) offended articles 14, 19 (1) (f), 31, 142 and 144 of the Constitution and was void. Held, that r. 12(4) did not offend any of the Articles of the Constitution and 'was valid. Article 142 provides that decrees passed by the Supreme Court shall be enforceable throughout the territory of India, and article 144 provides that all authorities, civil and judicial shall act in aid of the Supreme Court. Rule 12 (4) did not go against the decree of the Supreme Court. and accordingly it did not contravene articles 142 and 144. The declaration by the 230 Supreme Court that the appellant was a member of the service at the date of the institution of the suit was not affected by the appellant being placed under suspension. The only things affected by r. 12(4) were the salary and allowances of the appellant as to which the Supreme Court decree contained no directions. Rule 12(4) did not contravene article 19(1) (f). Conceding that the right to receive arrears of salary constituted the appellant 's property and that r. 12(4) placed substantial restrictions on the exercise of that right, the restrictions were in the interest of the general public. The taking of disciplinary action against public servants for inefficiency, dishonesty etc. was absolutely necessary in the interests of the general public. Suspension of the public servant pending enquiry was a necessary and reaso nable part of the procedure. Devendra Pratap vs State of U. P., [1962] Sapp. 1. section C. R. 315.1334, distinguished. The argument that there was discrimination between a public servant the penalty of dismissal etc. on whom was set aside by a court and another public servant a similar penalty on whom was set aside on appeal by the departmental disciplinary authority was incorrect. Rule 12(3) provided that in the latter case also the suspension of the public servant shall be deemed to have continued in force from the date of the original order of dismissal etc. Only in the case of a public servant who had not been placed under suspension pending enquiry, would r. 12 (3) not be operative. But such cases were rare. Rule 12(4) did n;t ' offend article 31 (1) and whatever deprivation of property resulted from r. 12 (4) was by authority of law.

minal Appeal No. 107 of 1961. Appeal by special leave from the judgment and order dated June 16, 1961, of the Bombay High Court in Cr. A. No. 21 of 1961. 345 Rajni Patel, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. H.R. Khanna, R. H. Dhebar and R. N. Sachthey, for the respondents. September 26. The judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave against the judgment of the High Court of judicature at Bombay raises the question of construction of s.3(b) of the Drugs Act, 1940, as amended by the Drugs (Amendment) Act, 1955, hereinafter called the Act. This appeal has been argued on the basis of facts found by the High Court. The appellant was carrying on business in the name of Deepak Trading Corporation at Bulakhidas Building, Vithaldas Road, Bombay. On December 27, 1958, the Sub Inspector of Police, accompanied by the Drug Inspector, raided the said building and found large quantities of absorbent cotton wool, roller bandages, gauze and other things. It was found that the appellant was not only storing these goods in large quantities but was actually manufacturing them in Bombay and passing them off as though they were manufactured by a firm of repute in Secunderabad. The samples of the aforesaid articles and lint were sent to the Government Analyst, who reported that out of the samples sent to him only the lint was of standard quality and the other articles were not of standard quality. The appellant was ' prosecuted before the Presidency Magistrate, 16th Court Bombay, for an offence under section 18 of the Act, inter alia, for manufacturing drugs which were not of standard quality. The learned Presidency. Magistrate acquitted the appellant on the ground that the prosecution had failed to prove that the articles were in the possession of the appellant. The High Court on a resurvey of the evidence came to a different conclusion and found that the said articles 346 were not only found in the possession of the appellant but also were manufactured by him and that they were below the standard prescribed. On the finding ', it convicted the. appellant and sentenced him to undergo rigorous imprisonment for three months and to pay a fine of Rs. 500/ under each count. Hence the appeal. Though an attempt was made to argue that the said articles had not been proved to be below the prescribed standard, it was subsequently given up ' The only question that was argued is whether the said articles are drugs within the meaning of section 3(b) of the Act. The said section reads ""drug" includes (i)all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the treatment mitigation or prevention of disease in human beings or animals other than medicines and substances exclusively used or prepared for use in accordance with the Ayur vedic or Unani systems of medicine, and (ii)such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals as may be specified from time to time by the Central Government by notification in the Official Gazette. The said definition of ""drug" is comprehensive enough to take in not only medicines but also substances intended to be used for or in the treatment of diseases of human beings or animals. This artificial definition 347 introduces a distinction between medicines and substances which are not medicines strictly so called. The expression "substances", therefore, must be something other than medicines but which are used for treatment. The part of the definition which is material for the present case is " 'substances invented to be used for or in the treatment". The appropriate meaning of the expression "substances" in the section is "things". It cannot be disputed, and indeed it is not disputed, that absorbent cotton wool, roller bandages and gauze are "substances" within the meaning of the said expression. If so, the next question is whether they are used for or in "treatment". The said articles are sterilized or otherwise treated to make them disinfectant and then used for surgical dressing; they are essential materials for treatment in surgical cases. Besides being aseptic these articles have to possess those qualities which are utilized in the treatment of diseases. Thus for instance, in the case of gauze one of the articles concerned in this appeal it has to conform to a standard of absorbency in order that it might serve its purpose: otherwise the fluid which oozes is left to accumulate at the site of the wound or sore. The Legislature designedly extended the definition of " 'drug" so as to take in substances which are necessary aids for treating surgical or other cases. The main object of the Act is to prevent substandard in drugs, presumably for maintaining high standards of medical treatment. That would certainly be defeated if the necessary concomitants of medical or surgical treatment were allowed to be diluted: the very same evil which the Act intends to eradicate would continue to subsist. Learned counsel submitted that surgical instruments would not fall within the definition and that gauze and lint would fall within the same class. It is not necessary for the purpose of this appeal to definite exhaustively "the 'substances" falling within the definition of " 'drugs"; and we consider that whether or not surgical instruments are drugs", the articles concerned in this case are. 348 Learned counsel for the appellant sought to rely upon a report of a high powered committee consisting of expert doctors, who expressed the opinion in the report that as the surgical dressings did not come under the purview of the Drugs Act, no control on their quality was being exercised. Obviously, the opinion of the medical experts would not help us in construing a statutory provision. We, therefore, hold, agreeing with the High. Court, that the said articles are substances used for or in the "treatment" within the meaning of section 3(b) of the Act. An impassioned appeal was made for reducing the sentences imposed upon the appellant. When a similar argument was advanced in the High Court, it pointed out that this was a gross case where large quantities of spurious drugs had been manufactured by the appellant and passed off as goods manufactured by a firm of repute. The appellant was guilty of an anti social act of a very serious nature. In our view, the punishment of rigorous imprisonment for three months was more lenient than severe. There is no case for interference with the sentences. The appeal fails and is dismissed. Appeal dismissed.

IN-Abs

The appellant was found in possession of large quantities of absorbent cotton wool, roller bandages and gauze which he had manufactured. On analysis these were found to be sub standard and the appellant was prosecuted under section 18 of the Drugs Act, 1940, for manufacturing sub standard drugs. He was convicted and sentenced to undergo rigorous imprisonment for three months and to pay a fine of Rs. 500/. The appellant contended that these articles were not drugs as defined in section 3(b) of the Act and that the sentence imposed was too severe. Held, that absorbent cotton wool, roller bandages and gauze were "drugs" within the meaning of section 3(b) and the appellant was rightly convicted. In the definition "drugs" "included substances intended to be used for or in treatment of diseases". "Substances" was something other than "medicines" and meant "things". The said articles were sterilized or otherwise treated to make them disinfectant; they were used for surgical dressings and were essential materials for treatment in surgical cases. The object of the Act of maintaining high standards of medical treatment would be defeated if the necessary concomitants of medical or surgical treatment were allowed to be diluted. Held, further,that the sentence erred on the side of leniency rather than severity and could not be reduced. It was a case where large quantities of spurious and sub standard drugs had been manufactured by the appellant. He was guilty of an antisocial act of a very serious nature.

Appeal No. 614 of 1961. APpeal by special leave from the judgment and decree dated December 22, 1959, of the Andhra Pradesh High Court, Hyderabad in Second Appeal No. 428 of 1959. A. V. Viswanatha Sastri and T.V.R. Tatachari, for the appellants. A.Ranganadham Chetty and P. D. Menon, for the respondent No. 1. 1962. September 26. S.K. DAs. J. This is an appeal by special leave and the short question for decision is the true scope and effect of section 4 of the Madras Irrigation Tanks (Improvement) Act, 1949 (Mad. XIX of 1949), hereinafter referred to as the Act. The section is in these terms : "No Court shall entertain any suit or appli cation for the issue of an injunction to restrain 310 the exercise of any powers conferred on the Government by section 3. " The courts below have dismissed the suit brought by the appellants, holding on a preliminary issue that section 4 aforesaid applies and the suit cannot be entertained. The question before us is, whether this finding is correct. We must first state the relevant facts. The appellants were the plaintiffs in the first court. They brought the suit in a representative capacity on behalf of the roots of several villages whose lands are irrigated by what is locally known as the "Gudur anicut system". There is a stream or small river known as Venkatagiri river which flows west to east and then takes a turn to the south. It passes by or near villages Chennur, Gudur, etc. The case of the appellants was that from time immemorial their lands were irrigated from four tanks; three of the tanks received their supply of water from the Venkatagiri river through a channel emanating from the Gudur anicut at a place called Ananthamadugu. The fourth tank also received its supply of water from the 'same river through a channel emanating from near the "Pumbaleru anicut" further down the river. In addition, a separate channel from the "Pumbaleru anicut" directly irrigated about Ac. 600 00 of land. It was stated that on the whole, about Ac. 4000 00 of the land of the appellants were irrigated in the manner indicated above under the "Gudur anicut system". The ryots of Chennur" a village situate higher up the river, had also a tank for irrigating their lands. These ryots made several attempts to secure a portion of the water of Venkatagiri river by having an anicut constructed over the river at a place called Gollapalli, about one mile up the river, in order to get supply of water to Chennur tank by means of a supply channel emanating from near the place of the proposed Gollapalli anicut. These attempts failed in 1929 1930. But they renewed their attempts 311 and in 1935, the Madras Government passed an order (G. O. No. 2241/1 dated October 16, 1935) directing the construction of an anicut at Gollapalli for supply of water to the Chennur tank with certain safeguards to ensure that the supply to the "Gudur anicut system" was not adversely affected and to utilise only the excess water going to waste during the flood season for the Chennur tank. The appellants objected to the scheme of G.O. No. 2241/1 dated October 16 1935 and the matter was further investigated by Government. Finally, G.O. No. 1161 dated May 6, 1939, was issued modifying the earlier order in some respects. In pursuance of that order, a masonry anicut known as the Chennur anicut was constructed in 1944, the details whereof were stated in exhibit A 6 and summarised in paragraph 11 of the plaint. With those details we are not at present concerned, except merely to state that the anicut consisted of two portions : a 'free ' portion 61 feet long on the west and a 'fixed ' portion about 11. 4 feet long, the free portion to be kept fully planked only when the river was in flood with a view to divert surplus water to Chennur tank and was not to be planked until the Gudur anicut was "surplusing". The appellants alleged that the Chennur ryots did not stick to the arrangements made as a result of G. O No. 1161 dated May 6, 1939, but renewed their attempts for getting a larger supply of water from Venkatagiri river and the appellants came to know that behind their back and without notice to them, the State Government passed another order in 1952 in which they directed (i) the extension of the Chennur anicut by another 46 feet. , (ii) removal of the dam stones and planks altogether and the construction of a permanent masonry wall over the crest of the anicut to the entire length of 175 feet, (iii) raising the height of the wall by 3 feet more, and (iv) installation of three vents with screw gearing shutters for the flow of water down the Chennur anicut. The appellants alleged that this would seriously affect their accustomed right to the supply of water from 312 Venkatagiri river under the "Gudur anicut system" and practically deprive them of water during the low supply and spring periods. They, therefore, prayed for a decree (a) declaring that the defendant has no right in the circumstances stated above to alter or extend or add to the Chennur anicut over Venkatagiri river at Gollapalli in any manner whatsoever; (b) for costs of the suit ; and (c) and for such other and further reliefs as in the circumstances the court may deem fit and proper in the circumstances. They specifically said in the plaint that it was not necessary to ask for a permanent injunction "as the defendant (meaning the State of Andhra Pradesh) was bound and certain to give effect to the declaration granted by the court". At first, the State of Andhra Pradesh was the only defendant. Certain other defendants, presumably ryots of Chennur, were made parties defendants on a later date. We have given above a summary of the case of the appellants as alleged in the plaint. A written statement was filed by the State of Andhra Pradesh, as also by the 4th defendant, in which it was averred that the proposed alterations to the Chennur anicut would not injuriously affect the rights of the appellants and certain details were given as to the flow of water in the river at different times. As we are no deciding this case on merits, we are not proposing to enter into those details. By a supplemental written statement the defendant State, respondent before us, took the plea that section 4 of the Act was a bar to the entertainment of the suit. This plea was taken up for trial as a preliminary issue. The trial court held in favour of the State. An appeal to the District 313 judge failed and so also a Second Appeal to the High Court. The points which have been urged on behalf of the appellants are these : (1)The provisions of section 3 (1) of the Act are restricted to effecting improvements to a tank as defined in s.2 (d), and such improvement covers, for example, raising the height or increasing the width of the band, or lengthening the wear, or extending the bed of the tat*; it may even extend to improving the supply channel but does not go any further ; the State Government in proposing the alterations in the Chennur anicut arc proposing to do something which is in excess of the powers given by section 3 (1) and, therefore, section 4 does not bar the entertainment of the suit of the appellants. (2)On any view, section 4 bars the entertainment of a suit for the issue of an injunction to restrain the exercise of powers conferred on the Government by section 3 (1); the present suit is not a suit for injunction and the appellants have specifically said that they do not ask for an injunction; therefore, section 4 is no bar. (3)The State Government did not purport to act under section 3 (1) when they passed G. O. Ms. 53 F. and A (F.P.) dated February 15, 1952, and as they did not issue a notice as required by r. 5 of the Madras Irrigation Tanks (Improvement) Rules, 1050, the action proposed to be taken by them cannot come under section 3 (1); therefore, section 4 does not apply. (4)Section 3 (1) is ultra vires the Constitution and section 4 must fall within s.3. We shall now proceed to consider these points one by one. Earlier in this judgment, we have read section 4 of the Act. That section is closely connected 314 with sub section (1) of s._3 and we may now set out that sub section. "section 3 (1) Notwithstanding anything contained in any other law for the time being in force, the Government shall have power to raise the full tank level of any tank or to take any other measures for increasing its capacity or efficiency, wherever it may be situated and whether in a ryotwari, zamindari, inamdari or other area. " It will be useful if we briefly refer here to the preamble and some of the other provisions of the Act in order to show what is the object or purpose of the Act. The long title of the Act shows that it is an Act "to empower the State Government to increase the capacity and efficiency of irrigation tanks in the State of Madras. " The preamble also states : "Whereas it is expedient to empower the State Government to increase the capacity and effi ciency of irrigation tanks in the State of Madras;. " Section 2(d) of the Act defines a tank to mean an irrigation tank in the State of Madras. Then come ss.3 and 4 which we have already quoted. Section 5 deals with the payment of compensation where, in consequence of anything done in pursuance of section 3, the owner of any land or property sustains loss or damage including any diminution of the supply of water to any land or any tank or other source from which water is supplied. The compensation is to be determined in the manner laid down in s.5. Section 6 provides for an appeal against the Order of the Collector under section 5 to the Subordinate Judge 's court having jurisdic tion over the area in which the land or property for the damage to which compensation is to be paid is situated. Section 7 deals with the power to make rules and one of the rules, viz., rule 5 of the Madras Irrigation Tanks (Improvement) Rules, 1950, made in pursuance of that power will be considered by us later. 315 Very briefly put, the object of the Act is to increase the capacity and efficiency of irrigation tanks in the State of Madras and section 3 (1) gives the State Government power to take measures for the purpose of increasing the capacity or efficiency of irrigation tanks, whether the irrigation tanks be situated in a ryotwari, zamindari, inamdari or other area. Obviously, the purpose is to increase facilities for irrigation of agricultural lands from irrigation tanks. Now,, there is no dispute before us that the Chennur tank as well as the four tanks from which the appellants get a supply of water for irrigating their lands are irrigation tanks within the meaning of the Act. The controversy before us has centered round the expression "to take any other measures for increasing its capacity or efficiency. " The expression "its capacity or efficiency" undoubtedly means the capacity or efficiency of the irrigation tank in ques tion which, in this case, is the Chennur tank. The word 'capacity ' in its ordinary dictionary sense means "holding power" or "receiving power" and must, we think, depend on the cubic content of the tank. Learned counsel for the respondent State has conceded before us that the proposed alterations in the Chennur anicut do not increase the capacity of the Chennur tank. He has however very strongly contended that the proposed alterations in the Chennur anicut will increase the efficiency of the Chennur tank by making a larger supply of water available within the holding power of the tank. He has also contended that there is no reason why a narrow interpretation should be put on section 3 (1) so as to restrict the improvement measures to the width, breadth or depth of the tank or its supply channel only. He has submitted that if by the proposed 'alterations in the Chennur anicut there is a, larger supply of water to the Chennur tank through its supply channel, then the measures which 'the State Government are proposing to take are undoubtedly measures 'for increasing the efficiency of 'the Chennur tank. Learned counsel for the appellants, 316 on the other hand, has submitted that the word `efficiency ' read in the context of the definition clause in section 2 (d), means only efficiency in the distribution of water from the tank itself. The same contentions were urged in the High Court also and, dealing with these contentions, the learned Chief justice said : ""The efficiency of a tank depends in a large measure upon the quantity of Water that is available for irrigation purpose. Without sufficient volume of water, a tank could not fulfill the purpose for which it was dug. Therefore, it should have sufficient quantity of water to maintain 'its efficiency '. To construe it in the manner suggested by the counsel for the appellants is to deprive these words of a part of their content. " We are in agreement with the view thus expressed by the learned Chief justice. Learned counsel for the appellants has submitted that the Chennur tank and its supply channel only can be the objects of improvement measures by the State Government, but not the Chennur anicut on the Venkatagiri river. We are unable to agree and see no reason why such a narrow construction should be put on sub section (1) of section 3. The supply channel to the Chennur tank takes off water from the Venkatagiri river and it starts from near the Chennur anicut. It is obvious that if the supply channel does not supply sufficient water to the tank, then the tank loses its efficiency. If the supply of water is increased, then the efficiency of the tank is also increased. The proposed alterations in the Chennur anicut are intended to increase the volume of water which will go through the supply channel to the Chennur tank and in that sense, the measures proposed to be taken are measures to improve the efficiency of the Chennur tank. A question was mooted before us as to how far the State Government can go up the river in order to improve the Chennur tank. Perhaps, the answer to that question is that 317 the improvement measures proposed to be taken must have a direct and proximate relation to the tank, the efficiency of which is ' to be increased. The State Government cannot go up the river to a distance of several miles and take measures which have no direct or proximate relation to the tank in question. In the case before us, however, the supply channel to the Chennur tank emanates from the very place where the Chennur anicut has been made. Obviously, therefore, the Chennur anicut is meant for the purpose of feeding the supply channel to the Chennur tank. The connection is both direct and proximate. We are, therefore, of the opinion that the view concurrently taken by the courts below is the correct view and the measures which the State Government are proposing to take in the matter of improving the Chennur anicut are measures which come within section 3 (1) of the Act. The first contention urged on behalf of the appellants must therefore be overruled. counsel for the appellants wished to read from the speeches made by some of the members of the State legislature and the answers given by the Minister piloting the Bill, in order to show that section 3 (1) was not intended to cover alterations to an 'anicut '. It is, however, well settled and this court has so ruled in more than one decision, that legislative proceedings cannot be referred to for the purpose of construing an Act or its provisions, though such proceedings may be relevant for the proper understanding of circumstances under which the legislation was passed and the reasons which necessitated it. Learned counsel for the appellants has also referred to the provisions of the Madras Irrigation Works (Repairs, Improvement and Construction) Act, 1943 (Mad. XVII of 1943) and submitted that those provisions authorised the Government to repair or improve irrigation works or construct new irrigation works. This contention was also considered by the learned Chief Justice, and he 318 rightly pointed out that the scope of the two statutes was different : one dealt with private irrigation works and the other with improvement of irrigation tanks situate in a ryotwari, zamindari, inamdari, or other area and furthermore, the proposed alterations in the Chennur 'anicut ' would not amount to improvement of any irrigation work within the scope of the 1943 Act. We proceed now to a consideration of the second point. Here again, we think that the courts below are right. It is indeed true that the appellants did not formally ask for an injunction; but , in effect, what they asked for was a declaration which they said the State Government must obey and. would be thus restrained from exercising the powers conferred on it by section 3 (1). We agree with the courts below that having regard to the pleadings and the reliefs asked for, the suit was in reality a suit for restraining the State Government from exercising its powers under section 3, though framed in such a manner as to give the appearance of a suit for mere declaration. In our opinion, it would be a circumvention of section 4 to entertain a suit of this nature. Under section 42 of the Specific Relief Act, any person entitled to any right as to any property may institute a suit against a person denying such right, and the court may, in its discretion, make therein a declaration that he is so entitled; but no court shall make a declaration which would be futile, assuming that by reason of section 4 of the Act the appellants are prohibited by law from asking for an injunction. If, on the contrary, the State Government be bound by the declaration asked for (if granted by the Court) as is pleaded by the appellants, then the effect would be to restrain the State Government from exercising its powers under section 3(1) of the Act. If that be the true nature of the reliefs asked for by the appellants, section 4 would undoubtedly apply and the entertainment of the suit would be barred under that section. Learned counsel for the 319 respondents suggested an alternative submission for our consideration. He attempted to construe section 4 in such a way as would, in his view, bar even a suit for declaration against the State Government. This construction introduced into the section a number of words which do not occur there and dissected 'the section in a way not warranted by the plain words used therein. We have come to the conclusion that the somewhat novel reconstruction of section 4 attempted by learned counsel for the respondent State does not merit any further examination and we prefer to rest our decision as to the second point on the finding concurrently arrived at by the courts below. As to the third point, it may be disposed of on a very short ground. The High Court has rightly pointed out that the order dated February 15, 1952, (exhibit B 1) was based on the communication of the Board of Revenue dated April 8, 1950 (exhibit B 10) and that communication states clearly enough that Government was advised that it could take action under section 3 (1) of the Act. Obviously., therefore, it is not correct to say that Government did not purport to exercise its powers under section 3(1) as the order (exhibit B 1) did not mention it. If the entire proceeding is considered, it is clear that Government was purporting to act under the powers given to it by section 3 (1). Rule 5 of the Madras Irrigation Tanks (Improvement) Rules, 1950 states: " 'A notice specifying the nature of the improvement to be effected under section 3 and the probable cost thereof, according to the technical plan and estimate, shall, in all cases, be polished or caused to be published by the Collector of the district. The notice shall be in form B. Such publication shall be (1) in the District Gazette; 320 (2) by affixture at the site of the proposed work; (3) by affixture in the village Chavadi in the village or villages where the lands under ayacut of the tank and the lands proposed to be benefitted under the work are situated; and (4) by beat of tom tom in the said village or villages. " The argument based on this rule is that the notice required by it in not having been published, it must be held that the State Government. did not purport to act under section 3; secondly, the rule being mandatory in nature, failure to publish the notice as required by the, rule invalidates the order of the State Government dated February 15, 1952, (exhibit B 1). We are unable to accept either of these two contentions as correct. We have already pointed out earlier that exhibit B 10 on which exhibit B 1 is based, shows that the State Government was proposing to exercise its powers under section 3 (1) and asked the Board of Revenue "to get suitable rules and regulations made. " Secondly, the High Court rightly pointed out that the proposed action had not been taken when the appellants filed their suit and there was still time for the State Government to publish the notice under r. 5. In this view of the matter, it is unnecessary to determine at this stage whether r.5 is mandatory or merely directory, and we do not think that non publication of the notice in the circumstances can stand in the way of the application of section 4 of the Act. As to the fourth and last point, it is sufficient to point out that the validity of section 3(1) was not challenged in any of the courts below and in an appeal by special leave, counsel for the appellants cannot be allowed to take a point which was not urged before. 321 For the reasons given above, we would dismiss this appeal with costs. We may, however, point out that Narasimham, J., in the course of his judgment made some observations regarding the merits of the claim of the appellants which were not justified and may prejudice the appellants in subsequent proceedings. The learned judge said that it was not correct to say that the appellants would suffer diminution of water supply by reason of the proposed alterations in the Chennur anicut; and furthermore that the proposed measures would augment the supply of water to both Chennur ryots and Gudur ryots. Perhaps, the learned judge forgot that he was not dealing with the case on merits. The only point before him was whether section 4 barred the entertainment of the suit. We must therefore say that the learned Judge 's observations on the merits of the claim of either party were premature and not necessary for determination of the only issue which was before the court. Appeal dismissed.

IN-Abs

The lands of village Gudur were irrigated by tanks which received water from the Venkatagiri river through the "Gudur anicut system". The Government proposed to make alterations in the Chennur anicut up the river for supplying water to the Chennur tank for irrigating lands of village Chennur. The residents of village Gudur filed a suit for a declaration that the Government had no right to alter or extend or add to the Chennur anicut over the river, and stated in the plaint that it was not necessary to ask for a permanent injunction as the Government was bound to give effect to the declaration granted by the Court. Held, that the suit was barred by section 4 of the Madras irrigation Tanks (Improvement) Act, 1949. Section 4 provided 309 that no court shall entertain any suit for an injunction to restrain the exercise of any powers conferred on Government by section 3. Section 3 empowered the Governtnent to "raise the full tank level of any tank or to take any other measures for increasing its capacity or efficiency". The proposed alterations were within section 3 as they would increase the efficiency of the Chennur tank by making a larger supply of water available within the holding power of the tank. It was not correct to say that section 3 only authorised improvements in the tank itself or in the supply channels from the tank but not in the anicut. Though the plaintiffs did not formally ask for an injunction, the suit, in effect, was one for an injunction to restrain the Government from exercising its powers under section 3. It is clear that the action proposed to be taken by Govern ment was under the powers given under s.3. The mere fact that no notice as required by r. 5 specifying the nature of the improvement, its cost etc. was issued did not indicate that the action was not under section 3 nor did it invalidate the order proposing the improvement. The proposed action had not been taken when the suit was filed and there was still time to publish the notice.

iminal Appeals Nos. 62 and 63 of 1958. Appeals from the judgment and order dated April 15, of the Allahabad High Court in Criminal Appeals Nos. 1332 and 1476 of 1954. A. N. Mulla, B. B. Tawakley, J. P. Goyal, A. Banerji and K. P. Gupta, for the appellants. G. C. Mathur and C. P. Lal, for the respondents. September. The judgment of the Court was delivered by MUDHOLKAR, J. These are appeals by a certificate granted by the High Court of Allahabad. They arise out of the same trial. : The appellants in both the appeals except Chandrika Singh were convicted by the Second Additional District & Sessions judge, Kanpur, of offences under section 471, Indian Penal Code read with sections 467 and 468, I.P.C. and sentenced variously. Tulsi Ram, Beni Gopal and Babu Lal were each convicted of offences under section 417 read with section 420 and Moti Lal of, offences under section 417, I.P.C. and Lachhimi Narain of offences under section 420, I.P.C. Separate sentences were awarded to each of them in respect of these offences. All the six appellants 384 were, in addition, convicted under section 120 B, I.P.C. and sentenced separately in respect of that offence. In appeal the High Court set aside the 'conviction and sentences passed on Tulsi Ram, Beni,, Gopal, Babu Lal and Moti Lal of offences under, section 471 read with sections 467 and 468, I.P.C. and also fitted Moti Lal of the offence under section 417, I.P.C.It however, upheld the conviction of all the appellants under section 120B, I.P.C. as well as the conviction of Tulsi Ram, Beni Gopal and Babu Lal of offences under section 417 read with section 420, I.P.C. As regards Lachhimi Narain it maintained the conviction and sentences passed by the Additional Sessions judge in all, respects and dismissed the appeal in toto. The relevant facts arc as follows : The appellants, other than Chandrika Singh, are members of a Marwari trading family belonging to Rae Bareli and Chandrika Singh was their employee. The relationship amongst Lachhimi Narain and the first four appellants in Crl. A. 62 of 1958 would be clear from the following genealogical table Bhairo Prasad Sri Niwas (accused) Sagar Mal : : : Lachhimi Tulsi Gobardhan Pahlad Narain Gopal Ram das Rai : Babu Lal : (Suraj Mal minor) Nand Lal (deceased) Moti Lal Parshottamdas (died during pendency of the case). 385 It is common ground that Lachhimi Narain was the Karta of the family and the entire business of the family was done under his directions and supervision. This fact is material in view of the defence taken by the first four appellants in Crl. A. 62 of 1958. It is common ground that the family carried on business in the names and styles of (1) firm Beni Gopal Mohan Lal with head office at Rae Bareli, (2) Tulsi Ram Sohan Lal with head office at Lalgunj in the district of Rae Bareli, (3) firm Bhairon Prasad Srinivas with head office at Rae Bareli, (4) firm Gobardhan Das Moti Lal with head office at Madhoganj in the district of Partapgarh and (5) firm Sagarmal Surajmal with head office at Unchahar in the district of Rae Bareli. Though different members of the family were shown as partners in these five firms, one thing is not disputed and that is that the business of each and every one of these firms was being conducted by and under the orders and directions of Lachhimi Narain though in point of fact he was shown as partner along with his father Sri Niwas and brother Pahlad only in the firm of Bhairo Prasad Srinivas. It is common ground that in May, 1949, the firm Bhairo Prasad Srinivas was appointed the sole importer of cloth for distribution amongst wholesalers in the Rae Bareli district. Prior to the appointment of this firm as sole importer a syndicate consisting of four firms of Rae Bareli was the sole importer of cloth in that district. It would, however, appear that this syndicate failed to take delivery of large consignments of cloth with the result that the Deputy Commissioner discovered that cloth bales valued at about Rs. 2,25,000/ were lying at the railway station and demurrage on the consignment was mounting every day. It is not disputed either that it was at the instance of the Deputy Commissioner that the firm Bhairo Prasad Srinivas agreed to act as sole importers take delivery of the cloth and distribute it 386 amongst wholesalers. They were also required to take delivery subsequently of cloth worth 'over Rs. 23 lakhs. This firm and one other allied firm were also importers and distributors of foodgrains and salt in the district. Both the courts below have held that in order to obtain short term credits the appellants hit upon an ingenious device and succeeded in securing credits to the tune of Rs. 80 lakhs between May, 1949, and December, 1949. While the appellant Lachhimi Narain has throughout admitted that such a device was resorted to, the other appellants denied any knowledge of the aforesaid device. The particulars of the device adopted are these: A partner or an employee of one of the firms booked small consignments of say two or three bags of rape seed, poppy seed or mustard seed from various stations in Rae Bareli and Partapgarh districts to various stations in West Bengal, including the city of Calcutta. The person concerned used to execute for warding notes and obtain railway receipts in respect of such consignments. These receipts were prepared by the railway authorities in triplicate, one being given to the consignor, one sent to the destination station and one kept on the record of the forwarding station. The consignor 's foil of the railway receipt was then taken to Rae Bareli and there it was tampered with by altering the number of bags, the weight of the consignment and the freight charges. All this was admittedly done by minims under the direction of Lachhimi Narain himself. These forged railway receipts were then endorsed by the consignor in favour of one or other of the firms Beni Gopal Mohan Lal, Tulsi Ram Sohan Lal, Sagarmal Soorajmal or Bhairo Prasad Srinivas and thereafter these firms drew large sums of money commensurate with the huge quantities of goods specified in the forged railway receipts and on the security of these railway receipts drew demand drafts or hundis in 387 favour of variour banks and two firms in Kanpur as payees on a firm styled as Murarka Brothers, Calcutta, as drawee. It may be mentioned that this firm was established by the family in Calcutta about a year or so before the transactions in question were entered into. After this firm was established in Calcutta Lachhimi Narain opened an account in the name of the firm in the Calcutta Branch of the Allahabad Bank and authorised Babu Lal and Chandrika Singh, who was originally an employee of the firm Bhairo Prasad Srinivas and was transferred to Calcutta, to operate on the account. The banks which discounted the hundis and the drafts were the Kanpur branches of the Bank of Bikaner, the Bank of Bihar, the Bank of Baroda and the Central Bank of India and the firms were Matadin Bhagwandas and Nand Kishore Sitaram, both of Kanpur. These payees realised the amounts by presentation of the hundis and railway receipts to Murarka Brothers at Calcutta. The banks obtained payment through their branches in Calcutta while the two firms obtained payments through certain banks. To enable Murarka brothers at Calcutta to honour the hundis on presentation Lachhimi Narain and Tulsi Ram, the _acquitted accused Srinivas and a munim of theirs named Hanuman Prasad, who was also an accused but died during investigation, used to get money transmitted from the firms ' account in the Rae Bareli, Lucknow and Kanpur branches of the Allahabad Bank to the ac count of Murarka Brothers at Calcutta by telegraphic transfers. Delivery of the consignments despatched by the partners or the employees of the various family firms could obviously not be taken with the help of forged railway receipts because had that been done the fraud would have ' been immediately discovered. Instead, delivery was taken through commission agents on indemnity bonds on the allegation that the railway receipts had been lost. Such bonds were executed either by one of the partners or by an employee and after getting them verified by the station masters and 388, goods clerks of the booking stations they were endorsed in favour of the consignees. It has been established by evidence and it is not disputed before us that these consignees in fact took delivery of the small consignments at the special request of Lachhimi Narain, disposed of the consignments and credited the sale proceeds to the account of Bhairo Prasad Srinivas or Murarka Brothers at Calcutta. The bulk of these forged railway receipts is not forth coming, presumably because, they have been destroyed after the hundis supported by them were honoured and the receipts received from the banks or the firms which were payees under the hundis. It is the prosecution case that the banks and the firms obtained discount charges of one or two annas per cent for the amounts paid by them, although had the family firms obtained these amounts by way of loan they would have been charged interest at 6 to 9 per cent on these amounts. Towards the end of December, 1949, the Kanpur branch of the Bank of Bikaner and the Bank of Bihar received back a number of hundis unhonoured along with corresponding forged railway receipts. The Bank of Bikaner received five hundis for an amount of Rs. 3,52,000/ out of which hundis worth Rs. 1,82,000/ had been negotiated by the bank directly with the firm Bhairo Prasad Srinivas and hundis worth Rs. 1,70,000/ through Nand Kishore Sitaram. Six hundis were received back by the Bank of Bihar, Kanpur, valued at Rs. 1,92,000/ . These were negotiated through Matadin Bhagwandas. The bank adjusted the account by debiting Matadin Bhagwandas with the amount. These unpaid payees instituted inquiries from the consignees and the railways and came to know that the railway receipts offered as security to them were forged. These railway receipts have been exhibited in this case in order to prove the charge of forgery. 389 After the cheating practised by the family firms and forgeries committed by them came to light, Daya Ram, P. W. 62, a partner in the firm Matadin Bhagwandas filed a complaint before the City Magistrate, Kanpur on January 4, 1950, and B. N. Kaul, Manager of the Bank of Bihar, lodged a report the police station, Colonelganj, Kanpur, on January 18, 1950. The appellants, except Chandrika Singh executed a mortgage deed on January 5, 1950, in favour of the Bank of Bikaner for Rs. 3,62,000/which included Rs. 3,52,000/ due on unpaid hundis interest and other charges. According to the prosecution, Bhairo Prasad Srinivas paid the firm Matadin Bhagwandas Rs. 1,00,000/ and that Lachhimi Narain executed a promissory note for the balance of Rs. 92,000/_ in their favour. According to the defence, however, the criminal case filed by Matadin Bhagwandas was compounded by payment of the amount settled between the parties and that as a result they stood acquitted of the charge contained in the complaint of Matadin Bhagwandas. The appellant, Lachhimi Narain, has taken all the blame upon himself He not only admitted that he had obtained credit to the tune of Rs. 80 lakhs on the security of railway receipts in which the quantities of goods consigned had been increased, but also admitted that he had got the quantities inflated by his munims, Raj Bahadur and Hanuman Prasad, both of whom are dead. According to him, except for the complicity of the two munims the whole thing was kept a secret from everybody else. His defence further was that he had committed ' no offence as he intended to pity, off and did pay off the entire amount raised. The other appellants 'admitted that each of them had played some part or other in these transactions but denied having been a member of the conspiracy and contended what each of them did was ,it the bidding of Lachhimi Narain, 390 The first point raised by Mr. A. N. Mulla on behalf of the appellants was that no sanction as required by section 196A of the Code of Criminal Procedure was on the record of the case and, therefore, the entire proceedings are void ab initio. He admitted that there is a document on record, exhibit P 1560, which is a letter addressed by Mr, Dave, Under Secretary to the Government of U. P., Home Department to the District Magistrate, Kanpur informing him that the Governor has been pleased to grant sanction to the initiation of proceedings against the persons mentioned in that order. But according to Mr. Mulla, this communication cannot be treated "either as a valid sanction or its equivalent". He points out that for a sanction to be valid it must be by a written order signed by the sanctioning authority and that no one can function as a substitute for the sanctioning authority nor can oral consent, even if it was given, be deemed in law to be valid. He further contended that the document on record does not show on its face that the facts 'of the case were considered by the Governor. His argument is that had the true facts of this case been placed before the Governor, that is, that the firm Bhairo Prasad Srinivas never sought its appointment as sole importer of cloth for Rae Bareli district, that the firm was in fact prevailed upon by the Deputy Commissioner to take up the work and help the Government in a critical situation, that though large credits were undoubtedly obtained by making fraudulent representations and committing forgeries it was never the intention of Lachhimi Narain to cause loss to anyone, that in fact everyone has been paid in full, and that the prosecution was launched not at the instance of any of these persons but at the instance of the railway authorities and that, therefore, no useful purpose would be served by launching a prosecution, sanction would not have been given. We did not permit Mr. Mulla to raise this point because it is not a pure question of law but requires 391 for its decision investigation of facts. It is not his contention that there was no sanction at all but the gravamen of his complaint is that there is no proper proof of the fact that sanction was given by the authority concerned after considering all the relevant facts and by following the procedure as laid down in article 166 of the Constitution. Had the point been raised by the appellant in the trial court, the prosecution would have been able to lead evidence to establish that the Governor had in fact before him all the relevant material, that he considered the material and after considering it he accorded the sanction and that that sanction was expressed in the manner in which an act of the Governor is required to be expressed. Mr. Mulla, however, says that section 196A of the Code of Criminal Procedure is a sort of brake on the power. , of the criminal court to enquire into the charge of conspiracy, that the court does not get jurisdiction to enquire into that charge unless the brake is removed and that it is, therefore, essential for the prosecution to establish that the brake was removed by reason of the fact that the appropriate authority had accorded its sanction to the prosecution after complying with the provisions of law and that it was not obligatory on the defence to raise an objection that there was no proper sanction. There would have been good deal of force in the argument of learned counsel had exhibit P. 1560 not been placed on record. Though that document is not the original order made by the Governor or even its copy, it recites a fact and that fact is that the Governor has been pleased to grant sanction to the prosecution of the appellants for certain offences as required by section 196A of the Code of Criminal Procedure. The document is an official communication emanating from the Home Department and addressed to the District 'Magistrate at Kanpur, A presumption would, therefore, arise that sanction to which reference has been made in the document, had in fact been accorded. Further, since the communication is an official one, a presumption would also arise 392 that the official act to which reference has been made in the document was regularly performed. In our opinion, therefore, the document placed on record prima facie meets the requirements of section 196A of the Code of Criminal Procedure and, therefore, it is not now open to the appellants to contend that there was no evidence of the grant of valid sanction. We, therefore, overrule the contention raised by learned counsel . The next point urged by Mr. Mulla is that the charge as framed jumbles up several offences and, therefore, has led to miscarriage of justice. This also is not a point which had been taken up in the courts below. That apart, we do. not think that there is any substance in this point. The objection is with respect to the first charge which reads as follows: " 'That between the months of May 1949 and December 1949 both months inclusive, in the district of Rae Bareli, Pratabgarh and Kanpur, Sri Niwas, Lachhimi Narain, Tulsi Ram, Beni Gopal, Babulal, Moti Lal, Brij Lal Coenka, Chajju Lal and Chandrika Singh agreed to do amongst themselves and the deceased Hanuman Prasad and Purshottom Dass or caused to be done illegal acts viz. the act of cheating the (1) Bank of Bikaner, Kanpur, (2) Bank of Baroda, Kanpur (3) Bank of Bihar, Kanpur, (4) Central Bank of India, Kanpur, (5) M/s. Matadin Bhagwan Dass, Kanpur and (6) M/s. Nand Kishore Sitaram of Kanpur by dishonestly inducing them to part with huge sums of money on the basis of hundis drawn on Murarka Bros., Calcutta covered with securities knowing such R/Rs. to be forged and cheated the aforesaid Banks and Bankers by using forged documents as genuine knowing them to be forged in pursuance of a common agreement amongst them all and thereby committed an offence punishable under section 120B read with sections 467/468/ 393 471 and 420 of 'the Indian Penal Code and within the cognizance of the court of Sessions. " It is the concluding portion of the charge to which learned counsel has taken objection. We do not think that there has at all been any jumbling up of the charges. The charge is just one and that is of conspiracy. A reference is made to other sections of the Code to 'indicate the objects of the conspiracy that is, to cheat and to commit forgery. The charge by referring to Various sections of the Indian Penal Code merely makes it cleat that the object of the conspiracy was to forge railway receipts '. which were valuable securities to commit forgeries for the purpose of cheating, to use forged documents as genuine. What was meant by the charge Was apparently fully under stood by the appellants because they never complained at the appropriate stage that they were confused or bewildered by the charge. In the circumstances, therefore, we overrule this objection also ' of learned counsel. Since the commission of forgeries by Lachhimi Narain could not be denied what we have next to acertain is whether Lachhimi Narain is guilty of cheating and if so whether section 420, I.P.C. As held by the learned Additional Sessions Judge and the High Court or under section 417, I. P.C. as contended before us. Learned counsel points out and rightly, that for a person to be convicted under section 420, I. P.C. it has to be established not only that he has cheated someone but also that by doing so. he has dishonestly induced the person who was cheated to deliver any Property etc. A person can be said to have done a thing dishonestly if he does so with the intention of causing wrongful 'gain to one person or wrongful loss to another person. Wrongful loss is the loss by unlawful means of property to which a person is entitled while wrongful gain to a person means a gain to him by unlawful means of property to which 394 the person gaining is not legally entitled. Learned counsel contended that there has been no wrongful loss whatsoever to the banks and the two firms which discounted the hundis drawn by one or the other of the firms owned by the family . The High Court has held that these firms did sustain a wrongful loss inasmuch as they got very meagre amounts for discounting the hundis whereas had the true facts been known to them, they would not have discounted the hundis though they may have advanced loans and charged interest at between 6 and 9% on the amounts advanced. It was because of the fraudulent misrepresentation made to the banks and the firms that they lost what they could have otherwise been able to obtain and thus wrongful loss has been caused to them. We, have been taken through a large number of documents on the record and it is clear from these documents that those who discounted the hundis in question were entitled to charge, apart from the discount charges, interest at 6% or above in case of non payment within 24 hours of presentation. A reference to some of the exhibits 1440 to 1454 which are the debit vouchers of the Bank of Bikaner and Exs. 1330 to 1345 which are debit vouchers of the Bank of Bihar clearly show that in fact interest in the case of the first Bank at 6% and in the case of the second at 9% was charged, debited and realised by these banks from the firms in question for the entire, period during which the hundis though presented, remained unpaid. These documents are only illustrative but they do indicate that in fact the banks were not deprived of interest. Learned counsel pointed out that the Managers and officers of the Banks and the firms were examined and they do not say that any loss of interest was caused to them in these transactions. Mr. Mathur who appears for the State, however,, pointed out that in the nature of things the hundis could not be presented for payment in less than ten days and in this connection he referred to Exs. P. 1106 and 1055. These are records of bills purchased by the Central Bank of 395 India, Kanpur. He referred us to the penultimate columns of these exhibits headed 'date enquired on" and contended that this column contained the date of presentation. As an illustration he referred us to the first entry dated June 10. It was the date on which the hundi was discounted by the Central Bank of India and then he said that the date in the penultimate column is June 20 which means that the hundi was presented on June 20. According to him, therefore, for this period of ten days and for 24 hours thereafter the bank would have got only the discount charges and no interest. The hundi in question was realised on June 25 and, therefore, according to him all that the bank must have got was interest for four days. But it may be pointed out that the heading of the penultimate column has not been correctly reproduced in the paper book. We have been referred to the original and there the heading is "Date enquired". Bearing in mind this fact as well as the entry in the last column which is headed "non payment advice sent" we think that what is stated in the penultimate column is not the date of presentation at all but some other date. Unfortunately there is no column in either of the documents to show the date of presentation. Therefore, these documents do not help the State at all. Apart from that we may mention that it was for the Bank to take care to see that there was no delay in the presentation of hundis and if they themselves delayed they had to take the consequences. Further, we may point out that if the Bank was not able to earn interest or earn only very little interest in these transactions for as long as ten days that would have been so in all the transactions, that is, not merely transactions which were supported by forged railway receipts but also transactions which were supported by genuine railway receipts. There is, therefore, no substance in the contention of Mr. Mathur. Mr. Mathur then contends that the fact that the banks stood the risk of losing their moneys 396 because the railway receipts which supported the bills were forged documents, wrongful loss must be deemed to have been caused to the banks by the action of the firms. There is considerable force in this argument but we do not wish to express any final opinion thereon, because in our opinion the firms of the appellant have undoubtedly made an unlawful gain. No doubt, Mr. Mulla contended that because the firms were able to obtain temporary credits on the basis of their hundis, it cannot be said that they have made any wrongful gain to themselves. His contention is that the firms had good credit in the market and for obtaining credit in the transactions in question they gave good equivalents in the shape of hundis. He also pointed out that out of the 180 odd hundis drawn by the firms only a very few were dishonoured and that this happened only in the month of December, 1949. It was not shown. , he proceeded, that Murarka Brothers on whom the hundis were drawn were not throughout the period of nine months when the transactions were entered into, in a position to meet the hundis. Out ' of hundis worth Rs. 80 lakhs those 'worth Rs. 74 lakhs were in fact honoured and even the remaining hundis is would have been honoured but for the fact that there was slump in the market and cotton, bales, worth Rs.12 lakhs belonging to the appellants were lying pledged in, the godowns of the Central Bank of India for securing an amount of Rs. 9 lakhs. Had these bales been sold in the normal course there would have been no crisis in December of the kind which occurred and ' led 'to the dishonourment of certain hundis, in which the Bank of Bikanet and Matadin Bhagandas were payees: Bearing in mind all these facts, learned counsel wants us to draw he inference that the obtaining of credit was not on the security of forged railway receipts but oh the security of hundis themselves which were drawn by parties who had credit in the market and drawn on a party ;which has not been shown not to be possessed 397 of adequate funds to meet the hundis throughout period covered by the transaction& We do riot think that the argument of learned counsel has much force. B. N. Kaul, (P.W. 32), the Manager of the Kanpur branch of the Bank of Bihar, has said that he purchased hundis because the railway receipts; showed that the consignments were large and their value, was commensurate with the amount for which the bills had been drawn. He added that he would not have purchased these hundis if the consignments, were for very small quantities, apparently meaning thereby that if the value of the consignments was not commensurate with, the amount to be advanced he would not have purchased the hundis. Apart from the evidence of Kaul there is also other evidence to ' show that the real basis of discounting bills was not merely the credit of the appellant or the security, afforded by, these bills. Thus evidence is in consonance with, the normal banking practice of discounting hundis, only when they are supported by railway receipts, of, consingnments despatched by the drawer to, outside parties. No doubt, bills or hundis are themselves securities and taking into consideration the credit of the drawer of a hundi a bank may conceivably discount such hundis but where the, hundis are themselves supported by railway receipts it would be futile to say that the railway receipts were not intended by the parties to be regarded as further security for discounting the bills. Where a consignor of goods draws a hundi for the price of the consignment on some bank or firm and supports that hundi with the railway receipt obtained by him, in respect of the consignment, the party in fact pledges the consignment to the bank discounting the hundi and, there fore, in such a transaction the railway receipt cannot be regarded as anything else than a security for that transaction. If that security turns out to be worthless or practically worthless because the value of the consignment is only a fraction of what it was represented to be, the discounting of the hundi by, the party 398 drawing it must necessarily be regarded as unlawful. It would thus follow that the firms in question made a gain by obtaining credits and that these credits were obtained by them by resorting to unlawful means. The gain they made was, therefore, unlawful. Mr. Mulla contended that for an act to be regarded as dishonest it is not enough to show that one person deceived another and thereby made a wrongful gain but it is further necessary to show that as a result of the deception the other person sustained wrongful loss. In support of his contention he has relied upon the decision in Sanjiv Ratanappa Ronad vs Emperor (1). That was a case where the first accused who was a police Sub Inspector was found to have made a false document by altering a certain entry made by him in his diary with a view to create evidence. It was argued before the Court that in order to constitute an offence of forgery under sections 463 and 464 the document must be made dishonestly or fraudulently and those words must be read in the sense in which they are defined in the Indian Penal Code and that it was not enough to show that the deception was intended to secure an advantage to the deceiver. Dealing with this argument Baker, J., who was one of the judges constituting the Bench observed at p. 493 : "The definition of 'dishonestly ' in section 24 of the Indian Penal Code. applies only to wrongful gain or wrongful loss and although there are conflicting rulings on the question of the definition of the word 'fraudulently ', the concensus of opinion of this Court has been that there must be some advantage on the one side with a corresponding loss on the other. " Section 463, which defines forgery, runs thus "Whoever makes any false document or part of a document with intent to cause damage or injury, to the public or to any person, or to (1) (1932) 1. L. R. LVI Bom. 399 support any claim or title, or to cause person to part with property, or to enter any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery. " The intention to cause damage or injury to the public or to any person is thus an clement which has to be established before a fabricated document can be held to be a false document or a forgery. In view of the terms of section 463 what the learned judge has observed is understandable and may be right. Here, however, we are concerned with the offence under section 420, I.P.C. which speaks of dishonest inducement as a necessary ingredient. As Baker, J., has rightly pointed out: "As dishonesty involves a wrongful gain or wrongful loss, obviously it does not apply to the present case where no pecuniary question arises. " But, in an offence under section 420, I.P.C. a pecuniary question necessarily arises. The first part of section 464, I.P.C. provides that a person is said to make a false document who dishonestly or fraudulently makes ' signs etc., a document with a particular intention and covers cases both of acts which are dishonest and acts which are fraudulent. Where no pecuniary question arises the element of dishonesty need not be established and it would be sufficient to establish that the act was fraudulent and, therefore, it may be, as the learned judge has held, that where an act is fraudulent the intention to cause injury to the person defrauded must be established. But where the allegation is that a person has dishonestly induced another to part with property something different has to be considered and that is whether he has thereby caused a wrongful loss to the person who parted with property or has made a wrongful gain to himself. These are the two facets of the definition of 400 dishonesty and it is enough to establish the existence of one ' of them. The law ' does not require that both should be established. The decision relied upon by learned counsel is, therefore, distinguishable. Learned counsel then referred to the dissenting judgment of Subrahmania Ayyar, J., in Kotamraju "Venkatarayudu vs Emperor (1) to the effect that in regard to offences failing under section 465 and 461 it must be established that the deception involved some loss or risk of loss to the individual and to the public and that it was not enough to show that the deception was intended to secure advantage to the deceived. This decision as well as some other decisions referred to by learned counsel 'are therefore distinguishable for the same reason which distinguishes Sanjiv Ratanappa Ronad 's ' case (2) from the one before us. We are, therefore,/ of the view, that the offence of cheating has been established. The High Court has found that dishonesty has been established against Lachhimi Narain because it was he who drew and negotiated the various hundis. According to learned counsel the prosecution has not established that the other appellants had either drawn any hundi or discounted any hundi, this contention, however, does not appear to be sound because there is a finding of the learned Additional Sessions judge that the appellant Tulsi Ram had sold to the Central Bank of India certain hundis covered by forged rail " way receipts. He has also found that the appellant Beni Gopal had admittedly booked a consignment of two bags of rape seed from Rae Bareli to Raniganj and drawn a hundi of Rs. 40.000/ on the basis of the railway receipt which was tampered with and subsequently got verified the stamped indemnity bond for this very consignment which was sent to the firm Chiranji Lal Ram Niwas for taking delivery. Another consignment of two bags, this time containing poppy seeds, was booked by the firm of Beni Gopal and Beni Gopal drew a hundi for Rs 38,000/ on Murarka (1) Mad. (2) (1932) I. L. R. LVI Bom. 401 Brothers and sold that hundi to the Central Bank of India. This hundi was supported by a railway receipt which had been tampered with. It is on the basis of those findings that the learned Additional Sessions judge convicted both these appellants for an offence under section 417/420, I.P.C. The learned Additional Sessions judge has also held that the appellants, Babu Lal and Moti Lal, were likewise guilty of offences under section 417/420, I.P.C. The conviction and sentence passed on Moti Lal was set aside by the High Court. In our opinion the prosecution has failed to establish that Babu Lal had 'either drawn or negotiated hundis supported by forged railway receipts. The material upon which the learned Additional Sessions judge has relied and, apparently, on which the High Court has relied, does not touch these matters at all. Whatever other part Babu Lal might have played in these transactions his actions do not bring home to him the charge under section 420, I.P.C. For this reason his conviction and sentence for the offence of cheating must be set aside and we accordingly do so. The High Court has affirmed the conviction of Tulsi Ram and Beni Gopal for offences under section 417/ 420, 1. As already indicated there is evidence to show that both these persons had taken part either in the drawing or in the negotiation of hundis which were supported by forged railway receipts. The evidence adverted to by the learned Additional Sessions judge has not been challenged before us. We must, therefore, confirm the conviction of the appellants, Tulsi Ram and Beni Gopal, for the offence of cheating. We would, however, like to make it clear that having found that the acts fall under section 420, I. P. C. it was not appropriate for the High Court to affirm the conviction under "section 417/420", 1. P. C. thus indicating that if the offence is not one it is the other. 402 The only other question which needs to be considered is regarding conspiracy. Mr. Mulla fairly admitted that in any case Lachhimi Narain cannot escape the conviction under section 120B even if all the other appellants are held not to have been parties to the conspiracy because two other persons were admittedly associated with Lachhimi Narain. These per sons would have been made co accused in the case but for the fact that they died in the meanwhile. Regarding the other appellants before us, Mr. Mulla strongly contends that there is no evidence of conspiracy. He concedes that he cannot challenge the correctness of the findings of the Additional Sessions judge and the High Court regarding the commission of certain acts by the appellants but his contention is that those acts are not sufficient to show their complicity of the other appellants in the conspi racy. According to him, the other appellants were made to do these acts by Lachhimi Narain and that they were not in the know of the deception which Lachhimi Narain had systematically practised in all the transactions. We cannot accept the argument. At least in so far as two of the appellants are concerned, Tulsi Ram and Beni Gopal, they are guilty of cheating itself. That fact coupled with the other evidence referred to in the concluding portion of the judgment of the High Court, and the circumstances established against each of the appellants are sufficient to warrant the conclusion that they were in the know of the conspiracy. In so far as Babu Lal is concerned the acts established are: (1) signing four forwarding notes; (2) presenting a cheque at the Bank of Bikaner, Kanpur; (3) cashing a cheque; (4) paying off certain hundis accompanied by forged railway receipts; and (5) signing 32 indemnity bonds. The forwarding notes related to certain consignments on the security of which hundis had been discounted by certain banks, By presenting a cheque to the Bank of Bikaner Kanpur, and by cashing another cheque, Babu La. 403 had operated on the bank account to which the proceeds of certain hundis supported by forged railway receipts had been credited. These facts, taken in conjunction with the acts of payment of hundis accompanied by forged railway receipts would be sufficient to establish his connection with the conspiracy. In addition to this circumstance, he also signed or endorsed 32 indemnity bonds on the strength of which delivery of a large number of consignments, railway receipts in respect of which had been forged, was ultimately taken. Similarly as regards Moti Lal the following acts have been established: (1) signing of 23 forwarding notes in connection with consignments, the railway receipts of which were tampered but which supported certain hundis drawn by the firm; (2) he signed or endorsed 52 indemnity bonds on the strength of which delivery was taken of the consignments, the railway receipts in respect of which were tampered with and yet were offered as security to banks or firms which discounted hundis for the value of these consignments. These circumstances are sufficient to justify the conclusion drawn by the Additional Sessions judge and upheld by the High Court. In addition to these circumstances, we must bear in mind the fact that these four appellants are closely related to Lachhimi Narain, that their family business is joint and, therefore, they have a common interest. It is inconceivable that they could not have been in the know of what was being done by Lachhimi Narain. In the circumstances we uphold their conviction under section 120B, 1. As regards Chandrika Singh, the matter stands on a different footing. He was originally an employee of the firm Bhairo Prasad Srinivas and was transferred to Calcutta when a year before the transactions in question commenced, when the firm of Murarka Brothers was established. He was in charge of paying hundis presented to Murarka 404 Brothers. The High Court has held him to be a party to the conspiracy on the basis of the following facts: 1. He signed the letter of authority, exhibit P 1388 dated July 22, 1948, by which Lachhimi Narain authorised him to operate the account of Murarka Brothers in the Calcutta branch of the Allahabad Bank, as proved by Chandrika Chaubey, P. W. 44, and, admitted by the appellant; 2. he paid Rs. 25,000/ to the Hindustan Commercial Bank and received the hundis and railway receipts concerned,, as admitted by him and proved by G. N. Ghosh, P. W. 57, and the voucher exhibit P 1232; 3. he made payments to the Bank of Bihar at Calcutta on behalf of Murarka Brothers and obtained the hundis and railway receipts concerned, signing vouchers, Exs. P1342, 1343, 1346 and 1348 to 1353 about the same, as admitted by him; and 4. he made similar payments to the Calcutta Branches of the Central Bank of India, the Punjab National Bank and the Allahabad Bank, as admitted by him and, so far as the Punjab National Bank is concerned, proved by the receipt exhibit P.1375 and, so far as the Allahabad Bank is concerned, by the vouchers, Exs. P.1440 to 1446 and 1448 to 1457, as admitted by him: The first circumstance relied upon by the High Court is really this that he appended his specimen signatures to the letter of authority signed by Lachhimi Narain to the Allahabad Bank Calcutta wherein he (Chandrika Singh) was authorised to operate on the account of Murarka Brothers. This was done long before 405 the conspiracy and, therefore, has no bearing on the question before us. The remaining three reasons would merely indicate that Chandrika Singh had paid the hundis which it was his duty to do. It may be that along with those hundis forged railway receipts were also submitted to him but from this one circumstance it would not be legitimate to infer that he had any hand in the conspiracy. At worst what could be said is that his suspicion could have been aroused but nothing more. Therefore, in our opinion, none of the reasons given by the High Court supports the conclusion that Chandrika Singh was a party to the conspiracy. Our attention was, however, drawn to a further reason given by the learned Additional Sessions judge. That reason is as follows : "Chandrika Singh was asked to explain as to what he did with the forged R/Rs. and why lie did not take delivery on them at Calcutta when they were endorsed in favour of Murarka Brothers. To this he replied that he gave the R/Rs. of Calcutta to Calcutta Commission agents, and he sent other R /Rs to Raj Bahadur Singh munim of Bhairo Prasad Sri Niwas. But we find (sic) is that delivery in all these cases have (sic) been taken by the Calcutta merchants and the merchants of other West Bengal stations on indemnity bonds. No question has ever been put to any of these witnesses even suggesting this plea. Therefore, the explanation of Chandrika Singh appears to be altogether false and it is evident that he destroyed the R/Rs. and did not use them as it was in his knowledge that they were forged and if he presented them at the railway station for delivery then the Station Master would compare the number of bags in the corresponding invoices and fraud would be detected. This shows the common assent of mind of Chandrika Singh conspirator 406 which is usual in conspiracy for the secrecy of the crime. " It seems to us that the reasoning of the learned Additional Sessions Judge is faulty. The reasoning is entirely based upon the assumption that the railway receipts which were endorsed in favour of Murarka Brothers were forged or tampered with. It has been brought out in evidence that in point of fact the appellants, firms used to send genuine consignments of food grains etc. to West Bengal. The possibility of railway receipts covering such consignments begin endorsed in favour of Murarka Brothers has not been ruled out. The answer given by Chandrika Singh that he gave the railway receipts to the Calcutta Commission agents may well have related to the railway receipts in respect of the genuine consignments. There was, therefore, no risk as envisaged by the learned Additional Sessions judge in Chandrika Singh handing over the railway receipts of such consignments to Commission Agents for obtaining delivery. Apart from that, bearing in mind the general outline of the device employed by the appellants ' firms it would not be reasonable to assume that consignments, the railway receipts had been tampered with were endorsed in favour of Murarka Brothers. On the whole, therefore, we think that the expla nation given by Chandrika Singh is reasonable and he is at least entitled to the benefit of doubt. III the circumstances, therefore, we set aside the conviction under section 120 B, I. P. C. as well as the sentences passed on him. As regards the sentences, bearing in mind the fact that the offences were committed 13 years ago, that the appeal was pending in the High Court for about four years and thereafter it took almost three years for the High Court to prepare the paper book, we think that grave though the crimes of Lachhimi Narain are, we should reduce the sentence. He was 407 52 years of age when these transactions were commenced and today he is 65 years of age. If we affirm the sentence of imprisonment for a period of 7 years it will mean that he will be in jail till he is 72 years of age and perhaps in failing health. No actual loss has resulted to anyone by reason of the fraud practised by him and by the family. He and other members of the family. have suffered a great deal monetarily during all these years and have also suffered in their reputation. We, therefore, think that it would be sufficient if we sentence him to imprisonment for three years and raise the fine imposed upon him by the learned Additional Sessions judge from Rs. 5,000/ to Rs. 10,000/ or in default to undergo rigorous imprisonment for one year. We modify the sentences passed on him accordingly. We would make it clear that these sentences are in respect of all the various offences of which Lachhimi Narain has been convicted and that we are not imposing separate sentence or sentences in respect of each offence for which he has been convicted. In so far as the remaining four appellants are concerned we think that no useful purpose would be served by sending them to jail at this distance of time. Each of them had undergone a few weeks ' imprisonment before being released on bail and in our opinion instead of sending them to jail now to serve out the remaining sentence it would be just and fair to reduce the substantive sentence of imprisonment awarded to each of them to the period already undergone and add to it a fine of Rs. 3,000/ each or in default to undergo rigorous imprisonment for a period of six months. In doing so we have borne in mind three circumstances, one of which we have already indicated. The second is the extreme youth of these persons when the alleged transactions took place and the third is that though they knew what was going wrong and hoped to benefit by it, they acted under the influence of the dominating personality of 408 Lachhimi Narain who was the karta of the family. We modify the sentences accordingly. Appeals, partly allowed.

IN-Abs

The appellants were tried and convicted for conspiracy to cheat certain banks. The prosecution had put on record a letter from the Under Secretry to Government which stated that the Governor had been pleased to grant sanction for the prosecution of the appellants. The sanction was not challenged before the trial court or the High Court, but before the Supreme Court the appellants contended that no sanction as required by section 196A, Code of Criminal Procedure was on record and that the document on record did not show on its face that the facts of the case had been considered by the Governor. The appellant further contended that for conviction for cheating the prosecution had to establish both that the appellants had caused wrongful gain to themselves and caused wrongful loss to the banks and that as no wrongful loss to the banks had been established, the appellants could not be convicted of cheating or of conspiracy to cheat. Held, that the appellants were not entitled to raise the question of sanction for the first time in the Supreme Court as it required for its decision investigation of facts. The document on record was an official communication which recited the fact that the Governor had granted the sanction. A presumption arose ,that the sanction had in fact been accorded. A further presumption arose that the official act of granting sanction to which reference was made in the communication had been regularly performed. The document on record prima facie satisfied the requirements of section 196A. Held, further, that to establish that the accused had disho nestly induced another to part with property within the meaning of section 420, Indian Penal Code, it was not necessary to prove both wrongful gain and wrongful loss. Wrongful gain and wrongful 383 loss were two facets of the definition of dishonesty and it was enough to establish the existence of one of them. In the present case, the appellants had made wrongful gain to themselves by obtaining credits by unlawful means and even if no wrongful loss was caused to the banks, the appellants were guilty of cheating. Sanjiv Ratanappa Bonad vs Emperor, (1932) I. L. B, LVI Bom. 488, and Kotamraju Venkatarayudu vs Emperor, , distinguished. The sentences of imprisonment imposed on four of the appellants were reduced to the period already undergone and a fine of Rs. 3,000/ was imposed on each on the grounds that no useful purpose would be served by sending these appellants to jail after a long interval of time, that these appellants were very young at the time of the commission of the offences and that they had acted under the influence of the dominating personality of the main accused.

iminal Appeal No. 62 of 1951. Appeal by special leave granted by the Supreme Court of India on the 14th May, 1951, from the Judgment and Order dated the 9th August, 1950, of the High Court of Judicature at Bombay (Bavdekar and Vyas JJ.) in Criminal Appeal No. 319 of 1950 arising out of the Judgment and Order dated the 6th January, 1950, of the Court of the Sub Divisional Magistrate F.C., Ratnagiri City, in Criminal Case No. 77 of 1949. 774 M. C. Setalvad, Attorney General for India (G. N. Joshi and P. A. Mehta, with him) for the appellant. K. B. Chaudhury for the respondent. March 13. The Judgment of the Court was delivered by MAHAJAN J. The respondents were charged with having committed an offence punishable under section 9(2) read with section 4 of the Bombay Building (Control on Erection) Act, 1948, for commencing the work of erection of a cinema theatre without obtaining the necessary permission from the controller of buildings, Bombay. The sub divisional magistrate, Ratnagiri, held that the Act not having been validly extended to Ratnagiri, no permission of the controller of buildings was necessary for the construction. He accordingly acquitted them. On appeal by the State Government, the order of acquittal was maintained by the High Court. This appeal is before us by special leave from the concurrent orders of acquittal. Special leave was granted on the Attorney General for India undertaking on behalf of the State Government of Bombay that whatever the decision of the court might be, no proceedings will be taken against the respondents in respect of the subject matter under appeal. At the hearing of the appeal it was made plain by the learned Attorney General that no adverse consequences will flow to the respondents or to their building being completed, by the acquittal order being pronounced as bad, and that the State Government will not in any way interfere with the respondents when they take steps to complete the building, the construction of which was commenced without the permission of the controller. The State Government merely wants to have the question of law decided as a test case because the decision of the High Court, if left unchallenged, would have far reaching effects. The facts giving rise to the prosecution of the respondents, shortly stated, are these: There was in force in the State of Bombay an Ordinance, Bombay 775 Building (Control on Erection) Ordinance, 1948. It was applicable to certain areas specified in the schedule. The district of Ratnagiri was not one of the areas therein specified. Sub section (4) of section (1) of the Ordinance empowered the provincial government by notification in the official gazette to extend to any other area specified in such notification its provisions. It further empowered the provincial government to direct that it shall apply only in respect of buildings intended to be used for such purpose as may be specified in the notification. On 15th January. 1948, the Government of Bombay issued the following notification: " In exercise of the powers conferred by sub section (4) of section 1 of the Bombay Building (Control on Erection) Ordinance, 1948 (Ordinance No. I of 1948), the Government of Bombay is pleased to direct that the said ordinance shall also extend to all areas in the province of Bombay other than the areas specified in the schedule to the said Act and that it shall apply to said areas only in respect of buildings intended to be used for the purpose of cinemas, theatres and other places of amusement or entertainment. " The consequence of this notification was that in the district of Ratnagiri no cinema building could be commenced without the permission of the controller after that date. Ordinance I of 1948 was repealed by Act XXXI of 1948, The Bombay Building (Control on Erection) ' Act, 1948". It was made applicable to areas specified in the schedule. Sub section (3) of section I authorized the provincial government by notification in the official gazette to direct that it shall also extend to any other. areas specified therein. It further authorized the provincial government to direct that it shall apply only in respect of buildings intended to be used for such purposes as may be specified in the notification. By section 15(1) of the Act it was pro vided that `` The Bombay Building (Control on Erection) Ordinance, 1948, is hereby repealed and it is hereby 776 declared that the provisions of sections 7 and 25 of the Bombay General Clauses Act, 1904, shall apply to the repeal as if that Ordinance were an enactment. " The respondents started constructing a cinema at Ratnagiri on 15th August, 1948, after the commencement of Act XXXI of 1948 without obtaining the permission of the controller of buildings as required by the Act under the impression that the Act had application only to areas specified in the schedule and the district of Ratnagiri not having been specified in the schedule, the provisions of the Act had no application to that area. As above stated, they were prosecuted for committing an offence under section 9(2) read with section 4 with the results above mentioned. The order of acquittal was based on the ground that although the notification extended the scope of the ordinance to area, other than those which were mentioned specifically in the schedule thereto, it did not extend to those areas the provision, of the Act in spite of the application of the provisions of section 25 of the Bombay General Clauses Act. In Judgment, the construction placed by the High Court on the language of section 15 is erroneous and full effect has not been given to its provisions or to the provisions of section 25 of the Bombay General Clauses Act. We think on a true construction of section 15 of the Act and section 25 of the Bombay General Clauses Act, the notification issued on 15th January, 1948, under the ordinance continued in force under Act XXXI of 1948 and that by it the provisions of the Act stood extended to other areas in the State to the extent indicated in the notification. Section 25 of the Bombay General Clauses Act, 1904, provides `` Where any enactment is, after the commencement of this Act, repealed and re enacted by a Bombay Act, with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, bye law or form made or issued under the repealed enactment shall, so far as it is not inconsistent with the provisions re enacted, 777 continue in force and be deemed to have been made or issued under the provisions so re enacted unless and until it is superseded by any appointment, notification, order, scheme, rule, bye law or form made or issued under the provisions so re enacted. " It cannot be contended that the notification was inconsistent with the provisions of Act XXXI of 1948. It is clearly in accordance with its scheme and purpose. The High Court did not combat the proposition that in view of the provisions of section 25 of the Bombay General Clauses Act the notification continued in force after the coming into force of the Act. It, however, held that even if the notification was taken as having been issued under Act XXXI of 1948, the notification merely extended the ordinance to these areas and not the Act. In the opinion of the High Court, the word "Act " instead of " Ordinance " could not be read in the words of the notification by the force of section 25 of the Bombay General Clauses Act and the notification literally construed, only extended the ordinance to those areas. It was considered that if the intention was to extend the Act to these areas, such an intention could only be carried out by enacting in Act XXXI of 1948 a proviso like the one enacted in the Cotton Cloth and Yarn (Control) Order, 1945, or by use of language similar to the one used in section 9 of the Bombay General Clauses Act, 1904. The proviso in the Cotton Cloth and Yarn (Control) Order is in these terms:" Provided further any reference in any order issued under the Defence of India Rules or in any notification issued thereunder to any provision of the Cotton Cloth and Yarn (Control) Order, 1943, shall, unless a different intention appears, be construed as reference to the corresponding provision of this Order. " We do not find it possible to support this line of reasoning. It appears to us that the attention of the learned Judges was not pointedly drawn to the concluding words of section 15 (1) of the Act. It is specifically provided therein that the provisions of 778 sections 7 and 25 of the Bombay General Clauses Act shall apply to the repeal as if the ordinance were an enactment. The ordinance by use of those words was given the status of an enactment and therefore the word "ordinance" occurring in the notification has to be read accordingly and as extending the Act to those areas, and unless that is done, full effect cannot be given to the 'Concluding words used in section 15(1) of the Act. The concluding words of section 15(1) of the Act achieve the purpose that was achieved in the Cotton Cloth and Yarn (Control) Order by the "proviso. " By reason of the deeming provisions of section 15, the language used in the notification extending the ordinance to those areas as a necessary consequence has the effect of extending the operation of the Act to those areas. When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion. [Vide Lord Justice James in Ex parte Walton : In re Levy(1)]. If the purpose of the statutory fiction mentioned in section 15 is kept in view, then it follows ,that the purpose of that fiction would be completely defeated if the notification was construed in the literal manner in which it has been construed by the High Court. In East End Dwellings Co. Ltd. vs Finsbury Borough Council(2), Lord Asquith while dealing with the provisions of the Town and County Planning Act, 1947, made reference to the same principle and observed as follows: " If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. . The statute says that you must imagine a certain state of affairs; it does not (1) , at P. 756, (2) 779 say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. " The corollary thus of declaring the provisions of section 25 of the Bombay General Clauses Act applicable to the repeal of the ordinance and of deeming that ordinance an enactment is that wherever the word "ordinance" occurs in the notification, that word has to be read as an enactment. For the reasons given above we are satisfied that the High Court was in error in holding that the notification only extended the provisions of the ordinance to Ratnagiri district and not the provisions of Act XXXI of 1948 to that area. It may, however, be observed that the manner adopted by the legislature in keeping alive the notifications issued under the ordinance by use of somewhat involved language in matters where the rights of the citizens regarding the construction of buildings were being affected was not very happy. It has certainly led three judges to think that the intention of the legislature was not brought out by the language. People who are not lawyers may well be misled into thinking that the notification issued under the ordinance has terminated with its repeal and not having been re issued under the Act, the provisions of which again in clear language provide that it only extends to areas specified in the schedule and which gives power to extend it, that those areas are excluded from the scope of the Act. It would have been much simpler if the legislature made its intention clear by use of simple and unambiguous language. Because of the undertaking given by the learned Attorney General not to proceed any further in this matter, it is not necessary to set aside the acquittal order of the respondents, which will remain as it stands. A appeal allowed. Acquittal not set aside.

IN-Abs

The Bombay Building (Control on Erection) Ordinance of 1948 applied to certain areas mentioned in the Schedule to the Ordinance, and in exercise of the powers vested in it by the Ordinance the Government extended its provisions to certain other areas including Ratnagiri in respect of buildings intended to be used for cinemas and other places of entertainment, by a notification of the 15th January,. This Ordinance was repealed by the Bombay Building (Control on Erection) Act of 1948 the provisions of which were similar to those of the earlier Ordinance. Section 15(1) of the Act repealed that Ordinance and declared that " the provisions of sections 7 and 25, Bombay General Clauses Act, 1904, shall apply to the repeal as if that Ordinance were an enactment. " Held, reversing the judgment of the Bombay High Court, that on a true construction of section 15(1) of the above said Act and section 25 of the Bombay General Clauses Act, 1904, the notification issued on the 15th January, 1948, under the Ordinance continued in force under the Act of 1948 and that by it the provisions of the Act stood extended to other areas in the State including Ratnagiri to the extent indicated in the notification. Ex parte Walton: In re Levy and East End Dwelling Co. Ltd. vs Finsbury Borough Council ([1952] A.C. 109) referred to.

Appeals Nos. 436 to 438 of 1961. Appeals by special leave from the judgment and order dated December 9, 1959, of the Punjab 886 High Court in Letters Patent Appeals Nos. 407, 408 and 409 of 1959. Achhru Ram and B. D. Jain, for the appellants. Gian Singh Vohra, for the respondents. October 4. The Judgement of the Court was delivered by GAJENDRAGADKAR, J. What is the effect of the retrospective operation of section 31 introduced by the Punjab Pre emption (Amendment) Act, 1960 (X of 1960) in the parent Act of Pre emption (No. 1 of 1913). That is the short question which arises for our decision in these three appeals which have been ordered to be consolidated for the purpose of hearing by this Court. These appeals arise from three pre emption suits instituted by the respondents against the respective appellants. The respondents ' case was that the properties in suit had been sold by Aftab Rai on May 31, 1956, for Rs. 10,000/ to the appellants and it is these sales which they wanted to preempt. They alleged that they are the owners of agricultural land in Patti Aulakli and Patti Rode, in Mauza Marahar Kalan, and as such, they had the statutory right to claim pre emption, under section 15(c) (ii) and (iii). The appellants resisted this claim on the ground that the respective vendees from Aftab Rai had transferred by exchanges about 2 kenals out of the lands purchased by them and as a result of the said exchanges the appellants had themselves become entitled to preempt the said sales under the same statutory provision. Since the appellants had acquired equal status with the respondents who claimed to be the preemptors, their claim for pre emption cannot be sustained. That, in brief, was the nature of the contest between the parties. 887 The trial Court held that the exchanges on which the appellants relied bad not been proved and so, it gave effect to the respondents ' right to preempt under section 15(c) (ii) & (iii). The appellants took the matter before the Addl. District Judge in appeal. The lower appellate Court was pleased to admit additional evidence under 0.41, r. 27, of the Code of Civil Procedure and held that the exchanges in question had in fact been proved and were, in law, valid. It, therefore came to the conclusion that the appellants acquired equal status with the respondents and so, the respondents ' claim for pre emption must fail. That is why the appeals preferred by the appellants were allowed and the respondents ' suits were dismissed. The dispute was then taken up before the High Court of Panjab by the respondents by second appeals. Mahajan, J., who heard these appeals held that the property acquired by exchange in lieu of the part of the property purchased by the vendees did not give the appellants a right to preempt. He referred to the fact that exchange of lands was sometimes recognised as conferring on the party the right to preempt, but that was where the land exchanged did not form part of the land sold and preempted. In the result, the High Court held that the plea made by the appellants was not well founded in law and so, the respondents were entitled to pre empt. As a result of this finding, the decrees passed by the lower appellate Court were reversed and the respondents ' suits were decreed. The appellants then moved the Division Bench by Letters Patent appeals, but these appeals were dismissed. It is against the decrees thus passed by the Division Bench in Letters Patent appeals that the appellants have come to this Court by special leave. We have already noticed that both the appellants and the respondents are claiming a right to 888 preempt under section 15(c) (ii) and (iii) of the Parent Act of 1913. On February 4, 1960, the amending Act No. 10 of J960 was passed. Section 4 of the amending Act has substituted anew s.15 of the old s.15 after making substantial changes in the provisionsof the earlier section. Clauses (ii) and (iii) of theoriginal s.15(c) have been deleted, with the result that the claims for preemption made both by the appellants and the respondents have ceased to be recognised by the amended provisions. The appellants contend that since the respondents have got a decree for pre emption in their favour on the provisions of the unamended s.15, that decree can no longer be sustained because of the provisions of s.31 of the amending Act. Section 31 provides that no Court shall pass a decree in a suit for pre emption whether instituted before or after the commencement of the Punjab Pre emption (Amendment) Act, 1959(1960) which is inconsistent with the provisions of the said Act. In support of his argument that s.31 being retrospective in operation the respondents ' title to claim pre emption can no longer be entertained. Mr. Achhru Ram for the appellants has invited our attention to a recent decision of this Court in the case of Ram Sarup vs Munshi (1) pronounced on August 30, 1962. In that case, Ayyangar, J., who spoke for the Constitution Bench considered the question about the retrospective operation of section 31 and has observed that the said provision is retrospective and that the language used in the said section is "plain the comprehensive so as to require an appellate Court to give effect to the substantive provisions of the amending Act whether the appeal before it is one against a decree granting preemption or one refusing that relief," It was no doubt urged before the Court in that case that the words used in section 31 did (1) ; 889 not justify the application of the amended provisions to proceedings pending before the appellate Court; them said words showed that the said provisions could be invoked only in cases which were pending before the trial Court. This contention was rejected and so, it must be taken to be settled that the provisions of section 31 are retrospective and can be relied upon by the appellants in their present appeals before this Court. This position would undoubtedly have helped the appellants but for another complication which has been introduced by the relevant provisions of the amended section 15 enacted by the amending Act. We have already noticed that some persons whose right to preempt was recognised by the corresponding provisions of the parent Act, have been omitted by the amended section. The amended section has also introduced another class of persons on whom the right to claim pre emption has been conferred. These persons are the tenants who hold under tenancy of the vendors the land or property sold or a part thereof. This class of tenants has been introduced in clauses (a), (b) and (c) of amended section 15. Clause four of section 15(1) (c) provides that the right of pre emption in respect of agricultural land and village immovable property shall vest in the tenants who hold under tenancy of the vendors or any one of them the land or property sold or a part thereof. Similar provisions are made in clauses (a) & (b) of the said section. For the respondents Mr. Vohra contends that they are the tenants who hold under tenancy of the vendor the lands in question and as such, they are now clothed with the right to claim pre emption. In other words, the respondents argument is that though the right to preempt which they possessed under clauses (ii) and (iii) of the unmended section 15(c) of the parent Act have been taken ,way retrospectively by the amending Act, they have been clothed with the same right by virtue of 890 the fact that they fall under the fourth clause of the amended s, 15 (1) (c) and the conferment of this right like the destruction of their right under the deleted provisions of the unamended section must operate retrospectively. He, therefore, suggests that the respondents ought to be given an opportunity to prove their case under the fourth clause of section 15(c) as amended. In this connection, he has referred us to the fact that this plea has been specifically taken by the respondents in their statement of the case before this Court. It is on this plea that the question about the effect of the retrospective operation of section 31 arises. Mr. Achhru Ram contends that though section 31 is retrospective and in that sense the rights to preempt which vested in the respondents at the time when they instituted the present suits have been retrospectively taken away from them, it cannot be said that the right to preempt to which the respondents lay claim in the present appeals has been retrospectively created. His argument is that by the amending Act, the Legislature has no doubt provided that certain classes of persons who were entitled to preempt under the old Act should not be given that right and the extinction of the said right should operate retrospectively, but that cannot be said to be the policy of the legislature in regard to the rights which have been created for the first time by the amending Act. The argument thus presented may prima facie appear to be attractive; but a close examination of the words used in section 31 shows that it is not well founded. Section 31, in substance, requires the appellate Court to pass a decree in a preemption matter which is not inconsistent with the provisions of the amending Act. In the present appeals, if we were to uphold the respondents ' right to claim preemption on the strength of the provisions of section 15(c) 891 as they stood prior to the amendment, that would be inconsistent with the provisions of the amending Act, and so, the change made by the amending Act has to be given effect to and the right which once vested in the respondents must be deemed to have been retrospectively taken away from them. On this point there is no dispute. Would it make any difference in the legal position when we are dealing with rights which are created for the first time by the amending Act on the date when this Court will pass a decree in the present appeals? If the rights created in favour of the tenants are not recognised and a decree is passed ignoring the said rights, that decree would be inconsistent with the relevant provisions of the amending Act, and section 31 has clearly enjoined that no Court shall pass a decree which is inconsistent with the provisions of the amending Act. The position, therefore, appears to be clear that when a decree is passed in a preemption matter pending before the appellate Court, that Court must refuse to recognise the right to preempt which was recognised by the unamended Act but has been dropped by the amending Act just as much as it must recognise rights which were not recognised by the unamended Act but have been created by the amending Act. The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of section 15 retrospectively and that will apply as much to the extinction of the old rights as to the creation of new ones. The retrospective operation of section 15 which is consequential on the retrospective operation of s.31 is not affected by the fact that the right of preemption prescribed by section 15 if; referred to as a right which shall vest in the persons specified in subsections (a), (b) and (c) of section 15(1). It is, however, urged that the law of preemption requires that the preemptor must possess the right to preempt at the date of the sale, at the 892 date of the suit and at the date of the decree. This position cannot be disputed. But when it is suggested that the respondents cannot claim that they had the right when they brought the present suit or when the sales were effected, the argument ignores the true effect of the retrospective operation of section 31 and section 15. If the inevitable consequence of the retrospective operation of s.31 is to make the substantive provisions of section 15 also retrospective, it follows that by fiction introduced by the retrospective operation, the rights which the respondents claim under the amended provisions of section 15 must be deemed to have vested in them at the relevant time. If the relevant provisions are made retrospective by the legislature, the retrospective operation must be given full effect to, and that meets the argument that the right to preempt did not exist in the respondents at the time when the sale transactions in question took place. Therefore, we are satisfied that the respondents are entitled to claim that they should be given an opportunity to prove their case that as tenants of the lands in suit they have a right to claim preemption. Incidentally, when the respondents filed the present suits, they had a right to preempt under the relevant provisions of the Act as they stood at that time; by the amendment, that right has been taken away, but instead they claim another right by virtue of their status as tenants of the lands, and this right is, by the retrospective operation of section 31, available to them. We must accordingly set aside the decrees passed by the High Court and send the matters back to the trial Court with a direction that it should allow the respondents an opportunity to amend their claims by putting forth their right to ask for preemption as tenants under the amended provision of 8. 15. After the amendments are thus made, the appellants should be given an opportunity 893 to file their written statements and then appropriate issues should be framed and the suits tried and disposed of in the light of the findings on those issues in accordance with law. Under the unusual circumstances in which the litigation has thus secured a further lease of life, we direct that the costs incurred so far should be borne by the parties.

IN-Abs

The properties in suit had been sold by A to the appellants on May 31; 1956, but the respondents, as the owners of certain agricultural land in the patti claimed that they had a right of preemption under section 15 (c) (ii) and (iii) of the Punjab Preemption Act, 1913. In the suit instituted by the respondents for this purpose the appellants resisted the claim on the ground that the vendees from A had transferred by exchanges some of the items out of the lands purchased by them and that as a result of the said exchanges the appellants themselves had become entitled to preempt the said sales under the same statutory provision. The suit was, however, decreed by the trial court and the decision was confirmed by the High Court of Punjab. The appellants obtained special leave to appeal to the Supreme Court and during the pendency of 885 the appeal the Act was amended by Punjab Act 10 of 1960, by which, inter alia, (1) cls. (ii) and (iii) of section 15 (c) of the original Act were deleted, (2) cl.4 of section 15 (1)(c) provided that the right of preemption in respect of agricultural land and village immoveable property shall vest in the tenants who held under tenancy of the vendors or anyone of them the land or property sold or a part thereof, and (3) section 31 provided that no court shall pass a decree in a suit for preemption whether instituted before or after the commencement of the amending Act of 1960 which was inconsistent with the provisions of the said Act. In view of the new provisions introduced by the amending act the respondents raised a new contention that they were tenants who held under tenancy of the vendor of the lands in question and, as such, they were entitled to the right of preemption under cl.4 of s.15 (1)(c) of the Act, as amended, even if it be held that the right to claim pre emption under cls. (ii) and (iii) of s.15 (c) of the unmended Act was taken away retrospectively by the amending Act. The appellants pleaded that even assuming that cl.4 of s.15 (1)(c) was applicable, the respondents could not get a decree on the bassis of the new right of pre emption inasmuch as they had no such right on the date on which the suit was filed or when the sales were effected. Held, that (1 the provisions of s.31 of the Punjab Pre emption Act, 1913, as amended by Punjab Act 10 of 1960, are retrospective in operation and, therefore, the decree passed in favour of the respondents by the trial court and affirmed by the High Court under the unmended section could not be sustained. Ram Sarup V.Munshi [1963] 3 S.C.R. 858 followed. (2) The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of amended s.15 retrospectively, and hence the rights which the respondents now claim under the amended provisions must be deemed to have vested in them at the relevant time, with the result that they are entitled, on remand, to ask for a decree passed on the basis of the said rights,

iminal Appeal No. 12 of 1961. Appeal from the judgment and order dated April 26 1960, of the Madhya Pradesh High Court Jabalpur in Criminal Appeal No. 388 of 1958. B. Sen and I. N. Shroff, for the appellant. The respondent did not appear. September 28. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. A charge sheet was presented by the appellant the State of Madhya Pradesh against the respondents Peer Mohammad and his wife Mst. Khatoon under section 14 of the (hereinafter called the Act) read with cl. 7 of the Foreigners Order, 1948 (hereinafter called the Order) in the Court of the Magistrate 1st Class, Burhanpur. The case against the respondents was that they had entered India on May 13, 1956, on the strength of a Pakistani passport and a visa issued in their favour on. May 8, 1956, and reached Burhanpur on May 15, 1956. Even after the period of the 431 visa had expired, they continued to stay in India. Consequently, the district Magistrate, Burhanpur, served a notice on them on May 14, 1957 calling upon them to leave India on or before May 28, 1957. The respondents did not comply with the notice and by their unauthorised and illegal over stay in India, they rendered themselves liable under section 14 of the Act and cl. 7 of the Order. The respondents pleaded that they were not foreigners but were citizens of India. They were born in India at Burhanpur and had been permanent residents of the said place; and so the present criminal proceedings instituted against them were misconceived. The prosecution, however, urged that the respondents had left India for Pakistan some time after January 26, 1950, and under article 7 of the Constitution they cannot be deemed to be citizens of India. In the alternative, it was urged that since the respondents had obtained a Pakistani passport, they have acquired the citizenship of a foreign country and that has terminated their citizenship of India under section 9 of the (LVII of 1955). It appears that before the learned Magistrate, only this latter plea was pressed and the learned Magistrate held that the question as to whether the respondents had lost their citizenship of India under section 9 (2) of the has to be decided by the Central Government and cannot be agitated in a court of law. Therefore, the learned Magistrate passed an order under section 249 of the Code of Criminal Procedure, directing that the respondents should be released, and the passport seized from them should be returned to them after the period of appeal, if any. Against this order, the appellant preferred an appeal in the High Court of Madhya Pradesh, and before the High Court it was urged by the appellant that on a fair and reasonable construction of article 7 432 it should be held that the respondents cannot be deemed to be citizens of India *and so, they were liable under section 14 of the Act and cl. 7 of the Order. This appeal was heard by Shrivastava and Naik, JJ. Shrivastava, J., took the view that article 7 did not apply to the case of the respondents who had left India for Pakistan after January 26, 1950, and so, they could not be held to be foreigners on the ground that they had left India as alleged by the prosecution. Naik,J., however, came to a contrary conclusion. He took the view that since it was proved that the respondents had left India for Pakistan after January 26, 1950, article 7 was attracted and so, they must be deemed to be foreigners. Since there was a difference of opinion between the two learned judges who heard the appeal, it was referred to Newaskar. J. Newaskar, J., agreed with the conclusion of Shrivastava, J., and so, in the light of the majority opinion, it was held that under article 7, the respondents could not be held to be foreigners. In regard to the alternative case of the prosecution that the respondents had obtained a Pakistani passport and so, had lost their citizenship under section 9(2) of the , the High Court held that it was a matter which had to be determined by the Central Government and it is only after the Central Government decides the matter against the respondents that the appellant can proceed to expel them from India. It, however, appears that the High Court read the order passed by the trial Magistrate as amounting to an order of acquittal, and so, quashed the said order with liberty to the appellant to institute fresh proceedings against the respondents if and when considered necessary by it. In fact, as we have already mentioned, the order passed by the trial Court was one under section 249 Cr. It is. against this decision of the High Court that the appellant has come to this Court with a certificate granted by the High Court. At this stage, we may add that there were eleven 433 other cases of a similar nature which were tried by the Magistrate along with the present case and considered by the High Court at the appellate stage. Appeals against the companion matters are pending before this Court, but their fate will be decided by our decision in the present appeal. Section 14 of the Act provides, inter alia, that if any person contravenes the provisions of this Act or of any order made thereunder, he shall be punished in the manner prescribed by the section. Clause 7 of the Order issued under the said Act prescribes that every foreigner who enters India on the authority of a visa issued in pursuance of the Indian Passport Act, 1920 shall obtain from the Registration Officer, specified therein, a permit indicating the period during which he is authorised to remain in India and shall, unless the period indicated in the permit is extended by the Central Government, depart from India before the expiry of the said period. The prosecution case is that the respondents having entered India with a visa have overstayed in India after the expiration of the visa and the period indicated in the permit and so, they are liable to be punished under section 14 of the Act and cl. 7 of the Order. It would be noticed that in order that the respondents should be liable under the said provisions, it must be shown that when they entered India, they were foreigners. In other words, cl. 7 of the order applies to every foreigner who enters India in the manner therein indicated ; and that raises the question as to whether the respondents were foreigners when they entered India. The prosecution contends that the respondents were foreigners at the relevant date on two grounds. It is urged that they left India for Pakistan after January 26, 1950, and so, under article 7 they cannot be deemed to be citizens of India at the relevant time. The alternative ground is that they have acquired a passport from the Pakistan 434 Government and as such they lost the citizenship of this country under section 9(2) of the citizenship Act. It is common ground that the latter question has to be decided by the Central Government, and so, this J. Court is not concerned with it. The only question which falls for our decision, therefore, is: can the respondents be said to be foreigners at the relevant date under article 7, because they left India for Pakistan after January 26, 1950 ? The answer to this question would depend on the construction of article 7. In construing article 7, it would be necessary to examine briefly the scheme of the seven Articles that occur in Part 11. These Articles deal with the question of citizenship. Article 5 provides that at the commencement of the constitution, every person who has his domicile in the territory of India and who satisfies one or the other of the three tests prescribed by cls. (a), (b) and (c), shall be a citizen of India. Article 6 deals with persons who have migrated to the territory of India from Pakistan and it provides that they shall be deemed to be citizens of India at the commencement of the Constitution if they satisfy the requirements of clauses (a) & (b). In other words, article 6 extends the right of citizenship to persons who would not satisfy the test of article 5, and so, persons who would be entitled to be treated as citizens of India at the commencement of the Constitution are covered by articles 5 and 6. Article 7 with which we are concerned provides that notwithstanding anything in articles 5 and 6, a person who has after March 1, 1947, migrated from the territory of India to the territory now included in Pakistan shall not be deemed to be a citizen of India. The proviso deals with persons who having migrated to Pakistan have returned to the territory of India under a permit for resettlement or permanent return, but with that class of persons we are not concerned in the present appeal. Article 8 deals with the 435 rights of citizenship of persons of Indian origin who reside outside India. Article 9 provides that no person shall be a citizen of India by virtue of articles 5, 6 or 8, if he has voluntarily acquired the citizenship of any foreign State. Articles 10 and 11 then lay down that the rights of citizenship prescribed by articles 5 and 6 shall be subject to the provisions of any law that may be made by Parliament; that is to say, the said rights will continue unless they are otherwise affected by any law made by Parliament in that behalf. Article 11 makes it clear that the provisions of Part 11 Will Dot derogate from the power of Parliament to make any provision with respect to the acquisition and termination of ' citizenship and all other matters relating to citizenship. That, in brief, is the scheme of Part 11. It is urged by Mr. Sen on behalf of the appellant that where the Constitution wanted to limit the scope of the Article by reference to the date of the commencement of the Constitution, it has used appropriate words in that behalf, and in that connection, he relies on the use of the words "at the commencement of the Constitution" which occur in articles 5 and 6. Article 7 does not include such a clause, and so, the migration from the territory of India to the territory included in Pakistan to which it refers should not be construed to be limited to the migration prior to the commencement of the Constitution. Just as a person who has migrated to Pakistan from India prior to January 26, 1950 shall not be deemed to be a citizen of India by virtue of such migration, so should a person who has migrated from India to Pakistan even after the commencement of the Constitution be denied the right of citizenship. That is the appellant 's case and it Is based substantially on the ground that the clause "at the commencement of the Constitution" is not used by 436 This argument, however, cannot be accepted because it is plainly inconsistent with the material words used in the Article. It will be noticed that a person who shall not be deemed to be a citizen of India is one "who has, after the first day of March, 1947, migrated from the territory of India to the territory of Pakistan. " It is true that migration after January 26, 1950, would be migration after March 1, 1947, but it is clear that a person who has migrated after January 26, 1950, cannot fall within the relevant clause because the requirement of the clause is that he must have migrated at the date when the Constitution came into force. "Has migrated" in the context cannot possibly include cases of persons who would migrate after the commencement of the Constitution. It is thus clear that it is only persons who had migrated prior to the commencement of the Constitution that fall within the scope of article 7. The use of the present perfect tense is decisive against the appellant 's contention and so, the absence of the words on which Mr. Sen relies has no significance. Besides, as the article is worded, the use of the said words would have been inappropriate and having regard to the use of the present perfect tense, such words were wholly unnecessary. The proviso to article 7 which deals with cases of persons who having migrated to Pakistan have returned to India under a permit for resettlement, also supports the same conclusion. The migration there referred to appears to be migration prior to the commencement of the Constitution. It is relevant to refer to article 9 in this connection. This Article deals with cases of persons who have voluntarily acquired the citizenship of any foreign State and it provides that such persons shall not be deemed to be citizens of India by virtue of articles 5, 6 or 8. Now, it is clear that the acquisition of the citizenship of any foreign State to which this Article refers is acquisition made prior to the commencement, 437 of the Constitution. "Has voluntarily acquired" can have no other meaning, and so, there is no doubt that the application of article 9 is confined to the case of acquisition of citizenship of foreign State prior to the commencement of the Constitution. In other words, the scope and effect of article 9 is, in a sense, comparable to the scope and effect of article 7. Migration to Pakistan which is the basis of article 7 like the acquisition of citizenship of any foreign State which is the basis of article 9, must have taken place before the commencement of the Constitution. It will be noticed that migration from Pakistan to India as well as migration from India to Pakistan which are the subject matters of articles 6 and 7 deal with migrations prior to the commencement of the Constitution. The Constitution makers thought it necessary to make these special provisions, because migrations both ways took place on a very wide scale prior to January 26, 1950, on account of the partition of the country. Migrations to Pakistan which took place after January 26, 1950, are not specially provided for. They fall to be considered and decided under the provisions of the ; and as we will presently point out, citizens migrating to Pakistan after the said date would lose their Indian citizenship if their cases fall under the relevant provisions of the said Act. It is true that as article 7 begins with a non obstante clause by reference to articles 5 & 6, and there is a little overlapping. The non obstante clause may not serve any purpose in regard to cases falling under article 5 (c), but such overlapping does not mean that there is any inconsistency between the two Articles and it can, therefore, have no effect on the construction of article 7 itself. Therefore, we are satisfied that article 7 refers to migration which has taken place between March 1, 1947, and January 26, 1950. That being so, it cannot be held that the respondents fall within article 7 by virtue of the fact that they migrated from India to Pakistan some time after 438 January 26, 1950, and should, therefore, be deemed not to be citizens of India. In this connection, it is necessary to add that cases of Indian citizens acquiring the citizenship of any foreign State are dealt with by article 9, and the relevant provisions of the . If the foreign citizenship has been acquired before January 26, 1950, article 9 applies; if foreign citizenship has been acquired subsequent to January 26, 1950, and before the came into force, and thereafter, that is covered by the provisions of the , vide Izhar Ahmed Khan vs Union of India(1). It is well known that the has been passed by the Parliament by virtue of the powers conferred and recognised by articles 10 and 11 of the Constitution and its relevant provisions deal with the acquisition of citizenship of India as well as termination of the said citizenship. Citizenship of India can be terminated either by renunciation under section 8, or by naturalisation, registration or voluntary acquisition of foreign citizenship in any other manner, under section 9, or by deprivation under section IO. The question about the citizenship of persons migrating to Pakistan from India after January 26, 1950, will have to be determined under these provisions of the . If a dispute arises as to whether an Indian citizen has acquired the citizenship of another country it has to be determined by such authority and in such a manner and having regard to such rules of evidence as may be prescribed in that behalf That is the effect of section 9(2). It may be added that the rules prescribed in that behalf have made the Central Government or its delegate the appropriate authority to deal with this question, and that means this particular question cannot be tried in courts. The result is that the respondents cannot be said to be foreigners by virtue of their migration to Pakistan after January 26, 1950, and that is the only question (1) [1962] Supp. 2 S.C.R. 235. 439 which can be tried in courts. If the State contends that the respondents have lost their citizenship of India under section 9 (2) of the , it is open to the appellant to move the Central Government to consider and determine the matter, and if the decision of the Central Government goes against the respondents, it may be competent to the appellant to take appropriate action against the respondents. So far as the appellant 's case against the respondents under article 7 is concerned, the High Court was right in holding that the respondents were not foreigners within the meaning of cl. 7 of the Order and cannot, therefore, be prosecuted under section 14 of the Act. The appeal accordingly fails and is dismissed. Appeal dismissed.

IN-Abs

The respondents who were citizens of India left India for Pakistan sometime after January 26, 1950. They returned to India in 1956 on the strength of a Pakistani passport and visa. They continued to stay in India even after the period of the visa had expired and were prosecuted under section 14 , read with cl. 7 Foreigner 's Order, 1948, for unauthorised and illegal overstay in India. The High Court acquitted them holding that they had not become foreigners on.account of their leaving India after January 26, 1950, and the question whether they had lost their Indian citizenship on account of acquisition of Pakistani citizenship could not be agitated before a court of law. The appellant contended that in view of article 7 of the Constitution the respondents could 430 not be deemed to be citizens of India as they had migrated to Pakistan after March 1, 1947, within the meaning of article 7. Held, that article 7 was applicable only to persons who had migrated to Pakistan between March 1, 1947, and January 26, 1950, and under this Article the respondents had not ceased to be citizens of India. The words "has migrated" in article 7 could not include cases of persons who would migrate after the commencement of the Constitution, they refer only to persons who had migrated at the date when the Constitution came into force. The absence of the words "at the commencement of the Constitution" in article 7 has no significance. Cases of acquisition of foreign citizenship after January 26, 1950, were covered by the provisions of the , and of the rules made thereunder. The Central Government or its delegate was the appropriate authority to deal with such questions and they could not be tried in courts. Izhar Ahmad Khan vs Union of India, referred to.

Appeal No. 545 of 1961. Appeal from the judgment and order dated October 23, 1958, of the Bombay High Court in Income tax Reference No. 23 of 1958. K. N. Rajagopal Sastri and R. N. Sachthey, for the appellant. Purushottam Trikamdas, section N. Andley, Rameshwar Nath and P. L. Vohra, for the respondent. 611 1962. October 12. The following judgments were delivered. The judgment of Kapur and Hidayatullah, jj. was delivered by Hidayatullah, J., Sarkar, J., delivered a separate judgment. HIDAYATULLAH J. This is an appeal by the Commissioner of Income tax, Bombay., against the judgment and order of the High Court of Bombay dated October 23, 1958, by which the High Court answered two questions referred to it under section 66 (2) of the Income tax Act in favour of the respondent jadavji Narsidas & Co. The High Court certified this case as fit for appeal to the Supreme Court and hence this appeal. The facts are simple. The year of account is the section Y. 2001 corresponding to October 10, 1944, to November 4, 1945, and the assessment year is 1946 47. The respondent is a firm consisting of four partners and was registered under section 26A of the Income tax Act for the relevant year. The assessee firm carries on business which is mainly speculation. In the year of account it claimed inter alia a loss of Rs. 1,05,641 which it was said, arose in speculation in a venture of the assessee firm with one Damji Laxmidas. This venture was carried on in the name of Damji Laxmidas on behalf of an alleged firm in which Damji was said to have a share of /6/ and the assessee firm the balance. A deed of partnership dated November 14, 1944, was also produced before the Income tax Officer. The sum of Rs. 1,05,641 represented half the losses of the joint venture, the other half being claimed by Damji in his own individual assess ment. The so called firm of Damji Laxmidas and the assessee firm was an unregistered one. The Income tax Officer. , Bombay, disallowed these losses and added back this amount along with some others to convert a loss of Rs. 55,931 declared by the assessee firm into a profit of Rs. 1,88,575. This profit was carried by him in accordance with the share of the partners into their individual assessment. 612 In the assessment of Damji, it may be stated here, the loss was not allowed on the ground that having arisen in an unregistered partnership, it could only be considered in the assessment of the unregistered partnership. In rejecting the evidence of the loss of Rs. 1,05,641 in the assessment of the assessee firm the Income tax Officer gave three reasons (i) that the ankdas were in the name of Damji Laxmidas and not in the name of the unregistered firm or the assessee firm, (ii) that the assessee firm claimed only 18/ of the losses and riot /10/ according to its share and (iii) that the assessee firm which was a well known firm doing extensive business was said, surprisingly enough, to have entered into a partnership wit an insignificant person like Damji Laxmidas to carry on this vast business. He held that the assessee firm had purchased these losses from Damji Laxmandas to be able to set them off against its profits to avoid tax. The Appellate Assistant Commissioner dismissed the appeal filed by the assessee firm and so also the Appellate Tribunal. The two members of the Appellate Tribunal gave different reasons. The judicial Member (Mr. A. R. Aggarwal) observed: "So far as the last item No. (3) is concerned we are not satisfied that really the loss of Rs. 1,05,641/ was the loss of the assessee. It is admitted by the assessee that the ankdas are in the name of Damji Laxmidas. By no evi dence we are satisfied (sic) that really the assessee did business in the joint account. Consequently, this claim of the assessee is disallowed. " The Accountant Member (Mr. P. C. Malhotra) observed : "I agree with my learned brother in the order which he has passed. I would, however, like to add a few words. It is not even the assessee 's case that loss of Rs. 1,05,641/ was suffered by it. 613 According to the assessee it did some joint venture transactions with Damji Laxmidas. Damji Laxmidas came in appeal to the Tribunal in respect of his share of the loss. It was held that the loss arising to a person in a joint venture cannot be allowed in his personal assessment as the loss is suffered by an unregistered partnership. It can only be carried forward in the account of the unregistered firm. " The assessee firm applied to the Tribunal asking that a case be stated to the High Court but failed. The assessee firm then moved the High Court under section 66 (2) of the Income tax Act and under the High Court 's direction the Tribunal stated a case on the following questions "(1) Whether there was any legal, admissible evidence to justify the Tribunal 's finding that the transaction in question was not the transaction of the assessee. (2) If not, whether the assessee can claim the set off of such loss although it is the loss of an unregistered partnership. " The first question arises out of the observations of the judicial Member and the second question from those of the Accountant Member. The High Court answered both the questions against the Department. It held that there was no legal admissible evidence to justify the finding that the transactions in question were not those of the assessee firm and further that the assessee firm could claim a set off in respect of the share of loss in the unregistered firm "if the Income tax Authorities do not proceed to determine the losses of the unregistered firm and do not bring it to tax as permitted by section 23(5)(b). " On the first question the appellant argues that the High Court has decided the case as an Appeal 614 Court which it was not entitled to do. This is not a true representation of what the High Court did. Whenever the question propounded is whether there is any material on which a finding can be given the discussion savors of an appellate approach but it is not so. The High Court noticed that the Tribunal had picked up only one reason from the order of the Income tax Officer and held that the assessee firm had " 'purchased losses" from Damji Laxmidas but said nothing about the other reasons which had influenced the Income tax Officer. The High Court, however, examined all the reasons given by the Income tax Officer and reached the conclusion that there was no evidence to justify the finding which had been given in the case. Before examining the evidence ourselves to see which conclusion is justified, we wish to make a few general observations. In a reference under section 66, a finding given by the Tribunal is considered final and the High Court accepts it without examination of the material. The High Court does not hear an appeal but answers certain questions of law in the light of the facts proved. If a finding is final in this way, one does expect that the reasons for reaching it will at least be stated with sufficient fullness to inform all concerned what they were. Even if the reasons given by an inferior Tribunal are not restated, at least a general approval of them, or such of them as are acceptable, should appear. In the present case, all that is stated is "It is admitted by the assessee that the ankdas are in the name of Damji Laxmidas. By no evidence we are satisfied (sic) that really the assessee did business in the joint account. " This, by itself, is hardly a fair disposal of the question whether the assessee firm did business in a joint account with one Damji Laxmidas. The solitary ground for rejecting the claim is too indefinite to 615 warrant this conclusion. It is contended that we should take into account also the reasons given by the Income tax Officer which were before the Income tax Tribunal and which have also been mentioned in the statement of the case. The High Court did so and we allowed those reasons to be brought before us. We would, however, have preferred if the order of the Tribunal in the appeal filed by the assessee firm had even briefly expressed their approval of those reasons and not left them to be mentioned in the statement of the case. The question, then, is whether there was evidence to justify the Tribunal 's finding that the transactions with Damji Laxmidas were not the transactions of the assessee firm. In such an inquiry the Court looks not to the sufficiency of the evidence but whether any evidence exists at all. Even if there be slight evidence which was believed by the Tribunal and on which the conclusion can be rested, such question must be answered in the affirmative. But the finding must not proceed upon conjecture, suspicion or surmise. If there is not a scintilla of evidence, the finding cannot be sustained because the proved facts would not then support the inference. In this connection, the Income tax Officer gave three reasons. The most important of which being the ankdas were in the name of Damji. According to the deed of partnership, which has been produced in the case, the four partners of the assessee firm and Damji had entered into a partner ship to do business together, specifying the shares of the partners of the assessee firm which shares inter se are in the same proportion as their interest in the assessee firm. The new firm was not given a trade name. This is no doubt an unusual feature. But if no name was given then business could be carried can only in the name or names of one or more partners. That Damji 's name was chosen, and not any other, does not lead to the inference that business was not done, If Damji 's 616 name was used then it is reasonably clear that the ankdas would be in his name and that is how the matter stood. The next reason is that the losses were claimed on the basis of half and half by the assessee firm and Damji, in their respective assessments contrary to the proportion of /10/ and /6/ as in the deed. What ever may be said of the losses claimed by Damji which were in excess of the agreed share the same cannot be said of the assessee firm which is claiming a share of losses which is less than the a greed rate. But sometimes additional responsibility is shouldered by a partner because of some action taken by him not meeting with the approval of the others. Often enough the shares are readjusted by agreement. There may be many reasons why the loss claimed by the assessee firm was less than what it could have really claimed but this hardly leads to the inference that no business was done. This circumstance also does not lead to the inference which has been drawn from it. The third reason is that it is unlikely that the partners of a big firm like the assessee firm would enter into an agreement with a comparatively small ' man for doing such vast business. It is pointed out that Damji had at no time paid Income tax in excess of Rs,. 1,300. The accounts of the new partnership have been exhibited in the case. They show a long course of business. The total business done was to the tune of Rs. 9 lacs odd. As speculative business is made up, almost always, of either loss or profit we should also look to the extent of the profits made and not merely the losses. In this case, but 'for one or two transactions which miscarried, Damji would have made a huge profit. It is possible that he was chosen as a partner In view of his acumen in these matters rather than his ability to finance the projects. This is not to say that buying of losses ' is not common or that men of straw are not taken on as partners to give up 617 their losses to equalise profits elsewhere. The fact remains, as pointed out by the High Court, that losses can only be bought if they have been incurred and in the present case there is a long course of business which at certain stages was profitable though ultimately it showed a loss. it is impossible to say in this case that the assessee firm took over losses without actually having done business in company with Damji. There is no foundation, whatever, for the inference that the losses were purchased by the assessee firm from Damji whether we take the reasons given by the Income tax Officer individually or collectively. We are of the opinion that the High Court did not exceed its powers in examining the evidence in support of the inference of the Income tax Officer that no business was done in company with Damji but the assessee firm took over some of his losses. The answer of the High Court to the first question is therefore upheld. This brings us to the second question and it is whether the assessee firm can set off the loss of Rs. 1,05,641 against its other profits from its other business? The High Court has held that it can do so. In our opinion, and we say it with great respect, the High Court was in error in reaching this conclusion. To begin with the assessee firm as a firm could not enter into a partnership with Damji. Damji could be admitted into the assessee firm or the members of the assessee firm could enter into a partnership with Damji in their individual capacity. The assessee firm however could not do so as a firm. This was held by this Court in Dulichand vs Commissioner of Income tax(1). There was thus a partnership between Damji and the four members of the assessee firm acting for themselves and indeed the deed which has been produced in this case shows as much. In the affairs of the unregistered firm, the assessee firm had no locus standi. There were thus two distinct (1) 618 partnerships. One was the assessee firm which was registered COnsisting of four partners and the second was an unregistered firm consisting of five partners of whom the fifth was Damji. The provisions which bear upon the question are many and need not be set out at length. The gist of the relevant sections will be stated by us in this judgment. Under section 24(1) an assessee sustaining a loss of profits in any year under any of the heads mentioned in section 6 is entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year. From April 1, 1953, loss sustained in speculative transactions can only be set off against profits arising in the same kind of business. In the present case, both the profits of the assessee firm and the loss in the transactions with Damji arose out of speculation and no difficulty arises. By assessee in the section is meant the person by whom tax is paid and in every instance it is necessary to find out who that assessee is. In this case the assessee is a registered firm of four partners and these partners did business resulting in profits as members of the assessee firm and also as members of another unregistered firm which led to a loss. Now the 'assessment of firms is done differently accordingly as they are registered or unregistered. Section 23 (5) states that when the assessee is a firm the total income of the firm must be assessed but if the firm is a registered firm the tax payable by the firm is not to be determined but the total income is to be carried to the assessment of the partners in accordance with their shares and the profits or losses, as the case may be, must be assessed as part of their other income. But when the assessee is an unregis tered firm, the assessment is of the firm itself unless the Income tax Officer finds that by assessing the unregistered firm as a registered firm more tax is likely to result. The assessment otherwise is of the unregistered firm and not of the partners in their 619 private assessment. This is the gist of the rule contained in the fifth sub section of section 23. There are, however, other provisions which must also be noticed. The first provision to notice is section 16 (1) (b) which says that when the assessee is a partner of a firm, then whether the firm has made a profit or loss, his share (whether a net profit or a net loss) is to be computed in the stated manner and if his share so computed is a loss, such loss may be set off or carried forward and set off in accordance with the provisions of section 24. Section 24 then provides for the set off of the loss as well as the carrying forward of the loss. The second proviso deals with the question of set off in relation to both registered and unregistered firm. It says that when the assessee is an unregistered firm (not assessed as a registered firm) the loss can only be set off against the income. , profits and gains of the firm and not those of partners, but if the assessee is a registered firm, the loss which cannot be set off against the income, profits and gains of the firm shall be apportioned among the partners and they alone shall be entitled to have the amount of loss set off under the section. Shortly stated, the losses incurred by an unregistered firm can be set off only against its own profits while the net losses of a registered firm are apportioned among the shareholders and they alone are entitled to set them off. Then come the provisions with regard to the carrying forward of the losses under section 24 (2). Here also there is a difference between registered and unregistered firms. The difference continues the distinction made by the proviso to sub section (1) which we have just noticed. Proviso (c) deals with a registered firm and partners in unregistered firms in the same manner as the proviso to sub section (1) above analysed. It says that (a) a registered firm is not entitled to carry forward and set off any loss apportioned between the partners and (b) partners in unregistered firms assessed as such are likewise not entitled to carry forward and set off against their own income losses sustained by the firm. An unregistered firm assessed as a registered firm comes under (a) above. What then is the position here ? The unregistered firm has not been assessed. The assessee firm alone has been assessed and on its own assessment it has shown a profit. It seeks to set off against its profits a loss of Rs. 1,05,641 which, it is said, was incurred by it in partnership with Damji. We have shown above that there can be no partnership between the assessee firm and Damji. There was however a partnership between Damji and the four partners of the assessee firm in their individual capacity . Now under section 24 (1) 2nd Proviso the losses of the unregis tered firm of Damji and these four partners can only be set off against the income, profits and gains of the unregistered firm and not those of its partners. The loss of Rs. 1,05,641 could be set off against the income, profits and gains (if any) of the unregistered firm of five persons and not of the partners. In the same manner the loss, if not absorbed, could be carried forward to be set off against further income, profits and gains of the same unregistered firm of five persons. The High Court was thus in error in holding that those losses could be set off against the income of the assessee firm. It makes no difference that the Department has not assessed the unregistered firm or taken action under section 23 (5) (b). What the High Court has ordered just cannot be done as it is against the provisions of section 24. Whether the partners in their individual assessments would be able to take advantage of section 16 (1) (b) and the decision of the Privy Council in Arunachalam Chettiar vs Income tax Commissioner (1) (a point almost conceded before us), is not a matter on which we need pronounce our opinion. That question does not arise for our consideration. The answer of (1) (1936) L. R. 63 I. A. 233. 621 the High Court to the second question is set aside and the question is answered in the negative. In view of the equal success parties will bear their own costs here and in the High Court. SARKAR. , J. The respondent, a firm registered under the Income tax Act, 1922, claimed in its assessment to that tax for the year 1946 47, a set off for a sum of Rs. 1,05,641/ as its share of the loss of another partnership said to exist between it and one Damji Laxmidas and which, for convenience, I will call the bigger partnership. The Income tax Officer refused to allow the set off on the ground that the existence of the bigger partnership had not been established. The respondent firm 's appeals, first to the Appellate Commissioner and then to the Appellate Tribunal from the order of the Income tax Officer failed. Thereafter pursuant to an order obtained by the respondent firm from the High Court of Bombay, two questions were referred by the Tribunal to that Court for decision. Both these questions were. answered by the High Court against the Department and the Commissioner of Income tax has thereupon filed the present appeal. The first of these questions is, "Whether there was any legal admissible evidence to justify the Tribunal 's finding that the transaction in question was not the transaction of the assessee". Now it has been held by this Court in Dulichand Lakshminarayan vs The Commissioner of Income tax, Nagpur (1) that eta firm as such is not entitled to enter into partnership with another firm or individuals". The respondent firm, therefore, as a firm could not in law have entered into any partnership with Damji. It would hence be to no purpose to enquire whether there was evidence to justify the finding that such a partnership existed or in other words, to enquire whether the evidence showed that an agreement of partnership (1)[1956] S.C.R. 154,163. 622 which in law could not be made had in fact been made. That which the law does not recognise does not for a court of law exist. I think therefore that the first question does not really arise and no answer to it need be given. The second question which was referred to the High Court was, "If not, whether the assessee can claim the set off of such loss, although it is the loss of an unregistered partnership." As framed, this question is posed only if the first question is answered in the negative. As in my view the first question does not arise at all, I will consider this question independently of the first. The High Court , s answer to this question was that the respondent firm can claim the set off and this answer was based on the assumption that a partnership between a firm and an individual is permissible, an assumption which must be held to be unwarranted in view of the decision in Dulichand 's case.(1) It must be held that no partnership in which the respondent firm as such is a partner, exists. If the partnership does not exist, the respondent firm cannot have suffered any loss as a partner in it and there is therefore no loss for which it can claim a set off. The sections of the Act dealing with set off would not justify a set off in such circumstances. Thus under section 10 an assessee is entitled to set off the loss incurred by him in one business against the profits made by him in another business : see Anglo French Textile Co. Ltd. vs Commissioner of Income tax (2). It is hardly necessary to point out that in the case of a single business its profits can only be ascertained after its losses have been taken, into account. If this also is to be called a set off, I suppose it may also be justified under section 10. It is clear that the set off contemplated by this section is of a loss suffered by the assessee himself. That is not the position in the present case. The assessee, the respondent firm, has no interest in the bigger partnership (1) [1956] section C. R. 154, 163. (2) ,453. 623 and, therefore, no concern with its losses. Sub section (1) of section 24 also provides for set off by an assessee of a loss suffered by him under one head of income against the profits earned by him under another head. This section would not assist the respondent firm or the same reason as in the case of. 10 and also because it applies when two heads of income are being considered while in the present case we have only one head of income, namely., business. The second proviso to sub sec. (1) of section 24 provides for certain rights of set off in the case of assessment of unregistered and registered firms. That part of this proviso which deals with an unregistered firm cannot obviously apply to the present case which is one of the assessment of registered firm. The other part of the proviso dealing with a registered firm would not assist the respondent firm either though it is a registered firm, because the right of set off that it gives is only to the partners of a registered firm and not to the registered firm itself and in the present case we are not concerned with a claim of set off by any partners of the respondent firm. No other section of the Act dealing with set off has been brought to our notice. The second question should therefore be answered in the negative. Strickly speaking, this question also does not arise. As the bigger partnership does not exist, no question of its being registered or otherwise can arise. Learned counsel for the respondent firm however contended that the bigger partnership was really between Damji and the partners of the respondent firm. I will assume that to have been so. It may be that in such a case the individual partners of the respondent firm in their respective assessments may claim a set off of their shares of the loss of the bigger partnership but with such assessments of individual partners this case is not concerned. The question here is whether the respondent firm can claim a set 624 off in its own assessment. I venture to say that it does not follow that because the partners of the respondent firm may in their individual assessments be able to claim the set off, the respondent firm itself can do so they are different assessees each with a separate and independent right of set off. One cannot claim a set off basing such claim on the other 's right to it, But it was said that in the present case the real assessees were the partners of the respondent. I am entirely unable to accept that contention. Section 23(5) of the Act contemplates a registered firm as an assessee though it did not have to pay any tax itself as the law stood prior to April 1, 1956. The whole proceedings in the present case have been conducted on the basis that the respondent firm was the assessee. The questions raised in this case were framed on that basis and we are not called upon by them to say whether the partners of the respondent firm had any right of ' set off. The assessees in the present case were not the partners of the respondent firm. If they were, we would have found the respective incomes of the individual partners from other sources being considered but this was not what had happened. It seems to me to be impossible to contend in the present case that the assessees were the partners of the respondent firm. I would allow the appeal with costs here and below. By COURT : In view of the opinion of the majority the answer of the High Court to the first question is upheld and the answer to the second question is set aside. The parties will bear their own costs here and in the High Court.

IN-Abs

The respondent, a firm consisting of four partners, was registered under the Indian Income tax Act, 1922. For the assessment year 1946 47 it claimed to set off a sum of Rs. 1,05,641, as its share of the loss in respect of certain transactions said to have been carried on in the name of D by another partnership between it and D, which was not registered. The income tax authorities rejected the claim and the Appellate Tribunal agreed with their decision on the grounds (1) that it being admitted that the ankdas were in the name of D, there was no satisfactory evidence that the assessee did business in the joint account, and (2) that, in any case, the assessee could not claim the set off as the loss was suffered by an unregistered firm. 610 On a reference, the High Court held (1) that there was no legal admissible evidence to justify the Tribunal 's finding that the transactions in question were not those of the assessee, and (2) that the assessee firm could claim a set off in respect of the share of loss in the unregistered firm "if the income tax authorities did not proceed to determine the losses of the unregistered firm and did not bring it to tax as permitted by section 23 (5) (b). " Held, that the High Court erred in its view that the asses see firm could claim a set off in respect of the loss incurred in the unregistered firm. Held, further (per Kapur and Hidayatullah,. JJ.) : (1) that if under section 66 of the Indian Income tax Act, 1922, a finding given by the Appellate Tribunal is to be considered final, it is necessary that the reasons for reaching it should be stated by the Tribunal with sufficient fullness to inform all concerned what they are. (2) that there could not be a partnership between D and the registered firm. If there was a partnership it was between D and the four partners of the assessee firm in their individual capacity, and under the provisions of section 24 of the Act the loss of Rs. 1,05,641 could not be set off against the profits of the registered firm. Per Sarkar, J. In view of the decision in Dulichand Laksh minarayan vs The Commissioner of Income tax, Nagpur, [1956] section C R. 154, that a firm as such is not entitled to enter into partnership with another firm or individuals, the assessee firm could not in law enter into partnership with D, and the questions answered by the High Court did not really arise in the present case.

Appeal No. 21. of 1962. Appeal by special leave from the judgment and order dated September 23, 1958, of the Bombay High Court in I.T. Reference No. 87 of 1957. H.N. Sanyal, Additional Solicitor General of India, N. D. Karkhanis and R. N. Sachthey, for the appellant. A.V. Viswanatha sastri, J. B. Dadwhanji, O. C. Mathur and Ravindra Narain, for the, respondent, 768 1962. October 25. The judgment of the Court was delivered by SHAH, J. For the year of account ending March 31, 1955, Afco Private Ltd. a private limited company earned a total income which was finally computed in assessment proceedings by order of the Income tax Tribunal, at Rs. 49,843/ . The company declared a dividend of Rs. 11,7121 on July 13, 1955, and before the close of the year of assessment 1955 56 declared an additional dividend of Rs.5,612/ , thereby distributing in the aggregate dividend which was not less than 60% of the total income, reduced by the income tax and super tax payable by it. The company then claimed rebate at the rate of one anna in the rupee on the amount computed according to Schedule 1, Part 1, Item B read with section 2 of the Finance Act 15 of 1955. The Income tax Officer and the Appellate Assistant Commissioner rejected the claim because in their view the claimant was a company to which the provisions of section 23A of the Income tax Act could not be made applicable. In appeal, the Income tax Appellate Tribunal, Bombay ', reversed the order of the Income tax authorities. The Tribunal opined that the expression "cannot be made applicable" in Item B of Part 1 of Schedule 1 of Finance Act 15 of 1955 must be read in conjunction with section 23A of the Income tax Act, and the benefit of rebate provided by the Finance Act, 1955, cannot be denied to a Private Company if the conditions prescribed in section 23A(1) are fulfilled. The following question referred by the Tribunal to the High Court of judicature at Bombay was answered in the affirmative : "Whether on the facts and in the circumstances of the case, the assessee company having distributed dividends of over 60% of the company 's total income less income tax and super tax payable thereon is entitled to the rebate of 769 1 anna per rupee on the undistributed balance of profits as provided in clause (1) of the proviso to item B of Part 1 of the 1st Schedule to the Finance Act of 1955 ?" By the Finance Act 15 of 1955 Schedule 1 Item B read with section 2 of the Act rates of tax were prescribed in the case of companies. Item B providedthat "in the case of every company Rate surcharge on the whole of total income Four annas one twen in the tieth of rupee the rate specified in the pre ceeding column. Provided that in the case of a company which, in respect of its profits liable to tax under the Income tax Act for the year ending on the 31st day of March, 1956, has made the prescribed arrangements for the declaration and payment within the territory of India, of the dividends payable out of such profits., and has deducted super tax from the dividends in accordance with the provisions of sub section (31) of section 18 of that Act (i) where the total income, as reduced by seven annas in the rupee and by the amount, if any, exempt from income tax, exceeds the amount of any dividends (including dividends payable at a fixed rate) declared in respect of the whole or part of the previous year for the assessment for the year ending on the 31st day of March, 1956, and the company is a corn any to which the provisions of section 23A of the Income tax Act cannot be made applicable, a rebate 770 shall be allowed at the rate of one anna per rupee on the amount of such excess ; (ii)x x x x" By section 23A(1) of the Income tax Act at the material time the Income tax Officer was authorised to order a company to pay super tax, at the rate of eight annas in the rupee in the case of a company whose business consisted wholly or mainly in the dealings in or holding of investments, and at the rate of four annas in he rupee in the case of any other company, on the undistributed balance of the total income of the previous year, that is to say, on the total income reduced by the amounts of income tax and super tax and any other tax payable under any law in excess of the amounts allowed in computing the income, and in the case of Banking companies in addition to the taxes, funds actually transferred to a reserve fund, and the dividends actually distributed, if any, where in respect of any previous year the profits and gains distributed as dividend by the company within the twelve months immediately following the expiry of that previous year were less than 60% of the total income of the company of that year as reduced by the amounts aforesaid, unless the Income tax Officer was satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profits made in the previous year, the payment of a dividend or a larger dividend than that declared would be unreasonable. It is manifest that the order under section 23A(1) would (excluding certain procedural conditions) be ordinarily made if the company has distributed by way of dividend within the twelve months immediately following the expiry of the accounting year less than the prescribed percentage of the total income as reduced by the, amount of taxes paid in the case of non Banking Companies and reserve fund in addition thereto in the case of Banking Companies 771 By the first paragraph of sub section (9) of section 23 A it is provided that "Nothing contained in this section shall apply to any company in which the public are substantially interested or to a subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year. " This clause is followed by two explanations. Explanation 1, in so far as it is material to this case, provides : "Explanation 1 For the purposes of this section, a company shall be deemed to be a company in which the public are substantially interested (a) x x x x (b) if it is not a private company as defined in the Indian Companies Act, 1913 (VII of 1913), and (i) x x x x (ii) x x x x (iii) x x x x Explanation 2. x x x x" Section 23A was enacted to prevent evasion of liability to pay super tax by shareholders of certain classes of companies taking advantage of the disparity between the rates of super tax payable by individuals and by the companies. The rates of super tax applicable to companies being lower than the highest rates applicable to individual assessees, to prevent individual assessees from avoiding the higher incidence of super tax by the expedient of transferring to companies the sources of their income, and thereby securing instead of dividends the benefit of the profits of the company, the Legislature had by Act XXI of 1930, as modified by Act VII of 1939, enacted a special 772 provision in section 23A investing the Income tax Officer with power, in certain contingencies prescribed in the section to order that the undistributed balance of the assessable income reduced by the amount of taxes and the dividends shall be deemed to have been distributed at the date of the general meeting. By the Finance Act 15 of 1955 section 23A (1) was amended and the Income tax Officer was directed to make an order that the Company shall be liable to pay super tax oil the undistributed balance at the rates prescribed under the section. But by virtue of sub. section (9) of section 23A the or der can be made only in respect of a company in which the public are not substantially interested or of a subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year, and by cl. (b) of the first explanation thereto a private company as defined in the Indian Companies Act, 1913, is not a company in which the ' public are substantially interested. It is, therefore, competent to the Income tax Officer to pass an order under section 23A (1) if the conditions thereof are fulfilled directing payment of super tax by a private company at the rates prescribed by the Finance Act 15 of 1.955 on its undistributed balance. To reduce the rigour of this provision the Legislature has provided for inducement in the form of rebate on the difference between nine annas in every rupee of the total net income, and the amount of dividend declared, to companies which have declared dividends so as not to attract the application of an order under section 23A. But that benefit is admissible only in favour of companies to which the provisions of section 23A of the Act cannot be made applicable. The Income tax authorities held that the expression company to which the provisions of section 23A of the Income tax Act cannot be made applicable ' is descriptive of a class of companies against which in no circumstances can an order under section 23A of the 773 Indian Income tax Act be made, and private limited companies being companies in respect of which an order under section 23A of the Income tax Act can be made if the conditions prescribed relating to distribution of dividend are fulfilled, the benefit of rebate is not admissible in their favour. The Tribunal and the High Court held that the expression " 'cannot be made applicable" only refers to a state of affairs in which having regard to the circumstances an order under section 23k of the Indian Income tax Act cannot be made. In our judgment the Income tax Appellate Tribunal and the High Court were right in so holding. The Legislature has used the expression "cannot be made applicable" which clearly means that the applicability of section 23A depends upon an order to be made by the Income tax Officer, and not upon any exclusion by the provisions of the Act. Before an order can be made under section 23A of the Income tax Act, the Income tax Officer has to ascertain (i) whether the company conforms to the description in sub section (9) of section 23A; if it does ' the lncome tax Officer has no power to make an order ; and (ii) if the company is not one which falls within cl. (9) of section 23A whether having regard to inadequacy of the declaration of dividend, an order for payment of super tax should not, because of the losses incurred by the company in the earlier years, or to the smallness of the profits in the previous year, be made. Satisfaction of the Income tax Officer as to the existence of several conditions prescribed thereby even if the company is one which does not fall within sub section (9) of section 23A is a condition of the making of the order. The language used by the Legislature clearly indicates that it is only when an order under section 23A will not, having regard to the circumstances ' be justified that the right to obtain rebate under the Finance Act 15 of 1955 is claimable. The Legislature has not enacted that the benefit of rebate is admissible only to companies against which the order under sub section (1) of section 23A can never be made. 774 The Legislative history as disclosed by the earlier Finance Acts supports this interpretation of the relevant provision. In the Finance Acts prior to 1955 rebate under Part I of the 1st Schedule Item B was admissible if the company had in respect of profits liable to tax under the Indian Income tax Act made the prescribed arrangements for declaration and payment of dividends payable out of the profits and had deducted super tax from the dividends in accordance with section 18(3D) & (3E), where the total income reduced by seven annas in the rupee ' and the amount exempt from income tax exceeded the amount of any dividends declared and no order had been made under sub section (1) of section 23A of the Income tax Act. The right to rebate arose under those Finance Acts if no order under section 23A was made. The Income tax Officer had therefore to decide even before completing the assessment of the company whether the circumstances justified the making of an order under section 23A, and unless an order under section 23A was made the assessee became entitled automatically to the rebate of one anna in the rupee. Such a provision led to delay in the disposal of assessment proceedings and caused administrative inconvenience. It appears that the Legislature modified the scheme of granting rebate in enacting the Finance Act of 1955 with a view to simplify the procedure and avoid delays, and not with the object of depriving the private limited companies as a class, of the benefit of rebate which was permissible under the earlier Acts. Counsel for the Income tax Commissioner invited our attention to the Finance Acts of 1956 and 1957 and contended that the Legislature in dealing with the right to rebate under Part II relating to the rates of super tax used phraseology which restricted the right of rebate only to public companies. Ie must be noticed that even under the Finance Act of 1955 by Part II of Schedule 1, item D, a rebate of three annas per rupee of the total income was to bf 775 allowed to companies in respect of profits liable to tax under the Income tax Act for the year ending March 31, 1956, if the company had made prescribed arrangements for payment of dividend payable out of profits and for reduction of super tax from dividends in accordance with the provisions of sub section 3D of section 18 of the Act and the company was a public company with a total income not exceeding Rs. 25,000/ . This provision was slightly modified in the Finance Act of 1956 where the rebate admissible was at the rate of five annas in the rupee, (other condition being fulfilled) if the company was a public company with total income not exceeding Rs. 25,000/to which the provisions of section 23A could not be made applicable. Under the Finance Act of 1957 rebate was admissible in favour of companies "referred to in sub section (9) of section 23A of the income tax Act with total income not exceeding Rs. 25,000/ . " All these provisions about rebate were enacted in prescribing the rates of super tax. In the Finance Act of 1955 the Legislature in dealing with the right of rebate under Part I prescribing rates of income tax, made it admissible in respect of companies to which provisions of section 23A of the Income tax Act could not be made applicable, whereas under Part II prescribing rates of super tax, rebate was made admissible in respect of public companies having income not exceeding the prescribed amount and rebate at a lower rate where the income exceeded the prescribed limit. If it was intended by the Legislature to exclude private limited companies from the benefit of rebate the Legislature would have adopted the same phraseology as was used in that Act in dealing with the rebates in prescribing rates of super tax. The legislative history instead of supporting the case of the Income tax Department yields inference against their interpretation. We are therefore of the view that the High Court was right in holding that the company was 776 entitled to the rebate claimed by it. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

IN-Abs

For the year of account ending March 31, 1955, the appellant, a private limited company, earned a total income of Rs. 49,843. The company declared a ' dividend of Rs. 11,712 on July 13, 1955, and before the close of the year of assessment 1955 55 declared an additional dividend of Rs. 5,612, thereby distributing in the aggregate dividend which was not less than 767 60% of the total income, reduced by the income tax and supertax payable by it. The company then claimed rebate at the rate of one anna in the rupee on the amount computed according to Sch. 1, Part 1, Item B, read with section 2 of the Finance Act, 1955. The Income tax authorities rejected the claim on the ground that the expression "company to which the provisions of section 23A of the Income tax Act cannot be made applicable" in the provision of law aforesaid in the Finance Act, 1955, on which the appellant company relied, referred to a company against which in no circumstances could an order under section 23A be made, and private limited companies being companies in respect of which an 'order under section 23A could be made if the conditions prescribed relating to distribution of dividend were fulfilled, the benefit of rebate was not admissible in favour of the appellant company. The Appellate Tribunal and the High Court took the view that the benefit of a rebate provided by the Finance Act could not be denied to a private company if the conditions prescribed in section 23.A(1) of the Income tax Act were fulfilled, because, according to their view, the expression "can not be made applicable" only refers to a state of affairs in which having regard to the circumstances an order tinder section 23A could not be made. Held, that the appellant company was entitled to the rebate claimed by it. The expression "to which the provisions of section 23A of the Income tax Act can not be made applicable" in Sch. 1, Part 1, Item B, of the Finance Act, 1955, meant that the appli cability of section 23A of the Income tax Act depended upon an order to be made by the Income tax Officer, and not upon any exclusion by the provisions of the Act. It was only when an order under section 23A would not, having regard to the circumstances, be.justified that the right to obtain rebate under the Finance Act was claimable.

riminal Appeal No. 2 of 1962. Appeal by special leave from the judgment and order dated April 25, 1953 of the Rajasthan High Court Jaipur Bench, Jaipur in Criminal Revision No. 237 of 1956. section P. Varma, for the appellant. section K. Kapur and P. D. Menon, for the respondent. October 22. The judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave is directed against the decision of the High Court of Rajasthan in Criminal Revision No. 237 of 1956 confirming that of the Sessions judge, Alwar, convicting the appellant under section 379 of the Indian Penal Code and sentencing him to a fine of Rs. 200/ . To appreciate the questions raised in this appeal the following facts, either admitted or found by the High Court, may be stated. On November 24, 1945, one Ram Kumar Ram obtained permission, exhibit PB, from the Government of tile former Alwar State to supply electricity at Rajgarh, Khertal and Kherli. Thereafter, he entered into partnership with 4 others with an understanding that the licence would be transferred to a company that would be floated by the said partnership. After the company was formed, it put in an application to the Government through 691 its managing agents for the issue of a licence in its favour. exhibit P. W. 15/B is that application. On the advice given by the Government Advocate, the Government required Ram Kumar Ram to file a declaration attested by a Magistrate with regard to the transfer of his rights and the licence to the company. On April 8, 1948, Ram Kumar Ram filed a declaration to that effect. The case of the prosecution is that Ram Kumar Ram was a friend of the appellant. Pyarelal Bhargava, who was a Superintendent in the Chief Engineer 's Office, Alwar. At the instance of Ram Kumar Ram, Pyarelal Bhargava got the file exhibit PA/ 1 from the Secretariat through Bishan Swarup, a clerk, before December 16, 1948, took the file to his house sometime between December 15 and 16,1948, made it available to Ram Kumar Ram for 'removing the affidavit filed by him on April 9, 1948, and the application, exhibit P. W. 15/B from the file and substituting in their place another letter exhibit PC and another application exhibit PB. After replacing the said documents, Ram Kumar Ram made an application to the Chief Engineer on December 24, 1948, that the licence should not be issued in the name of the company. After the discovery of the tampering of the said documents, Pyarelal and Ram Kumar were prosecuted before the Sub Divisional Magistrate, Alwar the former for an offence under section 379 and section 465, read with section 109, of the. Indian Penal Code, and the latter for an offence under sections 465 and 379, read with section 109 of the Indian Penal Code. The Sub Divisional Magistrate convicted both the accused under the said sections and sentenced them on both the counts. On appeal the Sessions judge set aside the Conviction under section 465, but maintained the conviction and sentence of Pyarelal Bhargava under section 379, and Ram Kumar Ram under section 379, read with section 109, of the Indian Penal Code. Ram Kumar Ram was sentenced to pay a fine of Rs. 500/ and Pyarelal Bhargava to pay a fine of Rs. 200/ . Against these convictions both the accused 692 filed revisions to the High Court and the High Court set aside the conviction and sentence of Ram Kumar Ram but confirmed those of Pyarelal Bhargava. Pyarelal Bhargava has preferred the present appeal. Learned counsel for the appellant raised before us three points, namely, (1) the High Court has wrongly relied upon the confession made by the accused before Shri P. N. Singhal, Officiating Chief Secretary to the Matsya Government at that time, as that confession was not made voluntarily and, therefore, irrelevant under section 24 of the Evidence Act; (2) the said confession having been retracted by the appellant, the High Court should not have relied upon it as it was not corroborated in material particulars; and (3) on the facts found 'the offence of theft has not been made out within the meaning of section 379 of the Indian Penal Code. Another argument, namely, that the statement made by Pyarelal Bhargava before the Chief Secretary was not a confession in law, was suggested but not pursued and, therefore, nothing need be said about it. The first question turns upon the interpretation of the provisions ' of section 24 of the Evidence Act and its application to the facts found in this case. Section 24 of the Evidence Act lays down that a confession caused by inducement, threat or promise is irrelevant in criminal proceedings under certain circumstances. Under that section a confession would be irrelevant if the following conditions were satisfied: (1) it should appear to the court to have been caused by any inducement, threat or promise; (2) the said threat, inducement or promise must have reference to the charge against the accused person; (3) it shall proceed from a personal authority; and (4) the court shall be of the opinion that the said inducement, threat or promise is sufficient to give the accused per son grounds which would appear to him reasonable in supposing that he would gain an advantage or avoid any 693 evil of a temporal nature in reference to the proceedings against him. The crucial word in the first ingredient is the expression " appears". The appropriate meaning of the word "appears" is "seems". It imports a lesser degree of probability than proof. Section 3 of the Evidence Act says: "A fact is said to be 'proved ' when after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Therefore, the test of proof is that there is such a high degree of probability that a prudent man would act on the assumption that the thing is true. But under section 24 of the Evidence Act such a stringent rule is waived but a lesser degree of assurance is laid down as the criterion. The standard of a prudent man is not completely displaced, but the stringent rule of proof is relaxed. Even so, the laxity of proof permitted does not warrant a court 's opinion based on pure surmise. A prima facie opinion based on evidence and circumstances may be adopted as the standard laid down. To put it in other words, on the evidence and the circumstances in a particular case it may appear to the court that there was a threat, inducement or promise, though the said fact is not strictly proved. This deviation from the strict standards ,of proof has been designedly accepted by the Legislature with a. view to exclude forced or induced confessions which sometimes are extorted and put in when there is a lack of direct evidence. It is not possible or advisable to lay down an, inflexible standard for guidance of courts, for in the ultimate analysis it is the court which is called upon to exclude a confession by holding in the circumstances of a particular case that the confession was not made voluntarily. The threat, inducement or promise must proceed from a person in authority and it is a question 694 of fact in each case whether the person concerned is a man of authority or not. What is more important is that the mere existence of the threat, inducement or promise is not enough, but in the opinion of the court the said threat, inducement or promise shall be sufficient to cause a reasonable belief in the mind of accused that by confessing he would get an advantage or avoid any evil of a temporal nature in reference to the proceedings against him: while the opinion is that of the court, the criterion is the reasonable belief of the accused. The section, therefore, makes it clear that it is the duty of the court to place itself in the position of the accused and to form an opinion as to the state of his mind in the circumstances of a case. In the present case it was found that certain documents in the Chief Enginecr 's Office were tampered with and certain papers were substituted. The appellant was the Superintendent in the Chief Engineer 's Office. On April 11, 1949, Shri P. N. Singhal, Officiating Chief Secretary to the Matsya Government, was making a departmental inquiry in respect of the missing documents. The appellant, among others, was questioned about the said documents. The appellant first made a statement, exhibit PL, in which he stated that he neither asked Bishan Swarup to bring file No. 127, nor did he recollect any cause for calling for that file on or about that date. As Shri Singhal was not able to find out the culprit, he expresser his opinion that if the whole truth did not come out, he would hand over the inquiry to the police. Thereafter, the appellant made a statement, exhibit P.L. 1, wherein, in clear terms, he admitted that about the middle of December 1948 Ram Kumar Ram took file No. regarding issue of licence to the Bharat Electrical and Industrial Corporation Ltd., Alwar, from his residence to show it to his lawyers, and that he took the file more than once for that purpose. He also added that this was 695 a voluntary statement. Learned counsel for the appellant argued that the Chief Secretary gave the threat that, if the appellant did not disclose the truth he would place the matter in the hands of the police and that the threat induced the appellant to make the disclosure in the hope that he would be excused by the authority concerned. There is no doubt that the Chief Secretary is an authority within the meaning of section 24 of the Evidence Act, but the simple question is whether the alleged statement by the said authority reappears" to the court to be a threat with reference to the charge against the accused. As we have said, under particular circumstances whether a statement appears to the court to be a threat or not is a question of fact. In this case the three lower courts concurrently held that in the circumstances of the case the statement did not appear to be a threat within the meaning of section 24 of The Evidence Act., but that was only a general statement which any person who lost his property and was not able to find out the culprit would make. It may be that such a statement under different circumstances may amount to a threat or it may also be that another court may take a different view even in the present circumstances of the case, but in exercising the powers under article 136 of the Constitution we are not prepared to differ from the concurrent finding given by the three courts that in the circumstances of the present case that the said statement did not appear to them to be a threat. The second argument also has no merits. A retracted confession may form the legal basis of a conviction if the court is satisfied that it was true and was voluntarily made But it has been held that a court shall not base a conviction on such a confession without corroboration. It is not a rule of law, but is only rule of prudence. It cannot even be laid down as an inflexible rule of practice or prudence that under no circumstances such a conviction can be 696 made without corroboration, for a court may, in a particular case, be convinced of the absolute truth of a confession and prepared to act upon it without corroboration; but it may be laid down as a general rule of practice that it is unsafe to rely upon a confession, much less on a retracted confession, unless the court is satisfied that the retracted confession is true and voluntarily made and has been corroborated in material particulars., The High Court having regard to the said principles looked for corroboration and found it in the evidence of Bishan Swaroop, P.W 7, and the entry in the Dak Book, exhibit PA. 4, and accepted the confession in view of the said pieces of corroboration. The finding is one of fact and there is no permissible ground for disturbing it in this appeal. The last point is that on the facts found no case of theft has been made out. The facts found were that the appellant got the file between December 15 and 16, 1948, to his house, made it available to Ram Kumar Ram and on December 16, 1948, returned it to the office. On these facts it is contended that the prosecution has not made out that the appellant dishonestly took any movable property within the meaning of section 378 of the Indian Penal Code. The said section reads : "Whoever, intending to take dishonestly any movable property out of the possession of any person without that person 's consent, moves that property in order to such taking, is said to commit theft. The section may be dissected into its component parts thus : a person will be guilty of the offence of theft, (1) if he. intends to cause a wrongful gain or a wrongful loss by unlawful means of Property to which the person gaming is not legally entitled or to which the person losing is legally entitled, as the case may be: 697 see ss.23 and 24 of the Indian Penal Code; (2) the said intention to act dishonestly is in respect of movable property; (3) the said property shall be taken out of the possession of another person without his consent; and (4) he shall move that property in order to such taking. In the present case the record was in the possession of the Engineering Department under the control of the Chief Engineer. The appellant was the Superintendent in that office; he took the file out of the session of the said engineer. removed the file from office and handed it over to Ram Kumar Ram. But it is contended that the said facts do not constitute the offence of theft for three reasons, namely, (i) the Superintendent was in possession of the file and therefore he could not have taken the file from himself; (ii) there was no intention to take it dishonestly as he had taken it only for the purpose of showing the documents to Ram Kumar Ram and returned it the next day to the office and therefore he had not taken the said file out of the possession of any person; and (iii) he did not intend to take it dishonestly, as he did not receive any wrongful gain or cause any wrongful loss to any other per son. We cannot agree that the appellant was in session of the file. The file was in the Secretariat of the Department concerned, which was in charge of the Chief Engineer. The appellant was only one of the officers working in that, department and it cannot, therefore, be said that he was in legal posse ssion of the file. Nor can we accept the argument that on the assumption that the Chief Engineer was in possession of the said file, the accused had not taken it out of his possession. To commit theft one need not take movable property permanently out of the possession of another with the intention not to return it to him. It would satisfy the definition if he took any movable property out of the possession of another person though he intended to return it later on. We cannot also agree with learned counsel that there is no wrongful loss in the present case. 698 Wrongful loss is loss by unlawful means of property to which the person losing it is legally entitled. It cannot be disputed that the appellant unauthorisedly took the file from the office and handed it over to Ram Kumar Ram. He had, therefore, unlawfully taken the file from the department, and for a short time he deprived the Engineering Department of the possession of the said file. The loss need not be caused by a permanent deprivation of property but may be caused even by temporary dispossession, though the per son taking it intended to restore it sooner or later. A temporary period of deprivation or dispossession of the property of another causes loss to the other. That a person will act dishonestly if he temporarily dispossesses another of his property is made clear by illustrations (b) and (1) of s.378 of the Indian penal code. They are: (b) A puts a bait for dogs in his pocket, and thus induces z 's dog to follow it. Here, if A 's intention be dishonestly to take the dog out of Z 's possession without Z 's consent, A has committed theft as soon as Z 's dog has begun to follow A. (1). A takes an article belonging to Z out of Z 's possession without Z 's consent, with the intention of keeping it until he obtains money from Z as a reward for its restoration. Here A takes dishonestly; A has therefore committed theft. It will be seen from the said illustrations that a temporary removal of a dog which might ultimately be returned to the owner or the temporary taking of an article with a view to return it after receiving some reward constitutes theft, indicating thereby that temporary deprivation of another person of his property causes wrongful loss to him. We, therefore, hold that the facts found in this case clearly bring them within the four comers of section 378 of the Indian 699 Penal Code and, therefore, the courts have rightly held that the appellant had committed the offence of theft. No other Point was pressed before us. In the result the appeal fails and is dismissed. Appeal dismissed.

IN-Abs

The appellant was convicted under section 379 of the Indian Penal Code. He was a Superintendent in the Chief Engineer 's office and got a file removed from the Secretariat through a clerk, took it home and made it available to his friend, the co accused, who removed certain documents by substituting others. The appellant returned the file to the office that next day. He made a confession when the Chief Engineer threatened that if he did not disclose the truth the matter would be placed in the hands of the Police. That confession was later retracted. The three courts below were of the opinion that the statement of the Chief Engineer did not amount to a threat in the circumstances of the case. Held, that section 24 of the evidence Act waives the stringent rule of proof as laid down by section 3 of the Act and requires the court to form a prima facie opinion on the evidence and circumstances of the particular case whether a confession should or should not be excluded as being involuntary. It is not possible to lay down any inflexible standard and the Supreme Court acting under article 136 of the Constitution would not ordinarily differ from the concurrent findings arrived at by the courts below. A retracted confession may form the legal basis of a con viction if the court is satisfied that it was true and voluntarily made. As a general rule of practice, however, it is unsafe to rely upon a confession, much less a retracted confession, unless the court is satisfied that the retracted confession was true, voluntarily made and corroborated in material particulars. In the present case there could be no doubt that the necessary ingredients constituting the offence of theft were mad 690 To constitute theft the loss caused need not be permanent Even temporary dispossession, though the person taking the property intended to restore it, may constitute theft. Illustrations (b) and (1) of section 378 of the Indian Penal Code clearly show that a temporary deprivation of another person of his property may cause wrongful loss to him.

Appeal No. 327 of 1962. Appeal from the orders dated. July 5, 1961, of the Mysore High Court, Bangalore in Writ Petition No. 556 of 1960. M. C. Setalvad, Attorney General of India and Naunit Lal, for the appellant. C. K. Daphtary, Solicitor General of India, section T. Desai and I.N. Shroff, for the respondent. 112 1962. October 23. The judgment of Das, Kapur and Sarkar, JJ., was delivered by Sarkar, J. The judgment of Hidyatullah and Dayal, jj., was delivered by Dayal, J. SARKAR, J. This is an appeal against a judgment of the High Court of Mysore which held that the respondent was not liable to pay any octroi duty to the appellant municipality in respect of dutiable goods brought to its factory as on a proper interpretation of the appellant 's by law fixing the octroi limits, the respondent 's factory was outside those limits. The question that arises in this appeal is one of the interpretation of that by law. The appellant municipality was constituted under the Bombay District municipal Act, 1901. Section 4 of the Act gives power to the Government to declare any local area to be a municipal district and to extend, contract or otherwise alter the limits of any municipal district. Section 9 provides that there shall be a municipality for every municipal district. Section 59 of the Act inter alia provides that a municipality may subject to certain conditions impose "an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein". In exercise of its powers under this section, the appellant municipality imposed an octroi, duty on certain goods. Section 48 of the Act gives a municipality power to frame by laws for various purposes including that of "fixing octroi limits". The appellant municipality framed a by law under this Nation fixing octroi limits, in these terms : "The Octroi limits of the Municipal District shall be The same as the Municipal District. " The dispute is as to the meaning of the words "Municipal District ' in this by law. The respondent is a company owning a factory which prior to September 3, 1959, was outside the 713 municipal district of the appellant municipality as such district was till then constituted. There is no dispute that the respondent has all along been bringing into its factory goods of the variety specified in the rule imposing the octroi duty for consumption and use therein but no duty was payable so long as the respondent 's factory was outside the municipal district and therefore also admittedly outside the octroi limits as defined by the aforesaid by law. By a notification issued on August 25, 1959, the Government of Mysore extended the municipal district of the appellant municipality with effect from September 3, 1959, and as a result of this extension the respondent 's factory came to be included within that district. On such extension the appel lant municipality demanded octroi duty on goods brought into the respondent 's factory contending that the factory had thereupon come within its octroi limits as defined by the by law. The respondent disputed this contention and moved the High Court of Mysore under article 226 of the Constitution for a writ of mandamus directing the appellant municipality to forbear from collecting the duty. The High Court did not accept the appellant municipality 's contention and issued the writ. The question is whether upon the extension of the municipal district the factory came within the octroi limits as defined by the by law. The appellant municipality says it did and for these reasons: The expression "municipal district" has not been defined in the by laws and therefore the definition of that expression in section 3(5) of the Act would by virtue of section 2O of the Bombay General Clauses Act, 1904, apply in interpreting the by law. Under sub sec. (5) of section 3 of the 'Act a municipal district means the municipal district of a municipality for the time being and hence the octroi limits prescribed by the by law would be the municipal district of the appellant municipality as constituted from time to time. Upon the extension 714 of the appellant municipality 's municipal district, therefore, its octroi limits would stand extended and the factory would admittedly be within the extended limits. We are unable to accede to this contention. It is based on section 20 of the General Clauses Act. Now under that section, expressions used in by laws are to have the same meaning as they have in the Act unless there is anything repugnant in the context. If there is any such repugnancy. , the definition in the Act cannot be resorted to for interpreting a by law. It seems to us that there is such repugnancy in the present case and this we now proceed to show. As we have earlier said. , a by law is made under section 48. That section provides that a by law can be made only with the sanction of the Government. Sub section (2) of ' that section requires that "Every Municipality shall, before making any by law under this section, publish. . . . for the information of the persons likely to be affected thereby, a draft of the proposed by law". There are provisions enabling persons to make objections to, or suggestions regarding a proposed by law and for these being considered by the municipality before it makes the by law and thereafter by the Government before it give ' its sanction. It is therefore, not open to much doubt that a by law made without the previous publication of its draft to the persons mentioned would be an invalid by law. Now who are these persons ? They must be "persons likely to be affected thereby", that is, by the by law, they must be Persons whom the by law when made is likely to affect by its own terms. ' Since however anyone can send goods to places within the octroi limits, all the world may in a sense be said to be affected by a by law fixing those limits. If all such persons were contemplated by section 48 (2), then a by law fixing octroi limits to be valid, would have to be published to all the world. 715 This would be an impossibility and was clearly riot intended. Quite obviously publication to persons residing outside the municipal district as constituted when the by law was made or who were not the rate payers of the municipality was not contemplated. The present by law must therefore have been made without publication to such persons. It is not said that the respondent was not one of them. Now suppose the appellant municipality 's contention was right. Then the by law would now bring within the octroi limits of the appellant municipality the respondent 's factory and some other premises though the by law had not been published to the respondent or the owners of the premises. The respondent and all other such persons would then be affected by the by law though the by law bad not been published to them before it was made. Such a by law would be invalid under the Act. It would be invalid from the beginning and not only on the extension of the municipal district for it would be a by law not made in compliance with the provisions of section 48 and therefore not a by law validly made. But then it may be said that when made, the by law did not affect any one to whom it had not been published and therefore it had been validly made. This argument seems to us to proceed on a misconception. The by law would still be invalid as contingently affecting persons to whom it had never been published, namely, those who resided outside the municipal district as constituted when the by law was made, the contingency being the extension of the municipal district. Those persons would be contingently affected by the by ,law itself because the limits mentioned in it were capable of being extended to include them. They are so affected because the by law itself provided that the limits fixed by it would in a certain contingency stand extended. 716 We, therefore, think that the expression " 'municipal district" in the by law must be understood as referring to the municipal district as existing when the by law was framed. The context would prevent the definition in the Act being applied to interpret the by law. The by law cannot, therefore, refer to the municipal district as from time to time existing. Now it is not in dispute that if the octroi limits fixed by the by law are so understood, then the respondent 's factory has all along been outside those limits and the respondent cannot be made liable to pay octroi duty. It makes no difference that its factory is now within the municipal district of the appellant municipality for it is still outside its octroi limits. It was said that if the view that we have taken is right, then no by law can ever affect people to whom it had not been published before it was made, and if this is so, then on the extension of a municipal district, all the existing by laws would have to be re made for the added area for they could not affect the people there as to them, ex hypothesis, the by laws had not been published before they had been made. It was contended that such a result could not have been intended by the Act and, therefore, the view that we have taken is erroneous. As regards this argument, we first observe that nothing has been brought to our notice from which it can be gathered that it was not the intention of the legislature that on the extension of the municipal district the by laws have not to be re enacted. If that was not the intention of the legislature, then of course the entire foundation of the present argument would fail and it would require no further discussion. Let us however assume that it was intended that the existing by laws would apply to the added areas without fresh re enactment. If such was the intention, that intention must necessarily be referrable to some provision in the Act. In such a case it would be 717 because of that provision of the Act that the by laws would be affecting people to whom they had not before their making been published and not by their own terms or force. From what we have said it does not follow that a by law cannot under some provision in the Act other than section 48 affect people to whom it had not been published before it was made. All that we have said is that a by law cannot be made under section 48 so as to affect people by its own terms or force unless to them it had been previously published. We are concerned only with the initial validity of a by law for interpreting the meaning of the words used in it. The argument for the appellant contemplates a situation where an existing valid by law is by an independent statutory provision made to affect people to whom it had not been published before it was made. With such a situation we are not conceded. We are unable to agree that if some provision of the Act exists which makes a valid by law applicable to the newly added areas of a municipality and to the residents there, though to them the bylaw might not have been published before it was made, it would follow that a by law could be validly made under the Act without previous publication to persons likely to be affected thereby. We repeat that if it cannot be so made, the present by law cannot be read as including within the octroi limits the municipal district as extended from time to time. To do that would be to give it a meaning against its context and this, the General, Clauses Act does not warrant. It was contended on behalf of the appellant that since at the time the municipal district was extended an opportunity had been given to the respondent to object , it could not now take any exception to the imposition of the octroi duty on the ground that it had no opportunity to object to the rule levying the duty or the by law fixing the octroi limits 718 when these were made. All this seems to us to be to no purpose. The respondent is not basing its objection to pay the octroi duty on this ground. All that it says is that it is not liable as its factory is not within the octroi limits. It raises a question of interpretation of the by law. The fact that the respondent could have objected to the extension of he municipal district is wholly irrelevant in interpreting the by law fixing the octroi limits and the only question in this case is of such interpretation. We may add that if a by law is invalid because it had not been published to persons likely to be affected by it, it would not become valid when the municipal district of the municipality concerned was extended on notice to everyone entitled to object to the extension. Then it was said that the by law could not be amended for it could only be put in the same term in which it stands now as it is intended to put the entire municipal district within the octroi limits. The fallacy in this argument seems to us to be that even if a by law was framed in identical words now, the content of it would be different, the municipal district contemplated by the new by law would be different from that contemplated by the earlier one. Therefore, in substance, the by law would be a changed one inspite of the identity of its form. It would be different in effect. In the view that we have taken we think it unnecessary to pronounce upon the contention of the respondent that the definition in section 3(5) of the Act did not contemplate a municipal district as from time to time constituted. The appeal fails and is dismissed with costs. RAGHUBAR. DAYAL, J. We are of opinion that this appeal should be allowed. Section 59(1)(b)(iv) of the Bombay District Municipal Act, 1901 (Bom. Act3 of 1901), hereinafter 719 called the Act, authorises any Municipality to impose an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein. The Bagalkot Municipality imposed this tax and provided, under by law No. 3 framed by it in the exercise of powers conferred under section 48(1)(j), that "the octroi limits of the Municipal District shall be the same as the Municipal District". This by law was framed prior to the extension of the limits of the Bagalkot Municipal District over which the Bagalkot Municipality had jurisdiction. The necessary declaration extending the aforesaid limits was made by the State Government under section 4 of the Act on August 25, 1959. After the extension of the limits of the Municipal District, the factory run by the respondent company came within the limits of the Municipal District in which the Bagalkot Municipality exercises control. The Municipality did not frame any new by law fixing afresh the octroi limits of the Municipal District. It however demanded octroi duty from the respondent company on the goods which were brought to the factory. The respondent company objected to the demand on the ground that the factory to which the goods were brought was beyond the octroi limits fixed under the by law framed by the Municipality and that the goods on which octroi was demanded were not brought within the octroi limits. It contended that, in the absence of the. framing of any fresh by law fixing such octroi limits as would include the factory within them, the Municipality could not claim octroi duty on the goods entering the factory. This contention found favour with the High Court which issued a mandamus to the Municipality to forbear from collecting any octroi in respect, of goods delivered by the railway administration ' at the factory premises and also directed the company to pay octroi on the goods carried by road at the point of entry and to get a refund of the octroi at the point 720 Where the goods left the octroi limits. were also issued to the Municipality for such refund. The Municipality has appealed against the J. order of the High court. It is contended on its behalf that the octroi limits fixed under the by law framed by the Municipality extend up to the limits of the Municipal District as extended by the Government declaration of August 25, 1959, and that there was no necessity for framing any fresh by law fixing new, octroi limits. We have to determine the extent of the octroi limits of the Municipality as fixed under by law No. 3(1) which reads : " The octroi limits of the Municipal District shall be the same as the Municipal District. " The octroi limits fixed were coterminous with the limits of the Municipal District, whatever they may be from time to time. If the limits of the Municipal District were extended, the octroi limits ,would be the extended limits of the Municipal:District and, if the limits of the Municipal District were contracted, the octroi limits would be similarly contracted. Section 3(5) defines 'municipal district ' to mean any local area which is at present a municipal district, and any local area Which may, hereafter , be constituted a municipal district under section 4, if such municipal district has not ceased to exist under the provisions of the said section. ' Section 4 empowers the State Government, subject to the pro visions of sections 6, 7 and 8, to extend,,, contract or other wise alter the limits of any municipal district from time to time. It is clear therefore and there is nothing in the section to indicate to the contrary that subsequent to the extension, contraction or alteration of the limits there does not come into existence a new municipal district. The erstwhile muni 721 cipal district continues with this modification that its area is either extended or reduced or its limits are altered. Sub sections (2) and (3) provide, inter alia, for the setting forth clearly of the local limits included or excluded from existing municipal districts by notification and for erection and maintenance of boundary marks defining the altered limits of the municipal district. The municipal district, as defined in section 3(5) of the Act, therefore means the local area within its limits as fixed for the time being. In view of 'section 20 of the Bombay General Clauses Act, the expression 'municipal district ' in the by law will have the same meaning as that expression has in the Act, unless there be anything repugnant in the subject or context. We do not find any such repugnancy in the context of the by law which would make the definition of the municipal district in the Act not applicable to the expression 'municipal district ' in octroi by law No. 3., The octroi duty is, by nature, a duty which is realised on goods entering certain limits over which the municipality charging the octroi has control. There is no reason why octroi duty ' which is levied solely for the purpose of raising funds, and not to afford protection to trade in any particular area, be not charged from the. same goods entering a certain part of the municipality, that is to say, there is no good reason why the limits within which goods on entry from beyond should pay octroi duty be different from the limits of the municipal district over which the municipality has control. The question then arises, why cl. (iv) of sub section (1)(b) of section 59 uses the expression 'octroi limits ' instead of "municipal district ', an expression which is used with reference to some other taxes which the municipality can impose. The answer is found in the provisions of sections 39 and 81 of the Act. 722 Clause (b) of section 39 empowers a municipality to enter into an agreement with another municipality, cantonment authority, local board, panchayat or committee appointed for an area under Chapter XIV regarding levy of octroi duty whereby the octroi duties respectively leviable by the contracting bodies may be levied together, instead of separately, within the limits of the area, subject to the control of the said bodies. Section 81 authorises any one of the contracting bodies to establish such octroi limits and octroi stations as may be deemed necessary for the entire area in which the octroi is to be collected. The limits of any such two contracting parties will not be common throughout and will not be identical with the limits of either of the municipal districts and therefore it would be necessary for the municipality, which is to collect octroi duties under the agreement, to fix the octroi limits for the entire area for the purpose of collecting octroi duties. Sub section (2) of section 77 provides for penalty for the evasion of octroi in cases of goods liable to the payment of octroi and passing into a municipal district without payment of such octroi. It is noticeable that it does not use the expression 'passing into tile octroi limits of a municipal district ', but uses the expression passing into a municipal district '. The use of the expression 'octroi limits ' in cl. (iv) of section 59 (1)(b) therefore need not lead to the conclusion that a municipality can pick and choose between its parts and exempt any part of it from the levy of octroi duty. It follows therefore that ordinarily octroi duty must be imposed on all good entering the limits of the municipal district controlled by the municipality. This is what by law No. 3 framed by the appellant Municipality provides for. It is contended for the respondent that the Municipality cannot make a by law fixing such octroi 723 limits as vary from time to time. We see no good reason why it cannot do so. Further, the by law No. 3(1) fixed the limits of the municipal district to be the octroi limits. These are definite limits and vary only when an alteration is made by the Government in the limits of the municipal district and then too on account of the content of the expression municipal district '. The definition of 'municipal district ' will be read into the definition of 'octroi limits ' as required by the General Clauses Act and they will vary with that definition. The municipality does not exceed its jurisdiction to frame the by law fixing the octroi limits to vary from time to time according to the limits of the municipal district. No question of extending its jurisdiction arises in case the limits of the municipal district are contracted. No question of exceeding its jurisdiction arises if the limits are extended, as at the time the by law would be applicable to the extended limits, the municipality will have jurisdiction to make a by law applicable for that area. If it frames a by law in such a way as to be immediately effective in the area newly, added to its limits, it cannot be said to be exceeding its jurisdiction. just as the Act contemplates the (extension of the limits of the municipal district and the application of its various provisions therein , the by laws made applicable within the area of the municipal district will be applicable to the extended area the moment any fresh area is added to the municipal district. We do not find anything in the Act or rules which disables the, municipality to fix the octroi limits in this way, or, in other words, which makes it incumbent on the Municipality to fix the octroi limits as frequently as the area of the municipal district is altered by a notification of the Government under section 4. There is nothing in the Act that the by laws duly framed by a municipality become null and void 724 and ineffective when the limits of the municipal district for which they were framed are extended. Such is not the contention for the respondent either. It is not contended that those by laws do not continue to be in force within the old limits of the municipal district. What is contended by the respondent is that they cannot apply to the new area added to the old municipal district ', until the requisite procedure laid down for the framing of the by laws under sub sections (2) and (3) of section 48 has been followed; as, other wise, the persons residing in the newly added area would have no occasion to object to the by laws which are sought to be made applicable to them. The sub sections are "(2) Every Municipality shall, before making any by law under this section, publish in such manner as shall in their opinion be sufficient, for the information of the persons likely to be affected thereby, a draft of the proposed bylaw, together with a notice specifying a date on or after which the draft will be taken into consideration, and shall, before making the bylaw receive and consider any objection or suggestion with respect to the draft which may be made in writing by any person before the date so specified. (3) When any by law made by a Municipality is submitted to the Central Government, State Government or Commissioner for sanction, a copy of the notice published as aforesaid and of every objection or suggestion so made, shall be submitted for the information of the Central Government, State Government or Commissioner along with the said by law. " The respondent 's contention is met for the appellant by reference to section 8 of the Act which affords an opportunity to the persons who entertain any objection to the proposal for including the proposed area 725 in the existing municipal district to file objections with reasons therefore within the specified period. It is urged for the respondent that no objection with respect to any particular by law or rule can be made at the time when the Government notifies objections against the proposal to extend the limits of a municipal district. There is nothing to bar such an objection. The objector can say that he would not like that area to be included in the municipality as it would make him and others liable to certain taxes, which, in the circumstances prevailing in that area, would not be right and would be prejudicial to the residents of that area. This is the view taken by this Court in Rajnarain Singh vs The Chairman Patna Administration Committee, Patna (1). In that case, a certain local area was included within Patna City by a notification issued by the local Government under section 6 of the Patna Administration Act, 1915 (Bihar & Orissa Act 1 of 1915). There was no provision in that Act for the local Government notifying any objections from the residents of the area to be included within Patna against tile proposal for such inclusion. The validity of the notification was not questioned in that case. Shortly after the inclusion of the area within Patna, the local Government issued a notification under section 3 (1) (f), on April 23, 1951, extending to Patna the provisions of section 104 of the Bihar & Orissa Municipal Act, 1922 with some modifications and thereby made the residents of the newly added area subject 'to certain taxes. That notification was held to be bad because the local Government had brought about a change of policy by the modification made. It was said, "In our opinion, the majority view was that an executive authority can be authorised to modify either existing or future laws but not in any essential feature. Exactly what constitutes an essential feature cannot be enunciated in general (1) [1955] 1.S.C.R. 290, 301, 303. 726 terms, and there was some divergence of view about this in the former case, but this much is clear from the opinions set out aboveit cannot include a change of policy. Now coming back to the notification of 23rd April, 1951. Its vires was challenged on many Grounds but it is enough for the purposes of this case to hold that the action of the Governor in subjecting the residents of the Patna Village area to municipal taxation without observing the formalities imposed by sections 4, 5 and 6 of the Bihar and Orissa Municipal Act of 1922, cuts across one of its essential features touching a matter of policy and so is bad. " It was further observed, "The notification of 23rd April, 1951, does in our opinion, effect a radical change in the policy of the Act. Therefore it travels beyond the authority which, in our judgment, section 3 (1)(f) confers and consequently it is ultra vires. " The change in policy was in the sense that the scheme of the Bihar & Orissa Municipal Act 1922, was that the people would not be made subject to the liability ,, of municipal taxation without being afforded an opportunity to object against such a proposal. The provisions of the 1922 Act referred to as guaranteeing this right to the people were stated to be sections 4, 5 and 6 of that Act. Section 4 empowers the State Government to declare its intention to constitute or alter the limits of the municipality. Section 5 provides for taking into consideration objections submitted within the specified time after the aforesaid declaration and section 6 empowers the State Government by notification to constitute the municipality and to extend to it all or any of the provisions of that Act or to govern any local area in the municipality. 727 It follows that under the present Act persons residing in an area to be included in the municipal district could file objections to the proposed inclusion of the area to the Municipal district on the ground that certain by laws imposing taxes will affect them adversely. Further, sub s.(2) of s.48 of the Act provides the publication of the by law proposed to be made for the information of the persons likely to be affected thereby. The persons to be affected by the bylaw fixing octroi limits are not only the inhabitants of the municipality, but include persons who bring goods into the municipality for consumption, use or sale therein. In fact it is such persons who are the first to be affected by the levy of the octroi duty. They will have to pay it first. They may pass it on to the purchasers subsequently. It is to be presumed that the publication made at the time of the making of the by law fixing the octroi limits must have been such as had given notice to the persons other than the residents within the municipality. Such persons could file objections against the proposed by laws. It follows therefore that the residents of the area subsequently added to a municipality, an area which is bound to be adjacent to the original area, cannot effectively contend that they had no opportunity of objecting to the making of the by law. Further, the provisions of these sub sections can have reference only to the occasion when bylaws are to be framed or amended and can have no effect on the question of the applicability of the bylaws to the newly added area of the municipal district. In the absence of any express provision in the Act to the effect that no rule or by law shall be applicable to the newly added area till it is freshly enacted after following the regular procedure, we are not prepared to accept this contention, air, its acceptance would mean that the municipality becomes 728 liable for discharging its functions under the Act with respect to matters it has to deal with in that area and would be deprived of the necessary powers which it possesses for enabling it to discharge those functions properly till it has re enacted all the old by laws. Section 59 of the Act refers to the imposition of taxes, naturally, for the purpose of obtaining funds to meet the municipality 's obligations within the district under its authority. Residents within an area of the municipal district cannot therefore avoid the liability to pay a tax merely on the ground that when that tax was imposed the area in which they reside was not included within the municipal district. The legislature could not have intended the exemption of such persons from payment of the tax when it provided for the extension of the limits of a municipal district but did not expressly provide for the applicability of the rules and by laws then in force to the newly added area or for the liability of the residents of the newly added area to the taxes then in force within the municipal district and for the reimposition of such taxes and the remaking of such rules and by laws in accordance with the prescribed procedure. We are of opinion that the extension of the limits of the municipal district connotes that the area newly added to the municipal district comes not only under the control of the municipality, but also becomes subject to such laws, rules and by laws which be in force within the municipal district. Lastly, reference may be made to section 191B in Chapter XIV A. It provides inter alia that when any local area is added to a municipal district, the State Government may, notwithstanding anything contained in the Act or in any other law for the time being in force, by order published in the official gazette, provide for the extension and commencement 729 of all or any taxes, rules by laws ' or forms made, issued, imposed or granted under the Act by any existing municipality and in force within its area immediately before the day from which the local area was included to the municipal district, to and in all or any of the other areas of the successor district municipality, in supersession of corresponding taxes, rules, by laws, it ' any, in force in such other areas immediately before the aforesaid day, until the matters so extended and brought into force are, further superseded or modified under the Act. No order under this provision seems to have been issued ,by the State Government. The provision, however, indicates that the compliance of the procedural provisions mentioned in sub section (2) of s.48, of the Act is not a necessary condition for the existing by laws of a municipality to apply to the areas included in it at a later time. If such an order is issued by the Government, that clarifies the position. its, enact ment, however, does not mean that in the absence of such an order, all the matters mentioned in cl.(x) of sub s.(1) of 's.19B will not Ineffective in the area included in a municipal district under a notification under s.4 of the Act. We bold that the octroi limits fixed under bylaw No. 3 include the area newly added to the municipal district by the notification of August 25, 959, and that, consequently, the respondent company ",as liable to pay octroi duty on the goods entering its premises. We would 'therefore allow this appeal with costs, set aside the order of the Court below and dismiss the writ petition of the respondent. By COURT : In accordance with the opinion of the majority, this appeal is dismissed with costs.

IN-Abs

The appellant municipality imposed octroi duty on certain,goods brought within the octroi limits. The by laws fixed the octroi limits to be the same as the Municipal District. Section 4 of the Bombay District Municipal Act 1901, under which the municipality was constituted, empowered the Government to declare any local area to be 1 municipal district. At the time of the 'imposition of the octroi (duty the respondent 's factory was situated outside the municipal district and was not subject to the octroi duty. Subsequently, the Government extended the municipal district so that the factory came to be included within that district. The appellant contended that upon such extension its octroi limits also stood extended to include the factory and the respondent became liable to pay octroi duty in respect of goods brought into, the factory. 711 Held (per Das, Kapur and Sarkar, jj., Hidayatullah and Dayal, jj., dissenting), that octroi duty was not leviable on the respondent. The expression 'municipal district" in the by. law referred to the municipal district as existing when the, bylaw was framed. The context prevented the definition of "municipal district" in the Act, namely, the municipal district as from time to time existing, from being applied under s.20 of the Bombay General Clauses Act, to interpret the by law. The by law had been made without being published to the respondent, and if it was so read referring to the municipal district from time to time existing it would be invalid for non compliance with the provisions of section 48 of the Act. Per Hidayatullah and Dayal, JJ. The octroi limits fixed under the by laws included the area newly added to the municipal district and the respondent was liable to pay octroi duty on the goods entering its premises. In view of section 20 of the Bombay General Clauses Act, the expression "municipal district" in the by law will have the same mean ing as that expression has in the Act. There is nothing repugnant in the subject or context which would make this definition inapplicable. At the time when the municipal district was extended notice was published to the respondent and it could have objected to the inclusion of the area on the ground that the bye law imposing the octroi duty would affect it adversely. There is no express provision in the Act that no rule or 'by law shall be applicable to the newly added area till it is freshly enacted. Rajnarain Singh vs The Chairman, Patna Administration Committee, Patna, , referred to.

No. 65 of 1962. Petition under article 32 of the CoNstitution of India for the enforcement of Fundamental Rights. A. section R. Chari, R. K. Garg avid K. R. Chaudhri, for the petitioners. N. section Bindra and R. H. Dhebat, for the respondents. October 11. The judgment of the Court was delivered by SHAH, J. Being in possession of evidence that the petitioners and others were concerned in the commission of offences of conspiracy to smuggle gold from foreign countries into thE port of Deogad in the District of Ratnagiri, contrary to the provisions of the Sea Customs Act and the Foreien Exchange Regulation Act, P. N. Kalyankar, Sub Inspector.of Customs and Central Excise, arrested the petitioners and produced them before the judicial Magistrate F Class, 575 Deogad. On December 29, 1961, the Government of Maharashtra promulgated a notification in exercise of the powers conferred by section 14 of the Code of Criminal Procedure, 1898 (as amended by Bombay Act XXIII of 1951 in its application to the State of Maharashtra) appointing Mr. V. M, Gehani to be a Special judicial Magistrate having jurisdiction over the area comprising Greater Bombay and Ratnagiri District, and conferred upon him all the powers of a Presidency Magistrate in respect of the trial in the case involving the seizure of approximately 49,990 tolas of foreign gold and known as the "Deogad Gold Seizure Case. ' On January 10, 1962, the Government of Maharashtra gave consent in writing as required by section 196 A sub section (2) of the Code of Criminal Procedure to the institution of criminal proceedings against the petitioners and eight others for offences punishable "under section 120B of the Indian Penal Code, 1860 read with section 167(81) of the (as amended) and section 120B of the Indian Penal Code read with section 167(81) of the (as amended) and section 8(1) of the Foreign Exchange Regulation Act. 1947 (as amended) and section 120B of the Indian Penal Code read section 8(1) with and section 23 of the Foreign Exchange Regulation Act, 1947 (as amended)". Thereafter H. R. Jokhi, Assistant Collector of Customs & Central Excise, Marine & Prevention Division, Collectorate of Central Excise Bombay instituted a complaint in the Court of the Special Magistrate appointed under the Notification dated December 29, 1961, against 16 persons (including the petitioners) alleging that they were parties to a conspiracy at Bombay, janjira, Dabhol and Deogad (the latter three places being in the District of Ratnagiri) and other places to smuggle large quantities of gold into India, with a view to evade or attempt to evade payment of duty thereon and to evade or attempt to evade the prohibition and 576 restrictions in force relating thereto during the period from about October 1959 to the end of April 1961. or thereabout in breach of the provisions of the and the Foreign Exchange Regulation Act, 1947, and that the said persons had in pursuance of the "conspiracy and with continuing purpose and design" in or about the month of April 1961 acquired or were concerned in importing and acquiring possession, contrary to the and the Foreign Exchange Regulation Act, gold totalling 49,990 tolas valued at over Rs. 70,00,000/ . The petitioners applied to the Special Magistrate that they be tried at Deogad or at Ratangiri the headquarters of the District, for they were permanent residents of Deogad carrying on their respective occupations at Deogad, that they had already made their individual arrangements for their defence at Deogad and that it would be just and convenient that their trial should take place in the District of Ratnagiri. The Magistrate rejected their appli cation. The petitioners then moved the High Court of judicature at Bombay praying for an order that the case against the petitioners be transferred for trial to the court of some judicial Magistrate at Deogad or at Ratnagiri competent to try the case : in the alternative the petitioners prayed that the Special Magistrate Mr. Gehani be directed to try the said case either at Deogad or at Ratnagiri at which place all 'facilities ' were available. The High Court dismissed their application. The petitioners then moved this Court under article 32 of the Constitution for a writ of certiorari or other appropriate writ or direction quashing the Notification dated December 29, 1961., issued by the Government of Maharashtra or in the alternative declaring section 14 of the Code of Criminal Procedure as amended by the Bombay Act 23 of 1951 ultra vires and void and for an order that the case be heard at Deogad or at Ratnagiri in the State of Maharashtra by any Magistrate competent to enquire into or try the case. By this petition 577 the petitioners submitted that section 14 of the Code of Criminal Procedure as amended by the Bombay Legislature by Act 23 of 1951 and the Notification dated December 29, 1961, issued by the Government of Maharashtra appointing Mr. Gehani as Special judicial Magistrate and investing him with the powers of a Presidency Magistrate, infringed article 14 of the Constitution. Sub section (1) of section 14 of the Code as amended, in so far as it is material, provides "14. Special Magistrates. The State Government may in consultation with the High Court, confer upon any person who holds or has held any judicial post under the Union or a State, or possesses such other qualifications as may, in consultation with the High Court, be specified in this behalf by the State Government by notification in the Official Gazette, all or any of the powers conferred or conferrable by or under this Code on a judicial Magistrate in respect to particular cases or to a particular class or classes of cases, or in regard to cases generally in any local area." By section 6 A which was also added by Bombay Act 23 of 1951 in the Code, constitution of different classes of ,Judicial Magistrates was provided, and under that head were included Presidency Magistrates. The State Government was, under the amended Code, competent to appoint a person with the requisite qualifications a Special Magistrate and to confer upon him the powers conferred or conferrable under the Code on a judicial Magistrate in respect of a particular case or a particular class or classes of cases or in regard to cases generally in any local area. Section 14 of the Code of Criminal Procedure as originally enacted prohibited the 578 appointment of a Special Magistrate to function in any local area within the Presidency towns, but that limitation upon the power of the State Government has, by the amendment made by Bombay Act 23 of 1951, been removed, and it is now open to the Government of Maharashtra to constitute a Special judicial Magistrate with power to function in any local area including Greater Bombay. The expression ,local area ' includes any part of a State, and it may cover more than one District. The Government of Maharashtra therefore could appoint Mr. Gehani a Special, ' judicial Magistrate, having jurisdiction over Greater Bombay and the District of Ratnagiri and could confer upon him the powers of a Presidency Magistrate in respect of the trial of the case known as the Deogad Gold Seizure Case. In M. K. Gopalan vs The state of Madhya Pradesh the validity of section 14 of the Code of Criminal Procedure 1898 (V of 1898.) was challenged on the plea that it was void because it infringed the fundamental right of equality before the law guaranteed by article 14 of the Constitution. This Court held that a law vesting discretion in an authority to appoint a Special Magistrate under section 14 of the Code of Criminal Procedure to try cases entirely under the normal Procedure cannot be regarded as discriminatory and is not hit by article 14 of the Constitution. There is substantially no difference between the powers conferrable by section 14 of the Code as originally enacted and section 14 as amended by Bombay Act 23 of 1951. Apart from certain procedural matters such as consultation with the High Court before entrustment of the said powers, the only difference made by the Bombay Act is that a Special Magistrate may be appointed even in respect of a Presidency town. Section 14 contemplates that a Special 'Magistrate may be entrusted with powers which are conferrable by or under the Code on a judicial Magistrate. A Presidency Magistrate being a Judicial Magistrate under (1) 579 section 6 A as added by the Bombay Legislature, powers conferrable on a Presidency Magistrate may lawfully be conferred upon a Special judicial Magistrate who has been appointed for the Presidency town with or without any additional locality. Section 20 of the Code of Criminal Procedure provides that every Presidency Magistrate shall exercise jurisdiction in all places within the presidency town for which he is appointed, and within the limits of the port of such town and of any navigable river or channel leading thereto, as such limits are defined under the law for the time being in force for the regulation of ports and port dues. There is, however, nothing in this section which detracts from the authority which may be exercised by the State Government under section 14 to appoint a Special judicial Magistrate in respect of a Presidency Town nor is there any prohibition against the investiture of powers of a Presidency Magistrate upon such Magistrate in respect of a locality outside the Presidency town so long as he has jurisdiction also over a Presidency Town. On the principle of M. K. Gopalan 's case (1), section 14 of the Code of Criminal Procedure, as amended, cannot be regarded as infringing article 14 of the Constitution. Validity of the Notification issued by the Government of Maharashtra directing the trial by Mr. Gehani who had jurisdiction both over the Greater Bombay area and the District of Ratnagiri may now be considered. Relying upon the judgment of this Court in Bidi Supply Company vs The Union of India (2), it was submitted that the impugned Notification was unauthorised. That was a case where an assessee who was ordinarily assessed to income tax by Officers within the town of Calcutta was informed by letter dated January 25, 1955, in pursuance of section 5 (7 A) of the Income tax Act, 1922 (Xl of 1922) as amended by Act XL of 1940 the assessment records of the assessee were transferred from the Income tax Officer, Calcutta to the Income (1) (2) ; 580 tax Officer, Special Circle, Ranchi in the State of Bihar and that he do correspond in future regarding the assessment proceedings with that Income tax officer. The assessee had received no previous notice of the intention of the Income tax authorities to transfer the assessment proceedings from Calcutta to Ranchi, nor had he any opportunity to make any representation against the said decision. The assessee challenged by a petition to this Court the validity of the order of transfer contending that it violated the equal protection clause of the Constitution. Section 64 of the Income tax Act provides for the normal place of assessment of assesses. By subsection (1) it provides that where an assessee carries on a business, profession or vocation at any place, he shall be assessed by the Income tax Officer of the area in which that place is situate, or, where the business, profession or vocation is carried on in more places than one, by the Income tax Officer of tile area in which the principal place of his business, profession or vocation is situate. In all other cases, in assessee shall be assessed by the Income tax Officer of the area in which he resides. By subsection (5) of section 64 it is provided, inter alia, that the provisions of sub section (1) and (2) shall not apply where by any direction given or any distribution or allocation of work made by the Commissioner of Income tax under sub section (5) of section 5, or in consequence of any transfer made under sub section (7A) of section 5, a particular Income tax Officer has been charged with the function of assessing that assessee. This Court held in the Bidi supply Company 's case (1) that sub section 5 (7A) of section 5 as it stood at the material time contemplated transfer of a pending case for a particular year. It was observed that "the provision that such a transfer may be made 'at any stage of the proceedings ' obviously postulates proceedings actually pending, and 'stage ' refers to a point in between the commencement and the termination of those proceedings. Further the provision that such transfer shall not render necessary (1) ; 581 the reissue of notice already issued by the Income tax Officer from whom the case is transferred quite clearly indicates that the transfer contemplated by the sub section is the transfer of a particular case actually pending before an income tax Officer of one place to the Income tax Officer of another place. " The decision of the Court turned on the meaning of the word 'case ' used in sub section 5(7A) as enacted by the Income tax Act Amendment Act, 1940 and this Court held that the expression 'case ' meant an assessment case of a particular year. After this decision the Legislature intervened and by the Income tax Amendment Act 26 of 1956 it added an explanation that the word 'case ' in relation to any person whose name is specified in the order of transfer means all proceedings under the Income tax Act in respect of any year which may be pending on the date of the transfer, and includes all proceedings under this Act which may be commenced after the date of the transfer in respect of any year. The principle of the case in Bidi Supply Company (1) has no relevance in considering the validity of the Notification issued under section 14 of the Code of Criminal Procedure as amended by the Bombay Act 23 of 1951. The assessee in the Bidi Supply Company 's case (1) obtained the benefit of a lacuna in the provisions of the Indian Income tax Act, there being apart from a provision for transfer of a pending case, no general power to transfer future assessment proceedings. A Notification Under section 14 of the Code of Criminal Procedure is an order constituting a Special Magistrate with jurisdiction over a certain local area and with powers which are normally exercisable by a Judicial Magistrate. The constitution of a Special Magistrate does not amount either directly or indirectly to a transfer of any 'case ': nor are there any such considerations present in that order as were pointed out by this Court in the Bidi Supply Company 's case (1) relating to the meaning of the word "case ' used in the Income tax Act, as would compel us to (1) ; 582 hold that a "case ' within the meaning of section 14 means a pending case only. Under section 14 the State Government is competent to appoint a special Judicial Magistrate in respect of 'any particular case or a particular class or classes of cases or in regard to cases generally in any local area '. The words used in section 14 must mean a case which is either pending or which may be instituted after the date of the constitution of the Special Magistrate. It was then submitted that the Notification appointing a Special Magistrate, for trial of the intended complaint against the petitioners, having regard to the circumstances of this case, and conferring upon him the powers of a Presidency Magistrate operated discriminatively against the petitioners, for, it was said, other persons similarly situated as the petitioners were ordinarily liable to be tried by the Magistrate within whose jurisdiction the offence was alleged to be committed, and could not be required to go to a distance of more than three hundred miles from their normal place of residence to defend them selves. It was urged that Mr. Gehani being a Presidency Magistrate for the trial of the case against the petitioners and others he would be sitting in Bombay where he normally functions, and it would result in great inconvenience to the petitioners to be called upon to attend the sittings of the Court in Bombay specially when there are Magistrates availa ble in Deogad who are competent to hear and decide the case against the petitioners. By the Notification Mr. Gehani has been invested with the powers over Greater Bombay and Ratnagiri District. His jurisdiction therefore extends over the whole of the Greater Bombay area and the District of Ratnagiri. There is no provision in the Code of Criminal Procedure which enjoins upon a Magistrate the duty to hold his sitting in any particular place. Under section 9(2) of the Code of Criminal Procedure the State Government is required to direct at what place or 583 places the Court of Session shall ordinarily hold its sitting, but if, in any particular case, the Court of Session is of opinion that it will tend to the general convenience of the parties and witnesses to hold its sitting at any other place in the sessions division, it may with the consent of the prosecution and the accused, sit at that place for the disposal of the case or the examination of any witness or witnesses therein. There is, however, no similar provision in respect of the sittings to be held by Magistrates. The Special judicial Magistrate Mr. Gehani having the power therefore to sit at any place within his local area as defined by the terms of his appointment, this Court cannot speculate as to what place Mr. Gehani will function in the exercise of his jurisdiction. The question is one for his discretion. It may be remembered that the petitioners had moved the High Court of Bombay asking for the transfer of the case from the Court of Mr. Gehani to any Magistrate functioning in the District of Ratnagiri, because of the alleged ground of inconvenience, and that application was rejected by the High Court. It cannot be now urge by the petitioners that the trial at Bombay is inconvenient to them and may prejudice a fair trial. It is true that under the Code of Criminal Procedure "every offence shall ordinarily be enquired into and tried by a Magistrate of the local area in whose jurisdiction it was committed" but the charge in this case against the accused is in respect of a conspiracy at Bombay, Deogad, Dabhol, janjira and other places to commit offences under the and the Foreign Exchange Regulation Act and also of commission in pursuance of the conspiracy of substantive offences under those Acts. It is the prosecution case that importation of gold contrary to law took place in the area of Deogad port whereas the offenders conspired at different places including Bombay. By designating a Special Magistrate who would have jurisdiction both over the place where the offenders are alleged to have conspired and the place where offences were 584 actually committed, the State has taken care to see that the trial of the case is held by a Magistrate who has territorial jurisdiction in both areas. It is not suggested that the Notification was issued for any ulterior purpose. The State has having regard to the special circumstances constituted a Special Magistrate, as it was entitled to, and the Notification does and even suggest the place where the Magistrate is to hold his sittings. The ground of inconvenience in support of the plea of discrimination cannot therefore be sustained. It is urged that against the order of conviction which may be passed by Mr. Gehani whole is invested with the powers of a Presidency Magistrate an appeal would lie only to the High Court whereas if the case were tried before a Magistrate of Ratnagiri District an appeal would lie to the Court of Session and a further revision application to the High Court. This it was pointed out made a substantial difference of procedure between persons similarly situated. It is true that if the complaint was filed in the Court of Magistrate having jurisdiction over Deogad alone, as it could lawfully be filed, an appeal would, against an order of conviction, lie to the Court of Session, Ratnagiri and an application in the exercise of revisional jurisdiction to the High Court from the order of the Court of Session. But it is difficult to hold that this amounts to any discrimination. Apart from the fact that the trial by a special Magistrate and an appeal directly to the High Court against the order of the Magistrate may be regarded normally as more advantageous to the accused persons, the distinction between Courts to which the appeal may lie arises out of the constitution of the Special Magistrate and not any special procedure evolved by the Notification. On the allegation made in the complaint, the complainant could lawfully institute proceedings in the Court of a Presidency Magistrate at Bombay or of any competent Magistrate in the District of Ratnagiri. 585 Such Magistrates would by virtue of section 182 of the Code of Criminal Procedure entertain the complaint and appeals from orders of conviction recorded by them would lie to the High Court, or the Court of Session, according as the Magistrate, trying the case was a Presidency Magistrate, or a judicial Magistrate of the First Class. The difference of the venue results from the nature of the jurisdiction exercised by the Magistrate trying the case, and not from any unequal dealing by the ' executive constituting the Courts of the Magistrates. It is because Powers exercisable by a Presidency Magistrate are conferred upon the Special Magistrate, as they may lawfully be conferred, that the incidental right of appeal, which is prescribed, by the statute is exercisable in the High Court and not in the Court of Session. We do not think that there is any discrimination practised by the Notification constituting a Special Magistrate for the trial of the case against the petitioners and others. The petition therefore fails and is dismissed. Petition dismissed.

IN-Abs

Section 14 of the Code of Criminal Procedure, as amended by Bombay Act 23 of 1951, empowered the State Government to appoint a qualified person as a special Magistrate and to confer upon him powers conferrable upon a judicial Magistrate in respect of a particular case or a particular class or classes of cases or in regard to cases generally in any local area. By a notification dated December 29, 1961, the Government appointed Mr. G to be a Special Judicial Magistrate for the area comprising Greater Bombay and Ratnagiri District and conferred upon him all the powers of a Presidency Magistrate in respect of the trial of the Deogad Gold Seizure case. The petitioners, who are accused in the case, moved the Supreme Court for a writ of certiorari for quashing the notification on the ground that the notification and the amended s.14 infringed article 14 of ' the Constitution. Held, that the amended section 14 does not offend article 14 and is valid. There is substantially no difference between the powers conferrable by the unmended and by the amended section 14. M. K. Gopalan vs State of Madhya Pradesh, [1955] 1 S.C.R. 168, relied on. Held, further that the notification constituting a Special Magistrate for the trial of the petitioners was not discriminatory. Amended section 14 contemplates both a case which is pending and one which may be instituted after the date of the constitution of the Special Magistrate. The constitution of a Special Magistrate does not amount directly or indirectly to a transfer of any 574 case. The fact that Mr. G may hold the trial at Bombay and not at Deogad while other similarly situated would be tried at Deogod may result in inconvenience to the petitioners but this could not sustain the plea of discrimination. The charge against the petitioners is in respect of conspiracy at Bombay, Deogad and other places and the petitioners could have been lawfully tried at Bombay. The notification constituted a Special Magistrate and conferred jurisdiction on him both over the place where the petitioners are alleged to have conspired and the place where the offences are alleged to have been actually committed. It did not amount to discrimination that from the judgment of the Special Magistrate an appeal would lie to the High Court while if the petitioners were tried by a Magistrate at Deogad, an appeal would lie to the Sessions judge and then a revision would lie to the High Court. The difference of the venue results from the nature of the jurisdiction exercised by the Magistrate trying the case and not from any unequal dealing by the notification.

Appeal No. 214 of 1962. Appeal from the judgment dated July 8, 1960 of the Kerala High Court, Emakulam, in Income tax Referred Case No. 10 of 1957. section T. Desai and Sardar Bahadur, for the appellant. K. N. Rajagopal Sastry, R. N. Sahthey and P. D. Menon, for the respondent. October 25. The judgment of the Court was delivered by HIDAYATULLAH, J. The assessee, A.V. Thomas & Co., Ltd., Alleppey, claimed a deduction of Rs. 4,05,072 8 6 in the assessment year 1952 53 as a bad debt which was written off in its books of account on December 31, 1951. This claim was disallowed. After sundry procedure, the following question was considered by the High Court of Kerala and answered against the assessee company : "Whether on the facts and the circumstances of the case, the Tribunal was correct in holding 778 that the amount of Rs. 4,05,071 8 6 claimed by the assessee Co. as a deduction was not admis sible either under section 10(2) (xi) or 10(2) (xv) ?" The High Court certified the case as fit for appeal to this Court and this appeal has been filed by the assessee company. The Commissioner of Income tax (Bangalore) Kerala, is the respondent. The assessee company was incorporated in 1935 and, as is usual with companies, its Memorandum of Association, authorised it to do multifarious businesses. According to clauses 1, 5, 18 and 23, it was authorised "to be interested in, to promote, and to undertake the formation and establishment of other companies", to make investments and to assist any company financially or otherwise. At the material time the assessee company had three directors, whose names are given below 1. A. V. Thomas 2. section Sankaranarayana lyer and 3. J. Thomas. There was another private limited company known as the Southern Agencies Limited, Pondicherry, and its directors were : 1. A. V. Thomas 2. section section Natarajan, and 3. C, section Ramakrishna Karayalar. There was a mill in Pondicherry known as Rodier Textile Mill belonging to the Anglo French Textiles Limited, Pondicherry. The assessee company averred that the Southern Agencies Ltd., took up in 1948 the promotion of a limited company to be known as Rodier Textile Mills Ltd., Pondicherry, with 779 a view to buying and developing the Rodier Textile Mill. The assessee company, so it was stated, financed the Southern Agencies Ltd., Pondicherry, by making over funds aggregating to the sum of Rs. 6,05,071 8 6. This amount was not given directly by the assessee company but at its instance by India Coffee and Tea Distributors Ltd., Madras. The assessee company further stated that though an entry in its own books dated December 31, 1948, showed this amount as an advance for purchase of 6,000 shares of Rs. 100 each in the Rodier Textile Mills Ltd., the main intention of the assessee company was to assist and finance the Southern Agencies Ltd. within the terms of the assessee company 's Memorandum. The subscription list for the Rodier Textile Mills Ltd. remained open from January 5 to January 20, 1949. No application for shares was made on behalf of the assessee company and the shares were not acquired. The public took no interest in the new company which was being promoted and the whole project tailed. On September 1, 1950, the assessee company approved of the action of Mr. A. V. Thomas in making the said advance and on September 18, 1950, a resolution was passed by the Board of Directors of The assessee company that the amount of Rs. 6,00,000 should be shown as an advance for purchase of shares in the Rodier Textile Mills Ltd. (in formation) and the balance of Rs. 5,072 8 5 be shown under sundry advances due from the promoters of the new company. The Southern Agencies Ltd. however, did not return the ' entire amount. On December 7, 1951, it paid back Rs. 2,00,000 which appears to have been received in full satisfaction. Though as late as June 12, 1951, the advance was considered to be good and recoverable, the balance was written off on December 31, 1951, which was the close of the year of account of the assessee company. It was this amount which was claimed in the assessment year 1952 53 as a bad 780 debt actually written off, or alternatively as an expenditure, not of a capital nature, laid out or expended wholly and exclusively for the purpose of the assessee company 's business. The Income tax Officer, Alleppey, held that the debt was written off at a time when it was neither bad nor doubtful and the claim to write it off was premature. He, therefore, disallowed it. An appeal was taken to the Appellate Assistant Commissioner and he upheld the order of the Income tax Officer though on a different ground. He held that the advance was made for the purpose of purchasing shares of the new company then in formation and it was thus made for the acquisition of a capital asset, which was either the control of the new company or ""to gain its good will likely to result in the grant of agency rights" to the assessee company. According to the Commissioner, the loss, if any, was of a capital nature and the question whether the claim of bad debt was premature or otherwise did not arise for consideration. The Appellate Assistant Commissioner also held that the deduction could not be claimed as an allowance under section 10(2)(xv) of the Income tax Act. The assessee company appealed to the Tribunal. The Tribunal upheld the order of the Appellate Assistant Commissioner but on a third ground. The Tribunal accepted that one of the objects of the assessee company was the promotion and financing of other companies for gain but this advance of Rs. 6,00,000 was not made by the assessee company in the normal course of its business. It was rather a transaction "actuated only by personal motives". In reaching this conclusion the Tribunal observed that the advance was made to Southern Agencies Ltd. which was not a company promoted by the assessee company, that between these two companies there was no previous business connection and at the assessee company had no expectancy of a financial benefit. The Tribunal held that the 781 Rodier Textile Mills Ltd.,, Pondicherry, was not being financed or promoted by the assessee company and that the statement by the assessee company that it would have received some agency right was not supported by evidence. The Tribunal was of the opinion that this advance was probably due to the " substantially common ownership of the assessee company and the Southern Agencies Ltd., of two individuals, namely, A. V. Thomas and section section Natarajan." The Tribunal thus held that this deduction could not be claimed as it was given out of " 'personal motives" and not as a part of the business of the assessee company. The assessee company demanded a case but it was refused by the Tribunal. The assessee company in its application for the case had propounded three questions as under : "(i) Whether on the facts and in the circums tances of the case, the sum of Rs. 4,05,072 8 5 can be claimed by the assessee as a bad debt written off under the provisions of Section 10(2) (xi) of the Act, (ii) Whether on the facts and in the circums tances of the case, the assessee can claim the sum of Rs. 4 '.05,072 8 5 as permissible deduction under Section 10(2) (xv) of the Act, and (iii) Whether co the facts and in the circums tances of the case, the assessee is permitted to claim the deduction of the said sum of Rs. 4,05,072 8 5 as a proper debit and charge it to the Profit and Loss account of the assessee company. " These questions show that the deduction was claimed (i) as a loss in the doing of the business under 782 section 10(1); (ii) as a bad debt actually written off under section 10(2)(xi); and (iii) as an expenditure laid out wholly and exclusively for the purpose of the business under section 10(2)(xv) of the Income tax Act. The assessee company applied to the High Court and the High Court directed a reference on the single question which has been quoted. That question shows that the High Court did not direct the case under section 10(1) of the Act. The Tribunal had considered the case from the point of view of the business and had held that this was not an advance in the normal course of business but one out of ""personal motives". The High Court apparently had not accepted that the matter could be considered under section 10(1) and framed the question under cls. (xi) and (xv) of section 10(2). The question as propounded and considered by the High Court related to the two clauses only. An attempt was made before us to raise the issue under section 10(1) and to claim the deduction as an ordinary business loss. We disallowed the argument because in our opinion the question as considered in the High Court does not embrace it. The assessee company should have requested the High Court at some stage to frame a question that there was no material for the Tribunal to reach the conclusion that this was not a business transaction but a case of an advance out of personal motives. It was contended before us that the High Court in calling for a reference on the single question had stated that that question would cover three matters. The first two 'here mentioned in the question and the third which was said to be implicit was whether the Tribunal was competent to decide a case which had not been made out by the Department at an earlier stage. But this was not the same thing as saying that the Tribunal had no material before it on which it could reach the conclusion that this was not an advance in the ordinary course of business by the assessee company. No doubt, the High Court in its order calling for a statement of the case has observed that there was no dispute at any 783 earlier stage that this was not in the ordinary course of business, but that conclusion of the High Court in the order it made under section 66(2) can have no relevance or binding force. Indeed, the High Court was in error in giving a finding of its own and it is not surprising that the Tribunal protested against this finding. It was open to the High Court to frame a question whether there was any material to support the finding of the Tribunal and to ask the Tribunal to state a case thereon. Not having done so, the question as framed drives the assessee company to prove its case either under section 10(2)(xi) or under section 10(2)(xv) and it is from these two angles that the case will be considered by us. Clauses (xi) and (xv) of section 10(2) read as follows : "(2) Such profits or gains shall be computed after making the following allowances, namely x x x a (xi) when the assessee 's accounts in respect of any part of his business, profession or vocation are not kept on the cash basis, such sum, in respect of bad and doubtful debts, due to the assessee in respect of that part of his business, profession or vocation, and in the case of an assessee carrying on a banking or money lending business, such sum in respect of loans made in the ordinary course of such business as the Income tax Officer may estimate to be irrecoverable but not exceeding the amount actually written off as irrecoverable in the books of the assessee : (Proviso omitted) (xv) any expenditure (not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive, and not being in the nature of capital expenditure or 784 personal expenses) laid out or expended wholly and exclusively for the purpose of such business, profession or vocations". In support of its case, the assessee company stated that as there was no dispute about the facts that this was an advance in the ordinary course of business it should be treated as a trading loss or alternatively as a bad debt or an expenditure claimable under section 10(2)(xv). The assesses company relied strongly upon certain Ledger entries of the Rodier Textile Mills Ltd. in the books of the assessee company. These have been marked as Annexures A. 1 to A. 3. The High Court also referred to these accounts and they have been construed as showing, that there was an attempt by the assessee company to acquire a capital asset. These accounts began in 1948 and ended on December 31, 1951. The accounts are headed "Personal Ledger. " In December, 1948, sundry amounts totalling Rs. 6,05,071 8 5 are shown as amounts "paid to you by Indian Coffee and Tea Distributors Ltd., Madras, towards purchase of shares. " On January 1, 1949, the account opened with a debit balance of Rs. 6,05,071 8 5. Nothing appears from the accounts who this " 'you" was. A number of reversing entries were made in respect of certain amounts and then on December 31, 1949, the amount was shown as follows : By advance for sundry expenses due from the promoters of new company debited to this trans ferred 5,071 8 5 By balance 6,00,000 0 0 1950 opened with entry on January I To Balance 6,00,000 0 0 and closed with an entry By Amount paid to Southern Agencies Ltd, 6,00,000 0 0 785 This was shown as an opening balance on January 1, 1951. On December 7, a payment of Rs. 2,00,000 was shown and Rs. 4,00,000 were transferred for writing off. On December 31., 1951, Rs. 4,00,000 were written off and so also the amount of Rs. 5,072 8 5. The last amount included a sum of Rupee 1, hire for carriage which was also written off after the entry had been reversed. From these accounts it is quite clear that to begin with the amount was shown as an advance for purchase of shares of the Rodier Textile Mills Ltd. If this was the purpose, it was not an expenditure on the revenue side. The High Court correctly pointed out that it was not the business of the assessee company to buy agencies and sell them. The shares were being acquired by the assessee company so that it might have the lucrative business of selling agency and similar other agencies from the Rodier Textile Mills Limited. As late as December 15, 1952, the Chairman of the assessee company stated in his speech as follows : "You are aware that an advance was made to the Southern Agencies (Pondicherry) Ltd. to acquire for us shares in Rodier Textile Mills Ltd. It was felt that when the promotion and working of Rodier Textile Mills Ltd., became a fait ac compli, our company stood considerably to gain by securing their agency for handling their goods. " This clearly shows that the assessee company intended to acquire a capital asset for itself This purpose takes the case of the assessee company out of section 10(2)(xv) of the Income tax Act, because no expenditure can be claimed under that clause which 'is of a capital nature. By the declaration of the Chairman of the assessee company the case under section 10(2)(xv) becomes completely untenable. In any event, the 786 amount was not expended in the year of account ending with December 31, 1951 : it was expended in 1948. It remains to consider the case under section 10(2)(xi). In this connection, we were referred to the Memorandum of Association to show that it was one of the objects of the assessee company to promote other companies and this amount was paid to Southern Agencies Ltd. to promote the Rodier Textile Mills Ltd. There is no doubt that the objects mentioned in the Memorandum of Association of the assessee company include the promotion and financing of other companies. A Memorandum, however, is not conclusive as to the real nature of a transaction. That nature has to be deduced not from the Memorandum but from the circumstances in which the transaction took place. Here, the different versions given in the books of account of the assessee company belie the assertion that this was an amount paid to promote the Rodier Textile Mills Ltd. Even though this money was available on December 31, 194 8, and the subscription list for the shares remained open from January 5 to 20, 1949, no application for a single share was made on behalf of the assessee company. The entry till the end of 1949 was that the amount was laid out for purchase of shares. It was only subsequently that it was shown to be an advance to the Southern Agencies Ltd. In fact, the entry comes only at the end of 1950 when it is set down "By Amount paid to Southern Agencies Ltd." The assessee company raised three contentions in support of the case that this became a bad and doubtful debt which was actually written off : (a.) that the High Court was wrong in saying that before the assessee could claim the deduction under section 10(2)(xi) it must prove that it had in the past purchased and sold agencies, (b) that the object of the assessee company was to apply for shares but as it did not 787 apply for shares the transaction between it and the Southern Agencies remained an advance in the ordinary course of business, and (c) Southern Agencies having failed to give back the money the assessee company was within its rights to write off this bad and doubtful debt. Now, a question under section 10(2)(xi) can only arise if there is a bad or doubtful debt. Before a debt can become bad or doubtful it must first be a debt. What is meant by debt in this connection was laid down by Rowlatt, J., in Curtis v.1. & G. Oldfield Ltd.,(1) at p. 330 as follows : "When the Rule speaks of a bad debt it means a debt which is a debt that would have come into the balance sheet as a trading debt 'in the trade that is in question and that it is bad. It does not really mean any debt which, when it was a good debt, would not have come in to swell the profits. " A debt in such cases is an outstanding which if recovered would have swelled the profits. It is not money handed over to someone for purchasing a thing which that person has failed to return even though no purchase was made. In the section a debt means something more than a mere advance. It means something which is related to business or results from it. To be claimable as a bad or doubtful debt it must first be shown as a proper debt. The observations of Rowlatt, J., were applied by the Privy Council in Arunachalam Chettiar vs Commissioner of income tax(2), at p. 245, where their Lordships observed as follows: "Their Lordships moreover can give no countenance to a suggestion that upon a dissolution of partnership a partner 's share of the losses for several preceding years can be accumulated and thrown into the scale against (1) , 330. (2) (1936) L. R. 63 I. A. 233, 245 788 the income of another partner for a particular year. No principle of writing off a bad debt could justify such a course, whether in the year following the dissolution or., as logic would permit, in some subsequent year in which the partner 's insolvency has crystallised. The ; 'bad debt" would not, if good, have come in to swell the taxable profits of the other partner. " This Court also approved the dictum of Rowlatt, J., in COMMissioner of Income tax vs Abdullabhai Abdulkadar (1) at p. 550 and referred to the observations of Venkatarama Ayyar, J., in Badridas Daga, vs Commissioner of Income, tax, (2) where the learned judge speaking for this Court said that a business debt "springs directly from the carrying on of the business and is incidental to it and not any loss sustained by the assessee, even if it has some connection with his business." Section 10(2)(xi) is in two parts. One part deals with an assessee who carries on the business of a banker or money lender. Another part deals with business other than the aforesaid. Since this was not a loan by a banker or money lender, the debt to be a debt proper had to be one which if good would have swelled the taxable profits. Applying these tests, it is quite obvious that an advance paid by the assessee company to another to purchase the shares cannot be said to be incidental to the trading activities of the assessee company. It was more in the nature of a price paid in advance for the shares which the Southern Agencies had a right to allot in the Rodier Textile Mills Ltd. This cannot, therefore, be described as a debt and indeed the changes in the books of account of the assessee company clearly show that the assessee company itself was altering the entries to convert the advance into a debt so as to be able to write it off and claim (1) ; , 954. (2) ; 789 the benefit of section 10 (2) (xi). In our opinion, section 10(2)(xi) was inapplicable to the facts of this case. In the result the appeal must fail and it is dismissed. The assessee company shall pay the costs of the respondent. Appeal dismissed.

IN-Abs

The assessee company was incorporated in 1935 and its Memorandum of association authorised it, inter alia, to promote and to undertake the formation and establishment of other companies and to assist any company financially or otherwise. There was another company known as the Southern Agencies Ltd. and Mr. A. V. Thomas was director of both these companies. In 1948 the Southern Agencies Ltd. began the promotion of a company to be known as the Rodier Textile Mills Ltd., with a view to buying up a Mill known as the Rodier Textile Mills. The assessee company made an advance of Rs. 6 lakhs odd to the promoter for the purchase of 6000 shares of the new company. The public took no interest in the new company and the whole project failed. No application for shares was made on behalf of the assesee company and no share was acquired. The Southern Agencies Ltd., however, did not return the entire amount. On December 7, 1951, it paid back only Rs. 2 lakhs which was received in full satisfaction. The balance of Rs. 4,05,071 8 6 was written off on December 31, 195 1, which was the close of the year of account of the assessee company. For the assessment year 1952 33 the assessee company claimed a deduction of that amount as a bad debt actually written off, or alternatively as an Expenditure, not of a capital nature laid out or expended wholly and exclusively for the purpose of its business. 777 Held, (1) that the amount advanced for the purchase of shares was of a capital nature and, therefore, the balance was not allowable as an expenditure under s 10 (2) (xv) of the Indian Income tax Act, 1922, as it was not the business of the assessee company to buy agencies and sell them; and in any event the amount was expended in 1948 and not in the year of account ending December 31, 1951. (2) that it was not a bad debt under section 10 (2) (xi). A debt in such cases is an outstanding which is recovered would have swelled the profits. It is not money handed over to some one for purchasing a thing which that person has failed to return even though no purchase was made. Curtis vs J. & G. Old field Ltd., , Arunachalam Chettiar vs Commissioner 'of Income tax, (1936) L. R. 63 I. A. 233, Badridas Daga vs Commissioner of Income tax; , and Commissioner of Income tax vs Abdullabhi Abdulakadar; , , relied on.

ions Nos. 130 & 133 of 1962. Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. section K. Venkatarangaiengar and R. Gopalakrishnan, for the Petitioners (In both the Petitions). P. D. Menon, for the Respondents (In both the Petitions). November 5. The judgment of the Court, was delivered by GAJENDRAGADKAR,J. These two writ petitions Nos.130 of 1962 and 133 of 1962 have been filed by Heggade. Janardhan Subbarye and Ravindra Prabhu respectively (hereinafter called the petitioners) under article 32 of the Constitution, challenging the validity of the orders issued by respondent No. 1, the State of ' Mysore, under article 15(4) of the Constitution on July 10, 1961 and July 31, 1962, respectively. Both the petitioners had applied for admission to the pre Professional Class in Medicine in the Karnatak Medical College, Hubli, and the applications had been submitted to respondent No. 2, the Selection Committee appointed in that behalf by respondent No. 1. According to the petitioners, they would have secured admission to the said Medical College but for the reservation directed to be made by the two impugned orders. They alleged that the orders were ultra vires, and so, they prayed for an appropriate writ or order restraining the respondents from giving effect to the said orders and requiring, them to deal. with the petitioners ' 'applications on the merits. 477 The points raised by the present petitions are covered by the decision of this Court in the case of M.R. Balaji vs State of Mysore(1) and so, it is common ground that the petitioners are entitled to an appropriate writ or order as claimed by them. Learned counsel for the respondents however, drew our attention to the fact that as a result of the decision of this Court in the case of M. R. Balaji (1) respondent No. 1 was feeling some doubt as to whether the reservation made by the impugned orders in respect of the Scheduled Castes and the Scheduled Tribes was also struck down by this Court. As the judgment shows, respondent No. 1 has consistently fixed the percentage of reservation in respect of the Scheduled Castes and the Scheduled Tribes at 15% and 3% respectively. Five orders have been passed by respondent No. 1 one after the other under article 15(4), but the reservation fixed for the Scheduled Castes and the Scheduled Tribes has always remained the same. It is true that the judgment of this Court does not expressly say that the validity of the said reservation was not assailed before this Court and cannot, therefore, be deemed to have been affected by the decision. However, as the judgment shows, the only attack against the validity of the impugned orders was directed against the additional reservation made in favour of the socially and educationally Backward Classes of citizens in the State. The petitions filed in the said cases were confined to the said reservation and during the course of the arguments before this Court, it was not suggested by the petitioners ' learned counsel that the reservation made in favour of the Scheduled Castes and Tribes was in any manner irregular or not justified by article 15(4). This position is not disputed by the petitioners ' learned counsel before us. Therefore, we think that in order to avoid any doubt in the matter it is necessary to make it clear that our judgment in that case does not affect the (1) (1963) supp. 1 section C. R. 439. 478 validity of the said reservation which is distinct and separate from, and independent of, the other reservation which was challenged. The said reservation continues to be operative and the fact that the impugned orders have been quashed does not alter that position. The said orders have been quashed solely by reference to the additional reservation made by the impugned orders in regard to the socially and educationally Backward Classes, and so, respondent No. 1 would be justified in giving effect to the reservation made in respect of the Scheduled Castes and Scheduled Tribes. In the result, we allowed the petitions and direct that an appropriate writ or order should be issued ' restraining the respondents from giving effect to the two impugned orders. In the circumstances of these cases, we direct that the petitioners should get from the respondents costs incurred by them, except the hearing fee. Petitions allowed.

IN-Abs

The petitioners challenged the validity of the orders issued by the State of Mysore under article 13(4) of the Constitution on July 10, 1961, and July 31, 1962. The petitioners contended that they had applied for admission to the Pre Professional Class in Medicine in the Karnatak Medical College, Hubli and they would have secured admission to the said medical college but for the reservation directed to be made by the orders mentioned above. They contended that the above mentioned orders were ultra vires. They prayed for an appropriate writ or order restraining the respondents from giving effect to those orders and requiring them to deal with their applications for admission on merits. Held, that the petitioners were entitled to an appropriate writ or order as claimed by them and the respondents were restrained from giving effect to the above mentioned orders. M. R. Balaji vs State of Mysore [1963] Supp. 1 S.C.R. 439, followed. The impugned orders we quashed only with reference to the additional reservation made in favour of the socially and 476 educationally backward classes and so the respondents were at liberty to give effect to the reservation made in favour of the ' Scheduled Castes and Scheduled Tribes, which was not challenged at all. The said reservation continues to be operative.

Appeal No. 8 of 1953. Appeal by special leave from the decision dated 16th August, 1951, of the Labour Appellate Tribunal of India, Calcutta, in Appeal No. 43 of 1951 (Cal.). C. K. Daphtaru, Solicitor General for India, (Sri Narain Andley, with him) for the appellant. C. P. Varma for the respondent. March 16. The Judgment of the Court was delivered by BHAGWATI J. This is an appeal by special leave from a decision of the Labour Appellate Tribunal 'of India, Calcutta, confirming an award made by the Regional Conciliation Board (Textiles & Hosiery), Kanpur, in an industrial dispute between the appellants and the respondents. 781 The respondents 2, 3 and 4 were employees of the appellants, respondent 2 was employed in the clerical cadre while respondents 3 and 4 were employed as wrapping boy and piecer respectively and their service conditions were governed by the standing orders of the Employers ' Association of Northern India, Kanpur, of which association the ' appellants were members. There was a theft in the canteen within the mill premises between the night of January 6 and 7, 1950, and some money belonging to the appellants invested in the canteen account was stolen from the safe. A report of the theft was made to the police authorities and an investigation was made by the police, as well as the appellants in the matter with no result. The management of the appellants thereafter took action against one J. P. Gurjar, who was in charge of the canteen in connection with the losses of money from the account of the canteen and after the completion of the enquiries terminated his services. An industrial dispute in respect of the non employment of the said J. P. Gurjar arose between the parties which dispute was at the material time taken in appeal before the Industrial Court (Textiles & Hosiery), Kanpur. During the pendency of those proceedings, some time in August, 1950, the respondent 4 made a confession in regard to the said theft implicating the respondents 2 and 3 also therein. On the 29th August, 1950, the management of the appellants presented to the respondents 2,3 and 4 charge sheets in respect of the said theft and suspended them on the 30th August, 1950, from their service. They also made an application on the 2nd September, 1950, to the Additional Regional Conciliation Officer, Kanpur, asking for permission to dismiss the respondents 2, 3 and 4. The Additional Regional Conciliation Officer, Kanpur, instituted an enquiry, heard the respondents 2,3 and 4, considered the evidence which was led before him by the appellants as well as the respondents 2,3 and 4 and made an order on the 12th October, 1950, according to the appellants permission for the dismissal of the 782 respondents 2, 3 and 4. The respondents 2, 3 and 4 were accordingly dismissed from their employ by the appellants with effect from the 13th October, 1950. An industrial dispute thereupon arose between the appellants and respondents 2, 3 and 4 in respect of the non employment of respondents 2,3 and 4 and respondent 1, a registered trade union, of Which the respondents 2, 3 and 4 were members, ultimately moved the Regional Conciliation Board (Textiles and Hosiery), Kanpur, on the 1st November, 1950, challenging the propriety and bona fides of the appellants in terminating the services of respondents 2, 3 and 4. The appellants filed their written statement on the 25th November, 1950, contending inter alia that the dismissal was fully justified, regular and proper, having ' been made in accordance with the permission accorded by the Additional Regional Conciliation Officer. The only issue which was canvassed before the Regional Conciliation Board was whether any or all of the three workmen named in the application dated the 1st November, 1950, has/have been wrongfully dismissed and if so, to what relief is he/they entitled. The Board consisted of three members, Shri R. P. Maheshwari, Chairman, and Shri B. B. Singh and Shri J. K. Bhagat, Members. Shri J. K. Bhagat was not present on the last date of the hearing and the award was therefore signed on the 20th April, 1951, by Shri R. P. Maheshwari and Shri B. B. Singh. Under the terms of the award the Board held that the dismissal was wrongful and that the respondents 2, 3 and 4 were entitled to reinstatement as also to the full wages, including dearness allowance from the date of their suspension to the date they were taken back on duty. The appellants preferred an appeal to the Labour Appellate Tribunal of India, Calcutta. The appeal was heard on the 16th August, 1951, and the Labour Appellate Tribunal dismissed the appeal of the appellants. The appellants obtained special leave from this Court and filed the present appeal. 783 Two contentions were urged by Shri C. K. Daphtary who appeared for the appellants before us (1) that the award was void and inoperative as it was made by only two members of the Board, the third, member, Shri J. K. Bhagat not having been present at the last hearing and not having signed the same and (2) that the Additional Regional Conciliation Officer having given the written permission for dismissal of respondents 2, 3 and 4 no industrial dispute could arise by reason of the non employment of respondents 2, 3 and 4 and the Regional Conciliation Board had therefore no jurisdiction to entertain the application made before it by respondent 1 on behalf of the respondents 2, 3 and 4 and the award of the Regional Conciliation Board ordering the reinstatement of respondents 2, 3 and 4 was therefore without jurisdiction, void and inoperative and the Labour Appellate Tribunal was in error in confirming the same. In support of his first contention Shri C. K. Daphtary relied upon clause 4 and clause 7, sub clause (3) of the G. N. No. 781 (L)/XVIII, dated 10th March, 1948, issued by the United Provinces Government regarding the constitution of Regional Conciliation Boards and Industrial Courts for the settlement of industrial disputes within the State. Clause 4 " No business may be transacted at any meeting of any Board unless all the three members are present Clause 7 (3) " Where no amicable settlement can be reached on one or more issues the Board, if all the members thereof agree or if they do not so agree, the majority of,the members agreeing or if no two members agree, the Chairman alone, shall record an award and the reasons for such award, on the issues on which the parties were unable to reach an amicable settlement." Shri C. K. Daphtary therefore urged that Shri J. K. Bhagat not having been present at the last meeting of the Board and not having signed the 784 award the award could not be lawfully made by the Chairman and the other member who were present and who signed the award and the award was therefore void and inoperative. Shri C. P. Varma who represented the respondent before us however drew tour attention to the Government Order No. 388(11)/ XVIII/37 (LL) /50 dated 2nd March, 1951, which amended the above clauses 4 and 7(3). Clause 4 as amended provides: " (1) Notice of every meeting of the Board shall be given to the members by the Chairman in advance. ( 2) If apart from the Chairman either or both the other members fail to attend any meeting of the Board of which notice has been given to them, the Chairman may transact the business ' of the Board without the presence of the absent member or members ; and no such business or proceedings, of the Board shall be held invalid merely by reason of the fact that either one or both of the members were not present at the meeting. " Clause 7 (3) as amended provides: "Where no amicable settlement can be reached on one or more issues, if all the members present agree the Board or if they do not so agree the majority of the members agreeing 'or if no two members present agree or if only the Chairman is present, he alone, shall record an award and the reasons for such award on the issues on which the parties were unable to reach an amicable settlement." These amendments in the clauses 4 and 7 (3) are enough in our opinion to repel the contention of Shri C. K. Daphtary that the absence of Shri J. K. Bhagat from the last meeting and also his non participation in the making and signing of the award rendered.the award void and inoperative. The Board was empowered under the amended clauses 4 and 7(3) to act in the absence of Shri J. K. Bhagat and the award as it was made and signed by the two remaining members, viz., Shri R. P. Maheshwari and Shri B. B. Singh, was lawful and binding on the parties. 785 In support of his second contention Shri C. K. Daphtary relied upon clauses 23 and 24 of the Government Notification dated the 10th March, 1948, above referred to. Clause 23 : " Save with the written Permission of the Regional Conciliation Officer or the Assistant Regional Conciliation Officer concerned irrespective of the fact whether an enquiry is pending before a Regional Conciliation Board or the Provincial Conciliation Board or an appeal has been filed before the Industrial Court, no employer, his agent or manager, shall discharge or dismiss any workmen during the continuance of an enquiry or appeal and pending the issue of the orders of the State Government upon the findings of the said Court. . . Clause 24: "(1) Except as hereinbefore provided every order made or direction issued under the provisions of this Order shall be final and conclusive and shall not be questioned by any party thereto in any proceeding. . . Shri C. K. Daphtary contended that the order made by the Additional Regional Conciliation Officer on the 12th October ' 1950, giving the appellants permission to dismiss respondents 2, 3 and 4 was final and conclusive in regard to the appellants ' right to dismiss them from their employ and their dismissal accordingly by the appellants could not be the foundation of any industrial dispute which could be referred to the Regional Conciliation Board at the instance of respondent 1. He further contended that if no industrial dispute could thus arise the Regional Conciliation, Board had no jurisdiction to entertain the same and the award made by the Board was therefore without jurisdiction, void and inoperative and could not also be confirmed by the Labour Appellate Tribunal. We are unable to accept this contention. The Government Notification dated 10th March, 1948, was issued by the Governor of the United Provinces in exercise of the powers conferred by clauses (b), (c), 786 (d) and (g) of section 3 and section 8 of the ,United Provinces . It provided for the constitution by the Provincial Government of such number of Conciliation Boards as might be deemed necessary for the settlement of industrial disputes consisting of three members of which one was to be the Conciliation Officer for the area, one was to be representative of the employers and one was to be the representative of workmen, the Conciliation Officer for the area being the Chairman of the Board. The order provided for the mode in which industrial disputes may be referred to the Board for enquiry and the manner in which the enquiry was to be conducted. It also provided for the constitution by the Provincial Government of such number of Industrial Courts as it might be necessary consisting of a President assisted by such equal number of assessors as the President might determine representing employers and employees. Provision was made for appeals to such Industrial Courts from the awards of the Board and also for the hearing of the said appeals. After making further provision for the procedure to be adopted before the Boards as well as the Industrial Courts, the Order by clause 23 above mentioned imposed a ' ban on the discharge or dismissal of any workman by the employer, his agent or manager during the pendency of an enquiry before the Regional Conciliation Board or the Provincial Conciliation Board or of an appeal before the Industrial Court except with the written permission of the Regional Conciliation Officer or the Assistant Regional Conciliation Officer concerned and by clause 24 made every order or direction issued under the provisions of the said Government Order final and conclusive except as thereinbefore provided. It is clear that clause 23 imposed a ban on the discharge or dismissal of any workman pending the enquiry of an industrial dispute before the Board or an appeal before the Industrial Court and the employer, his agent or manager could only discharge or dismiss 787 the workman with the written permission of the Regional Conciliation Officer or the Assistant Regional Conciliation Officer concerned. Even if such) written permission was forthcoming the employer, his I agent or manager might or might not discharge or, dismiss the workman and the only effect of such written permission would be to remove the ban against the discharge or dismissal of the workman during the pendency of those proceedings. The Regional Conciliation Officer or the Assistant Regional Conciliation Officer concerned would institute an enquiry and come to the conclusion whether there was a prima facie case made out for the discharge or dismissal of the workman and the employer, his agent or manager was not actuated by any improper motives or did not resort to any unfair practice or victimisation in the matter of the proposed discharge or dismissal of the workman. But he was not entrusted, as the Board or the Industrial Court would be, with the duty of coming to the conclusion whether the discharge or dismissal of the workman during the pendency of the proceedings was within the rights of the employer, his agent or manager. The enquiry to be conducted by the Regional Conciliation Officer or the Assistant Regional Conciliation Officer concerned was not an enquiry into an industrial dispute as to the non employment of the workman who was sought to be discharged or dismissed, which industrial dispute would only arise after an employer, his agent or manager discharged or dismissed the workman in accordance with the written permission obtained from the officer concerned. This was the only scope of the enquiry before the Regional Conciliation Officer or the Assistant Regional Conciliation Officer concerned and the effect of the written permission was not to validate the discharge or dismissal but merely to remove the ban on the powers of the 'employer, his agent or manager to discharge or dismiss the workman during the pendency of the proceedings. Once such written permission was granted by him that 102 788 ,order made or direction issued by him was to be final land conclusive and was not to be questioned by any party thereto in any proceedings. The only effect of )clause 24(1) was to prevent any party to the pending proceedings from challenging the written permission thus granted by the officer concerned Such written permission could not be made the subject matter of any appeal at the instance of either party and both the parties would be bound by the order made or direction issued by the officer concerned so far as it gave or refused the permission to the employer, his agent or manager in the matter of the proposed discharge or dismissal of the workman. This was the only scope of the provisions of clauses 23 and 24 (1) above. mentioned. ' Once the written permission was granted by the officer concerned, the ban against the discharge or dismissal of the workman would be removed and the employer, his agent or manager could in the exercise of his discretion discharge or dismiss the workman but in that event an industrial dispute within the meaning of its definition contained in section 2(k) of the , would arise and the workmen who had been discharged or dismissed would be entitled to have that industrial dispute referred to the Regional Conciliation Board for enquiry into the Same. That right of the workman to raise an industrial dispute could not be taken away in the manner suggested by Shri C. K. Daphtary by having resort to the provisions of clauses 23 and 24(1) aforesaid. That right was given to the workman by the terms of the , and the U.P. , XXVIII of 1947, and would remain unaffected by any of the provisions hereinbefore referred to. We are therefore, of the opinion that this contention of Shri C. K. Daphtary also fails. We may before concluding advert to one circumstance and that is that even though the Labour Appellate Tribunal rightly confined its jurisdiction to 789 determining substantial questions of law involved in the appeal, it nevertheless observed that even on the) facts the conclusions of the Board were perfectly justified and there was no substance in the appeal on merits as well. The appellants were not heard at all on merits; and it was hardly legitimate for the Labour, Appellate Tribunal suo motu to consider the merits of the appeal and arrive at a finding in regard to the same. ' If at all the Labour Appellate Tribunal bad any jurisdiction in regard to the merits it was incumbent upon it to have heard the appellants in regard to the merits before arriving at a conclusion in regard to the same. The result is that this appeal fails and must be dismissed with costs. Appeal dismissed. Agent for the appellant : section section Shukla.

IN-Abs

Under the provisions of clauses 4 and 7 (3) of Notification No. 781 (L)/XVIII issued by the United Provinces Government on March 10, 1948, the absence of one of the members of the Regional Conciliation Board on the last date of hearing and his nonparticipation in the making and signing of the award would not render the award void or inoperative. The dismissal of workmen and their non employment would not cease to be An industrial dispute merely because the Regional Conciliation Officer had given written permission to the employer to dismiss them under clause 23 of the U.P. Government Notification of March 10, 1948. Such permission does not validate the dismissal but only removes the ban on the right of the employer, his agent or manager to dismiss the workmen concerned during the pendency of proceedings relating to an industrial dispute.

Appeals Nos. 378 and 379 of 1962. Appeals by special leave from the judgment and order dated January 18, 1961 of the Bombay High Court in Miscellaneous petition No. 255 of 1960. C. K. Daphtary, Solicitor General of India, B. R. L. lyengar and R. H. Dhebar, for the appellants in C. A. No. 378/62 and respondents in C. A. No. 379/62. A.S. R. Chari, M. K. Ranmmurthi, D. P. Singh, and section C: Agarwala, for the respondent in C. A. No. 378/62 and Appellant in C. A. No. 379162. 791 1962. October 30. The judgment of the Court was delivered by GAJENDRAGADKAR, J. The respondent E.X. Joseph is in the service of the Government of India in the Audit and accounts Department at Bombay. He was she Secretary of the Civil Accounts Association which consists of non gazetted staff of the Accountant General 's Office. The said Association was affiliated to the All India Non Gazetted Audit and Accounts Association. The latter Association had been recognized by the Government of India in December, 1956. In May, 1959, the Government withdrew recognition of the said Association. In spite of the withdrawal of the recognition of the said Association, the respondent continued to be its Secretary General and refused to dissociate himself from the activities of the said Association, though called upon to do so. As a result of his activities, on or about June 3, 1960, he was served with a charge she sheet for having deliberately committed breach of Rule 4(b) of the Central Civil Services (Conduct) Rules, 1955 (hereinafter called the Rules). Appellant No. 1 0. K. Ghosh, Accountant General, Maharashtra, who held the enquiry, found the respondent guilty of the charges levelled against him. Accordingly, a notice to show cause why he should not be removed from service was served on the respondent. On July 25, 1960, appellant No. 1 served a memo on the respondent intimating to him that it was proposed to hold an enquiry against him for having deliberately contravened the provisions of Rule 4(A) of the Rules in so far as he participated actively in various demonstrations organised in connection with the strike of Central Government employees and had taken active part in the preparations made for the said strike. On August 8, 1960, the respondent filed a I writ petition on the original side of the Bombay 792 High Court under article 226 of the Constitution and prayed that a writ of certiorari should be issued to quash the charge sheets issued against him by appellant No. 1 in respect of the alleged contravention of Rules 4 (B) and 4 (A) and a writ of prohibition should be issued prohibiting a appellant No. 1 from proceeding further with the departmental proceedings against the respondent. In his petition, the respondent asked for other incidental reliefs. The main ground on which the respondent challenged the validity of the departmental proceedings initiated against him was that Rules 4(A) and 4(B) were void in so far as they contravened the fundamental rights guaranteed to the respondent under article 19(1) (a), (b), (c) and (g). This contention was resisted by appellant No. 1 and appellant No. 2, the Union of India, who had been impleaded as respondents to the said petition. It was urged on their behalf that the impugned Rules were valid and so, the claim for a writ of certiorari or writ of prohibition was not justified. The writ petition was heard by a Division Bench of the Bombay High Court. On January 18, 1961, the High Court rejected the petition in so far as the respondent had claimed writs in regard to the enquiry for breach of Rule 4(A); the Court held that the said Rule was valid and so, the departmental proceedings initiated against the respon dent in respect of the breach of the said Rule could not be successfully impeached. In respect of the proceedings under Rule 4(B), however, the High Court held that the said Rule was invalid and so, the departmental proceedings in respect of the breach of the said Rule have been quashed. It is against this decision that the appellants, the A.G. and the Union of India, have come to this Court by Appeal No. 378/1962; whereas E. X.Joseph the respondent, has preferred Appeal No. 379/1962: Both the appeals have been brought to this Court by special leave. 793 The appellants contend that the High Court was in error in holding that Rule 4(B) was invalid, whereas the respondent urges that Rule 4(A) was invalid and the decision of the High Court to the contrary is erroneous in law. Before dealing with the contentions of the parties, it is necessary to set out the two impugned Rules. These Rules form part of a body of Rules framed in 1955 under article 309, of the Constitution. Rule 4 A provides that no Government servant shall participate in any demonstration or resort to any form of strike in connection with any matter pertaining to his condition of service,. whereas Rule 4 B lays down that no Government servant shall join or continue to be a member of any Service Association of Government servants : (a) which has not, within a period of six months from its formation, obtained the recognition of the Government under the Rules prescribed in that behalf, or (b) recognition in respect of which has been refused or withdrawn by the Government under the said Rules. The case against the respondent is that he has contravened both these Rules. The question about the validity of Rule 4 A has been the subject matter of a recent decision of this Court in Kameshwar Prasad vs The State of Bihar (1). At the hearing of the said appeal, the appellants and the respondent had intervened and were heard by the Court. In that case, this Court has held that Rule 4 A in the form in which it now stands prohibiting any form. of demonstration is violative of the Government servants ' rights under article 19(1)(a) & (b) and should, therefore, be struck down. In striking down the Rule in this limited way, this Court made it clear that in so far as the said Rule prohibits a strike, it cannot be struck down for the reason that there is no fundamental right to resort to a strike. In other words, if the Rule was (1) [1962] Supp. 3 S.C.R. 369. 794 invoked against a Government servant on the ground that be had resorted to any form of strike specified by Rule 4 A, the Government servant would not be able to contend that the Rule was invalid in that behalf. In view of this decision, we must hold that the High Court was in error in coming to the conclusion that Rule 4 A was valid as a whole. That takes us to the question about the validity of Rule 4 B. The High Court has held that the impugned Rule contravenes the fundamental right guaranteed to the respondent by article 19 (1) (c). The respondent along with other Central Government servants is entitled to form Associations or Unions and in so far as this right is prejudicially Rule, the said Rule is invalid. The learned Solicitor General contends that in deciding the question about the validity of the Rule, we will have to take into account the provision of clause (4) in article 19. This clause provides that article 19(1) (c) will not affect the operation of any existing law in so far as it imposes, in the interests of public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub clause. The argument is that the impugned Rule does nothing more than imposing a reasonable restriction on the exercise of the right which is alleged to have been contravened and, therefore, the provision of the rule is saved by clause (4). This argument raises the problem of construction of clause (4). Can it be said that the Rule imposes a reasonable restriction in the interests of public order ? There can be no doubt that Government servants can be subjected to rules which are intended to maintain discipline amongst their ranks and to lead to an efficient discharge of their duties Discipline amount Government employees and their efficiency may,in a sense, be said to be related to public order. But in considering the scope of clause (4), it has to be borne in mind that the rule must be 795 in the interests of public order and must amount to a reasonable restriction. The words "public order" occur even in clause (2), which refers, inter alia, to security of the State and public order. There can be no doubt that the said words must have the same meaning in both clauses (2) and (4). So far as clause (2) is concerned, security of the State having been expressly and specifically provided for, public ' order cannot include the security of State, though in its widest sense it may be capable of including the said concept. Therefore, in clause (2), public order is virtually synonymous with public peace, safety and tranquility. The denotation of the said words cannot be any wider in clause (4). That is one consideration which it is necessary to bear in mind. When clause (4) refers to the restriction imposed in the interests of public order, it is necessary to enquire as to what is the effect of the words "in the interests of". This clause again cannot be interpreted to mean that even if the connection between the restriction and the public order is remote and indirect, the restriction can be said to be in the interests of public order. A restriction can be said to be in the interests of public order only if the connection between the restriction and the public order is proximate and direct. Indirect or far fetched or unreal connection between the restriction and public order would not fall within the purview of the expression "in the interests of public order. " This interpretation is strengthened by the other requirement of clause (4) that. , by itself, the restriction ought to be reasonable. It Would be difficult to hold that a restriction which does not directly relate to public order can be said to be reasonable on the ground that its connection with public order is remote or far fetched. That is another consideration which is relevant. Therefore, reading the two requirements of clause (4), it follows that the impugned restriction can, be said to satisfy as the test of clause (4) only if its. connection with public order is shown to be rationally proximate and direct, 796 That is the view taken by this Court in The Superintendent Central Prison, Fatehgarh vs Dr. Ram Manohar Lohia, (1). In the words of Patan jali Sastri .T., in Rex vs Basudev,(2) "the connection contemplated between the restriction and public order must be real and proximate, not far fetched or problematical. " It is in the light of this legal position that the validity of the impugned rule must be determined. It is not dispute that the fundamental rights guaranteed by article 19 can be claimed by Government servants. article 33 which confers power on the parliament to modify the rights in their application to the Armed Forces, clearly brings out the fact that all citizens, including Government servants, are entitled to claim the rights guaranteed by article 19. Thus, the validity of the impugned rule has to be judged on the basis that the respondent and his co employees are entitled to form Associations or Unions. It is clear that Rule 4 B imposes a restriction on this right. It virtually compels a Government servant to withdraw his membership of the Service Association of Government Servants as soon as recognition accorded to the said Association is withdrawn or if, after the Association is formed, no recognition is accorded to it within six months. In other words, the right to form an Association is conditioned by the existence of the recognition of the said Association by the Government. If the Association obtains the recognition and continues to enjoy it, Government servants can become members of the said Association ; if the Association does not secure recognition from the Government or recognition granted to it is withdrawn, Government servants must cease to be the members of the said Association. That is the plain effect of the impugned rule. Can this restriction be. said to be in the interests of public order and can it be said, to be a reasonable restriction ? In our opinion, the only answer to these questions would be in the negative. It is difficult to see any direct or proximate (1) ; [1949] S.C.R. 657,661. 797 or reasonable connection between the recognition by the Government of the Association and the discipline amongst, and the efficiency of, the members of the said Association. Similarly, it is difficult to see any connection between recognition and public order. A reference to Rule 5 of the Recognition of Service Association Rules recently made in 1959 would clearly show that there is no necessary Connection between recognition or its withdrawal and public order. Rule 5 enumerates different conditions by clauses (a) to (1) which every Service Association must comply with; and Rule 7 provides that if a Service Association recognised under the said Rules has failed to comply with the conditions set out in Rule 4, 5, or 6, its recognition may be withdrawn. One of the conditiOn imposed by Rule 5(1) is that communications addressed by the Service Association or by any office bearer on its behalf to the Government or a Government authority shall not contain any disrespectful or improper language. Similarly, Rule 5(g) provides that the previous permission of the Government shall be taken before the Service Association seeks affiliation with any other Union, Service Association or Federation; and Rule 5 (h) prohibits the Service Association from starting or publishing any periodical, magazine or bulletin without the previous approval of the Government. It is not easy to see any rational, direct or proximate connection between the observance of these conditions and public order. Therefore, even without examining the validity of all the conditions laid down by rule 4, 5 or 6, it is not difficult to hold that the granting or withdrawing of recognition may be based on considerations some of which have no connection whatever either with the efficiency or discipline amongst the Services or with public order. It might perhaps have been a different matter if the recognition or its withdrawal had been based on grounds which have a direct, proximate and rational connection with public order. That however 798 cannot be said about each one of the conditions prescribed by rule 4, 5 or 6. Therefore, it is quite possible that recognition may be refused or withdrawn on grounds which are wholly unconnected with public J. order and it is in such a set up that the right to form Associations guaranteed by article 19(1)(c) is made subject to the rigorous restriction that the Association in question must secure and continue to enjoy recognition from the Government. We are therefore, satisfied that the restriction thus imposed would make the guaranteed right under article 19(1)(c) ineffective and even illusory. That is why we see no reason to differ from the conclusion of the High Court that the impugned Rule 4 B is, ' invalid. In the result, appeal No. 378/1962 fails and is dismissed. In regard to appeal No. 379/1962, though we have partly reversed the conclusion of the High Court in respect of the validity of the whole of Rule 4 A. it appears that the departmental proceedings initiated against the respondent in respect of,the alleged breach of rule 4 A have to be quashed, because the alleged contravention of the said Rule on which the said proceedings are based is contravention of that part of Rule 4 A which has been held to be invalid by this Court. The material charge against the respondent in that behalf is that he had deliberately contravene the provisions of Rule 4 A in so far as he has participated actively in the various demonstrations organised in connection with the strike of Central Government employees and took part in the preparations made for the said strike. It will be noticed that the result of the decision of this Court in Kameshwar Prasad 's(1) case is that in so far 'as the rule prohibits any form of demonstration, it is invalid. It is not invalid in so far as it may prohibit participation in strikes. The charge against the respondent is not that he participated in any strike ; the charge is that he participated in the various demonstrations ; and that is a charge based upon that part of (1) [1962] Supp. 3 S.C.R. 369. 799 the rule which prohibits demonstrations altogether. It is true that the demonstrations in which he is alleged to have participated actively were organised in connection with the strike ; but that does not mean either in fact or in law that he participated in the strike itself. Similarly, the charge that he took active part in the preparations made for the said strike, also does not mean in fact or in law that he participated in the strike. If he joined demonstrations organised in connection with the strikes, or if he took part in the preparations for the strike, it cannot be said that he took part in the strike as such, and so, the charge cannot be reasonably construed to mean that his conduct amounted to a contravention of the rule which prohibits strikes. Therefore, though Rule 4 A is partly, and not wholly, invalid as held by this Court in the case of Kameshwar Prasad(1), the particular charge against the respondent being on the basis of that part of the rule which is invalid, it must follow that the departmental proceedings based on that charge are also invalid. That is why appeal No. 379/1962 must be allowed and the departmental proceedings instituted against the respondent for the alleged contravention by him of rules 4 A and 4 B must be quashed. There would be no order as to costs. Appeal 378/62 dismissed. Appeal 379/62 allowed. (1) [1962] Supp. 3 S.C.R. 369.

IN-Abs

The respondent, A Central Government servant, who was the Secretary of the Civil Accounts Association of non Gazetted Staff, was departmentally proceeded against under rr. 4(A) and 4(B) of the Central Civil Services (Conduct) Rules, 1955, for participating in demonstrations in preparation of a general strike of Central Government employees and for refusing to dissociate from the Association after the Government had withdrawn its recognition of it. He impugned, the validity of the said rules on the ground that they infringed his fundamental rights under article 19 of the Constitution. The High Court held that r. 4(A) was wholly valid but quashed the proceeding under r. 4(B) which it held to be invalid. Rule 4(A) provided that no Government servant shall participate in any demonstration or resort to any form of strike in connection with any matter pertaining to his conditions of service and r. 4(B) provided that no Government servant shall join or continue to be a member of any services Association which the 790 Government did not recognise or in respect of which recognition had been refused or withdrawn by it. Held, that in view of the decision of this Court that r. 4(A) of the Central Civil Services (Conduct) Rules, 1955, in so far as it prohibited any form of demonstration was violative of the Government servants ' fundamental rights under article 19(1) (a) and (b), the High Court was in error in holding that the rule was wholly valid. Kameshwar Parsad vs The State of Bihar, [1962] supp. 3 S.C.R. 369, referred to. Participation in demonstration organised for a strike and taking active part in preparation for it cannot, either in law or fact, mean participation in the strike. The respondent could not, therefore, be said to have taken part in a strike as such and the proceeding against him under section 4(A) being based on that part of it which was invalid must also be invalid. It was clear that r. 4(B) of the said Rules imposed res triction on the undoubted ' right of the Government Servants under article 19 which were neither reasonable nor in the interest of public order tinder article 19(4). The rules clearly showed that in the granting or withdrawing, of recognition, the Government right be actuated by considerations other than those of efficiency or discipline amongst the services or public order. The restriction imposed by r.4 (B), therefore, infringed article 19(1) (c) and must be held to be invalid. The Super tenant, Central Prison, Fatehgarh vs Dr. Ram Manohar Lohia, ; and Rex vs Basudev, , referred to.

ppeal No. 286 of 1960. Appeal by special leave from the judgment and decree dated March 26, 1958, of the Patna High Court in Second Appeal No. 1330 of 1954. N.C. Chatterjee and R. C. Prasad, for the appellant. section N. Andley and section P. Varma, for the respondent No. 1. 1962. November 9. The judgment of the Court was delivered by DAS GUPTA, J. The subject matter of this litigation is a plot of land measuring 1267 sq. in the Sakchi New Planning area in the town of Jamshedpur. On June 23,1937, Abdul Gani, through whom the present appellant claims to be interested in the land, applied for settlement of this plot of land to the Land Officer of the owner of the land, the Tata Iron and Steel Company Ltd. The application was allowed and the land was let out to Abdul Gani as a tenant from month to month at a rent of Re. 1/per month. The suit out of which this appeal has arisen was brought in 1949 for ejectment of the tenant after determination of the tenancy by a notice to quit the premises. There was also, a prayer for arrears of rent at Re 1/ per month. The defence of Abdul Gani was that he was an agriculturist tenant as contemplated under the 3 Ghotanagpur Tenancy Act and not a monthly tenant and that no monthly rent was paid for the land It 'was, also pleaded that the lease being for agricultural and horticultural purposes at an annual rent, the defendant acquired a valid occupancy right and was not liable to ejectment. The present appellant was added as a defendant by an order dated May 25, 1953. He also filed a written statement contending that by operation of the provisions of Chotanagpur Tenancy Act, Abdul Gani had acquired occupancy right, that the purpose for which settlement was made with Abdul Gani could not create a monthly tenancy and the plaintiff was not entitled to Khas possession. The Trial Court (The Additional Munsif, Jamshedpur), accepted the defence plea that the tenancy created in favour of Abdul Gani was agricultural, that Abdul Gani had acquired an occupancy raiyat 's right therein and as the tenancy Act was governed by the Chotanagpur Tenancy Act the suit was not triable by a civil court. Accordingly, he dismissed the suit. On appeal the Subordinate Judge, Singhbhum, with the findings of the Trial Court that the holding was agricultural and therefore governed by the Chotanagpur Tenancy Act and accordingly affirmed the judgment and decree of the Trial Court. The High Court of judicature at Patna however came to the conclusion in Second Appeal that the lease was not for agricultural and horticultural purposes and there was no question. of the defendant having acquired the right of occupancy in the land. The High Court allowed the appeal, set aside the judgment and decree of the courts below and decreed the plaintiffs suit. Against this decision of the High Court this appeal has been filed by special leave granted by this Court. 4 In support of the appeal it is urged before us by Mr. N. Chatterjee, that the High Court erred in holding that the lease was not for agricultural or horticultural purposes. He points out that the application for lease of the land mentions ""garden purpose" as the purpose of the tenancy, and argues that that is sufficient to make Abdul Gani a raiyat within the meaning of section 6 of the Chotanagpur Tenancy Act. Section 4 of the Act states that for the purpose of this Act there shall be four classes of tenants, namely, (1) tenure holders,(2) raiyats, (3) under raiyats and(4)Munderi Khunt kattidars. Admittedly ' and obviously, Abdul Gani was not a tenant under classes 1, 3 and 4 and the only way he could come within the ambit of Chotanagpur Tenancy Act was by being a "raiyat" as mentioned in class (2). "Raiyat" is defined in section 6 of this Act to mean "primarily a person who has acquired a right to hold land for the purpose of cultivating it by himself or by 'members of his family or by hired servants. or with the aid of partners ; and includes the successors in interest of persons who have acquired such a right It has been settled by a number of decisions of the Calcutta and the Patna High Courts that the purpose of planting an orchard comes within " 'the purpose of cultivation. " If it appears that Abdul Gani took lease of the land in dispute for the purpose of growing an orchard he clearly became a raiyat ' under the Chotanagpur Tenancy Act. While there is no document creating the lease we have, in the present case, Abdul Gani 's application for lease and the landlord 's order granting the lease. The application is in these words: "I beg to apply for a plot of land measuring 1267 sq It. in Sakchi New Planning for Garden Purpose and for permission to retain one step in the east side. I agree to hold the land on monthly tenancy and to abide by the terms and conditions of the 5 Company and the house building rules. I also agree to abide by the rules and bye laws of the Jamshedpur Notified Area Committee in force from time to time. I agree to pay the security deposit to be fixed by you in respect of my tenancy as soon as the plot IS allotted to me and shall submit the plan of MY proposed house for approval of the Chief Town Engineer before I start construction. I therefore request that you will kindly allot me a plot of land in the above mentioned Basti on your usual terms." Mr. Chatterjee fastens on the words "for garden purpose" and argues that that shows clearly that the purpose was to grow an orchard. It will not be proper however to look only at this one phrase "for garden purpose" and to ignore the rest of the document. It has to be noticed that after stating in the first sentence that he wanted the land "for garden purpose" Abdul Gani stated in the next paragraph that he agreed to hold the land "on monthly tenancy" and again that he agreed "to abide by the terms and conditions of the Company and the house building. rules. " It is difficult to conceive of a lease for cultivation being taken on a monthly tenancy. It is even more difficult to understand why Abdul Gani would agree "to abide by the house building rules" if I the purpose was only to grow an orchard. These two facts, namely, that the land would be held on monthly tenancy and the tenant would abide by the house building rules, have to be considered along with the earlier statement that the land was being applied " 'for garden purpose. " The terms of the application for lease are, in our opinion, sufficient to show that the lease was not for an agricultural or horticultural purpose. In view of this, it is unnecessary to investigate how the land was actually used. It may be mentioned however that if one did examine the evidence to 6 find out such user, it becomes clear that while a part of the land was used for growing some guava, trees and some flowers, a pacca room was also erected: on a portion of the land. On a consideration of all these things we find ourselves in agreement with the High Court that the purpose of the lease was not agricultural or horticultural. We have, therefore, come to the conclusion that the High Court was right in decreeing the plaintiff 's suit. The appeal is accordingly dismissed with costs. Appeal dismissed.

IN-Abs

The predecessor in interest of the present appellant applied to the land officer of the respondents for the settlement of the subject,matter of dispute, situated in,Jamshedpur. The land was let out to him as tenant from month to month at a rent of Re. 1 / per month. There was no document creating the lease. The application for settlement contained averments to the effect that the applicant wanted it 1 for garden purposes" that he agreed to hold the land "on monthly tenancy" and that would abide by the "house building rules". Following a notice to quit the respondents who are the owners of the plot filed a suit for eviction of the appellant and for arrears of rent. The defence raised was that there was no monthly tenancy and the lease was for agricultural and horticultural purposes and the appellant was an agricultural tenant within the meaning of sections 4 and 6 of the Chotanagpur Tenancy Act who has fixity of tenure. _The trial court upheld the contention and on appeal it was confirmed by the Subordinate Judge. On second appeal the High Court of Patna held that the lease was not for agri cultural purposes and ordered eviction. The present appeal is by way of special leave granted by this Court. The main contention before this Court was that since the application for Jew made it clear that the land was for "garden 2 purpose" the appellant was raiyat within the meaning of section 6 of the Act. Held, that the statement of the purpose had to considered alongwith the other facts mentioned in the document, viz. that the application was for a monthly tenancy, and that the applicant agreed to abide by the house building rules. On such consideration, it was clear that the lease was not for horticultural or agricultural purposes.

Appeal No. 201/60. Appeal by special leave from the judgment and order dated June 18, 1958, of the Bombay High Court, Nagpur, in Misc. No. 391 of 1956. M.C. Setalvad, Attorney General for India, section N. Andley, and Rameshwar Nath, for the appellant. S.N. Kerdekar, N. K. Kherdakar and A. G. Ratnaparkhi, for the respondent No. 1. 1962. November 8. The judgment of the Court was delivered by 970 GAJENDRAGADKAR J. This appeal raises a ' short question about the construction of clauses 23, 24 and 24 A in The Central Provinces and Berar Letting of Houses and Rent Control Order, 1949 (hereinafter called the Order). jogeshwar s/o Parmanand Bhishikar (hereinafter called the respondent) owns a house known as the Bhishikar Bhawan in Nagpur. Block No. 2A had been let out by him to a firm known as the Dayalbagh Stores for carrying on business. Since the tenant was in arrears as to rent,, the respondent obtained from the Rent Control Authorities permission to terminate the said tenancy. Meanwhile, the tenant intimated to the respondent by telegram on July 24, 1955, that it had vacated the said premises on that day. Prior to the receipt of this telegram, however, the appellant Chimandas Bagomal Sindhi had made an application to the Addl. Commissioner, Nagpur, on July 15, 1955, that the premises occupied by the said tenant were likely to fall vacant, and prayed that the same should be allotted to him as he was a displaced person within the meaning of the Order. The Addl. D. C. passed an order of provisional allotment in favour of the appellant on the same day and since then, the appellant has been in possession of the said premises. The respondent then came to know about the said provisional allotment and gave intimation to the Addl. D. C. that he needed the, premises for his own purposes, and so, he moved for the cancellation of the said provisional allotment order. On July 23, 1956, the Addl. D. C. purporting to exercise his powers under clause 23 (1) of the Order confirmed the provisional allotment in favour of the appellant. The respondent then moved the Nagpur High Court by a writ petition No. 307 of 1955 for cancellation of the said order. On April 10, 1956, Mr.Justice Bhutt set aside the order of allotment and remanded the case for disposal in accordance with 971 law. That is how the first stage of this dispute came to an end. On remand, the Addl. Commissioner confirmed the earlier order. He held that the respondent did not need the premises for his own occupation and he thought that there was no going back on the earlier provisional order of allotment in favour of the appellant. This second order was challenged by the respondent by another writ petition filed in the Nagpur High Court (No. 391 of 1956). Meanwhile, the appellant had filed a Letters Patent Appeal (No. 95 of 1956) against the decision of Bhutt, J., on the earlier writ petition filed by the respondent. By consent, the said Letters Patent Appeal and the subsequent writ petition filed by the respondent were heard together by a Division Bench of the High Court. 'The Division Bench has set aside the order of allotment passed in favour of the appellant and allowed the subsequent writ petition filed by the respondent. It is against this order that the appellant has come to this Court by special leave. It appears that after remand, the respondent .brought it to the notice of the Addl. D. C. that the appellant owned As. /4/ share in the Hind Vastra Bhandar and that he had, therefore a place where he could carry on his business. This allegation was repeated by the respondent in his second writ petition and it was urged by him that in view of the fact that the appellant had a place of business of his own, he was not entitled to the accommodation alloted to him by the impugned order. This plea was met by the appellant on the ground ' that the business mentioned by the respondent bad been dissolved. From the affidavit filed by the appellant in that behalf it does appear that the appellant had a share in the Hind Vastra Bbandar and Krishna Watch Co. both of which Partnerships carried on their business at Nagpur, but on 972 April 8, 1957 the said partnerships had been dissolved and so, after the said date of dissolution there was no place of business to which the appellant could lay any claim. In support; of this plea, the appellant has filed the deed of Dissolution in question. , The High Court has held that reading the definition of the words "displaced person prescribed by clause 2 (2) together with the relevant clause of the Order under which the impugned allotment had been made in favour of the appellants it must be, held that the appellant was not a displaced person and as such, he was not entitled to the said allotment. That is how the main point which arises for our decision in the present appeal is 'about the construction of the said relevant clauses of the Order. The order had been passed by the Government of the Central Provinces, and Berar by virtue of the powers conferred on it by section 2 of the Central provinces and Berar Act No. XI of 1946. Sub clause (2)of clause 2 defines A displaced person as meaning any person who, on account of the setting up of the Dominions of India and Pakistan, or on account of civil disturbances or fear of such disturbances in any area now forming part of Pakistan has been displaced from or has left his place of residence in such area after the 1st day of March, 1947, and who has subsequently been residing in India. The Appellant claims to be such a displaced person. Clause 13 provides, inter alia, that the landlord would be entitled to claim ejectment of his tenant if he shows that he needs the house or portion thereof for the purpose of his bona fide residence, provided he is not occupying any other residential house of his own it the city or town concerned. He can also obtain: ejectment of his tenant if it is shown that the,, tenant has secured alternative accommodation or has left the area for a continuous 973 period of four months and does not reasonably need the house. Clauses 22 to 27 form part of Chapter III which deals with the collection of information and letting, "of accommodation. Clause 22 (1) provides that every landlord of a house situate in an area to which this Chapter applies, shall give intimation about the impending vacancy as specified by subclauses (a) and (b). s Clause 22 (2) lays down that no person shall occupy any house in respect of which this Chapter applies except under an order under sub clauses (1) of clause 28 or clause,, 24 or on an assurance from the landlord that the house is being permitted to be occupied in accordance with sub clause (2) of clause 23. It would thus be noticed that all vacancies occurring in houses governed by ' Chapter III have to be filled in the manner specified by clause 22 (2). Clause 23(1) provides that on receipt of the intimation under; clause 22, the, Dy. Commissioner may within fifteen days from the date of receipt of the said intimation, order the landlord to let the vacant house to any person holding an, office of profit under; the Union or State Government or to any Person holding it post under the Madhya Pradesh Electricity Board, or to a displaced person or to an evicted, person and thereupon. ' notwithstanding any agreement to the contrary, the landlord shall let the house to such person and place him in possession thereof immediately, if it is vacant or as soon as it becomes vacant. The proviso to this sub clause gives right to the, landlord to plead that he needs the house for his own occupation, and if such a plea is accepted by theDy. Commissioner, the landlord would, be allowed to occupy the same. In other words, in cases falling underclause 23 (1) before the D.C.makes an order directing the landlord to let the house to one of the personsspecified. in the different categories by that clause, it would be open to the landlord to urge 974 his own need and if that need is established, an order ' under clause 23(11) would not be passed against him. Clause 23(2) provides that if no order is passed and served upon the landlord within the period specified in sub clause (1), he shall be free to let the vacant house to any person. Clause 24 provides for the penalty for noncompliance with the. requirements of clause 22(1). Under this clause, the Dy. Commissioner is empowered to order the landlord to let the house forthwith to any of the persons falling under the categories specified by that clause. Since the power conferred on the D. C. to make an order under this clause is intended, in a sense, to punish the landlord for his contra vention of clause 22, it prima facie appears that the landlord is not given an opportunity to ' prove his own need as under the proviso to 23 (1). Clause 24 A deals with cases where the Dy. Commissioner receives information to the effect that a house is likely to become vacant or available for occupation by a particular date ; and in such cases it empower.% the Dy. Commissioner to, make an,. order on the same lines as provided by clause 23(1). This clause lays down that the order passed under it shall be complied with by the landlord unless the house does not become vacant or available for occupation within one month from the date of receipt by him of the said order, or the landlord applies for the cancellation of the said order stating his grounds thereof. This provision means that an order passed under clause 24A can be challenged by the landlord by pleading that he needs the premises for himself That, in brief, is the scheme of the relevant provisions. The High Court has taken the view that in allotting the premises in question to the appellant ' the Addl. D. C. has failed to notice the fact that on July 15, 1955, when the provisional allotment order 975 was passed, the appellant had a place of business of his own inasmuch as he was a 4 annas sharer in a partnership which had its place of business. According to the High Court, as soon as it appeared that the appellant had a place of business of his own, he ceased to be a displaced person within the meaning of clause 23(1) and the other relevant clauses. This conclusion proceeded on the basis that though the appellant may be taken to have satisfied the require ments of the definition of the expression "displaced person" under clause 2(2), that definition had to be read in the light of the context of clause 23(1) and its meaning had to be controlled by the said context. Clause 2 begins with the words that in this Order, unless there is anything repugnant in the subject or context, the defined terms will carry the meaning assigned to them by the respective definitions. The whole object of enabling the Dy. Commissioner to make an order of allotment in respect of the persons specified in different categories by the relevant clause, is to provide accommodation to those persons who were without any accommodation. Since that object is implicit in the relevant provision, the definition must be construed in the light of the said implicit assumption of the relevant provision. It is on this view that the impugned order has been set aside by the High Court. It may be conceded that prima facie the view taken by the High Court appears to be attractive. It does appear to be reasonable that provisions of the kind contained in Chapter III would normally be expected to assist persons of specified categories to obtain accommodation and that would impliedly postulate that such persons have, no accommodation which they can claim their own. If the words of the relevant provision are ambiguous, or if their effect can reasonably be said to be a matter of doubt, it may be permissible to construe the said provisions in the light of the assumption made by the High 976 Court. But, arc the words of the relevant in any sense ambiguous, or is the effect of those words doubtful ? In our opinion, the answer to these questions must be in the negative. Clause 23 (1) refers to the persons in the specified categories, and empowers the D.C. to make an order of allotment in their favour. There are no terms of limitation qualifying the said persons and the scheme of the relevant provisions does not seems, to contemplate any such limitations It 'is significant that the said persons are not entitled as a matter of right to an order of allotment. What clause 23(1) does is to confer power on the D.C. to make an order of allotment if he thought it OX expedient, fair to do so in a particular case. it is only where an order is made by the D.C. that an obligation is imposed on the landlord to let the premises to the person named in the order. Having regard to the words used in describing the persons "and the categories, it seems plain that the provision Contemplated that a person belonging to one of those categories may be entitled to claim its benefit 'on the ground that accommodation already available to him was patently insufficient or unsuitable. ' When such a plea is made, the D. C. may have to consider it Arid in doing so, "he may have to examine the contentions raise landlord against such a plea as Well as the claim that the landlord may make for his own personal occupation. The enquiry which would thus become necessary would be in the nature of a enquiry and, the power conferred on ' the D. 'C. may have to be exercised in a flair and just manner. We do not think that clause 23 (1) as well as clauses 24 and 24 A necessarily exclude 'the cases 1 of person 's specified in them on the grounds that the said persons already have an accommodation which they can call their own. Persons there specified would no doubt have a much better claim for accommodation if is shown that they have no accommodation at all. But 977 even if such persons have accommodation, their claims cannot be ruled out on the preliminary ground that the very fact that they have accommodation takes them out of the provisions of the respective clauses. It is quite true that if a person belonging Ca, to the specified categories has suitable and sufficient accommodation, he would normally not be entitled to claim the benefit of clause 23(1). That, however, is a matter to be considered by the Dy. Commissioner on the merits. We are, therefore, satisfied that the High Court was in error in assuming that the provisions of clause 23(1) and clauses 24 and 24A impliedly postulate that the persons belonging to the respective categories specified by them can receive allotment only if they have no previous accommodation of their own. That being so, we must hold that the appellant 's case cannot be thrown out merely on the ground that he had other accommodation by virtue of the fact that he was a partner in two concerns to which we have already referred. This conclusion cannot, however, finally dispose of the appeal before us because it seems to us that after the remand order was passed by Mr. justice Bhutt, the Addl. D.C. has not dealt with the matter in accordance with law as he was required to do. He appears to have taken the view that since a provisional order had already been passed, there was "no going back" upon it. He thought that after remand, the scope of the enquiry was confined to the examination of the question as to whether the respondent proved that he needed the premises for his own occupation. It is true that he has incidentally mentioned the fact that the appellant owned a /4/ share in the business which was carried on in Nagpur, but he has added that the said fact does not preclude him from obtaining a shop for starting a business exclusively of his own. This observation shows that the Addl. D.C. did not properly appreciate the scope and effect of the 978 provision contained in the relevant clause. Besides, reading the order as a whole, it is quite clear that he took an unduly narrow view of the limits of the enquiry which he was bound to hold as a result of the remand order and that has vitiated his final conclusion. We, therefore, think that it is necessary that the matter should be sent back to the Addl. Commissioner, Nagpur, with a direction that he should consider the case on the merits afresh. We wish to make it clear that the question as to whether the appellant should be given allotment of the premises in question should be determined by the Addl. D. C. in the light of the position as it stood on July 15, 1955. We are making this observation because there has been some controversy before us as to whether the appellant has lost his right in the premises belonging to the partnership of which admittedly he was a member by reason of the fact that the, said partnership is alleged to have been dissolved on April 8, 1957. The learned Attorney General has contended that if the matter has to go back, the Addl. D.C. should be free to consider the subsequent events that have taken place, and the appellant 's case should, therefore, be dealt with on the basis that he has no longer any shares in the said partnerships. We are not inclined to accept this contention. The fact that the present proceedings have been protracted would not entitle the appellant to ask the Addl. D.C. to take subsequent events into account. It is clear that the dissolution of the partnership took place long after the appellant obtained the provisional allotment from the Addl. D.C. and it is by no means clear that if the Addl. D.C. had been then told that the appellant had a place of business of his own, he would have granted accommodation to him in the present premises on the same day that he moved him in that behalf. We are satisfied that the question about the propriety and validity of the said provisional order must be judged in the light of the facts as they obtained on that day. 979 Mr. Kherdekar for the respondents wanted to argue before us that under cl. 2(2) the appellant was not a displaced person on that day and he has relied on the fact that the appellant had been carrying on business in several places in India, since 1945. This point has not been considered either by the Addl. D.C. or the High Court. If so advised, the respondents may take this point before the Addl. D.C. and we have no doubt that if raised, it would be dealt with by the Addl. D.C. in accordance with law. The result is, the appeal is allowed, the order passed by the High Court on the writ petition is set aside and the matter is remanded to the Addl. Commissioner, Nagpur, with a direction that he should deal with the dispute between the parties afresh in accordance with law. Costs incurred by the parties so far would be costs in the final order which may be passed after remand. Appeal allowed.

IN-Abs

The respondent had let out his house to a firm against whom he obtained permission from the Rent Control Authority to terminate the tenancy on the ground of arrears of rent. Meanwhile, the tenant intimated to the respondent by telegram that he had vacated the premises, but prior to the receipt of the telegram, the appellant bad applied to the Additional Deputy Commissioner that since the premises were likely to fall vacant, they should be allotted to him as he was a displaced person, and provisional allotment was made in his favour and he continued to be in possession since then. The respondent then moved for the cancellation of the said allotment on the ground that he needed the premises for his own use, but the allotment was confirmed in favour of the appellant by, the Additional Deputy Commissioner. The respondent then filed a writ petition in the High Court for cancellation of the said order, which was set aside and the case was remanded for disposal in accordance with law; against this the appellant filed a Letters Patent Appeal. On remand the earlier order was confirmed by the Additional Deputy Commissioner, against which the respondent filed another writ petition in the High Court. The Letters 969 Patent Appeal and the subsequent writ petition were heard together and the High Court allowed the writ petition and set aside the order of allotment in favour of the appellant on the ground that as soon as it appeared that the appellant had a place of business of his own, he ceased to be a displaced person within the meaning of cl. 23(1) and the other relevant clauses. Held, that cl. 23(1) refers to the persons in the specified categories and empowers the Deputy Commissioner to make an order of allotment in their favour. There are no terms of limitation qualifying the said persons and the scheme of the relevant provision does not seem to contemplate any such limitation. Clause 23(1), as well as cls. 24 and 24A do not necessarily exclude the cases of persons specified in them on the ground that the said persons already have an accommodation of their own and the High Court was in error in assuming that the provisions of cis. 23(1),24 and 24A impliedly postulated that the persons belonging to the respective categories specified by them could receive allotment only if they had no previous accommodation of their own. Held, further, that after remand the Additional Deputy Commissioner did not properly appreciate the scope and effect of the provision contained in the relevant clause and he took an unduly narrow view of the limits of the enquiry which he was bound to hold as a result of the remand order and that has vitiated his final conclusion.

62 to 465 of 1960. Appeals from the judgment and order dated September 26,1955, of the Bombay High Court I. T. R. No. 22 of 1955. K. N. Rajagopal Sastri, J. K. Hiranandi and N.H. Hingorani for the appellants. N. D. Karkhanis and D. Gupta for the respondents. April 19. The Judgment of the Court was delivered by 270 SHAH, J. This is a group of appeals against orders passed by the High Court of Bombay in Income Tax Reference under section 66(1) of the Indian Income Tax Act. Chellsons Ltd. a Private Company was incorporated in April 1941. The shareholders of the company at the material time were Kishinchand Chellaram holding 6 shares and Shewakram Kishinchand, Lokumal Kishinchand and Murli Tabilram each holding three shares. Kishinchand, Shewakram and Lokumal were directors of the company. At a General meeting of the shareholders of the company held on July 10, 1943, it was resolved to declare dividend at "60 per cent on the shares" of the company and for the purpose of that of declaration the profits of the year 1941 43 were included in the profit of the year 1942 43. Pursuant to this resolution, Rs. 46,000/ were credited in the books of the company to the account of Kishinchand Chellaram on March 31, 1944 and Rs. 23,000/ were credited to each of the other three shareholders. Another meeting of the shareholders was held on July 15, 1944, and it was resolved to declare dividend at "60 per cent on the shares" out of the profit of the company for 1943 44. Pursuant to this resolution, on September 29, 1944, Rs. 30,000/ were credited in the company 's books of account to Kishinchand and Rs. 15 000/ were credited to the accounts of each of the other there shareholders. In their respective returns for the assessment year 1945 46, Kishinchand, Showakram, Lokumal and Murli who will hereinafter be collectively called the assessees included the amounts credited to them in the company 's books of account as dividends for the three years 1941 42 to 1943 44. On December 4,1947, at an Extraordinary General Meeting another resolution purporting to ' reverse the earlier resolutions dated July 10, 1943 and July 271 15, 1944, was passed by the company. The resolution read as follows: "The notice dated 25th November, 1947 calling the Extraordinary General Body Meeting for today, was placed on the table. " Whereas the sum of Rs. 1,90,000 paid to the shareholders during the year 1944 45 as per details given below viz 1941 42 1942 43 1943 44 Total Mr. inch and Chellaram 10,000 36,000 30,000 76,000 Mr. Shewakram Kishinchand 5,000 18,000 15,000 38,000 Mr. Lokumal Kishinchand 5,000 18,000 15,000 38,000 Mr. Murli Tahilram 5,000 18,000 15,000 38,000 Total 25,000 90,000 75,000 190,000 was sanctioned by the General Body inadver tently without taking into consideration the Company 's liability for taxation, including E. P. T. and all the shareholders having been fully apprised of the bona fide mistake it is hereby unanimously resolved that such dividend inadvertently paid be considered as loan to such individual shareholders ' and be paid back to the Company forthwith, and the con sideration of any dividend to the shareholder be deferred to the next Annual General Meet ing. The adjustment in this regard will not 272 be made in the books of the Company as on 6th April, 1947. " Even though this resolution was passed, and the proceedings for assessment before the Income Tax Officer were not disposed of the assessees did not file revised returns excluding the amounts credited as dividend, nor did they claim before the Income Tax Officer that those amounts not being income were not liable to tax. By his order dated January 1, 1950, the Income Tax Officer brought the income returned by the assessees including the amounts credited to them as dividends, for the three years to tax. In appeals to the Appellate. Assistant Commissioner, the assessees contended that the amounts credited by the Company to their accounts in respect of the years 1941 42, 1942 43 and 1943 44 were not, in view of the subsequent resolution, liable to be taxed as dividend income. 'The Appellate Assistant Commissioner rejected this plea. The assessees then appealed to the Appellate Tribunal and contended that the dividends for the three years in question were declared out of capital and such declaration of dividend being under the Indian,Companies Act invalid, in the assessment the amounts, credited to their accounts as dividend should be excluded. The Income Tax Appellate Tribunal held that the dividends in respect of the years 1941 42 and 1942 43, having been received before the year of account relevant to the year of assessment 1945 46, were not liable to be taxed in that year. But the Tribunal confirmed the orders of assessment as to the dividend for the year 1943 44, because, in their view, the resolution declaring dividend could not be reversed by a resolution at a subsequent General Meeting after the dividends had been paid. At the instance of 273 the assessees the Appellate Tribunal referred in each of the four cases the following two questions: (1) Whether the shareholders of the company at the meeting held on December 4, 1947 could reverse the resolutions passed on July 10, 1943 and July 15, 1944 ? (2) Whether the sum of Rs. . . received by the assessee. . . as dividend in the account year 1944 45 relevant for the assessment year 1945 46 has been lawfully taxed in the assessment year 1945 46? If not, could only the dividends that could have been paid out of the profits or a part thereof be taxed in the assessment year 1945 46 ? (In each set of questions the appropriate amount received and the name of the assessee was incorporated in the second question). The Tribunal observed in the order of reference that the Income Tax Department challenged the correctness of the claim made by the shareholders that dividend was paid without making provision for payment of tax, but they did not desire to go into accounts to ascertain whether provision for tax was made, as "the parties at the time of the hearing of the appeals proceeded on the footing that no such provision was made. Even if provision was made, it makes no difference in so far as the Department is concerned. The question is whether any divident has been declared out of capital and that question will have to be examined at the time of passing the order under Section 66 (5) of the Act, in view of question No. 2." The High Court declined to answer the first question because in their view it was unnecessary, and 'answered the first part of the second 274 question in the affirmative, and hold that the second part did not on that view arise for decision. Against the order of the High Court these four appeals have been preferred by the assessees. The only question material to these appeals which was argued by the assessees before the Tribunal was whether it was competent to the company by a subsequent resolution to reverse an earlier resolution declaring the dividend. The Tribunal held that the earlier resolution could not be reversed by a subsequent resolution, and therefore what was paid and received as dividend could not by a subsequent resolution of the company be treated as paid otherwise than as dividend. The High Court held that the assessments were properly made by the Income Tax Officer. They observed that the assessment of an assessee for each year is self contained and subsequent events cannot justify modification of the assessment. Section 16(2) provided (in so far as it is material) that "for the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or distributed to him. x x x". It is common ground that on July 15, 1944 dividend was declared by a resolution of the company and the amounts payable to the assessees were, in fact, credited on September 29, 1944, in the accounts maintained by the company, to each of the shareholders as dividend. The amounts were therefore declared as dividend, treated as dividend and received by the assessees as dividend. The assessees included the dividends so credited to their accounts in the returns. It may be assumed that the company failed to provide for payment of tax before declaring dividend and that after providing for payment of tax the net profits of company may not have 275 been sufficient to justify declaration of dividend at 60% of the value of the shares. On that assumption it may be inferred that the dividend or a part thereof was in truth paid out of the capital of the company. Payment of dividend otherwise than out of profits of the year, or other undistributed profits was at the material time prohibited by article 97 of Table A of the Indian Companies Act, 1913 as amended by Act. XXXII of 1936 read with section 17(2) of the Act; and therefore such payment may be regarded as unlawful. If the Directors of a company have deliberately paid or negligently been instrumental in paying dividend out of capital they may have, in an action by the company or if the company is being wound up at the instance of the Liquidator to compensate the company for loss occasioned by their wrongful or negligent conduct. (In ' the matter of The Union Bank Allahabad Ltd. (1). In this case we are not concerned with the validity of the distribution of dividend, 'or the liability of the directors arising out of improper distribution of dividend. We are concerned with the true character of the payment made on September 29, 1944, to the assessees. If dividend is declared and the amount is credited or paid to the share holders as dividend can the character of the credit or payment be altered by a subsequent resolution so as to alter the incidence of tax which attaches to that amount? By virtue of section 16(2) the liability to pay tax attaches as soon as dividend is paid, credited or distributed or deemed to have been paid, credited or distributed to the shareholders and the Income Tax Act contains no provision for altering the incidence of liability to pay tax on the dividend, merely because it is found that in declaring dividend and paying it the company violated a prohibition (1) All. 276 relating to payment of dividend in the Indian Companies Act. It is not necessary to consider in this case whether the shareholders may be compelled by the company to refund the amount improperly paid as dividend out of capital. Even if the shareholders agree to refund the amounts received by them as dividend the original character of the receipt as dividend is not thereby altered. In ascertaining ' whether liability to pay Income tax on dividend arose, a resolution of the company whereby payments made to the shareholders as dividend are to be treated as loans cannot retrospectively alter the character of the payment and thereby exempt it from liability which has already attached thereto. Before this Court two contentions were raised by counsel for the assesses : (1) that on the amount received by each of the asseseees tax was not eligible because it was not dividend at all, and (2) that what was declared and paid as dividend ceased to be such by virtue of the subsequent resolution. The first plea was not raised before the Tribunal, and on the question as framed it did not arise for decision on a reference under section 66 of the Indian Income Tax Act. The jurisdiction of the High Court under section 66 being advisory, they were concerned to give their opinion on questions which fairly arose out of the order of the Tribunal, and were in fact raised and referred. The question whether the payment made by the Company was not in the nature of dividend not having fairly arisen out of the order of the Tribunal, it cannot be raised in this Court as it could not in the High Court. In any event, we are of the opinion that payment made as dividend by a company to its shareholders does not lose that character merely because it is paid out of capital. Under the Income Tax Act, liability to pay tax attaches as soon as dividend is paid, credited or distributed or is so 277 declared. The Act does not contemplate an enquiry whether the dividend is properly paid credited or distributed before liability to pay Tax attaches thereto. The answer to the second contention for reasons already set out by us must be in the negative. The appeals therefore fail and are dismissed. In the circumstances of the case there will be no order as to costs. Appeals dissmissed.

IN-Abs

Chellsons Ltd., a private Ltd. Company, declared dividends without taking into account the company 's liability for taxation, including Extra Profits Tax. The dividends so declared were credited in the books of the company to the accounts of each of the share holders. Share holders in their return for the relevant assessment year included the amounts credited to them in the company 's books of account. Payment of dividends otherwise than out of profits of the year, or other undistributed profits was at the material time prohibited, by article 97 of Table A of the Indian Companies Act, 1913, as amended by Act XXXII of 1936 read with section 17 (2) of the Act; therefore such payment could not be regarded as lawful, the company having failed to provide for payment of tax before declaring dividend. On discovering its mistake at an Extra Ordinary General Meeting another revolution purporting to reverse the earlier resolutions declaring the dividends was moved, and the shareholders unanimously resolved inter alia that all the shareholders having been fully apprised of the bonafide mistake, the dividends inadvertently paid be considered as loans to such individual shareholders. Before the Income Tax Officer the assessee who was a shareholder did not file a revised return, nor did he claim that the amount received by him was not liable to tax. But on appeal before the Appellate Assistant Commissioner the assessee contended that amount credited by the company to his account was not in view of the subsequent resolution, liable to be taxed as dividend income. The plea was rejected. Before the Tribunal the assessee contended that the dividends were declared out of capital and such declaration was invalid under the Companies Act. The tribunal held that what was paid and received as dividend could not by a subsequent resolution of the company be treated as paid otherwise than as dividend. The High 269 Court agreed with the Tribunal observing that assessment for each year is self contained and subsequent events cannot justify modification of the assessment. The assessee came up in appeal to the Supreme Court. Held, that if the directors of the company have deliberately paid or negligently been instrumental in paying dividends out of capital they may have, in an action by the company or if the company is being wound up at the instance of the liquidator, to compensate the company for loss occasioned by their wrongful or negligent conduct. In Matter of The Union Bank, Allahabad Ltd. (1925) I.L. R. 47 All. 669 approved. Held, further, in ascertaining whether liability to pay income tax on dividend arose, a resolution of the company whereby payments made to the shareholders as dividends are to be treated as loans cannot retrospectively alter the character of the payment and thereby exempt it from liability which has already attached thereto. Held, also, the payment made as dividend by a company to its share holders does not lose the character, of dividend merely because it is paid out of capital. Under the Income Tax Act, liability to pay tax attaches as soon as dividend is paid, credited or distributed or is declared. The Act does not contemplate an enquiry whether the dividend is properly paid, credited or distributed before liability to pay tax attaches thereto.

riminal Appeal No. 97 of 1961. Appeal by special leave from the judgment and order dated February 1, 1961, of the Allahabad High Court (Lucknow Bench) Lucknow in Criminal Appeal No. 403 of 1960. section P. Sinha and Saukat Hussain, for the appellant. G. C. Mathur and C. P. Lal. for the respondent. November 13. The judgment of the Court was delivered by SUBBA RAO, J. This is an appeal by Special leave against the judgment and order of the Allahabad High Court, Lucknow Bench, confirming that of the Additional Sessions judge, Kheri, convicting the appellant under section 218 of the Indian Penal Code and sentencing him to two, years ' rigorous im prisonment. The prosecution case may be briefly stated : Some Railway officers and others, including one Chauhan, Railway Guard, went on two trollies towards Bhitra for a shoot. Chauhan had with him a 40 double barrelled gun of twelve bore bearing No. 23727. On either side of the Railway line there were reserve forests of the State. Some of the group got down from the trollies, flashed a search light and fired their guns. Two persons were shot dead. Chauhan in order to create evidence in his favour got a report entered by the appellant, a Police Head constable. in the General diary of the Police Station purporting to have been taken on December 13, 1956, at 6.45 P.M. to the effect that Chauhan had deposited the said gun in the Police Station. 'Many other manipulations were made by the appellant in the Police record to bring it in conformity with the said false entry. Several persons, including Chauhan and the appellant were prosecuted under sections 304 A, 201/109, 120 B and 218/109 of the Indian Penal Code, as. well under section 26 of the Indian Forest Act, and they were tried by the Additional Sessions Judge, Kheri. The appellant was also charged under section 218 of the Indian Penal Code. All the accused were acquitted except the appellant who was convicted under section 218 of the Indian Penal Code and sentenced to two years ' rigorous imprisonment. The appeal filed by him to the High Court was dismissed. Hence this present appeal. The learned counsel for the appellant raised two questions before us. The first was that as Chauhan was acquitted of all the offences with which he was charged, the charge against the appellant under. section 218, Indian Penal Code, should fall with it and the second that the prosecution against the appellant having been launched three months after the entry is alleged to have been made by him in the Police diary was barred by limitation under section 42 of the Police Act. Section 218 of the Indian Penal Code reads "Whoever, being a public servant, and being as such public servant, charged with the prepa ration of any record or other writing frames 41 that record or writing in a manner which he knows to be incorrect, with intent to cause, or knowing it to be likely that he will thereby cause, x x x x with intent thereby to save, or knowing it to be likely that he will thereby save any person from legal punishment, or with intent to save, or knowing that he is likely thereby to save x x x x x shall be punished with imprisonment of either descri ption for a term which may extend to three years, or with fine or with both." The crux of the section so far as it is relevant to the present inquiry is that the public servant should have acted in the manner contemplated by this section with an intent thereby to save or knowing it to be likely that he will thereby save any person from legal, punishment. The argument of the learned counsel under the, first head hinges upon the alleged inconsistency and ' conflict between the acquittal of Chauhan and the, conviction of the appellant. Chauhan had been ' charged along with the appellant for offences under SS. 304 A, 120 B, 201/109 and 218/109 of the Indian, Penal Code and section 26 of the Indian Forest Act. He was acquitted. Omitting for the time being section 218/109 Indian Penal Code. , let us see on what grounds he was so acquitted. The learned Additional Sessions judge found that the following facts had been established : (1) That there were three guns with the party, including Chauhan 's gun; (2) That between miles 8 and 9 after the ' trollies were stopped and were placed by the side of ', the track, Ramdeo trolly man and Lala went away and shortly after that four gun shots were heard and shortly after that Lala returned alone and then all the members of the party excepting Ramdeo returned to Mailani by the Cane Special, 42 (3) That at the time when the four gun shots were heard, Chauhan and Gupta were standing just near the track with their guns in their hands and, Dilawar, Amin and Hira also remained standing by the side of the track. (4) The medical evidence does not ' say about the duration of the gun shot injuries of Ramdeo and Chhotey but from the above noted discussion of the evidence it would appear that Ramdeo and Chhotey were likely to have received gun shot injuries between 7 20 to 7 40 P.M. in the night between December, 14 and 15, 1956. From the foregoing facts found the learned Judge came to the conclusion that there was no direct or substantial evidence of any kind connecting any of the five accused, including Chauhan, with the death of Ramdeo and Chhotey. It would be seen from the said finding that the learned judge accepted the evidence that Chauhan was in the shooting party that ' day, that he carried a gun with him, that two persons were killed with gun shots but for some reason with the correctness of which we are not concerned here he acquitted Chauhan. It is, therefore, manifest that whether Chauhan was guilty or not, at the time the false entries were made in the case diary there was every likelihood of Chauhan being prosecuted along with others for causing the death of Ramdeo and Chotey. Indeed as expected Chauhan and others were prosecuted though they were acquitted. On the said facts the mere acquittal of Chauhan cannot displace the finding of the learned Judge that the appellant manipulated the record with an intent thereby to save or knowing it to be likely that he would 'thereby save Chauhan from legal punishment. If the appellant had made the false entry in the diary and manipulated other records with a view to _ave Chauhan from the leggal punishment that might be inflicted upon him, the mere fact that he 43 was subsequently acquitted of the offence could not make it anytheless an offence under section 218 of the Indian Penal Code . Nor can we accept the contention that the acquittal of Chauhan for the abetment of the offence under section 218 of the Indian Penal Code committed by,the appellant affects the conviction of the appellant under section 218 of the Indian Penal Code. The gravamen of that charge against Chauhan is that he abetted the appellant in making a false entry in the diary and manipulating the record to fit in with that false entry ' The Additional Sessions judge considered the following three points in connection with the said offence (1) Whether Chauhan abetted Maulud Ahmad in making false entries in the General Diary of Police Station Mailani ? (2) Whether Chauhan deposited his gun at Police Station Mailani in the night between Dccember 14 and 15, 1956, and got the entry of the deposit in the General Diary antedated, i. e. according to the entry the gun was shown to be deposited on December 13, 1956, at 18 45 hours and whether Chauhan did it after consultation with Dilawar ? (3) Whether Maulud Ahmad (accused) made false entries in the General Diary of Police Station Mailani with the intention to save or knowing it likely that he would thereby save the offenders from legal punishment and by that false entry he was trying to get the evidence of the offences under sections 304 A of the Indian Penal Code and 26 of the Indian Forest Act to disappear ? The learned Judge found on the third point that the appellant intentionally falsified the official record with a view to save Chauhan but he acquitted Chauhan by giving him the benefit of doubt on the ground that his signature was not found against the 44 entry of deposit of the gun on December 13, 1956, and also against the entry of the return of the gun on December 18, 1956. In the view of the learned judge it was not established conclusively that Chauhan abetted the appellant in manipulating the record but that could not exonerate the appellant for it had been held on the evidence that the false entries had been made in the record by the appellant with a view to save Chauhan. Whether the acquittal of Chauhan was correct or not, the conviction of the appellant is not inconsistent with that of the acquittal of Chauban. That apart it appears to us from the record that the acquittal of Chauhan is not justified in the circumstances of the case. Though we cannot convict him as the State has not preferred an appeal to the High Court against his acquittal, we cannot rely upon that. acquittal to acquit the appellant against whom the case has been proved to the hilt. We,, therefore, hold that the conviction of the appellant is not inconsistent with the acquittal of Chauhan. The second question that is the question of limitation depends upon the provisions of section 42 of the Police Act. Section 42 reads "All x x x x prosecutions against any. person, which may be lawfully brought for anything done or intended, to be; done under the ' provisions of this Act, or under the general police powers hereby given shall be commenced within three months after the act complained of shall have been committed, and not, otherwise, x x x x x X." The period of three months prescribed for Commencing a prosecution under this section is, only with respect to prosecution of a person for something done or intended to be done by him under the provisions of the Police Act or under general Police powers given by the Act, Section 42 does not apply to prosecution 45 against any person for anything done under the provisions of any other Act or under Police powers conferred under any other Act. Under section 36 nothing contained in the Police, Act shall be construed to prevent any per son from being prosecuted under any Regulation or Act for any offence made punishable by this Act or for being liable under any other Regulation or Act or any other or higher penalty or punishment than is provided for such offence by this Act. This section makes it clear that the provisions of the Act including section 42 do not preclude a person from. being prosecuted for an offence under any other Act. A combined reading of these provisions leads to the conclusion that section 42 only applies to a prosecution against a per son for an offence committed under the Police Act. Under section 29 of the Police Act a Police officer, who is guilty of any violation of a duty, shall be liable on conviction before a Magistrate to a penalty Prescribed thereunder. Section 44 thereof imposes a duty on every officer in charge of a Police Station to keep a General Diary in such form as prescribed. If the appellant did not discharge his duty in the matter of keeping a regular diary, he had committed an offence under section 29 of the Act. If he was prosecuted for such an offence under section 42, it should be done within the time laid down thereunder, but the prosecution in the 'present case was for an offence under section 218 of the Indian, Penal Code which is an offence under a different act and for which a much higher punishment is prescribed. By reason of section 36 of the Police Act, section 42 thereof cannot apply to such a, prosecution. An appeal is made for the reduction of the sentence on the ground that the Head Conatable was only a tool in the hands of a superior officer who might have been approached by Chauhan. There is nothing on the record to disclose that Chauhan 46 approached any superior officer in the Police Department and that ' the appellant had manipulated the records on the dictation ' of such an officer. This is a pure surmise based upon an observation made by the learned judge of the High Court in the judgment. There is nothing improbable in Chauhan or some other person interested in him directly approaching, the appellant and the appellant acting in the manner. he did for consideration or otherwise. If a police officer manipulates the record such as police diary etc., it will be the end of honest criminal investigation in our country, Such offences shall receive deterrent punishment. The punishment awarded errs more on the side of leniency than otherwise. For the aforesaid reasons we hold that the decision of the High Court is correct. The appeal fails and is dismissed. Appeal dismissed.

IN-Abs

C and some other persons went on a shoot with guns where two persons were shot dead. In order to create evidence in his favour C got a false report entered by the appellant, a Head constable, in the General Diary purporting to have been made on the previous day to the effect that 0 had deposited his gun. C and the appellant and the others were tried for various offences including offences under sections 304 A and 218/109 Indian Penal Code. All the accussed were acquitted but the appellant was convicted under section 218. The appellant contended that after the acquittal of C, his conviction under section 218 couple not be sustained and (ii) that the prosecution having been launched more than three ' months after the entry was made was barred by limitation under section 42 Police Act. 39 Held, that the appellant was rightly convicted. Whether C was guilty or not, at the time the entry was made there Was every likelihood of C being prosecuted, for causing the death of two persons. The acquittal of C did not affect the finding that the false entry was made with the intention to save or knowing it to be likely to save C from legal punishment. The acquittal of C under section 218/109 did not exonerate the appellant as it had been found that he had made the false entry with a view to save C. Held, further, that the prosecution was not barred by section 42 of the Police Act. Sections 36 and 42 read together showed that section 42 was applicable only to prosecutions for offences under the Police Act and not to prosecutions under the Penal Code or other Acts.